Business Law

Unjust Enrichment in Texas—Overview

A contract usually lies at the center of any transactional dispute. And in such circumstances, the courts look to the contract to arrive at a remedy and make the damaged party whole again.  However, in certain circumstances, a party receives a benefit at the expense of another and there is no contractual relationship between them. These are nuanced and unusual areas of transactional law. In such circumstances, Texas courts employ the doctrine of “unjust enrichment.” In this guide, we will discuss the elements of unjust enrichment and how they are applied in Texas. Common Law Unjust Enrichment Texas law holds that unjust enrichment only exists where a contract does not. Therefore, if a contract (whether expressed or implied) exists between the parties, then the contract controls any dispute and unjust enrichment is not applicable to the case.  Elements Of Unjust Enrichment That all said, the elements of unjust enrichment are: One party receives a benefit from another party, The benefit was conferred at the detriment to the other party, and There was no contract between the parties. At the heart of an unjust enrichment cause of action is an unexpected benefit conferred by one party upon another without the proper payment for that benefit by the receiving party. This concept is rather hard to get a handle on, so an example of an unjust enrichment cause of action may be helpful.  Suppose Person A builds and delivers a high-performance bicycle to the home of Person B. However, the home is actually that of Person C. Person C accepts the bicycle and enjoys riding it. Since Person B never received the bicycle, they do not pay for it. Now Person A has delivered a bicycle but has not received payment. At this point, Person A has a claim against Person C for unjust enrichment (i.e., Person C has received the benefit of the bicycle to the detriment of Person A—they were never paid). Since there is no contract between Person A and Person C there is no breach of contract claim. However, there is a claim for unjust enrichment.  Texas courts use the concept of a “quasi-contract” to untangle such a situation. A quasi-contract is an obligation imposed by law as a matter of equity. In this example, there was a quasi-contract between Person A and Person C. Since Person C accepted and is enjoying the benefits of a high-performance bicycle, they should have to Pay Person A for the bicycle.  Quantum Meruit v. Unjust Enrichment Very closely associated with unjust enrichment is the concept of “quantum meruit.” Quantum meruit occurs where a person confers a benefit on another and thereby has a reasonable expectation to compensation for that conferred benefit. Like unjust enrichment, where no contract exists, equity still demands that the befitting party pay for the benefit conferred.  The key distinction is that a quantum meruit case relies on a reasonable expectation of one party to receive compensation for a benefit conferred. Unjust enrichment seeks to prevent the injustice of receiving a benefit without paying for it.  Unjust Enrichment Is Not Fraud You do not need deceit or ill intent for an unjust enrichment claim. Rather unjust enrichment frequently occurs due to a mistake or an unintended act. Therefore, the party receiving the unjust enrichment could have simply been the recipient of an unexpected boon. That said, Texas law requires that if they have willingly received a benefit then there should be restitution (i.e., they should pay for that benefit or return it). Damages For Unjust Enrichment The quasi-contract principal employed by Texas courts speaks directly to the equitable nature of an unjust enrichment claim. Equity is a demand for fairness. When a party delivers a service, they have a reasonable expectation to receive an exchanged benefit. Restitution is based on the receiving party’s gain rather than the delivering party’s loss. Therefore, in the case of the bicycle example, restitution could either be the return of the bicycle or payment for the bicycle. Consult an Attorney As you can see, unjust enrichment is a nuanced area of transactional law that requires skill in its identification. The Hunnicutt Law Group’s attorneys have decades of experience in all aspects of transactional law. If you feel that someone has received unjust enrichment in Texas at your expense, contact us today to see how we can get the equity under Texas law that you deserve.

