BizLawBuz …. The Power of Know

A recent update from the State Bar Business Law Section addresses a recent decision out of the Oakland County Circuit Court, where Judge Colleen O’Brien granted a preliminary injunction requiring an auto supplier to keep shipping parts even though the customer was delinquent in payments and, as a result, in breach of the purchase order. To the extent you work in the auto sector, be aware of what could be an ongoing bias in favor of OEMs and larger tier suppliers. The hopes were this would lessen with the shake-up in the industry, but this case suggests otherwise.

Appended below is an Opinion and Order from Judge Colleen O’Brien in Oakland County Circuit Court in Metavation LLC v. Grede LLC, Case No. 11-116105-CK granting a preliminary injunction in a supplier dispute, provided by Adam Kochenderfer of Wolfson Bolton PLLC.

In the Metavation action, the Court granted Plaintiff’s motion for a preliminary injunction after Defendant refused to produce component parts under supply contracts between the parties. Among other things, Defendant claimed that alleged late payments entitled Defendant to unilaterally terminate the contracts. Defendant further argued that the shutdown of Plaintiff’s assembly operations, and consequent employment losses, would not constitute “irreparable harm” under Michigan law. The Court disagreed, holding that

1. the terms of the parties’ contracts control and “[d]e minimus delays in payment do not permit a party to unilaterally terminate a contract;”
2. the factor regarding irreparable harm weighs in favor of Plaintiff because Plaintiff relied on frequent shipments of parts from Defendant, and, if Defendant ceased shipments, “Plaintiff’s manufacturing business would come to a halt;” and
3. “the prevention of job losses serves the public interest.”

Therefore, the Court issued a preliminary injunction ordering Defendant to continue producing and shipping the component parts to Plaintiff in accordance with the parties’ contracts.

Dirk A. Beamer

From an article quoting Wright Penning & Beamer partner Dirk A. Beamer which appeared in The News Herald:

Saturday, October 31, 2009

By Jason Alley

DETROIT — The city of Ecorse has filed a lawsuit against a former mayor who is seeking re-election Tuesday, alleging that he owes the city more than $90,000 for a legal battle he lost in 2007.

A neighbor of former Mayor Larry Salisbury sued him years ago in both his official capacity as mayor and as an individual, claiming that Salisbury harassed him and denied him the city approval needed to sell his house.

A federal jury heard the case and sided with the neighbor, Joseph Door. The jury ordered the city to pay Door $11,000 and for Salisbury to individually pay him $66,000.

Nearly four months later, the federal court also ordered the city and Salisbury to jointly pay Door’s attorney fees and costs totaling nearly $30,000.

While mayor, Salisbury had the city put up a bond with taxpayer money to satisfy the judgment against him while he appealed the verdict, according to the latest lawsuit.

The 6th U.S. Circuit Court of Appeals in Cincinnati upheld the jury’s decision Dec. 29, 2008, and ordered the city and Salisbury to pay Door the money he was owed.

Since that time, the latest lawsuit alleges, Salisbury has never reimbursed the city for the amount that was fronted to cover his part of the judgment.

“Salisbury owed a duty of loyalty and a duty of good faith to (the) city,” the lawsuit says. “It was Salisbury’s duty to promote and protect the financial interests of the city, and it was his duty not to exploit the financial interests of the city for his personal gain or benefit.”

Attorney Dirk Beamer, who filed the suit on behalf of the city, said he isn’t sure Salisbury was authorized to use “cash out of the city’s coffers” to pay for a judgment against him individually.

“We question the propriety of him in the first place allowing the bond to be placed on his behalf with city funds,” Beamer said. “The city has effectively been forced to cover what is his own personal liability. … The city, obviously, is in need of funds and should be reimbursed by Mr. Salisbury.”

While the case was filed days before the election, Beamer said the timing is coincidental at best.

“People can infer what they choose to … but it’s a straightforward fact that there is money advanced or paid and arguably should not have been,” he said.

Salisbury declined to comment on the allegations of the suit, but through a spokesman said he intends to file a grievance with the State Bar of Michigan against the city’s attorney for abuse of process by bringing the case against him.

The lawsuit was filed in Wayne County Circuit Court and has been assigned to Judge Jeanne Stempien.

Contact Staff Writer Jason Alley at jalley@heritage.com or at 1-734-246-0867.

