ENTERPRISE COUNSEL GROUP SUPPORTS LEADERSHIP DEVELOPMENT AS SPONSOR OF MILESTONE LEADERSHIP SUMMIT

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Renowned Law Firm Sponsors SoCal Leadership Event on the Heels of its own Successful Session on Working With Millennials

IRVINE, Calif. – Enterprise Counsel Group (ECG)—a business law firm specializing in trial, appellate, transactional, labor and real estate matters—is pleased to support leadership development both within its own firm and among its clients. Last month, it hosted a workshop at the Pacific Club in Irvine, Calif. titled “Working with Millennials,” which discussed points on how to better integrate millennials into the workplace. Later this month, ECG will participate in the Milestone Leadership Summit, the premier offsite corporate retreat for companies in Southern California where leadership teams come to learn leadership develop skills and gain valuable strategic growth opportunities.

“ECG sets itself apart from other business law firms because we don’t only provide impeccable representation for our clients, but we have an unwavering dedication to their best interests,” said David Robinson, founding partner of ECG. “From workshops like ‘Working with Millennials’ that equip our clients with practical tips and solutions, to participating in events like the Milestone Leadership Summit that enables our firm to learn, bond and grow together in order to provide an even stronger united front, ECG strives to do all it can to provide the best services to its clients.”

Last month’s Working with Millennials workshop took place on April 25, 2017 and was cohosted by Robinson and Brian Calle, vice president and opinion editor at the Orange County Register and a member of the Board of Governors at the University of Southern California. There, more than 35 attendees (all clients of ECG) discussed how to better integrate millennials into the workplace, best practices when handling conflicts with millennials and how to best traverse the widening generational gap between millennials and baby boomers—all issues that have shaken up the workforce in recent years.

The 2017 Milestone Leadership Summit will take place on May 12th at the Hyatt Regency in Huntington Beach, Calif. In addition to participating in the summit—along with other presidents, C-suite leaders and top entrepreneurs from many of Southern California’s most successful companies—and gaining insights

on how to think, strategize and foster innovation, Robinson will also be addressing attendees and introducing the summit’s main speaker, author Jeff DeGraff.

“I’m honored to participate and speak at the summit later this month and am excited to hear Jeff share his wisdom,” said Robinson. “Even though ECG is one of the most prominent law firms in Southern California, our leadership must continue to pursue and invest in its own inherent creative and intelligent solutions. I look forward to collaborating and exchanging ideas with other leaders, and in turn, providing an even better service to our clients.”

For more information about ECG, please visit http://www.enterprisecounsel.com/.

About Enterprise Counsel Group

Enterprise Counsel Group, A Law Corporation (ECG) is a prominent West Coast law firm providing impeccable representation including litigation, mediation, arbitration and transactional services for a wide range of businesses and industry leaders. Driven by the values of professional competence, enthusiasm, intensity of effort and an unwavering dedication to clients’ best interests, ECG discovers and implements the most innovative, practical and cost-effective solutions in and out of the courtroom. For more information visit www.EnterpriseCounsel.com and follow ECG on LinkedIn, Facebook and Twitter.

 

DAILY JOURNAL SELECTS JAMES S. AZADIAN FOR 2017 TOP 40 UNDER 40 LIST

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Azadian, a Partner and Shareholder of Enterprise Counsel Group, Ranked Among Best Lawyers in California

IRVINE, Calif. – Enterprise Counsel Group (ECG)—a business law firm specializing in trial, appellate, transactional, labor and real estate matters—is pleased to announce that James S. Azadian, a shareholder of the firm, has been named by the Daily Journal in this year’s list of top 40 lawyers under the age of 40 in California.

In its profile of Azadian, the Daily Journal highlights his ability to successfully traverse complex state and federal appeals with emphasis on the First Amendment and California’s anti-SLAPP statute. Most recently, Azadian represented a New York Times best-selling author, who was sued in a class action of nearly 70,000, and settled the case at $5,000, a remarkable feat. Azadian also recently provided aid to a custody case that gained national attention, where he assisted the young girl’s attorney, her relatives and the Choctaw Nation of Oklahoma to affirm—in a unanimous decision by the California 2nd District Court of Appeal—the girl’s placement with her biological family. The linchpin of the case was Azadian’s ability to clearly argue in court that the foster parents did not incorporate Choctaw heritage into her daily lifestyle.

