Federal Defend Trade Secrets Act of 2016 Can Protect Your Business

On May 11, 2016, President Obama signed the Defend Trade Secrets Act of 2016 (“DTSA”), which statute went into effect immediately. Virginia and most other states have existing laws against misappropriation of trade secrets, many adopting versions of the Uniform Trade Secrets Act (UTSA). These laws allow businesses to seek redress for misappropriation of trade secrets in a state court venue, which can be procedurally problematic when the offending party has no connection to the applicable state.  The DTSA creates a civil cause of action under federal law, which now allows businesses to prosecute trade secret cases in federal court against individuals and businesses located in other states.  In addition, the DTSA specifically covers trade secret misappropriation that occurs overseas. 

The DTSA provides various remedies for the aggrieved business, including recovery of actual damages, recover of damages for unjust enrichment, recovery of exemplary damages (two times proven actual damages), and recovery of attorney’s fees.  Injunctive relief is also available; or, when an injunction would be inequitable, a party can seek a reasonable royalty for the unauthorized use or disclosure of a trade secret.  In order for a business to recover exemplary damages or attorney’s fees, it will need to need to demonstrate that there was a willful and malicious appropriation of the trade secret.  It should be noted, however, that in order for a business to recover exemplary damages or attorney fees against a former employee, any employment or non-disclosure agreement entered into after May 11, 2016 must advise the employee of the whistleblower and immunity protections afforded by the DTSA.

Businesses in Virginia, large and small, may invoke the DTSA to file a claim in federal court rather than pursuing a claim in state court under existing state law. Unlike Virginia state courts, federal courts allow for summary judgment on depositions and are more likely to rule on a summary judgment basis.  Furthermore, in certain circumstances, the DTSA allows plaintiffs on an ex parte basis to instruct a federal marshal to seize property “necessary to prevent the propagation or dissemination of the trade secret.”  Because of this strong but harsh provision, it is expected that judges will be more likely to issue temporary restraining orders as an alternative remedy.

Although the DTSA does not pre-empt state law, it does protect employees in that it does not codify the “inevitable disclosure” doctrine available in some states, which doctrine allows employers to enjoin employees from working for competitors on the basis of the information the employee possesses.  Under the DTSA, an injunction against an ex-employee working for a competitor must be based on evidence of actual or threatened misappropriation of a trade secret.

Gross & Romanick, P.C. can help your business utilize the DTSA and similar state laws to protect against the misappropriation of trade secrets, both by preparing protective language to insert into agreements with employees, contractors and consultants, and by aggressively litigating theft claims against individuals or businesses that appropriate your trade secrets.

Summer Venues and Marijuana Possession

Summer in Northern Virginia is synonymous with the start of the concert season at the Wolftrap National Park for the Performing Arts. It is also the time of year when area residents plan to camp in the Prince William National Forest and take weekend drives along the George Washington Memorial Parkway. Unlike Jiffy Lube Live, the Patriot Center, and the multitude of state parks in the Northern Virginia area, Wolftrap, the Prince William National Forest and the GW Parkway are “federal enclaves”. This means that misconduct at these venues can result in facing criminal charges in the United States District Court for the Eastern District of Virginia, Alexandria Division.

In other words, possession of just a small amount of marijuana can literally become a federal case. The United States Park Police routinely patrol the parking areas, overlooks and camp grounds. Often officers are dressed in plainclothes and are not easily identifiable. These federal officers can be aggressive in their efforts to uncover marijuana and alcohol possession.

In a case recently handled by our lawyers, we successfully persuaded the United States Attorney’s Office that the arresting officer’s aggressive behavior violated our client’s constitutional rights. In another recent case, an attorney at our law firm convinced a federal judge to suppress evidence of marijuana possession because the traffic stop which lead to the discovery of marijuana exceeded the permissible scope of the stop under the US Constitution. It is extremely important that every individual charged in federal court retain an experienced attorney to fully protect his or her rights.

Business Conspiracy and Employee's Fiduciary Duties

FACTS: Feddeman & Co offered a group of its employees the opportunity to buy out the main stockholder, creating an employee-owned corporation. During the negotiations, the buy-out began to seem unattainable to the employees, so these employees and directors of Feddeman met with a competitor (Langan Associates). The employees discussed the possibility of employment with Langan Associates, and used the threat of resignation as a leverage.

