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 free consultation today. 

Continue Reading
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.

Continue Reading
Family Law

How to File for Divorce in Dallas County

Filing for divorce in Dallas County can be overwhelming. Going it alone in Dallas County divorce court can be perilous. Nevertheless, the state provides help on its website for self-represented parties filing for divorce in Dallas County.  In general, low conflict and fewer assets mean a faster and easier divorce. A contested divorce can take significantly longer. Here, we discuss Dallas County’s divorce filing requirements for both contested and uncontested divorces. Where to File For Divorce in Dallas, Texas Texas encourages the use of electronic filing. However, self-represented parties may file their pleadings in paper form. Parties can file their paperwork at the Peal C. Smith Civil File Desk on the first floor of the George L. Allen Court Building. Information on the Dallas County divorce filing fees is available here.   Parties should file all pleadings that do not require a Dallas County divorce filing fee (motions, etc.) at the clerk’s window next to the courtroom hearing your case. Note that Texas law requires all attorneys to file divorce papers in Dallas County electronically. Can I File for a Dallas County Divorce Online? Yes. In fact, attorneys must file electronically for family law cases. Texas also encourages self-represented parties filing for divorce in Dallas County to file electronically. To file, you will need to select and register with an electronic filing service provider. You can do this on the Texas website here. After registration, you may upload your court documents anytime. The website is open 24 hours a day. The date and time of your filing will be the submission date and time. Once accepted, you will be notified by email. Note that you must submit a completed civil case information sheet at the time you file your divorce petition. This form is available on the Texas website here. Steps to File for an Uncontested Divorce in Dallas County & Required Forms Uncontested divorces are the easiest divorces to get. If the parties agree on everything, they simply have to wait the 60 days “cooling off” period required under Texas law, then be on their way.  Uncontested Divorce (No Minor Children) If you and your spouse agree on all issues related to property division, have no minor children, and own no real property, then you may seek an uncontested divorce. For self-represented parties, the State of Texas website provides a comprehensive set of Dallas County divorce forms and instructions needed to obtain an uncontested divorce in the state. These forms include: Affidavit of Indigency,  Original Petition for Divorce,  Waiver of Service,  Final Decree of Divorce,  Certificate of Last Known Address,  Notice of Change of Address, and  Affidavit of Military Status.  However, even with a simple divorce such as this, it’s a good idea to have an attorney look over your documents before filing. Uncontested Divorce (With Minor Children) If you have children, you can still qualify for an uncontested divorce if You and your spouse agree about all the issues (including child custody and child support) and will both sign the necessary court forms; and There are no court orders for custody and support of your children already in place. The State of Texas website provides forms for an uncontested divorce with minor children here. Steps to File a Contested Divorce in Dallas County & Required Forms The pace of a contested divorce typically varies according to the level of cooperation by the non-filing spouse. Like uncontested divorces, contested divorces in Texas include (1) a Petition for Divorce (including summons); (2) Service of Process; and (3) a Final Divorce Decree.  Original Petition for Divorce and Summons A petition or complaint for divorce kicks the process off. It must be on file for at least 60 days before a court will rule on it. Courts call this a “cooling off” period. The intent behind the law is to minimize the divorce rate by promoting reconciliation between the parties.  The petition sets out the parties, children, and basis for seeking a divorce. The most common basis for a divorce in Texas is that the parties have irreconcilable differences that render the marriage insupportable. Courts call this a no-fault divorce. In the alternative, petitioners for a divorce in Texas may seek a fault-based divorce. Grounds for a fault-based divorce include cruelty, abandonment for over one year, adultery, and felony conviction.  Parties must attach a summons and serve it along with the divorce petition. A summons is an official court document that informs the other spouse of the divorce proceedings. In Texas, the respondent spouse has until the first Monday following 20 days after the date of service to respond. They must file a response on or before this date at 10:00 AM or risk a default judgment. Certificate of Service of Process A Certificate of Service of Process states to the Court that the divorce petition, subsequent motions, and other pleadings have been sent via certified mail or hand-delivered to the other spouse in the divorce. Texas also allows spouses to serve each other via a private process server or sheriff. In rare cases where a spouse can’t be located, a court may permit service by social media or publication in a newspaper.  Final Divorce Order After 60 days and a hearing for an uncontested divorce, or after trial for a contested divorce, the court will issue a Final Decree of Divorce. Here, the court spells out who is entitled to what property and rules on all child custody and support matters. What If Your Spouse Doesn’t Want a Divorce? In Texas, individuals don’t need their spouse’s consent to get divorced. You just need to serve them and pay the filing fees. If your spouse simply refuses to participate in the divorce outright, then you can get a default judgment. Your spouse will have until the first Monday following 20 days from the date of service in which to respond. If they fail to respond within that time, you may motion the court to issue a default divorce. If you get a default […]