“In court, they [the foster parents] said they had painted the kitchen ‘Navajo Blue,’” Azadian told the publication. “That’s all they had done.”

Azadian joined Enterprise Counsel Group in 2010 and became a partner in 2012. He currently serves as the chair of the firm’s nationwide Appellate, Writs and Constitutional Law Practice, and its Regulatory Practice. Azadian’s practice concentrates primarily on appellate law, constitutional law, regulatory law and affairs, and intellectual property litigation. He has served as counsel in over 150 appeals and writ proceedings in a wide variety of areas, and he frequently serves as special counsel to other law firms to prepare advocates for oral argument and to assist with the drafting of appellate briefs as well as critical motions at the trial court level. In addition, he is an adjunct professor teaching graduate courses in legal ethics and the law & public policy at the University of Southern California, as well as appellate advocacy at Pepperdine University School of Law.

For each year since 2010, Azadian has been named among the top attorneys in Super Lawyers’ Southern California Rising Stars, a recognition that less than two percent of the lawyers in the state can claim. In January 2014, he was selected to the American Registry as “one of North America’s Top Attorneys” in recognition of achieving consistently successful outcomes for clients on appeal. That same year, he was awarded the Chief Justice John Marshall Medal by the Supreme Court Historical Society for his excellence in appellate advocacy and his commitment to the advancement of civic learning among youth.

“We are proud to have James on our team,” said David Robinson, president and founding shareholder of ECG. “He exemplifies the seasoned and accomplished attorneys we strive to have at ECG that not only understand successful litigation, but also the importance of providing the kind of client service and counsel that ECG has built its reputation on.”

For more information about James Azadian and ECG, please visit www.enterprisecounsel.com/james-s-azadian/.

About Enterprise Counsel Group

Enterprise Counsel Group, A Law Corporation (ECG) is a prominent West Coast law firm providing impeccable representation including litigation, mediation, arbitration and transactional services for a wide range of businesses and industry leaders. Driven by the values of professional competence, enthusiasm, intensity of effort and an unwavering dedication to clients’ best interests, ECG discovers and implements the most innovative, practical and cost-effective solutions in and out of the courtroom. For more information visit www.EnterpriseCounsel.com and follow ECG on LinkedIn, Facebook and Twitter.

ENTERPRISE COUNSEL GROUP CONTINUES TO BOLSTER FIRM WITH TWO NEW HIRES

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Prominent West Coast Business Law Firm Welcomes Litigators Issa Mikel and Jonathon Dykstra

IRVINE, Calif. – Enterprise Counsel Group (ECG)—a business law firm specializing in trial, appellate, transactional, labor and real estate matters—is pleased to announce that seasoned litigators Issa Mikel and Jonathon Dykstra have recently joined the Irvine, Calif. group.

Issa Mikel is a skilled senior litigator with experience handling all aspects of complex business litigation matters in state and federal courts, including securities (state and federal), civil fraud, breach of contract, shareholder and derivative matters, real estate and other matters. His experience includes successfully defending several of the largest financial institutions in the country in civil actions (including class actions, derivative actions and individual suits) and regulatory investigations arising out of the recent financial crisis. He received his Juris Doctor from Columbia University School of Law, where he was a Harlan Fiske Stone Scholar and a member of the Columbia Human Rights Law Review and the Columbia Journal of Law and Social Problems. He is licensed to practice in both California and New York.

Jonathon Dykstra is an outstanding veteran litigator who has taken/defended nearly 100 depositions and argued more than 200 motions. Receiving his Juris Doctor from the University of Virginia School of Law, where he won the school’s William Minor Lile Moot Court Competition, Dykstra is licensed to practice in both California and Nevada.

“We are pleased to welcome Issa and Jonathon to our group,” said David Robinson, president and founding shareholder of ECG. “Both of these accomplished attorneys understand not only how to successfully litigate, but also how to provide the kind of client service and counsel on which ECG has built its reputation. We are thrilled to have them on board.”

For more information about ECG, please visit www.EnterpriseCounsel.com.

