Contracts

June 22, 2015

How to Put a Lis Pendens On a California Property

I often get calls from clients who are looking for a real estate lawyer to put a lis pendens on someone’s real property. I then explain to them that they must file a lawsuit to do this and they are surprised. A lis pendens literally means a “Notice of Pending Action.” In other words, it is a notice to the world that there is a lawsuit regarding title to that real estate. A lis pendens is not a lien and it cannot stop someone from selling or getting a loan secured by real property, however, it usually does effectively deter others from buying, selling or borrowing money because it means the ownership rights to that property are in question.

A lis pendens is permitted in some types of lawsuits and actually required in other types of actions. It is required in lawsuits for Partition, Eminent Domain, Quiet Title, Claims to Escheted Property, Forefeiture Proceedings, and Actions to Declare a Building Uninhabitable. It is permitted in other types of cases where someone has a real property claim such as mechanic’s lien foreclosure lawsuits, divorces, suits to enforce easement rights, and suits to specifically enforce a real estate contract. It is critical, however, to consult a real estate litigation lawyer who is familiar with these laws because you may subject yourself to liability later for improperly filing a lis pendens.
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August 12, 2013

How to Be Prepared for a Business Lawsuit

by Adina T. Stern, Esq.

The time to prepare for a business lawsuit is before you have been sued or need to sue someone. Keep in mind that most business litigators charge by the hour so to the extent you can present your documents to your lawyer in a thorough organized manner, the more cost effectively your business attorney can represent you. Careful record keeping and document organization are the best ways to help your business litigation attorney. Here are some tips on how you can do this:

Keep a Detailed Calendar. People do not realize how important it is to keep an accurate calendar of what they do and where they have been until they are embroiled in a lawsuit. A good calendar can prove where you have been and where you have not been. For example, in construction or breach of contract cases, it may be critical to prove how much work was performed and when it was performed. A good calendar entry which documents who you were with, what you did, when you did it, and where you were is invaluable to prove details you may not realize will be important at some time in the future. Similarly, in fraud actions a critical issue is sometimes what the plaintiff knew and when they discovered it. Cases will often turn on when certain information is conveyed by one party to another. A thorough record of meetings can also prove you were not around when information was provided because you can show you were somewhere else at the time. A good calendar can be in written form or on your computer; just make sure it is in a form that will not be lost or destroyed if it is needed. For purposes of determining statutes of limitations it is also critical to have a detailed and accurate calendaring system.
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July 22, 2013

Buying a Business: Common Dangers and Pitfalls

by Adina T. Stern, Esq.

Anyone who wants to buy a business needs to be cautious before signing an offer. It is critical to consult with a lawyer who is experienced in California business sales to guide you through the process. Very often the business purchase agreements presented by brokers to potential buyers are designed to protect the broker and not the parties to the agreement. By contrast, the California Association of Business Brokers has an excellent standard form that is a good starting point for negotiations.

Structuring the Transaction. First you need to decide the structure of the agreement. Structuring the transaction is not an issue that should be determined by a business broker. You should consult with your tax advisor and attorney to determine how you are going to hold the company. Will you operate the business as an S-Corporation, a C-Corporation, a limited liability company or some other form? Are you buying an existing company or only the assets of the business? Each transaction is different and must be separately evaluated.
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January 2, 2013

A New Year Brings New Laws to California In 2013

by Adina T. Stern, Esq.

Practicing law in January is always challenging because with the New Year there are always changes in California law. This year is no exception. Governor Jerry Brown signed over 800 new laws that took effect in California on January 1, 2013. Some of the new laws that will be of interest to our clients in the areas of litigation, real property law, business and contract law, and privacy are listed below.

Privacy. California has joined many other states in banning employers and colleges from demanding the passwords for an employee, prospective employee or college applicant’s social media account. Employers and colleges can no longer demand or even ask for social media login information. This does not mean you can freely post whatever you want on Facebook, that information can still be the subject of discovery.

Changes in Litigation Laws. AB 1875 limits depositions to seven hours of testimony. There are a number of important exceptions to this rule but it will make it more difficult to harass witnesses and litigants by keeping them at their depositions unreasonably. AB 1631 allows out-of-state attorneys to represent a party in an arbitration proceeding in California if certain conditions are met.
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October 12, 2012

Boilerplate: What Does the Fine Print Mean? Part 2 – Attorney Fee Provisions

by Adina T. Stern, Esq.