Continue Reading
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. 

Continue Reading
Business Law

The Four Breach of Fiduciary Duty Elements Explained

To recover against a defendant for a claim of breach of fiduciary duty, you must prove all the following by a preponderance of the evidence: The defendant was acting as a fiduciary of the plaintiff with respect to the subject matter involved; The defendant breached a fiduciary duty owed to the plaintiff; The plaintiff suffered an injury; and The defendant’s breach of fiduciary duty caused the plaintiff’s injuries. What follows is a brief discussion of how Texas courts analyze each element of a fiduciary duty breach. Element #1: Fiduciary Duty In Texas, establishing the breach of fiduciary duty elements is contingent upon the existence of a fiduciary relationship. A fiduciary relationship exists whenever an individual (fiduciary) is entrusted to advise or act primarily for the benefit of or in the interests of another individual. In addition, the fiduciary must have the legal authority to act. Authority is typically established by contract.  A fiduciary is required to act in good faith and with loyalty, unaffected by personal motives. Examples of fiduciary relationships recognized by Texas courts include: An attorney-client relationship, Relationship between a religious leader and a congregant, Relationship between trustee and beneficiary, Relationship between business partners, Relationship between CEO and organization and shareholders, Relationship between homeowners’ association  and members, and Certain employer-employee relationships where the employee has a high level of authority  However, fiduciary duties only arise as to matters within the scope of the fiduciary relationship. For example, a pastor may owe a fiduciary duty to a parishioner with respect to divorce counseling. However, the fiduciary relationship would not extend to matters outside the scope of such services. If the pastor wanted to date the parishioner’s ex-spouse after the divorce, there would be no fiduciary relationship and thus no duty to breach. Element #2: Breach of Duty A fiduciary duty ranks among the highest levels of legal obligation owed to another. Fiduciaries owe the utmost level of good faith to those whom they act on behalf. In general, there are two types of fiduciary duties: the duty of care and the duty of loyalty. The duty of care requires the fiduciary to act with reasonable prudence and diligence in carrying out their duties to further the best interest of the one to whom they owe that duty. Examples of a breach of the fiduciary duty element include a CEO’s failure to regularly attend board meetings, an attorney’s failure to communicate adequately with their client, or an asset manager mismanaging client funds.  The duty of loyalty generally requires the fiduciary to place the interest of the one to whom they owe a duty above their own. Fiduciaries should also disclose any conflicts of interest. The duty of loyalty prohibits self-dealing and direct competition with the one they are acting on behalf of. An example of a conflict of interest and self-dealing would be an executive stealing trade secrets from their own company and using them to set up a competing business across the street. Element #3: Damages Plaintiffs who have sustained a personal noneconomic injury may sue for breach of fiduciary duty. Examples include emotional distress and even imprisonment (for example, resulting from attorney malpractice). With respect to business relations, courts typically require the plaintiff to have suffered some form of economic loss. Common injuries include lost profits, future losses, and reputational damage. In some cases, you may be able to seek a court order to recover any benefits the fiduciary wrongfully acquired by breaching their fiduciary duty. In addition, a plaintiff may be able to recover punitive damages if they can show that the defendant’s breach was intentional or flagrant. Element #4: Causation The final breach of fiduciary duty element requires the plaintiff to show that the fiduciary’s careless or disloyal act caused the injuries alleged. Texas courts have held that the element of causation is satisfied when the plaintiff proves that the fiduciary’s conduct was a “substantial contributing cause” of the injury. This means that simple reliance on an intentional misrepresentation will suffice to establish causation, even when the reliance is not the sole factor—or even the predominant factor—leading to the injury. How Can an Attorney Help? Hunnicutt Law Group is experienced in business litigation and other legal matters involving elements of breach of fiduciary duty. The Dallas, Texas firm has represented businesses of all sizes and has recovered substantial amounts on behalf of clients. If you have suffered an injury because of a breach of fiduciary duty, contact Hunnicutt Law Group today for a free consultation.

