Author Archives: MKT Law

Litigation of Business | Business of Litigation

Small Businesses Sue AIG Over Workers’ Compensation Insurance Scheme

ALTON, Ill. (Oct. 9) (Press Release): Small businesses in California, New York and New Jersey this week initiated coordinated class action lawsuits in federal courts on both coasts against American International Group (“AIG”), its subsidiary companies and former CEO Maurice Greenberg alleging unfair business practices, fraud and violations of the federal racketeering statutes.

The businesses allege that for approximately four decades beginning in the 1970s, AIG engaged in a sophisticated scheme to misreport the amount of workers’ compensation premiums it collected in each state, thereby causing insured employers to pay more in certain workers’ compensation fees than they otherwise would have paid. By making it appear less money was collected in workers’ compensation premiums in these states, AIG caused  . . .

Small Businesses Sue AIG Over Workers’ Compensation Insurance Scheme.

Standard
Civilized Proceedings, Litigation of Business | Business of Litigation

Man who appeared in court is legally dead, judge says

Of course, the ex-wife shows up to oppose his request to be declared legally alive again. Filed under Hollywood movie script ideas, comedy?

An Ohio man who appeared in court on Monday is legally dead, a judge has ruled. Donald Eugene Miller Jr. was declared dead in 1994, eight years after he disappeared from his home in Arcadia, the Courier reports. On Monday, Judge Allan Davis of Hancock County said Miller is still legally dead because a death ruling cannot be changed after three years have passed. UPI and Yahoo News noted the story. Miller, 61, told the court he was an alcoholic and he left town because he lost his job and he was unsure what to do. He wants to revArse the death ruling so he can get a driver’s license and reinstate his Social Security number. Miller’s former wife, Robin Miller, opposed Miller’s attempt to reverse the ruling. She has been receiving Social Security death benefits for her children and she says she . .

via Man who appeared in court is legally dead, judge says.

Standard
Attorneys & Lawyers & Counselors

Federal courts are open, but some stays have been granted

Come on, Baby! Let’s stay us some civil actions between private litigants, Baby!  Come on . . .  Got a brief due Thursday, so let’s get us some blanket stays going on . . . Baby!

Why lawyers are not lyricists.

MKT

**************************

The federal courts may be open for business during the government shutdown, but business there is anything but routine. Criminal litigation continues without interruption, Third Branch News reports. But the Justice Department has asked PDF U.S. Attorneys across the country to curtail or postpone civil litigation that is not absolutely necessary. As a result, federal prosecutors are filing motions for stays of litigation on a case-by-case basis. And judges’ responses to such requests have varied greatly. Chief Judge Loretta A. Preska has issued an order PDF staying all civil cases in the Southern District of New York except for civil forfeiture cases in which federal prosecutors have appeared as counsel. The stay will be lifted the first day after the president signs a budget appropriation into law. Preska was apparently responding to a letter from Preet Bharara, the U.S. Attorney . . .

via Federal courts are open, but some stays have been granted.

Standard
Appealing Appeals Applied, Attorneys & Lawyers & Counselors

Practice Tip for Aspiring Appellate Attorneys

courthouse-1330873-mIf you want a successful win/loss record* as an appellate attorney, always remember to only represent the Respondent when a case goes up on appeal.

In 2012, US federal courts of appeal granted the Appellants reversals in only around 12% of all civil cases appealed out from federal district courts, considered federal trial courts.

Nationwide in 2008 (most recent data I found), the combined rate for US state intermediate appellate courts  (e.g., usually state “courts of appeal”) that reversed lower court decisions averaged out at only 15%.

Also nationwide in 2008, in cases appealed to a state court of last resort (e.g., usually a state “supreme court”) the cases affirmed outnumbered reversals more than two-to-one. While nationwide the same year, cases affirmed by state intermediate appellate courts outnumbered reversals at a rate of four-to-one.

Finally in 2008, leaving my local courts last, but certainly not considering them least, in deciding 147 civil and criminal appeals combined, the Supreme Court of Minnesota only issued reversals in about 14% of all appeals. Meanwhile, in Minnesota’s intermediate appellate court, the Court of Appeals decided 2,046 criminal and civil cases, with the Appellants doing slightly better by obtaining reversals about 16% of the time.

The numbers don ‘t lie. If you want to have the best possible win/loss record for your appellate practice, the odds are much higher if you only represent the party that prevailed at trial court level: The Respondent.

If your practice allows you to pick and choose cases on this basis, please leave a detailed comment below explaining for me how it’s done, because I sure don’t enjoy that luxury in my practice!

* Other outcomes may be considered a “win” or a “loss” as well, but are not incorporated in the above discussion in order to keep the definition of a “win” as clean, clear and indisputable as possible. The outcomes left out that could be considered either a “win” or a “loss,” depending on the interpretation of each particular case’s final result, can include cases where an appellate decision is issued that modifies a lower court’s decision (one way or the other), cases when an order is issued dismissing an appeal (for any number of reasons), cases when an Appellant voluntarily agrees to dismiss the appeal (usually with undisclosed reasons), along with many other potential outcomes that are never so neatly and distinctly defined that they fit in a classical “win” column or “loss “column.

