My second in a series of litigation-related personal responses since I’ve started my internship this semester. The first related to Dismissal of Action regulations. That one was simple – a matter of formality to be submitted to the Courts after a settlement had been reached.
The case I’ve been reading now is much more different. It is more involved, its an ongoing lawsuit, and it involves equities more than trademarks. Before I begin to generally discuss my new knowledge (Because case specifics would be unethical to discuss with respect to multiple privacy concerns), I’ll start us off with some lovely legal jargon necessary to understand what I’m saying.
I want to preface this by saying that prior to reading through this case and researching terminology when needed, I did not know any of the below legal jargon myself. So don’t worry – I’m not that much of a smartypants. I had to look it up/ask the attorney multiple times.
What use is a post about Fiduciary duty if you don’t know what fiduciary means! That’s where I’m going to start.
1) n. from the Latin fiducia, meaning “trust,” a person (or a business like a bank or stock brokerage) who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty. Characteristically, the fiduciary has greater knowledge and expertise about the matters being handled. A fiduciary is held to a standard of conduct and trust above that of a stranger or of a casual business person. He/she/it must avoid “self-dealing” or “conflicts of interests” in which the potential benefit to the fiduciary is in conflict with what is best for the person who trusts him/her/it.While a fiduciary and the beneficiary may join together in a business venture or a purchase of property, the best interest of the beneficiary must be primary, and absolute candor is required of the fiduciary. (Emphasis added)
2. Information and Belief
n. a phrase often used in legal pleadings (complaints and answers in a lawsuit), declarations under penalty of perjury, and affidavits under oath, in which the person making the statement or allegation qualifies it. In effect, he/she says: “I am only stating what I have been told, and I believe it.” This makes clear about which statements he/she does not have sure-fire, personal knowledge (perhaps it is just hearsay or surmise), and protects the maker of the statement from claims of outright falsehood or perjury.
3. In perpetuity
adj. forever, as in one’s right to keep the profits from the land in perpetuity.
In my case, our client receives a royalty income in perpetuity.
4. Limited Liability Company (LLC)
I have seen law firms with LLC at the ends of their names for years now. I finally took it upon myself to google it. I don’t think I can condense the regulations and definitions of an LLC into a few lines. Please click me to read the IRS’s description about limited liability companies.
5. Inter Alia
I’ve never seen this used. It’s just Latin for “among others” (pretty cool!)
(in-tur eh-lee-ah) prep. Latin for “among other things.” This phrase is often found in legal pleadings and writings to specify one example out of many possibilities. Example: “The judge said, inter alia, that the time to file the action had passed.”
n. money not paid when due, usually the sum of a series of unpaid amounts, such as rent, installments on an account or promissory note, or monthly child support.
7. Unjust Enrichment
n. a benefit by chance, mistake or another’s misfortune for which the one enriched has not paid or worked and morally and ethically should not keep. If the money or property received rightly should have been delivered or belonged to another, then the party enriched must make restitution to the rightful owner. Usually a court will order such restitution if a lawsuit is brought by the party who should have the money or property.
8. Constructive Trust
A relationship by which a person who has obtained title to property has an equitable duty to transfer it to another, to whom it rightfully belongs, on the basis that the acquisition or retention of it is wrongful and would unjustly enrich the person if he or she were allowed to retain it.
A constructive trust does not arise because of the expressed intent of a settlor, one who establishes a trust. It is created by a court whenever title to property is held by a person who, in fairness, should not be permitted to retain it. It is frequently based on disloyalty or other breach of trust by an express trustee (the person appointed or required by law to execute a trust), and it is also created where no express trust is created but property is obtained or retained by other Unconscionable conduct.
The right to a constructive trust is generally an alternative remedy. The aggrieved party can choose between a trust and other relief at law, such as recovery of money wrongfully taken, but cannot obtain both types of relief.
The decree establishing the constructive trust requires the defendant to deliver possession and convey title to the property and to pay to the plaintiff profits received or rental value during the period of wrongful holding and otherwise to adjust the equities of the parties after taking an accounting.
9. Unconscionable Means
When a court uses the word unconscionable to describe conduct, it means that the conduct does not conform to the dictates of conscience. In addition, when something is judged unconscionable, a court will refuse to allow the perpetrator of the conduct to benefit.
In contract law an unconscionable contract is one that is unjust or extremely one-sided in favor of the person who has the superior bargaining power. An unconscionable contract is one that no person who is mentally competent would enter into and that no fair and honest person would accept. Courts find that unconscionable contracts usually result from the exploitation of consumers who are often poorly educated, impoverished, and unable to find the best price available in the competitive marketplace.
Unconscionability is determined by examining the circumstances of the parties when the contract was made; these circumstances include, for example, the bargaining power, age, and mental capacity of the parties. The doctrine is applied only where it would be an affront to the integrity of the judicial system to enforce such contracts.
Unconscionable conduct is also found in acts of Fraud and deceit, where the deliberate Misrepresentation of fact deprives someone of a valuable possession. Whenever someone takes unconscionable advantage of another person, the action may be treated as criminal fraud or the civil action of deceit.
10. Quantum Meruit
n. Latin for “as much as he deserved,” the actual value of services performed. Quantum meruit determines the amount to be paid for services when no contract exists or when there is doubt as to the amount due for the work performed but done under circumstances when payment could be expected. If a person sues for payment for services in such circumstances the judge or jury will calculate the amount due based on time and usual rate of pay or the customary charge, based on quantum meruit by implying a contract existed.
So…a lot of learning right there. That’s why I love this internship! I learn so, SO much every single time. Actually, I got an e-mail today morning – my attorney invited me to come along with them to court where they were going to be contesting for sanctions for the defendant (We are representing the plaintiff in this case)
I’ve read the case action against the defendant from the plantiff’s POV so far. It was quite interesting, but quite long as well. I crammed in the rest of it during lunch break, that’s how fascinated I was while reading the case and observing how our firm retold the story, pointed out breaches and nicely summed up quite an insulting case action against the defendant. We’re accusing them of fraud, malpractice, embezzlement…you name it. The lawsuit is going to be for some ridiculously high amount like $30-50 million dollars. (Estimated. I don’t want you googling this!)
But really, QUITE fascinating. I’m really bummed I couldn’t join with the team and observe them in court today. Maybe next time. I hope so, next time! This case is going to be my baby – I’m going to see it through to its completion, however it may turn out.
Being somebody’s fiduciary is like…being their trusted/loved one. And then breaching that fiduciary trust is convincing them that you have their interest at heart, convincing them to give you POA, and then slowly diverting all of their income to yourself. Its pretty extreme – people tell their significant other that they’ll just help them manage their finances, but the reality is that they aren’t paying the bills, taxes, or pension funds. They’re literally stealing away your livelihood and all the while, you don’t suspect a thing until its too late, your trust funds are all gone, and you find yourself broke.
Ridiculous! This is why I don’t want to be too rich. You make far too many enemies.