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Connectiuct Business Litigation Blog
Commentary on lawsuits and legal issues impacting Connecticut businesses. Authored by experienced business litigation attorney, Kane Bennett of Aeton Law Partners, LLP.
Dispute Between Business Partners Ends In Dissolution and Double Damages Under Connecticut Wage Act
In Saunders v. Firtel, a decision to be officially released on September 22, 2009, the Connecticut Supreme Court upheld an award of double damages under Connecticut’s wage and hour laws in what amounted to a dispute between two business partners, Barry Saunders and Burton Firtel. The supreme court also upheld judicial dissolution of a company owned by the partners. The case highlights the complications that can arise between partners when one partner is also an employee in the business. In this case, Saunders became part owner of a company that Firtel previously formed by himself. Saunders also became an employee of the company as part of a larger business relationship. This is not an uncommon arrangement in business, especially when a small business is purchased by a larger company. Saunders and Firtel also formed another limited liability company together as equal owners. The business relationship was documented with an operational agreement. Although the partners successfully operated the business for years, a dispute arose out of unpaid wages after Saunders unsuccessfully tried to change the compensation structure of the business relationship. In response, Firtel fired Saunders. Saunders brought a lawsuit in Connecticut state court for unpaid wages claiming he was an employee. He also sought to dissolve the limited liability company formed with Firtel. A few months ago, Connecticut’s wage and hour laws were in the national spotlight because of the scandal with AIG’s bonus plan for its employees in Wilton, Connecticut. AIG claimed that it had to pay the bonuses because it feared double damages under Connecticut’s wage and hour laws. In this instance, Saunders brought his case in
Connecticut Business Litigation And Improper Interference With A Business Contract
Unfortunately, all too often business competitors resort to unfair and improper tactics to gain an advantage in business. A common example occurs when a competitor maliciously or intentionally interferes with a company’s contracts or business relationships. When this occurs, businesses have to consider whether a legal remedy is available. In Connecticut, courts have long recognized the business litigation claim of tortious interference with contractual relations as an available remedy for this type of conduct. To be successful against a competitor in a lawsuit for this claim, a business must prove three essential elements: Existence of a contract or beneficial business relationship Knowledge of the relationship Intentional interference with the contract or business relationship Actual loss or damage Upon first consideration, tortious interference with a contract might seem to apply to many business competitors. However, Connecticut courts require more than mere interference for a successful lawsuit. In particular, not every act of interference is actionable in court. In Connecticut, a business must also prove that the interference was "improper" or with an "improper motive." A business can prove that interference with a contract was improper by demonstrating any of the following: Fraud or misrepresentation Intimidation Malice Other improper motive or means Although the improper motive element is harder to prove, a successful claim could also result in an award of punitive damages. Additionally, a business does not have to prove that the interference actually resulted in a breach of the contract or business relationship. As such, if your business is dealing with a competitor that has crossed the line and resorted to fraud or unfair
Withdrawn Negligence Defense In Rape Case Could Still Be A Problem
After making national news, Stamford Marriott Hotel & Spa has requested that its attorneys withdraw a special defense in a case involving a rape in its hotel parking garage. In 2006, a 40 year old woman was sexually assaulted in front of her two small children in the hotel’s garage. The assailant admitted the crime and was sentenced to prison. As such, the rape was not in dispute. The woman later sued and brought a complaint against the Marriott alleging various allegations of negligence. As detailed by Christian Nolan of The Connecticut Law Tribune, the attorneys representing Marriott raised two special defenses to the woman’s complaint that caused a public backlash against Marriott. Reportedly, Marriott’s defenses included contributory negligence of the rape victim and failure to mitigate damages for the children. Marriott quickly changed its course and withdrew the defenses. Marriott’s withdrawal of the defenses may spare it further public relations problems, but the potential for an angry jury at trial could remain a problem. At least one Connecticut attorney estimated that a jury might very well award a premium for that type of defense if pursued at trial and not proved. Although Marriott has now withdrawn the defenses, it could still become a problem at trial based on Connecticut law concerning withdrawn pleadings. In Connecticut, withdrawn pleadings are no longer judicial admissions by the party, but they can remain available at trial as an evidentiary admission. If this matter goes to trial, Marriott will have various ways to argue against admissibility of the pleading, but the