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Business Law

How to Sue a Company in Texas

If a Texas company has harmed you then you will need to follow certain specific steps to sue a business in a Texas court. The process is highly formalized and complex. However, in general, the process is divided into three distinct stages: pre-trial, trial, and post-trial. In this guide, we will discuss only the pre-trial stage helping you to initially understand how to sue a company in Texas. Filing Your Lawsuit This is the foundation of your case and can often prompt an out-of-court settlement. However, to trigger that potential you need to reach a certain threshold in your lawsuit. Therefore, begin by researching, drafting, and filing your lawsuit. Research Your Lawsuit In Texas, your claim is initiated with a “petition.” The petition is a formal document that you file with the court that starts the lawsuit. To begin, your petition must identify the substantive law that the company (i.e. the defendant) violated. For example, if the defendant failed to pay for your plumbing services, then they potentially breached a contract. In that case, you must prove specific elements in a breach of contract claim to win. For instance, you would need to prove that:  There is a valid contract, You have performed your obligations under the contract, The defendant has not performed their obligations under the contract, and You have suffered damages.  After you have identified a valid claim against the defendant, you then need to check to see if you brought your claim in time. This is called the statute of limitations. In Texas, the most common statute of limitations period is two years. However, you should research to make sure that your claim doesn’t have a shorter or longer statute of limitations. Drafting and Filing Your Petition Since the petition is a formal court document, you need to draft it in a specific format and include the following: A succinct statement of the relevant facts of the case that support your claim, including what the defendant did to harm you. Note that you do not need to present evidence at this stage—just assert the facts as you understand them. The principal of law violated (e.g. breach of contract, etc.) and its elements.  What relief you are seeking from the court (e.g. money damages, specific performance, etc.). The names and addresses of all the parties involved.   At this point, you need to know in what court to file your petition. This is called the proper jurisdiction for suing a business. In general, you file your petition with the court in the same county as the principal office of the defendant. Finally, you will need to pay a filing fee to the court. While fees vary from county to county, generally expect to pay approximately $200 in filing fees.   Serving The Defendant After you file your petition, you must then ask the court to give notice to the defendant of your lawsuit. The court does this by serving the petition and a “citation” through a third party on the defendant. Note that you cannot serve the defendant yourself. The citation generally states: Why the defendant is being sued; What is the legal basis for the lawsuit; What is the remedy (i.e. money damages, etc.); and That the defendant must respond and appear. As you can see, filing your petition and serving the defendant is complex. Therefore, we encourage you to seek an experienced litigation attorney to represent you. After Filing Your Lawsuit After you file your petition and serve the petition and citation on the defendant, the obligation then moves to them to answer your petition. Note that the defendant’s response can raise a whole new set of procedures and decisions. The Defendant’s Response The defendant has a certain amount of time to respond to your petition. As a response, the defendant can: Not respond, thus ignoring the petition and setting up a default judgment; Answer the petition; or Answer and file a counter-petition. A counter-petition is a claim against you by the defendant that you then would have to answer. Assuming that the defendant answers but does not file a counter-petition, then the pretrial “discovery” stage begins. Discovery This is when the parties get information from each other. That information usually takes the form of: Interrogatories—written questions from one party to the other; Production of documents—the request to produce documents from one side to the other; and Depositions—the questioning under oath by one party of the other. Discovery is complex, and frequently one party will object to discovery requests. To successfully navigate pretrial discovery, you must become familiar with the Texas Rules of Civil Procedure. Again, an experienced litigation attorney can help you navigate various aspects of discovery in suing a business. Once discovery is complete, your lawsuit enters its last pretrial stage of attempted settlement. If settlement negotiations fail, then your lawsuit will move to an actual trial.   Getting a Lawyer Once you have filed your petition, the defendant has responded, and discovery is underway, you are in the thick of the lawsuit. At this point it is necessary to have an in-depth knowledge of Texas court rules to successfully manage your lawsuit. Those rules include: Rules of civil procedure governing discovery, motions, and other pretrial matters; Rules of evidence governing what is admissible at trial; Rules for how to preserve objections; and Rules for how to preserve issues for appeal. If you are not familiar with these rules, you will not understand what is happening in your case and how to protect your interests. Hunnicutt Law Group Litigation Attorneys  At Hunnicutt Law Group, we have highly experienced and skilled litigation attorneys who can sue a business for you. Even though your case is properly before a Texas court, you need experienced litigation attorneys to finish the job. Hunnicutt Law Group has decades of success and thoroughly understands how to sue a company in Texas. Contact us today to see how we can help you and your lawsuit.

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Business Law

How Long Does It Take to Get an LLC in Texas?

