Ridesharing Hit with More Business Lawsuits

California prohibits unlawful, unfair, and fraudulent business practices, as well as unfair, deceptive, untrue or misleading advertising. Recently, the district attorney offices for Los Angeles and San Francisco claimed that Uber, one of the the most popular ridesharing companies, violated these California business laws in recently filed actions against the company.

Uber (recently valued at $41 Billion and has backers from Wall Street to Silicon Valley), is no stranger to lawsuits, which are coming from all over the world. In California, the district attorneys’ offices are alleging that Uber misleads consumers about the service’s safety and overcharges them with unnecessary tolls in violation of California consumer protection laws.

According to the lawsuit, Uber claims to be an industry-leader in conducting background checks, but fails to fingerprint its drivers. The district attorneys’ offices claim that without fingerprinting, the company’s criminal checks are “completely worthless.”

The San Francisco district attorneys’ offices also accuse Uber of fraud for charging certain tolls. Uber charges a $4 “airport fee toll,” which is automatically added to rides to and from San Francisco International Airport, even when drivers do not pay a toll themselves. Uber also automatically adds a $1 “safe rides fee” to every ride, claiming that this fee goes to funding the company’s background checks.

The district attorneys’ offices have asked the court for an injunction that will force Uber to stop these practices immediately. They also seek restitution and civil penalties for riders who suffered economic harm from the unnecessary fees.

California law allows a $2,500 penalty to be issued for each violation of the business code. The district attorneys’ offices claim that that are “tens of thousands of violations,” meaning that Uber may be facing a very expensive lawsuit.

Lyft, a competing ridesharing company, who recently raised $700 million, chose to settle a similar lawsuit, agreeing to stop picking up passengers at airports until it obtains the necessary permits and approvals. Lyft will also submit its application to a California testing agency to measure its accuracy in calculating fares.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business, contract, and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law needs

 

What is an Adhesion Contract?

An adhesion contract is also referred to as a contract of adhesion or a standard form contract.  Often times this type of contractual agreement is drafted by one party, and usually looks like a template contract used in all agreements with that party. Adhesion contracts are commonly used for car purchases, cell phone and cable contracts, insurance matters, rental agreements, mortgages, and deeds.

In an adhesion contract, the drafting party is usually a business (typically a large business) with a much stronger bargaining position. The other party, usually the purchaser or consumer, does not have a role in drafting the contract and is simply presented with a “take-it-or-leave-it” offer without the ability to negotiate or modify the contract terms.

Because of the mismatched drafting power that is a part of an adhesion contract, courts will carefully scrutinize the terms of challenged adhesion contracts. A court can invalidate provisions in an adhesion contract if it finds evidence of unequal bargaining power, unfairness, and unconscionability, all to the detriment of the challenging party.

In determining whether there was unequal bargaining power, unfairness, and unconscionability, a court will examine the nature of what the signing party was agreeing to, the possibility of unfair surprise, and whether there was a lack of notice. The “doctrine of reasonable expectations” is one way for an adhesion contract challenger to justify invalidating an entire adhesion contract, or certain terms thereon. Under this doctrine, the weaker party will not be held to contract terms that are beyond what the party would have “reasonably expected” from the contract.

For example, a cell phone company forcing all customers who use its services to attend arbitration sessions in Detroit would likely not be “reasonably expected” by consumers in Southern California.  A court will not, however, free a party from an obligation to perform contract terms just because they did not read or understand a contract.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business, contract, and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law needs.

Title Insurance: Why It’s Important and Why You Need It

Title insurance protects real estate owners and lenders from property loss or damage that could arise from defects in the title to the property, or damages due to liens and/or encumbrances.  Each title insurance policy is different, as each one will have different terms and conditions.

For most types of insurance (such as car or health insurance), the insured generally pays a monthly premium to protect against potential future events. With title insurance, the insured pays a one-time premium at the close of escrow (when the property sale becomes final) to protect against events that occurred in the past. For example, title insurance can protect a property owner from claims from other individuals who claim to own the property or have certain rights to it.