Continue Reading
Business Law

The Four Elements of a Breach of Contract Claim

A breach of contract claim is the heart of almost all business litigation. The basic breach of contract elements require you to prove: There was a valid contract; You performed your part of the contract; The defendant failed to perform their part of the contract; and You sustained damages caused by the defendant’s breach. If you relied on someone to do something they contracted to do and that person failed to do so, you may have a breach of contract claim. The Four Breach of Contract Elements The complaining party must prove all the breach of contract elements to have a successful breach of contract claim. You have four years from the date of the breach to bring your breach of contract claim. The court will typically dismiss any claims brought outside that window. There are exceptions to that rule where the defendant fraudulently concealed the breach or if the plaintiff was not aware that the breach occurred. Was There a Valid Contract? This element may be the most important and hardest to prove. A valid contract requires that all the following exist between the parties: An offer; Mutual acceptance of the terms; A meeting of the minds;  Communication by both parties of their acceptance; and Mutual intent that the contract be legally binding. In other words, there is a valid contract where one party offers to do something, the other party accepts, both parties are on the same page as far as the terms of the contract, and they intend to be legally bound by the terms. A contract can even be unilateral. That is, if someone promises to do something or not do something in such a way that the other person is justified in relying upon that commitment. Unilateral contracts become enforceable once the promisor acts upon their promise.  Once the plaintiff proves that a valid contract existed, they must show that they upheld their part. After that, the plaintiff must show that the defendant did not fulfill their obligations. And finally there must be evidence of actual damages that the plaintiff suffered as a result.  What Damages Can the Plaintiff Recover? Compensation for breach of contract claims is intended to place the plaintiff in the position they would have been in had the defendant never breached. Generally this means financial compensation.  General damages compensate for direct losses caused by the breach and include basic financial damages and reimbursement of costs. Special damages (also known as consequential damages) are less directly related damages that are nevertheless foreseeable as a result of the breach. For example, they might include compensation for profit loss because of delays due to the breach or because the plaintiff missed out on other business opportunities as a result. Least common are equitable damages. This is when the court demands that the defendant follow through with performing their end of the contract. Can an Oral Contract Be Breached? The short answer is yes. Breaches of oral contracts are harder to prove, but the contracts are absolutely enforceable. Breach of oral contract elements are the same as for written contracts. The hardest part of proving a breach of contract for an oral agreement is proving that the contract existed and was valid. The plaintiff might have to present witness testimony to do so. They could also show evidence in the form of any sort of relevant document such as bills, emails, faxes, or other communications. If one or both parties acted to further the contract, that could prove that a contract existed. Not all oral contracts are valid, however.  The Statute of Frauds The Statute of Frauds requires that certain contracts must always be in writing. These include contracts for sales/purchase of real estate, marriage, and wills. For a written contract to be enforceable, its essential terms must be clear. Partial Performance  There is an exception to the requirement that certain contracts must be in writing for a party to have a valid breach of contract claim. If one party begins to act on their obligations of an oral agreement that should be in writing, the court will not prevent them from enforcing the contract. The idea is that it would be unfair to deny enforcement because one side acted in reliance upon the agreement. Without enforcement, the party that tried to uphold their end suffers a detriment while the other party is unjustly enriched. For example, let’s say that one party agreed to sell their land to another party in return for money and for the buyer to do some necessary improvements to the land, like adding a new septic system. If the buyer paid the seller’s asking price and began to install the septic system and then the seller refused to give them the property, the court would likely enforce the contract. Are There Any Defenses for Breach of Contract? Yes! In some special circumstances, someone might be justified in breaching a contract. Those circumstances include: Material misrepresentations of fact—if someone was given misleading information or some important term was misrepresented, the contract would be void; Duress—the breaching party was pressured unfairly into signing; and Impossibility of performance—the breaching party is unable to fulfill their end based on uncontrollable circumstances. A court would probably dismiss a breach of contract claim where no valid contract existed because: The contract or some of its terms were illegal; Essential terms were too vague or missing; A new agreement replaced the old contract; The contract was oral where a written one was required;  There was a mutual mistake causing one or both parties to not perform their obligations; or Mistaken belief—neither party understood the terms. A defendant might also have a defense where the plaintiff received the essential benefits of the contract so there was no material breach, did not actually suffer damages, or accepted alternative payment in lieu of contract fulfillment. Contact the Hunnicutt Law Group to Discuss Your Case The Hunnicutt Law Group attorneys are available to assist you with all your business needs. Experience […]

