Litigation of Business | Business of Litigation

Can’t Recall One Like This Before? Honestly, I Just Don’t Remember? Or Have Any Idea . . .

I got a nice win this week I really wasn’t expecting. I always try to keep my client’s expectations low, realistic, but low. I find I 20140607-032051-12051938.jpgcan meet or exceed their expectations that way and keep them happier.  In this business, you cannot over-promise just to get a case signed up and then never deliver what you promised. Well, I can’t. And this was a case that real low expectations were justified.

The Defendant and his construction company had previously been charged with very serious fraud in a licensing context and apparently agreed to a fine and forfeiture of a business license (I think maybe all business licenses for a real long time, like, forever). As usual, no one knew about this before doing business with him. Although it is public knowledge, it is not as if he has to wear a scarlet letter on his forehead. Now that I said that, I’m thinking maybe . . . naw, never never mind.

The guy was a classical narcissistic conman. Not the kind of conman that will build up your trust and confidence and then disappear with your life savings. The life savings you handed him yourself, voluntarily, a few minutes earlier believing he’d be right back with . . .whatever it was it sounded good at the time. Not the kind who can disorient you with charm and charisma and the next thing you know he borrowed your new car . . . a little while ago. Well, a while ago and is coming right back . . .of course he’s coming back .  . How long ago? Three weeks? Maybe founo conr or so . . .. damn it!

Those conmen I always have a touch of respect for as professionals. They are good at what they do. Some are so good they have it down to an art. But no. This guy we dealt with this week, he was the idiot kind of conman. Actually,calling him a “con man” is an insult to conmen everywhere.

The guy I’m talking about is the kind of conman that only fools himself forever. He believes his own BS. He cons some of the people for some of the time. But is caught and found out in the end. Nobody really believes him for very long because his greedy, true self shines through.

He can’t keep it hidden for long–the greed is too strong and stupid.  The greed-need won’t be ignored. Or avoided; or suppressed. For awhile. Never too long. The greedy-needy monster comes out and takes over and it is: All for me none for you. At any cost and without much subterfuge. No creative tricks, no sleight-of-hand or unbelievable story that just might be true because it is just too much to myiodABriEake up.

If a cat-burglar is akin to the professional conman above, then this guy is akin to the smash abroken-glass-1006530-snd grab burglar with an old truck he rams store windows with so he can grab a couple twelve packs while being recorded by surveillance video. The problem is he always rips a few people off before he is figured out. He always gets to drinks five or six beers before the cops show up after seeing his license plate on the surveillance video.

Back to reality, my client sued him for unpaid wages and for a promise he made to split the profits from a commercial construction project with him.The wages were a no brainer and after enough time and relentless accusations–he gave up. He stopped lying. He told the truth and admitted it. But he didn’t stop lying for long. He had a plan. He’ll through another lie that’s kinda true on top of it.  I’m sure he thought that would fool the lawyers and the Court. It didn’t.

At his deposition, it all came back. The game. The con. the lies. But he was stuck. He had already told the truth. The gawd awful truth. So what can he say now?Richard_Nixon_1969_inauguration

I don’t know. I have no idea. I really don’t know. I can’t recall. I don’t remember that.

In a deposition just over two hours long, he said a variation of no recollection a world-record worthy amount of times: Idea= 25 (as in “I have no”); know=73 (as in “I don’t); recall=54 (ditto); remember=23 (thought that would be more).

Anyway, I think the Judge read the deposition transcript or at least the court’s clerk did because what follows is the Order I got. It was a painful depo to conduct. It must have been worse to read how much this guy didn’t know. At one point he claimed he was broke and minutes later claimed he could not remember why or what he did with a withdrawal out of the company bank account in the tens of thousands of dollars–that was only about a year earlier!

More to come on the memorandum supporting the Order . . . I’ll explain paragraph two next time. I am not sure I have ever gotten more than I asked a Court for before? At least in a favorable way. . .

Order Granting Plaintiff’s Motion for Summary Judgment

1. Plaintiff’s motion for summary judgment as to his employment claim is GRANTED. Defendants are liable, jointly and severally, for Plaintiff’s unpaid wages in the amount of $12,950.00 plus a penalty of $5,250.00 under Minnesota Statute § 181.13.

2.Plaintiff’s motion for summary judgment as to his contract claim for half of the profits is GRANTED in part. Only Defendant T J is liable to Plaintiff for half of the profits from the project in the amount of $33,142.00.

