Lawsuit

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Running an online business can have a variety of hidden legal dangers.  When you decide to create a website and open an online business, you are setting shop to the world. Your customers can be anywhere.

Recently, one of my clients opened a vintage jewelry shop online.  Her office is based in Manhattan. A customer residing in California purchased an antique engagement ring from her site. The customer claimed that the ring was not authentic and started a lawsuit in California.  Does the California court have lawsuit jurisdiction of the case?

There is no foolproof way of avoiding being subject to the jurisdiction of a foreign court in a lawsuit. However, there a number of ways that you can minimize the risk of being sued in another state:

  • Draft a Terms of Use and Privacy Agreement.  On your website, you need two agreements, a Terms of Use and Privacy Agreement.  You need to have two clauses drafted within these agreements: a forum selection and a choice of law. I drafted a forum selection clause for my client stating that jurisdiction is in the County of New York, State of New York. The choice of law was New York.
  • Draft a specific contract with each customer.  If possible, draft a contract tailored to the services provided for each customer. When negotiating, you may be able to also obtain pertinent information about the customer, such as if they have an office in New York State. If your customer provides a contract to you, make sure that you review the forum selection clause and choice of law.
  • Be aware of where you do business. If you do significant business in another state, the court in foreign jurisdiction may rule that you have enough minimum contacts so that you can be subject to a lawsuit in that state.
  • Choose a Country.  On your website, you should have users pick a country where they reside. If they reside in a country that you may suspect fraud and are unaware of the court system, such as Nigeria, simply do no allow customers to purchase your goods or services from there.
The Law Office of Frederic R. Abramson represents online businesses in New York. If you have a question regarding lawsuit jurisdiction in New York, call me at 212-233-0666.
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Note to Small Business: There is no Lawsuit Plague

by Fred Abramson on September 27, 2010 · 3 comments

Mark Henkins, writing in bnet.com puts forth a persuasive rebuttal to the argument that our current “litigious” climate has produced an avalanche of frivolous lawsuits that have hurt small businesses.

According to Mr. Henkins, the rhetoric espoused by this view goes like this: “Lawsuit abuse that clogs our courts and raises the costs of goods and services,”  as warned by the National Federation of Independent Business, which calls itself ”The Voice of Small Business.” What’s more, “many small businesses become innocent victims of this sue-thy-neighbor mentality.”

Similarly, groups like the American Tort Reform Association argue that excessive litigation has caused pain for small businesses. The ATRA state that “these lawsuits compromise access to affordable health care, punish consumers by raising the cost of goods and services, chill innovation, and undermine the notion of personal responsibility.”

However, the facts demonstrate that the risk to small businesses from being destroyed by a frivolous lawsuit is remote.

  • According to The National Federation for Independent Business when it asked 3,500 small business owners to rank the problems they faced. “Costs and Frequency of Law Suits/Threatened Suits” came in 65th of 75, barely beating out “Solid and Hazardous Waste Disposal.”
  • The number of civil tort cases shrank by more than 31 percent from 1996 to 2005, according to a U.S. Department of Justice examination of state courts in the nation’s 75 most populous counties.

Small businesses should not discount the risk of lawsuits. If you enter into a business dealings without a written contract, you are placing your business at risk.  However, a lawsuit without merit can often be defeated by making an early motion to dismiss the claim, with minimal legal costs.  Simply put, the argument that there is an increase of law suit plague is not supported by the facts.

What do you think? Has your business been subject to lawsuit that was without merit? What do you think the legal system could do to better address this issue?

The Law Office of Frederic R. Abramson represents small businesses in New York State. If you have any questions regarding litigation, call me at 212-233-0666.

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Thousands of New Yorker’s have fallen behind on paying their bills.  The New York Times reports that debt collection law firms have taken over the docket in New York Civil courts demanding repayment. In New York County, there are two courtrooms devoted to debt collection lawsuits.

