Articles Posted in Contracts

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Whether you are litigating in federal court or Georgia state court, it is very important to ensure that your side is in total compliance with all statutory demands and procedural requirements. Failing to meet the obligations of these rules can have disastrous consequences for your case. In some situations, even slight missteps could cost you thousands of dollars (or more). Make sure that your interests are completely protected by retaining a skilled Georgia business attorney to handle your case for you.

One recent federal case from the 11th Circuit Court of Appeals demonstrates how damaging a lack of complete procedural compliance can be. The case began when a motel group filed a lawsuit against an insurance company, alleging that the insurance company was liable for breach of contract. The lawsuit started out in Florida state court in 2013, but, as is the case with many commercial litigation actions, the case qualified for removal to federal court, which the insurance company sought in this situation.

Ten days after the removal to federal court, the insurance company submitted to the motel group a settlement proposal that complied with the Florida statutes and the Federal Rules of Civil Procedure. Florida Statutes Section 768.79 gives the recipient 30 days to respond. The motel group did not respond in that time-frame.

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Here in Georgia, the law gives you very broad freedom when it comes to setting up contracts. Generally, you can make your contract say whatever you want, unless it violates the law or violates public policy. This can be a major benefit to you. If you have the right representation from a skilled Atlanta commercial contracts attorney and you get an agreement that clearly protects your interests and plainly places your expectations and objectives down in “black and white,” then you can proceed with confidence that, if necessary later, you can get those terms enforced in court.

A recent contracts case before the Georgia Court of Appeals highlights this. The parties in the dispute were a Rockdale County motorsports vehicle dealership and an Atlanta-based administrator of vehicle service contracts and extended warranties. The parties’ contract called for the administrator to offer its services through vehicle dealerships, and for the dealerships and the administrator to share in the profits.

After a few years, certain sums, which previously had been paid to the administrator, were subsequently directed to a reinsurer controlled by the Rockdale County dealership’s owner. Eventually, the relationship went south, and the reinsurer initiated an arbitration action. The reinsurer argued that the administrator improperly took in fees not authorized by the contract. After the hearing, the arbitrator agreed with the reinsurer and ordered the administrator to pay $462,000 in damages.

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Say you successfully filed your commercial litigation action before the deadline imposed by the statute of limitations. Subsequently, the other side did… nothing, and the deadline for filing a response has passed. So… that’s it, you win, you’re “home free” and you can get all of the damages that you were seeking, right? Not necessarily. Getting to that successful outcome requires more. Even when a defendant refuses to respond, your case still requires keen attention to detail and careful dotting of i’s and crossing of t’s in order to maximize your success. For that (and many other) reasons, having legal representation from a skilled Atlanta commercial litigation attorney from the very start can help you get the most out of your lawsuit.

There are actually several steps that you must undertake – and complete properly – in order to achieve a full success in a case where the defendant takes no action. Failing to complete any step with the precision required by the law and the rules of procedure can potentially do great damage – or completely ruin – your case.

A recent federal case from here in North Georgia is an example of a plaintiff’s case done right. The plaintiff was an Indianapolis-based staffing firm seeking substantial damages from a New York-based merchandising company following a dispute over a project in Georgia.

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Doing business today will often mean interactions with clients, contract partners, and others that may bring you into contact with many different states. This may sometimes bring about a situation in which you need to enforce a judgment from one state in another or defend against such a judgment. When these commercial litigation situations arise, it is important to have knowledgeable Georgia business counsel on your side who understands the law and the role the Georgia courts can play in pursuing the outcome you need. Recently, the Georgia Supreme Court entered an informative decision about using this state’s courts to oppose a judgment entered by another state.

The underlying relationship that eventually led to litigation in that recent case was a commercial contract between a telecom company and an IT services and training company. The contract called for the latter company to provide services for the former. Eventually, the relationship soured, and the services company sued in state court in St. Louis, Mo. That case was resolved when the trial court there entered a default judgment in favor of the plaintiff, awarding it $52,589. A default judgment is a final resolution of a court case in favor of one party due to the other party’s failure to take a required action to participate in the case. Often, these occur in favor of plaintiffs because defendants fail to respond or take other required actions.

Four months after securing the judgment in St. Louis, the plaintiff brought its case to Atlanta, asking a judge in Fulton County to enter an order of enforcement of foreign judgment. A foreign judgment is any judgment entered by any court outside Georgia. In order for your out-of-state judgment to be enforceable and collectible in this state, you have to get an order from a Georgia court declaring it to be recognized in this state. Georgia has something called the Uniform Enforcement of Foreign Judgment Act (UEFJA), which indicates what’s required to make your out-of-state judgment enforceable here.

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In any commercial agreement, one enters into the agreement confident in the belief that it will be productive and beneficial to both sides. Unfortunately, that doesn’t always happen. Sometimes, business relationships break down, and litigation is the result. If you find yourself in a failed business relationship that has reached (or is headed toward) litigation, it is important to have skilled Georgia business litigation counsel representing you, both to help you pursue your claims and to defend against the claims of your opposition.

One recent example of a lawsuit that resulted from a business relationship disintegration was a real estate investment LLC that was created to own and operate certain commercial real estate properties in the Buckhead area of Atlanta. The two members of the LLC established an operating agreement in 1995. Eighteen years after its creation, the LLC sold its last asset and planned to distribute its proceeds and dissolve.

