Klein & Wilson

Newport Beach California Business Litigation Law Blog

Be Careful in Becoming a Minority Shareholder in a Corporation or Minority Member in a Limited Liability Company

While two percentage points may seem like a very small difference in power in running a company, those two percentage points can make all the difference in the world. Under the law, there is an immense difference between being a 51 percent owner and a 49 percent owner. Unless there is a shareholder agreement or an operating agreement that protects the rights of minority interests, a minority owner has few legal rights. 

When someone violates their fiduciary duty to you as an investor

Investors are part of what makes American capitalism succeed. Those who have assets can choose to invest their capital in someone else's plan or idea. This helps fund innovation and provides potential income for those who invest.

When you invest capital in a business, you expect that the company will abide by the business plan and repay your investment. As the business succeeds, you could receive regular income as a shareholder.

Causes of contract disputes and how to resolve them

Business to business contracts are established to ensure that everyone is on the same page, and to protect the interests of both sides. When written well, they help to prevent disputes from arising in the first place, because they are clear on the consequences of certain actions, and they leave nothing to interpretation.

However, no matter how well a business to business contract is written, there is still a small possibility of a dispute. This is why it is important that you understand how disputes tend to arise so that you can more easily address the underlying issues to make a resolution. The following are some of the most common causes of contract disputes, and some suggestions on how these disputes can be resolved.

California Super Lawyers® 2019: Gerald Klein and Mark Wilson

Each year, Super Lawyers® recognizes the top lawyers in Southern California via a patented multiphase selection process involving peer nomination, independent research and peer evaluation. The Southern California lawyers who receive the highest point totals during this selection process are recognized in Southern California Super Lawyers® Top Lists.

Klein & Wilson is honored to announce that Gerald A. Klein and Mark B. Wilson have been listed in both the 2019 Super Lawyers® Top 50 Orange County List and the 2019 Super Lawyers® Top 100 Southern California List.

Gerald Klein and Mark Wilson have been selected to the California Super Lawyers® list for the last 15 years.

Lawyers - Do You Want to Do Business With Your Client? Read This First!

Some lawyers think the California Rules Of Professional Conduct prohibit them from doing business with clients. However, lawyers are free to engage in business transactions with clients if they follow three simple rules set forth in California Rule of Professional Conduct, rule 1.8.1:

1. the business transaction must be fair and reasonable;

2. the client must be represented in the transaction by independent counsel chosen by the client, or the client must be advised in writing to seek the advice of an independent lawyer of the client's choice and is given a reasonable opportunity to seek that advice; and

3. the client must provide informed written consent to the terms of the transaction and the lawyer's role in it.

Does Stormy Daniels Have a Legal Malpractice Action against Michael Avenatti?

If Stormy Daniels' allegations about Michael Avenatti's representation are true, then Daniels likely has a legal malpractice action against Avenatti, and he could face California State Bar discipline.

Even though Michael Avenatti represented Stormy Daniels in cases outside California, Avenatti is subject to the California Rules of Professional Conduct. See California Rules of Professional Conduct (CRPC), rule 8.5(a) ["A lawyer admitted to practice in California is subject to the disciplinary authority of California, regardless of where the lawyer's conduct occurs."].

A Significant Ruling in a Legal Malpractice Binding Arbitration

Klein & Wilson's client, a major employer in San Diego, hired Higgs, Fletcher & Mack, the largest and oldest law firm in San Diego, to evaluate its employment practices. After making a few tweaks to the company's policies, the law firm said the company was good to go. Years later, the company's employees filed a class action lawsuit alleging the company's policies (which the law firm blessed) violated numerous Labor Code sections. The law firm told the client it would defeat the class action in a summary judgment motion. After mediating the employment class action, the law firm determined its advice was wrong and advised the client to settle. At a binding arbitration before three retired judges, Klein & Wilson proved the law firm breached its fee agreement (by charging fees for work that had no value) and fell below the standard of care (by steering the client into Labor Code violations). On December 19, 2018, the San Diego County Superior Court entered a judgment against the law firm, ordering it to disgorge all its fees and pay damages which, after correcting the arbitration award (increasing the amount the arbitrators awarded), total $1.8 million.

Your legal rights when a landlord doesn't maintain a property

Renting property as a commercial tenant helps you save money compared to purchasing property. Especially in the first few years of your business, obtaining a lease is often a wise decision. You can develop your brand and a loyal customer base before you invest in permanent real estate. After all, it can be quite difficult to predict how your business will grow or change when you first open up for business.

Renting provides you with savings that you can invest back in your business, as well as flexibility. Unfortunately, renting can also create situations that could damage your business. For example, improper or inadequate maintenance on the part of your landlord could affect your ability to use the space and the comfort of your clients or customers when visiting you.

Avoid Attorney-Client Fee Disputes By Discussing The Economics Of Litigation

Many potential clients are surprised at the expenses associated with litigation. Unsophisticated purchasers of legal services do not understand the inefficiencies associated with getting their cases to trial and are frustrated by the gamesmanship over procedural matters. After paying thousands of dollars of fees and costs (with no end in sight), some clients look for a scapegoat to vent their anger. Not surprisingly, the client's lawyer is an easy target.

Setting aside pro bono work, before accepting representation for new clients, consider discussing the economics of litigation. A simple example will make the point. It does not make sense for a client to hire an attorney who charges $600 per hour to recover $10,000 in a contract dispute. The client will spend more money on the attorney than is in dispute and will be in a worse position. That client should go to small claims court without an attorney.

  1. RATED BY | Super Lawyers | Top 100 | Southern California | SuperLawyers.com
  2. Avvo Rating | 10.0 | SUperb | Top Attorney Litigation
  3. PREEMINENT AV | Martindale-Hubbell | PeerReviewRated
  4. RATED BY | Super Lawyers | Top 50 | Orange County | SuperLawyers.com
  5. Best Lawyers | BEST LAW FIRMS | U.S.NEWS | 2018
  6. KLEIN & WILSON | RECOGNIZED BY | Best Lawyers | 2019
  9. AVVO Client's Choice | Award 2017
  10. OCTLA | Orange County | Trial Lawyers Association | Trial Lawyer Of The Year
  11. The National Trial Lawyers | Top 40 Under 40

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Newport Beach, CA 92660

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