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Archive for April, 2012

Posted:
April 16, 2012
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Bankruptcy Cases in the News

Bankruptcy Cases in the News

In past blogs we have discussed the importance of the automatic stay, 11 USC 362 to the debtors fresh start and efforts to reorganize and get on with their lives. In a recently decided case from the U.S. Bankruptcy Court Eastern District of Louisiana, Judge Magner traced the importance of the automatic stay to debtors and severely punished a secured creditor, Wells Fargo (WF), for violating it. In this Chapter 13 case the judge found that WF willfully violated 11 USC 362, the automatic stay when it:

 

“Charged Debtor’s account with unreasonable fees and costs; failed to notify Debtor that any of these post-petition charges were being added to his account; failed to seek Court approval for the same; and paid itself out of estate funds delivered to it for payment of other debt.”

 

Accordingly in this case Michael L. Jones v. Wells Fargo Mortgage, Inc., 06-1093 (Eastern District of Louisiana) the court determined that there were very serious violations. As discussed in other blogs, the automatic stay is a central feature in assuring that the debtor gets a fresh start. In their case the creditor’s actions failed to allow the debtor a fresh start by wrongfully misapplying his payments to penalties, late fees and other costs WF was not entitled to.

 

In addition to the wrongful conduct WF apparently never conceded its violation but dug in and over litigated and filed appeals with dubious merit. The Court also believed that WF had treated other debtors wrongfully, too, in other cases. Therefore, Judge Magner held that not only were full compensatory damages due to debtor for all loses and attorney fees, but also punitive damages too. The opinion stated, in part:

 

“Section 362(k) allows for the award of actual damages, including costs and attorneys’ fees, as a result of a stay violation, and punitive damages “in appropriate circumstances.” Punitive damages are warranted when the conduct in question is willful and egregious, or when the defendant acted “with actual knowledge that he was violating the federally protected right or with reckless disregard of whether he was doing so.” There is no question that Wells Fargo’s conduct was willful. As previously decided Wells Fargo clearly knows of Debtor’s pending bankruptcy and was represented by bankruptcy counsel in the case. Wells Fargo is a sophisticated lender with thousands of claims in bankruptcy cases pending throughout the country and is familiar with the provisions of the Bankruptcy Code, particularly those regarding the automatic stay.”

 

Judge Magner under the egregious circumstances of the case awarded to debtor $3,170,000.00 in punitive damages. This was done because WF’s behavior was reprehensible having caused 5 years of litigation; and, clandestine hiding its misconduct and failing to make voluntary corrections of its errors. It demonstrated “an arrogant defiance of Federal law.”
The Judge determined that based on all the circumstances that such a large award should be imposed to discourage future misconduct and benefit society at large. Judge Magner noted that the award might also deter others tempted to misconduct in the absence of such a deterrent.

If creditors harass you during your bankruptcy, or after, you should seek legal help immediately.

[Guy Vining, a bankruptcy attorney, in metro-Detroit, maintains his office in the city of Taylor, Michigan, where he serves the downriver communities of Monroe, South Rockwood, Gibraltar, Brownstown Township, Grosse Ile, Woodhaven, Trenton, Southgate, Riverview, Allen Park, Lincoln Park, Dearborn, Dearborn Heights, Westland, Wayne, and Ecorse. If you or a family member of friend would like a no-obligation no cost consultation/financial analysis, just call or E-mail Guy Vining of Vining Law Group, P.L.C to schedule a meeting.]

 

Posted:
April 13, 2012
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Employment Law in the News

Employment Law in the News


    The New York Times reported on March 21, 2012 that FedEx settled a case for $3,000,000.00 which alleged discrimination against applicants for employment by unlawful considerations of sex, race and gender being used in the hiring process.

In Michigan the legislature enacted the Elliott Larsen Civil Rights Act (ELCRA) which makes it unlawful to discriminate in hiring, employment opportunities and/or termination based upon race, gender, age, weight, handicap and national origin. In Michigan an aggrieved employee may either sue under the ELCRA or the federal statute.

