Articles Posted in Commercial and Business

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Once you find yourself in a business dispute, there are many decisions you’ll have to make, which is why it is beneficial to have a skilled Florida business litigation attorney on your side. Sometimes, as a recent case that originated in South Florida demonstrates, that decision is determining where you will litigate your case. It is extremely important to choose wisely, as picking federal court when there is no federal court jurisdiction can lead to dismissal.

In that case that was recently ruled upon by a federal appeals court, a West Palm Beach LLC was in the business of selling children’s car seats. The LLC held the patents to those seats as an assignee. The LLC inked a patent licensing agreement with a California entity for the latter to market the seats in exchange of for royalty payments. Eventually, a dispute arose over an unpaid royalty the Palm Beach County LLC alleged it was owed, and the dispute proceeded to federal court in South Florida.

During the appeal process, the 11th Circuit pointed out a problem. The case had relied upon something called “diversity jurisdiction,” which is when an action involves “an amount in controversy exceeding $75,000 and a claim between citizens of different states.” The case clearly involved an amount greater than $75,000, and it involved a Florida LLC versus a California LLC, so what, you may ask, was the problem?

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Almost anytime you are dealing with a sale of commercial property, you are dealing with a transaction that has the potential to encounter roadblocks or pitfalls and become a complex matter. As with any business matter where there is a large sum of money possibly at stake, it pays to, as one American motivational speaker has put it, “expect the best but plan for the worst.” In other words, be prepared from the beginning to be ready for any outcome, even the worst-case scenario. Part of that preparation means having an experienced South Florida real estate litigation attorney on your side from the very start.

That’s because, in any transaction like this – but especially in one that becomes disputed – details matter a lot. A recent case from Palm Beach County involving a contractual right of first refusal is an example. The holder of the right of first refusal was an entity that owned a senior living facility in Boynton Beach. That facility sat next door to the property over which the entity held the right. In the fall of 2013, the owner of that property next to the senior facility found a buyer for the property.

The owner of the senior facility (a/k/a the neighbor) exercised its contractual right and agreed to purchase for the same price and same conditions as the buyer had agreed to. A year later, though, the neighbor canceled its contract to purchase, having decided that “the current development environment” made the purchase “both time and cost prohibitive.”

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Just as there are many different roadway routes here in South Florida (most of which will inevitably be congested with heavy traffic) that can get you to your destination, there are also often a variety of ways you can use to get you to your desired endpoint in your shareholder litigation case. Whether you are a shareholder seeking to take action against your corporation, or you are a corporation defending against a shareholder action (or potential action,) it is important to understand what the law says you and cannot do. Be sure that you are relying on a knowledgeable South Florida commercial litigation attorney to arm you with the information you need as you make the vital decisions in protecting your interests.

A recent Tampa Bay area case is instructive on this topic. That case featured a chef who became the general manager and executive chef of a Clearwater restaurant and lounge. Two years after the restaurant opened, the chef was fired. After that, he contemplated legal action against his former employer.

In order to discover information that might help strengthen his case, the chef sought to make a shareholder demand to inspect the restaurant’s corporate records. Florida law gives corporate shareholders an “absolute right” to view and copy many of the records of the corporation. The law also gives shareholders a qualified right to inspect and copy certain other records.

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There are various circumstances that require strict compliance with all legal rules, even when some requirements are quite intricate. One of those is serving notice of a civil lawsuit. As a matter of policy, the law does not want a person or entity placed on trial without making sure unless all I’s have been dotted and all T’s crossed when it comes to providing that person or entity of notice about the lawsuit and the impending trial.

A failure to complete service of notice of your action may seem like a little thing, but it can substantially delay – or even completely derail – your landlord-tenant lawsuit and pursuit of much-deserved damages. On the flip side, procedural errors made by your opposition can be massively beneficial for you as a defendant, if you present and argue them correctly. For these and many other reasons, be sure you have an experienced South Florida commercial litigation attorney with the in-depth knowledge you need to get all the procedural hurdles of your case cleared the first time.

A recent Miami-Dade dispute between a mattress retailer (the tenant) and its landlord offers a good example of what we mean. The landlord had sued the tenant for breach of the lease and for eviction. In a lawsuit like this, the plaintiff (in this case, the landlord) is required to serve notice of the lawsuit on someone the defendant has designated with the state as the defendant’s registered agent, or else serve notice on the defendant itself.

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While most people, when they first hear the verb “prosecute,” think of criminal law and criminal trials, that verb also applies to civil cases as well. Merriam-Webster says that to prosecute is “to institute and carry on a legal suit or prosecution.” In a civil case, the law requires a plaintiff to pursue its prosecution in a diligent manner and, if that plaintiff takes no action for an excessive period of time, that inaction can be the basis for dismissal of the case.

As a recent case from Miami-Dade County shows, that tool can be a powerful one for defendants in a commercial litigation case. Whether your business is the plaintiff or defendant, it is essential to have reliable commercial litigation counsel on your side to make sure that you are getting the benefit of all of the procedural tools available or are, at least, not getting tripped up by them.

The case arose after a bank made available to two Venezuelans certain loans. The case, filed in state court in Miami, pitted the corporations, as the plaintiffs, against two of the bank’s owners. The corporations asserted claims for fraud, conversion and unjust enrichment among other things.

