by Mark Bauman | Mar 13, 2023 | Commercial Litigation & Corporate Law, Legal News
The first, and most important, issue is to know the limit of your liability and to protect yourself and your investment in your company by incorporating your business. In order to do this, it is important to consult with an attorney and disclose everything about your proposed business venture and past business experiences, both positive and negative. Your attorney can help outline the advantages and disadvantages of the various forms of business entities. Together, you should review all of the “corporate formalities” to which you must adhere in order to preserve the limited liability afforded to you by virtue of having incorporated your business.
As you get to know your customers and suppliers, your attorney can create contracts that suit your specific needs with each of them. Discuss with your attorney the need for a written employee handbook and written employment agreements containing confidentiality and non-competition obligations if necessary.
If you intend to enter into a partnership, you must discuss with your attorney the need for a detailed written buy-sell agreement with your business partners. If you and your partners do not spell out your rights and responsibilities in a written partnership agreement, disputes could end up being a “free for all” and create nothing but additional work and expense if conflicts arise. In addition, without a written agreement saying otherwise, your state’s law will control many aspects of your business. A partnership agreement allows you to structure your relationship with your partners in a way that suits your business. It outlines the shares of profits or losses for each partner, the responsibilities of each partner, and what will happen to the business if a partner decides to no longer be a part of the business.
This process must be carefully considered and outlined. As such, it is important to consult the proper professionals who can help you make the right decisions.
by Mark Bauman | Mar 13, 2023 | Commercial Litigation & Corporate Law, Legal News
The United States District Court for the Eastern District of Pennsylvania, in a memorandum opinion denying a bank’s request to dismiss a complaint, found that a bank violated the Deficiency Judgment Act when it received payment from the sale of a residential property on which it held a second mortgage as payment towards an earlier deficiency judgment obtained after it foreclosed on the debtor’s commercial property. Munoz v. Sovereign Bank, 06-2876 (September 18, 2006).
The Munoz’s borrowed money from Sovereign Bank to purchase a commercial property and business but they subsequently defaulted on the loan. The bank foreclosed and obtained a judgment for $1.14 million. It then executed on the property and purchased it at Sheriff’s sale for $31,000. The Munoz’s residential property was then sold pursuant to a judicial sale. Sovereign bank, which also held a second mortgage on the residential property, received $587,000 toward the satisfaction of its judgment obtained relative to the commercial property. The Munoz’s sued claiming that the bank failed to comply with Pennsylvania’s Deficiency Judgment Act, 42 Pa. C.S. § 8103.
The Deficiency Judgment Act prevents creditors from purchasing a debtor’s real property, often below fair market value, and continuing to execute on the debtor’s other property to satisfy the judgment without first considering the fair market value of the property it executed on. In other words, the bank must determine the balance due on the judgment by subtracting the property’s fair market value, not the price it paid to purchase the property, from the amount of the deficiency judgment. A creditor has six months to petition the court to fix the fair market value. If the creditor fails to do so, the court, upon petition of the debtor, may mark the entire judgment satisfied.
The bank argued that it had not violated the statute because, among other things, it did not execute against the residential property and the time in which it was required to fix the fair market value of the commercial property had not expired. The district court disagreed. It stated that the Deficiency Judgment Act requires the creditor to fix the fair market value by petitioning the court before “seeking to collect the balance due . . .” not before executing against the second property. Thus, Sovereign Bank’s obligations under the statute arose at the time it received the deed to the commercial property and it violated the act when it continued to collect the debt on the commercial property without first having determined the property’s fair market value. The district court also stated that the sixth month period in which a creditor has to fix the fair market value does not give a creditor a six month window in which to undermine the protection that the Deficiency Judgment Act gives the debtor.
