Update for Limited Liability Companies: What happens to Membership Interest when a Member Dies?

October 30, 2014 on 12:59 pm | In Business Law, Business Planning, John Tarley | No Comments

We blogged about the Virginia Supreme Court case of Ott v. Monroe. In that case, the Court ruled that when a father, in his will, assigned his majority interest in a limited liability company to his daughter, he only assigned a profit interest, not a control interest. Consequently, his daughter did not have the authority to “run” the company, absent the consent of the remaining LLC members.

In its 2013 session, the General Assembly modified the relevant LLC statutes in an attempt to overturn the Virginia Supreme Court’s decision. This blog post examines the new statute, and how it may impact your limited liability company.

Business Deal
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Neighbor Law: Tips for Avoiding Boundary Line Disputes

October 30, 2014 on 12:59 pm | In Construction litigation, General Interest, HOA, HOA litigation, John Tarley, Real Estate Litigation, Real Estate Strategies, State & Federal Litigation | No Comments

Few real estate topics cause more disputes between owners than those involving activities at a common boundary. We have reviewed boundary line disputes involving trees that straddle property lines and fences that encroach upon boundary lines.

A recent Portsmouth case highlights another issue relating to boundary lines.

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One important tip for your construction project – Change Orders

October 30, 2014 on 12:59 pm | In Construction litigation, General Interest, John Tarley, State & Federal Litigation | No Comments

The DPOR regulations require Class A Contractors to obtain written change orders “which are signed by both the consumer and the licensee.” This requirement sounds pretty reasonable and easy to maintain, yet the reality is that many contractors fail to fully comply with this provision, leading to possible problems down the road.

 

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When might a Virginia business be liable for unemployment compensation?

October 30, 2014 on 12:59 pm | In Business Planning, John Tarley, Merger & Acquisition | No Comments

In the Greater Williamsburg area, many small businesses face seasonal layoffs when the summer tourism season ends. For small businesses, these layoffs lead to questions regarding unemployment compensation. In this blog post, we will discuss the issue of when an employer can be liable for the unemployment compensation for a terminated employee.

 

Generally speaking, an employee terminated by you may be otherwise eligible for unemployment benefits, chargeable to your company if:

The basic qualifications for unemployment compensation are:

Once you have been determined to be the “employer” liable for unemployment compensation, you are responsible for all the benefits payable to that former employee. Unless extended benefits have been approved, the maximum benefit is 26 times the weekly benefits payable to the employee.

The weekly benefits are found in a table at Virginia Code § 60.1-602. This table is regularly updated, it tells you how much a person would receive per week in unemployment, based upon the amount they made when employed. For example, if a person made $6,300 in the prior twelve weeks when employed, he would receive $125 per week in unemployment, and a total of $3,250, if he were employed for the entire 26-week period.

The possibility of being liable for unemployment compensation worries many small business owners. Discuss the issue with your business attorney so that you can plan properly for your employment needs.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

 

jt photo 150x150 Using a company computer to email your attorney may be a bad idea

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Fictitious Name filings: Make sure you file properly for your business

October 30, 2014 on 12:59 pm | In Business Planning, General Interest, John Tarley, Merger & Acquisition | No Comments

Many businesses operate under a fictitious name, otherwise referred to as “doing business as” or “d/b/a.” There are many reasons for this use, but primarily, a company can use a catchy business name, like when a franchise opens a “T.G.I.F.” or “McDonalds,” but the company’s actual corporate name is not as exciting.

According to the Virginia Supreme Court, Virginia requires a company operating under a different name to file that name with the court and the State Corporation Commission “to prevent fraud and to compel an individual or a corporation to disclose the name of the real owner of the business, in order that the person or corporation may sue in or be sued by the proper name.”

Virginia statutes set forth the process for registering your fictitious name. For restaurants or other single location businesses, the process is pretty simple. First, you file a fictitious name certificate with the court clerk in the jurisdiction where your business is located. After the certificate is recorded, you file the certified copy with the State Corporation Commission.

Problems can arise for construction companies and other types of businesses who transact business in several localities. For those companies, you must file a fictitious name certificate in each county or city where you conduct business. We have had several matters in which these types of businesses failed to properly register their fictitious names in all the jurisdictions where they conduct business. For one thing, those entities cannot bring a lawsuit to collect monies due until they rectify that problem.

“Doing business as” is just another issue to consider when you set up your company. Make sure you fully advise your lawyer so all of your filings can be completed early, and correctly.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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Residential construction and mechanic’s liens; how you can protect your mechanic’s lien rights

October 30, 2014 on 12:59 pm | In Construction litigation, John Tarley, Real Estate Litigation, State & Federal Litigation | No Comments
Williamsburg Virginia Business Lawyers

Courtroom

 

With the downturn of the housing industry, we have seen a dramatic increase in the number of construction disputes, especially in residential construction. Owners are battling with the contractors, and subcontractors are trying to get paid by somebody. These cases lead inevitably to litigation.

