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July 2015 Archives

Challenging An Arbitration Award

Alternative dispute resolution is rightly gaining steam as an efficient, fair mechanism for the resolution of complex business disputes.  Many companies are redrafting their standard-form contracts to include mandatory arbitration clauses.  This is particularly true for companies doing business across state or national borders, so that they might avoid being hauled into court in a foreign jurisdiction.  But what if you agree to arbitrate a business dispute and end up losing?  Do you have any recourse?

Child Support When Combined Gross Income Exceeds $250,000

In a recent decision, a panel of the Massachusetts Appeals Court considered a Probate and Family Court's modification judgment ordering the payment of additional child support that was calculated based upon the portion of the parties' joint income in excess of $250,000.  Martin v. Martin, 87 Mass. App. Ct. 1119 (2015) (pursuant to Rule 1:28).  

Swedish Court of Appeals Overturns $173 Million Arbitration Award On Grounds That Arbitral Panel Exceeded Its Authority

One of the advantages of arbitration is the certainty that comes with it. While arbitration awards can be challenged in court, it is extremely difficult to overturn an award. In fact, courts will vacate, or refuse to confirm an arbitration award only if there was a serious conflict of interest or corruption on the part of a neutral arbitrator, or the arbitrators exceeded their powers. This latter ground, the arbitrators exceeding their authority, is most frequently used as a basis for setting aside an arbitral award. A recent decision by the Swedish Court of Appeals setting aside a US $173 million arbitration award provides some guidance on how this standard may be applied.

"Managerial Control" Key To Construction Site Negligence Claim

For a viable negligence claim against a construction project management firm, the plaintiff has the burden of showing that the defendant exercised "managerial control" over the manner in which the work was performed when the plaintiff was injured.  A recent Suffolk Superior Court ruling emphasized that in order for an injured plaintiff-laborer to bring suit against a construction manager, there must be a showing that the management company directed the work, assumed contractual responsibility, or otherwise could be deemed to have been "in control" of the jobsite.  

CFPB to institute TILA-RESPA Integrated Disclosure Rule on October 3, 2015

The Real Estate Settlement Procedures Act (RESPA) was enacted by Congress in 1974 in order to promote "more effective advance disclosure to home buyers and sellers of settlement costs." 12 U.S.C. § 2601(b)(1). In particular, RESPA requires the issuance of forms to the borrower that "conspicuously and clearly itemize all charges imposed upon the borrower and all charges imposed upon the seller in connection with the settlement." 12 U.S.C. § 2603(a). The related Truth-in-Lending Act (TILA) of 1968 requires that, "in the case of any consumer credit transaction," the lender "shall clearly and conspicuously disclose" to the borrower certain material terms and shall provide notice of right to cancel.  15 U.S.C. § 1635(a).  

Changing the Vocabulary Around Non-Custodial Parenting

In negotiating parenting plans for nearly 20 years, I have gradually eliminated a few different words from my vocabulary.  For example, it's been a long time since I've used the words "visit" or "visitation" to describe what a non-custodial parent does when he or she is with his or her children - regardless of whether it's related to a Wednesday night dinner, a full weekend of overnights from Friday pick-up to Sunday night drop-off, or an extended period of vacation.  

The Fate of Fixtures at the End of a Commercial Lease: Who Pays for Removal?

The obligation of a tenant to remove fixtures and the right of the landlord to recover the cost of removal of fixtures and attendant repairs to the property were the subject of a recent decision by Suffolk Superior Court Judge Robert Gordon in The Wilder Companies, Ltd. v. California Pizza Kitchen, Inc., 32 Mass L. Rptr. 505 (2015). 

Two Appellate Courts Hold That Banks' Duty of Care to Non-Customers Is Extremely Limited

The United States Courts of Appeals for the Sixth and Eleventh Circuits have added to the significant body of law limiting a bank's duty to non-customers harmed or defrauded by one of the bank's actual customers.  The Sixth Circuit reaffirmed that, under Michigan law, a bank only owes a duty of care to its own customers.  The Eleventh Circuit found that, under Florida law, a bank has no fiduciary relationship with its customers and only owes a duty of ordinary care in arms-length transactions with its customers, and that any aiding and abetting liability for acts of a bank's customers is limited to cases where a bank has actual knowledge of the customer's bad actions.

Family Law Arbitration

I recently returned from the American Academy of Matrimonial Lawyers Arbitration Training Institute as a Certified Family Law Arbitrator.  A few words about family law arbitration: Arbitration falls within the category of alternative dispute resolution ("ADR").  It can be a very helpful tool to resolve family conflict.  Contested litigation is the traditional method to resolve legal disputes arising from family law matters, but contested litigation can be a time consuming and expensive process.  As a result of the frustration and expense that many have experienced from being engaged in contested family law litigation, there has been a push in recent years to resolve family law matters through various ADR procedures, such as mediation, conciliation, and arbitration.  

Avoiding Some of the Uncertainty of Non-Compete Agreements: Fiduciary Duties of Minority Shareholders as a Basis For Enforcing Non-Compete Agreements

Evaluating the enforceability of a non-compete agreement under Massachusetts law involves an inherent degree of uncertainty.  This is because courts use subjective standards to determine whether to enforce a non-compete agreement based on whether it is: (1) reasonable in scope, length of time, and geographic area; (2) protective of a legitimate interest of the employer; and (3) supported by adequate consideration.  Thus, enforceability depends on the facts of a particular case.  Employers can increase the likelihood that a non-compete agreement will be enforced as written by tailoring non-compete agreements based on the guidance of past court decisions.  To that end, non-compete agreements should be limited to a duration of no more than 1-2 years. The geographic scope of a non-compete agreement should be limited to the area actually served by the employer or where the employer has specific plans to expand.  Non-compete agreements should also be presented to employees before hiring.  If the employee is already employed, employers should include some form of additional consideration, such as a raise or one time payment, for added certainty that a non-compete agreement will be enforced as written. 

Translating Written Documents in International Arbitration and Litigation

An inherent challenge of cross-national business endeavors is that, once a deal or business relationship is in place, the actual terms of the contract will be carried out in different countries. Despite the fact that the trans-national agreement or contract was written in one language and that the terms of the agreement likely specify that such language is the "controlling" language in the event of a dispute, the execution of the terms of that contract will, in almost all cases, be carried out in different languages.

"A House Divided": Determining the Disposition of the Martial Home Upon Divorce

Abraham Lincoln has famously stated that "a house divided against itself cannot stand"; and the disposition of the marital home is often one of the most contentious issues in a divorce case.  In many cases, the marital home represents the couple's most significant asset (other than retirement assets) and deciding how to distribute the property can be thorny, particularly as the mortgage lender will continue to consider both parties jointly obligated until the property is either sold or refinanced.

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