The decision to formalize your business through the establishment of a legal entity with Texas is one of the most savvy business decisions you can make. It sets your company apart from other fly-by-night operations. It allows you to grow and attract investors, and it alerts the public that you are taking your business seriously. In this guide we will discuss the very specific steps and formal timeline for setting up a Texas LLC. What Is an LLC and Why Do I Need One? LLCs are the most popular business vehicle in use today. They nicely blend the benefits of a corporation with the benefits of a partnership. Like corporations, LLCs have limited liability protection for their owners (i.e., “members”). Similar to partnerships, LLCs provide pass-through taxation. Finally, an LLC owns its property separately from its owners and thus additionally protects your assets from LLC activities. How Do I Set Up an LLC? How long does it take to get an LLC in Texas? It’s pretty swift, but the process needs to happen in a very specific order. At the outset we suggest that you do all the following online to avoid delays with mail-in documents. Certificate of Formation First you need to create your LLC with the State of Texas. Do this by filing a Certificate of Formation (COF) with the Texas Secretary of State (SOS). The COF must contain the following information. Name of the LLC This is the formal name of your company and will appear on all legal documents (e.g., leases, bank accounts, etc.). Make sure you pick a name you can live with for a long time. The name must include the phrase “limited company,” “limited liability company,” or an abbreviation of one of those. As a suggestion, consider a name that is not directly related to your business activity to give the business a bit more privacy. Registered agent This is the person that receives formal legal papers for the LLC (e.g., lawsuits, etc.). Consider a professional registered agent to avoid accepting service at your business address, which can be both disruptive and embarrassing. Governing authority This point is extremely important. How do you want your LLC managed? You can choose member-managed or manager-managed. With a member-managed LLC, all the members (i.e., owners) work together to run the business. With a manager-managed LLC, you elect a manager to run the LLC. That person is similar to the “president” of a corporation and will be responsible for the day-to-day operations of the LLC. Purpose and organizer Finally, you will provide information about the purpose of your LLC and its organizer. The organizer could be you or your attorney—essentially whoever is filling out the COF. Filing the COF How long it takes to set up an LLC depends on the speed of service. We recommend that you file the COF online and use expedited services. Currently the SOS takes up to 40 days to approve LLCs. With expedited service, formation takes approximately 5 days. Adopt an LLC Operating Agreement An operating agreement (i.e., “company agreement”) outlines how an LLC is run. The operating agreement establishes, among other things: The powers and duties of the members and/or managers, How profit is distributed, Who can be a member, and  How to leave an LLC (e.g., buy-out rules). Texas has some unique LLC laws, and without an operating agreement you will default to these laws, which can cause problems in the future. For instance, LLC members cannot leave an LLC unless an operating agreement outlines how to do so.  Additional Important Steps Don’t stop with just filing the COF, or you could delay how long an LLC takes to set up. There are several other very important steps to place your new LLC on firm legal footing. IRS Registration Go to the IRS website and apply online for a federal tax identification number for your LLC.  County and City Registration Requirements While Texas does not require a general state business license, often counties and cities do.  Check with the counties and cities where you plan to do business for any required licenses (this includes sales tax licenses). Hunnicutt Law Group Knows LLCs Don’t wonder “how long does it take to set up an LLC in Texas.” With Hunnicutt Law Group we have formed hundreds of LLCs, dozens of them custom-tailored. The above is a bare outline of how long it takes to set up an LLC. Making the investment now, instead of years in the future, is both smart and easier. Contact us today to see how we can help.

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Business Law

How to Remove a Member From an LLC in Texas

People enter into business together to realize a common vision based on a common interest. The belief in success and hope in the future often overrides all other concerns and seems to be the salve for all potential disagreements. However, those days frequently come to an end and discord arises between business partners.  Conflict arises most frequently from disagreements on future course, a failure to uphold obligations and duties, or one business partner acting in bad faith to harm the business. At that point, you may be faced with the problem of how to remove a member from an LLC in Texas. In this guide, we will go over your options and discuss them in light of Texas LLC law. Texas LLC Law on LLC Member Withdrawal or Expulsion Under Texas law, a member of an LLC may neither voluntarily withdraw nor be expelled from a Texas LLC. However, an agreement can modify this statutory default prohibition. Unless your LLC operating agreement has a provision for withdrawal or expulsion, there are only two mainstream options available for removing a member from an LLC. The first is voluntary dissolution and the second is judicial dissolution.  Voluntary dissolution requires a majority vote of the members. Involuntary dissolution requires a court order. Authorities in Texas have noted that this creates a significant conundrum if there is no operating agreement or any other agreement between the members of the LLC. This is one important reason, among many others, to prepare a written operating agreement for your LLC. An experienced business formation attorney in Texas can help you craft an agreement that meets the specific needs of your business. Look to the Operating Agreement Most LLCs have an operating agreement that governs the internal and external affairs of the business. Within that agreement are almost always provisions for how to remove someone from an LLC, whether voluntary or involuntary. The provision will outline: Notice requirements—how much time you need to give for the removal; Voting requirements—the needed votes to remove a member;  Valuation methods—how to value the member’s ownership interest; and Payment—the terms of payment for the ownership provision. By following the provisions of the operating agreement, you may be able to effectively and legally remove the troublesome member from the LLC. Note that this type of removal provision overrides the prohibitions of membership withdrawal and expulsion under Texas law. Secondary LLC Membership Agreements Frequently, to supplement a basic (or form) LLC operating agreement, the members elect to enter into a secondary agreement such as a buy-out agreement or an employment agreement. Under each of these agreements there may be similar provisions as discussed above that outline how to remove a partner from an LLC. Often such a buy-out is described as a “call” option. A call means that the non-exiting member or business unilaterally buys the interest of another member and forces them out of the business. Note that the non-acting member cannot prevent a call (this point is extremely important). A Third Way If there is no operating agreement or secondary membership agreements, and you do not want to dissolve the LLC to remove your troublesome business partner, a third option is to presently adopt an operating agreement with the appropriate removal/buy-out provisions.  However, the ability to do this relies on the willingness of your business partner (if they are the only other member of the LLC other than you) or a majority of the members (if there are more than just the two of you—e.g., three or more). In that event, Texas law allows you to adopt an operating agreement through a majority vote. That operating agreement can then have the proper buy-out provisions. On the other hand, you could adopt a stand alone buy-out agreement to achieve the same purpose. Hunnicutt Law Group Can Untangle the Knot If you are stuck without an operating agreement or any secondary agreements and are struggling with how to remove a member from an LLC in Texas, contact us. The Hunnicutt Law Group, through decades of small business legal counsel, has resolved hundreds of business disputes outside of litigation. With our creative and keen attorneys, we can help you find a way forward.  Texas law is very unusual because it does not allow an LLC member to withdraw from an LLC without an agreement. Less skilled attorneys would give up and just “live with it.” However, we believe creative legal practice can provide options when none seem apparent. Call us today to learn more about how we can help you and your business.