Getting A Contract In Writing Does Not Always Satisfy The Statute Of Frauds
One of the first things lawyers check for when contesting an oral contract is the statute of frauds. The statute of frauds comes from an English rule dating back to the 1600’s. At its most basic level, the statute of frauds requires certain types of contracts to be in writing or else they are not enforceable in court actions. However, sometimes, even when a contract is in writing, it still will not satisfy the statute of frauds. That is what happened in SS-II, LLC v. Bridge Street Associates, an advanced opinion released today by the Connecticut Supreme Court. The dispute involved an option to purchase property pursuant to a commercial lease that was in writing. The tenant wanted to exercise the option and the seller did not want to close on the sale. When the tenant brought a lawsuit for specific performance trying to force the sale, the owner raised the Connecticut Statute of Frauds as a defense and won in court. In Connecticut, the agreements that must be in writing under the statute of frauds include the following: any agreement by any executor promising to answer damages out of his own property any promise to answer for the debt, default or miscarriage of another any agreement made upon consideration of marriage any agreement for the sale of real property or any interest in or concerning real property any agreement that is not to be performed within one year any agreement for a loan in an amount which exceeds fifty thousand dollars. Not only do these
Law Firm Lawsuit Highlights Need For Businesses To Take Caution With Website Content
A recent decision by the United States Court of Appeals for the Ninth Circuit serves as reminder of the types of litigation that can arise from simply maintaining a website. Although the decision involved a dispute between two law firms, the facts could easily be related to competing businesses. The case involved Brayton Purcell, LLP, a California law firm that successfully sued another law firm for copyright infringement based on website content. Brayton Purcell had copyright protection for its substantial website content on elder law. According to the decision, a competitor law firm must have liked the content because the competitor copied the content verbatim for its own website. This resulted in an undisclosed arbitration ruling in favor of Brayton Purcell. Any business with a website should consider having a legal review done to determine if potential problems exist with the website’s content. Facing a lawsuit over a website is one the problems I discussed in a recent lecture on 5 Technology Bombs That Can Sink Your Business. There are many ways that a website can lead to litigation. Stanley Jaskiewicz authored an excellent article for E-Commerce Law & Strategy featured on Law.com related to "clearing" rights to publish content on websites. He cited a simple example of how a business website can infringe a copyright by merely copying and pasting a photograph from one website to the business’ website. In the process, the business might infringe the rights of the original photographer and the website owner. A basic legal compliance review for a website can avoid this type of problem. It starts with a risk
Do Not Count On Beating Goliath: Implement A Management Plan To Avoid Software Licensing Problems
This month’s business technology tip arises from the recent David v. Goliath story reported on by Douglas Malan of the Connecticut Law Tribune. Kent Johnson, the owner of a small computer repair shop in Connecticut was sued by the software Goliath Microsoft for allegedly selling one improperly licensed version of Microsoft Office. Microsoft put 15 people on the case and sued Mr. Johnson in federal court for copyright infringement. Mr. Johnson represented himself against Microsoft and reportedly reached a favorable settlement. Mr. Johnson has a website that provides all the details of the case form the very beginning. As much as Mr. Johnson’s apparent success against Microsoft was unusual, the notion of Microsoft going after business owners for copyright infringement is not. Microsoft, and other software publishers, might pursue an infringement case directly or through enforcement groups such as the Business Software Alliance (BSA) and the Software & Information Industry Association (SSIA). These groups estimate that piracy costs software publishers seven billion dollars annually. When you purchase software for your business, the software comes with a license that restricts your use of the software. If you violate the restrictions in the license by copying or distribution, software publishers consider it piracy. For example, typically you cannot install a software program for several users on multiple computers without purchasing additional licenses. Also, you generally cannot install a program on a network server and let multiple users have access to it without the proper number of licenses. Violation of a software license or copyright can implicate significant civil (and potential criminal penalties) in piracy cases. Penalties can range up
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