Continue Reading
Business Law

Texas Trademark Law

A trademark is a brand’s identification and can be a useful part of any business. Before using or registering a trademark, it is important to understand how Texas trademark law works.  What Is a Trademark in Texas? The Texas Secretary of State (SOS) defines a trademark as a mark “used in connection with tangible goods or products.” Under Texas trademark law, it is a “word, name, symbol, or device, or any combination of those terms” used to identify and distinguish one person’s goods from another and identify its source.  Keep in mind that trademarks and service marks, while similar in many respects, are different. A service mark is used to identify a service, rather than a product or good. How Do I Get a Trademark? There are two ways to obtain a trademark in Texas. First, by simply using a mark in connection with your products, you acquire common law ownership rights. Second, you can register your mark with the SOS or United States Patent and Trademark Office (USPTO). Common Law Ownership Rights There is no requirement to register a trademark to obtain ownership of it. If you use the mark in commerce in connection with your products or goods, then you own the trademark.   Registering a Trademark While common law ownership rights might be the quick and easy option for owning a trademark, Texas does not provide the same rights as it does to owners of registered trademarks. There are certain benefits to registering with the SOS. Notice Registration with the SOS alerts the state of Texas that you claim ownership over a trademark. Before someone else applies to register a similar mark, they are put on notice that the trademark is already registered. If you intend to use your trademark throughout the country, you can register it with the United States Patent and Trademark Office (USPTO). This provides notice to the rest of the country that you claim ownership of the trademark. Proof of ownership Once you receive your certificate of registration, you have proof of the following: Valid registration, Ownership of the trademark, and Exclusivity over the use of the trademark. This may be useful if someone else is accusing you of using their mark. Legal Protection  Texas trademark law allows you to sue someone for infringing on a registered mark. Plaintiffs who are successful with their trademark infringement cases may be awarded the following:  An injunction prohibiting the infringer from using and profiting from your trademark, The amount of profits the infringer made by using the trademark, and Attorney fees. The amount of the award cannot exceed three times the amount of actual profits the defendant made by using the trademark.   Registering your trademark with the SOS does not guarantee you have the superior right to use the mark. For example, you could be unaware that someone else has common law ownership rights over the mark because the mark is not registered. When processing a registration application, the SOS looks only at those marks registered with the SOS and the USPTO. The applicant is responsible for conducting a more thorough check to avoid infringing on someone else’s mark. What Do You Need to Register a Trademark? There are three requirements to register a Texas trademark. First, the mark must be “in use” before you file the application. Second, the mark must be distinctive. Third, the mark cannot be so similar to any other registered mark that it would confuse or deceive consumers.    Any individual, partnership, incorporated entity, or other legal entity can own and register a Texas trademark. How Long Does a Trademark Registration Last? Texas trademark registrations expire after five years. To re-register a trademark, the owner must submit a renewal to the SOS office during the last six months of the five-year registration period. The SOS requires that the mark still be in use at the time of renewal. Do You Need a Trademark Lawyer? Some businesses need help working through the registration process while others may be facing a trademark infringement accusation. In either situation, a Texas trademark lawyer is incredibly beneficial. Trademark Registration  Before even starting the registration process, you must know what actually qualifies as a protectable trademark. Between Texas statute and case law, there are legal tests and doctrines that determine what qualifies. Next, the application process to register the trademark brings its own set of complexities. According to the SOS, it initially rejects a majority of applications submitted by non-attorneys. Thus, it is important to hire an experienced attorney who can help you satisfy the legal requirements and accurately complete your application.  Trademark Infringement Cases As discussed above, both registered and unregistered trademarks are protected. However, there is no Texas trademark authority who can enforce your rights. If you believe someone is using your trademark, a lawyer can ensure your rights are protected through a trademark infringement claim. These cases can be complex, but at The Hunnicutt Law Group, our litigation lawyers have successfully represented businesses involved in trademark infringement disputes.  Contact The Hunnicutt Law Group Today Whether you need to register a trademark or believe you have a trademark infringement case, we can help. Founder Stephen Hunnicutt brings over 30 years of legal experience to his clients, providing zealous advocacy and personal attention. Contact us today so you can get back to business. 

