Author Archives: kern

Appellate Court Holds That Attorneys Fees Not Recoverable Even Though Credit Application Contained A “Prevailing Party Attorneys Fees” Clause

business contract transaction agreement signatures

Many businesses rely on a credit application for the terms and conditions of its sales to its customers. Often the credit application is the only document that the customer actually signs. Relying on invoices, purchase orders, bills of lading, delivery tickets and the like that are not signed by the customer in the ordinary course of business will not support an award of attorneys fees in the event of a collection action and judgment. This is true even though these documents may contain a prevailing party attorneys fees clause.  Because the credit application is usually signed by the customer, however, the creditor/seller often successfully relies on the prevailing party attorneys fees clause in the signed credit application for an award of attorneys fees in the event of collection litigation and judgment. Continue reading

Res Judicata Cannot Be Used to Shield Fraudulent Debtor Behavior

In the recent case of Wells Fargo Bank, National Association v. Weinberg, the Court set an important precedent that applies to the amendment of judgments to add individual debtors as alter egos of the corporation:

 

“The doctrine of res judicata1 did not bar the amendment of a judgment to add an alter ego2 as a judgment debtor, even if the issue of alter ego could have been raised earlier, as long as alter ego liability is a separate and distinct claim from the underlying action.”

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Creditors Rights Attorney Representing Secured Creditors Beware

Creditors Rights Attorneys Must Recognize Clarified Stay Termination Requirements for Chapter 7 Cases

There is a common misconception among both creditors and creditors rights attorneys that once property is abandoned by the Chapter 7 Trustee in a bankruptcy, the protection of the automatic bankruptcy stay no longer applies. This would free a secured creditor with an interest in the abandoned property to enforce its rights in the property. However, the Ninth Circuit made clear in Gasprom, Inc. v. Fateh (In Re Gasprom), 500 B.R. 598 (2013), that the Trustee’s abandonment of property alone is not sufficient to terminate the full protection of the automatic bankruptcy stay under 11 U.S.C. § 362.  Creditors must wait until the stay is formally terminated by the court or by the closing of the bankruptcy case. A foreclosure attorney must ensure that an automatic stay is terminated, or that the bankruptcy case is closed, before issuing guidance that the client may proceed with foreclosure. Continue reading

Court Limits Scope Of Guarantor Waivers

Note to readers: This brief post covers only one key aspect of this important case. There are other ramifications for contractual relationships that could impact you. Check with us for more details if you have an interest, or any concerns.

In the recent court case of California Bank & Trust v. Del Ponti, the court set an important precedent that applies to disputes on commercial loans between property developers and lenders.  In effect, a commercial lender cannot enforce waivers in guarantee agreements which are unlawful or otherwise contravene public policy.  Guarantor waivers are limited to certain legal and statutory defenses specifically set forth in the agreements, but not equitable defenses.  Continue reading

Failure to Pay Dividend Led to Chapter 13 Case Dismissal

The Failure To Pay The Promised Dividend To Unsecured Creditors Was Ruled Grounds For Dismissal Of A Chapter 13 Case, Even If The Debtor Makes All Monthly Plan Payments. 

 In the recent opinion issued in Schlegel v. Billingslea (In Re Schlegel), 14 C.D.O.S. 3166 (March 31, 2015), the United States Bankruptcy Appellate Panel of the Ninth Circuit addressed for the first time whether a Chapter 13 case with a confirmed plan may be dismissed for the debtors’ failure to pay the approved percentage dividend to unsecured nonpriority creditors during the applicable commitment period, even though the debtors otherwise made all monthly payments due under the confirmed plan.  Continue reading

Legal Tactic Switcheroo in Landlord-Tenant Dispute Fails Due to Missing “Rent Due” Notification

Timing of 3-Day Notice to Pay Rent or Quit was not preceded by written notice that the lease in question was reinstated and that rent was again due.

In December 2014, the Appellate Court issued an Opinion in the Santa Clara County case of Kruger v. Reyes, 14 C.D.O.S. 14116 (December 17, 2014) that illustrates the importance of adequate notice to the tenant of rent due when a terminated lease has been reinstated, particularly in cases where the tenant pays rent by directly depositing funds into the landlord’s bank account. Continue reading

Negotiations Resolved Lien Priority Dispute

Our Negotiation Techniques Resolve Lien Priority Dispute Before Complaint Served

We recently settled a lien priority dispute that resulted in the recovery of several hundred thousand dollars for our client, consisting of 100% of all principal, interest and attorneys’ fees due her. Continue reading

To Obtain Summary Judgment On A Contract Dispute, All Elements Of Breach Of Contract, Including Damages, Must Be Established

A plaintiff’s lawyers must think through all possible actions and results before selecting a course of action in commercial contract litigation. Continue reading

Insurance Claim for Pre-foreclosure Damage May Be Barred By Full Credit Bid at Foreclosure Sale

Foreclosing lenders in secured transactions who intend to make a claim under an insurance policy for pre-foreclosure damage should be wary of making a full credit bid at the foreclosure sale.  Continue reading

Poniatowski Leding Parikh Helps Local Horse Ranch Operation Obtain Conditional Use Permit

horse business attorneyWe recently helped a horse boarding and stables operation in the San Francisco Bay Area to successfully obtain a conditional use permit from Alameda County to continue in business at their long-time existing location. Prior to our involvement, the process had been hung up for over two years without resolution. Continue reading