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Common Types of Fraud Actions

August 27th, 2010

By Mark Schecter | No Comments »

Have you been lied to or taken advantage of by another person or business? You may have a viable cause of action for fraud.

Earlier this week, we discussed the elements of fraud – a four-part threshold that must be satisfied to sustain an action against another person.

Today, lets look at 3 common types of fraud claims:

1.    Fraud in the Inducement

This type of fraud takes place when someone deliberately deceives another person into taking action. This happens often when homeowners are tricked into transferring a deed giving their property away, while believing they are actually taking action to save their home.

2.    Fraudulent Misrepresentation

When a person knowingly makes a false statement or misrepresents the truth, causing another person to take action and sustain losses, they are engaging in fraudulent misrepresentation. This can include deliberate lies as well as known omissions of fact.

To prove this type of fraud, you must show three things:

1)    That the party providing the information is aware that the info is false;
2)    The party’s intention is to convince another person to take action based on false information; and
3)    The action-taker enters the agreement with the defrauder and sustains losses based on the information provided.

3.    Negligent Misrepresentation

This type of fraud is similar to the fraud described in the preceding paragraph. Unlike the first, negligent misrepresentation involves carelessness. It occurs when a person relays information to another to encourage action without knowing for sure if the information is credible.

Proving your Fraud Claim

The elements that must be satisfied to support a cause of action are the same for each type of fraud mentioned above. The only differences are the facts that lead up to the fraudulent actions. To learn more about what is needed to prove your fraud claim, read this article.

If you (or your business) has been injured due to the fraudulent actions of another person, use this form to contact us, or give us a call at (954) 779-7009

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Elements of Fraud Claims in Florida

August 25th, 2010

By Mark Schecter | 1 Comment »

fraud-elementsMuch has been said about mortgage fraud in recent months, especially with Florida holding the second highest rate in the nation.

But fraudulent actions are not limited to mortgages and are occurring everyday throughout the real estate market.

One of the most common incidents of fraud is when a seller misrepresents a property or fails to disclose important information to the home buyer, which usually causes a financial loss to the latter party.

If you have experienced this, you may have a cause of action against the defrauder – but there are certain elements you must satisfy first.

The elements of a fraud claim, established in Huffstetler v. Our Home Life Ins. Co., 67 Fla. 324, 65 So. 1 (1914), are:

(1)  a false statement must be made concerning a material fact;

(2)  the seller had (or should have had) knowledge that the representation was false;

(3)  an intention that the representation induces another to act on it; and

(4)  an injury to the acting party (homebuyer) relying on the representation.

In Johnson vs. Davis, 480 So. 2d 625, 627 (Fla. 1985), Davis entered into a contract to buy the Johnsons’ home for more than $300,000. Davis paid $5000, the first installment of the deposit, and agreed to pay the second installment of $26,000.

They Davis family later noticed a problem with the home’s roof. And after further investigation, they came to realize the roof was more problematic than the Johnsons mentioned before.

Davis filed a lawsuit against the Johnsons asking to rescind the contract to purchase, and for return of the deposit payments.

The court held that a seller has a duty to disclose when he or she knows of facts that affect the value of the home, and those facts are not readily observable. The court also upheld the Huffstetler decision which sets the standard needed to establish a claim of fraud.

If you (or your business) has been injured due to the fraudulent actions of another person, use this form to contact our Florida business lawyers, or give us a call at (954) 779-7009.

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Posted in business | 1 Comment »

Are your Claims Barred in Florida?

August 20th, 2010

By Mark Schecter | No Comments »

claims barred in floridaEvery business owner wants to get paid for services performed. Whether you are working with the public or involved in business-to-business relationships, you may have to take legal action for unpaid invoices and broken agreements.

In most instances, you can sue and recover your losses when you lose money at the hands of another person or business.

But here’s the deal… you must file the lawsuit in the time the law allows – the statute of limitations (SOL).

If you fail to commence your action before the SOL period expires, you can be barred from seeking legal remedies permanently. This includes the recovery of monetary and other damages.

The statute of limitations period varies, depending on the type of case you have, where the injury occurred and other factors. It’s in your best interest to know the amount of time you have to file a lawsuit to recover your losses.

Written and verbal contracts

Many civil actions stem from breach of contract issues involving business-to-business transactions. When a written contract is at issue, the SOL period is 5 years. If there is a verbal contract, the time limit is only 4 years.

Slander, defamation and libel

If you are trying to build a business, the last thing you need is for someone to slander you and your company. When your reputation has been damaged due to slander, libel or defamation, you have 2 years from the date of injury to file a suit in Florida against the slanderer.

