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Buy Out Payment To Departing Partner Not Subject To Forced Sale Discount

James Ficenec : August 13, 2011 5:59 pm : Business, Corporate and Partnership

buy out paymentIn the absence of a partnership agreement to the contrary, a partner who departs an ongoing partnership is entitled to have the partnership buy out his or her interest.  In Rappaport v. Gelfand, the California court of appeal rejected an argument that the value of a partner’s interest should be determined by assuming a one day liquidation sale.  Instead, the court ruled that the buy out price should be determined by calculating the value of the partnership assets more »

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A California Partnership Ceases To Exist Without Two Or More Partners

James Ficenec : August 10, 2011 9:37 pm : Business, Corporate and Partnership, Litigation

Occasionally a court decision seems so obvious that it is difficult to understand why the issue was disputed.  In Corrales v. Corrales, the California Court of Appeal held that a partnership cannot exist without  two or more partners.  This common sense conclusion has an important effect on the rights of former partners.

Under the California Revised Uniform Partnership Act, a partner is permitted to “disassociate” from the partnership.  The partnership must then buy out the disassociated partner’s interest.  This process assumes, more »

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Licensed Contractor’s Use Of Incorrect Fictitious Business Name Did Not Bar Claim For Payment

James Ficenec : June 27, 2011 11:04 pm : Construction, Litigation, Mediation, News

California law precludes actions by unlicensed contractors to recover payment for services as a contractor.  In Ball v. Steadfast-BLK, the California Court of Appeal ruled that the law did not prevent recovery by contractor who, while licensed as a sole proprietor, entered into a contract under an unregistered false business name.

Mr. Ball was a licensed contractor who more »

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A Defendant May Recover Its Attorneys’ Fees Incurred Defending Frivolous Civil Rights Claims

James Ficenec : June 26, 2011 8:34 pm : Appellate, Litigation, Mediation, News

Federal law generally permits a plaintiff who successfully pursues a civil rights claim to recover his or her attorneys’ fees.  A successful defendant, however, is typically only entitled to recover its attorneys’ fees if the complainant claims are determined to be absurd.  In this context, “frivolous” means without legal or factual basis.  A claim that has some legal and factual basis, but that does not succeed, is not frivolous.

The United States Supreme Court recently issued an opinion providing guidance to the trial courts for cases in which only some of the complainant demands are not having  legal basis .  In Fox v. Vice, the court analyzed the various options in such cases.  The court rejected a standard that purported to award a defendant fees “fairly attributable” to the plaintiff’s frivolous claims.  The court found that standard to be too amorphous.

Instead, the court ruled that the appropriate standard is to award the defendant the attorneys’ fees it would not have incurred “but for” the frivolous claims.  The court stated that this amount could be measured by the extra time spent on the lawsuit, by the increased expense (if any) litigating in federal court, and by the higher rates that might be charged by an attorney specializing in civil rights litigation.  The court reasoned that the “but for” standard provided a sufficiently clear standard to fairly award a defendant its attorneys’ fees incurred in fighting frivolous civil rights claims, even if not all of the plaintiff’s demands are absurd.

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