Feddeman then sued Langan and Feddeman's former employees for conspiring to ruin Feddeman's business, usurpation of Feddeman's business opportunities and breach of fiduciary duties.

In order to legally leave Feddeman the employees followed the advice of an attorney, who was also Langan's lawyer.

JURY RULING: An Alexandria Circuit Court jury awarded 3.3 million dollars to Feddeman.

COURT RULING: The judge set aside the 3.3 million dollar verdict in part because the "employee Defendants scrupulously adhered to the advise of counsel as to how to prepare to leave". The case has been appealed to the Supreme Court of Virginia.

SUPREME COURT RULING: The Virginia Supreme Court found that there was not basis to set aside the verdict because defendant employees and defendant directors did more than merely prepare to resign and advise others of a plan to leave. Credible evidence supported the jury determination that the conduct fell below the required standard of good faith and loyalty, and was sufficient to constituted a breach of fiduciary duty. The Court reinstated the 3.3 million dollar verdict.

ACTION ADVISE: When making an important business decision, hire a lawyer that does not have a conflict-of-interest. Conspiring against an employer with a competitor may be considered a breach of good faith and loyalty, as well as a breach of fiduciary duty.

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The above article is not meant to replace legal counsel. If you'd like to meet with one of our lawyers, please call 703-273-1400 or fill out our online Information Request form.

Commercial Landlord Law: Evictions

Jeffrey Romanick, partner at Gross & Romanick, P.C., prevailed on January 26, 2010 at a rehearing of an eviction of a restaurant in Baltimore (Maryland) City District Court.  

The Tenant, who was evicted January 15, 2010 for non-payment of rent, requested and received three separate hearings after the originally scheduled eviction date and time in the attempt to prevent or undue the eviction.  Mr. Romanick successfully won all of the hearings.  During the most recent three hour hearing, the tenant's lawyer argued that the rent had been cured at the time that the writ of restitution was filed and that the tenant should be given the opportunity to cure the rental default.  Mr. Romanick effectively presented factual evidence and legal argument sufficient to prevail at the hearing.

Because of a threatened protest by the Tenant's customers and friends, Edward Gross (managing partner at Gross & Romanick) arranged for a bodyguard to accompany the Landlord's chief witness.

The grateful Landlord's property manager circulated the following message: "I'm pleased to report that the judge awarded in favor of the Landlord and that the eviction was not reversed. Jeff did a wonderful job in court today to secure a successful outcome for Landlord. The hearing was long but without incident. (The bodyguard) who [accompanied] me to hearing was very helpful.  Thanks to the entire group!!"

Gross & Romanick, P.C. is a very experienced law firm, handling commercial landlord matters. Phone: 703-273-1400;  Website:www.gross.com

The Automobile Injury Patient: How to get paid

Many doctors who have treated personal injury victims have themselves become victims due to nonpayment of the medical bills. The desire of physicians to help the personal injury patient is often peppered with the fear that the mounting bills will not be paid or may not be paid for several years. However, there are ways to significantly reduce the risk of delayed or nonpayment for this type of care. In fact, the automobile injury case affords the doctor many avenues of insurance coverage not available in other types of case.

This article will discuss the best means of protecting your rights to be paid, utilizing available insurance and avoiding the pitfalls inherent in these cases.

Know Your Patient's Attorney

Contrary to political grandstanding, not all injuries are compensated by the court system through awards of millions of dollars. In fact, a great number of juries render verdicts for the defendant and give no money to the injured party. Ask the patient's attorney for an evaluation of the likelihood of success, especially if you are asked to wait for your money until after settlement or trial. Your bill is an extension of credit and you are entitled to consider whether you should invest in this case. A skilled attorney will want to cooperate with the doctor for many reasons including the need for medical reports and expert testimony at trial.

The good attorney should search for and help process insurance in order to pay the medical bills as they accumulate. Unfortunately, many attorneys believe that their only obligation is to handle the legal case without regard to payment of the medical bills. Even worse, many lawyers will help clients obtain the insurance coverage payments and advise them that they are entitled to keep this money even if it means a failure to pay the doctor.

