Archive

Archive for June, 2018

A Lawyer’s Reflections: The Way That Appears to be Right…But In the End Leads to Disaster.

Today I  took a photo of 50 Monroe in downtown Grand Rapids – right across the street from my office.

IMG_2426

The transformation of 50 Monroe, where my firm’s office used to be located for almost 20 years, is pretty fun to

watch.

I look forward to seeing the finished product.

As I posted a few days ago, there is a lot of development in Grand Rapids that makes downtown a fun place to be.

 

Now on to the topic of my post.

 

 

Lawyers are an easy target for scams…

 

 

 

I get strange e-mails all the time.

Most of these are allegedly from people from foreign countries, asking for legal services, or for me to assist with certain financial transactions that would compensate me significant money for little work.

 

This morning’s email.

Early this morning I received an e-mail from what appeared to be one of the attorneys at my office asking me if I was in the office and to respond to his e-mail and assist him with an urgent matter. The tone of the e-mail seemed strange.

Looking closer at the e-mail source, it was an impostor e-mail address.

Who knows what information my “colleague”  was going to ask me to provide him with because he “didn’t have access” that morning.

Nice try.

The lawyer scams are getting more creative these days.

 

Million Dollar Check.

Several years ago I received a nice check in the mail addressed to my law firm for approximately $1 Million.

It was related to a “request” from a foreign company (very far away, too far away to meet in person) to retain me as counsel in a business transaction in Michigan.

They wanted me to deposit the approx. $1 million check into our firm trust account, then disburse the check to the other party (less my legal fees, of course)
Fake Check for big bucks.

 

My first thought when the check came in…

Do they really think I am that stupid?

I know better.
Then it got me thinking, if I know better, then why do these scam artists really think I am going to fall for their  ploys?

Honestly, I receive countless of similar emails, fortunately, most of these emails get sent to my spam folder.

The answer becomes obvious when I peruse news headlines:

Estate planning lawyer gets 6 years in $46 million scheme preying on terminally ill

How awful is this headline? It breaks my heart just reading it.

 

Unwitting lawyer is suspended for arranging client loans to secure Nigerian inheritance

 

Just perform a google search and you can find other stories of lawyers in unethical situations…

“Attorney Pleads guilty to stealing $1.3 Million from clients”

“Traverse City Lawyer to Stand Trial, Accused of Embezzling from Elderly Clients”

 

The list goes on and on.

Well, there is, literally, my answer to my own question.

 

 

What is going on with our world?

As hard as it is for me to believe, these are real stories.

 

To answer my own question, the reason scam artists direct schemes at lawyers is because some lawyers fall for the schemes!

 

These con artists are relying on dollar signs trumping common sense and sound judgment in lawyers.

 

Proverbs 14:12 says “There is a way that appears to be right, but in the end it leads to death.”

I personally don’t believe that most people, including the people in the referenced headlines, wake up one day and decide to commit a crime, or make a serious lapse in judgment (like wiring a million dollars to a company in Nigeria) that costs them and others dearly.

I think people start with small compromises, that lead to big compromises. The proverbial “frog in the boiling water

The compromises that “appear to be right” in their own minds, but leads to devastation.
A Call to Leaders. Self-Examination.

As leaders in our families, business, non-profit, church, community, we find ourselves in positions with some varying degrees of power.

That power can easily be abused.

In small ways that lead to big ways.

This is a good call for daily self-examination: am I placing safeguard in my life to keep me from taking small steps in the wrong direction?

 

Questions? Comments? 

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauk

http://www.dwlawpc.com

Advertisements

Business Law Update: A Booming Downtown Real Estate Market Means Businesses Should Pay Careful attention to Contracts.

June 5, 2018 1 comment

Happy Tuesday, all.

I took this photo yesterday from the skywalk between the Amway Grand Plaza and the DeVos Place Convention Center. I like walking downtown and watching the development unfold.

6.4

It is an exciting time to be working or living in downtown Grand Rapids. Everywhere you look, real estate development is transforming the town.

Check out Experience Grand Rapids for a detailed list of all the current downtown development.

Not to rain on anyone’s parade (but that is kind of a lawyer’s job)…

With increased commercial activity comes increased opportunity to fall into legal pitfalls.

 

 

As I tell my clients – if you are in business for any amount of time, it is just a matter of time, you will probably get into a business dispute.

Real estate development is no exception. The more transactions, the more opportunity for hiccups along the way.  A Court opinion I read last week brought this reality to  my mind.

 

Case Study

Last week an unpublished Michigan court of appeals case was released that highlights some contract drafting pitfalls. You can check out the May 31st unpublished decision of Greater Faith Transitions, Inc. v Ypsilanti Community Schools here

 

The case was about a commercial lease in which Landlord also granted Tenant an option to purchase the Building.

These “lease with options to purchase” can pose interesting questions – as the facts of this case illustrate.