3.Plaintiff is entitled to recover his costs, disbursements, witness fees, and attorney’s’ fees. Plaintiff’s counsel must submit information on his reasonable attorneys’ fees within 10 days of the date of this Order.

4.Defendants’ counterclaims for Tortious Interference and Breach of Fiduciary Duty are DISMISSED with prejudice.

5.The attached Memorandum is incorporated herein.

More to come . . . .(Including a real good reason to not mix business and pleasure)

MKT

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Litigation of Business | Business of Litigation, Minding My Own Business, Publicly Recorded

Fiscal Year Bankruptcy Filings Lowest in Seven Years | United States Courts

United_States_Bankruptcy_Court_SealHappy, Happy, Joy Joy! Bankruptcy stats for the fiscal year are out! This is better than x-mas and thanksgiving all rolled into one holiday!

BANKRUPTCIES ARE BACK DOWN TO PRE-RECESSION  NUMBERS!

Bankruptcy cases filed in federal courts for the fiscal year 2014—the 12-month period ending September 30, 2014—totaled 963,739, down 13 percent from the 1.1 million bankruptcy filings in FY 2013, according to statistics released today by the Administrative Office of the U.S. Courts. This is the lowest number of bankruptcy filings for any 12-month period since 2007.

Additional statistics released 10-28-2014 include:

There is just a little taste below, but for more sexy stats and tantalizing tables go here:

 Fiscal Year Bankruptcy Filings Lowest in Seven Years | United States Courts.

Business and Non-Business Filings
Years Ended September 30, 2007-2014
FY Business Non-Business TOTAL
2014 28,319 935,420 963,739
2013 34,892 1,072,807 1,107,699
2012 42,008 1,219,132 1,261,140
2011 49,895 1,417,326 1,467,221
2010 58,322 1,538,033 1,596,355
2009 58,721 1,344,095 1,402,816
2008 38,651 1,004,342 1,042,993
2007 25,925 775,344 801,269
Bankruptcy Filings by Chapter of the Bankruptcy Code 12-Month Periods
Ending September 30, 2010-2014
Year Chapter
7 11 12 13
2014 642,366 7,658 372 313,262
2013 753,995 9,564 405 343,651
2012 874,337 10,597 541 375,521
2011 1,036,950 11,979 676 417,503
2010 1,146,511 14,191 707 434,839
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Contractually Bound, Minding My Own Business

Want Enforceable Contracts? Step One: Use written ones!

Questioning Questions??

I am asked contract questions by small business owners all the time. Basically the owner invariably wants to know, “Would my contract stand up in court if I have to sue or get sued?” My response is usually to ask (lawyers have a genetic defect that makes them answer questions with questions) if they always have a new contract signed for every job, with every customer and if they can find all their contracts when they need to? This is usually met with a long pause and then a look that’s something like, “He makes a living doing this???”

images-2Comfort

But the real reason I’m asked the question in the first place is that most small business owners (fortunately) don’t get sued, or have to sue, too often. That means they never have their contracts tested trying to enforce or defend one. Understandably, it would be comforting to know if, after all the hassle that can be inherent in getting clients to sign a written agreement, if it is even enforceable anyway.

Crystal BallFuture

Some people seem to think that if they show me their contract, I can pull out the crystal ball they give all of us in the second year of law school, and after I peer intensely into it, a before-then-unknown future is revealed to me. Of course, the future revealed takes place in a courtroom with a Judge ruling on the validity of the guy’s contract. Unfortunately, I must’ve missed class the day the crystal balls were passed out, because I don’t have one and I’ve never been able to do this.

Is that a Vulcan Thing?

I suppose it’s easy enough to just answer with a classic. Like rattling off something about a contract requires an offer and acceptance with valuable consideration exchanged and a meeting of the minds. But this answer seems to draw another look that indicates my ability to financially support myself is seriously being questioned. To avoid this constant questioning, I usually try a different approach.

Controldocument-40600

I have never seen a perfect contract that will be guaranteed to be upheld in every imaginable, unknown factual situation that may come up. My prediction is usually worthless in the end (particularly when they don’t show me the contract) and I think the focus should be on a different aspect of the contractual relationship that’s controllable: It’s physical manifestation.