While competent counsel cannot guarantee a win at trial, an inexperienced or ineffective attorney will have a difficult task contending with the high-caliber law firms hired by the insurance companies. Even if no suit is filed, an attorney who does not specialize in this area of law will generally not obtain the same level of settlements as experienced counsel. Finally, be extremely skeptical of the patients who are handling their own personal injury cases; insurance companies will take advantage of this situation. Doctors treating self-help patients should insist on "pay as you go" or refer them to a lawyer.

Medical Payments Coverage

Most automobile insurance policies have medical payments coverage, which is a "no-fault" source of payment for medical bills. If this type of coverage is included in a Virginia policy, there must be a minimum of $2,000 available (typical coverage is $5,000) over a maximum period of 3 years treatment. Policies issued in other States have similar provisions. The medical office should process these bills to obtain direct payment to the office. Allowing the patient, to process these bills may result in loss of this income. Before you rely on the attorney, find out his philosophy in this respect because many attorneys consider this money to be the property of the client. The patient's insurance agent can explain the amount of coverage available.

Do not expect the insurance company to offer information regarding the availability of coverage. Quite often, the insurance company will tell you to go to the liable party's insurance even when there is medical payments coverage. An attorney's call or letter should overcome this difficulty.

Reimbursement is only required for "reasonable and necessary expenses." Under this standard the insurance companies regularly claim that the treatment was excessive, that certain procedures were not needed or that the bills were abnormally high for the type of injury. They will request the medical records, narratives and other proof; give them what is reasonable, but do not accept a determination not to pay. The doctor's office must often advocate on behalf of the patient and should get the lawyer to insist on payment.

Do not assume a lack of coverage. Medical expense coverage may be available to many unexpected parties, such as relatives of policyholders even when they are in someone else's vehicle or are pedestrians. Read the policy. Ask the lawyer to make inquiries.

Health Insurance

Under Virginia law, medical bills must be paid by the health insurance carrier even if there is a personal injury-third party claim. Health insurance should be handled in the normal manner.

The medical office should not agree to any reimbursement to the health insurance company by way of assignment, subrogation or other type of pay back. Except in limited circumstances, health insurance policies issued in Virginia cannot require repayment to the insurance company. Therefore, do not reimburse any insurance company for payment received on a paid bill without the specific permission of the patient, as this may cause tremendous problems in obtaining return of this money by the patient from the insurance company.

Lien or Assignment

The patient and the lawyer should always be required to sign a lien/assignment form which requires the lawyer to pay the medical office out of the patient's portion of any settlement or judgment. Be sure the form is sent to the law firm. Current billing should be sent in order to be sure that the latest amount is paid.

Oral promises to pay out of settlement are not enforceable. Just sending the bills to the law firm will only amount to a total lien of $300 under the Virginia Code. Do not send this billing and medical records information directly to the insurance companies, unless instructed to do so by the law firm.

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The above article is not meant to replace legal counsel. If you'd like to speak to an attorney at Gross & Romanick, call 703-273-1400 or fill out their online Information Request form here.

Our Website Has A New Look

Check out our new website. We hope the new interface will make finding what you need that much easier. And remember, if you want to speak to an attorney directly, simply call us at 703-273-1400.

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.

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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.

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 Effect of a Default Judgement on Future Litigation (TransDulles Center v. Dr. Yash Sharma (1996))

Facts
Landlord obtained a default judgment in the General District Court in an unlawful detainer action. Tenant was personally served but did not appear at court. Default judgment was entered and landlord's witness presented evidence establishing a 3-month arrearage in rent, attorney's fees and costs. Even though the tenant was evicted pursuant to the unlawful detainer action, Tenant did pay the judgment amount.

Over a year later the Landlord again sued the Tenant for continuing rents accrued after the default judgment. The Tenant in this new case sought to assert defenses in order to deny liability.

Court Ruling
The issue of whether rent was owed had already been litigated, even though it was done by a default judgment. The Tenant cannot now deny liability.

Lease Drafting Tips
Permit the Landlord to seek continuing rents even after judgment or termination of the lease.

