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Archive for the ‘Recent Victories’ Category

Pietrangelo Cook wins benchmark residential construction dispute

Friday, February 3rd, 2012

A Memphis-area arbitration panel awarded residential homebuilder David Clark Construction contract damages and attorney fees Wednesday in a dispute closely-watched by the regional construction industry.  Clark is the immediate past president of the Memphis Area Home Builders Association.

In its binding opinion, the panel determined that the homeowners had breached the construction contract by changing the standards of construction and evicting Clark’s team from the project mid-stream.

Because binding arbitration provisions are so common in construction contracts, the decision will likely resonate across the home construction industry in its protection of the rights of homebuilders in disputes with owners.

The homeowners, in this case, contracted with Clark to build them a $600,000 home in the exclusive “Enclave” subdivision in Germantown, Tennessee.  After Clark had completed 80% of the work, the homeowners ceased payment, arguing that Clark had breached the construction contract because his work varied in small ways from the home designer’s original plan.  They then hired a new builder to finish the job at a substantially increased cost using building methods not customary for residential construction in the area, and sought to hold Clark liable for the balance.

Pietrangelo Cook attorneys vigorously defended the contract, arguing that Clark retained some discretion under its terms to vary from the plans, and that the homeowners had themselves breached, by changing the standards of construction in the middle of the game.

Bolstered by the expert testimony of widely-revered architect Carson Looney and builder Brad Rainey, Clark showed the arbitrators that his work was consistent with standard building practices in Memphis and Shelby County and that the homeowners’ unilateral termination of the contract was not allowed.

The arbitrators unanimously agreed, awarding Clark $230,000 in damages.

Click here to read the binding opinion of the Arbitration panel.

Posted in Firm News, Recent Victories |

Pietrangelo Cook attorneys prevail in $700,000 contract dispute

Wednesday, October 19th, 2011

On October 18, 2011, Pietrangelo Cook successfully defended its client, National Capital Management, LLC (“NCM”), against a $700,000 breach of contract claim and obtained a favorable judgment in its counterclaim against the Plaintiff.  The United States District Court for the Western District of Tennessee agreed with Pietrangelo Cook attorneys Jon Lakey and John Cook, that the plaintiff’s breach of contract claim was without merit.

The litigation primarily involved the proper interpretation of a commercial contract involving the sale of unpaid consumer accounts.  In the contract, the plaintiff, who was the seller, represented that all of the accounts would be “legal, valid and binding obligations” of the account debtors as of the date of sale.  However, the bulk of the accounts delivered by the seller were time barred and beyond the applicable statute of limitations.  Relying on the representation in the contract, NCM rejected the time barred accounts, and thereafter was sued by the seller.

In granting summary judgment to NCM, the court adopted Pietrangelo Cook’s proffered interpretation of the contractual language and held that time barred accounts were not “legal obligations”.  According to the court, “[u]nder Tennessee law, a time-barred debt ceases to be a legal obligation, instead surviving as a mere moral obligation, upon the running of the statute of limitations—unless and until the debtor fails to assert the statute of limitations affirmative defense or another applicable defense.”  Because the seller had failed to provide accounts which satisfied the contractual representation, Pietrangelo Cook’s client was entitled to summary judgment on the breach of contract claims.

The opinion, Genesis Financial Solutions, Inc. v. National Capital Management., No. 09-cv-02104 (W.D.Tenn.), can be viewed in its entirety here.

Posted in Firm News, Recent Victories |

Pietrangelo Cook defends hotel owner in dispute over oral agreement

Thursday, September 29th, 2011

On September 29, 2011, Pietrangelo Cook successfully defended its hotel client in a summary judgment motion brought by the client’s former attorney.  The former lawyer claimed in its lawsuit that Pietrangelo Cook’s client owed him distributions under an oral agreement between the parties.  The Shelby County Chancery Court agreed instead with Pietrangelo Cook that the oral agreement was barred under Tennessee law.

Pietrangelo Cook’s client, a limited liability company that owned and operated a hotel, had entered into an agreement giving its then lawyer an ownership interest in the LLC.  After receiving substantial distributions from the LLC, the former lawyer filed suit claiming that he was entitled to even more distributions beyond what was required under the LLC’s operating agreement.

