Articles Posted in Business Disputes

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When someone files a lawsuit alleging physical or emotional abuse, they can often find the legal process to be retraumatizing. They are forced to relive the incident(s) that hurt them over and over again, first when hiring a lawyer, then in deposition, then again in court. It’s not an easy process, and it’s a big reason that many victims never pursue legal action. It’s also a big reason many of those who do file never pursue it all the way to court.

Moss Gropen is one such victim who alleges he was abused and neglected by Palomar Medical Center. According to the lawsuit, Gropen went to the hospital for a scheduled procedure to remove fluid from the area surrounding his lungs. Instead, he claims he was admitted to the emergency room where doctors inserted a chest tube, then put him in a windowless room and left him alone with substandard nutrition. Gropen alleges he suffered from uncontrollable sobbing and anxiety, which resulted in post-traumatic stress disorder (PTSD), from which he says he continues to suffer.

Gropen is suing the hospital along with several of its doctors and employees for causing his PTSD. When he appeared at the offices of the hospital’s lawyers in July to provide his deposition, his wife came with him to provide emotional support during what was bound to be a challenging time for Gropen.

The lawyers immediately objected to the presence of Gropen’s wife at the deposition because she is a witness in the lawsuit. Having Gropen’s wife present while he provides his deposition could lead to the two of them colluding on their testimony. Gropen refused to provide testimony without his wife present and ended up leaving the office without providing testimony. Continue reading ›

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In the case of Pickering v. Owens-Corning Fiberglas Corp., 265 Ill. App. 3d 806, the plaintiff sought punitive damages against the defendant for the defendant’s failure to warn consumers of the dangers associated with asbestos exposure. Punitive damages are damages awarded in addition to compensatory damages and are intended to punish the defendant for their wrongful conduct and to deter similar conduct in the future.

In this case, the plaintiff sought to discover the net worth of the defendant as part of their efforts to establish punitive damages. The defendant objected to the request for net worth discovery, arguing that it was irrelevant to the issue of punitive damages and that it was overly burdensome and intrusive.

The court held that net worth discovery was relevant to the issue of punitive damages and that the defendant had a duty to disclose its net worth. The court noted that punitive damages are intended to punish the defendant and that the amount of punitive damages awarded should be proportionate to the defendant’s ability to pay. The court also noted that net worth discovery is a common practice in cases involving punitive damages. Continue reading ›

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“The focus of the crime fraud exception is on the intent of the client (citation omitted), not the legitimacy of the services provided by the attorney. An attorney may be completely innocent of wrongdoing, yet the privilege will give way if the client sought the attorney’s assistance for illegal ends.” People v. Radojcic, 2013 IL 114197, ¶ 49.

A lawyer’s participation in intentional breaches of fiduciary duty triggers the crime-fraud exception even though a fiduciary breach is no necessarily a crime or act of common law fraud. Intentional fiduciary breaches are regularly called constructive fraud however and give rise to the crime fraud exception. See Mueller Indus., Inc. v. Berkman, 399 Ill.App.3d 456, 469-73 (2d Dist. 2010) abrogated by People v. Radojcic, 2013 IL 114197 on other grounds (“In concluding that an intentional breach of fiduciary duty may serve as the fraud necessary to establish the crime-fraud exception, we take note of Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky.1991). … The Kentucky Supreme Court held that the breach of fiduciary duty was ‘on an equal par with fraud and deceit.”’) Lawyers who aid and abet fiduciary breaches and other torts are subject to suit. As Thornwood, Inc. v. Jenner & Block, 344 Ill. App. 3d 15, 28–29 (1st Dist. 2003), as modified on denial of reh’g (Nov. 10, 2003) recognized, a lawyer may not “escap[e] liability for knowingly and substantially assisting a client in the commission of a tort.” Continue reading ›

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Yes, it is possible to sue a lawyer in a shareholder derivative action in certain jurisdictions including Illinois. A shareholder derivative action is a lawsuit brought by a shareholder on behalf of a corporation against a third party. The lawsuit is typically brought when the corporation has been harmed by the actions of a third party, but the corporation’s management has failed to take action.

In a shareholder derivative action, the shareholder acts as a representative of the corporation and brings the lawsuit on the corporation’s behalf. If the shareholder is successful in the lawsuit, any damages or remedies awarded go to the corporation, not to the individual shareholder.

In some cases, the corporation’s harm may be caused by the actions of the corporation’s own lawyers. For example, if a lawyer provides negligent or inadequate legal advice to the corporation, causing the corporation to suffer damages, the corporation’s shareholders may be able to bring a shareholder derivative action against the lawyer on behalf of the corporation.

In order to bring a successful shareholder derivative action against a lawyer, the shareholders must be able to show that the lawyer breached their duty of care to the corporation and that this breach caused harm to the corporation. The shareholders must also show that they have exhausted all other available remedies, such as asking the corporation’s management to take action against the lawyer.

In conclusion, it is possible to sue a lawyer in a shareholder derivative action if the lawyer’s actions have harmed the corporation. However, such lawsuits can be complex and challenging, and it is important to seek the advice of a qualified attorney before pursuing this type of legal action. Continue reading ›

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The family of Marvin Gaye rocked the music world in 2015 when they sued Robin Thicke and Pharrell Williams for copying elements of Gaye’s hit, “Got to Give It Up,” in their own hit, “Blurred Lines.” Up until the jury sided with Gaye’s family, most musicians had assumed the musical elements in question were public domain.

That lawsuit seems to have opened up the floodgates, given the number of copyright lawsuits that have been filed in the music industry in the past eight years. Not all the lawsuits have ended in the plaintiffs’ favor, but enough have to give musicians pause when writing a new song.