About Enterprise Counsel Group

Enterprise Counsel Group, A Law Corporation (ECG) is a prominent West Coast law firm providing impeccable representation including litigation, mediation, arbitration and transactional services for a wide range of businesses and industry leaders. Driven by the values of professional competence, enthusiasm, intensity of effort and an unwavering dedication to clients’ best interests, ECG discovers and implements the most innovative, practical and cost-effective solutions in and out of the courtroom. For more information visit www.EnterpriseCounsel.com and follow ECG on LinkedIn, Facebook and Twitter.

Appellate Court Rules in Favor of ECG Client, Southern California Sunbelt Developers, Inc., Ushers End of 20-Year-Old Litigation

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Court Reverses Previous Order Denying Reimbursement of Over $280,000 in Receiver’s Fees

IRVINE, Calif. – Enterprise Counsel Group (ECG)—a business law firm specializing in trial, appellate, transactional, labor and real estate matters—announced today that on February 16, 2017, the Court of Appeal, Fourth Appellate District, Division Three, published its decision in Southern California Sunbelt Developers, Inc. (SCSD) v. Banyan Limited Partnership et al., one of Orange County’s longest-running civil disputes. Finding in favor of ECG’s client, SCSD—who prevailed in a previous trial after 15 years of litigation—the appellate court’s decision reversed the Orange County Superior Court’s order that denied reimbursement of more than $280,000 in receiver’s fees.

“This is a proud moment for ECG – not only because of the successful ruling for our client, but because this newly published decision provides much-needed clarity on the subject of appointing receivers and who must ultimately pay the receiver’s fees,” said Benjamin Pugh, ECG partner and SCSD’s lead attorney.

During the years of litigation, it was ordered that a receiver take control of one of SCSD’s real estate assets. In a little more than two years, the receiver charged more than $280,000. Seeking to recover these fees because it prevailed in trial, SCSD was denied recovery by the trial court. In this latest decision, the Court of Appeal reversed the ruling and directed the trial court to reconsider based on the factors elucidated in its published opinion.

“This is a final victory in a series of victories in this now 20-year-old litigation,” said Pugh. “After the trial court follows the Court of Appeal’s direction, this case can finally be put to bed.”

This decision is one of four prevailing appeals to arise from this case and to be won by SCSD and its principal, Dan Baer. For more information on these decisions as well as EGC, please visit www.EnterpriseCounsel.com.

About Enterprise Counsel Group

Enterprise Counsel Group, A Law Corporation (ECG) is a prominent West Coast law firm providing impeccable representation including litigation, mediation, arbitration and transactional services for a wide range of businesses and industry leaders. Driven by the values of professional competence, enthusiasm, intensity of effort and an unwavering dedication to clients’ best interests, ECG discovers and implements the most innovative, practical and cost-effective solutions in and out of the courtroom. For more information visit www.EnterpriseCounsel.com and follow ECG on LinkedIn, Facebook and Twitter.

Recent California Cases Underscore How a Procedural Mistake May Doom Your Appeal

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Practicing before any court requires familiarity with the governing rules.  In an appeal, a misstep may doom your case before you even begin drafting your opening brief.  A well-known appellate rule is that the filing deadline for the notice of appeal is jurisdictional.  However, perfecting an appeal involves much more than simply ensuring timely filing of a notice of appeal.  There are other critical rules to follow.

A recent California court of appeal decision serves as a reminder of one potential pitfall in the filing of a notice of appeal.  In Malbrue v. County of Los Angeles, Case No. B264115 (2d Dist., Div. 8, Dec. 14, 2016), the plaintiff and appellant, Kyle Malbrue, sued the County of Los Angeles and former Sherriff Lee Baca asserting five causes of action, including wrongful death on behalf of Kyle’s father who died while incarcerated.  The trial court granted summary judgment in favor of the county.  In doing so, the court refused to consider an expert declaration submitted by Kyle because it was untimely.  Kyle moved for relief from the judgment citing Code of Civil Procedure section 473, subdivision (b), which provides, in relevant part, “The court may, upon terms as may be just, relieve a party . . . from a judgment . . . taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.”  Kyle’s attorney also submitted a “declaration of fault,” taking blame for the late filing of the expert declaration.  The trial court denied the motion for relief under section 473(b).