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Business Law

Texas Independent Contractor Laws

At the time of hire, many people do not pay attention to whether they were called an employee or an independent contractor. In fact, if they did pay attention they may have thought those terms were interchangeable and had little real distinction. To the contrary, the distinction is real and it is important. There are significant implications for businesses and workers in how the worker is classified. In this guide, we will discuss Texas independent contractor law, why the worker distinction matters, how to tell the difference, and what to do if you have been wrongly classified. Why Does It Matter: Employee vs. Independent Contractor? At its essence, the distinction between an employee and an independent contractor matters because federal and state labor laws apply almost exclusively to employees. Therefore, being classified as an independent contractor relieves the employer of a significant amount of obligations and potential liability. On the flip side, employee classification entitles you to several legally conferred benefits and rights such as: A minimum wage; Overtime pay; Wages paid at least twice a month (with some exceptions); Workers’ compensation insurance (note: under certain circumstances, Texas allows employers to opt-out of workers’ comp.); Unemployment insurance; and A safe workplace. None of these benefits are available to independent contractors. Therefore, as you can see, there is a great incentive for businesses to classify workers as independent contractors rather than employees. What Is the Difference: Employee vs. Independent Contractor? Texas independent contractor law is clear when it states that the distinction between an employee and an independent contractor is much more than what the parties call themselves. Indeed, even having an “independent contractor agreement” does not, in and of itself, designate you as an independent contractor. The Texas Workforce Commission and the United States Department of Labor identify factors to consider in determining a worker’s status, including: Who controls a worker’s manner of performing job duties (note: this is the “direction or control” test discussed below); Whether the worker has economic independence in their work; Whether the worker uses their own equipment; What skills are necessary to complete the job; Whether the worker exercises independent business judgment; Whether someone supervises the worker; Whether the worker’s connection to the employer is limited to the terms of an agreement; Whether the employer pays the worker by the hour or by the task; Whether the employer can fire the worker at will; Whether the worker is economically independent from the business; Whether the worker’s performance is integral to the business’s operations; Whether the worker provides managerial skills or affects profitability and growth; The implied understanding of the parties (i.e., is this an employer/employee relationship); Whether the worker is involved in their own separate occupation; and Whether the worker’s relationship with the business is permanent. Considering these factors as a whole is critical. Simply checking off that most of these factors apply to your situation does not mean you are or are not an employee. However, the most important of the above considerations to determine a worker’s status is the “direction or control” analysis.  Direction or Control Test If the business exercises sufficient “direction or control” over the worker’s job and duties, then the worker is probably an employee. Again, the considerations are extremely nuanced, and the distinctions are important. For instance, a job title or a fixed work schedule does not determine status one way or another. Admittedly, the above legal test and Texas contractor law does not give a black-and-white answer, and is frustratingly dependent on the facts of the working relationship. Nevertheless, to initially help determine your worker status, consider the following. You could be an independent contractor if: You control your work in a meaningful way; You supply our own equipment; Your tasks are short and self-contained projects; and Your skills are not managerial in nature.   You could be an employee if you are: Paid by the hour; Essential to the company’s operations; Subject to termination at will; and Closely supervised about the details of your work. We urge you to use the above lists as a starting point to your introduction to independent contractor law and not as a final determination. Contact The Hunnicutt Law Group Today The Hunnicutt Law Group has experienced employment lawyers highly familiar with the nuances of Texas independent contractor laws. Therefore, we can help determine your worker status under Texas law and get you what you deserve as an employee. If you think you have been wrongly classified, contact us today to see how we can help get you the rights and benefits you deserve.