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There are many things you undoubtedly want to accomplish when you enter into a commercial contract. You want to make sure the contract that appears on paper gives you the benefit of the bargain for which you negotiated. You also want to make sure that each of the agreement’s terms is written with the utmost clarity. With no ambiguity, you can be sure you are getting the benefit of the bargain that you wanted. You can also be sure that the pitfall of contract ambiguity doesn’t jump up and “bite” in the event you need to take action in court. To make sure your agreement is totally clear and devoid of ambiguity, be sure you’re relying on an experienced Florida business attorney throughout the contract negotiation and execution process.

How problematic can ambiguity be? Here’s a case from here in South Florida that’s a good example. The owner of a golf course in Hollywood decided to convert the course into residences. The owner signed a “Master Plan Design and Consulting Agreement” with an architect. The contract stated that the architect would receive a base fee of $250,000.

The contract, however, also contained a provision for a bonus to the architect of up to $1.25 million, based upon the architect’s completion of certain tasks. These included getting the neighboring residents to OK the removal of certain restrictive covenants that limited the property’s use to golf or other recreation, as well as gaining approval from the City of Hollywood for the master plan. The paragraph’s final sentence said that the “Bonus Fee shall be earned and payable upon receipt by the Owner of all approvals and permits necessary to develop the property in conformance with the Master Plan developed by Architect for the Project.”

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There can be many different ways to win your commercial litigation case. It could be a factual discovery, a procedural rules violation by the other side or a decades-old precedential ruling from a higher court. Sometimes, the key to success may even lay in the outcome of a separate case that is making its way through the courts at the same general time as yours. Such was the case for an assignee of two purchase and sale contracts. This recent outcome highlights the importance of identifying (and utilizing) all of the things that can influence your case favorably. To make sure you have the effective legal representation that your business’ commercial litigation case requires, be sure you have an experienced South Florida commercial litigation attorney on your side.

In the case mentioned above, the underlying agreements were two contracts for the purchase of real estate. The contracts called for the payment of a certain sum in commissions to a broker after the sale transaction closed. Along the way, though, the purchaser assigned certain of its rights and responsibilities to a different entity, and it was the assignee that closed on the sale of the property. While the purchaser assigned the purchase and sale agreements, it didn’t assign the broker compensation contracts.

After the closing, no one paid the broker. In the broker’s breach of contract case, it named both the purchaser and the assignee as defendants, asserting that it was entitled to damages under both the purchase and sale agreements and the broker compensation agreements. Subsequently, the purchaser filed a cross-claim against the assignee for the assignee’s failure to pay the broker.

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Sometimes, the path to success in your commercial litigation case is strong factual evidence. Other times, it is a clever or insightful legal strategy. Still other times, it is properly following the rules of court procedure, as well as using your opponent’s failure to follow the rules against it. To make sure you have the strongest possible case in your breach of contract lawsuit, you need an experienced South Florida commercial litigation attorney skilled in all three of these areas.

A recent breach of contract case in the realm of agribusiness is a good example. A Highlands County beekeeping business signed a contract with a Hardee County farm to provide pollination services for the farm’s crops. Unfortunately, many things allegedly went wrong. The farm allegedly didn’t pay a $4,500 sum due on the contract and destroyed the bee colonies by using toxic pesticides “in a manner inconsistent with their labeling,” which killed the bees.

The bee company sued, alleging breach of contract, negligence and violations of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA.) The jury sided with bee company and awarded $4,500 in contractual breach damages, $67,500 in negligence damages and an additional $72,000 in FDUTPA damages.

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A shareholder derivative suit can be very complex and challenging, whether you are the shareholder who is acting as a plaintiff in the case, or a person or entity defending against it. There may be many different pathways that can lead to success… or failure. Many of these paths involve understanding all of the procedural hurdles that a shareholder must clear. This is one of the many reasons why, whether you are the shareholder plaintiff or a defendant, you need a knowledgeable South Florida commercial litigation attorney on your side.

If you are considering a derivative action, chances are that you have a case that a third party or your entity’s management has harmed the company of which you’re a shareholder. This may involve a breach of fiduciary duty, fraud, waste of the entity’s assets or other wrongdoing.

As some recent cases have highlighted, there are preliminary steps that must be completed. Typically, before you can proceed with your derivative lawsuit, you first have to go to your entity’s board of directors and ask them to sue the third party directly if the alleged wrongdoer is a third party (or ask the board to cease its harmful course if your claim is that the board is the wrongdoer.) If they say “no”, then you can proceed with your derivative case. That demand, though, is a vital preliminary step and, if it isn’t performed, that failure often will often derail the shareholder’s entire case, regardless of the proof the shareholder has.

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Whenever you are negotiating a commercial contract, each piece is important. Each clause included or excluded may change the overall context of the agreement, either for the better or the worse. With that in mind, then, it is important to understand exactly what certain clauses can, and cannot, do for you (or against you.) As you go through that process, it pays to have on your side the voice of experience and legal knowledge from a skilled South Florida business attorney.

This legal knowledge can be vital because sometimes what a clause can or cannot do is not always obvious on its face. A recent corporate asset transfer case from Miami-Dade County is a good example.

In 2014, two parties agreed to a transfer of the corporate assets of a company that specialized in transporting the elderly and people with disabilities. The contract governing that transfer of assets contained an assignment clause, which allowed for an assignment of the purchaser’s rights and obligations, but only allowed such an assignment if the company consented.

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