June 13, 2021 In Business Litigation

What I Need to Do When a Creditor Sues You

Consumer Protection Attorney

Getting sued by a creditor is unpleasant, but there is a path that leads to a better outcome than just accepting the lawsuit. First, don’t panic. It sounds cliché, but this happens all the time and debt collectors count on the fact that the average person will not know what to do. Hiring a consumer protection attorney who is experienced in dealing with debt collectors should be your first course of action. Do your research and make sure your attorney is an expert in the field and handles these types of cases on a regular basis.

When you are served with the lawsuit, the worst thing you can do is to ignore it. In fact, the sooner you contact an attorney, the better he/she will be able to serve you. In some states, the debt collector may be able to garnish your paycheck if you fail to respond and a judge rules in their favor. You have a right to challenge the debt collector’s right to sue you. Did you actually incur this debt? Can the company suing you prove that? Again, here is where your attorney’s expertise will come into play. Attorneys that do this type of work are very familiar with the debt collectors and their attorneys. Your attorney will try to show evidence in court that the debt collector cannot prove they own the debt. If they can do this successfully, the lawsuit will be dismissed.

If the debt collector can prove that you owe the debt, you may still be able to settle for a lesser amount than the total you are being sued on. Many times, debt collectors will allow consumers to settle for pennies on the dollar. Depending on whether the debt collector is the original creditor or a third-party debt buyer, they may accept as little as 40-50% of the total owed. They generally also provide payment plan options, so you do not have to pay one lump sum. Again, your attorney will be able to help negotiate that settlement because he/she will know how to deal with the debt collector and is familiar with their tactics.

If you are currently being sued on a debt whether you believe it is yours or not, don’t stick your head in the sand. Time is of the essence, and you should contact a consumer protection attorney for a consultation today!

May 16, 2021 In Business Litigation

Discrimination and Harssment in the Workplace

Discrimination is being treated unfairly or differently for the worse, based on personal status or characteristics (such as race, gender, religion). When a coworker or boss makes a comment or does something that results in a hostile, threatening, or intimidating environment for someone else, that is considered harassment. If you aren’t sure about the rights that protect you as a person and employee, then consulting with a lawyer on your situation is advisable.

Examples of discrimination and/or harassment include:

Depending solely on word-of-mouth recruiting that tends to favor a certain kind of employee
Using discriminatory criteria when hiring, without being able to show how it relates to the job
Requesting that an agency only refers applicants of a particular status.
Not providing the same pay to workers in similar positions
Rejecting benefits after they were offered
Turning to the discriminatory preferences of customers, coworkers, or clients when choosing factors for employment
Requiring a specific kind of image or corporate look as prejudices in hiring
Firing employees based on unlawful reasons
Using a client or worker’s preferences to explain a demotion, discipline, or discharge
Making comments or requesting favors that are unwanted and sexual in nature
Conduct that creates a seriously threatening, unsafe, and harmful work environment for employees

There are almost limitless ways that discrimination or harassment can occur in the workplace. If you suspect that your adverse treatment at work is a result of discrimnation or harassment, getting legal assistance is paramount.

Being the victim of a harassment or discriminatory incident can wreak havoc on a person’s mental health. It is more than worth talking with a legal professional if you aren’t sure what happened to you constitutes legal action. For more information, contact a reputable law firm as soon as possible, such as an employment discrimination lawyer from Eric Siegel Law.

April 24, 2021 In Business Litigation

Recalled Off-Highway Vehicles in April of 2021 – Product defect lawyers

Recalled Off-Highway Vehicles in April of 2021

Recalled Off-Highway Vehicles in April of 2021 - Product defect lawyers

As the summer months approach, more people are going to start heading outdoors for seasonal activities. One activity that is especially popular is the use of recreational off-highway vehicles. An off-highway vehicle is defined as a type of vehicle that is designated for off-road use. Some off-highway vehicles are street legal but most people use theirs to go places where regular vehicles cannot.

Some common types of off-highway vehicles include dirtbikes, ATVs, and side by sides. While riding an off-highway vehicle can be a fun way to explore trails and get outdoors, off-highway vehicles are no stranger to recalls. Much like regular vehicles, off-highway vehicles are often the subject of recalls as manufacturers want to ensure that the vehicles are as safe as possible for those who ride them. If you own or operate an off-highway vehicle it is important to check the Consumer Product Safety Commission’s website frequently to ensure that your vehicle is not the subject of a recall. Below are three off-highway vehicles that were recalled in the month of April.