Continue Reading
Business Law

Texas Whistleblower Act & Whistleblower Protection Overview

Are you a whistleblower in the state of Texas? Get your questions answered by an attorney ASAP. Call 214-361-6740 or contact us online with your questions. If you are a public employee in Texas and you discover that your employer has violated state, local, or federal law, you may be wondering what your options are. Of course, you don’t want to jeopardize your employment, but you also understand right from wrong. The good news is that you have options for protection under the Texas Whistleblower Act.  What Is the Whistleblower Act in Texas? According to Texas Government Code, Chapter 5, Section 554.002, “The Texas Whistleblower Act protects public employees who make good faith reports of violations of law by their employer to an appropriate law enforcement authority.” Whistleblowers play an important role in keeping an eye out for corporate and government wrongdoing. An employee who discovers that their employer is engaging in unlawful conduct must choose between risk of the behavior continuing, and potentially being found partially responsible, or facing potential retaliation from the employer. Texas whistleblower protections serve to prevent retaliation and make this ethical choice much easier.  Who Is Protected by the Texas Whistleblower Act? The law applies to people employed by local or state government entities. This includes employees of state education institutions, commissions, boards, law enforcement, bus drivers, and others. It does not apply to employees in the private sector except for some circumstances in the medical field.  How to Establish a Claim for Retaliation Under the Texas Whistleblower Protection Act There are a number of factors that must apply for a whistleblower to bring a successful claim for retaliation. These include: The Texas whistleblower was a public employee; They acted in good faith when making the report; The reported behavior of the agency or public employee was unlawful; The report was made to an appropriate law enforcement authority; and The employer took adverse action against the employee in response to the report.  Details can be important when determining how to proceed in blowing the whistle on your employer.  Violation of the Law You do not have to know the exact law that was violated. Most people have a moral compass that helps to determine whether an action was right or wrong, and you must believe that the action was wrong and egregious enough to justify an official report rather than conversation with the employer.  Appropriate Authorities  One stipulation of blowing the whistle in Texas is that the report must be made to an appropriate law enforcement authority. There have been circumstances where reporting to the wrong authority has impacted the case. Depending on your circumstances, you may consider discussing the action with an attorney to determine the correct authorities to approach.  Retaliation Tactics Retaliation can come in many forms. It’s common for whistleblowers to be fired by their employers, but this is not the only method of retaliation. Employers may try to disguise the retaliation using other justifications. If your employer treats you unfairly after you have reported their illegal behavior, this may be considered retaliation. The type of retaliation will determine what kind of legal action you take. In some circumstances you may make a report of the retaliation to another organization for review, such as the company human resources department or the Equal Employment Opportunity Commission. An experienced whistleblower attorney can help you decide your next steps.  Compensation for Texas Whistleblower Retaliation The amount of compensation you receive in a claim against your employer for retaliation depends on the strength of your claim and extent of damages attributable to the retaliation. In a successful case for wrongful termination, an employee may entitled to: Lost wages and benefits as a result of the termination,  Reinstatement of employment,  Wages lost while searching for new employment,  Out-of-pocket expenses as result of searching for a new job, and  Attorney fees.  In cases involving harassment or discrimination, you may also be entitled to compensation for “pain and suffering.” Depending on the extent of your employer’s conduct, a court could also choose to award punitive damages to punish the behavior and set an example for similarly situated employers.  Why You Need an Attorney It is extremely difficult to pursue a whistleblower claim without legal representation. An employer will virtually never openly admit that they have retaliated against a whistleblower employee. You will need to have proof of the wrongdoing as to the legal violation of the employer and the retaliation conduct. Whistleblowing is a sensitive process, and you should not undertake it alone.  The experienced team at Hunnicutt Law Group can answer all your questions about the Texas Whistleblower Act and help move your case forward. We understand the complicated nature of these types of cases. Our team can assist you by reviewing the facts, explaining your options, and estimating how much your claim may be worth. Contact us to schedule your case consultation. 

