Under the so-called “American Rule,” a party that prevails in litigation typically is not entitled to recover the costs, expenses and legal fees it has to expend to secure a judgment in its favor. As such, many business contracts include a “fee-shifting” provision, requiring a defendant to reimburse a prevailing plaintiff for the reasonable legal fees it incurs to obtain a judgment in its favor – and courts routinely enforce such provisions. Sometimes, a fee-shifting provision is part of a much broader indemnification agreement. While doing so is perfectly appropriate, care needs to be taken in expressing the fee-shifting obligation, or it may not be enforceable. Indeed, that is precisely the unfortunate position in which the plaintiff found itself in Harris v. Imaging Advantage, LLC.
Five years ago, the plaintiffs in Harris initiated their suit against Imaging Advantage in the Business Litigation Session of the Superior Court. In December of 2021, the plaintiffs were awarded summary judgment on two different contract claims, the first of which related to a License and Services Agreement. According to Section 15.1 of the LSA:
Each Party … agree[d] to defend, indemnify and hold harmless the other Party … from and against any
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Massachusetts General Laws Chapter 93A is one of the most potent weapons in any business litigator’s arsenal. That statute prohibits deceptive or unfair acts or practices in the course of trade or commerce, and it allows for the recovery of attorneys’ fees and even multiple damages (when the malevolent conduct is knowing or willful). While many cases have held that a mere breach of contract alone is not to invoke Chapter 93A liability, other cases have held that leveraging a business partner into a concession – even if there is no breach of a contractual obligation – is actionable under Chapter 93A.
In light of this, it should come as no surprise that for years transactional attorneys have been trying to insulate their clients from the reach of Chapter 93A by using limitation of liability clauses. Unfortunately, the law as to the enforceability of a limitation of liability clause in the Chapter 93A context has been murky. Essentially, precedent set by the Appeals Court held that such provisions could be enforced if the alleged deceptive or unfair conduct arose out of contractual conduct but could not be enforced where the conduct at issue was tort-based (as in the case … Keep reading
ERISA generally requires retirement plan fiduciaries to invest prudently, diversify assets to minimize the risk of large losses, and act solely in the interest of plan participants. These duties have been interpreted as prioritizing the pecuniary interests of plan participants and their beneficiaries. Because investment returns are not to be sacrificed or greater risks assumed to promote collateral social policies, many plan fiduciaries have shied away from environmental, social and governance (ESG) investments.
However, such investments do not need to be avoided if the ERISA fiduciary gives appropriate consideration to the facts and circumstances relevant to a particular investment or course of action, including the role of the investment in the portfolio, and acts accordingly.
In fact, a recent proposal by the U.S. Department of Labor seeks to modify certain prior regulatory guidance that had chilled ESG investments. Appropriate considerations include the risk of loss, opportunity for gain or other return as compared to similar investment alternatives. Diversification, liquidity, projected return are all factors for considering investments in a retirement plan, but investment returns are not to be sacrificed or greater risks assumed to promote collateral social policies. Thus, ESG factors may serve as a “tie breaker” when considering … Keep reading
In this installment of The In-House Advisor, we interview David Morris, General Counsel of Vivid Seats (NASDAQ:SEAT). David is Vivid Seats’ first general counsel, having started at the online ticketing e-commerce marketplace Vivid Seats in June of 2021 – during the company’s SPAC merger transaction that led to Vivid Seats going public in October of 2021.
Before joining Vivid Seats, David served as Vice President and Associate General Counsel at TripAdvisor Inc., a global online travel research and marketplace business, where he worked from 2008-2021 on a wide variety of commercial, regulatory, and corporate matters for TripAdvisor’s global hotels, flights, and vacation rentals marketplace businesses. David worked in various roles as the company grew from 200 to over 3000 employees, the latest as Vice President and Associate General Counsel. David also has been a longtime board member of the Doug Flutie Jr. Foundation for Autism, a nonprofit named after the son of the former National Football League quarterback, and the Brandeis University Alumni Association.
Prior to his tenure at TripAdvisor, David served at Invensys, PLC from 2003-2008 and began his legal career at the law firms of Wilmer Hale and Hinckley Allen.
The In-House Advisor: The role of … Keep reading
Like many mobile Apps, the one implemented by Uber Technologies includes a statement saying that users agree to abide by the company’s terms and conditions. One of those provisions is a mandate that all disputes with Uber be resolved through binding arbitration. Thus, imagine Uber’s surprise when the Massachusetts Supreme Judicial Court held in Kauders v. Uber Technologies, Inc. that one of Uber’s customers was not bound to arbitrate and could sue Uber in a court of law.
