gets.primecure.net

Category: Legal Definitions

  • Distinct Legal Consequences in a Legal Partnership

    A partnership is a legal relationship that carries with it certain rights and obligations. Whether or not two or more persons have alegal partnership may become an issue. Our law defines a partnerhsip as a

    “juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit.”(La. C.C. Art. 2801).

    However, a legal and valid partnership may be established without a written agreement or contract, circumstantial proof may be offered to maintain that there was indeed a partnership. All of the surrounding facts are taken into consideration and explored by the court in order to determine whether a partnership had been formed, and to what extent each partner was involved. Thus, the facts are extremely important when an alleged partnership is created without any written documentation to support that contention.

    In a recent Second Circuit Court of Appeal Case in Louisiana, the court analyzed the plaintiff and defendant’s relationship in order to decide whether or not a partnership had existed between them. The facts consists of a duo who were romantically involved and lived together for an extended period of time. During their relationship, the defendant boyfriend approached the plaintiff girlfriend about starting a construction business together. The defendant had expertise and knowledge in the area, whereas the plaintiff had little if any, thus, he was relying on her more for the financial support versus any actual construction knowledge or managerial work. once they agreed on the type of construction operations they would be performing, they formed a company name and soon thereafter began small construction jobs around their community. They were approached by a third party construction company who showed interest in combining his construction company with the couple’s and forming a limited liability company (LLC). This is the point in the facts where the defendant faces a dilemma. The defendant was not included as a member of the L.L.C. because he was under a child support obligation to his former wife and he and the plaintiff wanted to protect their initial construction company from consideration in his child support proceedings. Further, the defendant had very poor credit and several outstanding judgments against him, therefore, it was in the best interest of the company, to put everything only in the plaintiff’s name. Both the plaintiff and defendant were paid nominal salaries, however, they constantly used the company’s funds for house hold bills and personal finances. Soon, the couple experienced problems and split apart, the plaintiff refused to allow the defendant access to any company records or funds and took the position that she was the sole owner of the company and the defendant a mere employee. Upon being prohibited any access to the company, the defendant filed suit, alleging that he and the plaintiff were business partners, each owning one-half of the initial company. He sought recognition as a co-owner of the company and requested partition of the company’s assets. However, the plaintiff denied the existence of any partnership, thus, relying on the state filings of the L.L.C. which listed her as the company’s sole owner. Thus, the question became, did they indeed have a partnership?

    The trial court granted the plaintiff’s counsel moved for involuntary dismissal which was granted. The Louisiana civil code of procedure article 1672 states,

    “In an action tried by the court without a jury, after the plaintiff has completed the presentation of his evidence, any party, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal of the action as to him on the ground that upon the facts and law, the plaintiff has shown no right to relief. The court may then determine the facts and render judgment against the plaintiff and in favor of the moving party or may decline to render any judgment until the close of all the evidence.”

    The trail court determined that despite the five witnesses the defendant offered, that the evidence taken as a whole, did not show that the fact or cause sought to be proven was more probable than not. Yet, on appeal, the dismissal was reviewed, taking into consideration what a partnership consists of and how it may be created. When there is no written agreement, as was the case between the parties, the existence of a partnership may be established by proof that the alleged partners agreed to form a partnership and participate in the profits to accrue from the business in determined proportions, to share in the losses as well as the profits of the partnership, and to have the property or stock of the partnership forma community of goods in which each party has a proprietary interest. Essentially, they must intend to have a business relationship between them that illustrates the major characteristics of a partnership. After reviewing the facts, the appellate court determined that the parties had agreed to form a construction business, operating it together, obtaining small jobs before the L.L.C. was even formed. Further, both the parties salaries were drawn from the company’s profits, and deposited into one bank account, allowing them to pay their shared living expenses. Lastly, the third party construction company owner testified that the plaintiff assured him that the couple was in partnership and that the defendant would obtain his share of the company despite the fact that she was listed as the sole member of the L.L.C. Thus, the appellate court reversed the involuntary dismissal, finding that the parties had in fact formed a partnership.

    A partnership is a legal relationship that can be entered into by mere verbal agreement. A written contract or agreement is not necessary, thus, one must be careful when agreeing to become involved in any type of business venture without realizing the potential consequences. Legal advice is always encouraged, especially in light of the financial costs that go hand in hand with entering into a partnership. Thus, if you are considering entering into a business venture take heed the legal ramifications of entering into such a relationship.

  • Playstation Network to Return: Legal Concerns Still Remain

    Sony announced yesterday that the Playstation Network (PSN) is set to return by the end of this week. Reports indicate access began to be provided to users starting on May 15 with different regions being incrementally phased in worldwide. Questions remain, however, as to the extent of previous breaches of the gaming network’s security and just how safe gamers are from having the incidences of May occur again.