The Times highlights the role of Cohen & Slamowitz, a Woodbury, N.Y. law firm.  The firm has been filing roughly 80,000 (wow!) lawsuits a year with only 14 lawyers.  Because debt collection law firms often do not have enough staff to vet their cases, the basis of many lawsuits is improper. In my experience, many debt collection lawsuits have incorrect information about the debtor and the amount in dispute.

Credit card companies have increasingly sold off debt to debt buyers. They sell the debt in bulk, usually for 5 cents or less on the dollar.  The  new owners of the debt then hire a law firm and then attempt to collect on the debt.  The law firms are hoping that people fail to answer the lawsuit and try to collect on a default judgment.

If you have been sued as a result of an alleged debt you should:

  • Read the papers that are given to you to find out the party that is suing you.  Do you have any relationship with the business suing you?
  • What are you being sued for? Is it a credit card debt?
  • Ask for verification of the debt. Make the law firm provide paperwork proving that you owe the debt. Often they are unable to come up with it.
  • When was the lawsuit filed? Depending how you have been served, you must provide an answer within 20 or 30 days.
  • Has the debt been resold? If the debt has been resold to a company that is located outside New York, it is unlikely that they will be able to provide a witness at trial. Even if the debt is valid, they will be unable to prove it and you will win.
  • Where are you being sued?  If you are a New York resident and the lawsuit is in New Jersey, they do not have proper jurisdiction over you and you can have your case dismissed.

If you have beens sued in New York for a debt, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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What you need to know about Supplier Agreements

by Fred Abramson on July 12, 2010 · 0 comments

A good supplier agreement is to designed to keep you out of court. It can also help you win a lawsuit if there is a dispute. If you have an ongoing relationship with a supplier, a well-drafted agreement is crucial. One especially thorny issue is creating a way to easily end a contract.  If you have an arrangement with a  supplier, there is normally an umbrella agreement which is succeeded by purchase orders.

Here is what you need to know when drafting an umbrella agreement:

  • Gauge the volume and frequency of the supplies you will require. You should specifically identify the goods that are to be delivered.  You should also leave room for anticipated problems, such as a downturn in the economy which could limit your ability to purchase goods.
  • Is the contract exclusive or non-exclusive? Suppliers usually favor exclusive agreements.
  • Negotiate a  termination clause.
  • Negotiate a  way to limit liability. If you are supplying goods like food, you don’t want to be held liable for damages for lost profits if you fail to make a delivery on time.
  • Term of the agreement. You should be wary of entering into an agreement for over 3 years.  Who knows what your business will look like a decade later?
  • Confidentiality. You probably don’t want your competitors to know the terms of your agreement.  Any information gleaned from a supplier agreement can be used for competitive advantage.

PURCHASE ORDERS

  • Identify each order and state that it is subject to the umbrella contract.
  • Create a purchase order that you can re-use.  It is best to leave time and quantity blank.
  • Date the purchase order.

Be aware that problems with supplier agreements is a major source of litigation.  I recently litigated a case between a supplier and a franchisee which was a result of a poorly drafted umbrella agreement that cost the franchisee $250,000.00.

If you questions regarding supplier agreements, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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If you obtain a judgment or a court order, the Sheriff is in charge for  – Enforcing Judgments & Court Orders. Listed below is information from the New York County Sheriff’s office regarding enforcement.

Property and Income Executions, Order of Attachment, Order of Seizure, et. al.
The Sheriff often works with litigants (including City agencies) who have court orders that awards them property and/or income. They are entitled to this property or income if it is not voluntarily surrendered by the other party in a court action.

Fee Schedule for Collection of Money

A service fee of five percent is charged in collection cases  from an execution or attachment. However, this is usually added to the judgment debtor’s payment, not deducted from the creditor’s award.

For example, if a judgment debtor owes $100, the five percent fee will be $5. The Sheriff will collect $105 from the debtor, so the creditor receives the full $100 to which he or she is entitled.