Honda CRF450R Off-Road Motorcycles

On April 29, 2021, Honda recalled 536 units of its CRF450R Off-Road Motorcycles due to a crash and injury hazard. The motorcycle’s drive chain can break while in use, causing the vehicle to suddenly lose its drive force posing a crash and injury hazards to the rider. The recall involves 2021 model year CRF 450R Honda motorcycles with the last six digits of the VIN number between 400223 and 401056. The motorcycles were sold at authorized Honda Powersports dealers nationwide from August 2020 to March 2021. Owners of these motorcycles should immediately stop using them and contact an authorized Honda Powersports dealer to schedule an appointment for a free repair. Honda is contacting known purchasers directly. To date, two reports of the chain breaking have been received and no injuries have been reported.

Kawasaki TERYX Off-Highway Vehicles

On April 22, 2021, Kawasaki USA recalled 100 units of its TERYX off-highway vehicles due to a fire hazard. The fuel pump retainer plate bolts can come loose causing fuel leakage over time which could start a fire. The recall involves 2021 Teryx S LE, Teryx4, Teryx4 LE, Teryx4 S LE, and Teryx4 S LE CAMO models. The off-highway vehicles were sold at Kawasaki dealers nationwide in March 2021. Owners of this vehicle should immediately cease use and contact a Kawasaki dealer to schedule a free repair to replace the fuel pump retainer plate bolts. Kawasaki is contacting all known purchasers directly. To date, no incidents or injuries have been reported.

Kawasaki BRUTE FORCE ATVs

On April 22, 2021, Kawasaki USA recalled 70 units of its BRUTE FORCE 750 All-Terrain Vehicles due to a fire hazard. The fuel pump retainer plate can come loose causing a fuel leakage over time, posing a fire hazard. The recall involves the 2021 BRUTE FORCE 750 4X4I EPS. The ATVs were sold at Kawasaki dealers nationwide in March 2021. Owners of this ATV should cease use immediately and contact a Kawasaki dealer to schedule a free repair to replace the fuel pump retainer plate bolts. Kawasaki is contacting all known purchasers directly. To date, no incidents or injuries have been reported.

Thanks to product defect lawyers such as Eglet Adams for their insight on recalled off-highway vehicles in April of 2021.

April 17, 2021 In Business Litigation

Case Report – Group Home Abuse

Group Home Abuse

I recently settled a lawsuit arising out of the strangulation death of an adult group home resident. John was a 30-year-old autistic man who became a resident of the defendant group home provider when he was 16 years old. At that time, prior to becoming a resident of the group home, John was cared for by his parents in their family home. After his parents divorced, John lived with his mother primarily. Due to his autism, he was prone to violent outbursts. As he became older and more mature, the outbursts became more violent. Further, because of John’s size, he was too difficult for his mother to handle. So, his mother made arrangements for John to reside at a group home that held itself out to the public as being able to manage autistic men with violent outbursts.

For most of his time at the group home, John did well. However, during the last year of his life, he became progressively more violent. John’s neurologist tried to modify John’s antipsychotic medications in an effort to better control his behavior. In addition, John’s parents, the group home administrators, and public officials who deal with individuals having developmental disabilities met to prepare a care plan in an effort to modify John’s behavior and provide safe care for him. However, John’s behavior continued to worsen.

In 2019, John attacked a group home caregiver. In defending himself, the group home caregiver punched John in the face, opening a large gash under his eye. This required stitches. While John was at the hospital, he became violent again, necessitating intervention by police officers. Ultimately, John was treated and released back to the group home.

On the following day, John became violent again. At this time, the on-duty aide attempted to restrain John. In doing so, he apparently put John in a chokehold which resulted in John’s death by strangulation. However, the aide denied that he strangled John. Instead, he said that he found John unresponsive on the floor sometime after he applied a restraint to him. He further claimed that John was breathing after the restraint and had subsequently gone to sleep.

