Phony Invoices Led To $4 Million Breach of Fiduciary Duty

Companies often utilize contractors to help complete jobs and fill gaps in their workforce. While this creates a mutually beneficial relationship, some individuals will abuse it. This was the case for an investment company that discovered one of its contractors was creating phony invoices totaling $4 million.

Forest Investment Associates filed a lawsuit against a couple the company alleges defrauded them by creating phony invoices. The couple worked at Kingwood Forestry Services, which was frequently retained by Forest Investments. The wife worked as an administrator and her husband worked as a contractor. The couple would submit invoices for work that was never performed, which would in turn be paid by Forest Investments and its clients. Because the wife worked in administration, she kept an eye on all of the false invoices and made sure the amounts were not too suspicious so as to raise eyebrows. The scheme, which began in 2011, totaled $4 million worth of false invoices. Forest Investments has filed a lawsuit against the company for breach of fiduciary duty.

Protecting Your Business

No business exists in a vacuum. Businesses rely on other companies and individuals to operate. These relationships need to be carefully and thoroughly defined by contracts to help prevent disputes. When a dispute or outright fraud does arise, business owners have the right to seek compensation for economic damages. While many types of fraud bring about criminal charges, the criminal prosecution will not provide any financial compensation for wrongdoing to the victims.

Businesses that are victims of fraud can seek compensation directly related to the fraud and can pursue damages for harm done to their reputation. Because these matters can be extremely complicated, it’s important that only experienced business fraud attorneys handle them.

Texas Business Fraud Attorneys

At Feldman & Feldman, our Texas business fraud attorneys fight aggressively for our clients. We understand how business fraud can impact your company, so we work to get your legal issues resolved quickly. To learn more about your legal options, contact us today to schedule an appointment with one our lawyers.

A Multimillion Dollar Website and Breach of Contract

Almost every business needs a website. For some businesses, website functionality is crucial to generating revenue; and, most types of marketing (websites included) are expensive endeavors. But what if you paid $32 million for a website that didn’t meet your expectations? That’s exactly what happened to car rental giant Hertz, which is suing its former marketing company, Accenture LLP, for breach of contract.

Hertz engaged Accenture to create a new website and mobile applications. From 2016 to 2018, Hertz paid Accenture over $32 million, but Hertz claims it did not get the website and mobile apps it wanted. According to the lawsuit, Accenture did not develop medium sized displays for the new website and mobile apps. While desktop and mobile sized displays were created, tablet-sized displays were not. Hertz requested the website and apps be “responsive” meaning they would automatically resize for the device on which they are accessed, but the Accenture “demanded hundreds of thousands of dollars in additional fees to deliver the promised medium-sized layout.”

Hertz also claims Accenture failed to deliver website coding that was secure, which could make the website vulnerable to hackers. Possibly the largest problem with the website is that it wasn’t extensible, meaning it couldn’t be expanded to be used for Hertz’s global brand. Hertz asserts the decision to disregard extensibility was deliberate and made without Hertz’s knowledge or consent. A website that’s not extensible leaves Hertz needing to spend additional marketing dollars developing websites and apps for global use.

What may seem like a simple breach of contract dispute on the surface can actually become much more complex in the digital age. Websites and mobile apps are incredibly complicated. When companies enter into a contract that does not discuss the specifics of every aspect of the project, disputes can easily arise between the parties as to what is included in the scope of work. Digital assets like websites are presenting unique legal challenges. When contracts involving websites are not thoroughly drafted, there’s more than enough room for disputes.

Houston Contract Attorneys

At Feldman & Feldman, our Houston contract attorneys understand the complexities of drafting contracts involving websites. We also regularly represent individuals and business owners in breach of contract disputes involving intangible marketing materials. If you are involved in a breach of contract dispute, contact us today to schedule an appointment with one of our dedicated attorneys.

Property Owners Association Refusing To Abide By Sale Of Marina

The Harborwalk in Hitchcock is a well known Galveston hot spot. Home to a marina, boat launch, restaurant, and even a swimming pool, it should be a bustling location. Instead, the entire area has been boarded up amidst a dispute among the location’s owner, the Flamingo Isles Municipal Utility District, and the Harborwalk Property Owners Association.

In total, the property consists of a 150-slip marina, yacht club, swimming pool, restaurant, ship store/welcome center, and extra real estate opposite the marina for expansion. The property was bought after previous owners went bankrupt; and, significant repairs were needed to get the property functional again. After pouring money into repairs, Harborwalk ran into a huge problem. The Harborwalk Property Owners Association has refused to vacate commercial properties and the Flamingo Isles Municipal Utility District has refused to properly dredge the marina. Although the utility district is responsible for dredging activities, it hasn’t dredged the Harborwalk, causing serious financial consequences. Without being dredged, the marina water is unsafe for boats. Last year, many boats were unable to dock at Harborwalk and many that tried were damaged. Harborwalk’s owner alleges the property owners association and the utility district are refusing to acknowledge and enforce the terms of the sale.