Get What You Pay For

Of course it is best to not use the contract you found on the internet that seems close to a good fit. Or better yet, don’t use the contract you cut and pasted together from many contracts you found on the internet. Make sure you have a solid agreement that was at least reviewed, if not written, by a lawyer with contract experience. It is a critical part of getting paid for what you do after all and not the best place to cut corners to save a little money (Grandma called it pennywise and pound-foolish).

E-V-E-R-Y T-I-M-E

The most important thing is to make sure you require a signed contract before starting any work on any job. Especially with existing clients. It is when you deal with people you think you know that most people get lax and don’t get a signed agreement. It is also when you will let your guard down and tend to have your larger credit lines extended. It isn’t a coincidence that people behave a bit differently when they know they have a signed agreement with you.

Don’t Trust–Verify FirstNo Deal

Because you have done business with the client before and for awhile, it is only natural to get a false sense of trust built up. Then you get sloppy (or lazy or don’t want to offend) and you’ll let them go a little longer or deeper with you on credit. But don’t do it. Guard against this.

This is when you have the most exposure. And it is when it hurts the most if a dispute comes up or the deal goes south or for some other reason the client can’t or won’t pay you. This is when you look back in the file after trouble has begun to find the contract it never seems to be there.

I Can See . . .

There is a future I can see and one I can guarantee will come to pass. Without that signed contract I”ll guarantee a future that is going to be harder and more expensive when you try to sue the contracts client. Without that signed paper, you probably lost your ability to collect the costs of collection, including recouping any of your attorney’s fees. Or worse, now you can’t prove it at all if the former client can’t seem to remember anything at all about this account or the terms you’re talking about or who the hell you even are?

diceIncreasing the Odds

My point is that no matter what type of contract you have it can be completely unenforceable if it is unused or goes unfound or is unsigned. The most important issue for a small business owner to worry about is actually using contracts religiously on every project and always requiring a signed contract for every job, from every customer, on every account and in every situation. At least this way when you do need to sue something out, or worse yet you get sued, you’ll have the best chance at prevailing. And prevailing in the most effective, efficient and economical way possible.

MKT

BTW: Yes, oral contracts are valid in Minnesota and can be (and are) successfully enforced. It is much more difficult and expensive to enforce an unwritten agreement if the other party denies the agreement or disputes the terms and conditions that you believe were agreed upon. Oral contract cases can (usually do) devolve into messy “he said-she said” situations that are decided on highly subjective credibility determinations alone. Don’t bet on that one.

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Minding My Own Business

News From your Friendly Minnesota Secretary of State’s Office

Good news about new business start ups. New businesses starting up make business attorneys very happy!

Minnesota on Pace to Exceed 2013 in New Business Filings

More than 14,000 New Business Filings Reported in Third Quarter

Posted Date: 10/8/2014

Contact: Nathan Bowie, (651) 297-8919, nathan.bowie@state.mn.us

SAINT PAUL, Minnesota — Secretary of State Mark Ritchie reports 14,135 new Minnesota businesses were filed in the third quarter of 2014, bringing the state’s year-to-date filings to 45,637 — edging out the 44,544 new business filings reported through the third quarter in 2013. The 2014 business filings are on pace to surpass the 58,260 filings for all of last year.

“It’s been a strong year for business filings, and these numbers point to the great number of innovators and entrepreneurs who call Minnesota home and believe in doing business here,” says Secretary of State Mark Ritchie.

Minnesota’s new business filings reports are available to view online for 2014 and 1990–2013. Last year, the Office of the Minnesota Secretary of State reported 58,260 new business filings, the third-highest annual total on record.

Sign up to receive business-related news.

MKT

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Legally Educated

Knowing is Not Quite Half the Battle

A guest post from my law clerk. Next up, we’ll get the new attorney to write one. Scott’s writing below is kind (and well done), even if he does call me old. Your check is docked!

chaclkboard

My name is Scott Jurchisin, and I am the new law clerk at MKT Law. I went to college at Hamline University, where I majored in Legal Studies and Philosophy. I am now a second-year law student at William Mitchell College of Law. I started competing in mock trial in high school, which is when I decided I wanted to become a lawyer. I continued to compete in mock trial through college, where I was nationally recognized for my performance. One of my mock trial coaches happened to be one of Mark’s former law clerks. So during my first year of law school, when Mark was looking for a new law clerk, my former coach gave him my name. Since then, I have been working for the firm and gaining real-world experience, which law school classes are unable to provide students.