 

Also, the Sacramento Bee reported on March 26, 2012 that Aaron’s Rentals settled a sexual harassment lawsuit for $6,000,000.00. In Michigan an employee has a right to work in an environment that is free of sexual harassment. Where co-workers or management engage in sexual misconduct in un-welcomed and (usually) repeated sexual conduct, the adversely affected employee may have a cause of action for sexual harassment.

Guy Vining has practiced law throughout the state of Michigan. His office is in the city of Taylor, Michigan, where he primarily serves the Metro-Detroit area. He has represented employers and employees in employment litigation in the trial court and the appellate courts in the following areas: whistleblower, breach of contract, public policy, discrimination, wage and hour violation, covenants not to compete, Americans with disabilities action and retaliation

Posted:
April 13, 2012
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Employment Law: Non-Competition Agreements

Employment Law

 

Non-Competition Agreements

#1

Guy Vining of the Vining Law Group, PLC, has extensive experience in representing both employers and employees in drafting and litigating employment agreements and non-competition agreements. This experience dates back to 1998 in a Genesee County matter in which he successfully assisted an employee in avoiding an injunction which would have prohibited him from working in his chosen field/occupation for 2 years within 100 miles of his former position.

It is very interesting to note that it was not many years ago when such contracts were absolutely illegal! The courts refused to enforce them because they were considered against “public policy.” After all, such contracts were restrictive of trades, business and pursuit of free competition, foundations of the free enterprise system, and all things American.

 

That changed with the enactment of so-called Michigan Anti-Trust Reform Act (MARA). Although MARA has a dignified name the impact of it was to allow non-competition agreements to protect established business from their employees. As in all things, the outer limits have been tested and many times employers have pushed too far and tried to obtain concessions which are sometimes draconian and many times, in reality, unnecessary. The touch-stone therefore of MARA is that a non-competition agreement will be enforceable if reasonable, as to:

 

  1. Reference an employer’s reasonable competitive business interests;
  2. Reasonableness in duration, area and time; and,
  3. Reasonable in light of the circumstances under which it is made.

 

In particular, MCLA 445.774a provides as follows:

     Sec. 4a. (1) an employer may obtain from an employee an agreement or covenant which protects an employer’s reasonable competitive business interests and expressly prohibits an employee from engaging in employment or a line of business after termination for employment if the agreement or covenant is reasonable as to its duration, geographical area, and type of employment or line of business. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement to render it reasonable in light of the circumstances in which it was made and specifically enforce the agreement as limited.

 

As an employer, one should be reasonable in analyzing the need for protection, the actual job duties, whether there really is any confidential matter to be protected and the extent of the protection really required. With these considerations in mind your lawyer can tailor an agreement which will be enforceable and accomplish real protection. Over kill will likely antagonize a judge and any good to be gained may be lost from the over reaching.

If you are an employer seeking to draft or enforce a non-competition agreement VLG can help you. Conversely, if you are and employee and need to defend against a non-competition agreement VLG will be able to assist you, as well.

Guy Vining has practiced law throughout the state of Michigan. His office is located in the city of Taylor, Michigan, where he primarily serves the Metro-Detroit area. He has represented employers and employees in employment litigation in the trial court and the appellate courts in the following areas: whistleblower, breach of contract, public policy, discrimination, wage and hour violation, covenants not to compete, Americans with disabilities action and retaliation

Posted:
April 11, 2012
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Employment Law in the News

Employment Law in the News

From time to time Guy Vining of Vining Law Group, PLC, (VLG) has both prosecuted and defended employment law claims for individual clients and various corporate clients. Employment law cases generally are very difficult because they are factually intensive requiring the review of many documents and the interviewing or deposing of multiple witnesses. Unlike a traffic accident case where the question might simply be: red light or green light?; the employment case may span many years and many incidents or events.

A great deal of care should be employed in determining who to hire to represent you in your employment law case. These cases require meticulous preparation and tenacity in advancing or defending the case. Past trial experience, good abilities at legal research, writing and trial practices are a must. Moreover, your attorney needs to have life experience and understand how witnesses and jurors see things.