In 2014 Christopher Kauders signed up to use the Uber App in what appears to have been the same way most users do. After establishing his account, Kauders, who is blind, claimed that three Uber drivers refused to provide him with rides because his guide dog accompanied him. Based on this, Kauders sued Uber in Superior Court.
Uber filed a motion to compel Kauders to arbitrate his claim, and Kauders countered that the arbitration clause did not bind him because he had not received adequate notice of it, nor had he agreed to it. While the Superior Court initially sided with Uber and ordered that the dispute be arbitrated, that decision later was vacated, and the matter was appealed to … Keep reading
In some contracts, a party must meet its obligations by a certain date or forfeit its rights, and some of those contracts also include a “time is of the essence” clause. As most practitioners know, coupling a date for performance with a time is of the essence clause means that the deadline is inflexible. Having said that, there also are a number of cases where such hard deadlines were deemed to have modified by the conduct of the parties. See, e.g., McCarthy v. Tobin. However, it is perilous to assume that your negotiations imply an extension when a time is of the essence clause is in play. Indeed, that is exactly what happened to the defendant in Reem Property, LLC v. Transfer Financial, LLC.
Reem Property was the high bidder in a foreclosure sale of real estate, and it entered into a Memorandum of Understanding with Transfer Financial to purchase that property. Pursuant to the MOS, Reem paid a $10,000 deposit. The time for closing was set for 12:00 p.m. on June 30, 2014, and time was of the essence. Before the closing, Reem’s counsel found that there was a problem with the newspaper advertisement … Keep reading
You have gone back and forth with an adversary via email several times and keep getting closer to a monetary settlement. Finally, the other side makes an offer that is over your bottom line, and you want to put the matter to rest. Should you accept? Maybe, but before you do, be sure that you have thought through all the non-monetary components of that offer. Failing to do so could end up binding you to an agreement that does not include provisions that are important to your client.
Lane v. Powell started as a wrongful death and personal injury action that became particularly nasty during the litigation. Certain lawyers, expert witnesses and other non-parties were accused of defamation and criminal witness tampering. Eventually, summary judgment limited the claims in the case, and the remaining parties engaged in serious settlement negotiations. After several emails between counsel closed the gap, the following exchange took place:
- First, Defendants’ counsel wrote: “I’ve got $120,000 for all claims and nowhere else to go for more.”
- Two days later, Plaintiffs’ counsel responded: “$120,000 is accepted. …The releases will include the 93A case, but no confidentiality.”
- Twelve minutes later, Defendants’ counsel answered: “Excellent, that’s great.
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How many times over the years have you seen a clause in a contract stating that it only can be modified by a written instrument signed by the parties? Depending upon how long you have been practicing, the answer may well be hundreds, if not thousands. The problem with such a clause, however, is that it may not be as binding as it appears. Indeed, in a recent decision by Judge Saris in the Federal District Court, she ruled that a series of contracts prohibiting oral modifications or modification by conduct were, in fact, modified by words and acts.
In May of 2019, Sasha Hoffman began working for Thras.io Inc. pursuant to a written “Consulting Agreement” covering the period May 1 through July 31, and the parties subsequently entered into three additional Consulting Agreements that extended the term of her work through October. Each Consulting Agreement contained the following clause:
No provision of this Consulting Agreement may be modified, amended, waived or terminated except by a prior instrument in writing signed by the parties to this Consulting Agreement. No course of dealing between the parties will modify, amend, waive or terminate any provision of this Consulting Agreement
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Over the years, I have written a number of blog posts dealing with forum selection clauses, often in disputes where a party who wanted to enforce those provisions was not able to do so. While in-house counsel may view a forum selection clause as a boilerplate provision (and that is not necessarily inappropriate), it is critical that such a boilerplate provision be drafted properly. As the First Circuit’s recent decision in Bautista Cayman Asset Co. v. Fountainebleu Plaza, 2021 WL 2154778, confirms, failing to do so can lead to a forum selection clause being of little or no value.
In March of 2017, Bautista Cayman Asset Company brought a collection action against Fountainebleu Plaza, S.E. and others in the Federal District Court for the District of Puerto Rico. While Bautista eventually was awarded summary judgment on its claim, the defendants appealed, arguing that the Federal District Court had no subject matter jurisdiction, because the parties’ contract had a forum selection clause stating:
In the event of any litigation that arises in connection with this contract, with the Loan, or with the other documents connected hereto, the parties submit to the jurisdiction of the General Court of Justice
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