    With its restoration of access to Playstation and Qriocity users in US, Europe and Asia, Sony is ending a month of outage that was first spurred by a breech of the networks’ security. As we explored previously, that Sony has admitted that the breech occurred due to the exploit of a known vulnerability opens a rather clear inquiry of just how negligent the electronics giant was in the matter. Down since April, the Playstation gaming network and Qriocity, a movie and music service, have been sorely missed by users that frequently accessed the services for their entertainment needs. However, with that access came the disclosure of information that is now likely in the open. What this information can be used for, and the subsequent ramifications for the users, remains to be seen but there is no doubt the courts will begin seeing discussion on the damages caused.

    Sony has been adamant about the upgrades they have made to their system, stating they have “been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that [their] fans can again enjoy the first class entertainment experience they have come to love.” This statement, made by Sony Executive Deputy Vice President Kazuo Hirai, also came with an expression of gratitude for the patience and support offered by fans. The reality of the situation, however, is that those whose information was disclosed have zero patience for an invasion of their privacy.

    Preliminary reports from Sony claim that 100 million accounts were affected by the recent breech, though if this number is accurate remains to be seen. It is obvious, though, that this number of accounts is staggering and was definitively avoidable. This availability touches upon the definition of negligence in American law; what makes this case exceptionally unique is that accounts in Asia and Europe were affected as well. Regardless of its reach worldwide, the PSN breech has, according to Sony, led to ‘considerable’ security upgrades to the free service. What these upgrades involve remain a secret, obviously, but many in the technology industry question how many additional vulnerabilities Sony may be aware of and what action, if any, has been taken to shore them up.

    Understanding your rights in a negligence case in which personal information is disclosed is important for people in Louisiana and across the country. Those 100 million users whose accounts were exposed should undoubtedly pursue legal representation as essential private details now lie in ill-intending hands. However, should the breech have included even more than the hundred Sony claims through connected networks or other system breeches, anyone affected should quickly position themselves to protect their legal interests immediately. By contacting an attorney, someone affected in a negligence claim can begin legal proceedings that protect their claim from timing out (prescription) or being handled without them (class actions, etc.).

    Contact our offices today for more information regarding this case.

  • Playstation Network Breeched Again in Late May

    In what can only be considered a confusing lapse in digital security, Sony announced another breach of their network security in late May. This news comes on the heels of the major shutdown that aggravated a world of gamers. As the length of downtime nears a month, questions linger as to how much knowledge the electronics giant had regarding system vulnerabilities and why a breach was what it took to search for solutions.

    Relating to a vulnerability regarding password resets, the most recent security breach is a major headache for Sony. The Playstation 3 Network, albeit free, is relied upon by millions of users for online gaming and, more importantly, includes a wealth of personal information for all of these users. Within the first security breach, this personal information, unfortunately, also includes billing details that could lead to vulnerability for customers who only wished to enjoy their games as sold.

    Regarding the most recent breach, reports indicate that users will know their account has been compromised if they received an email indicating that their password had been changed. While the information made vulnerable in this act remains unclear, it is just yet another incident in a problematic series of events that raise significant questions about the protection being utilized by Sony and the amount of negligence that may be at play. Negligence claims involve an injured party suing a defendant for the damages suffered that were avoidable through the direct intervention of that party. In short, negligence claims deal with the ‘avoidable;’ news reports that have come out regarding this matter indicate that Sony was aware of the vulnerability.

    The full extent of what information the hackers were able to attain is still unclear and may require litigation to fully understand. However, the facts clearly indicate this case will test the specific definition of cyber security and the expectations of companies to protect the information of users, regardless on the price of said service. Following the case will be crucial not only for those individuals who may have had their information breeched but also for those looking to better understand the law and how it applies to issues like this. For that reason we will continue to blog on the matter and provide updates as they become available.

    The Berniard Law Firm handles a wide variety of negligence cases, technology related or not, and would be happy to discuss this or any other matter with potential clients. Contact our offices today for more information.

  • Hurricane Katrina Case Allowed to Move Forward

    On August 29, 2005, Hurricane Katrina devastate much of the Gulf Coast, prompting the Louisiana Legislature to enact Acts 2006, which extended the prescriptive period within which insured’s were allowed an additional year to file certain claims under their insurance policies for losses incurred by the storms. Despite many insurance contracts granting only one year for insured’s to file claims, this prescriptive period extension allowed many residents more time to file as a result of the difficult circumstances caused by the storm. The Louisiana Supreme Court recently were asked to determine whether the Plaintiffs’ lawsuit, seeking damages from the Louisiana Citizens Property Insurance Corporation (LCPIC), filed nearly three years after Hurricane Katrina had prescribed. In an earlier decision made by the Fourth Circuit Court of Appeal, the prescriptive period was held to be interrupted by a timely filing of a class action petition against the insurer, which included the Plaintiffs as putative class members. Time is of the essence when filing lawsuits, here, the Louisiana Supreme Court held that the plaintiffs were timely and permitted to continue their lawsuit against LCPIC.