by Mark Bauman | Mar 13, 2023 | Legal News, Other News
In Hohns v. Gain, M.D., ___ A.2d. ___ (Pa. Super. 2002), the plaintiff sued a surgeon for failure to obtain informed consent prior to the performance of a repeat breast biopsy. The plaintiff had previously undergone breast biopsies in the late 1980s due to a positive family history of breast cancer. One of her prior biopsies was positive for carcinoma in situ after which an additional biopsy was performed to assure that there was no additional cancerous tissue. The biopsy at issue was performed in 1997 after the plaintiff developed breast firmness. The biopsy was recommended to rule out the recurrence of cancer. The plaintiff alleged that she suffered an inferior cosmetic result requiring reconstructive surgery. She alleged that she was not told that substantial disfigurement could result and had she been told, she would have obtained more information and would not have come to any quick decisions about having the biopsy.
A trial, the jury determined that while the doctor failed to obtain informed consent, the failure was not a substantial factor in bringing about the harm. On appeal, the Superior Court agreed. It found that the plaintiff’s overriding reason for having the biopsy was because she wanted to be sure that she was 100% cancer free. According to the Court, “if other factors completely dominate the patient’s decision to proceed with a procedure, [the] lack of information cannot be deemed substantial.”
This case illustrates that claims for failure to obtain informed consent cannot be looked at in a vacuum and that it is helpful to consider other factors which contribute to a patient’s consent and the effect that the other factors bear on producing that consent.
by Mark Bauman | Mar 12, 2023 | Commercial Litigation & Corporate Law, Legal News
O’Brien & Ryan, LLP prepares and reviews employment contracts for health care practitioners, as well as for employers and employees outside of the health care industry. Typically, these contracts include a restrictive covenant, which is commonly referred to as a non-competition provision. The restrictive covenant aims to protect an employer from an employee who leaves the employment relationship and then seeks employment that is in direct competition with the former employer. The restrictive covenant places limitations on where the former employee is permitted to work and also provides a time period in which the limitation applies. The effectiveness and reasonableness of the restrictive covenant has been frequently challenged and therefore, it is imperative to fully understand the intricacies of the restrictive covenant before entering into the employment contract.
In addition to restrictive covenants, employment contracts will discuss benefits and compensation. Employers and employees need to carefully scrutinize the benefits and compensation that will be offered and accepted in order to ensure that a fair and reasonable package is being offered. Without ample consideration of the benefits and compensation, the employer or employee could be faced with a long-term commitment that does not provide what is rightfully deserved.
For more information on employment contracts, please contact Anthony P. DeMichele.
by Mark Bauman | Mar 11, 2023 | Commercial Litigation & Corporate Law, Legal News
O’Brien & Ryan, LLP handles a substantial number of commercial litigation claims. Of interest, O’Brien & Ryan, LLP is currently representing a dental practice that was recently sold to a purchasing dental group. This transaction involved an asset purchase agreement, restrictive covenants, leases, a commercial note and other related documents that are involved with this type of business transaction. Shortly after the transaction was finalized, the purchasing group claimed that there were several breaches of the asset purchase agreement and related documents. The existence of an arbitration agreement in the asset purchase agreement prompted the purchasing group to file a demand for arbitration with the American Arbitration Association.
In addition to handling the typical construction litigation claims involving disputes between owners, general contractors, subcontractors, design professionals and sureties, O’Brien & Ryan, LLP is currently embroiled in a construction litigation claim involving successor in interest liability. This type of a claim adds a twist to the typical construction litigation claim and involves a theory of recovery against an acquiring corporation that purchases the assets and liabilities of a corporation that was involved in the underlying construction dispute.
These are just a small sampling of the commercial litigation matters that O’Brien & Ryan, LLP is currently handling. For more information on the commercial litigation department at O’Brien & Ryan, LLP, please contact Anthony P. DeMichele.
by Mark Bauman | Dec 24, 2021 | General Liability and Casualty, Legal News
In Brown v. Greyhound Lines, Inc., 2016 PA Super 108 (Pa. Super. Ct. May 24, 2016), the Pennsylvania Superior Court reviewed issues concerning the attorney-client privilege and the work product doctrine in the context of attorney and third-party administrator communications.