The county coroner brought attention to the strangulation by showing that John had bruising and swelling in his neck area, exactly where a chokehold would cause such damage. John’s death was otherwise unexplained. When the coroner ruled the death a homicide, police officers interviewed the aide. During the course of interrogation, the aide admitted that he may have gotten his arm around John’s neck during the restraint.

John’s parents sued the group home for negligence and wrongful death. This case settled for a confidential amount. Contact your local wrongful death law firm such as Mishkind Kulwicki Law Co., L.P.A.

March 13, 2019 In Business Litigation

Creepy Tech Patents

Patent Lawyers

In the future Artificial Intelligence and robots and innovation have the promise of making our lives easier. But what happens when companies are already using types of this technology to spy on us and cross all kinds of boundaries? That’s when a tech-heavy future utopia could become problematic.

Which do you prefer a cold steel robotic hug or one from a person or animal? Microsoft has patented a tele-linked pillow to offer a type of robotic hug to those you care about when at a distance. Microsoft also recommends this technology be used to invade the space of business associates with a mechanical handshake.

Verizon has patented an advertiser-friendly smart television that employs a few audio and visual sensors to spy on consumers while they watch television. Then the technology uses what they learn from consumers activities during TV such as cuddling,playing a music instrument, or cleaning to target more specific ads to them. Don’t worry the TV isn’t just spying on you: it also wants to examine how you interact with those you live with to detect patterns such as sports activity, arguing, talking, or singing. Big Brother moving into your living room anyone?

These inventions call to mind cautionary Sci-Fi tales such as The Giver or Brave New World. Will it really be possible that innovation could create so many choices that society may eventually become open to government powers creating a more peaceful environment of less choices.

It’s in these moments when we could have a super hero of some sort rescue us from the dystopian future we seem determined to bring about with inventions that have lost their sense of humanity. But who? Perhaps Wonder Woman with her Golden Lasso of Truth to prevent corporations will ill intentions from tricking us into embracing creepy technology.

After all, Wonder Woman was invented herself in 1941 by William Moulton Marston, the inventor of the polygraph machine, also known as the lie-detector test.

Google in partnership with Motorola has invented a new version of the lie-detector test they are hoping will have broad appeal. It’s a stylish digitally enhanced tattoo that uses galvanic skin responses to detect when it believes we’re lying.

And the digital tattoo also has the ability to dampen the voices of those that wear it.

If you have questions about patent law, patent lawyers, trusts can explain the details.

August 6, 2018 In Business Litigation, General

Non-compete agreements in Tennessee

Are non-compete agreements enforceable in Tennessee?

It depends. Generally speaking, non-compete agreements, also called ‘covenants not to compete’, are disfavored in Tennessee. See Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984). Courts interpret these agreements strictly in favor of the employee, in part because the agreement is a restraint on trade. Having said that, courts will uphold non-compete agreements if there is a legitimate business interest to be protected and the agreement sets reasonable time and territorial limitations. Id.

What makes a non-compete agreement reasonable?

When deciding whether a non-compete agreement is reasonable, Tennessee courts will consider the following relevant factors:

1. the consideration supporting the agreement;
2. the threatened danger to the employer in the absence of the agreement;
3. the economic hardship imposed on the employee by the agreement; and,
4. whether the agreement is against the public interest.

Additionally, the time and territorial limitations must be no greater than necessary to protect the employer’s legitimate business interest. In other words, a company cannot expect a court to uphold a non-compete agreement which purports to prevent an employee from ever taking a job with another company in the same general line of work.

Does the employer have a legitimate business interest which deserves protection?

Obviously, employers cannot restrain ordinary competition. Therefore, employers must show that without the non-compete agreement, the employee would gain an unfair advantage in future competition with the employer. Id.

Courts consider the following to determine whether an employee would have an unfair advantage:

1. whether the employer provided the employee with specialized training;
2. whether the employee is given access to trade or business secrets or other confidential information; and,
3. whether the employer’s customers tend to associate the employer’s business with the employee due to the employee’s repeated contacts with the customers on behalf of the employer.

Of course, an employer does not have a protectable interest in the general knowledge and skill of an employee. Id. However, an employer can typically prevent former employees from using its trade or business secrets or other confidential information in competition with the employer. While figuring out what constitutes a trade secret is generally easy, determining what constitutes confidential information can be much more difficult. Indeed, in one particular case, a Tennessee court held that customer lists, customer credit information, pricing information, and profit and loss statements did not constitute confidential information because such information is easily available from sources other than the employer. Id.