Fraud

The statute of limitations for a lawsuit arising from fraudulent actions is 4 years.

There are many other factors that affect the SOL period. Contact Florida business attorney sooner rather than later to discuss which SOL period applies to your business matter.

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Posted in South Florida, breach of contract, business | No Comments »

Defend your Company in Breach of Contract Lawsuits

August 18th, 2010

By Mark Schecter | No Comments »

businessman-womanIf your company is involved in a dispute or is being sued, it is imperative that you understand how to protect your interests.

Let’s review legal defenses that are commonly used to defend companies against breach of contract claims. You may find one (or more) of these defenses applicable to your situation.

Implied Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing requires all parties of a contract to adhere to the contract’s original purpose. It’s a defense that is relied on in many contract disputes. In Florida, the court has made it clear that this defense cannot negate the terms of a valid contract.

Unconscionable Contract Terms

A contract is considered unconscionable when the terms are unjust or unfair. In Kohl v. Bay Colony Club Condominium, Inc., 398 So. 2d 865, 868 (Fla. 4th DCA 1981),, the Florida court held that when the terms of the contract are unfair and unreasonable at the time the contract was entered into, unconscionability can be used as a legitimate defense to a breach of contract claim.

Statute of Limitations

There is a limited period of time in which you can bring forth a breach of contract action. In Florida, a breach involving a written contract must be filed with the court within five years. If this does not happen before the time period expires, the injured party can be permanently barred from recovering damages for any of its losses.

Impossibility of Performance

If you are unable to perform as per a contract due to circumstances beyond your control, this is referred to as “impossibility of performance.” In Home Design Center Joint Venture v. County Appliances of Naples, Inc., 563 So. 2d 767, 770 (Fla. 2d DCA 1990), the court established impossibility of performance as a legitimate defense to some breach of contract claims.

Above is merely a partial list of defenses that are used in breach of contract lawsuits. If your company has been accused of failing to fulfill the obligations of a contract, consult a knowledgeable contract attorney to discuss how to best defend your company. You may find additional defenses available to you that are not covered in this article.

Contact our contract lawyers to discuss how you can defend your company against breach of contract claims. You can use this form to email or call us at (954) 779-7009.

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Posted in breach of contract, business, small business | No Comments »

Boca Raton Condo Association is Being Sued

August 13th, 2010

By Mark Schecter | No Comments »

The Sun Sentinel is reporting that Boca Teeca Condominium Association located in Boca Raton, Florida is being sued by the Fair Housing Center of Greater Palm Beach.

The federal lawsuit alleges that Boca Teeca refuses to allow parents with children under the age of 15 to live within their community.

The lawsuit stems from an incident in which a single father with three young children was turned away in December 2008 despite having financing in line to buy a $120,000 condo unit.

The father of three and his real estate agent reported the incident to the Palm Beach County Office of Equal Opportunity who later launched its own investigation.A female employee was later sent to Boca Teeca to inquire about renting a condo unit with two young children. She was also turned away by the association as her kids were under the age of 15.

“In the previous two years, discrimination cases against families ranked third, behind disability and race cases… Of the 96 cases investigated in 2008-09, 45 percent were for people with disabilities, 25 percent were for families with children, and 14 percent were for race and color,” according to Pamela Guerrier, manager of the Office of Equal Opportunity.

Randall Berg, attorney for the Fair Housing Center, says a condo association can legally stop families with young children from moving into its community when (and only when) they are considered “housing for older persons” as set forth under federal and state housing laws.

To qualify as “housing for older persons,” the community must show that at least 80 percent of their residents are 55 or older.

Boca Teeca was advised it is breaking the law by denying young children, and asked to reverse its decision. The association ignored the request and earlier this week, a federal lawsuit was filed against Boca Teeca and its President Ronald Erhardt detailing the Office of Equal Opportunity’s investigation and email negotiations.

Source: Sun Sentinel

Have you encountered this problem? Contact our real estate lawyers today. You can email our firm or give us a call at (954) 779-7009.

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Questions to Ask Before you Hire a Business Lawyer

August 11th, 2010

By Mark Schecter | No Comments »

QuestionsLawyers are essential for many successful businesses, from large corporations to small companies. They can represent a company at various stages and help resolve conflicts before they lead to lawsuits.

Choosing a lawyer can be a daunting task when you don’t know what to look for in potential candidates.

Our last article reviewed three ways a lawyer can help your business. Today, we are looking at questions you can ask before you hire a lawyer:

Does he/she have the experience my business needs?