The arguments in Kyle’s opening brief on appeal all concerned the trial court’s denial of relief under section 473(b).  However, the court of appeal did not reach the merits because of a fatal error in Kyle’s notice of appeal.  In his notice of appeal, Kyle checked the box indicating he was appealing from the “Judgment after an order granting a summary judgment motion,” and he identified the date of the judgment.  The notice of appeal did not reference the order denying the motion for relief under section 473(b), even though that order was separately appealable (see General Bank Nederland v. Eyes of the Beholder Ltd. (1998) 61 Cal.App.4th 1384, 1394).

The court concluded that, because Kyle appealed only from the judgment, it had “no jurisdiction to consider the propriety of the subsequent order denying Kyle’s motion to vacate the judgment.”  Consequently, the court dismissed the appeal.

Some might think the result in Malbrue is overly harsh.  Others might think the court of appeal’s decision is contrary to the rule that “[t]he notice of appeal must be liberally construed.”  (See Cal. Rules of Court, rule 8.100(a)(2).)  However, the rule of liberal construction “applies primarily . . . where the notice of appeal has misdescribed the judgment or order sought to be appealed from.”  (Russell v. Foglio (2008) 160 Cal.App.4th 653, 661.)  That is, the court may be lenient when “it is reasonably clear what appellant was trying to appeal from,” despite a poor description in the notice of appeal.  (See Luz v. Lopes (1960) 55 Cal.2d 54, 59.)  As another court put it, “[w]here several judgments and/or orders occurring close in time are separately appealable . . . each appealable judgment and order must be expressly specified” in the notice of appeal.  (Filbin v. Fitzgerald (2012) 211 Cal.App.4th 154, 173.)

In Malbrue, there was no misdescription.  Kyle clearly identified the judgment, yet challenged only a separate appealable order in his brief.  The Malbrue court cited a case holding “it is well ‘beyond liberal construction’ to view an appeal from one order as an appeal from a ‘further and different order.’”  (See Baker v. Castaldi (2015) 235 Cal.App.4th 218, 225; see also Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 47 [“The rule favoring appealability in cases of ambiguity cannot apply where there is a clear intention to appeal from only part of the judgment or one of two separate appealable judgments or orders.”].)

In hindsight, the appellant’s mistake in Malbrue may seem obvious.  But it really is an easy error to make.  The day after Malbrue was decided, another appellate decision was issued involving the very same mistake.  In Manasserian-Virabyan v. Muradyan, Case No. B265877 (2d Dist., Div. 7, Dec. 15, 2016), the appellant’s opening brief challenged an order of dismissal and an order denying a motion for relief under section 473.  However, the appellant did not list the second order on the notice of appeal and, consequently, the court of appeal found it lacked jurisdiction to review that order.

The opinions in Malbrue and Manasserian-Virabyan are unpublished and therefore not citable in California courts.  They nonetheless offer an important lesson in appellate practice.  A procedural slip-up may prevent your case from being decided on the merits.  The safest course is to retain experienced appellate counsel as soon as you suspect there may be an appealable issue.

Cory Webster practices in appeals and business litigation at Enterprise Counsel Group in Irvine.

The Legal California Non-Compete Agreement

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It is no secret that California law strongly disfavors non-compete agreements between employers and employees. However, through careful legal study and competent drafting, a company can still protect itself with different types of agreements to accomplish the same goals. This article will introduce the various ways an employer can still use non-compete type agreements without violating California law.

Introduction

California law automatically voids all blanket non-compete agreements. See D’Sa v. Playhut, Inc., 85 Cal. App. 4th 927, 933 (2000). Moreover, the inclusion of such non-compete clauses may also open a company to tort suites alleging intentional interference with prospective economic advantage.  See Edwards v. Arthur Andersen LLP, 44 Cal.4th 937, 950 (2008). Finally, firing someone if they refuse to sign an unenforceable non-compete agreement opens the employer to tort liability for wrongful termination. See D’Sa at 930. California courts have even extended this wrongful termination liability to employers who fire their newly-hired employees in order to honor another company’s unenforceable non-compete agreement. See Silguero v. Creteguard, Inc., 187 Cal. App. 4th 60, 71 (2010).