Action Advice
(1) File unlawful detainers in the General District Court, not the Circuit Court (2) Obtain personal service on the Tenant (3) Always present proof at court by a witness, not just by affidavit (4) Object to any contest of liability when seeking additional rental amounts at a later lawsuit.

The above is not meant to replace legal counsel. If you'd like to speak to an attorney, please contact Gross & Romanick directly by calling 703-273-1400 or by filling out the online Information Request Form.

The Lease Indemnity Clause

THE PURPOSE: Typically a Lease will state that Tenant will indemnify and hold the Landlord harmless from any claims of damages, suits, fines, liabilities, losses, costs and expenses or injury by the Tenant, Tenant's employees and third parties. Often the indemnity clause states that it even applies to Landlord's own negligence.

CASE LAW: In Appalachian Power Co. v. Sanders an indemnity provision was upheld which required the Tenant to indemnify the Landlord, even though the injured party fell on the premises into a hole from an old water meter. However, in the case of Hiett v. Lake Barcroft Community Ass'n an indemnity agreement signed by a triathalon participant, absolving negligence of the event's sponsor, was set aside on the basis of public policy.

INSURANCE: The Lease should require the Tenant to include in its insurance policies, provisions that: (1) protect the Landlord from subrogation or other claims that are covered by fire, casualty or other types of coverage; and, (2) prevent the invalidation of insurance coverage if the Tenant has waived its right to recover from the Landlord.

ADVICE: The Lease should include hold harmless, indemnification, and defense provisions relating to mechanic's liens, property damage, business losses, personal injuries, theft, safety, and environmental laws. Landlord's agents, employees, invitees and independent contractors should be covered by these provisions. The Lease should protect the Landlord from its own negligence, from construction injuries, and from damages caused by mechanical systems.

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The above is not meant to replace legal counsel. If you'd like to speak to an attorney, please contact Gross & Romanick directly by calling 703-273-1400 or by filling out the online Information Request Form.

Happy Clients

Here's a note that a client recently sent to Jeff Romanick of Gross & Romanick.

"Just wanted to personally thank you again for making the best out of my situation today. I couldn’t have asked for a better outcome, especially considering the charges against me. I am forever indebted to you! I wish you nothing but the best in your future legal conquests and cases."

To speak to Jeff Romanick (or any of the attorneys at Gross & Romanick) about your own situation, please contact the firm by calling 703-273-1400 or by filling out their online Information Request Form.

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.

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The above article is not meant to replace legal counsel. To speak to an attorney, contact Gross & Romanick directly by calling (703) 273-1400 or by filling out their online Information Request form.

Credit Applications: The Smart Way to Extend Credit

Merchants, landlords and anyone who extends credit via note, contract or lease should follow the lead taken by banks when making credit decisions. Make sure your applicant fills out a credit application. The credit application is a fact sheet about the debtor; often, it also includes credit terms. Part of the credit application should be a request for specific documents, such as tax returns, deeds and automobile titles. There are important reasons why you should obtain detailed information before you extend credit.

First, if there is a default, background information and a listing of assets will be invaluable during the collection process. It is imperative to have facts about the person's employment, bank accounts, assets, address and social security number. This information may be difficult to obtain if the account goes into default.

Second, considered decisions regarding extension of credit can only be made based upon complete data. (See box below for tips on how to investigate credit-worthiness.)

Third, if the debtor was untruthful or misleading on the credit application, it may be possible to sue for fraud or oppose the debtor's discharge in bankruptcy.

Finally, the terms and conditions regarding the extension of credit should be included in the application. In the absence of a written and signed agreement, the court will not award pre-judgment interest or attorney's fees.

Make certain the applicant actually signs the credit application. An otherwise completed application is virtually useless against the debtor without this signature. Also, if you want a personal guarantee, prepare separate signature lines for the guarantors. The guarantee should be made clear by the terms of the credit application and the form of the signature.