This is one of the first questions to ask when you are looking to hire a lawyer. It is important to seek out someone that has the experience your business needs.
Inquire not only about the extent of experience but the type of law he/she has handled over the years.

If you are in the start-up phase of your business, you may prefer a lawyer that has assisted with organizing and incorporating new businesses. If you are established but require a lawyer to handle disputes or pending lawsuits, you will need someone that is good at resolving disputes and/or litigating cases involving business.

Is he/she an effective communicator?

Good communication is vital for any relationship, especially the attorney-client relationship. You will need to communicate your thoughts, concerns, and business needs to your lawyer.

You can assess a lawyer’s communication skills long before you retain his services. Choose someone that answers your telephone calls, responds to emails, and communicates effectively before you hire him.

Is he/she familiar with my business and industry?

Hiring a lawyer that is familiar with how your business operates and the industry in which it exists, can prove to be beneficial for your company’s overall success.

Search for someone that represents companies similar to yours, and provides legal assistance in matters that mirror your own.

Choosing a lawyer is not a decision to make lightly. Take time to research prospects before you hire. Hopefully, these questions will get you started.

If you are looking for effective and tenacious business lawyers, contact us to see if we have what you need.

Photo via Oberazzi

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Posted in Corporation Law, Fort Lauderdale, South Florida, business, business lawyer | No Comments »

Proving the Existence of Trade Secrets

August 3rd, 2010

By Mark Schecter | No Comments »

In our last article we looked at what is a trade secret, and case law that addressed the question.

In Thomas v. Alloy Fasteners, Inc., 664 So. 2d 59 (Fla. 5th DCA 1995) the Florida court ruled that “there is nothing magical or secret” about the customer lists and cold-calling method used by Alloy’s former employee. And because the potential customers’ names and contact information could be obtained from public sources, there was no secret as to the class of likely customers.

In Templeton v. Creative Loafing Tampa, Inc., 552 So. 2d 288 (Fla. 2d D.C.A. 1989), the court reached a similar decision. During his time with Creative Loafing, Templeton developed relationships with advertising clients and various other contacts. He knew many on a first name basis and continued to reach out to the contacts after he was no longer employed with the company.

The court also stated “an employer may not preclude its former employee from utilizing contacts and expertise gained during his former employment.” Templeton knew the contacts on a first name basis and because there was no “secret” process to obtaining their identities, the list of contacts was not a trade secret protected under the Florida statute.

How can a company prove the existence of a trade secret?

The law seems to indicate that a business must first show:

  • That the process is secret and not accessible to the general public or your competition;
  • The extent of measures taken by you to guard the secrecy of the information;
  • The value of the information to you and your competitors;
  • The extent to which the information is known outside of your business;
  • The extent to which it is known by employees and others involved in your business;
  • The amount of effort or money expended by you in developing the information; and
  • The ease or difficulty with which the information could be properly acquired or duplicated by others. Thomas v. Alloy Fasteners, Inc.

If you are unable to prove a business process is a trade secret, you may not be able to take legal action to protect your trade secrets from former employees.

Contact our business lawyers to discuss steps you can take to protect your company’s trade secrets. You can use this form to email or call us at (954) 779-7009.

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Posted in business, trade secret | No Comments »

What is a Trade Secret (and What is Not)?

July 30th, 2010

By Mark Schecter | 1 Comment »

divulge-trade-secretIn recent days, we have discussed common business disputes, the divulgence of trade secrets, and how both can affect your business. Today, we are continuing our discussion on trade secrets and former employees.

As mentioned, the court can take legal action through an injunction to stop former employees from divulging trade secrets – but what is a trade secret and what is not?

The Florida Statute that governs this topic is the Uniform Trade Secrets Act (Florida Statute §688). The law prohibits the misappropriation of trade secrets, including the acquisition, disclosure, and use of the information to the disadvantage of the owner of the trade secret.

Without a non-compete agreement in place, to prevent a former employee from working with a competitor you must prove the former employee had knowledge of your trade secrets and that he/she either divulged, attempted or threatened to divulge those secrets to your competitor.

This rule was established by a Florida case in the early 1990’s – Mach Corp vs Seagate Tech – to protect the employee’s right to seek employment in their field and work in direct competition with their former employer, in the absence of proof that trade secrets were exposed.

The court opined that knowledge of trade secrets, working with the competition, and mere suspicion is not enough to justify the issuance of an injunction against a former employee.

Are all Business Processes Considered Trade Secrets?

No. In Thomas v. Alloy Fasteners, Inc, the employee (Thomas) developed customer lists and engaged in cold-calling during his employment with Alloy Fasteners, Inc. When he left Alloy, Thomas took the customer lists with him and continued to reach out to the prospective customers.  Thomas never signed a non-compete agreement with Alloy.

