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Monday, August 25, 2008

Success At Fairfax County Juvenile Court

A recent client was very pleased with Gross & Romanick for the handling of 2 charges against his son in Fairfax County Juvenile Court. The charges were underage possession of alcohol and petty larceny. (Gross & Romanick attorney Ashely Dean was able to obtain a dismissal of both charges.) The father wrote to Gross & Romanick to say:

"
Indeed a very good result. If we need legal help in the future, we certainly will call you. Also, if we hear of anyone else needing assistance we will recommend you, and would be glad to give a recommendation at your request."

If you or a loved one need legal representation, contact the attorneys at Gross & Romanick today.


Thursday, August 21, 2008

Who Is Gross & Romanick?

Gross & Romanick, P.C. is a law firm located in Fairfax, Virginia. We provide practical solutions for our client's legal problems. The law firm built its success by being responsive to client concerns and applying hard work with integrity to find creative legal solutions. We meet our client's legal needs by using cost saving technology and combining sophistication with sensitivity. We are proud of our reputation for being knowledgeable, responsive, accessible, aggressive and professional. The law firm is led by our managing partner Edward Gross. Our attorneys are licensed in Virginia, the District of Columbia and Maryland.

A firm with great experience, Gross & Romanick is cited in Martindale-Hubbell® as having “an exemplary reputation and well established practice” with “high professional standing.” The firm received Martindale-Hubbell’s® highest ethical rating.

Our firm has extensive experience, expertise and diversity to enable us to provide our clients with a full range of legal services. We effectively and efficiently handle legal matters of all levels of complexity. Our proximity to the Fairfax County/City Courthouses and our years (since 1980) of representing litigants makes us very familiar with the practices and procedures of the courts of Northern Virginia.

Courts in which our attorneys are admitted to practice:

State Courts: Virginia, Maryland and the District of Columbia.

Federal Courts: United States Supreme Court; Court of Appeals for the 4th Circuit and the District of Columbia; U.S. District Courts for Virginia, Maryland and the District of Columbia; U.S. Bankruptcy Courts for The Eastern District of Virginia and Maryland.

We handle criminal and traffic cases in Fairfax County, Loudoun County, Arlington County, Alexandria City & Prince William County.

Would you like to contact us with respect to your legal concerns? Please fill out our Information Request Form.

Tuesday, August 19, 2008

Check: To Cash Or Not To Cash

You receive a check for less than the amount owed from a company. The company has stated that they owe you less than you contend is owed. Should you cash the check?

Virginia Law: In the 2002 case of Gelles & Sons General Contracting, Inc. v. Jeffrey Stack Inc., the Virginia Supreme Court for the first time interpreted Virginia Code §8.3A-311 which is a 1992 statute enacted to address the issue of cashing such checks. According to the Supreme Court opinion, the test is whether "a reasonable person" would consider the check to be a tender in full satisfaction of the claim.

Facts of Case: A general contractor ("general") and its subcontractor ("sub") dispute the amount owed by the general to the sub. The general wrote two letters to the sub setting out its position and included a check with the second letter which stated that it represented "final payment". The sub cashed the check but sued for the balance it claimed was due. The trial court found (and the Virginia Supreme Court agreed) that the letter and check was a "drop-dead letter" offer of final payment. By cashing the check, the sub could not sue for any additional sums.

Advice: If there is a question about whether a check is tendered as final payment, look at the correspondence and notations on the check to determine the intent of the maker. Cashing checks may be risky if there is some evidence for an accord and satisfaction.

For more information or to seek legal counsel for your business, contact the attorneys at Gross & Romanick today.

Thursday, August 14, 2008

Guarantees - Should the Spouse Sign?

As part of its Business Law practice, the attorney's at Gross & Romanick frequently receive questions about whether or not a spouse can--or should--serve as Guarantor in a business debt. As part of their client education initiative, they've prepared the following article.

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Often, a guaranty of a debt or lease may mean the difference to the creditor between getting paid and taking a loss. The first to get paid when a business is failing are the creditors who can pursue the operators of the business. Guarantors, who are not operators of the business, have a unique incentive to pressure the business to pay.

Spouses may be particularly attractive as co-guarantors because an individual guarantor's principal asset is often a residence or some other asset owned as "tenants-by-the-entirety," which cannot be seized unless both spouses are judgment debtors. (See The Edward Gross Report, Spring 1992.) However, several recent cases indicate that enforcing guarantees against spouses may violate the Equal Credit Opportunity Act, 15 U.S.C §1691, when the guarantees were required solely on the basis of marital status. NationsBank v. Sarelson, (Fairfax Circuit Court, 1992); CMF Virginia Land, L.P. v. Edward L. Brinson, et.al., (U.S. District Court, Eastern District of Virginia, 1992). These cases indicate that creditors may have difficulty enforcing guarantees against spouses who are not parties to the contract when the applying spouse would independently qualify for credit under the creditor's standards.

In order to protect yourself, be sure to document your reasons for requiring a spouse to sign as a guarantor. Make sure that you can prove a legitimate business purpose behind your requirement, such as showing that the spouse was an owner, officer, or other active participant in the business at the time the contract was made, or, alternatively, that the spouse in the business would have been ineligible for credit without the spouse's co-guaranty. Since circumstances will often have changed, accurate documentation of your reasons at the time guaranty is executed is critical to the successful enforcement of the guaranty at any later date.

Beware! These same rules will apply to consumer debts, for which the Equal Credit Opportunity Act was originally intended.