Property Execution


The purpose or function of the property execution is to satisfy a judgment by seizing property. In most cases the judgment will be for money owed. The Sheriff will either seize cash, personal property or real property, or conduct a public auction to convert the property to cash. Although we are essentially acting as agents for the judgment creditor in the action, our activities will be performed in a neutral, unbiased manner.  The Sheriff seizes only property the debtor has an interest in.

Property Execution Fees
$40.00
Each additional defendant: $15.00

Income Execution

An income execution is an enforcement issued by the judgment creditor’s attorney as an officer of the court, or the court clerk, directing the Sheriff to satisfy a money judgment from the  debtor’s income. The debtor’s earnings and State and Federal rules for payment, calculation and regulation determine the amount of each payment. Payments may be paid, voluntarily or involuntarily, to the Sheriff through payroll deductions. Income executions, which are not paid voluntarily, are served second stage on the debtor’s employer.  In a second stage service, the proper amount of money is seized from the debtor’s pay. The employer is required to forward this specific amount to the Sheriff for application to the account.

Income Execution Fees
Debtor: $30.00
Employer: * $30.00
* If the money is not recovered from the debtor, the debtor’s employer is served, and the debtor’s salary is garnisheed.

The purpose of an attachment is to seize and encumber property, which may be used to satisfy a judgment. Personal and real property can be attached and liquidated to satisfy a money judgment.

The above process is a “provisional remedy.” Anlthough the attachment is ordered by the court, it is also pre-final judgment. Any property seized is taken into the Sheriff’s custody and held until the court orders the final disposition.

Attachment Fees
$80.00
Each additional defendant: $55.00
Received and Levy: $40.00

Each Additional Levy Fee
Serve Defendant: $15.00
Mileage: $25.00

Order of Seizure
An order of seizure is used to seize specific personal property items when ownership and possession is disputed. A final judgment will usually direct the disposition of the property to a specified party,

The above process is a “provisional remedy.” Although the seizure is ordered by the court, it is also pre-final judgment. Any property seized is taken into the Sheriff’s custody and held until the court orders the final disposition.Property Seizure Fee
$116.50

Additional Fees – Against Secondary Defendant or Party
Executing against additional defendant or party: $55.00
Serving an additional defendant not in possession: $15.00
Summons filed w/Order of Seizure for each defendant: $15.00

If you have a question about collecting a judgment, contact me at the Law Office of Frederic R. Abramson at 212-233-0666

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Do you Know When a Motion to Dismiss Should be Made?

May 19, 2010

You know that litigation could be expensive.  If your attorney is a Linchpin he will always present an analysis of the costs of defending a lawsuit to you.  Great attorneys are often able to limit the costs of litigation while continuing to defend you aggressively. Bad attorneys make lots of money by drafting unnecessary motions.
Some judges […]

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Wage Garnishment: What should you do?

March 24, 2010

 
Wage Garnishment is a very powerful tool for either the government (most commonly the IRS), a company or an individual to collect money damages.  If you are a plaintiff in a civil action, if you obtain a judgment you may be able to have the sheriff garnish the wages of the person you are suing.
If […]

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What Litigation Costs and Expenses are Recoverable in NY? How about Attorney Fees?

March 19, 2010

Nearly every lawsuit asks for recovery of attorney fees, costs and expenses for bringing the action.  When potential clients contact my office for the first time for a civil litigation matter, the most common question asked is whether attorney fees are recoverable.
Attorney fees are generally not recoverable.  There are exceptions to this rule, such as when authorized by […]

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NY State Court Civil Litigation- Why Case Investigation is Vital

March 19, 2010

If you are planning to start a lawsuit in New York State Court, one of your first tasks is helping you lawyer investigate the facts of your case.  Believe it or not, case investigation of your civil litigation matter begins before you walk into your lawyers door and may not end until a judgement has […]

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Construction Litigation: When is it time for the owner to plan on it?

March 10, 2010

The constuction industry is subject to more than its fair share of litigation. This not because the people who you work with are bad people (even though there a few bad apples). It is because industry itself if very complex.
There are many factors of what makes a project sucessful.  A successful project may not have anything […]

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