Press Release
Kang, Haggerty, Fetbroyt All Named to South Jersey Magazine’s Awesome Attorneys List
Cherry Hill, NJ (December 4, 2015): Kang Haggerty LLC (KH), with offices in Philadelphia, PA and Cherry Hill, NJ is pleased to announce that all three named partners in the firm have been selected in the 2015 Awesome Attorneys listing published annually by South Jersey Magazine.
In Clipper Pipe & Serv., Inc. v. Ohio Casualty Insurance Co., the Pennsylvania Supreme Court held that the Contractor and Subcontractor Payment Act, 73 P.S. §§ 501-506 (“CASPA”), does not apply to construction projects where the owner is a government entity.
The United States Department of the Navy had entered into an agreement with Contracting Systems, Inc. II (“CSI”) for the construction of an addition to, and renovations of, a training center in Lehigh Valley. CSI, in turn, subcontracted with Clipper Pipe & Service, Inc. (“Clipper”) to perform heating, ventilation, and air conditioning work. When CSI failed to pay Clipper per the terms of their agreement, Clipper filed suit against CSI and its surety, the Ohio Casualty Insurance Company (“OCIC”) in the United States District Court for the Eastern District of Pennsylvania.
OCIC and CSI moved for summary judgment contending that CASPA does not apply to public works projects because a government entity does not qualify as an “owner” under CASPA. CASPA defines an “owner” as “[a] person who has an interest in real property that is improved and who ordered the improvement to be made.” “Person” is defined as “[a] corporation, partnership, business trust, other association, estate, trust foundation or a natural individual.” According to CSI and OCIC, government bodies cannot be “owners” under CASPA because the word “government” does not appear in the definition – i.e., a government body is not an “association” and therefore not a “person” or “owner.” Further, OCIC and CSI argued that the Prompt Payment Act (“PPA”), not CASPA, addresses public works projects. OCIC and CSI argued that given the substantial differences between CASPA and PPA, it would be untenable if both applied simultaneously.
In its August 11, 2014 decision in Griswold v. Coventry First, LLC, et al. the Third Circuit affirmed the District Court’s decision that denied Defendant’s motion to compel arbitration, and held that Plaintiff, Lincoln T. Griswold, was not estopped from pursuing his fraud claim by rejecting arbitration.
Griswold purchased an $8.4 million life insurance policy in January of 2006, establishing a Lincoln T. Griswold Irrevocable Trust for the “sole and exclusive purpose” of maintaining ownership of the policy. Shortly thereafter the formation of the Trust, Griswold formed a limited liability partnership in Georgia, Griswold LLP, as the sole beneficiary of the policy. Upon the receipt of the proceeds from the life insurance policy, this limited liability partnership would be dissolved, and the trustee would then liquidate the property, satisfy the claims of creditors, and distribute remaining property to the partners. At the completion of this task, the trustee would file a “Cancellation of the Election to Become a Limited Liability Partnership” to terminate the partnership.
With lawsuits directed at the marketing campaigns of trendy products becoming as trendy as the products themselves,1 the United States Supreme Court recently gave POM Wonderful its blessing to bring a Lanham Act claim against Coca-Cola for a potentially misleading label that is compliant with the Food, Drug, and Cosmetic Act (FDCA).
On May 13, 2014, the Superior Court of Pennsylvania, in Socko v. Mid-Atlantic Systems, clarified the requirement of new consideration when an employer and employee enter into an employment agreement containing a non-competition restrictive covenant after commencement of employment. As an appellate decision, this new clarification leaves a lasting and binding effect on the trial courts.
When Mid-Atlantic hired Socko as a salesman in March 2007, Socko signed an employment agreement with a two-year covenant not to compete. He resigned in February 2009, but was rehired in June 2009 and signed a new employment agreement with a similar two-year covenant not to compete. Subsequently, he signed a third employment agreement on December 28, 2010 containing a two year non-compete covering eight named states, including Pennsylvania, and anywhere else that Mid-Atlantic did business. In January 2012, Socko resigned and took a position with a competitor basement waterproofing company located in Camp Hill, Pennsylvania. Mid-Atlantic wrote the new employer enclosing the third employment letter and threatening litigation. The new employer terminated Socko, who sued for declaratory judgment seeking a determination that the non-compete provision of the employment agreement was unenforceable for lack of sufficient consideration.
In energy, technology, healthcare and other key sectors of the economy, employers increasingly insist their employees agree to non-competes and other post employment restrictions. Yet when the employment relationship ends, the restrictive covenants are either ignored by both the employee and the employer or fought out in court with the outcome both uncertain and costly.
Employers have legitimate interests in protecting their confidential business information and key customer relationships developed at significant expense. Consequently, many employers require new employers to agree to contractual employment and post-employment restrictions on their activities and conduct. Such restrictive covenants may be a part of an employment agreement or set forth in a separate non-compete and non-disclosure agreement. New employees eager to start out on the right footing are inclined to sign whatever documents are presented to them in connection with the hiring process. Later, if the relationship ends questions arise as to the enforceability of the restrictions. Understanding the basic legal principles applicable to enforcement of restrictive covenants can help both parties.
The economic loss doctrine prevents a plaintiff from recovering purely economic losses via a tort action (i.e., a negligence claim) in the absence of personal injury or damage to “other property.” One court has described the economic loss doctrine as “prohibit[ing] plaintiffs from recovering in tort economic losses to which their entitlement flows only from a contract.” Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995). In other words, a plaintiff should be limited to a contract claim “when loss of the benefit of a bargain is the plaintiff’s sole loss.” Id.
To illustrate, if a property owner hires a contractor to build a wall, which subsequently collapses due to the contractor’s negligence in constructing the wall, the property owner cannot sue the contractor for negligence. The property owner’s redress is confined to the terms of the contract. Given that the wall collapsed, it is likely that the contractor breached the contract with the property owner, who presumably bargained for a wall that should not collapse. Since nothing other than the wall was damaged, and no one was injured, however, the property owner’s relief is restricted to what was specifically bargained for – the wall. Thus, the property owner will only be able to recover the cost of the wall, or the cost of repairing the wall (i.e., he should only get what he bargained for: a wall).
In a blast from the past and a shout out to movie buffs everywhere, the widow of John DeLorean is in litigation against a company from Texas associated with her husband’s legendary car famously featured in the Back to the Future films. According to Sally DeLorean, DeLorean Motor Company in Texas has exploited the car’s trademark and image of its builder, her husband. He began his career working for General Motors in the 1960s and 1970s and eventually became so popular as a carmaker that he starred in a whiskey ad in Playboy magazine in 1981. His iconic car model only had 9,000 finished copies but was such a craze that it landed a role in pop culture history in film.
The Sherman Antitrust Act of 1890 has long stood as a benchmark in antitrust law, aimed at the prevention and dismantling of business enterprises which have knowingly set out to gain monopolistic power over a given market. While the Sherman Act… Continue reading ›
Kang Haggerty News