Summary of the Facts

  • On August 13, 2013, plaintiff and defendant entered into a lease with option to purchase a property in Ypsilanti owned by defendant.
  • The parties intended the lease to be effective until August 31, 2018.
  • Under the lease terms, plaintiff was required to make monthly rent payments and to pay for all utility bills, including water bills.
  • According to plaintiff, it had attempted to enforce its option to purchase the property in a text to defendant on February 2, 2017, that stated:
    I tried to call you to make you aware of the fact that we’re buying the church this year.
  • On February 13, 2017, defendant sent to plaintiff a letter from its attorney and a Notice to Quit Termination of Tenancy, claiming that plaintiff was in default of the lease for repeated failure to pay water bills.

Plaintiff, tenant, sued its landlord, among other things, for interfering with its right to exercise its option to Purchase.  The trial court ended up dismissing Tenant’s lawsuit.

The tenant appealed.

The opinion of the Court of Appeals was interesting, essentially holding that the tenant’s claim for breach of contract was not ripe – since a contract was not yet breached. The tenant was not yet evicted.

(See opinion, page 2 – “Plaintiff claims that “Defendant’s improper use of summary proceedings to evict Plaintiff from the leased premises will breach the parties’ Lease
with Option to Purchase because Plaintiff will be deprived of its right to cure any defaults during the term of the Lease (i.e., through August 31, 2018) so that Plaintiff can exercise its option to purchase thereunder.”)

 

The ultimate ruling aside, the case, to me, provides a good opportunity to highlight a few drafting issues that can come up in commercial leases.

First, a general point I want to bring to the business owner’s attention:

Why Careful attention to Business Contracts is important – Freedom of Contract 

First and foremost, when entering a business contract each party should understand – they will be bound to the contracts they sign.

In a commercial lease context the courts’ mantra is “Freedom of Contract“.

The Court will look at the contract that the parties’ agreed to, and, absent extraordinary circumstances, enforce it by its term. (therefore in  a commercial lease you might see language such as the following “rent is due with no right of offset, setoff, counterclaim…”) In such instance, the landlord is telling the tenant that tenant has no right to withhold rent just because landlord may have breached a duty under the lease.

The Courts have recognized that commercial landlords and tenants are “free to contract”:

 

Drafting Issues.

Going back to the court opinion, it doesn’t appear to me from reviewing the opinion that the parties disputed that the tenant defaulted in failing to pay utility bills.

Question:

Did the lease have a provision that said that the “Option to Purchase” terminated if:

  • the tenant had been in default at any time?
  • or, only in Default at the time the Option was being exercised?
  • Or, did it say nothing on the subject of Default?

Another question:

was there a lease provision that strictly provided where “notices” must be sent?

e.g. – was it left up to the parties to interpretation whether or not notice delivered “via text message” was an appropriate method?

 

If these issues are plainly addressed in business contracts, then possibly, the parties avoid a lawsuit.

 

 

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauk

 

 

 

Detroit Startup Week Kicks Off – Schedule Now Available, Includes Legal Workshops

Today starts art festival in Grand Rapids – I took this photo just minutes ago.

Summer is coming fast and so is Detroit Startup Week. Scheduled from June 18-22.

6.1

According to its website, Startup week is:

“A week long celebration of Detroit’s entrepreneurs. Volunteer-led and completely free for attendees, we are aiming to create a community driven event that builds a stronger startup ecosystem. Startup Week is held in dozens 

of cities around the world.”

Crain’s Detroit reported  that the venue will be moved to outdoors where a crowd of 8,000 – 10,000 is expected, up from last year’s 6,500.

Crain’s reports that Startup week will consist of similar “weeklong collection of panel discussions, speeches, activities, networking and competitions is bringing back its women-tailored entrepreneur events.”

 

The Schedule is Now Available

Check out the great workshops and events for entrepreneurs which will take place in Detroit in the coming weeks.

Last year the week kicked off with Detroit’s Small Business Legal Academy.

 

This year there are several types of legal workshops including:

  • Social Enterprise/non-profit.

Social Enterprise is definitely a trending area in Michigan.

 

I think it is no secret – that startup businesses would do well to get some basic legal  during their business startup

 

I had a client send me this e-mail, below (unprompted) which I was given permission to share – it is extremely on point:

 

“I don’t think you understand how valuable your assistance is. A small guy like me, without you, would sign whatever they put in front of me and get into big trouble because of that someday.  The problem is that most small businesses don’t understand how critical legal review is either.” – client

 

The reality is that there are a host of legal areas that can turn into pitfalls for startup businesses – over the years I have written on quite a few of those areas, including:

Terms and Conditions in Contracts

Non-Competition Agreements

Entity Formation and Personal Liability

Personal Guarantees

 

 

Cash flow is a barrier for startups. This doesn’t mean you should avoid educating yourself on the legal issues affecting your business.

Take advantage of the resources available.

Consult with an attorney – Particularly law firms friendly to startup businesses.

 

e-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

twitter: @JeshuaTLauka