Most lenders require real estate purchasers to have title insurance. In fact title insurance is usually one of the many fees involved in closing costs. What buyers should know is that they usually have the option to shop around for their own title insurance if they want to, and should always review the coverage offered to ensure that all appropriate endorsements are included. This could be a good idea if the buyers expect to property to greatly appreciate in value.

Should a title dispute arise in a real estate transaction, the title insurance company should be responsible for the buyer’s litigation representation and associated costs. Specific terms and limits of the policy, and the extent of the representation, will be outlined in the policy. However, it may still be (and often is ) beneficial for a buyer to retain his, her, or its own counsel to oversee the representation provided by the insurer, as an insurance company’s attorney may be more concerned with saving the insurance company money throughout the litigation process.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business, contract, and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law needs.

 

Quiet Enjoyment for a Commercial Tenant in California

Previously on our blog, we have discussed the many differences between rights held by residential as opposed to commercial tenants. Recently we examined how both residential and commercial tenants have a right to quiet enjoyment of their rented property, but that it is sometimes more difficult for commercial tenants to escape the term of a lease for a violation of the covenant. Here, we will discuss what quiet enjoyment means for a commercial tenant.

The right to quiet enjoyment requires a landlord to ensure that a tenants’ use and enjoyment of the property will not be disturbed.  Every California lease includes a covenant of quiet enjoyment, and such a covenant is often an express term in commercial leases.  But unlike residential rental agreements, parties to a commercial lease can modify or waive the covenant of quiet enjoyment.

Even if a commercial lease contains a provision ensuring quiet use and enjoyment, another provision in the lease can modify or limit the remedies available for a breach by the landlord. For example, in one case, the lease agreement reserved a right for the landlord to renovate the property. The Landlord did so, but the tenant complained that the renovation, which was diminishing the tenant’s visibility to customers and causing dust to enter the premises, was interfering with his right to quiet use and enjoyment. A court held that the provision allowing remodeling without claims for damages modified the covenant of quiet enjoyment, and the tenant lost. Fritelli, Inc., v. 350 North Canyon, 202 Cal.App.4th 35 (2011).

As this case shows, the answer to “What does quiet enjoyment mean for a commercial tenant” is often determined by the specific terms of the commercial lease at issue.  The right can be eliminated or modified by a term or multiple terms of the lease agreement, making a particular commercial tenant’s rights as unique as their lease.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business or real estate law concerns.

Negotiating a Commercial Lease

Unlike run of the mill residential leases, many terms of commercial leases are usually negotiable, although your leverage in the negotiation will be affected by your real estate knowledge and the current rental market. For example, if there is a surplus of commercial space available in your preferred area, you will likely have more leverage to negotiate terms with a prospective landlord.  Similarly, having confidence in and being informed about the terms of the lease, strength of the market, and desirability of the property, you will also work in your favor during negotiations.  In negotiating a commercial lease, common negotiating points include the rent, rent increases, lease term, common area operating expenses, and sublease and assignment terms.

Negotiating a Commercial Lease: Rent Payment and Increases

Although landlords generally do not lower the rental prices they offer, they may consider reduced rent, i.e., rent concessions, to compensate for moving costs, tenant improvements, or caps on rent increases. Commercial lease agreements almost always contain an annual percentage increase on rent. The amount of the annual increase is often negotiable, as is a cap on the percentage increase. If the lease space needs a lot of improvement, this may be used to lower rent or support a request that the landlord cover certain improvements.

More complicated commercial leases, such as leases with rental provisions that include percentages of net sales as a component of the monthly rental amount, are often subject to more intensive negotiations where the tenant and the landlord would look to balance the benefits of a lower base rent against the potential for high returns from sales figures.

Negotiating a Commercial Lease: The Term of the Lease

Depending on whether you are a commercial landlord or tenant, you may prefer either a short or long term lease.  Generally, a tenant will prefer a short-term lease, which will allow more flexibility.  A commercial landlord will usually prefer a long-term lease, ensuring steady rent for a period of years. Commercial tenants negotiating a commercial lease who have a location-sensitive businesses often find that long term leases are more beneficial because they can rely on the affordable business space for a predictable period of time, and the stress of moving frequently is eliminated.  In addition, a long term lease generally allows tenants to lock in more favorable rental rates. A common way to balance the competing benefits of long term and short term  leases is to negotiate option rights, i.e., the right to renew the lease for successive terms.

