Protective Orders usually list those persons who can view documents that are designated "confidential": like counsel of record and their staff, designated business representatives of the client, court reporters, and experts.
Sometimes information can be so sensitive that the producing party doesn’t want to share it with an expert. A well-designed Protective Order can deal
Let’s say a client calls telling you that a valued former employee has left to work for a competitor. Just before leaving, the employee emailed himself a substantial number of your client’s confidential documents. He’s now made a presentation to a potential customer, using the "stolen" information, and he secured the customer for his new
In a classic understatement, Judge Gale said in a North Carolina Business Court opinion last Thursday that "North Carolina case law addressing problems inherent in electronic discovery. . .is not yet well developed." Op. ¶50. But in Blythe v. Bell, 2012 NCBC 42, the Judge went ahead and posted some road
Maybe you’ve got a friend who is a bankruptcy lawyer. Maybe not. But if you do, you should think about forwarding to them this post about the Fourth Circuit’s decision from last Tuesday in Johnson v. Zimmer. It’s a decision of first impression in all of the Circuit Courts about how to determine the size of a Chapter 13 Debtor’s "household", which is relevant to determining her "disposable income" for purposes of a Chapter 13 Plan.
Let’s start with why those terms are important. A Chapter 13 Debtor is obligated to make payments to his creditors based on her "projected disposable income." The Bankruptcy Code defines "disposable income" as "current monthly income received by the Debtor" reduced by "amounts reasonably necessary to be expended for the Debtor’s maintenance and support, for qualifying charitable contributions, and for business expenditures."
The "amounts reasonably necessary to be expended" are determined, in part, by the size of the Debtor’s "household." Congress didn’t bother to define what "household" means, so that was the main challenge for the Fourth Circuit.
How The Dictionaries Define "Household"
Well that’s easy, you would think. Look up "household" in the dictionary. Because we give undefined words their ordinary meaning. But that doesn’t really work because the common definitions for "household" are different and could yield different results.
Black’s Law Dictionary says that a "household" is "1. A family living together. 2. A group of people who dwell under the same roof." Webster’s Third New International Dictionary says that the term means "a social unit comprised of those living together in the same dwelling place."
How The Bankruptcy Courts Have Dealt With This Issue
The bankruptcy courts have adopted three different approaches to define a "household." Those are:
The reason that Johnson’s case was so difficult was that she was divorced and remarried. Her new husband had three kids from his prior marriage and she had two. The children from the first marriages spent about half a year with the Debtor and her new husband and the rest of their time with their other parent.
So the Debtor said her household consisted of her husband and all the kids, or seven. Zimmer, a creditor, said that the count of 7 resulted in an overcalculation of the Debtor’s expenses and that counting the household as smaller would free up income to pay under her Chapter 13 Plan to her unsecured debts.
The Fourth Circuit Applies The Economic Unit Approach, With Fractions
The Bankruptcy Judge, J. Rich Leonard, agreed partly and applied a variation of the economic unit approach. He "fractionated" the kids based on the number of days that they were in the Debtor’s house, and calculated that she had 2.59 children in her house full-time. He rounded that up to three, and declared the household to be one of five.
A divided Fourth Circuit affirmed.Continue Reading Fourth Circuit Carves Up Children (For Bankruptcy Purposes Only)
We all know how a residential real estate loan goes. You apply to a Bank for the loan; the Bank orders an appraisal of the property; maybe you get a copy of the appraisal; maybe you don’t; the Bank makes the loan taking a Deed of Trust on the property as security. What if the
It’s not every day that you see a "mandatory injunction," In fact, Judge Jolly said last Friday that such an injunction was "rare and generally disfavored as an interlocutory remedy," in Bayer Cropscience LP v. Chemtura Corp., 2012 NCBC 40. Op. ¶22. But that didn’t stop the Judge from entering an injunction that
If you are making a motion to disqualify opposing counsel before Judge Murphy in the Business Court, his decision yesterday in McKee v. James is likely to be of concern. He not only denied the Motion, but he dropped a few nuggets along the way which the party opposing the motion in your case may
Can you force a party to a lawsuit to join in another party’s claim? There’s no answer in the North Carolina Rules of Civil Procedure. But Judge Gale provided an answer this week in Nelson v. Alliance Hospitality Mgt., LLC, 2012 NCBC 39.
Two Rules were implicated: Rule 18, which allows for joinder of claims
If you are wondering what North Carolina has to do to comply with the Affordable Care Act now that the Supreme Court has said it passes constitutional muster, there are better places to look than my blog. But there’s an excellent post from Professor Jill Moore at the UNC School of Government. It’s on the
.jpg)
Do you have a client who says his associate embezzled a lot of his money? Does he want to sue the Bank that held the funds, claiming that the Bank should have known that misdoings were afoot and blown the whistle? You’d better tell him to think twice before bringing that claim to the Business Court, based on last week’s decision in Global Promotions Group, Inc. v. Danas Inc.
The Plaintiffs in Global had given one of the Defendants signature authority over their accounts at BB&T. That Defendant later made unauthorized wire transfers from the accounts and deposited forged and unauthorized checks drawn on those accounts into their own accounts. The total amount embezzled was more than $300,000.
The Plaintiffs said that BB&T should have discovered and prevented these transactions, but it was a claim looking for a cause of action that just couldn’t be found.
Judge Jolly first considered the North Carolina Uniform Fiduciaries Act, which states that a Bank can be liable for checks drawn by a depositor’s fiduciary only if "the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing such check, or with knowledge of such facts that its action in paying the check amounts to bad faith." N.C. Gen. Stat. §32-9.
Even if the Defendants were fiduciaries of the Plaintiffs (about which there was little discussion) Judge Jolly found nothing in the Complaint to support an allegation of bad faith, He said that "suspicious circumstances," with a "failure to make inquiry," were not "bad faith." Op. ¶24. A failure to make inquiry amounts to bad faith only if if it is "due to the deliberate desire to evade knowledge because of a belief or fear that inquiry would disclose a vice or defect in the transaction, – that is to say, where there is an intentional closing of the eyes or stopping of the ears.’" (quoting Edwards v. Northwestern Bank, 39 N.C.App. 261 (1979)).
He held that the Plaintiffs had not alleged facts giving rise to a reasonable inference of either actual knowledge or the turning of a blind eye to the misconduct. He went on to hold also that the Plaintiffs did not have a claim under what he termed the "more stringent" common law standards of care for banks.
On that "more stringent" standard, in trying to impose a fiduciary duty on BB&T, the Plaintiffs argued that the Bank and its employee had "exercised actual control over" the accounts and that they had placed a "special confidence" in the employee as a result. They argued that the Bank’s employee therefore had a "responsibility to oversee their accounts." Op. ¶32.
Not so, said Judge Jolly, who wrote that "all banks exercise some degree of custodial control over their
customers’ accounts; nonetheless, banks ordinarily do not owe fiduciary duties to their customers." Op. ¶33. The Plaintiffs’ allegations did nothing more than merely establish the existence of an ordinary relationship between a bank and its customers, as all banks have a responsibility to safeguard their customers’ accounts." Id. Judge Jolly observed that "an ordinary relationship between a bank and its customers does not, without more, impose upon the Bank any special duties to its customers." Op. ¶30.
After that, the other claims asserted by the Plaintiffs against BB&T fell like dominoes.Continue Reading Bank Not Liable For Embezzlement, Says NC Business Court