Investigate Credit Worthiness

• Call other creditors of applicant
  
• Call industry contacts
  
• Check with landlords and credit references
  
• Obtain a Credit Bureau Report
  
• Review Dun & Bradstreet Reports
  
• Study court records for information about: Judgments, pending litigation, title to real estate, liens on realty, and UCC financing statements
  
• Hire an investigator or attorney Have your CPA review financial records

The above is not meant to replace legal counsel. To speak to an attorney about extending credit to applicants, contact Gross & Romanick directly by calling 703-273-1400.

Assault & Battery

A recent client wrote to Gross & Romanick to offer thanks for the firm's expert handling of an assault and battery case.

Jeff Romanick handled the Assault & Battery Trial. The client was found Not Guilty. Ash Charles Dean handled the expungement: all arrest records were expunged.

The pleased client wrote: “Jeff – I hope this email finds you well. I am thrilled to have the expungement granted and the matter closed. Thank you for your and Ash’s assistance.”

For more information on Gross & Romanick's Criminal Law Practice, please contact the firm directly by calling 703-273-1400 or by filling out their online Information Request Form.

Virginia Lawyers Who Tweet

Our very own Jeff Romanick, @FairfaxLawyer, is mentioned in a recent Virginia Lawyers Weekly article on the Virginia Legal community on twitter.

Take a look: its a fascinating analysis of Twitter for those not in the know and a run-down of Virginia Lawyers on twitter.

Buildout Allowance - Landlord Gets Slammed

FACTS: Tenant leased property from a commercial Landlord. Part of the lease agreement was a building allowance of $699,000 to be paid by Landlord for improvements. Tenant hired a contractor to do the improvements to the property. The Contractor accidentally demolished an unoccupied improvement on the property. Upon noticing their mistake - the same day, The Contractor offered to remedy by either rebuilding the improvements or allowing for a credit for the value of the improvements. Instead of accepting one of the offered remedies the Landlord decided to withhold $301,000 of Tenant's allowance. When Tenant and Contractor sued for the allowance, the Landlord counter-claimed for lost rent and replacement of the improvement even though the Landlord did not have a tenant for the demolished space and did not replace the demolished improvement.

COURT RULING: The Court determined that the Landlord's counter-claims were without merit; and that the Landlord and its counsel should have known of the meritless nature of the claim. Judgment was entered against the Landlord for $351,057.65 for the withheld allowance plus interest. The Court also sanctioned the Landlord the sum of $251,018.16 for attorney's fees and costs for the baseless counter-claim and defenses, which prolonged the litigation (Va. Code § 8.01-271.1).

ACTION ADVISE: A building allowance is an enforceable right of the tenant. If the landlord withholds payment for the allowance, it will need good cause to do so. Furthermore, if a landlord does not have a tenant for the demolished or damaged space, it should not withhold a building allowance on the basis of lost rent. If the landlord has no intention of rebuilding the damaged improvements, the landlord is not acting in good faith by charging the contractor for the repair cost. Finally, asserting baseless claims in a court proceeding can result in sanctions. Try to resolve these disputes out of court!

The above article is not meant to replace legal counsel. If you'd like to speak to one of Gross & Romanick's attorneys, please contact the firm by filling out their online form, emailing law@gross.com, or calling (703) 273-1400.

Mechanic's Lien: What is Part of the Original Contract

A recent decision by Judge Thomas D. Horne of the Circuit Court of Loudoun County in Tart Lumber Co., Inc. v. Drewer Dev. Corp. may have significant impact on the timing requirements for filing mechanic's liens by suppliers, subcontractors and other lien claimants. Judge Horne dismissed approximately half of the $91,613.51 of liens by finding that each invoice evidenced a separate contract with a separate required date for filing of the memorandum of mechanic's lien.

Under Virginia Code ß43-4 a lien claimant must file a memorandum of lien no "later than ninety days from the last day of the month in which he last performs labor or furnishes material." In the 1993 Virginia Supreme Court case of American Standard Homes Corp. v. Reinecke a portion of a mechanic's lien was dismissed because subsequent orders were not considered part of the original deal; thus, the memorandum for the earlier materials was found to be filed after the statutory period for filing expired.

Judge Horne essentially agreed with the title companies' view of the Reinecke case. Even though the contractor signed a credit agreement pursuant to which the goods were delivered, the court found that each separate delivery was a separate contract. The credit agreement did not obligate the supplier to sell, nor the buyer to purchase, any specific materials. Thus, the court found each order to be a separate contract with a new 90-day filing requirement.

