Archive for February, 2016

Business Owners: Understand the Real Cost of Litigation.

February 29, 2016 Leave a comment

This morning I was reading a legal blog  “Above the Law” – the article was written by an attorney named John Balestriere 

The article was titled “The Un-Sweet Spot Of Litigation

This article provides very practical advice for my clients – small/closely-held businesses.

John makes a great point – the court system is impractical for “most disputes”.  As he writes:

The problem is the middle range, and that is the place that perhaps encompasses most disputes of most Americans. If your damages are too high to be in small claims court, but not over a million and “only” $50,000 or $300,000 or “only” about your lower-paying job, then litigation likely doesn’t make sense

This article reminds me of the conversation that I have with any client of mine entering litigation.  In any such conversation, my clients are typically hearing similar words of advice from me:

“Make a business decision.”

“Don’t throw good money after bad.”

“Let’s find a cost-effective solution.”

You may ask, what are cost-effective solutions?

At an extreme, as John points out in his article, simply “walk away”.

Other cost-effective solutions include mediation, or arbitration. 

Some of the ways business owners can be pro-active to utilize cost-effective solutions to resolve disputes is to include mediation/arbitration clauses in their Terms and Conditions

Questions? Comments?


That Happened on a Friday. Attorney General Announces Felony Charges Filed Against Former State Reps.

February 26, 2016 Leave a comment

Yesterday evening I noticed that the Michigan Attorney General and Michigan State Police were holding a press release today regarding the findings of their investigation into potential misconduct of two former state legislators.

I didn’t think much of it.

Then, much to my surprise, I get an e-mail today at 12:52 pm  with the following caption:

“Schuette, MSP Announce Felony Charges Against Former Reps Gamrat and Courser” 

Please keep in mind that all parties are innocent until proven guilty. But man, what a way to ruin a weekend…

One of the charges brought against Todd Courser is that he committed perjury.

Under Michigan Law, MCL § 750.423 perjury is a felony.

“(1) Any person…of whom an oath is required by law, who willfully swears falsely in regard to any matter or thing respecting which the oath is authorized or required is guilty of perjury, a felony punishable by imprisonment for not more than 15 years.”

I tell all of my clients – whether they are testifying at a deposition or at trial – the number one rule when giving testimony is:

“tell the truth”.

Simple, right?

Could these charges and the ensuing warrants  have been avoided by the telling of the truth?

A Judge or Jury will decide that.

You can read the full press release below.

“Schuette, MSP Announce Felony Charges Against Former Reps Gamrat and Courser 

Investigation by Michigan State Police and Attorney General results in felony misconduct in office and perjury charges

LANSING ­– Michigan Attorney General Bill Schuette and the Michigan State Police today announced that felony charges of misconduct in office have been filed against former State Representatives Cindy Gamrat and Todd Courser following a joint investigation by the Michigan State Police and the Department of Attorney General into the actions of the two former state officials that ended with the expulsion of Gamrat and resignation of Courser last year.  Courser was also charged with one count of felony perjury related to testimony he gave to the Michigan House of Representatives while under oath.

Additionally, Schuette said the case will be forwarded to the Michigan Secretary of State, which has initial jurisdiction over state campaign finance law, to review for possible violations, and to the Michigan Attorney Grievance Commission.  Courser is currently licensed to practice law in the State of Michigan.

Charges against Gamrat and Courser were filed this morning at the 54-A District Court in Ingham County.  The defendants will be contacted via their attorneys and have been offered the chance to turn themselves in to the Michigan State Police. Arraignments are expected soon thereafter.

Schuette’s office opened its investigation late last summer and officially joined with the Michigan State Police following passage of House Resolutions 141 and 145 on September 11, 2015, which formally requested an investigation following the expulsion of Gamrat and resignation of Courser from the House of Representatives.

While more details will be revealed during the prosecution, Schuette said that charges will allege that Gamrat and Courser engaged in a pattern of corrupt conduct while holding state office, including both lying to the House Business Office during its investigation and Courser lying during testimony before the House Select Committee, while under oath, about directing staff to forge his signature on proposed legislation. The charges:

Cindy Gamrat:

  • Two charges of Misconduct in Office, MCL 750.505, a felony, with a maximum penalty of five years in prison and/or a maximum $10,000 fine.

Todd Courser:

  • Three charges of Misconduct in Office, MCL 750.505, a felony, with a maximum penalty of five years in prison and/or a maximum $10,000 fine.
  • One charge of Perjury, MCL 750.423, a felony, with a maximum penalty of 15 years in prison.

“The voters placed a sacred trust in the hands of Todd Courser and Cindy Gamrat when they chose them to serve as their voices in the Capitol,” said Schuette. “But instead of serving their home towns, they served only themselves at the expense of everyone else.

“With the filing of these charges, it is my hope that citizens of Michigan see that no one is above the law, not even those who walk in the halls of power; that no one is beyond the reach of the law, not even those who make the laws and when laws are broken, that justice can and will be delivered.

Once arrangements are completed, further information will be made available by the Attorney General’s office about bond and future court dates.

These charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.”

Categories: Uncategorized

Business Law Update: Michigan Bill Would Restrict Non-Competition Agreements

February 22, 2016 1 comment

On February 3, 2016 House Bill 5311 was introduced. If passed it would limit the enforceability of a non-competition agreement signed between an employer and an employee.

Check out the text of the bill here

The Bill was referred to the committee on commerce and trade.

The Bill has a few key components to it:

1. Require Employers to follow a Specific Procedure.

The Bill would only permit Employers to enforce a non-competition agreement if the Employer followed a procedure, including:




2. Low-Wage Workers Excluded.

Further, the Bill would prohibit employers from requiring an employee who is classified as a “low-wage worker” from signing a non-compete.  I think this limitation could make sense, for reasons I have explained in past posts.

3. Certain Provisions in the Non-Compete Would be Void.

The Bill would also render void and unenforceable any provision that was added to circumvent the intention of the Bill – “e.g. – employee can’t waive their rights under the bill.”

It will be interesting to see how this Bill comes back from the committee on trade and commerce.

Questions?  Comments?


They Did What? Real Estate Legal News: Be Careful What you Record Against Real Estate.

February 19, 2016 Leave a comment

Yesterday an Oregon Couple plead guilty to filing “retaliatory liens” on the property of a federal judge and other government officials.  The liens exceeded $100 Million.

The couple allegedly filed the liens while charges were pending against them for unpaid taxes.


Can you imagine going to a closing on your home, or refinancing a mortgage and hearing from your lender or title insurance company, “sorry, we can’t assist in closing on your home until the $100 Million lien is removed.”

Yet, this happens.

I’ve previously written about these real life “Paper Terrorists” as described by one federal prosecutor.

Most who regularly work in the real estate industry aren’t in realistic danger of being labeled a “Paper Terrorist”.  However, there are real dangers to be aware of when recording liens (or any document) against real estate.

A typical example is a contractor or tradesman who believes his company is owed money and wants to file a lien against the real estate where he provided his services.

Michigan law permits a contractor to file such a lien if the procedures set forth in the Michigan Construction Lien Act are substantially complied with.

However, if the lien isn’t filed “in good faith” you could get sued for “slander of title”.

Slander of title isn’t just a danger for contractors filing liens. it is really a caution for anyone in the real estate industry recording any document against real estate. See a January 21st, 2016 court of appeals decision brought by a landowner against the City of East Grand Rapids for recording an affidavit affecting real estate under MCL  565.451a   – 208 Pioneer Club Rd. Se Llc v. City of E. Grand Rapids, 2016 Mich. App. LEXIS 124, *2 (Mich. Ct. App. Jan. 21, 2016).

In that case, the Court of appeals affirmed the lower court’s ruling dismissing the slander of title claim. However, the practical point to consider is that it still cost the City attorney fees fighting the lawsuit and appeal.

Slander of Title

Slander of title at common law means that an individual or company maliciously published false statements that disparaged a plaintiff’s right in property, causing special damages. B & B Inv. Grp. v. Gitler, 229 Mich. App. 1, 8, 581 N.W.2d 17, 20 (1998).

Broken down, the elements that make up slander of title are:

  • Malice,
  • False statements
  • disparage your rights in property; and
  • cause special damages. (typically include costs of a lawsuit)

Slander of title is a common cause of action filed in response to a contractor who threatens to put a lien on property for non-payment.  However, in order to succeed on a claim of slander of title all elements must be proven, including “malice” –

In my example of the contractor seeking to file a lien –  the question needs to be asked:

Are you  (contractor) recording a lien on the property simply to force payment, even though you know you probably aren’t entitled to file the lien? 

Takeaway:  Whenever considering to record anything against real estate that you don’t own, you should consult with legal counsel.



Current News and a”Non-Disparagement Clause”

February 16, 2016 Leave a comment

In those rare instances where I’ve been asked to comment to reporters on a court case I was involved in, or asked to provide an opinion on matters of law, I’ve admittedly been a bit reluctant to share.


This latest headline from the ABAJournal may fill you in:

New York appeals court says client can sue lawyer over Wall Street Journal comment

Evidently, the lawyer represented an employee who was bound by a “non-disparagement” clause, contained in a severance agreement.

The “non-disparagement” clause had not expired when the lawyer made a comment to the Wall Street Journal that has the lawyer currently in hot water with his (former?) client.

You can read the full article for all the details.

This article, besides reassuring my fear of sharing to reporters, prompted me to delve into the topic of non-disparagement clauses.

1. Non-Disparagement Clauses in Settlement Agreements.

Often times as part of a confidential settlement agreement, the parties to a dispute will agree not to “disparage” each other.

Disparage – as you will see below – has a fairly common meaning.