Continue Reading
Business Law

Texas Uniform Trade Secrets Act Overview

The Texas Uniform Trade Secrets Act (TUTSA) serves the purpose of defining trade secrets and providing guidelines and remedies to businesses whose trade secrets are exposed.  What Is a Trade Secret? Under Section 134A.002(6) of the Texas Uniform Trade Secrets Act, a trade secret is information that has been protected by reasonable measures. The information is valuable because it adds a benefit to the product or service.   Trade secrets can be the ingredients in a recipe, a manufacturing process, or any other information that provides an advantage or key element to a business. The TUTSA states that Texas trade secrets include any business, scientific, technical, economic, or engineering information, as well as any design, prototype, plan, program device, code, or procedure related to a business.   Importance of the Texas Uniform Trade Secret Act If a trade secret is crucial to the success of your business, it is important to protect that secret. Let’s say you make chocolate cookies and your cookies are better than everyone else’s. This could be because of a special ingredient. It could be because of the ratio of that ingredient to other ingredients. It could be your baking process. All of those things set your cookies apart, and without that “secret” your cookies would be like everyone else’s. So as a successful entrepreneur, you wouldn’t want your cookie secret leaked to your competitors. This is where the TUTSA applies. Misappropriation of Trade Secrets The legal cause of action for exposed information is called the “misappropriation of trade secrets.” Misappropriation occurs when a trade secret is improperly acquired, or the trade secret is disclosed or used without consent. Consent to use the secret may be expressed or implied. There are a number of factors that a court may take into consideration when evaluating a claim of misappropriation. Some of these factors may include: The scope of the trade secret known outside of the business; The degree of knowledge possessed by others involved in the business, including employees; The measures taken by the business to keep the information a secret; The value of the information to the success of the business; The value of the information to competitors of the business;  Time, money, and effort put into developing the trade secret; and  How easy or difficult it may be for competitors to acquire or duplicate the protected information.  The trade secret does not actually have to be used in order for you to seek legal remedies.  Legal Remedies for Trade Secret Misappropriation Under the TUTSA If you believe your company’s trade secrets have been misappropriated, you may be entitled to one or more legal remedies.  Injunctive Relief Injunctive relief is available if actual or threatened misappropriation takes place. Injunctive relief prevents the potential or continued use of trade secret information. In exceptional circumstances, an injunction may allow royalties to be paid as a condition for future use.  Damages The value of the trade secret and how much it impacts the business determine economic damages. This may include actual loss caused by the use of the information and unjust enrichment. Compensation for royalties from the use of the information may be appropriate. If the defendant’s behavior was malicious, the court may choose to award punitive damages to punish the behavior.  Attorney Fees If it hadn’t been for the misappropriation, you would not have had the unexpected cost of attorney fees. The court has the ability to award attorney fees to the prevailing party.  Maintaining Secrecy Under TUTSA The Texas Uniform Trade Secrets Act states that the information cannot just be deemed a secret by the owner after it has been exposed. The company must show that they took reasonable efforts to protect the trade secret. Reasonableness may vary with the circumstances of the business operations, industry, and importance of the information. Some protective efforts may include: Labeling information as confidential; Requiring a nondisclosure agreement before employees view the information; Stating confidentiality guidelines in an employee handbook; Maintaining control over passwords and restrictions; Storing information in a way that is not readily available to everyone; Keeping records of who accesses the information; and Maintaining employee exit protocol to ensure the return of all information.  Efforts made to prevent disclosure of the trade secret help the court determine the importance placed on the information before it was exposed.  Legal Assistance in Protecting Your Trade Secrets For over 25 years, The Hunnicutt Law Group has been handling sensitive business law needs, including the application of the Texas Uniform Trade Secrets Act.  Preventatively, we can help you protect your trade secret through drafting legally binding contracts for employees and partners along with comprehensive nondisclosure agreements for anyone who may have access to your information. Our experienced attorneys can assist you with copyright applications and pursue litigation to defend your rights. Contact our commercial litigation team to learn more about how we can help. 