If you are an employee with a potential non-compete dispute or an employer looking to prevent unfair competition and/or protect confidential information from your competitors, you need a business litigation lawyer Memphis knows and trusts to handle the matter for you.

Call us today at 901.372.5003.

July 30, 2018 In Business Litigation, Contracts, General

When can a subcontractor file a lien?

Under Tennessee law, a subcontractor is considered an indirect lien claimant since he or she typically does not have a contract with the owner of the property. Even though a subcontractor does not have a contract with the owner, he or she might still have lien rights. To determine if a subcontractor has lien rights, you must consider the following: Did the subcontractor contribute to an improvement in real property? Is the improvement part of a residential or commercial project? Has the subcontractor taken the necessary steps to ensure he or she has not lost whatever lien rights he or she may have had?

Improvements

In most situations, this is obvious. The subcontractor has either performed services or delivered materials as part of a construction or renovation project that permanently alters or “improves” the real property.

Residential or commercial property

For subcontractors, Tennessee law treats residential projects and commercial projects differently.

Residential projects

Generally speaking, subcontractors do NOT have lien rights for improvements made to residential property. One exception in which a subcontractor does have lien rights against residential property is when the owner is acting as the general contractor. In that situation, the subcontractor has a direct contract with the owner/general contractor. As an aside, a subcontractor may have a cause of action against an owner that is acting as the general contractor even if their contract is not in writing.

Commercial projects

Subcontractors have lien rights for improvements to commercial property. However, they must follow specific statutory requirements or they risk losing those rights. Subcontractors must send a Notice of Nonpayment to the owner and general contractor to keep their lien rights. Tennessee law has strict requirements for Notices of Nonpayment. Subcontractors must include very specific information and must send their Notice timely otherwise they risk losing their lien rights. After sending a timely Notice of Nonpayment with all the required information, subcontractors must then send a copy of their Notice of Lien to the owner and general contractor too. Once both the Notice of Nonpayment and Notice of Lien have been timely sent, a subcontractor can file his Notice of Lien.

Enforcing a valid lien

To enforce a valid lien claim, a subcontractor must file his or her lawsuit within ninety (90) days of their Notice of Lien. If they fail to file an appropriate lawsuit within that statutory time frame, he or she will lose his or her lien rights.

If you are dealing with a general contractor that has not paid, you need a construction lawyer Memphis trusts to help you through the process.

December 19, 2017 In Business Litigation, Civil Litigation, Contracts

Get Specific! You Must Mention “FEES” in Your Attorney Fee Provisions

Tennessee Requirements for Attorney Fee Provisions

As the business lawyer Memphis TN trusts when it comes to contract negotiation and drafting, one piece of simple legal advice we frequently give our small business clients is to always include attorney fee provisions in your contracts and routine business forms. Why? Because if you don’t have such a provision and you end up in litigation, you’re on the hook for your own attorney fees and legal expenses even if the breach of contract, or the resulting litigation, isn’t your fault.

It has always been the case that a contractual provision allowing for the recovery of attorney fees must be specific. However, just last month, in Nyrstar Tennessee Mines-Strawberry Plains, LLC v. Claiborne Hauling, LLC, the Tennessee Court of Appeals went further to reinforce this principle by making clear that attorney fee provisions must specifically invoke the magic words “attorney fees.” The Court held that it is not enough simply to provide recovery of “costs,” “expenses” or even “legal expenses” – all of which the Court held was simply not specific enough to permit recovery of attorney’s fees.

In Nyrstar, the plaintiff won at trial on its breach of contract action against the defendant and the judge awarded the plaintiff $116,073.43 in damages. After winning the case, the plaintiff then sought attorney’s fees of $106,779.50 and expenses of $2,982.12 pursuant to the attorney fee provision in the applicable contract. The specific language of the contract in Nyrstar was as follows:

The Customer must pay Nyrstar all costs and expenses incurred by Nyrstar in connection with enforcing its rights against the Customer under an Agreement including legal expenses and other costs incurred in recovering monies owed by the Customer to Nyrstar.