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Business Law

Can You Get Fired for Not Getting the COVID-19 Vaccine in Texas?

COVID-19 has thrown the entire world into a heightened level of uncertainty and concern that touches almost every area of life. We have questions about our health, our rights, our relationships, and our jobs. With differing opinions regarding the advent of COVID-19 vaccines, we understand that many employees want to know, Can your employer fire you for not getting vaccinated? The answer is “yes” in many cases. We can walk you through the legal reasons and the exceptions to this answer. First, let’s take a brief look at basic employment rules in Texas. Basic Employment Rules in Texas Texas is an at-will employment state. This means that unless you have specific terms in an employment contract or a specific statute to protect you, you can be fired for any reason or no reason at all. If you can find a term in your employment contract that gives you the right to refuse a vaccine without termination, you might have a chance against your employer in a civil lawsuit. Otherwise, you have to convince the courts or the government that getting fired for refusing a vaccine is against public policy. For many, successfully arguing that an employer’s vaccination rules violate public policy is unlikely.  A Recent Federal Court Ruling Allows COVID-19 Vaccine Requirements for Employment in Texas On June 12, 2021, the U.S. District Court in the Southern District of Texas decided a case called Bridges v. Houston Methodist Hospital (Bridges). In Bridges, the hospital required its employees to be vaccinated against COVID-19 by June 7, 2021. Hospital employees believed they would be fired if they refused to take the vaccine, and they sued for wrongful termination. The court disagreed with the employees’ arguments that the vaccine requirements were against public policy or were a form of forced human experimentation. Instead, the court decided that the hospital had the right to require the vaccine to protect staff, guests, and patients. Under the at-will employment system, many employees whose job requirements include the COVID-19 vaccine can either comply or leave their jobs.  Options for Employees Who Object to Vaccine Requirements at Work Can you be fired for not getting vaccinated? Yes. Can you fight a job termination based on your vaccine refusal? Sometimes. Please read below for more information. Exceptions to Your Employer’s Right to Require Vaccines While the Bridges case generally dismisses arguments that terminating employees who refuse vaccines is wrongful, it does identify circumstances that might give an employee a valid wrongful termination claim. You might have a valid wrongful termination claim for refusing the vaccine if your refusal is based on: Sincerely held religious beliefs or  A disability-related need. On May 28, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) also warned that employers that offer vaccinations to their employees might improperly pressure employees to reveal their protected medical information. Be aware of this if your employer is qualified and offers to vaccinate you. This area of employment law is complex and could change as our understanding of COVID-19 evolves. As our understanding progresses, you might ask again, Can my employer fire me for not getting vaccinated? And the answer might be “no.”  If you have questions about your rights when it comes to your employer’s vaccination rules, speak to an experienced employment attorney immediately. An attorney can determine your best course of action to protect your rights and advocate for your concerns.  Filing a Claim for Wrongful Termination If the circumstances surrounding your firing can support a wrongful termination claim, you can file a complaint with the EEOC and the Texas Workforce Commission (TWC). If you win your case, you could receive money damages and job reinstatement. You normally have 180 days to file a complaint with either the EEOC or the TWC. When it comes to workplace disputes, this time passes quickly. It’s best to let an attorney handle these deadlines and gather the right evidence to prove your case.  Our Attorneys Are Ready to Guide You and Fight for You So, can your employer fire you for not getting vaccinated? Don’t answer “yes” to this question without speaking to an attorney first. Even if the law doesn’t appear to be on your side, an experienced employment attorney can often see favorable arguments that you can’t. Speak to our attorneys at The Hunnicutt Law Group. We can give you the small firm attention your case deserves while winning the big firm results you seek. We’re here to listen to, inform, guide, and protect you through the entire employment complaint process. Speak to us today for some peace of mind and a sense of direction in these times. You can contact us online or call us at (214) 361-6740 to set up an appointment.  

