Welcome to a new decade! (Or is it?) The start of a new year always presents a good opportunity to reflect on the year that was. Looking back at 2019, the Rhoades McKee Commercial Litigation Group was privileged to represent a wide range of clients, each with their own unique legal issues and challenges. We were also honored to receive referrals and recommendations from other trusted advisors, professionals, clients, and connections. For that, we are always grateful.
In 2019, our Commercial Litigation Group was once again recognized by Chambers and Partners and US News Best Lawyers as one of the best in Michigan and the metropolitan Grand Rapids area. Many of our lawyers were also individually recognized by Michigan Super Lawyers®, Best Lawyers of America®, and Grand Rapids Magazine for their litigation work. We also continue to stay up-to-date on the latest legal developments and are dedicated to providing helpful advice to our clients.
Helping clients efficiently and effectively navigate and resolve their legal issues remains our goal, and 2019 presented a number of highlights in that regard. For example:
- Quickly Disposing of a Multi-Million Dollar Claim: Rhoades McKee was retained by a large multinational corporation to defend it against a lawsuit seeking millions in damages arising from environmental contamination at a manufacturing facility that the client sold more than twenty years ago. We filed a motion for summary disposition early on, arguing that the plaintiff had to provide notice of a claim and file any suit within ten years after the sale. The court granted our motion, dismissing the lawsuit in its entirety.
- Using Our Valuation Expertise: A shareholder retained us to help deal with a fellow threatening shareholder who was interfering with the business – a situation that looked certain to end up in Court. But, utilizing corporate counsel, we held a number of mediation sessions to negotiate our client’s exit (or, alternatively, his acquisition) from the company. After engaging a valuation firm, we understood a range of value for the company and negotiated a deal under which the fair market value of the opposing party’s 50% interest would be determined by two valuation firms. The valuations came in millions lower than the opposing shareholder anticipated, because he failed to appreciate the application of valuation discounts and the flow-through nature of income. Because the opposing shareholder did not have the financial ability to buy out our client, we negotiated the redemption of the opposing shareholder’s interests. The buy out was completed within approximately six months of our engagement – a great outcome that also avoided the delay and expense of shareholder litigation.
- Knowing the Options: Our client’s lease included an option to purchase the property where it operated its business. But when our client informed the landlord that it intended to exercise the option, the landlord asserted a host of false arguments as to why it did not have to sell the property per the terms of the option. Knowing the requirements of option law in Michigan, we were able to ensure that the client did precisely what it needed to under the option agreement and then sued for specific performance. The Court ultimately awarded us summary disposition, ordering the landlord to sell the property per the terms of the option and ordering the landlord to pay our client’s legal fees to boot.
- Creatively Using the Rules to Our Client’s Advantage: Because a fellow subcontractor refused to pay for the damage caused to our client on a construction site, our client was forced to sue for $9,600. Early on, we filed an offer of judgment for roughly $9,600. The subcontractor continued to be unreasonable and dragged our client through two years of litigation. The Court ultimately entered an award of damages above the offer-of-judgment amount – exposing the subcontractor to a final judgment roughly ten times the amount of the offer. Rather than risk additional delays, the client accepted an immediate cash payment of $85,000 from the subcontractor in full and final settlement of a $9,600 dispute.
- Obtaining True Fair Value: Our client came to us after receiving notice that the corporation in which she was a shareholder had merged and froze her out, claiming to buy out her ownership interest for fair value. Demanding that the corporation produce the records surrounding the merger, digging into the details of the transaction, and exposing problems with the merger, we were able to negotiate a higher and more fair buy-out price for the client.
- Beating Them to the Punch: Our client signed a broad non-competition agreement as part of selling his business, with the understanding that the buyer would employ him long after the sale was finalized. Unfortunately, the buyer then laid off our client, claiming the decision was made for economic reasons – and then refused to hire him back after they decided to fill the same position later. When our client went to work for another company in the same general line of business – but doing different work for different customers than he had done with his old company – the buyer sent letters threatening to sue unless the new employer fired our client. With a preemptive strike, we filed suit against the buyer– filing a declaratory relief action asking the Court to determine on an expedited basis that the buyer had breached the contract, the non-competition provisions were excessive, and under either scenario they were void. After reading the motion and brief, the buyer agreed to release our client from the remaining five years of his non-compete in exchange for dismissal of the lawsuit.
- Achieving Complete Justice: A local packaging manufacturer looked to us for help in collecting over $340,000 in invoices for packing products. After several attempts to collect, we filed a suit. The buyer then filed a counter-complaint, alleging that there was an oral agreement to modify the written invoices and limit “markup.” Given the clear evidence of the balance owed, and the lack of any evidence to support the buyer’s counterclaims, we served the buyer with an offer of judgment in an effort to shift our client’s fees to the buyer. Through discovery, we established that there was no agreement to limit markups and then moved for summary disposition. The Court dismissed the buyer’s counterclaims, granted summary disposition in our client’s favor, and set the matter for an evidentiary hearing on damages. Following the evidentiary hearing, the Court entered a judgment in our client’s favor for the full amount requested, and our motion to recover all of our client’s legal fees remains pending.