Moreover, choice of law or severability provisions alone do not save an employer from the above mentioned tort liability. See D’Sa at 934. Indeed, as long as the employee works mostly in California, California courts will not honor choice of law provisions when dealing with non-compete agreements unenforceable under California law. See, e.g., Frame v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 20 Cal. App. 3d 668, 673 (1971). Furthermore, if a company is based in California, non-compete clauses are also void for any employees it hires outside of California. See Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881, 885 (1998). Finally, California courts have gone so far as to refuse to honor the orders of foreign courts if they think those orders purport to enforce a non-compete that is contrary to California law. See Robinson v. Jardine Ins. Brokers Int’l Ltd., 856 F. Supp. 554, 559 (N.D. Cal. 1994) (issuing a preliminary injunction against an English court order that prohibited the plaintiff from doing business with defendant’s clients because the restriction violated California’s non-compete laws).

It is therefore very important for California employers who want to preserve their trade secrets, customers, good will, and employee loyalty to correctly draft their employee agreements in order to both protect themselves to the fullest extent possible and simultaneously avoid going too far. These goals can be achieved by drafting and executing enforceable non-compete clauses within the limited exceptions allowed under California law, employee non-solicitation clauses, confidential information clauses, forum selection clauses, and arbitration clauses.

Enforceable Non-Compete Clauses

 Not all non-compete clauses are banned in California. Importantly, California enforces non-compete clauses during the employee’s term of employment, so long as they do not extend after termination. See Fillpoint, LLC v. Maas, 208 Cal.App.4th 1170, 1174 (2012); Edwards at; Cal. Bus. and Prof. Code § 16600. California also enforces post-termination non-compete agreements where the departing employee is also the owner, or partial owner, of the business, and is selling his or her ownership interest as part of the departure. See Fillpoint at 1174; Edwards at 955; Cal. Bus. and Prof. Code § 16601. Importantly, in such a situation, the price paid for the departing owner/employee’s ownership interest must include a premium for “good will” being acquired by the new owner. Id.

Non-Solicitation Clauses

 California courts have upheld narrowly-drafted non-solicitation clauses – i.e., provisions in an employment agreement prohibiting the employee from “soliciting” the employer’s customers and/or employees after the employee’s departure. See Loral Corp. v. Moyes, 174 Cal.App.3d 268, 280 (App. 6th Dist. 1985). But California courts have made it clear that broad provisions that contain, a customer and employee non-solicitation clause, as well as a post-termination non-compete clause, are invalid. See Fillpoint at 1183.

The enforceability of a non-solicitation clause turns on what the agreement deems “solicitation,” whether the identity of an employer’s customers and/or employees can be considered a “trade secret,” and the extent of the employee’s personal knowledge.

Confidential Information Clauses

 California courts have banned all blanket customer non-solicitation clauses. See The Retirement Group v. Galante, 176 Cal.App.4th 1226, 1240 (2009). However, a company can include a “confidential information clause” and an “obligations upon termination of employment clause” to provide the functional equivalent of a customer non-solicitation clause.

First, California law prohibits misappropriation of “trade secrets” – i.e., information that has economic value to the company and kept reasonably secret from the public. See Muggill v. Reuben H. Donnelley Corp., 42 Cal. 2d 239, 242 (1965) (court rules that there is a trade secret exception to the general rule against non-compete clauses); Cal. Civ. Code § 3426.1. California courts do not prohibit agreements in which the employee agrees not to disclose trade secrets. See Loral at 276; See Edwards at 289. Accordingly, California courts have also held that customer information and identity may qualify as trade secrets, and have held that the use or disclosure of a former employer’s customer information to solicit customers for a new employer was a misappropriation of trade secrets. See Morlife, Inc. v. Perry, 56 Cal.App.4th 1514, 1526 (1997).

Again, whether a “confidential information” clause will be upheld if it functionally prohibits a former employee from providing services to the employer’s customers at a new job depends on the facts, and careful drafting.

It is important to note that California courts do not recognize the “inevitable disclosure doctrine,” a theory positing that an employee will inevitably rely on the former employer’s trade secrets in a new job. See Whyte v. Schlage Lock Co., 101 Cal.App.4th 1443, 1447 (2002). This means an employer has to prove the former employee actually misappropriated confidential information in order to prevail when using this method. See Whyte at 1464.