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Business Law

Defamation of Character in Texas Overview

A false statement about your business can have a serious impact on its reputation, morale, and productivity. If someone is making disparaging statements about your company, take immediate action to protect your business. Consult with a business litigation attorney from The Hunnicutt Law Group.  What Is Defamation of Character in Texas? Under Texas defamation law, defamation of character is when a person or entity speaks or writes false information about another that causes damage. For businesses, a defamatory statement could result in damage to the company’s reputation and negatively impact its business dealings.   Texas recognizes three forms of defamation: libel, slander, and business disparagement. Libel Libel is a written form of defamation that includes publications such as social media posts, news and magazine articles, and any type of online print. Slander Slander is spoken defamation in the form of speech, radio broadcasts, TV airings, and other types of oral communication. Business Disparagement This form of defamation involves one party making false statements about a company with the intent to discourage others from doing business with them. How Do You Prove Defamation? To be successful with a defamation claim in Texas, you must prove the following: The defendant made a false statement to a third party—either oral or written; The statement was defamatory; The defendant acted with the requisite intent; and The defamatory statement caused damages. Keep in mind that a negative comment is not the same as a false or disparaging statement.  False Statement The defendant must actually communicate the false statement to someone else either in print or through speech. A comment made in private will not suffice. Defamed the Plaintiff You must show that the false statement was actually damaging to you or your business’s reputation.   Requisite Intent The defendant’s degree of fault that you must prove varies based on your status as either a public or private person. For public figures and officials, you must show that the defendant acted with “actual malice,” meaning they knew the statement was false and communicated it anyway. For private citizens, you only need to show that the defendant acted negligently and published the statement without knowing whether it was true or not. Damages Under the libel and slander laws in Texas, you need to prove that actual harm resulted from the false statement. However, the statement can be so defamatory that the plaintiff does not need to show actual damages. This is known as defamation per se, where the court presumes a loss of reputation and mental anguish based on the disparaging nature of the comment. Defamation per quod, on the other hand, requires the plaintiff to prove there were actual damages and show the amount of damage sustained. How Long Do You Have to File a Defamation of Character Claim? Generally, you have one year to file a defamation claim in Texas. The one-year statute of limitations starts on the date the defamatory statement was made. If you miss the filing deadline, it is unlikely a court will hear your case. This is why it is so important to contact an attorney as soon as possible if you want to file a lawsuit for defamation in Texas. There are certain instances when you can request an extension to file. For example, if the defendant is absent from Texas for any part of the one-year period, the statute of limitations “clock” suspends for the length of the defendant’s absence. The limitations period may also extend if the person who made the defamatory statement has a legal disability. This can include being under 18 years old or “of unsound mind.” Protect your rights and contact The Hunnicutt Law Group to assist you in filing your defamation claim within the statutory period. What Damages Are Available for Defamation of Character in Texas? Defamation is a civil (versus criminal) matter. This means that a successful claim of defamation of character in Texas is not punishable by fines or imprisonment. Instead, most plaintiffs seek financial damages. If a company loses business because of a false statement made by a third party, then that is financial harm. It is also possible to recover the costs and expenses of having to protect your reputation. Damages for mental and physical ailments based on the defamatory statement may also be available. Contact Us to Discuss Your Case With you or your business’s reputation on the line, it is critical to have an experienced law firm fighting for you. Founding attorney, Steve Hunnicutt, has represented businesses and business owners in Dallas and the surrounding Texas areas since 1988. Contact The Hunnicutt Law Group to schedule your in-person consultation or video conference.  

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Business Law

Negligent Misrepresentation in Texas

Most people expect to deal fairly with one another and get what they bargained for. Unfortunately, there are individuals who play fast and loose with the truth, either to move transactions along or to get more than they deserve. At The Hunnicutt Law Group, we strive to uphold good faith and fair dealing in Texas commerce. Negligent misrepresentation is a remedy under the law where people who may not have been committing fraud but still didn’t deal honestly can be held accountable. What Is Negligent Misrepresentation? Generally, negligent misrepresentation occurs when one person negligently makes a representation that causes another person to act in a way that results in their injury. Usually, negligent misrepresentation occurs during a business transaction, but the transaction can also be less formal. According to the Texas Supreme Court, elements of negligent misrepresentation are: A person makes a false material representation; The person knew that the representation was false or made it recklessly without any concern for its truth; The person intended to induce another person to act upon the representation; and The other person actually and properly relied on the representation and suffered harm. Importantly, a negligent misrepresentation case requires neither a contract between the parties nor that the misrepresentation is intentionally false or misleading.  Negligent misrepresentation is a tort-based principle where one party owes a duty of care to another. That means that the party making the representation owed a duty to another party to make accurate and truthful representations about the transaction in question. Negligent misrepresentation is often easier to prove than fraud because the intent is not a critical element. Therefore, someone may recover damages with a negligent misrepresentation claim where a fraud claim may not be successful. Do You Have a Case? While proving negligent misrepresentation in Texas may be easier than proving fraud, there is still a significant legal standard that needs to be met.  The Hunnicutt Law Group can help you meet this standard. We will investigate your claim and employ a rigorous analysis to apply Texas law to the facts of your particular situation. With significant experience in transactional law, the Hunnicutt Law Group knows what to look for in evaluating the conduct of parties in a business transaction.  If you entered into a transaction (again, this could be a formal business deal or a less formal arrangement) where you acted in reliance on someone else’s representations, we can help. Our attorneys will examine those representations against Texas precedent and determine if there was a negligent misrepresentation. If there was, the Hunnicutt Law Group can advocate zealously for your case.    What Damages Can You Get? Damages for negligent misrepresentation are costs that you suffered outside the transaction,  but that resulted from an act of negligent misrepresentation in the transaction. You do not receive damages simply because you did not receive what you bargained for in a transaction.  For example, imagine you purchased an item from someone who claimed that the item was brand new. As it turned out, the item was broken and you had to pay someone else to fix it. You could recover the cost of fixing the item in a negligent misrepresentation claim. However, the difference in cost between that item and an actual brand new item would not be considered damages under negligent misrepresentation.  As you can tell, calculating damages in a negligent misrepresentation claim can be complicated. But the Hunnicutt Law Group can help you make sure that there are clearly identifiable and recoverable damages and help you quantify them There Is a Time Limit to Bring Your Claim The Texas statute of limitations prevents plaintiffs from bringing claims for events that occurred long in the past. You need to file your negligent misrepresentation claim in court within two years of the date when the alleged act of negligent misrepresentation occurred. Literally, time is of the essence in some cases, so contact us today.   Why an Attorney Can Help The law is complicated, and the devil is in the details. The law governing negligent misrepresentation in Texas is not set out in the statutes but rather handed down by Texas courts. Therefore, identifying whether you have a winning case takes adept analysis. The Hunnicutt Law Group is staffed with seasoned litigators who can assist you in evaluating your potential claim. In addition, our attorneys are experienced enough to avoid the pitfalls and exploit the opportunities in negligent misrepresentation cases—pitfalls and opportunities which may be otherwise missed by less experienced attorneys or those attempting to represent themselves. Contact Us The Hunnicutt Law Group has the experience and knowledge to properly evaluate your potential negligent misrepresentation claim and give you a clear and balanced assessment. We give you small firm attention with big firm results—with over 25 years in the courtroom, you can count on us to provide seasoned and skilled advocacy. Contact us online, in person, or by phone to schedule your consultation today. 