Negotiating a Commercial Lease: Subleases or Assignments

The right to sublease or assign a space is also negotiable. Tenants usually seek this right to protect themselves from being locked into a space when business needs require the tenant to move. Landlords sometimes will agree to a sublease or assignment in order to make sure their property is filled, but some either specifically prohibit or restrict such rights to protect the quality and type of tenants.  Granting the tenant sublease and assignment rights subject to the landlord’s “reasonable” discretion and approval is a good way to reach a reasonable compromise on these issues.

If you have any questions about negotiating a commercial lease, contact an experienced attorney. Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. Contact us at (310) 277-7747 to see how we can help you with your business or real estate.

Supreme Court Rules for Amazon in Employee Searches Case

It is common practice for retailers to search their employees before they leave work. In a recent United States Supreme Court opinion,  Integrity Staffing Solutions v. Busk, the Court ruled that workers do not have a federal right to be paid for the time spent in these post-shift employee searches. This decision will save businesses billions of dollars, including companies like Amazon, who is projected to save over $100 million.

In the opinion  the justices unanimously rejected former Amazon warehouse workers claims that Amazon and the company that staffs several Amazon facilities were not fairly compensated for their time during these employee searches, and that Amazon and the staffing company were therefore violating federal wage laws. Integrity Staffing Solutions v. Busk, 574 U. S. ____ (2014).

The opinion of the Court centered on what constitutes a “principal activity.” Under the 1938 Fair Labor Standards Act, workers must be compensated for their principal activities, which the Supreme Court previously described as activities that are “integral and indispensable” to the job itself.  The Court found that the security screenings at issue did not constitute principal activities, as they were not integral and indispensable parts of the job. Therefore, there is no need for companies to compensate their employees for the time they spend waiting to be searched and the time of the employee search.

Amazon’s position was that employee searches help protect against theft, and is necessary but not part of the employees’ jobs. This ruling may shield several other companies who use employee searches from facing similar claims, including Apple, Ross Stores Inc., CVS Health Corp., and J.C. Penney Co.  If the Supreme Court had decided for the workers, Amazon and the various staffing agencies it uses could have been liable for the back wages of as many as 400,000 workers, amounting to $100 million or more.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

Complications of Buying and Selling Property with Easements

Whether you are buying or selling real estate, it is important to determine whether any easements encumber the property, and, if there are, what effect the easements will have on the deal.

First, an easement is generally defined as a right to cross or use someone else’s land for a specified purpose. For example, your neighbor may have a small easement over your land to access the closest main road. The easement does not allow your neighbor to occupy the land, but your neighbor can stop other people from using your land (including you) if it interferes with his or her access to the main road. You still have every right, as the property owner, to use that land too.

So now the question becomes, if you are moving and selling the property, what happens to that easement? Will your neighbor be out of luck and unable to access the main road?

As a seller, you need to tell potential buyers about the easement. When the property sells, the easement has to be incorporated in the deed and all other legal documents. The seller also has to tell the easement holder, in our example the neighbor, that the property is being sold.

Easements need to be publicly recorded in the County Recorder’s Officer (or similar government agency) so that they show up on a title search.

Once a real estate buyer is informed about an easement, he or she should obtain a copy of the recorded easement and contact the easement holder and see what, if any, limitations exist with respect to the easement, or put another way, exactly how the easement affects the property.  For example, does the easement exist indefinitely, or does it cease when the land is divided or sold?

These important issues are best to work out beforehand with all parties involved to avoid future litigation over the use and enjoyment of the property and the easement.

If you have any questions about easements or real estate transactions, contact an experienced attorney. Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

What is a Receivership?