The lawsuit commenced when 42 plaintiffs filed personal injury actions against Greyhound for injuries sustained in a bus accident. FirstGroup owns, operates, and/or controls Greyhound. Appellants Greyhound Lines and FirstGroup America appealed the trial court’s order to produce discovery requests.
One discovery request at issue concerned a mock deposition of the bus driver created for appellants’ counsel in preparation of a deposition in another case. Greyhound contended the trial court erred in concluding, “a recorded statement, videoed by a third party, transcribed by a Court Reporter is clearly within [the definition of a] discoverable statement identified by Rule 4003.4,” and argued that the mock deposition should be afforded protection under the attorney-client privilege.
Greyhound asserted two issues for review regarding the mock deposition. First, “whether communications between counsel for a party and the party’s claim administrator, which hired counsel, are protected by the attorney-client privilege.” (emphasis added). Second, in the alternative, “whether communications between counsel for a party and the party’s claim administrator, who is investigating on counsel’s behalf, are protected by the attorney-client privilege.” (emphasis added). The court waived both issues on the basis that Greyhound’s brief failed to sufficiently develop an argument and merely cited case law without applying it to the case at hand.
Even if Greyhound’s brief did sufficiently develop the issue to avoid waiver, the court explained, Greyhound failed to satisfy its initial burden of proof producing adequate facts to show privilege is applicable to the mock deposition. The court noted that the mock deposition was “never intended to be confidential.” Although it was unclear whether the videotape was actually shared, the trial court and Superior Court both noted it was clear that a court reporter and videographer were present while taking the bus driver’s statement. Therefore, the court concluded, “in the absence of an affidavit, statement, or testimony in support of the circumstance, Greyhound has not demonstrated a reasonable expectation that the videotaped statement would remain confidential.”
FirstGroup’s assertion that the trial court erred in ordering the production of the mock deposition was also waived. The court concluded that the issue was not before it, as FirstGroup failed to file a notice of appeal from the specific mock deposition order. The court also noted that FirstGroup’s brief adopted the arguments made by Greyhound, which it found insufficient. Therefore, the trial court’s order to produce the mock deposition was affirmed.
The second discovery request at issue was for the “contents of claim files, correspondence, and emails discussing the bus accident that were sent to or from any individual employed by Gallagher Bassett,” a third-party adjustment company which hired counsel and contractually handled claims and investigations for Appellants Greyhound and First Group. Greyhound and FirstGroup argued the information should have been afforded protection under the work-product doctrine. FirstGroup contended that although the information may have appeared at first to be a “recitation of investigative efforts of Gallagher,” it is clear after closer inspection that the documents “contain the mental impressions and/or legal theories that Gallagher Bassett intends to utilize in defending claims made by those injured in the bus accident.” The court found this argument to be conclusory, as FirstGroup failed to describe how or why the documents contained mental impressions.
Additionally, FirstGroup argued that the communications between counsel and Gallagher should have been afforded the protection of the attorney-client privilege because “unlike an insurance company, Gallagher is in a unique position and serves as a direct arm of Greyhound.” Gallagher was defense counsel “client representative,” and information relayed between Gallagher and its counsel should be afforded the same protection as if it were relayed directly to Greyhound. The court asserted, however, that FirstGroup cites no case law to support its contention. The issue was waived.
The court criticized appellants’ claim that any and all information contained in Gallagher’s file is privileged. Quoting the trial court, “Appellants have unreasonably and improperly claimed attorney-client privilege and mental impression privilege of Greyhound claims representatives [in order] to thwart proper discovery.” The trial court individually reviewed the hundreds of documents. Appellants, however, did not review the trial court’s decision “document by document,” and merely asserted the trial court erred in its ruling. Therefore, the court concluded, appellants failed to carry their burden of proof to claim privilege as to the second discovery request, and the trial court’s order was affirmed.
