Recently, Gross & Romanick assisted a client with terminating his residential lease and helped him obtain monetary damages due to mold in the rental apartment.
After receiving the check the client wrote to the firm to say: “Thank you so much for your help. I am very happy with the way this all turned out and the way you handled my case. I will use you in the future if I need a lawyer”.
For more information about how the attorneys at Gross & Romanick can help you with traffic offenses and criminal law, personal injury & wrongful death, or business law & commercial landlord cases, call 703-273-1400 or fill out their online Information Request form now.
Monday, November 2, 2009
Thursday, October 29, 2009
Pre-Judgment Attachment: Get It Before It Vanishes
Unfortunately, filing a lawsuit to collect a debt is often an encouragement to the debtor to move and conceal assets. This sometimes makes creditors hesitant to take early legal action. But, Virginia law has a solution: the pre-judgment attachment. Virginia law allows a creditor to bring the debtor's property into court custody at the outset of a lawsuit, thereby assuring that the property will be available to satisfy any judgment the court eventually grants.
Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.
To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.
Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.
Grounds for Attachment:
In summary form, it is sufficient grounds for attachment that the defendant:
* Is a nonresident corporation or individual, which has assets or debts owed to it in Virginia
* Is removing or about to remove out of the Commonwealth with intent to change domicile
* Intends to remove, or is removing, or has removed the specific property sued for or his assets or the proceeds of the sale of his property out of the Commonwealth so that the debtor will not have therein assets sufficient to satisfy the judgment
* Is converting, is about to convert or has converted his property into money, securities or debt with the intent to hinder, delay or defraud creditors
* Has assigned or disposed of or is about to assign or dispose of his assets with intent to hinder, delay or defraud creditors
* Has absconded or is about to abscond from the Commonwealth or has concealed himself to the injury of his creditors, or is a fugitive from justice.
***
The above is not meant to replace legal counsel. To speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out one of our information request forms.
Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.
To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.
Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.
Grounds for Attachment:
In summary form, it is sufficient grounds for attachment that the defendant:
* Is a nonresident corporation or individual, which has assets or debts owed to it in Virginia
* Is removing or about to remove out of the Commonwealth with intent to change domicile
* Intends to remove, or is removing, or has removed the specific property sued for or his assets or the proceeds of the sale of his property out of the Commonwealth so that the debtor will not have therein assets sufficient to satisfy the judgment
* Is converting, is about to convert or has converted his property into money, securities or debt with the intent to hinder, delay or defraud creditors
* Has assigned or disposed of or is about to assign or dispose of his assets with intent to hinder, delay or defraud creditors
* Has absconded or is about to abscond from the Commonwealth or has concealed himself to the injury of his creditors, or is a fugitive from justice.
***
The above is not meant to replace legal counsel. To speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out one of our information request forms.
Wednesday, October 28, 2009
Reasonable Attorney's Fee?
Unless there is an agreement providing for attorney's fees, a Virginia court will not award attorney's fees for breach of contract or failure to pay on an open account. While most companies are aware of this problem and put attorney fee provisions in their supply contracts or promissory notes, there is still a problem. If these agreements provide for "reasonable attorney's fees", then the court may want proof of the amount the litigation actually cost (sometimes by expert witnesses) and often awards less than the contingency fee, the actual cost, and the cost it will take to collect the judgment. If the agreement states a fixed percentage such as "25%" or "1/3", the court may decide that it did not take that much effort to obtain the judgment and award less than the amount that the client will be forced to pay the attorney out of collection. Furthermore, if the debtor defaults on a confession of judgment note, the clerk of court who enters the confessed judgment will not determine the amount to be awarded under a "reasonable attorney" fee clause.
The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, please contact them by calling 703-273-1400 or by filling out their online information request form.
The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, please contact them by calling 703-273-1400 or by filling out their online information request form.
Monday, October 26, 2009
Important Eviction Deadlines
During a commercial eviction procedure there are important deadlines that landlord must meet in order to successfully evict a tenant. Some of them are as follows:
Notice of Default
There are no 5 day statutory notice requirements as in residential evictions. However, all notices required by the lease must be satisfied before filing the Unlawful Detainer.
Service of Unlawful Detainer
Must be made 5 days prior to first return date.