A receivership is used to help enforce court judgments. A court can appoint an unbiased third party to be a receiver, and this person or entity is then charged with carrying out a court’s orders. Establishing a receivership is only one of many options to enforce a judgment, but they are particularly useful in cases involving management of a corporation, small business, or income-producing real property.

The purpose of a receivership is to enforce an order in a way that avoids conflicts of interest and properly represents the court’s wishes. Receivers are often asked to file reports with the court to make sure they are operating in a transparent manner.

One way a receivership can be utilized is when a court decides that a business owes a creditor a certain amount of money. Upon winning this judgment, a creditor’s attorney may motion the court to appoint a receiver to enforce the judgment and ensure that the business debtor acts quickly to pay the creditor and does not attempt to hide or liquidate assets, particularly if the case involves fraudulent transfers, Deed of Trust foreclosures, and certain other white collar crimes.

Similarly, receivers are also often appointed to manage real property. Sometimes property is used to satisfy a creditor’s claims, and a receiver can be appointed to manage the property in a way that generates income, or the receiver may be asked to sell the property and distribute the funds.

Regardless of the matter involving the receiver, parties should ensure that the court order directing the receiver contains clear instructions and guidance as to the receiver’s responsibilities, as well as the responsibilities of the defendant and plaintiff in the case.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

Why You Should Never Destroy Evidence

If you find yourself or your business in the middle of a lawsuit, the absolute last thing you should do is destroy evidence, such as documents and files, whether or not they are damaging or incriminating.  If you have been sued and you get rid of or destroy evidence, including emails, you may face severe penalties, including criminal ones.  An example of the many rules and laws that prohibit tampering with or destroying evidence is the federal Sarbanes-Oxley Act.

In 2002, Congress passed the Sarbanes-Oxley Act. One of the Act’s provisions makes it a federal crime to destroy evidence, including documents, computer drives, and even emails. This provision was enacted in response to the type of conduct committed by Enron’s auditors, who destroyed anything with details about the energy company’s fraud on its investors.

The corporate-responsibility law was taken even further in 2012, when the 11th U.S. Circuit Court of Appeals in Atlanta upheld a conviction of a fisherman who was charged with Sarbanes-Oxley violations when he threw some of his fish overboard.

This extreme example was appealed to and reviewed by the United States Supreme Court.  During oral argument, the Justices largely mocked the idea of applying the anti-shredding provision of the Sarbanes-Oxley Act to fish, but an opinion will not be handed down until summer 2015. In the midst of biting questions from the high Court, proponents of the argument still held that this section of the Act is a straightforward ban on destroying evidence.

Despite the humorous nature of this example, it is important to stress the gravity of tampering with and/or destroying evidence, as violators could face up to twenty years in prison under Sarbanes-Oxley, or other penalties under similar state laws.  Thus, it is important to always err on the side of caution, keeping all documents, emails, hard-drives, and so on to avoid potential violations.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

Specific Performance in Real Estate Transactions

Specific performance is a type of remedy available in some contract disputes where a plaintiff requests that a court enforce the contract in question and force the defendant to perform the agreed upon terms instead of or in addition to paying the plaintiff money damages. It is most commonly used when there is a dispute over the purchase and sale of real estate.

Specific performance is an important remedy because real estate projects often involve large amounts of capital, builders frequently rely on a specific location, and a particular piece of property could be essential to a project.

To bring a lawsuit for specific performance a plaintiff has to establish the following elements:

  • That an enforceable contract exists between the parties;
  • Adequate consideration (i.e., payment);
  • The plaintiff’ performed his/her/its part under the contract, or has a valid excuse for nonperformance;
  • The defendant breached the contract; and
  • Proof that damages or another remedy at law are insufficient.

The court must be able to make out the essential terms of the contract, which include the identities of the buyer, seller, and property, the price to be paid (consideration), and the time and manner of payment. If certain terms are missing, the court might be able to insert reasonable ones.
The law presumes that real property is unique, Therefore, an action to enforce the sale of a particular piece of property can typically be enforced by specific performance. If the plaintiff is successful the court will order the sale of the property at the price and terms agreed upon.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.