The trial court awarded the plaintiff its expenses, but refused to award the plaintiff its attorney’s fees, despite the contract language providing for the recovery of “legal expenses.” The trial court stated:

[t]he plaintiff Nyrstar’s language does not use the term “fees.” It uses “expenses,” which has been found to be inadequate. Merely providing for the “recovery of ‘costs and expenses’” is insufficient to reach a contractual right to recover attorney’s fees.

(Emphasis added). The Tennessee Court of Appeals upheld this decision. The Nyrstar case means that you should pull out your contracts and regular business forms, and then call us today to make sure that the language you are using in your attorney fee provisions is correct. After all, what is the point of having an attorney fee provision in your contracts and forms if it’s not going to hold up in court?

Bottom Line

Your attorney fee provision MUST specifically provide for the recovery of “attorney’s fees,” and not merely “costs” or “expenses.”

Even if a provision provides for the recovery of “legal expenses” or “costs and expenses of any suit or proceeding,” the right to recover attorney’s fees is not created because the provision does not specifically implicate “fees” as part of the recovery.

If you’d like the small business lawyer Memphis TN trusts to review your small business contracts and routine business forms to make sure your language complies with the requirements in Tennessee for attorney fee provisions, call us today at (901) 372-5003.

August 24, 2016 In Business Litigation

Patterson Bray Wins on Motion to Dismiss

Victory for Patterson Bray!

Patterson Bray is happy to announce a victory in a business litigation case. Our strategy? A Rule 12 Motion to Dismiss. Our client, a former officer and employee of a factoring corporation, was wrongfully sued in his individual capacity by a former customer of his employer. Our client served as Chief Financial Officer, and had merely signed agreements on behalf of the company. The Plaintiff alleged that our client’s employer had misapplied payments and committed other improper acts in connection with their Factoring and Buyout Agreements.

Our Strategy

The Complaint contained numerous allegations against the factoring corporation, but its only mention of our client was that he was an officer of the company, and that, as an officer he was somehow responsible for implementing the policies and procedures that damaged Plaintiff.

After our firm was hired to represent the former officer, we carefully analyzed the Complaint filed against him in Federal Court. In our judgment, the claims in the lawsuit were neither valid nor properly stated, so we filed a Motion to Dismiss for Failure to State a Claim. See Federal Rule of Civil Procedure 12.

What is a Motion to Dismiss for Failure to State a Claim?

A motion to dismiss for failure to state a claim is filed at the very beginning of a case which argues, essentially, that a plaintiff’s claim is either not legally correct, or that insufficient facts have been alleged to suppose an otherwise valid legal claim.

When such a motion is filed, the judge must assume that all the allegations of the plaintiff’s complaint are true, resolving any and all doubts in favor of the plaintiff. For obvious reasons, then, such motions are usually very difficult to win. The corresponding benefit is equally obvious, though, because dismissal at this early stage allows the client to avoid most of the costs of litigation.

The Court’s Ruling in Our Case

The Federal District Court judge agreed with our argument and granted the Motion to Dismiss filed on behalf of our client. In dismissing the breach of contract claim, the Federal District Court Judge said:

A corporate officer cannot be held liable for a corporation’s debts merely because he exercises dominion or control over the organization. Schlater v. Haynie, 833 S.W.2d 919, 924 (Tenn. Ct. App. 1991). Likewise, a corporate officer signing a contract on behalf of corporation does not bind himself to the contract. Bill Walker & Associates, Inc. v. Parrish, 770 S.W.2d 764, 770 (Tenn. Ct. App. 1989). Instead, a court will only hold an officer liable on a contract if it appears that the officer signed the contract in his personal capacity.

Here, Plaintiff has alleged no facts showing that [the former officer] was a party to the Factoring Agreement in his personal capacity. The Factoring Agreement’s signature page clearly shows that [his] signature was in his capacity as CFO. (ECF No. 1-1 at 3.) Additionally, he is not even a signatory to the Buyout Agreement. Plaintiff’s Complaint instead apparently attempts to hold [the former officer] liable because he exercised control over [the corporation’s] actions. However, Tennessee law does not allow this. See Schlater 833 S.W.2d at 924. Therefore, its breach of contract claim against [the former officer] fails.