The court ruled that “there is nothing magical or secret” about the customer lists and cold-calling method used by Thomas. Furthermore, because the potential customers’ names and contact information could be obtained from public sources, there was no secret as to the class of likely customers.

“Customer lists may not qualify as trade secrets unless the employer presents evidence that they are the product of great expense or effort, that they are distillations of larger lists, or that they include information not available from public sources. If the information on the lists is easy to obtain merely by looking at the advertisements, maga­­zine, periodicals, in addition to many other sources, local newspapers and the yellow pages, they will not qualify as trade secrets.”

In the absence of a non-compete agreement, Thomas was free to reach out to the customer lists.

Next week, we will discuss ways to prove the existence of a trade secret. Subscribe to our feed to be notified when the new articles are published.

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Posted in Corporation Law, business, contract law, trade secret | 1 Comment »

Protect Trade Secrets from Former Employees

July 27th, 2010

By Mark Schecter | 2 Comments »

trade-secretsLast week, we discussed common disputes you may face during the course of business.

Absent from the list is a dispute that may not be as common, but can be just as detrimental to your business – and it is the divulging of trade secrets by former employees.

When you hire an employee, there is a strong possibly that he or she will have access to and knowledge of trade secrets that you rely on in your business.

If there ever comes a time when the employee is no longer working with your company, you do not want those secrets to fall into the hands of your competition, do you?

What is a trade secret?

Florida’s Uniform Trade Secret Act defines a trade secret as:

…information, including a formula, pattern, compilation, program, device, method, technique, or process that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. See Fla. Stat. §688.002

Can you prevent a former employee from working with the competition?

Florida law states that a former employee is free to take a job with any of your competitors when no agreement indicating otherwise is present. In fact, the courts believe it should be expected in the absence of an agreement.

In Lee vs. Cercoa, the Florida court said even in the absence of a non-compete agreement, a former employee is under a duty not to disclose any trade secrets – including skills, techniques or processes – in his or her new employment, whether for his own benefit or to the detriment of the previous employer.

If you can prove the employee has such knowledge, the court may be able to issue an injunction to stop the employee from working with the competition, but only if you can prove he/she either divulged or attempted to divulge trade secrets to your competitor.

Without this proof, you may not be able to take any action to protect your company’s trade secrets.

Contact our business lawyers to discuss steps you can take to protect your company’s trade secrets. You can use this form to email or call us at (954) 779-7009.

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Posted in business | 2 Comments »

Protect your Business in these Common Disputes

July 21st, 2010

By Mark Schecter | 3 Comments »

CourtroomBusiness disputes are a common problem for both large and small companies. In fact, litigation has increased substantially when it comes to business-related issues.

While we have discussed broken contracts and agreements in detail on this blog, there are several other legal issues that business owners are susceptible to on the road to success.

Lets discuss three common disputes you will want to protect your business from:

1. Employment Disputes

Employment is a complex area of law. Three disputes that often lead to lawsuits are discrimination, sexual harassment, and workers compensation claims. There are others, including wrongful termination and trade secret issues involving current and former employees, that you may be forced to deal with.

2. Breach of Contract Disputes

A written contract is a legally binding agreement. The parties are obligated to perform services and provide products as promised. Unfortunately, contracts are not always honored. While some end amicably, others are breached. Those broken agreements can cause your business to lose money and force you to file a lawsuit to recover your damages.

3. Business-to-Business Disputes

There are many advantages to building business-to-business relationships. When they are on one accord, two (or more) companies can support, strengthen, and generate word of mouth buzz for each other. However, those same relationships can get messy when disagreements come into play. These types of disputes can lead to costly litigation that is not beneficial for either business.

Hire a lawyer to protect your Florida business.

An experienced business lawyer will attempt to resolve business disputes in the most creative, cost-efficient, and expedient manner possible. This may include offering alternatives – such as mediation and arbitration – that will get you closer to the resolution you desire.

In mediation, all parties sit down with a third-party mediator to discuss the claims and reach a mutual settlement agreement. Arbitration, in contrast, is when the parties present their cases to an arbitrator, who then makes a settlement decisions for all parties to adhere to.

Is your company protected from the common business disputes mentioned above?

Contact the business lawyers of Schecter Law, PA to discuss how (and why) you should take proactive action to protect your business. You can use this form to email or call us at (954) 779-7009.

Photo credit: pennstatelaw

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Posted in breach of contract, business, business lawyer, contract law, small business | 3 Comments »

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