Continue Reading
Business Law

Understanding Shareholder Oppression in Texas

Owning and operating a closely held corporation can become contentious when you don’t have equal shares and an equal say. When a few owners have a majority of shares and call the shots, their actions may not benefit you. Sometimes, their actions rise to the level of shareholder oppression. What Is Shareholder Oppression? Shareholder oppression is conduct by the majority shareholders that is unfair to minority shareholders’ interests. Oppression arises because shareholders don’t have equal rights. Some stockholders may hold more shares than others, allowing them to exert more control over the business. This type of oppression of minority shareholders most often happens in private, closely-held corporations. These are businesses formed by just a few people. If you go by the Internal Revenue Service (IRS) definition, a closely held corporation is one in which five or fewer individuals own more than 50% of the outstanding stock at any time during the last half of the tax year. In order to qualify, the company must not be a personal services corporation. What Is Minority Shareholder Oppression? Minority shareholders are those who own fewer than 50% of the company’s voting shares. The majority shareholders own more than 50% of the company and often end up controlling the direction of the business and dictating the outcome of any disputes that may arise. In this way, minority shareholders end up with very little say in the business. Furthermore, they usually have few options to remove themselves from the situation. Because most shareholder oppression occurs in closely held corporations, minority shareholders can’t easily sell their shares and move on. As a result, they are often stuck with their investment. Examples of Shareholder Oppression Shareholder oppression can take on many forms. Oppression of the minority shareholders can happen when majority shareholders: Vote in their own best interests, ignoring the interests of minority stockholders; Exclude minority shareholders from important financial and management discussions and decisions, effectively freezing them out of company management; Fail to provide adequate corporation records to minority shareholders; Use tactics to force minority shareholders to sell their shares to the majority for less than the shares are worth—also known as “squeezing out;” Block minority shareholders from business premises; Use their position to dilute minority ownership; Use their power to fundamentally change the nature or structure of the business from what minority shareholders initially agreed to; and Refuse to pay dividends. If you believe the majority shareholders in your company are treating you and other minority shareholders unfairly, talk with a Dallas business litigation attorney. What Are Minority Shareholders’ Rights? In Ritchie v. Rupe, the Texas Supreme Court noted that when there is no shareholders’ agreement, minority shareholders lack contractual rights regarding the business and voting power. The minority shareholders also lack any statutory rights to demand equal say. Without a contract, minority shareholders have limited rights and are at risk of abuse by majority shareholders. Can I Sue for Minority Shareholder Oppression? Before 2014, minority shareholders could force the majority shareholders to buy them out for a fair amount. This option gave minority owners a way out of a bad situation. Ritchie v. Rupe changed that. In Ritchie v. Rupe, a fourth shareholder who owned 18% of the company tried to sell her shares to the other three shareholders. They refused. Next, Rupe tried to sell her shares to a third party, but the majority shareholders wouldn’t cooperate again. Rupe sued, and the trial and appeals courts ruled in her favor. However, the Supreme Court of Texas ruled state law didn’t recognize a court-ordered buyout. The court limited minority shareholders’ remedies when dealing with shareholder oppression in Texas by deciding shareholder oppression is not a basis for filing a lawsuit.  Because of this case, minority shareholders can’t hold majority shareholders responsible for oppression unless the conduct harms the corporation. Are There Remedies for Shareholder Oppression in Texas? Minority shareholders may have the right to file a derivative lawsuit. This is a case brought on behalf of the corporation to enforce the corporation’s rights when the business leaders won’t. In response to shareholder oppression, minority shareholders can file a derivative lawsuit based on a breach of fiduciary duty. Instead of alleging the business leadership harmed minority shareholders, they argue the leadership has damaged the business. Call for Help Today If you believe the majority shareholders are oppressing you and other minority shareholders, contact a Dallas business litigation attorney at The Hunnicutt Law Group online or at 214-361-6740. Our attorneys will carefully review your situation and advise you of your legal options, such as filing a breach of fiduciary duty suit. 

Continue Reading