Forum Selection Clauses

 A forum selection clause states that any lawsuit regarding the employee agreement must be litigated within a certain state, no matter where the parties file the initial suit. As mentioned above, California will not honor choice of law clauses if the effect leads to enforcing a normally unenforceable non-compete clause. However, California courts have shown a general tendency to honor forum selection clauses even if it means enforcing non-compete agreements that are against California public policy.

California federal courts have a better track record than California state courts enforcing such clauses, but generally the rulings under both jurisdictions have been favorable to forum selection clauses. See generally Hartstein v. Rembrandt IP Solutions, LLC, 2012 U.S. Dist. LEXIS 105984 (N.D. Cal. 2012); Verdugo v. Alliantgroup, L.P., 237 Cal. App. 4th 141 (2015); but see Bullard v. Anaqua, Inc., No. RG14725925 (Cal. Super. April 22, 2015).

The U.S. Supreme Court has ruled that courts must honor forum selection clauses “in all but the most exceptional cases.” See, e.g., Atlantic Marine Constr. Co. v. United States Dist. Ct. for the W. Dist. of Texas. 134 S. Ct. 568, 574 (2013). In California, the courts have interpreted “exceptional cases” to mean situations in which the forum selection clause itself, viewed in isolation, violates California public policy. See, e.g., Am. Online, Inc. v. Super. Ct., 90 Cal. App. 4th 1, 12 (2001). A company can therefore preempt any challenge to the forum selection clause by showing that the employee willingly agreed to the forum selection clause, the company has connections to the forum, and the forum selection clause does not deny anyone their day in court. See Am. Online at 10, 11, and 12 n.5. Finally an employer should not forget to include a choice of law provision, or else the new forum may end up enforcing California law.

Arbitration Clauses

The final card an employer has is the arbitration clause. Moreover, agreements which have both an arbitration clause can also include a forum selection clause that specifies the forum that will enforce the arbitral judgment. California courts have ruled that an arbitrator’s decision is final and have refused to hear appeals even when the arbitrator ended up enforcing a non-compete in California. See Jones v. Humanscale Corp., 29 Cal.Rptr.3d 881, 889 (2005).

This means that the arbitrator essentially gets to decide whether the non-compete agreement is enforceable, and California judges will very likely not review their decisions. Therefore, relying on arbitration agreements to enforce non-competes is a high risk, high reward strategy. Although arbitration clauses are not likely to result in the enforcement of a non-compete agreement otherwise void under California law, in a close case, if an arbitrator rules in favor of the employer, that ruling will most likely be upheld by the courts.

This article was written for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem.

Stanley Chen is a law clerk (awaiting bar results) in the civil litigation and transactions departments at Enterprise Counsel Group in Irvine

 

Not All Animals Are Pets: Exceptions to Residential Landlords’ No-Pets Policies

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Even if a residential landlord has a strict no-pet policy, they should cautiously enforce the policy because some renters may have a right to keep an animal if it assists an individual with a disability. However, landlords are not required to accept all animals for renters claiming to have a disability. In the housing context, animals can be classified in three categories; service animals, companion / emotional support animals, and pets. A landlord’s ability to enforce its no-pet policy depends on which category applies to the animal.

Service Animals

Service animals are not pets. Under the Americans with Disabilities Act, service animals are dogs that are “individually trained to do work or perform tasks for the benefit of an individual with a disability.” [1] No-pet policies do not apply to service animals. If a disability is not obvious, a landlord is allowed to investigate whether the dog is a service animal, but it is important to know that only two questions may be asked:

(1) Is the animal required due to a disability? and

(2) What tasks is the service animal trained to perform?

Additional questions can be costly. A landlord may be liable for a penalty of $55,000 for a first violation and $100,000 for subsequent violations.  Although the law affords protections for individuals with disabilities, it does not protect those who falsely claim a pet is a service animal. This is a misdemeanor in California punishable by a $1,000 fine and up to 6 months in jail. Because service animals are not required to wear identification, it is not always obvious that they are a service animal. Unruly behaviors like pulling their handler, barking, growling, jumping and disobeying commands are not acceptable and are signs the dog is not a service animal.