While Judge Horne is only a circuit court judge and his opinion has no precedent value in other courts, it may mean that other judges and ultimately the Virginia Supreme Court will have the same interpretation of the Reinecke case. On the other hand, we are aware that other circuit court judges have ruled more favorably regarding inclusion in "last perform(ed) labor or furnish(ed) materials". Apparently there are some cases on appeal to the Virginia Supreme Court to settle this issue.

Meanwhile, it will be important to file mechanic's liens within 90 days of the last day of the month for each separate invoice, or make sure you can prove that subsequent deliveries were pursuant to a prior single contract. Judge Horne's opinion focused on whether the supplier would have been required to deliver and whether the contractor would have been required to accept the materials in question; absent such requirement, he found that there was no contract and each delivery was a separate sale with a separate time period. This means that claimants need a written contract for the entire order, or file quick and often.

As you imagine, claimants seeking to collect unpaid bills believe the courts are impairing the protection that the mechanic's lien statute intended to provide. Property owners, title companies and banks are pleased with the ruling which presents another technical roadblock to enforcement of a mechanic's lien.

The above article is not meant to replace legal counsel. To speak to an attorney, please contact Gross & Romanick directly by filling out our online form, emailing law@gross.com, or calling (703) 273-1400.

Employers Rights Regarding Jury Duty

The words "jury duty" are not music to an employer's ear. It means the employee may miss a few days of work, or even a week or more. Many employers believe they must pay the employee for the time missed. Employers can breathe a little easier if they understand Virginia Code § 18.2-465.1 and the Federal Jury System Improvement Act.

Virginia Code § 18.2-465.1 does not specifically mention payment of salary. It does, however, state that an employer may not discriminate against an employee who is called to jury duty. The Code states that the employer may not discharge the employee, or take any adverse personnel action. Also, upon reasonable notice by the employee, the employer may not require the employee to use sick days or vacation time for the appearance in court.

The Federal Jury System Improvements Act (28 USC §1875.) does not allow an employer to intimidate, coerce or otherwise discriminate against an employee who must attend jury duty. However, an employer is not required to pay an employee for time missed as long as the employer's actions would be the same toward any employee who missed work time.

The Commonwealth of Virginia has prepared a book that answers frequently asked questions about jury duty. That book, which is published on the Internet at www.courts.state.va.us/jury/cover.htm, states that "many employers will continue to pay your salary while you are in jury service."

Consumer Online at http://consumer.org.nz/problem/leg-jury.html also offers legal advice to jurors. The site states that employers are "encouraged", but not required, to pay their employees for time missed for jury duty. Also, if an employer decides to pay an employee for jury duty, then the fee normally paid to the juror will be paid to the employer for reimbursement.

One other interesting web site is http://www.ahipubs.com/problem_solvers/jury.html. This site is designed to answer employer's questions, such as how to handle a key employee has been called to jury duty. The site advises that an employer may ask an employee not to serve, but the employer must demonstrate to the court that an extreme hardship would be placed on the employer if the employee were required to serve. An employee may refuse an exemption from jury duty, even if secured by the employer. In that case, the employer may not, "threaten to [or] discharge, intimidate or coerce" or retaliate in any way for the time the employee serves on jury duty.

Conclusion
So long as an employer does not discriminate, violate an employee contract/policy or the Fair Labor Standards Act (FLSA), an employer does not have to pay an employee for time spent at jury duty. Nevertheless, an employer may not force an employee to use sick or vacation days for jury duty as long as reasonable notice has been given to the employer.

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The following article is not meant to replace legal counsel, merely to serve as an educational supplement to Gross & Romanick's clients. If you'd like to speak with an attorney about your specific situatin, please contact Gross & Romanick directly by e-mailing law@gross.com , filling out our online form, or calling 703-273-1400.

Prebankruptcy Provisions: Should you include them in your contracts?

As part of its Business Law practice, Gross & Romanick is dedicated to educating its clients; this information, however, is in not intended to replace legal counsel. If you need legal representation, please contact Gross & Romanick today by visiting their website or by calling 703-273-1400.