‘Disparagement’ is ‘a false and injurious statement that discredits or detracts from the reputation of another’s property, product, or business.’ Black’s Law Dictionary (7th ed. 1999).

stated another way:

(1) To speak of in a slighting or disrespectful way; belittle. (2) To reduce esteem or rank.’ . . . American Heritage Dictionary (4th Ed. 2000)

2. Michigan Case Law Concerning “Non-Disparagement Agreements”

Rarely have I ever seen a non-disparagement clause become an issue. In fact, a review of Michigan case law supports this – I found only a handful of cases in Michigan where the parties litigated over one party’s alleged “disparagement” after a settlement agreement was entered.

One such case was the 2011 case of Sohal v. Mich. State Univ. Bd. of Trs. & Davoren Chick M.D., 2011 Mich. App. LEXIS 915, *12-14, 2011 WL 1879728 (Mich. Ct. App. May 17, 2011).

There, Plaintiff,  a participant in MSU’s internal medicine residency program, entered into a “resignation and settlement agreement” with MSU under disputed circumstances. The Agreement contained a “non-disparagement clause”.

Plaintiff sued and argued that Defendants breached the non-disparagement clause, entitling him to “rescind” the Agreement (and therefore sue under all of the laws that he would have otherwise waived).

One of Plaintiff’s arguments was: “the word “non-disparagement” is ambiguous. (If you’ve read my previous post you can understand why this argument does not win the day.)

The Court was not convinced. It held:

“the term “disparage” in the non-disparagement clause is not ambiguous. While plaintiff attempts to ascribe several “reasonable” meanings to the term “disparage,” and thus the non-disparagement clause, the term fairly admits of but one interpretation.” Citing Meagher v Wayne State Univ, 222 Mich App 700, 722; 565 NW2d 401 (1997).

As the Court noted, “Other state courts have determined that the term “disparage” in non-disparagement clauses of settlement agreements are unambiguous.” (citations omitted).

In closing – non-disparagement clauses are standard clauses (but not universally used). Courts have consistently held that “Disparage” is a plainly understood term. It isn’t an ambiguous term.













Michigan Law Update: Patent Trolls, Aggressive Solicitation, and a Real Estate dispute

February 12, 2016 Leave a comment

Happy Friday!

A few brief legal updates on proposed Bills and a Court decision.

Patent Trolls!

Back in July I wrote a post about legislation that was introduced in the House : A Tool for Business in Fighting Against Patent Trolls

That House Bill has sat for about 8 months. The House Judiciary Committee is meeting Tuesday and this is an agenda item.  Let’s see if there’s any movement on this bill after the committee meetings.

Aggressively Soliciting For Money at the ATM…a punishable (ticket)?

The Aggressive Solicitation Prohibition Act  was introduced back on December 1st.  It prohibits anyone for “soliciting” for my money under numerous circumstances.

Good idea. The penalty is a little confusing – a $100 ticket? Civil infraction? I’m not sure what this is expected to deter, but I don’t write the laws…

Court of Appeals Decision – Romance and Real Estate

I just read a brief unpublished court of appeals decision, you can check out the case of Male v Russell.

Sometimes “rash” decisions (like signing of over real estate to a boyfriend) are made as a result of a romantic relationship….

I find this case interesting for several reasons:

1. It shows that a Judge will use its equitable powers to craft an “equitable” remedy in order to due justice.

2. It shows the equitable doctrine of laches won’t protect you if a judge determines that you don’t actually have “equity” on your side.

Questions? Comments?


Working to Build Better Communities: Lending Barriers to Stabilizing Neighborhoods in Detroit.

February 9, 2016 1 comment

Today Thomas J. Curry,  of the Office of the Comptroller of the Currency (“OCC”) spoke at the 2016 National Interagency Community Reinvestment Conference in LA.

You can read Mr. Curry’s complete remarks here.

Mr. Curry acknowledged the many groups and organizations “working to build better communities and improve the financial lives of low- and moderate-income individuals

A question you may want to ask yourself – do you fall into that category? Are you working to build a better community?

Mr. Curry used Detroit as an example of how the OCC is attempting to work through barriers to stabilize low-income neighborhoods.

The OCC had conversations with stakeholders in Detroit that “spurred the OCC to explore how we could clarify existing guidance in an effort to address certain perceived lending barriers.”

Mr. Curry identified market conditions that have “combined to bring mortgage financing to a near halt in Detroit” including:

  • “The limited number of home sales there can make it difficult to find comparable sales needed for valuation of a property.
  • Additionally, area home values may be so low that the cost to purchase a property and make needed repairs often exceeds the post-renovation market value.”

In response, the OCC is putting together a bulletin that “will provide guidance for OCC-regulated institutions that want to set up mortgage programs so that potential homeowners may be able to secure purchase or purchase/rehabilitation loans in excess of the supervisory loan to value, or LTV, limits.”

Its good to know that the federal agency in charge of regulatory certain lenders is trying to find solutions.

Regardless, I think Mr. Curry makes a good observation:  “the best ideas for improving economic opportunities spring from ongoing dialogue among interested parties in the community.”

We all have different opinions as to what we believe the answers are to stabilizing a community like Detroit, or Grand Rapids, or anywhere.

The key is that we all need to be a part of the conversation.

Show up!