Final exams in law school are supposed to measure how prepared students are to practice law. My final exam for my Contracts course was about whether a business and a building manager had an enforceable lease. I ended up writing nearly twenty pages over the course of three hours. After working at MKT Law, PLC for Mark K. Thompson, I realize that final exams are not a measure of my preparedness to practice law, but only of my knowledge of certain subjects.

Here’s the difference: When studying for my Contracts final, I am working in a closed environment. I could look at my list of all the topics covered in class that semester (offer, acceptance, consideration, promissory estoppel, the statute of frauds, the parol evidence rule, capacity, quantum meruit, etc.) and know that I would only be tested on those, and nothing else. I knew that there would be issues dealing with contract law, and my only obligation was to spot the contracts issues and write about them until my fingers went numb.

In contrast, whenever Mark gets a new client, I do not know exactly what the issue will be. The case will most likely require me to both identify and learn about an aspect of the law I am unfamiliar with. Fortunately, I have access to several resources at work (past cases, statutes, Mark’s years of experience and knowledge) that make the assignments from Mark manageable, unlike at school, where the only tool I have is my own brain.

Since starting work at the firm, I have realized that law school exams cannot mimic this aspect of real life: where the student is completely unaware of what type of issue a client will have. Students have to know the subject of the exam or they will not be able to study for it beforehand. In the legal field, lawyers find out what the problem is and then research it. Because of this difference, final exams measure how much a student knows, while the work of an actual lawyer measures how well a lawyer learns.

This is one of the many reasons my experience with Mark has been so valuable. Working at a firm gives me an opportunity to struggle with and learn the law without being confined to a particular subject area. When Mark hands me a new file, I do not know whether the issue will be regarding employment, securities, a personal injury, default on a loan, the breaking of a contract, a failure to disclose, or contractor services. Law school does not give me the same opportunity to constantly learn and explore the law that this work experience does. Working with Mark allows me access to a resource I never had access to before: the mind of someone who has been working in business litigation for fifteen years.

While Law school exams give me an opportunity to apply my knowledge, the firm constantly gives me opportunities to learn. In a world where “no two days are the same,” as is often fondly observed by Mark, being able to learn is more important than being knowledgeable.

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Discovered on Demand, Litigation of Business | Business of Litigation

Preserving Gmail for Dummies

Awesome news! On the path to no reason not to request ESI in smaller cases or even every case!

Ball in your Court

gmail_GoogleI posted here a year ago laying out a detailed methodology for collection and preservation of the contents of a Gmail account in the static form of a standard Outlook PST.  Try as I might to make it foolproof, downloading Gmail using IMAP and Outlook is tricky.  Happily since my post, the geniuses at Google introduced a truly simple, no-cost way to collect Gmail and other Google content for preservation and portability.  It sets a top flight example for online service providers, and presages how we may use the speed, power and flexibility of Google search as a culling mechanism before exporting for e-discovery.

View original post 625 more words

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Uncategorized

A New Champ!

  litmagglassBing and Microsoft get the award for this year’s (so far) finest, fine print award. Yes, Bing & MS win the coveted Lighted Magnifying Glass Trophy for 2014 (so far)!!!!

bingI suppose I shouldn’t complain. They sent me a card for $200 in free ads! But when you flip it over and read the fine print that the asterix obviously leads you directly to like a road map you find this:

20141014_234144

The photo doesn’t do it full justice, but it is actually on the bottom of the reverse side of the second page. But wait! It gets better! The disclaimer/warning/notice is also placed in a grey shaded area and the type color is GREY! GRAY, Microsoft, Grey! It looks like MS just gave up and isn’t even trying to be sneaky and maintain any plausible deniability because the type color for the MS logo is actually dark, normal black. But I do kid.

I still love you almighty, omnipotent and omnipresent MICROSOFT and your asterisked disclaimer is really quite kind and doesn’t significantly limit my ability to get $200 in free advertising. Does anyone use Bing? Do you bing things?

Now if all free ads would stop asking for my credit card before I get the free part of the deal I’d feel a little better and maybe even like I was actually getting something free. After all, we know you do that because you’re banking on us forgetting to cancel the damn order once the free part is over.

We didn’t really want this in the first place anyway because all we really wanted was the free thing. And only because it was free, ya know? But it’s too late again and now I’ve paid four months for something I never used once and don’t even remember what it was. I gotta cancel this.

Now if I could just find the unsubscribe or cancel procedure written down somewhere on this webpage . . . . Maybe it’s written in grey ink in that gray box at the bottom and on the flip side of the last page?