Creditors and lending institutions have recently been including various provisions in their contracts and credit agreements, which contemplate what will happen in the event of a bankruptcy. The provisions can be divided into three basic categories: (1) Waivers; (2) Covenants; and, (3) Representations/Admissions.

Waivers limit a borrower's right to either file a bankruptcy petition or to oppose the creditor's lifting of the automatic stay. Covenants provide for immediate relief from the automatic stay or consent not to contest a lift stay motion. Representations/Admissions include provisions in the agreement which admit the elements necessary for the creditor to lift the automatic stay, admit that any future bankruptcy filing will be made in bad faith to hinder or delay the creditor and admissions that security interests are properly perfected.

The prebankruptcy waivers provide a comfort level to lenders and creditors in the hope that they will not be delayed or damaged in the event of bankruptcy and they also are put in agreements to provide assurances that they are avoiding deals with debtors heading toward bankruptcy.

The courts are split on the enforcement of the prebankruptcy provisions. Some courts have expressed concern as to whether or not the provisions violate public policy. In almost all cases however, the courts have found the agreements are not necessarily self-executing. Therefore, a creditor should be weary of taking any action, which may result in a violation of the automatic stay without first obtaining bankruptcy court approval.

On the positive side, prebankruptcy provisions have proven to speed up the process and assist creditors in obtaining quick relief from the automatic stay of bankruptcy. In addition, some courts have upheld the various admissions and representations as conclusive evidence of the elements needed to lift the stay. This has led to a decrease in litigation cost for some creditors.

It would be dangerous and unadvisable to take any action which may be determined to be a violation of the automatic stay in reliance on the prebankruptcy provisions, but including the provisions may save you litigation fees in the long run. Therefore, while pre-bankruptcy provisions are not guaranteed to work, you may want to include them in your agreements.

Act of God: Are You Saved?

Gross & Romanick's litigation division offers legal counsel and representation to clients across the Metro DC area. The following article about "Acts of God" is meant to provide information to its many clients--but not to replace actual representation. To seek legal counsel, please contact Gross & Romanick today via their website or by calling 703-273-1400.

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Flood, fire, and famine may be the traditional hallmarks of divine intervention, but the law has a very specific definition of what count as actions by the Almighty. Legally, "Acts of God" are "misfortunes and accidents arising from inevitable necessity which human prudence could not foresee or prevent" - in other words "bad luck." The earliest recorded use of the term "Act of God" was by Sir Edward Coke in 1581; he used the term to refer to death, and later extended it to include a sudden tempest that broke down sea walls. In 1899 the Virginia Supreme Court had the opportunity to address the Act of God question when it excused a reluctant groom from his promise to marry because the unfortunate fellow had contracted a urinary disease that was aggravated by sexual intercourse. As the blushing Court states: "I desire to speak with all reserve: but to possess the lawful means of gratifying a powerful passion, with the alternative of abstaining or periling life, is, indeed, to incur a risk of intense misery, instead of mutual comfort."

Similarly, in 1931 the Virginia Supreme Court came to a widow's aid, when it made her deceased husband's life insurance company pay. The insurance company tried to avoid the insurance contract by a provision that required prompt notice of incapacity even from a person who was too incapacitated to give any notice. The court quotes: "The primary purpose of all insurance is to insure or to provide for indemnity, and it should be remembered that, if the letter killeth, the spirit giveth life."

Most Act of God defenses involve extraordinarily violent storms, sudden tempests, severe frosts, great droughts, lightening, earthquakes, sudden death and illness. Or, a remarkable "freshet"? A railroad company successfully argued that the sweeping away of a privy with one of their employees inside was excused because a freshet with this volume of water pouring through the creek could not have been anticipated.

To successfully employ the Act of God defense, one must have been victim of a natural cause without human intervention that could not have been prevented by exercise of reasonable care and foresight. So, ironically, a devout worshiper who testified that he was trotting through his church under the Spirit of the Lord when he injured a fellow congregant was not permitted to use "Act of God" as a defense.

Should an atheist be allowed to make the Act of God argument? Maybe an agnostic judge should decide the issue.