For more information or to seek legal counsel, contact the attorneys at Gross & Romanick today.

Monday, August 11, 2008

More Praise For Ash Dean

The team here at Gross & Romanick continues to earn the respect of its clients. A client wrote to us about his experiences with attorney Ash Charles Dean.

Dear Ash,

I wanted to thank you again for your representation in my case. If I get a chance, I will definitely refer people over to you. I appreciate your help, and now I can move on with my life with more of a peaceful mind.

Sincerely,

NL


To seek legal counsel, please don't hesitate to contact Gross & Romanick today!

Monday, August 4, 2008

Piercing the Corporation: The Veil Becomes a Wall


As a result of a recent decision by the 4th U.S Circuit Court of Appeals, the "veil" of immunity protecting the officers of a corporation from individual liability has become a "wall."

Proving Fraudulent Intent

In Perpetual Real Estate v. Michaelson Properties, the Court held that, in order to hold the officers or directors of a corporation personally liable for acts of that corporation, a plaintiff will have to prove actual legal wrong on the part of the officers or directors. This standard provides tremendous protection to officers and directors of corporations by dramatically increasing the burden of proof placed on the plaintiff.

By requiring evidence of actual legal wrong, the Court has placed an imposing barrier in front of every unpaid creditor. "Fraudulent intent" has always been something extraordinarily difficult to prove, since it requires a psychological probe into the mind of the defendant. In corporate fraud cases the actual wrong standard is particularly burdensome, since the only evidence of any such intent is likely to be in the form of letters and similar correspondence, all of which will be tucked away in the files of the defendant corporation-if the evidence exists at all.

Traditional Standards

Despite the seemingly far-reaching implications of the Court's ruling, the traditional evidence required to "pierce a corporation" will still figure prominently in any suit seeking to hold corporate officers or directors personally liable for corporate acts. In addition to evidence of actual intent, the plaintiff will generally need to prove that the corporation was really just an alter ego of the directors, and had no independent financial existence apart from the directors. In this vein, successful cases prove that:
  1. The directors and officers have co-mingled corporate funds/assets with their own personal assets, or diverted the corporation's assets for purely personal use or

  2. The corporation was so undercapitalized that it was clearly incapable of operating as a successful business and was, thus, merely a "nominal" corporation, consisting only of business cards and stationery.

Perhaps the most successful means of piercing a corporation is based upon the corporation's failure to maintain the "formalities" required by law. Most importantly, that it failed to file various documents with the State Corporation Commission. At the very least, its Articles of Incorporation must have been accepted by the State and a charter number issued.

Now more than ever, creditors should investigate corporations to whom they extend credit and insist on personal guarantees or collateral security. Corporate borrowers should maintain their corporate formalities, not commingle funds, and avoid even the appearance of fraud.

For more information or to retain legal counsel, please contact the attorneys at Gross & Romanick today.

Friday, August 1, 2008

Employees: Duty of Loyalty

As part of its commitment to client education, Gross & Romanick publishes articles on its website relating to its various practice areas--including Business Law.

Reprinted below is a recent article about duty of loyalty and non-competition clauses.

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Your top salesperson has just given you a two-week notice of resignation. When you discuss this problem with another employee, you learn for the first time that your top salesperson has already set up a competing company based upon copies of your files and solicitation of business from your clients. To compound the problem, several of your key personnel quit within days of your top salesperson; you learn that they are joining this new competitor. What can you do? Well, a recent case in the United States District Court for the Western District of Virginia may provide some help.

In National Legal Research Group v. Latham, the court, in an unusual ruling, enjoined a former employee from soliciting or communicating with clients of the firm for two years after resignation. Furthermore, the former employee was charged with actual damages caused to the former employer, as well as punitive damages, even though the offending employee had no written contract. This case could be a significant aid to employers seeking to enforce the so-called "Duty of Loyalty" that binds all employees.

Non-Competition Clauses

Of course, sales people should sign employment agreements containing restrictive covenants, which prevent them from copying confidential materials or competing upon termination of employment. However, such covenants are rarely executed because of the fear that excellent employee candidates may refuse employment on this basis.

To be enforceable, Virginia law generally requires that non-competition clauses be reasonably necessary for the protection of the employer, and not impose undue hardship on the employee. If the clause prevents the employee from competing in a limited geographical area or for a limited period of time, a court will generally uphold the agreement. If the clause has no such limits, courts will often find the restriction to be impermissibly overbroad and unenforceable. Since non-competition clauses are, in general, a restraint on free trade, a court will carefully examine the agreement and construe the clause, where possible, in favor of the employee.

Duty of Loyalty

Despite the failure to include a restrictive covenant in an employment agreement, the law implies an agreement on the part of the employee to faithfully serve an employer. In addition, an employee is a fiduciary with respect to information learned during the course of employment.

Virginia Trade Secrets Act

The Virginia Trade Secrets Act, Virginia Code §59.1-336 may prevent former employees from using information for which the company took reasonable steps to keep secret. This Virginia Code Section was the basis for the court's ruling in the National Legal Research Group v. Latham case.

Protect Yourself

Restrictive covenants in employment agreements are the best method for protecting your trade secrets and preventing competition from former employees. Nevertheless, you may have a case under the Virginia Trade Secrets Act if you take reasonable steps to protect your important trade secret information. Establish written procedures: inform your employees of what materials are considered protected and under what limited circumstances these materials may be utilized.