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Business Law

Motion for Default Judgment in Texas

A default judgment in Texas occurs where a defendant in a lawsuit fails to respond in a timely manner. If the defendant never responds, the plaintiff can file a motion for a default judgment. Basically, this allows the court to rule in favor of the plaintiff even without the need for a trial. The judge will issue a decision indicating that the defendant is responsible to pay whatever damages the plaintiff is seeking. In some cases, the defendant didn’t respond to the lawsuit because they did not know the plaintiff had filed a complaint. Some people don’t even realize that they’ve been sued, and the paperwork is sitting in a pile of unopened mail. Sometimes there is a wrong address for the defendant. In other cases, the defendant may just choose to ignore the lawsuit.  Another instance justifying a default judgment is when the defendant doesn’t attend a scheduled hearing. Regardless of the reason, once a Texas court issues an order granting a motion for default judgment, the defendant may have a hard time setting aside the judgment. If a court has entered a default judgment against you and you don’t know what to do, there is still hope. The skilled default judgment lawyers at The Hunnicutt Law Group are here to help and answer all your questions. With our lawyers, you get small firm attention, but with big firm results. What Is a Motion for Default Judgment in Texas? Texas Rule of Civil Procedure 21 governs motions in general and permits a litigant to ask the court to grant a default judgment. Usually, the plaintiff files a motion for default judgment if the defendant doesn’t respond or fails to attend a hearing. The plaintiff has to provide an affidavit of the material facts, proof the defendant was served, and proof of damages. The plaintiff also provides a draft order for default judgment for the court to sign. This motion is served upon the defendant, even though they did not respond to the original lawsuit. What Happens After the Filing of a Motion for Default Judgment? After the motion for default judgment is filed and served upon the defendant, the defendant has an opportunity to respond. The defendant’s response should state a valid reason why they didn’t respond within the 20 day period to respond to complaints. For example, the defendant could claim that they were never served the complaint and did not know of its existence. Once the judge has all the submissions, or the time for responding has passed, the court will make a decision. If the judge grants the motion, then they will issue a notice of default judgment upon the defendant. Filing a Motion to Set Aside Default Judgment in Texas If you received a notice of default judgment from a Texas court, your only option is to file a motion to set aside the default judgment. Normally, you would have 30 days from the judge’s order granting the motion to file a motion to set aside default judgment. There are some exceptions to this 30 day rule, however. If you received notice of default judgment by the placement of the notice in a newspaper or publication, then you have 2 years from the date of the default judgment to ask for a new trial. Also, those on active duty in the military would have additional time to respond. Reasons to Support a Motion to Set Aside Default Judgment in Texas There are seven reasons or grounds that would support a motion to set aside a default judgment: Mistake,  Inadvertence,  Surprise,  Excusable neglect, Fraud, Misrepresentation, or Other actions by the plaintiff. With the first four grounds, for the court to grant a motion to set aside the default judgment, the circumstances would have to be extraordinary. There would have to be a very good reason for the defendant to not respond to the lawsuit. One thing that helps is if, once the notice of default judgment was received, the defendant responded immediately. The last three reasons to support a motion to set aside a default judgment look to the actions of the plaintiff. Again, for a court to grant a motion to set aside, the circumstances would have to be extreme, such as the plaintiff engaging in some sort of fraud or subterfuge to trick the defendant into not responding. The Texas Default Judgment Lawyers at The Hunnicutt Law Group Are Here for You The Texas default judgment lawyers at The Hunnicutt Law Group have been representing clients with their business litigation needs for decades. We handle complex matters for local businesses, large companies, and individuals across the country. Stephen Hunicutt has over 25 years of experience with Texas default judgment claims in both federal and state courts. Contact our office today to schedule an initial consultation to learn more about how we can help you.