Removal
Tenant may seek to remove the case to the Circuit Court but must do so within 10 days after the first return date. If this occurs, be sure to demand that the tenant post a bond for future rent.
Appeal
If either tenant or landlord wants to appeal the General District Court trial verdict, a notice of appeal must be filed within 10 days; or, 30 days from a Circuit Court judgment.
Writ of Possession
If the court awards possession to the landlord, the Writ of Possession can be filed after 10 days. But, many clerks of court will not issue a Writ of Possession after 60 days.
Sheriff's Return
The sheriff must evict the tenant or return the writ of possession to the court without eviction within 30 days. Don't delay or Landlord may have to start the eviction all over again.
***
The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out their online Information Request form.
Notice of Default
There are no 5 day statutory notice requirements as in residential evictions. However, all notices required by the lease must be satisfied before filing the Unlawful Detainer.
Service of Unlawful Detainer
Must be made 5 days prior to first return date.
Removal
Tenant may seek to remove the case to the Circuit Court but must do so within 10 days after the first return date. If this occurs, be sure to demand that the tenant post a bond for future rent.
Appeal
If either tenant or landlord wants to appeal the General District Court trial verdict, a notice of appeal must be filed within 10 days; or, 30 days from a Circuit Court judgment.
Writ of Possession
If the court awards possession to the landlord, the Writ of Possession can be filed after 10 days. But, many clerks of court will not issue a Writ of Possession after 60 days.
Sheriff's Return
The sheriff must evict the tenant or return the writ of possession to the court without eviction within 30 days. Don't delay or Landlord may have to start the eviction all over again.
***
The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out their online Information Request form.
Wednesday, October 21, 2009
The Mechanic's Lien
Northern Virginia's construction industry was hit hard by the recent recession. One indicator of that is the spiraling number of mechanic's liens filed by unpaid general contractors, subcontractors and suppliers. The figures rose at a staggering rate during 1989 and 1990. By the end of 1990, more than $105 million worth of liens had been filed in Northern Virginia counties, including Loudoun, Fairfax, Arlington, Manassas and Alexandria. During the first half of 1991, 2,798 liens were filed, worth $53,144,530.10. In times like these, contractors have good reason to take advantage of this extraordinary remedy.
The mechanic's lien was specially created by lawmakers to protect the workers and suppliers whose sweat and effort should not go unrewarded, even if the General Contractor or Owner of the property goes bankrupt. A mechanic's lien gives contractors and sub-contractors a star preference over virtually all other creditors and liens, sometimes even challenging the Internal Revenue Service. The catch is: you must follow the rules. Even small errors could frustrate your chance to collect on a debt. Since mechanic's liens arise only under specific statutes, the courts strictly follow those laws.
What Is It & How Do I Get It?
Anyone whose work or materials are used to increase the value of real property has the right to secure a lien on that property. The lien is only a potential right until it is properly "perfected" in the manner specified by law. You perfect a lien by recording a Memorandum of Mechanic's Lien with the records division of the county or city where the property is located. This notice lets the world know of your lien interest. The Virginia Code sets out in detail what must be included in the Memorandum. Virginia Code, sections 43-5 (general contractors), 43-8 (sub-contractors) and 43-10 (laborers and materialmen).
The Memorandum and a lawsuit to enforce the lien (Bill to Enforce Mechanic's Lien) must be filed within specified time periods (see the filing deadlines). The Bill to Enforce asks the court to sell the property in order to pay the lien.
Enforcing Liens Against Subsequent Purchasers
The sale of the building or property does not destroy either a filed mechanic's lien or the legal right to file a lien. Thus, many new homebuyers are shocked to find that they may be responsible for a mechanic's lien filed after settlement. Title insurance is the method of protection recommended for residential purchasers. Fortunately, banks always require the owners of commercial property to have title insurance.
Virginia is only one of seven states giving mechanic's lien claimants the power to sell the property to satisfy the debt even against good faith purchasers. In fact, a 1988 Fairfax County Circuit Court case, (Talbot v. Swango, 18 Va. Cir. 5), held that purchasers after a foreclosure are at risk for liability on outstanding liens, even if the lien is not perfected until after the foreclosure sale! Since Virginia law provides a relatively generous amount of time to file a lien after work is completed (compared to Maryland and the District), subsequent purchasers may have no notice of the lien and no idea they can be liable for the debt.