Companion and Emotional Support Animals

Companion and emotional support animals provide relief or comfort for their owners with disabilities, but they are not trained to perform specific tasks and they do not receive the same protections as service animals. Additionally, they are not limited to dogs and horses. Oftentimes, cats and other domestic animals provide emotional support for people with disabilities.

The California Fair Employment and Housing Act (FEHA) prohibits housing discrimination on the basis of disability which it broadly defines as “any mental or psychological disorder or condition … that limits a major life activity.”[2] However, a landlord is not automatically required to allow a companion or emotional support animal simply because a tenant claims it was prescribed by a doctor for a disability. A tenant may be required to show two things: 1) that they have a disability, and 2) that the animal is an appropriate and reasonable accommodation for their disability.

If a landlord is skeptical of a claim an animals is a companion or emotional support animal, the landlord should request additional information. Landlords cannot not ask for medical records or detailed documentation, but they can ask for a letter from a medical provider that states the animal provides assistance or benefit directly related to a disability.

In 2004, the California courts decided a case called Auburn Woods[3] which stated it was “incumbent upon the landlord to request documentation or open a dialogue” with the tenant.[4] The goal of this interactive process should be to determine whether allowing a companion or emotional support animal constitutes an appropriate and reasonable accommodation for the disability. This is a question of fact, which means there is no one-size-fits-all answer.

Landlords should keep in mind that a resident who is denied the ability to keep a pet would have to establish discrimination by showing that they (1) suffer from a disability as defined in FEHA, (2) the landlord knew of, or should have known of, the disability, (3) accommodation is necessary to afford an equal opportunity to use and enjoy the dwelling, and (4) the landlord refused to make the accommodation.[5]

Pets

Renters do not have a right to keep a pet where a landlord has a “no-pet” policy. However, to further complicate the issue for landlords, numerous websites “certify” almost any pet as an emotional support animal for a fee. Many of these websites will provide a note from a self-proclaimed therapist, but none of these websites are recognized by the government. Again, an open dialogue and attempts to offer reasonable accommodation may help a landlord avoid liability for enforcing a no-pet policy for a tenant with a questionable companion or emotional support animal.

Matthew Rosene practices business litigation and appeals with Enterprise Counsel Group in Irvine.

This article was written for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem.

 

[1] Miniature horses can be service animals too. 28 C.F.R. § 36.302(c)(9)(i), 35.136(i).

[2] Government Code § 12926(i)(1)

[3]  Auburn Woods I Homeowners Assn. v. Fair Employment & Housing Com. (“Auburn Woods”) (2004) 121 Cal.App.4th 1578.

[4]  Id. at 1598.

[5]  Id. at 1595.

Before you say “I do” with a Closely Held Business Partner

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As a business law firm, ECG has helped many businesses prepare their organizational documents. In other instances, our firm’s attorneys have seen firsthand the dire consequences to business owners who failed to give adequate thought and care to adopting a suitable operating agreement, shareholder agreement or similar governance document. Such agreements among a small group of owners in a closely held business, in addition to their every-day practical uses, suddenly become extraordinarily valuable when business owners are confronted with a significant company “life event.” But often, in such a context, it is too late to adopt an agreement that could have solved or mitigated the problem amicably.

Corporate governance documents seem standardized; do they really require much attention?

Very clearly, they do. Would you feel comfortable about your family’s financial future without a will, trust and/or other estate planning documents in place? In establishing such a trust, would you rely on an online boilerplate form, or would you want to consider the individual needs and circumstances of yourself and your family members? The answers seem obvious. Similarly, adopting an appropriately suitable shareholder agreement or similar governance document to prepare for important future events in the life of a business should be of paramount importance to small business owners.

What if you don’t expect that any dispute or other issue would arise that you and your partners couldn’t resolve in short order?