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Business Law

Is a Verbal Agreement Legally Binding in Texas?

Most verbal agreements are legally binding in Texas. A handshake can be legally binding in Texas if the agreement is otherwise a valid contract. However, certain agreements must be in writing by law before they become binding. Texas’s verbal agreement law comes from Texas common law, the Uniform Commercial Code, and other Texas state statutes. Suppose your neighbor offers you 50 of his home-grown watermelons for $50.00 on the 1st of next month. You accept, but when the 1st of the month arrives, your neighbor says he will not honor your agreement. He has decided to sell the watermelons to a major grocery store instead to make a larger profit. Can you sue him to bind him to your oral contract? How do you know when you should contact an attorney about your claim? The answer depends on whether there was a valid verbal contract. Contract litigation can be complex, and lawsuits involving binding oral contracts can be more expensive because they are difficult to prove. If you object to an oral contract or need to enforce a verbal agreement in Texas, The Hunnicutt Law Group can help. Does a Verbal Agreement Hold up in Court in Texas? For any agreement to be enforceable in court, it must have all the elements of a valid contract. The law requires the parties to express mutual consent and exchange something of value (the “consideration”) to have an enforceable contract. Mutual Consent The parties must show mutual consent before a court will enforce either a formal, written contract or a handshake agreement. To have mutual consent, the parties must freely communicate their agreement and its terms to one another. It is as simple as an offer (“I offer to sell you 50 watermelons from my garden for $50 on the 1st of next month”) and acceptance (“I agree”).  Consideration For an agreement to hold up in court, there must be sufficient consideration. Consideration requires an exchange of value. You can think of consideration as a requirement that each party to the deal give up something to get something else. The neighbor must give up the watermelons to get paid, and you must give up your $50.00 to get the watermelons. Therefore, there is sufficient consideration in your oral agreement.  What Agreements Must Be in Writing? Texas laws require some agreements to be in writing before a court will enforce them. The subjects of these agreements are so important that Texas says they must be in writing to prevent fraud. Texas lists these agreements in the state’s “Statute of Frauds.” They include: Real estate agreements;  Agreements for the sale of goods valued at more than $500;  Agreements when a party cannot conceivably perform within one year; Loan agreements; Executory contracts (future obligations, like an equipment lease or development contract); and Agreements for oil or gas commissions. Verbal agreements can cause disagreements about the contract’s terms. While the agreements specified by the law must be in writing, it is always a good idea to put your agreements in writing even if the Statute of Frauds doesn’t require it.  Was There a Breach of Contract? When you delivered payment for your neighbor’s watermelons on the 1st of the month, you performed your contractual obligation. When your neighbor refused to sell you the watermelons, he broke his promise. A broken promise in an agreement is a breach of contract, and you may be able to recover damages. To recover for breach of contract in Texas, you must prove by a preponderance of the evidence that:  There was a valid contract (see above);  You fulfilled your contractual obligations;  The other party failed to perform; and  You suffered damages or harm as a result of the other party’s breach.  If the court finds a breach of contract, the breaching party must compensate the injured party to put them in the same position as if they had performed. In the case of a denied sale, your neighbor would have to pay you for the loss of the bargain.  In conclusion, a verbal agreement is legally binding in Texas unless the agreement must be in writing under Texas’s Statute of Frauds. If not required, oral contracts are enforceable.  Hunnicutt Law Group Is Here to Answer Your Questions If you have questions about verbal agreements in Texas or verbal contracts in Texas, do not hesitate to contact us at The Hunnicutt Law Group. We handle complex matters for local businesses, large companies, and individuals across the country. In addition, Mr. Hunicutt has over 25 years of experience with breach-of-contract claims in federal and state courts and arbitration. The Hunnicutt Law Group offers results-oriented and client-focused results and can help protect the viability of your business today. 

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