Statutory protection for contractors and subs is under continual challenge in the Virginia General Assembly. The legislature is considering measures that would shorten the time for filing liens and would provide less protection for contractors.
Get It Right the First Time
The Memorandum of Lien and the Bill to Enforce must be complete and accurate. Although there are a few trivial mistakes involving form that the courts will overlook, the courts strictly enforce the statutory requirements. One recurring problem is the failure to name the correct Owner or naming only a few of many owners. Avoid this mistake! Have a title search performed. Once the time for filing the mechanic's lien has expired, a judge will not allow an amendment to correct mistakes contained in the Memorandum.
Many deserving lien claimants have lost their only possibility of being paid because they failed to include all necessary parties or to correctly state all requirements in the Memorandum and the Bill to Enforce. The Virginia Supreme Court in Mendenhall v. Douglas L. Cooper, Inc., 239 Va. 71 (1990), dismissed an action to enforce a mechanic's lien, because the named trustee under a recorded Deed of Trust was not included as a party to the suit when it was filed. Because of the technical nature of these procedures, it is advisable to rely on an experienced attorney to enforce your rights.
The Case of the Absconding General
Suppliers of labor and materials should take steps to protect themselves from the risk of a nonpaying General Contractor before they begin work or deliver supplies. It is essential to make careful decisions regarding extension of credit (see article on Credit Applications). But, despite all reasonable measures, there will be those few General Contractors who pocket the money intended for subs and blow it on fun and frolic. Or more commonly, the General files for bankruptcy protection. In many states, including Virginia, once the Owner pays the bill to the General Contractor, he is released, regardless of whether the subs and suppliers get paid.
Virginia, however, has a seldom utilized statute (Virginia Code §43-11) which lets you impose personal liability on the Owner or General Contractor, despite the absence of a written contract. By following specific notice requirements, the sub-contractor or materialman can obtain this additional security without having to resort to the mechanic's lien process.
It is worth noting that Virginia law also imposes criminal sanctions on General Contractors or sub-contractors who intentionally and fraudulently keep money intended for those who performed labor or furnished materials. Virginia Code §43-13.
Conclusion
While the title companies may ultimately have to pay for a perfected mechanic's lien, they will test every technical aspect of the lien, from the filing date to inclusion of all necessary parties. Nevertheless, the mechanic lien process remains one of the best methods for assuring payment. During these tough times, it is often the only way to be paid.
Mechanic's Liens Filing Deadlines
Are Owners Liable When a Mechanic's Lien is Filed Against a Tenant?
What happens if your tenant hires a contractor to do work on the leased property, and then fails to pay for it. Many property owners would assume they have to pay once they receive notice that a mechanic's lien has been filed. Not necessarily so. With some exceptions, the mechanic's lien may only be good against the tenant's leasehold interest, and may not attach to the underlying property. Owners should check on this rule before agreeing to pay.
***
The above article is not meant to replace legal counsel. If you'd like to speak to an attorney, please contact Gross & Romanick by calling 703-273-1400, emailing law@gross.com, or filling out the firm's online Information Request Form.
Monday, October 19, 2009
Fictitious Name Filing: Where to File?
Many corporations mistakenly only file their tradename (also called fictitious name) certificates with the Virginia State Corporation Commission. In fact Va. Code §59.1-69 states that a proper certificate must be filed in "the same office of the clerk of the court in which deeds are recorded in the county or city wherein the business is to be conducted." File them with the SCC and the County.
The above is not meant to replace legal counsel. To speak to an attorney, please contact Gross & Romanick directly by calling 703-273-1400 or fill out their online Information Request form.
The above is not meant to replace legal counsel. To speak to an attorney, please contact Gross & Romanick directly by calling 703-273-1400 or fill out their online Information Request form.
Thursday, October 15, 2009
Limited Liability Companies
After a hard-fought legal battle over a limited liability company, the attorneys at Gross & Romanick were able to conclude a very favorable settlement which included the sale of a 25% ownership interest to its client for a very reasonable price. In addition, the intellectual property was conveyed to the LLC without an additional fee. The pleased client said, “Ed and Chris: Thank you for your help in getting this finalized."
To speak to the attorneys at Gross & Romanick, contact the firm by calling 703-273-1400 or by filling out their online Information Request Form.
Subscribe to:
Posts (Atom)