The Chancellor rejected the former lawyer’s claim, which was based upon an alleged oral agreement with a former Chief Manager of the LLC.  According to the court, because the alleged oral agreement was not included in the Operating Agreement or in any other written agreement, the former lawyer’s claim was barred under  Tenn. Code Ann. § 48-206-101(a)(2) and (a)(5) which provide that an operating agreement must be in writing and shall include “a description and statement of the agreed value of any … services contributed for each membership interest” and “[a]ny right of a member to receive, or of the LLC to make, distributions to a member.”

Posted in Firm News, Recent Victories, Uncategorized |

Pietrangelo Cook wins Board of Equalization dispute against Shelby County, Tennessee over interest rates

Tuesday, April 19th, 2011

On April 19, 2011, Pietrangelo Cook prevailed in a dispute against Shelby County, Tennessee over the interest rate accruing during the pendency of property tax appeals.  The Tennessee State Board of Equalization agreed with Pietrangelo Cook attorney John Cook, that the statute pertaining to appeal-period interest was ambiguous, and that Pietrangelo Cook client Pro-Serve, Inc., should not have to pay a higher rate as a result.

Pro-Serve filed timely appeals for each of the tax years at issue, and (while those appeals were pending) Pro-Serve paid the undisputed portion of taxes.  While Pro-Serve’s underlying appeals were largely successful, Pro-Serve was still required to pay some additional taxes.  At the time of final payment, Pro-Serve maintained that it was entitled to the lower appeal rate of interest from and after the date of its payment of the undisputed portion.  The County Trustee disagreed and insisted that Pro-Serve had to pay the 18% per annum non-appeal penalty rate for the entire period that the appeals were pending, because Pro-Serve did not pay the undisputed portion prior to the delinquency date.

The State Board disagreed with the County Trustee, explaining as follows:

T.C.A. § 67-5-1512(b) relieves taxpayers of delinquency penalty and interest otherwise accruing on property taxes as to property under appeal to the county and state boards of equalization, if the taxpayer pays the full amount of the tax prior to the delinquency date or pays the undisputed portion of the tax.  The statute does not specify a due date for the latter option, and that is the issue here.  A majority of the Board finds the taxpayer should not be penalized by the statutory ambiguity, nor should we imply a date if the consequence is a penalty.

Shelby County has filed a Petition for Judicial Review of the State Board’s Decision, which is currently pending in Chancery Court.

The State Board’s Final Decision can be viewed in its entirety here.

Posted in Firm News, Recent Victories, Uncategorized |

Pietrangelo Cook Wins Agency Decision Reversal in Unemployment Tax Case

Wednesday, November 17th, 2010

Pietrangelo Cook represented an interior design business that was seeking a redetermination of a decision by the Tennessee Department of Labor and Workforce Development that certain individual designers must be treated as employees rather than independent contractors.  The State’s initial determination would have required the business to pay unemployment tax for these individuals and to treat them as employees.  After briefing from counsel, the State reversed its decision in favor of the interior design business.  Partner Anthony Pietrangelo explained – “We were able to demonstrate that the individuals in question did not meet the definition of an “employee” and were instead properly classified as independent contractors.  This is a very good result for our client.  The question of whether individuals are properly classified as employees or independent contractors is one faced by nearly every business and getting it right can impact not only state and federal tax owed by a business but also a company’s exposure to tort liability.”

Posted in Firm News, Recent Victories |

Pietrangelo Cook Successfully Defends Preferred Medical Systems in $18 Million Lanham Act Case

Monday, October 25th, 2010

On October 4, 2010, the United States Supreme Court ruled in favor of Preferred Medical Systems, LLC by denying the Petition for a Writ of Certiorari filed by Medison America.  The Petition sought review of Preferred Medical’s successful defense of an $18 million lawsuit filed in federal district court in 2005.   The suit included a claim under the Federal Lanham Act, as well as ten additional claims under state law.  The district court had previously denied all claims, granting summary judgment in favor of Preferred Medical.  Medison appealed, but on December 18, 2009, the U.S. Court of Appeals for the Sixth Circuit affirmed the district’s court decision.  Medison then petitioned the U.S. Supreme Court for review.  Representing Preferred Medical, attorneys John Cook and Jon Lakey responded that the case did not warrant review and that the original judgment should stand.  The Supreme Court agreed, bringing this case to an end.

Posted in Firm News, Recent Victories |