One of the sad truths a business litigation lawyer must explain to their client is that sometimes the cost of going to court exceeds the amount of damages that can be recovered. This is true because in California, unless there is a special statute that allows the recovery of attorneys’ fees, those fees are not recoverable unless they are required by a written contract. This is one of the problems with an oral agreement; if a party breaches the agreement, the aggrieved party is not entitled to recover attorneys’ fees. Because of this rule, arguably the most important clause in a contract can be the attorney fee provision. This is the second installment of a multi-part blog that explains some of the more common provisions found in California agreements.

Unilateral Attorney Fee Clauses. In some states unilateral attorney fees provisions are permitted. An example of a unilateral attorney fee clause would be a clause that says if Company A has to sue Company B and prevails, Company B must pay Company A’s attorney fees. This leaves Company B with no attorney fees if it wins. In California unilateral attorney fee provisions are automatically construed to be reciprocal under Civil Code section 1717. Therefore, in the example above, Company A would still be allowed attorney fees even though the contract seemed to provide for attorneys’ fees only if company B won. Part 1 of this blog dealt with Choice of Law, Jurisdiction and Venue provisions. This is an excellent example of why choice of law provisions are critical. In California, unilateral attorney fee clauses are not allowed, in other states they are.
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August 2, 2012

Boilerplate: What Does the Fine Print Mean? Part 1 Choice of Law, Jurisdiction and Venue

by Adina T. Stern, Esq.

The standard legal provisions that appear at the end of a contract are often called “boilerplate provisions.” Although most people are not interested in the fine print of a contract, these provisions are important and because of the nuances in California law, it is important to understand why those provisions appear in your agreement. In fact, one of the biggest problem with online legal forms is that many of them have flawed or no standard legal provisions appropriate for California. The failure to include a critical provision can cost you tens of thousands of dollars in damages and legal fees if something goes wrong.

This is the first installment of a multi part blog that explains some of the more common provisions found in California agreements such as Choice of Law, Jurisdiction, and Venue. Before you sign any business contract, service contract, real estate agreement or other agreement whatsoever, it is important to have that agreement reviewed by an experienced business attorney who can make sure you understand and can live with all the provisions of the agreement. Indeed, as noted in a recent case, Ruiz v. Affinity Logistics Corp., even if the contract does include a choice of law provision, it does not necessarily mean that the provision is actually enforceable. There are many rules that go into determining if the clause, as drafted, will be upheld by a court.
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July 22, 2012

Addressing ADA Issues in Commercial Leases in California

by Adina T. Stern, Esq.

Recently, California courts have been overwhelmed with lawsuits brought under the Americans with Disabilities Act (ADA) and Unruh Civil Rights Act. Unfortunately, many commercial leases are drafted without addressing the critical issue of how the parties will comply with the ADA or who will absorb the cost of an ADA lawsuit. It is up to Landlords and Tenants to secure competent real estate lawyers to assist them with these issues. Although there are bipartisan attempts in Sacramento to reduce rampant ADA lawsuits, the most recent proposed legislation, SB-1186, has been modified and does not appear to have sufficient substance to provide relief for small businesses in the near future.

Addressing ADA Issues in Commercial Leases. The ADA obligates anyone who “owns, leases (or leases to), or operates” a “place of public accommodation” to make sure that place or premises complies with ADA guidelines. The question then becomes, who will have the burden of paying for compliance? It is important to allocate the burden in the lease. If it is a “gross” lease, the landlord will probably be responsible for the structure and building, however, if there are issues that are solely within the tenant’s control (such as placement of furniture), the tenant should still be responsible. Nevertheless, if the lease does not clearly allocate responsibility, problems will arise. At a minimum the lease should include a statement as to whether the property and the project in which it is located complies with the ADA, who will be responsible for retrofitting if it is required, and how the cost of compliance will be allocated. If the lease calls for Tenant Improvements and includes a Work Letter, ADA issues should be addressed in the Work Letter.
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