In dismissing the Plaintiff’s additional claims of conversion and fraud, the Judge went on to say:

A director or officer of a corporation does not incur personal liability for its torts merely by reason of his official character; he is not liable for torts committed by or for the corporation unless he has participated in the wrong.’” Cooper v. Cordova Sand & Gravel Co., Inc., 485 S.W.2d 261, 271–72 (Tenn. Ct. App. 1971).

Here, the only allegation against [the former officer] himself is that he “was responsible for implementing the policies and procedures that damaged Plaintiff,” or, in other words, acted as an officer of the corporation. Because Plaintiff’s Complaint lacks any reference to any tortious conduct on the part of [the former officer], it fails to state a claim against him for both conversion and fraudulent inducement.

This case was handled by Civil Litigation Attorneys Chris Patterson and Erin Shea.

Need a Business Litigation Attorney?

Call us at 901-372-5003 or visit our website to learn more about our services as business litigation attorneys.

We handle other kinds of cases as well, including: personal injury, apartment crime injuries, auto accidents, premises liability, wrongful death, contract drafting and review, general civil litigation, estate planning, wills, trusts, probate, business planning, and business entity formation.

May 16, 2016 In Business Litigation

How to Dissolve a Tennessee LLC

Need to dissolve your Tennessee LLC? The method for dissolving a business entity depends on the type of entity and its structure. This post will focus on the termination of a Tennessee Limited Liability Company (LLC). In addition, while LLCs can be dissolved both judicially and administratively, we will focus on dissolution by the person or persons associated with the LLC.

Disclaimer: This information is intended to be a general overview of the LLC termination process in Tennessee. The termination process may be different depending on the LLC, its makeup, or a client’s specific circumstances. This information should not be used as a substitute for consulting an attorney about terminating your LLC.

Statute on how to dissolve a Tennessee LLC

LLCs formed on or after January 1, 2006, are governed by the Tennessee Revised Limited Liability Company Act. Tenn. Code Ann. 48-249-601 provides the various methods for dissolving a Tennessee LLC and provides that an LLC is dissolved upon the first of the following to occur:

Expiration of the period fixed in the Articles of Organization, if any:
The occurrence of an event specified in the LLC documents;
Action of the members in accordance with Tenn. Code Ann. § 48-249-603;
Action of the organizers under Tenn. Code Ann. § 48-249-602 if not contributions have been accepted by the LLC;
An order of the court under Tenn. Code Ann. § 48-249-616 or § 48-249-617, also known as judicial dissolution;
An action of the Secretary of State under Tenn. Code Ann. § 48-249-605; also known as administrative dissolution; or
If there are no LLC members and a notice of dissolution is filed within 90 days of the occurrence of the event terminating the interest of the last remaining member and the LLC documents specify that the termination of the interest of the last member dissolves the LLC.

The statute specifically provides that the “termination, dissociation, death, incapacity, withdrawal, retirement, resignation, expulsion, bankruptcy or dissolution of any member, or the occurrence of any other event that terminates the membership interest of any member, shall not cause the LLC to be dissolved.” If any LLC is to be dissolved in any of these instances, it must be stated in the LLC documents.

What to Do Before Termination

Before terminating your entity with the Tennessee Secretary of State, the entity must file a Final Tax Return with the Tennessee Department of Revenue and obtain a Tax Clearance Letter to submit with its termination documents.

Submitting Termination Documents

If a Tennessee LLC is terminated by the organizers, Articles of Termination by the organizers must be filed with the Tennessee Secretary of State. If the LLC is terminated after a designated period, under the LLC documents, if there are no members left, or if by consent of the members, Notice of Dissolution must also be filed with the Secretary of State. Be sure to have appropriate documentation filed with your LLC documents showing any action that was taken to effect this decision, if necessary.

What to Do After Termination

Once an entity is terminated with the State, the LLC must stop doing business and wind up its affairs. To wind up the business, management must collect and pay all debts, sell assets, and distribute any remaining funds to the members of the LLC.

You Still Need to Consult a Business Lawyer

This information is only a general overview of the LLC termination process in Tennessee. The process may be different depending on the LLC, its makeup or a client’s specific circumstances. For this reason, it is important that you consult an attorney before taking steps to terminate your LLC.

If you need help terminating your LLC, we would be honored to assist you. Please call us at 901-372-5003 or email us here.