MKT

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Minding My Own Business

A New Desk (a new atty too)

My new desk is finally complete! It was supposed to be for my new law clerk (who isn’t very new any more) and was going to be done back in May–Five months later: TA-DA! Now that I’ve hired my first Associate Attorney (more later) I’ll just say it’s for the new attorney. Just to be special, ya know? Now that I think of it, the law clerk was supposed to have written a blog post sometime this summer too. I wonder what ever happened to that? I’ll check and get back to y’all (or he will). Until then, enjoy the wonders of the new desk in full living color, showing off all of it’s glorious deskiness  . . .

new deskMKT

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Attorneys & Lawyers & Counselors, Civilized Proceedings

Research Report: Rule 11 Sanctions for Filing Frivolous Rule 11 Sanction Motions for Frivolity

Following is my research report of actual case quotes/snippets that I found interesting (for some reason or another) while I was imageresearching the Question: Can you be sanctioned for bringing a frivolous or otherwise improper Rule 11 Motion for Sanctions?

Answered: Yes and you don’t even need to provide the 21-day safe-harbor period! See Fed.R.Civ.P. 11 (c)(2)(“If warranted, the court may award to the prevailing party the reasonable expenses, including attorney’s fees, incurred for the motion”) and Minn.R.Civ.P. 11.03 (a)(“If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney fees incurred in presenting or opposing the motion.”).

  • A Rule 11 violation is a serious thing, and “an accusation of such wrongdoing is equally serious.” Draper & Kramer, Inc. v. Baskin-Robbins, Inc., 690 F. Supp. 728, 732 (N.D. Ill. 1988).
  • imageThe imposition of Rule 11 sanctions should not be imposed so as to “ ‘chill an attorney’s enthusiasm or creativity in pursuing factual or legal theories [.]’ ” Robinson Rubber Prod. Co., Inc. v. Hennepin County, Minn., 12 F. Supp. 2d 975, 981 (D. Minn. 1998).
  • When a Rule 11 motion itself is not well grounded in fact or law, or is filed for an improper purpose, the court may sanction the moving party. Safe-Strap Co., Inc. v. Koala Corp., 270 F. Supp. 2d 407 (S.D.N.Y.2003).
  • The Court may impose sanctions for a Rule 11 motion that was “not well-grounded in fact,” and was “filed solely as a litigation tactic,” having “the effect of unnecessarily confusing consideration of the real issues.” Judin v. U.S., 34 Fed. Cl. 483, 493 (Fed. Cl. 1995).
  • “Counsel’s reliance on Gaiardo v. Ethyl Corp., 835 F.2d 479, 483 (3d Cir.1987) to rationalize his performance as a good faith effort to challenge existing law is to no avail. He did not even mention the Gordon case . . .” Borowski v. DePuy, a Div. of Boehringer Mannheim Co., 850 F.2d 297, 304-05 (7th Cir. 1988).

11-11-11_m

  • “His conduct throughout the entire case demonstrated the “ostrich-like tactic of pretending that potentially dispositive authority against [his] contention does not exist,” precisely the type of behavior that would justify imposing Rule 11 sanctions.” Id.
  • “The district court was correct in sanctioning plaintiff, who should not be permitted to rely on the defendants to do the research either to make his case or expose its fallacies.” Id.
  • “Rule 11 is not a toy. A lawyer who transgresses the rule abuses the special role our legal system has entrusted to him.” Draper & Kramer, Inc. v. Baskin-Robbins, Inc., 690 F. Supp. 728, 732 (N.D. Ill. 1988). “He can suffer severe financial sanctions and, if his misconduct persists, he can find himself before a disciplinary commission. See, e.g., Model Rule of Professional Responsibility 3.1 (“A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous.”). In short, a Rule 11 violation is a serious thing, and an accusation of such wrongdoing is equally serious.” Id.

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MKT

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Attorneys & Lawyers & Counselors, Litigation of Business | Business of Litigation

Help Wanted–Attorney with 0-3 Years of Experience–Apply Within

MKT Law, PLC, a boutique St. Paul law firm, is looking to add its first associate attorney with 0-3 years of experience. Experience in a law firm setting, as well as an interest in business litigation is preferred. 2014 graduates are strongly encouraged to apply. Interested and qualified candidates should send a cover letter and resume to Mark K. Thompson at mkt@mktlawoffice.com. No phone calls, faxes or snail mail please.

MKT LAW, PLC copy

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