Guy Vining offers a free telephone consultation with respect to employment law cases. In the event that he can help you with a particular matter he will set up an appointment to discuss the matter in greater detail. Since Mr. Vining has been helping people with these kinds of matters since 1982 he will be able to appropriately analyze your case. Please call for free to discuss yours at 734.281.2050. He has experience in prosecuting and defending sexual harassment cases; whistleblower cases; terminations in violation of public policy cases; and, general discrimination matters, including retaliation cases.

Guy Vining has practiced law throughout the state of Michigan. His office is located in the city of Taylor, Michigan, where he primarily serves the Metro-Detroit area. He has represented employers and employees in employment litigation in the trial court and the appellate courts in the following areas: whistleblower, breach of contract, public policy, discrimination, wage and hour violation, covenants not to compete, Americans with disabilities action and retaliation

Posted:
April 9, 2012
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Bankruptcy Cases in the News

Bankruptcy Cases in the News


A recent 6th Circuit Court of Appeals Case (unpublished), in re: Tammy Martin, No. 11-8052 revisited and highlighted several important aspects of bankruptcy protections for debtors. In this interesting case the debtor was awarded significant attorney fees for creditor collection actions which continued post filing and post discharge. The Court began it’s analysis by discussing 11 USC 524(a)(2) and stating:

 

    “Section 524(a)(2) of the Bankruptcy Code provides that a discharge “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset… debt [discharge under section 727… of this title] as a personal liability of the debtor, whether or not discharge of such debt is waived.” 11 USC § 524(a) (2). The subsection, along with 11 USC § 524(a) (3), is commonly referred to as the “discharge injunction.” As the Ninth Circuit recognized,

 

        The discharge injunction [comes] into force by operation of law upon entry of the discharge. A discharge injunction …is … an equitable remedy precluding the creditor, on pain of contempt, from taking any actions to enforce the discharged debt.

Espinosa v. United Student Aid Funds, Inc., 553 F.3d 1193, 1200 (9th Cir. 2008), aff’d, 130 S. Ct. 1367 (2010) (internal citations omitted). Once a discharge issued, § 524(a) (2) and (3) makes permanent the protections afforded by § 362’s automatic stay and prohibits a creditor from pursuing collection efforts against the debtor personally for debts that were discharged in the bankruptcy proceeding. Gunter v. O’Brien & Assoc. Co., LPA (In re Gunter), 389 B.R. 67, 71 (Bankr. S.D. Ohio 2008). “The purpose of § 524(a) is to afford a debtor a ‘fresh start’ by ensuring that a debtor will not be pressured in any way to repay a debt after it has been discharged.” Paglia v. Sky Bank (In re Paglia), 302 B.R. 162, 166 (Bankr. W.D. Pa. 2003).”

The Court noted that the creditor’s post discharge actions were willful. In other words, the creditor deliberately acted with [actual] knowledge of the bankruptcy case. It noted that a creditor does not have a defense of ‘mistake’ or ‘good faith belief’ that its actions were lawful. Although the creditor would have a defense if the debt was properly reaffirmed or negotiated in a valid, and new post discharge contract.

Since the creditor did not have a viable defense the Court of Appeals affirmed (upheld) the decision of the Bankruptcy Court in determining the creditor was in contempt of court and subject to sanctions of money damages. The debtor was therefore entitled to have her incidental expenses and all reasonable attorney fees paid.

The case illustrates the protection of the Bankruptcy Court through its automatic stay provisions, 11 USC 362, during pendency of a case; and, the power of the Court to protect the debtor’s fresh start. If a creditor has harassed you during the pendency of your case or post discharge you should contact a bankruptcy attorney so that the action may be reviewed as to whether it constitutes contempt of the court.

[Guy Vining, a bankruptcy attorney, in metro-Detroit, maintains his office is in Taylor, Michigan, where he serves the downriver communities of Monroe, South Rockwood, Gibraltar, Brownstown Township, Grosse Ile, Woodhaven, Trenton, Southgate, Riverview, Allen Park, Lincoln Park, Dearborn, Dearborn Heights, Westland, Wayne, and Ecorse. If you or a family member of friend would like a no-obligation no cost consultation/financial analysis, just call or E-mail Guy Vining of Vining Law Group, P.L.C to schedule a meeting.]