    The plaintiffs, like so many other Gulf Coast residents, suffered extensive property damage as a result of Hurricane Katrina. Maneuvering through the insurance filing process became tedious and very difficult, the plaintiff’s constantly received refusals by the insurance company to make any payments on their policy limits. Thus, the plaintiff’s turned to legal help in order to obtain help to rebuild their homes and their lives. On June 27, 2008, the Plaintiffs filed a petition against their insurer, LCPIC, seeking payment of their policy limits and damages, including damages for emotional distress and mental anguish. The allegations included: The plaintiff’s property was completely destroyed during the storm, the properties in question were covered by a policy of insurance issued by the defendant LCPIC, yet, the company refused to pay the policy limits. In response, LCPIC filed an Exception of Prescription, arguing that the suit was not filed within one year of loss and that the extended period of prescription provided by legislation had also expired. The trial court initially granted the defendant’s exception of prescription and dismissed the plaintiff’s claim with prejudice, finding that they had failed to file their claim timely. However, on appeal the trial court’s decision was reversed, the prescriptive period had been interrupted by the timely filing of a class action against the defendant insurer in which the Plaintiff’s were putative class members.

    Prescription, as defined by Louisiana’s civilian tradition, is defined as a means of acquiring real rights or of losing certain rights as a result of the passage of time. In the case of Cichirillo v. Avondale Industries, Inc, the court reasoned that prescription is designed to “afford a defendant economic and psychological security if no claim is made timely and to protect the defendant from stale claims and from the loss or non-preservation of relevant proof.” Prescription itself is a safety measure that was created in order to prevent defendants from the constant fear of a lawsuit twenty or more years after the fact. Conversely, the other type of period that exists in Louisiana, is liberative prescription. This is a period of time fixed by law for the exercise of a right, yet, a contractual limitation period is not a period of time fixed by law, it is a fixed agreement between the parties. Time is of the essence, yet, there are exceptions to the rule, this is exemplified by the fact that Louisiana extended the initial one year prescriptive period for property damage claims against insurers, for one additional year, allowing victims fo Hurricane Katrina more time to organize the various aspects of their lives that were devastated by the storm.

    The primary issue in this recent Louisiana Supreme Court decision, was whether or not the class action suit in which the plaintiff’s were putative class members, interrupted prescription, thus, allowing them continued access to their legal claim against the insurance company. Louisiana civil code article 1793 states, “Any act that interrupts prescription for one of the solidary obligees benefits all the others.” Thus, by becoming putative class members in the initial lawsuit against the insurance company, the plaintiff’s maintained their legal claims against the defendants, allowing them to pursue further legal action against the company despite the passage of time. The court of appeal held that the filing of the class action suits against LCPIC suspended or interrupted the running of prescription against the plaintiff’s property damage claims since they were found to be putative class members when the original class action petitions were filed.

    The defendant insurer argued that the contract, which provided one year from the date of the property damage, was the governing time period, even over the statutory extension provided by the Louisiana Legislature. The defendants supported this assertion by declaring that the public interest is served by permitting the insurer to limit the time of its exposure, as Louisiana Civil Code 802 states, “any suit not instituted within the specified time and any claims relating thereto, shall be forever barred unless a contract or the parties thereto provide for a later time.” However, even though the plaintiff’s did not unilaterally file a claim against the insurer within the one year contractual time period, they did enter into the class action against the insurer within the aforesaid time period. Upon the filing of the class action, liberative prescription on the claims arising out of the transaction or occurrences described in the petition were suspended as to all members of the class. The insurance contract provided a contractual time period, not a prescriptive time period, as a result, the additional one year time period afforded to Gulf Coast residents affected by the storm governs. The insurance company attempted to assert the contractual nature of its agreement to circumvent the application of the general codal and statutory rules of prescription is adverse to Louisiana civil Code Article 3471, which clearly circumscribes the limits of any contractual agreement attempting to incorporate a limitation period different from that established by law. Specifically, Louisiana Civil Code Article 3471 states:

    A juridical act purporting to exclude prescrption, to specify a longer period than that established by law, or to make the requirements of prescription onerous, is null.

    Thus, parties cannot “opt out” of prescriptive periods created by general codal and statutory rules. The plaintiff’s entered into a class action within the prescriptive time period, this interrupted the passage of time that would have taken away their legal rights to sue the insurer. Thus, the subsequent suit against the defendants was timely, and despite the contractual language that attempted to circumvent the Louisiana Legislature, the plaintiff’s filing was timely.

    (more…)