The latest copyright lawsuit to make headlines in the music industry involves another Gaye song, “Let’s Get It On.” Instead of Gaye’s family, this copyright lawsuit has been filed by the family of Ed Townsend, who was the primary songwriter and owned 2/3 of the royalties on the song.

The case hinges on two chord progressions that are similar, but not identical. Even a musical expert testifying on behalf of the plaintiffs admitted the two chords have slight differences, but he maintained that they are interchangeable.

An attorney for the plaintiffs showed the jury a video of Sheeran performing a mashup of the two songs in question. The attorney claimed that Sheeran’s ability to move seamlessly from one song to the other proves that Sheeran stole the chord progression from the 1973 hit. Continue reading ›

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If a lawsuit is filed and the parties decide to settle before the case gets to court, how can you know what evidence each party found to support their case? You can’t. Chances are good the defendant requested the court to seal the documents, meaning it would not be available to other lawyers, journalists, or the general public.

Over the years, attorneys for corporations have managed to convince the courts their clients need protection from the public, rather than the other way around. The courts’ willingness to go along with this has only endangered consumers who were prevented from being made aware of things like the dangers of opioids, weak car roofs, or guns with faulty triggers.

Over the years, various legislators and judges have acknowledged there are problems with the current system of sealing court documents, but so far they have been either unwilling or unable to make the necessary changes to protect consumers.

When the first rules allowing judges to seal court documents were created, they initially allowed judges to decide which documents to shield by considering them on a case-by-case basis. The rules were later broadened to include anything with the potential to embarrass or annoy a corporation. Continue reading ›

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Scott Norris Johnson is a quadriplegic who used to work for the IRS and now practices law suing local businesses for failing to comply with the Americans with Disabilities Act (ADA). As the lawyer filing these lawsuits, Johnson is entitled to at least a portion of the settlement money he receives from these lawsuits, but he is required to report that money on his income taxes. According to a recent lawsuit, Johnson knowingly failed to report that income on his taxes, thereby defrauding the U.S. government of hundreds of thousands of dollars.

Johnson pleaded guilty to the charge of tax evasion and agreed to pay $250,000 in restitution and spend 18 months of home detention. The judge presiding over the case, John Mendez, insisted that Johnson be made to pay a fine in addition to the $250,000 in restitution and home detention. That was not part of the plea agreement, but Johnson agreed to pay the $50,000 fine Mendez wanted him to pay.

Mendez pointed out that the money is a drop in the bucket for Johnson, who has assets of $1.3 million and a monthly income of $81,000, thanks to all the ADA lawsuits he’s filing. Mendez was also concerned by Johnson’s lack of remorse for his actions, and pointed out that, were it not for his disability, he’d be serving up to three years in prison. Continue reading ›

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We’ve all heard stories of the plucky entrepreneur who started a game-changing business and managed to sell it for millions of dollars. It’s a great rags-to-riches story, and it proves the American Dream is real. But what if the business is fake?

Charlie Javice was one of those young entrepreneurs. The company she started was called Frank, and the idea was to simplify the financial aid process for college students. When JP Morgan bought the company from Javice in 2021, it was valued at $175 million, and Javice was made managing director for student solutions. Now JP Morgan is suing her for allegedly exaggerating the company’s value … by a lot.

College students are a goldmine for banks. Almost all college students need to take out a loan in order to pay for their higher education, loans they spend decades paying off while the banks collect interest.

A lot of college students are also taking out credit cards for the first time, and most of them have not been taught how to use credit cards to their advantage. Instead, they’re more likely to end up in debt to the credit card companies.

According to court documents, when JP Morgan bought Frank, Javice allegedly told the bank’s executives that the company had more than 4 million users. The idea was that, by buying Frank, JP Morgan would gain access to a database containing the names and contact details of all those users who would no doubt be in need of financial assistance and a bank to provide its services. Continue reading ›

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Under the new federal “Speak Out Act,” employers will no longer be able to enforce pre-dispute non-disclosure and non-disparagement clauses to disputes involving sexual assault and sexual harassment claims. The new law, which passed with bipartisan support in Congress, was signed into law by President Biden on December 7. The new law took effect immediately.

The goal of the new law is to prevent the practice of using pre-dispute agreements to silence employees from reporting sexual impropriety in the workplace. Employers’ use of non-disparagement agreements (NDAs) to keep employees’ sexual harassment claims quiet came under scrutiny during the #MeToo movement.

The exact impact of the new law is not clear yet, however. A key limitation to the law is its application only to pre-dispute agreements. This means that NDAs containing non-disclosure or non-disparagement clauses entered into after a dispute concerning sexual assault or harassment has arisen are not prohibited or covered by the new law. However, employers still cannot preclude employees from reporting violations of employment laws to agencies entrusted with enforcing such laws, like the Equal Employment Opportunity Commission.  Additionally, the law does not define the term “dispute,” making it unclear whether a dispute requires the filing of a lawsuit or whether a complaint to a manager or HR qualifies as a dispute. Continue reading ›

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Sex trafficking requires more than one person to be involved in the process. So it should come as no surprise that the allegations against Jeffrey Epstein for sex trafficking didn’t stop with Epstein. His wife, Ghislaine Maxwell, was also found guilty of child sex trafficking and other crimes in connection with the abuse she and her husband committed on an ongoing basis.

Epstein and Maxwell were both very well-connected people, so it’s no wonder that people have speculated as to who knew about the sex trafficking before Epstein was arrested and the public became aware of his crimes. The horror and scope of the crimes has also led many to believe that it could not have been as secretive as many of those connected to Epstein have claimed. Since Epstein’s arrest, everyone from celebrities to politicians on both sides of the aisle have been accused of at least knowing about – if not directly participating in – Epstein’s sex trafficking. Continue reading ›

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