MKT–MKT Law–Appellate Practice Information

Related articles
Standard
Attorneys & Lawyers & Counselors

Lawyer agrees to five-year suspension for advising client to clean up his Facebook photos

Don’t you think that maybe he should of advised his client to dump the Facebook page before starting the litigation?  Just sayin’ …… MKT

 

A Virginia lawyer who advised a plaintiff suing over the death of his wife to clean up his Facebook photos has agreed to a five-year suspension. Matthew Murray was unavailable for comment on his suspension because he was volunteering with a group performing maintenance on the Appalachian Trail, relatives told the Daily Progress. The Legal Profession Blog notes the July 17 suspension order, published online on Aug. 2. Murray’s client, Isaiah Lester, had sued Allied Concrete for the death of his wife caused when a cement truck crossed the center line and tipped over on the Lesters’ car. Murray had instructed a paralegal to tell Lester to clean up his Facebook page after lawyers for Allied Concrete sought screen shots and other information, the Daily Progress says. Lester deleted 16 photos, including one in which he held a beer can . . .

via Lawyer agrees to five-year suspension for advising client to clean up his Facebook photos.

Standard
Attorneys & Lawyers & Counselors

IMPORTANT LEGAL NOTICE–PLEASE READ!

I have been reminded that I must have one of those fancy legal disclaimers on this blog so that no one thinks I am offering or providing legal advice over the intertubes. So please click on the following link to review my new legal disclaimer page and help me to comply with this mandatory request (my legal disclaimer is also prominently linked to on the menu located above). Thank you.

LEGAL DISCLAIMER

 

Standard
Attorneys & Lawyers & Counselors, Contractually Bound, Litigation of Business | Business of Litigation

I Personally Guarantee It!

1-satisfactionOver the past few months, I have had a few different cases where my client, an incorporated small business, either needed help with drafting (landlords) or negotiating (tenants)  a commercial lease agreement. In each case I try to impose, or conversely prohibit, a personal guarantee being a condition in the lease.   It is so standard to see a personal guarantee included in a lease that I am always amazed when it is absent. The exception, rather than the rule.

Most personal guarantees in commercial leases are the result of the landlord trying to minimize the inherent risks involved in renting property to a small business.  Since most small businesses have few, if any, liquid assets, the personal guarantee creates an extra level of protection for the landlord and helps assure that the lease will be fulfilled. Quite simply, the landlord is trying to make the agreement as secure as possible.

When a personal guarantee is agreed to it makes the individual signing the guarantee personally liable under the lease. This is prudent for a landlord just in case the tenant goes out of business, files for bankruptcy or otherwise can’t meet its financial obligations.  It is also a slick way to sidestep the personal liability shield that would otherwise insulate the owners of an incorporated business from this liability.

A savvy tenant, with something  to offer (even services or labor) can sometimes negotiate its way out of the requisite personal guarantee. But a sophisticated landlord will insist upon something else of value be put at stake instead. You can use UCC filings that cover a tenant’s business equipment, other assets, or even personal  property, and designate the landlord as the secured party. It is also possible to successfully omit personal guarantees under the right conditions. These situations may exist where the rental property is unique, yet fit for a tenant’s particular use, when the tenant has previously honored a lease with the same landlord and, of course, when the landlord has no concerns about the tenant’s solvency.

After all is said and done, a personal guarantee won’t be worth more than the paper it is printed on unless the guarantor is financially viable.  This brings me to the “moral of the story” got from an article I read today. It demonstrated a perfect example of a landlord doing everything possible, albeit somewhat after the fact, to try to make sure he would be able to collect the losses allegedly suffered from a default in a commercial lease. This applicable law in the case is technically distinct from a personal guarantee and is due to the particularities of partnership law (and demonstrates a darn good reason to operate as a corporation or LLC rather than as a partnership).

So, yesterday, the Am Law Daily reported on a case where a landlord is currently suing 450 attorneys, who were formerly partners at a large Manhattan law firm. In the lawsuit, the landlord alleges all of the partners are personally liable for the default in a commercial lease involving six floors of a high-rise office tower.

The lease runs through 2020 and, at one point in time, the landlord believed the default resulted in a loss of more than $45.45 million. Although the landlord only claims about $1.6 million damages now, there is still a lesson to be learned. That lesson is that you can never go overboard when trying to tie people personally to a lease in order to secure it.

You can read more the whole article here:  http://www.americanlawyer.com/PubArticleALD.jsp?id=1202621080749&Deweys_New_York_Landlord_Sues_450_Former_Partners#ixzz2g9PTUBqJ

By: MKT–www.mktlawoffice.com

Related articles

Standard
Contractually Bound, Litigation of Business | Business of Litigation

CONTRARY TO PUBLIC POLICY–Unenforceable and Void Contracts

“Judicial decision on one contract can rarely help us to the understanding of another.”  Lord O’Hagan, Rhodes v. Forwood, L. R. 1 Ap. Ca. 275 (1876).

contract imageI think one of my favorite contract clauses is when the drafter inserts language that tries to make the agreement exempt from any laws whatsoever. They usually go something like this:

 

“Party A agrees to pay this ‘service/labor/consulting/alternative/termination/whatever’ fee, despite any statutes or law to the contrary.”