The property owners and the building contractor should have a written contract. However, the subcontractors sometimes find themselves in a difficult situation, unpaid by an insolvent building contractor. It is usually then that we will receive a call from a subcontractor asking about their mechanic’s lien rights. Unfortunately, it may be too late for that subcontractor to preserve their mechanic’s lien rights because they failed to provide proper notice at the outset of the work performance. This blog post provides a brief overview of the notice requirements for subcontractors to preserve mechanic’s lien rights. Continue reading “Residential construction and mechanic’s liens; how you can protect your mechanic’s lien rights”

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Pesticides, Fungicides, and Herbicides: Why do Virginia HOAs need to know the difference?

October 30, 2014 on 12:58 pm | In HOA, HOA litigation, John Tarley, Unit Owners Association | No Comments

There are many issues that confront your common interest community as its board of directors and management company work hard to maintain the HOA. One issue that has recently come up is the need to be knowledgeable about the chemicals an HOA applies to its common areas.

The Property Owners’ Association Act in Virginia Code § 55-510.3 and the Condominium Act in Virginia Code § 55-79.80:01 both require that an association post notice of all applications of pesticide in or upon the common areas/elements. This notice must be provided by conspicuous signs placed in or upon the area where the pesticide will be applied, at least 48 hours prior to application. This blog post analyzes one particular question that an association should consider when applying chemicals to its common areas: What is a pesticide?

HOAs and pesticides

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Can an engineering firm limit its liability by contract?

October 30, 2014 on 12:58 pm | In Business Planning, John Tarley, State & Federal Litigation | No Comments

 

Maybe not, in certain circumstances. A Fairfax County judge has determined that an engineering firm cannot limit its liability by contract in a case involving a 2008 fee contract. The typical fee agreement for an engineering firm includes some form of “limitation of liability” in which the firm seeks to limit its liability “to the amount of fees paid” to the firm, whether the claim is for breach of contract or warranty, or for negligence. In the case of Dewberry & Davis, Inc. v. C3NS, Inc., the engineering services firm, Dewberry, filed a fee claim against C3NS. C3NS filed a counterclaim for breach of contract. Dewberry had a limitation of liability clause in its fee agreement. It sought summary judgment to prevent C3NS from claiming that the limitation of liability paragraph was void. The Court sided with C3NS.

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Can I “hire” an unpaid intern for my business?

October 30, 2014 on 12:58 pm | In Business Planning, Employment law, John Tarley, Merger & Acquisition, State & Federal Litigation | 2 Comments

I teach as an adjunct faculty member at the William & Mary Law School. I find this part-time teaching gig very stimulating intellectually because the law students at W&M are extremely intelligent, diligent, and driven. This past week a new class of first-year law students arrived with great expectations about their futures. The reality of the job market, though, is that the legal profession has not been immune from the effects of this difficult economy.

Some of my second-year law students have also arrived back into Williamsburg, and I have been surprised at the number of students who report they worked as an “unpaid intern.” Although this practice is permissible in certain situations, these working arrangements with private law firms probably violates federal labor laws, and it is particularly distressing that it occurs in the practice of law. This blog post provides some guidance for your small business when deciding whether to “hire” an unpaid intern.

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Attorneys’ Fees and Litigation – When fees get awarded to the “Prevailing Party”

October 30, 2014 on 12:58 pm | In Common Interest Community, Construction litigation, HOA, HOA litigation, John Tarley, Mediation, Real Estate Litigation, State & Federal Litigation, Unit Owners Association | No Comments

In litigation matters involving common interest communities (otherwise known as homeowners associations (“HOAs”) or condominium owners associations (“condo associations”)), the issue of awarding attorneys’ fees for prevailing parties ultimately arises. Generally, the HOA’s Governing Documents or the condo association’s Condominium Instruments contain such a provision. Otherwise, attorneys’ fees may be recoverable by statute for HOAs and condo associations.

These attorney fee-shifting provisions, either by contract or statute, are contrary to the typical “American Rule” cases in which each side pays their own attorneys’ fees. Because litigation has become so expensive to pursue, whether to award attorneys’ fees, and the amount of any award, has become separate litigation on its own at the conclusion of cases.

In the recent case of Dewberry & Davis, Inc. v. C3NS, Inc., the Virginia Supreme Court was faced with the issue of “whether the circuit court erred in applying an attorneys’ fees provision of a contract.” We had previously blogged about this case, because in the underlying contract between the parties, Dewberry & Davis, an engineering company, had limited its liability for damages. The trial court had determined the limitation of liability clause was void, pointing to a recent change to Virginia Code § 54.1-411that permitted an engineering company to include a limitation of liability clause. Because the contract predated the code change, the court determined that those changes “demonstrate that the General Assembly fully intended to alter the statute’s intent.”

The case continued to trial, and eventually, upon appeal, to the Virginia Supreme Court. This blog post explains that Supreme Court decision relating to the award of attorneys’ fees.

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