A dispute arose regarding the distribution of those proceeds, and that dispute led to litigation. In the first case, a former member of the LLC sued and won a $625,000 judgment. In the case recently before the Court of Appeals, the LLC and its member had sued the former member in pursuit of a declaratory judgment from the court regarding the proper distribution of the LLC’s proceeds. The defendant countersued for breach of contract and breach of fiduciary duty. While the plaintiffs were able to persuade the trial judge to grant a summary judgment in their favor on the defendant’s counterclaims, the appeals court concluded that the former member should be allowed to go forward with his case.

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Strategic decisions play an important role in any civil lawsuit. There are decisions regarding which claims to bring or not bring. There are decisions about which witnesses to call. There are choices regarding whether to settle or to litigate all the way to judgment. Additionally, you may find yourself in a situation in which you must decide if you prefer to resolve your case through trial or through some form of alternative dispute resolution. Regardless of the reasons why, if you and your Georgia business litigation attorney decide that litigation in court is best, it is important to fight aggressively to avoid having your case sidetracked into arbitration.

A case in which the issue of arbitration versus trial arose was a business dispute between a financial services firm and two of the advisors with whom it had contracted. The advisors involved in this case were both registered investment advisors who sold retirement plans and other investment products to the financial services company’s clients on behalf of that firm. The representatives were also licensed insurance agents, and they operated their own company, which sold property and casualty insurance.

At some point, the financial services company came to suspect that the representatives were engaging in misconduct. Specifically, the representatives’ agreement with the firm indicated that they were only allowed to market and sell the financial services company’s investment products to that company’s clients. The firm, however, believed that the representatives were using its list of potential clients as “leads” for marketing and selling property and casualty insurance on behalf of the agents’ separate entity, a practice known in the industry as “poaching.” Shortly after the representatives ended their relationship with the firm, the firm sued the representatives and their insurance agency for breach of contract and misappropriation of trade secrets.

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When you enter into a commercial contract, you likely have high hopes for a successful project, a mutually beneficial relationship and perhaps more business in the future. Of course that doesn’t always happen. Sometimes, the other side walks away in the middle of the project. When they do, and the contract did not give them the right to terminate the deal unilaterally, then you may be entitled to use their action as the basis to recover a sizable sum of compensation. To learn more about what you can do – and recover – in your commercial contract repudiation case, seek the advice of a knowledgeable Atlanta commercial contract attorney.

A case between a North Georgia entity and an out-of-state vendor is a good example of how to pursue damages when the other side repudiates your contract. The contract involved a Gwinnett County-based healthcare provider that hired a Seattle-area analytics firm to provide a software system that would allow the healthcare provider to access patient information in a more efficient and organized way. The contract had an initial five-year term.

However, just six months into the contract, the healthcare provider grew disillusioned and sought to end the project. The vendor, however, indicated that it remained ready, willing and able to complete the project and that the parties’ agreement did not give the healthcare provider the right to cancel the contract unilaterally.

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In a recent Georgia appellate case, a contractor appealed after there was a final judgment in favor of the plaintiff restaurateur in connection with her breach of contract and negligent construction claims. The restaurateur sued the contractor for damages related to work he performed during construction of a patio and sunroom that were to be added onto the plaintiff’s restaurant.

The plaintiff had planned these additions to a Mexican restaurant owned by herself and her spouse. Her niece had found the contractor in an online search and phoned him. Two weeks after meeting with the plaintiff, the plaintiff and defendant signed two construction contracts, one for the sunroom and one for the patio. The plaintiff gave the defendant a deposit, but didn’t hear from him for up to 7 weeks afterward. A building permit wasn’t secured until more than 2 weeks after the start of construction and after the contractor was supposed to complete the patio.

The plaintiff claimed that after looking at photos of his work, the defendant told her that the sunroom would match with the current structure. She wound up dissatisfied with his work, claiming he’d used warped wood and hadn’t installed support for pavers, which resulted in puddles. She had other concerns and asked the defendant and his subcontractor to rebuild the patio, but they refused. Even though he installed a flat roof instead of what she thought he would install, she didn’t ask him to stop or write down her concerns.

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For many years, lawyers and other scholars of contract law have spoken of a “meeting of the minds.” This refers to a state, sometimes called mutual assent, where there is a common understanding of an agreement’s terms between all of the parties. When there appears to be a meeting of the minds, but subsequent disputes potentially reveal otherwise, then it may require litigation to reach a resolution. Wherever you are in the process, it helps to a knowledgeable Georgia commercial contracts attorney to provide advice and representation to meet your need.

A recent case involving a dispute between a cold storage facility and one of its clients was an example of this issue of assent. The dispute arose after the grass and sod company noticed that some of its stored seed had been damaged by water and rodents, and notified the storage provider of the problem. The grass company eventually sent the storage provider an invoice for $9,625.

A week later, the storage provider sent the grass company a check, but it wasn’t for $9,625. The $275 check represented 50 cents for each pound of damaged product. The storage provider arrived at the 50-cents-per-pound rate based on a set of “Contract Terms and Conditions” that were printed on the reverse side of its warehouse receipt.

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