 

When I see one of these clauses, I just know there’s something fishy in the agreement.

Why else would anyone go to all the trouble of trying to make it so no laws can apply to the contract? Or even wanting such an application? I suppose, after all, those pesky laws always get in the way and . . . just won’t let me get my way!

 

I have litigated a number of contract cases with similar clauses that purport to contract around the law. And not once have I ever ran across an attorney willing to argue the clause to the court. Just think about trying to make that argument with a straight face.

 

Courts commonly call these types of contract provisions that try to skirt an established law or statute an illegal contract or that the clause is contrary to public policy. When found to be illegal or contrary to public policy, the clause is usually found to be void and unenforceable. In other words, don’t waste your time and any ink or paper writing one of these up and thinking you can bind someone with it.

 

This issue does come up for me from time to time. Usually I get a situation where someone has committed a crime and wants the victim to agree to a contract prohibiting the victim from reporting the crime. I always shoot these down because I won’t draft a contract that is clearly an illegal contract, unenforceable and void anyways.

 

On the flip side, certain statutes specifically permit “drafting around” it. A perfect example is in Minnesota’s Business Corporation Act (“MBCA”) found at Minnesota Statutes, Section 302A.111 (2013). The first section of this statute sets out provisions that are required to be in a corporation’s articles of incorporation. Then in Subdivision 2, the statute explicitly lists particular sections of the MBCA that will apply, unless you modify them in the corporation’s articles of incorporation or in a shareholder control agreement.

 

So, don’t waste your time, money or energy on drafting a contract that would clearly violate a statute or other law making it contrary to public policy/illegal. After all, it will be declared void and won’t be enforceable. However, like most legal issues, there are always exception that  may apply and it could be worth it to figure that out in advance of getting into any agreements where the exception could apply.

 

MKT

www.mktlawoffice.com

Related articles
Standard
Uncategorized

Give Yourself 5 Stars? Online, It Might Cost You

September 22, 2013

Give Yourself 5 Stars? Online, It Might Cost You

By

“I celebrate myself, and sing myself,” wrote Walt Whitman, America’s great bard of self-promotion. As the world goes ever more digital, quite a few businesses are adopting that philosophy — hiring a veritable chorus of touts to sing their nonexistent praises and lure in customers.

New York regulators will announce on Monday the most comprehensive crackdown to date on deceptive reviews on the Internet. Agreements have been reached with 19 companies to cease their misleading practices and pay a total of $350,000 in penalties.

The yearlong investigation encompassed companies that create fake reviews as well as the clients that buy them. Among those signing the agreements are a charter bus operator, a teeth-whitening service, a laser hair-removal chain and an adult entertainment club. Also signing are several reputation-enhancement firms that place fraudulent reviews on sites like Google, Yelp, Citysearch and Yahoo.

A phony review of a restaurant may lead to a bad meal, which is disappointing. But the investigation . . .

 

Read the whole article here: http://www.nytimes.com/2013/09/23/technology/give-yourself-4-stars-online-it-might-cost-you.html?smid=pl-share

Standard
Litigation of Business | Business of Litigation

Comparing Minnesota LLCs, Corporations and Partnerships

For anyone who has wondered about what some of the significant differences are between forming your business as a S corporation or C corporation, as an Limited Liability Company (LLC), and as a Limited Partnership, below is a handy-dandy chart explaining some of these differences. If you have more questions after reviewing this, make sure you contact a Minnesota Business Law Attorney (I come to mind). Enjoy!

Comparing Minnesota Business Entities

Characteristics

C Corporation

S corporation

LLC

Limited Partnership

Limited Liability

Yes

Yes

Yes

Limited Partner- Yes

General Partner-No

Continuity of Existence  i.e., perpetual existence

Yes

Yes

Varies

Varies

Maximum  Number of Owners Allowed

Unlimited

1-75

Unlimited

Unlimited

Variable Interests in Profits and Losses

No

No

Possible

Possible

 Single Owner Permitted

Yes

Yes

Yes

No

 Entity Taxable, i.e. No means pass through taxation allowed

Yes

No

No

No

 Classes of Ownership

Multiple classes permitted.

Only one class of stock permitted however, can be differences in voting rights.

Multiple classes permitted.

Multiple classes permitted

 Types of Owner(s)

Any

Ownership limited to U.S. citizens and residents and to certain U.S. trusts; no corporate (except S corp. which is 100% owner) or partnership shareholders.

Any

Any

Day to Day  Management Structure

Board of Directors (unless reserved to shareholders in Articles of Incorporation).

Board of Directors (unless reserved to shareholders in Articles of Incorporation).

Members or Managers

General Partner

Formality of Structure

Meetings of directors and shareholders, with minutes, required.

Meetings of directors and shareholders, with minutes, required.

Failure to hold meetings of members or managers  or to observe formalities regarding meetings may result in piercing of corporate veil

Per partnership agreement; limited partner engaging in management loses limited liability.

corp org

Related articles
Standard