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Bank sought the appointment of a referee. Home owner did not appear to oppose the bank’s motion. The court noted that the bank was not the lender but was assigned the mortgage by the lender. The assignment was dated after the foreclosure action was commenced but made effective as of a date prior to the commencement. The question before the court was whether this arrangement was sufficient to give the bank standing to pursue the foreclosure. The court decided that because that the bank had no interest in the mortgage as of the date that the foreclosure action was commenced it could not continue its foreclosure and the court was inclined to dismissed it. The court noted that date that the assignment was recorded was not the relevant issue. All that mattered was which bank held title to the mortgage as of the commencement of the lawsuit. Only that bank could sue for foreclosure.

A court recent denied a moviegoer damages for injuries suffered when he ate an unpopped popcorn kernel. The court held that because there is no such thing as a perfectly popped bag of popcorn, without any unpopped kernels, the moviegoer assumed the risk of such unpopped kernels when he purchased the popcorn.

A business that deals with tangible goods can lock its doors at night to prevent the theft of its business property. But what if a business deals with ideas, secrets and proprietary information that cannot simply be locked up to prevent their theft? What if there are other people, such as employees, that need to have access to that information? How can a business such as this protect itself? This article discusses one practice used to protect a business’ intellectual property, including its trade secrets, from improper use by an employee. Principally, we address the issue of how an employer can limit a departing employee’s ability to use his employer’s secrets or skills learned for the benefit of a competitor. As technology has developed and become easier to use, employees have greater access to a company’s sensitive information and encounter less difficulty in its misappropriation. As such, an employer’s ability to protect its secrets can become difficult to control. Additionally, as businesses become more global, competition by an employee using a past employer’s business secrets is harder to track. Therefore, employers will often seek to control who an employee can work for after he leaves the company, so that the employee’s ability to work at a competitor is limited. This type of control is effected by requiring an employee to sign a non-compete agreement as a term of employment. In this agreement, the employee promises not to work for a competitor (either specifically defined, or generally) of his employer for a specified period of time in a defined geographic area. Although the agreements are disfavored by courts, as they restrict an individual’s right to be gainfully employed, a non-compete agreement will be enforced if (i) it reasonably protects the rights and interests of the employer, (ii) is not overbroad, and (iii) is prepared and executed properly, as discussed at the end of this article. Although a court may eliminate those provisions of a non- compete agreement that are improper, an approach commonly referred to as “blue-penciling” the agreement, courts are reluctant to do so as they do not want to be seen as rewriting the parties’ agreement. If the court sees the agreement as too restrictive, and refuses to blue-pencil, the agreement will be disregarded and of no affect.

Many times, the non-compete agreement will be joined with a non-solicitation agreement, which prohibits the solicitation of the employer’s customers by the departing employee.

As mentioned, some issues that a court will look at include (i) the employer’s interests to be protected, (ii) the duration and scope of the agreement, and (iii) how the agreement is implemented.

Plaintiff commenced an action to recover on a mortgage note. The parties conceded that the property’s foreclosure left a balance due. Plaintiff now sought to recover the balance between the loan amount and the amount recouped by the foreclosure sale. Because the action came five years after the foreclosure sale, it was time barred, as such an action must have been commenced within 90 days from the date of the closing of the foreclosure sale. The court dismissed the case even though the plaintiff styled the case as one for recovery on the notes as opposed to an attempt to recover a deficiency judgment. (September 2008)

Plaintiff dropped off shipments at a UPS outlet store. UPS was allegedly instructed to ship the items COD and to accept money orders only. UPS accepted checks, some of which misspelled plaintiff’s name and some of which bounced. The court held that UPS could not avoid liability simply because plaintiff delivered his packages to an agent and not UPS directly. The court found further that because plaintiff accepted the checks tendered by the customers and delivered to plaintiff by UPS, plaintiff had waived his claims. (April 2008)

Plaintiff, a family-owned meat market, purchased an insurance policy which provided for replacement coverage on the business’ building and property. The policy also provided for one year of business interruption coverage. A fire destroyed the business’ inventory and badly damaged the building. When plaintiff submitted a claim, defendant, the insurance company, disputed the actual damages and paid slightly more than $163,000, and refused to pay more than seven months of business interruption losses. Following arbitration, plaintiff was awarded more than $407,000. Thereafter, plaintiff sued the insurance company for, among other things, consequential damages for the insurance company’s refusal to promptly pay under the policy, claiming that such refusal to pay under the policy, caused plaintiff’s business to collapse. The insurance company responded by pointing to the policy’s exclusion for consequential damages. Reversing the lower courts, the Court of Appeals held that the insurance company’s unreasonable refusal to pay under the policy caused plaintiff’s business to fail. Consequential damages are normally recoverable where they are reasonably contemplated between the parties. In this case, the Court held that business interruption coverage was in place to allow plaintiff’s business to continue in the face of a disaster. When defendant refused to promptly and properly investigate and pay for this loss, it knew the effect it would have on plaintiff. As such, the insurance company played a role in the ultimate loss and is liable, and the consequential damages that plaintiff sought was foreseeable and recoverable. The policy bar on consequential loss was inapplicable because such loss contemplated action by third-parties, not the insurance company.

Eight years after bidding successfully on a foreclosed property, the bidder sought to close. The delay in closing was due, in part, to environmental cleanup demanded by the bidder (as opposed to a refund of his winning bid). The bidder refused to pay accrued taxes and interest on the bid amount, claiming that the taxes are to be paid out the sale proceeds. The court held that because the winning bidder at an auction is the equitable owner, and because the term “sale” means bid date and not the closing date, the bidder was liable. As far as interest, because the bidder opted for the environmental cleanup, reaping those benefits which caused the delay, interest would accrue.

Plaintiff sued to enforce a note. Defendant claimed that the Note included an amount of interest which was usurious, thus rendering the Note unenforceable. Plaintiff claimed that defendant, who in the past had been his attorney, knew or should have known that the interest was usurious and could not raise that as a defense. The court found that although plaintiff was a sophisticated businessman and should have known if the loan was usurious, it was not completely certain how much of the repayment amount was interest and therefore denied summary judgment.

A Mediterranean-style restaurant sought to enjoin its landlord from leasing space to a pizzeria, claiming that doing so violated its lease. The lease provided that the owner would not rent space to another store for use as a substantially same restaurant. The restaurant claimed that when the pizzeria expanded, it became such a competing business, especially because the two eateries shared menu items. The court denied the injunction finding that the lease’s prohibition was not conclusive as the lease prohibited only a Mid-Eastern restaurant, which meaning was vague. Additionally, the court found that the pizzeria’s knowledge of the restriction was not determined, further supporting the denial.

Plaintiff owns the CANDYLAND mark in connection with candy. Defendant owns the mark in connection with games. When defendant licensed the mark to a third-party to use for selling candy, plaintiff sued. In response, defendant claimed that the mark was generic and not entitled to trademark protection as it simply added the word “land” to a generic term and used it connection with its store, and because others had used the mark to sell candy, thereby weakening the mark. Defendant also claimed that there was no confusion between the marks. The court denied both arguments. As far as the mark being generic, the court found that plaintiff used the mark in connection with the sale of candy and not for a candy store. Thus, the mark, as used in connection with candy goods, was not generic. Additionally, the defendant failed to convince the court that others’ use of the mark rendered it generic. Finally, the court found that given the information it had, it could not state for certain that the use of the marks by the parties was not confusing.