In certain types of litigation, including litigation involving real property and corporate assets, a party (typically the Plaintiff) will request that the Court appoint a receiver, or the Court may decide to appoint a receiver without being asked. A receiver is neutral person who is not a party to the litigation who takes possession of and manages property or assets belonging to one or more of the litigants.  California Rules of Court Rule 3.1179. A receiver is an...

As we discussed in our blog last week, a foreign corporation or other business entity transacting business within California must comply with the certification requirements of Corporations Code § 2105 and obtain a Certificate of Qualification.  As set forth in the following list, the consequences for failing to comply with the California Corporations Code (the “Code”) can be harsh. A foreign entity is not permitted to maintain an action or proceeding within California regarding...

We have previously written about doing business in California, and how the California Corporations Code uses a “transacting intrastate business” test.  Importantly, if a corporation or other entity is deemed to be doing business in California under the “transacting intrastate business” test, that entity must obtain a “Certificate of Qualification” under Corporations Code § 2105.  This post will look at what will and will not constitute “transacting intrastate business.” Transacting Intrastate Business Transacting intrastate business means that...

Section 16600 of the California Business and Professions Code prohibits contracts from restraining individuals “from engaging in a lawful profession, trade, or business of any kind.”  While the reach of Section 16600 is broad (recently reaching as far as the  Delaware Court of Chancery), it has traditionally been applied only to employment contracts or agreements that contain non-competition or non-compete clauses where the former employee is prevented from working with a competitor. But what about...

Previously on the blog we discussed how non-compete agreements in California are presumed void unless they meet one of two very narrow statutory exceptions. A recent decision from the  Delaware Court of Chancery further emphasized the reach and effect of this presumption by upholding a California employee’s right to contract despite a non-compete agreement in an employment contract governed by Delaware law. Specifically, in  Ascension Insurance Holdings, LLC v. Underwood et al., the Delaware Court...

Restrictive covenants are contract clauses that  limit a contracting party’s future conduct. A restrictive land covenant prevents certain use of the land. In this article, we will discuss restrictive land covenants, and how to enforce them in California. In general, restrictive land covenants serve the purpose of enforcing neighborhood presentation standards. These are your restrictive easements, Covenants, Conditions, and Restrictions (“CC&Rs”), and other Home Owner’s Association rules. They can range from mandating where a home owner...

Previously on the blog, we provided some general information about the formation requirements for various business entities. One of the most commonly utilized entities in California is the limited liability company (LLC). Generally speaking, the steps for forming an LLC in California include the following: Pick a Name for the LLC. Selection of the name is limited by the California Revised Uniform Limited Liability Company Act (RULLCA). See California Corporations Code Section 17701.08. The...

Previously on our blog, we discussed the differences between mergers and acquisitions, as well as the recent increase in merger and acquisition activity. There has been increased activity across different industries to adapt to new market dynamics linked to changes in technology. The newest major merger announcement has come from Staples, the office supply giant. In order to stay competitive with goliath’s like Amazon and Wal-Mart, Staples has announced a plan to purchase Office...

In January 2015, the United States Supreme Court agreed to hear a property case that originated in California dealing with whether the Fifth Amendment of the United States Constitution protects the seizure of personal property as well as real property. The case, Horne v. U.S. Department of Agriculture, has already been before the United States Supreme Court before. In 2002 and 2003, the U.S. Department of Agriculture (the “USDA”) forced the Horne family to take...

Previously on the blog, we defined what constitutes a cardinal change in a construction contract. Importantly, California is one of the few states that differentiates between a cardinal change and the related legal theory of  “abandonment.”  It is important for property owners and contractors to understand the difference and the implications of both. A cardinal change is a change that goes beyond the permitted changes detailed in the contract.  It is usually a request so far outside...