In other words, what if you know and trust your potential business partners and don’t believe that you need the business equivalent of a pre-nuptial arrangement? While money often is a primary concern for people getting married, business is almost always about money. Here are some common issues and scenarios that highlight the need to have a carefully prepared shareholder agreement or similar governance document for a closely held business:

  1. Protect Minority Shareholders. Statutory and common law protections for minority business owners do exist, but they are minimal and require a court to enforce. Consider a brief example: a 49% holder is the primary manager of a business, but has agreed that an otherwise “50/50 partner” should hold 51% for strategic reasons, such as qualifying for a grant or program. An opportunistic buyer comes along and the 51% owner wants to sell. Can the 49% owner prevent the sale? No, in the absence of an agreement between the owners, the majority can approve the sale and the 49% owner’s day job disappear.
  2. Protect Against Unwanted Future Partners. Generally, anyone can sell their interest in a business to an unrelated third party without the other owners’ approval. If your business partner decides to sell his or her ownership interest, this could leave you with co-owners of your business who you don’t know and never agreed to do business with. Because of this risk, many owners of small businesses enter into a so-called “buy-sell” agreement limiting all shareholders’ ability to sell their shares to outsiders.
  3. Maximize the Value of your Ownership. In the event business owners part ways and one owner is bought out by the other owner, how will the interest be valued? While there is not one correct answer to this, owners often prefer to specify this in advance in a “buy-sell” agreement. If the “buy-sell” agreement does not specify a purchase price formula in advance, there is a high probability the departing holder’s interests will be valued below the “market” or “fair” value. This is especially true in the event of a dispute between the parties.
  4. Protect Passive Investors and “Silent Partners.” For passive investors who invest hard dollars but make a minimal time commitment to the business, similar to minority holders (and these categories are not mutually exclusive), the investor should want to know up front what types of important decisions affecting the business would require their consent, for example: selling all or most of the business, acquiring a new business or changing the nature of the business, making a capital call, making distributions or incurring debt beyond certain levels
  5. Avoid Paralyzing Deadlock. Structuring board, management and shareholder/member provisions with forethought can prevent unnecessary deadlock down the road. Deadlock, in turn, can result in business delays and lost opportunities, and ultimately be time-consuming and expensive to resolve.

What if you aren’t sure whether the business will “take off,” and want to get down the runway before making a modest, but nevertheless tangible, investment in a comprehensive governance document?

In most cases, if you are willing to invest sufficient time and capital to launch a business, you should be willing to ensure that solid governance documents are in place. For certain start-ups that for whatever reason want to test-drive a business model before spending any money, it is possible to upgrade foundational documents later on. But caution is warranted for a couple reasons. First, businesses often have the intention to do this, but don’t, until it’s too late. This is especially true if the business really takes off, in which case owners are likely to be frantically busy and happily distracted by the excitement of it all. Moreover, the sudden success might create tension and disagreements among the founders over who was primarily responsible and who should reap the rewards. Second, an important part of business planning is minimizing downside risk. Even if the plan never takes flight, or worse, winds up in significant debt, you need the protections that are included in good corporate documents.

Lance McKinlay is an attorney with Enterprise Counsel Group.  His practice focuses on transactions and other corporate and securities law matters.

This article was written for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem.

 

Judge Rules OC Assessor Acted Arbitrarily, Exceeded Discretion, and Violated Law

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ECG PRESS ANNOUNCEMENT

January 21, 2016

Irvine, California

Today, Judge Peter J. Wilson of the Orange County Superior Court issued a multi-million dollar victory for a Westminster mobile home park owner/operator, finding the County Assessor violated the law by grossly overstating the mobile home park’s value following a 2009 change of ownership.

In his 21-page opinion, Judge Wilson scolds the Assessor for “his decisions to include, or ignore, available data” in performing Proposition 13 property reassessments. As a result, the judge found the Assessor failed to properly estimate the park’s future income, its expenses and impermissibly ignored visible defects and foreseeable repair costs – all in violation of law.

“It was amazing how the County completely ignored the law and the facts,” said David A. Robinson of the Irvine-based Enterprise Counsel Group, the park owner’s attorney. “We repeatedly pointed out how their people relied on ‘pie-in-the-sky’ assumptions no sensible buyer or investor would make, and how all this violated the California constitution. It would not surprise me if the County does this all the time, just thinking property owners will roll over and not fight back.”

Judge Wilson faulted the Assessor for failing to consider market data in calculating the park’s foreseeable operating expenses, for making assumptions about improved occupancy and higher rents contrary to reason, and for ignoring past flood damage and estimated repair costs.