The BUSKLAW Newsletter

  Continuing my quest to post about Michigan cases that are relevant to small(er) Michigan companies, there are two recent decisions from Kent County Business Court Judge Christopher Yates that business folks should keep firmly in mind. One case is obvious, the other less so, but let's have at it.  The first case involves the piercing of the corporate veil. You do know about the corporate veil, right? You can set up a corporation to insulate your personal assets from liability, but you can lose that protection if you play games to your creditors' detriment. That was the scenario in V&B Properties v Account-Ability Tax & Accounting LLC, et al . Defendant Account-Ability signed a real estate lease with Plaintiff V&B and then failed to pay $6300 in rent. After attempting to work things out, Defendant's principal (call her "Mrs. J"), decided to bag it, pay nothing to the V&B, and simply, through her husband ("Mr. L"), start a new accounting ...

  (Author's aside: Why no post since May? Because things have been busy here at BUSKLAW HQ - practicing law for clients!) When both parties to a contract breach it, what's a court to do? This was the issue presented to Kent County Circuit Court Judge Christopher Yates in Zackary Electric, Inc. v Knoebel Construction, Inc.  The facts are straightforward. Defendant Knoebel Construction was hired as a general contractor to build out an Altar'd State clothing store in Woodland Mall in Grand Rapids, Michigan. Knoebel in turn hired Zackary Electric as its electrical subcontractor for the project, and Zackary started work in July 2018.  On August 12, 2018, Zackary sent an invoice to Knoebel for $47K, but Knoebel did not promptly pay Zackary because Knoebel hadn't yet received any payment from Altar'd State. Unhappy with not being paid, Zackary left the job site on August 31, 2018, and it sent a letter to Knoebel declaring it to be in breach of the subcontract between ...

  Are you a party to a Michigan employment contract that includes non-competition, non-solicitation, and confidentiality provisions? Have you wondered whether these restrictive covenants have teeth, i.e., are they enforceable via a preliminary injunction? That's a great question, and we have the answer from Michigan Business Court Judge Christopher Yates in his recent decision:  Aaron Symonds v Lighthouse Insurance Group, Inc. Let's start with the facts. Mr. Symonds was a shareholder (i.e., not a mail clerk) in the Lighthouse Insurance Group . He signed an employment agreement that included non-competition, non-solicitation, and confidentiality obligations. He then voluntarily left Lighthouse to work for a Lighthouse competitor,  Collins & Associates , as their Vice-President of Commercial Lines. In that capacity, he began to solicit several Lighthouse clients to move their property and casualty insurance over to Collins. Symonds conceded under oath that his work fo...

  DISCLAIMER: probably not the real Marley. Still cute.  Having just survived the dog days of a Michigan summer, it's only fitting that we discuss a case involving a dog: Marley, a Labradoodle. How this cute canine could be the subject of a lawsuit before Kent County Judge Christopher Yates is questionable, but hey, lawyers argue, and they actually get over paid for it! (Most dogs don't argue, except for Huskies ; my working hypothesis is that Huskies are just reincarnated trial lawyers.) The plaintiff in the case is  Bainbridge Labradoodles , a Labradoodle purveyor at  $3K per puppy. Defendant is Susan Viele, a Labradoodle aficionado. In June 2016, Bainbridge and Viele signed a "breeder agreement," under which Bainbridge loaned Marley to Viele until Marley yielded four litters of puppies that would go to Bainbridge for breeding or placement. Marley gave birth to seven healthy puppies in September 2016, but despite repeated attempts, that was all. And now the th...

In my experience, trial lawyers have big egos. That's okay because a courtroom isn't a place for the faint of heart, and effective oral advocacy demands a strong personality. But a problem arises if a trial lawyer - in front of a judge - combines their big ego with stubbornness, especially when a point of law is on the table. Then, like a frozen turkey dropped into hot oil , the attorney's case can blow up. This is the scenario that played out in Kent County Judge Christopher Yates' decision in  Amira Medical Staffing v Rachel Richardson, Heather Martin, and Doria Coston.   Defendants Richardson, Martin, and Coston are described as "low-paid health care workers." Plaintiff Amira hired them to provide health services to a patient with a "traumatic brain injury." For some reason, the patient's mother decided to switch to another medical staffing agency, but these three nurses wanted to continue caring for their patient, so they left Amira an...

There's baseball and there's inside baseball . The former brings to mind Detroit Tigers baseball and the legendary Ernie Harwell . In the early 60s, my father and I would camp out on our porch during the summer months and listen to Ernie's play-by-play over the recently-invented portable transistor radio. Late games were punctuated by euphonious crickets and frogs, some of whom resided in or around our cement-pond swimming pool. This chorus - combined with Ernie's sonorous narrative - often sent me off to dreamland.  But "inside baseball" is different. The term implies knowing something that is beyond ordinary understanding. Esoteric even. More effort is required to grasp "inside baseball" information, but the payoff is greater: you become smarter! So bear with me. This blog has often cited business cases decided by Kent County (MI) Circuit Court Judge Christopher Yates . Judge Yates not only writes opinions with brevity and wit; he's a mo...

November is the month of Thanksgiving. And Thanksgiving for most folks means  time with family and friends (better yet, family who are friends),  an appropriate but modestly-priced wine ,  and  a turkey. Turkeys should live their brief sojourn on this earth in relative peace before winding up on our table. But that was not to be for the poor fowls in the recent Kent County (MI) Circuit Court case of  White Acres, LLC et al v. Shur Green Farms, LLC et al .  The case involves a plethora of parties (hence the "et al"), all of whom were in the distribution chain of a biofuel called Lascadoil. Unlike its parent product, Lasalocid, Lascadoil is not an appropriate turkey-feed additive. (Does anything with "oil" in its name sound fit for human or animal consumption?) So when a bunch of turkeys died after eating feed tainted with Lascadoil, the lawsuits started flying; each party was sued by its downstream buyer who in turn sued its upstream seller. And numero...

                                                   This Photo by Unknown Author is licensed under CC By-SA In last month's newsletter , we determined that Michigan law doesn't recognize the concept that "unreasonable" or adhesion contracts are unenforceable. But there is a caveat: a liquidated damages contractual provision must be reasonable to be enforceable.  A liquidated damages provision is a term of art in the legal world. It applies when, according to Professor Bryan Garner , the parties to a contract agree in advance on the measure of damages to be assessed if a party defaults. Liquidated damages provisions are common in employee non-competition agreements, and it was that clause in one such agreement that Kent County Circuit Court Judge Christopher Yates examined in the case of Alpha Automotive v Cunningham Chrysler of Edinboro. The...

When it comes to business contracts, some provisions are more important than others. And it's true that some of these critical clauses are buried deep within a contract, so by the time you get to them, your eyes are glazed over, and you gloss over them. But that could be unfortunate.  One such provision is what lawyers call the c hoice o f l aw   and  f orum s election clause (for convenience, "COLFS"). That clause typically reads as follows: The validity, interpretation, and construction of this agreement are governed by the laws of the State of [INSERT STATE], and any and all claims hereunder shall be brought in [SPECIFY NAME OF COURT AND COUNTY]. A recent decision by Kent County Circuit Court Judge Christopher Yates underscores the importance of a COLFS provision in an employment contract between OtterBase, a Grand Rapids, MI-based staffing firm, and two of their former employees, Carrie Rogers and Emily Reed. Rogers and Reed had experience in the staffing ...