Read the entire article and comments posted on The News Herald website.

Increasingly, workers and lawyers around the country are bringing lawsuits challenging the workers’ classification as independent contractors instead of employees. Often, companies look for opportunities to hire independent contractors instead of employees in order to avoid payroll taxes and employee benefit packages. The problem surfaces when a decision is driven solely by the desire to save money and not by an objective analysis of the job function.

Ultimately, the question of whether someone is an employee or an independent contractor must be determined by a multi-part analysis of the terms and conditions of the relationship and of the level of autonomy the worker has in performing her duties. The mere fact that the company classified someone as an independent contractor, or even a written agreement between the parties saying that the worker will be an independent contractor, will not be dispositive of the question.

Two pieces of legislation (the Independent Contractor Proper Classification Act and the Employee Misclassification Prevention Act) that stalled in last year’s Congress can be expected to resurface this year. Collectively, they would increase the Internal Revenue Services’ options for challenging the independent contractor designations and could result in greater liability for companies that misclassify workers.

Dirk Beamer

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Disputes & Litigation

From account collection to unfair competition, our lawyers handle it all

On television, courtroom lawyers neatly wrap up lawsuits in the span of a one-hour episode. In the real world, commercial disputes with customers, suppliers, competitors or employees rarely follow such an orderly process. At Wright Penning & Beamer, we bring a balanced combination of legal expertise and business common sense to our clients’ problems. We explore every avenue for delivering verdicts, judgments or settlements that bolster or protect the client’s bottom line.

Account Collection

Services Offered: We collect outstanding receivables for our clients through negotiation and, when necessary, litigation.

Unlike “collection firms” that act much like collection agencies, Wright Penning & Beamer assures direct attorney involvement and oversight in debt collection cases. Through long-standing relationships with major corporations like Sysco Food Services of Detroit, LLC, Wright Penning & Beamer has successfully handled thousands of collections matters.

Business Disputes and Litigation

Services Offered: We work with clients to find the most comprehensive and cost-effective solutions to business disputes. Where appropriate, we seek to negotiate and enforce win-win solutions for our clients and those they do business with. And, when necessary, we develop and implement aggressive trial strategies to protect our clients’ legal rights and business interests through the legal system.

At heart, our lawyers are business people. We analyze each dispute carefully to understand the legal options and the business ramifications. In courtrooms across the state and across the nation, Wright Penning & Beamer attorneys deliver results. When those results are challenged on appeal, we prevail nine times out of ten.

Construction

Services Offered: We represent both contractors and property owners in commercial and residential construction disputes, including proceedings under Michigan’s Construction Lien Act.

Wright Penning & Beamer enjoys relationships with several national lien firms who engage us to file and enforce construction liens in Michigan.

Contract Disputes

Services Offered: We find effective resolutions to contract disputes between our business clients and third parties. Where the other party will not entertain reasonable, joint solutions, we bring and/or defend lawsuits to enforce contract terms on a state and national level.

We work with supplier contracts, personal service contracts, verbal and written contracts, software and technology contracts, confidentiality and non-compete agreements, and everything in between.

Insurance Coverage Disputes

Services Offered: We pressure your insurance carrier to honor its obligations to you if you have been denied coverage under your policy.

We are unique in the fact that we have experience representing insured parties, insurance carriers, and insurance agents. We have served as general counsel to the National Association of Professional Allstate Agents for nearly ten years.

Landlord/Tenant Disputes

Services Offered: We act to enforce rights for payment of rent or possession of property on behalf of landlords. We act to protect the rights of commercial tenants if landlords fail to live up to their lease obligations.

We handle dozens of landlord/tenant disputes for business clients every year.

Sales Representative Contracts

Services Offered: We develop clear agreements with your sales force that minimize the chance of any dispute once you part ways, and we provide experienced representation when disputes do arise.

We have litigated millions of dollars in disputed commissions over the past ten years, covering topics ranging from auto parts to holographic images.

Unfair Competition

Services Offered: We seek quick remedies when competitors engage in business practices that cross the line – whether they involve violations of a non-compete agreement, the misappropriation of proprietary information, or tampering with customers.

Our attorneys have both initiated and defended claims of this kind in state and federal courts across the country for clients such as Toshiba Business Solutions-Michigan, Masters Green and Chemco Products. Dirk Beamer has written and published about rights and risks under the Uniform Trade Secrets Act.