The dispute is a complicated one. Firstly, the utility district is a government agency, which means it has certain legal requirements and responsibilities to meet. Determining whether or not the agency has met these requirements and responsibilities is not always straightforward. Secondly, Harborwalk will have to contend with a property owners association, which also poses legal challenges. Property owners associations usually have their own bylaws and requirements for all members.

Commercial Litigation Attorneys

If our company is suffering severe financial injury due to a breach of a contract, you need an attorney who is able to offer innovative, aggressive legal representation. Feldman & Feldman has represented businesses in breach of contract litigation for many years. Litigation is the primary focus of our law firm. We know how to handle complicated commercial litigation matters. We have experience successfully resolving legal claims involving governmental agencies and other organizations. By using innovative and personalized strategies, we can help clients resolve matters quickly and efficiently. Contact us today to schedule an appointment with one of our commercial litigation attorneys.

As Texas Fights Clergy Abuse The Catholic Diocese of Dallas Is Subjected To Police Search

Earlier this year, Catholic dioceses across Texas released the names of priests credibly accused of sexually abusing parishioners, many of whom were children. This list was released after public outcry when police arrested Father Manuel LaRosa-Lopez, a Conroe priest, for four counts of indecency with a child in September 2018. The release of names led to an investigation by Dallas police, which conducted a thorough search of a church and several offices just last week.

Dallas police executed search warrants at St. Cecilia Catholic Church, looking for diocese records. St. Cecilia Catholic Church is the same church in which a pastor was accused of stealing funds and sexually assaulting three teenage boys more than a decade ago. Arrest warrants were issued for pastor Edmundo Paredez for these allegations in September 2018. As police investigated Paradez, they uncovered allegations against four additional priests: Jeremy Myers, William Hughes, Richard Thomas Brown, and Alejandro Buitrago. Paradez and the other four priests were all named on the list of over 300 clergy members who were credibly accused of sexual abuse. While the Dallas police have been tight lipped about their investigation, it could lead to criminal charges filed against the priests and justice for victims.

However, the Catholic Church is not the only denomination facing clergy abuse allegations. Shortly after the Catholic dioceses released their list of priests accused of sexual abuse, an investigation by the Houston Chronicle and the San Antonio Express-News revealed 380 Southern Baptist Convention church leaders and volunteers across the country have been accused of sexual misconduct. Over 220 of these individuals have been charged with sex crimes.

Texas Clergy Abuse Lawyers

While criminal charges can help provide justice for victims and prevent predator priests from targeting and hurting more victims, the criminal cases do nothing to offer victims compensation. Sexual abuse victims have the legal right to pursue civil lawsuits against their perpetrators. At Feldman & Feldman, we’ve helped clergy sexual abuse victims hold religious institutions responsible for failing to protect them. If you have been a victim of clergy sexual abuse, we know how challenging coming forward can be, but we promise to be with you every step of the way. Contact us today to schedule a free and confidential consultation to learn your legal options.

Houston Law Firm Files Lawsuit Over Faulty Printer: Here’s What You Need To Know About Warranties

Picture this: you have a really important print job, but as you stand in front of your office printer it starts making strange noises. Before you know it, the printer is jammed and your print job isn’t happening anytime soon. This is a common scenario for anyone that works in an office, which can become incredibly frustrating, particularly if the printer is brand new and fails to operate properly at all. This was the case for a local Houston law firm who became so fed up with printer problems that they filed a lawsuit against HP, Inc. alleging breach of contract, fraud, negligent misrepresentation, and breach of express warranty. While it’s unclear how this office drama will play out, it does serve as an important reminder to business owners about warranties.

According to the Houston law firm that bought an HP Color Laser Jet printer, the five-year warranty it purchased included promised in-person repairs, parts, and service “at your door the very same business day.” The firm claims the printer had problems since it was delivered, including constant paper jams and print jobs that would take hours. The firm tried to troubleshoot the issue with HP’s customer service call centers, but were unable to resolve the issue. The final straw broke when the firm needed several important printing jobs done, but the printer could only print one page every three to four minutes. Despite the promise in the warranty to send an on-site technician, the firm claims HP did not honor this promise and instead refused.

Like this Houston law firm, many businesses rely on technology and/or machinery to operate. In certain industries, when a business doesn’t have certain machines operational, everything comes to a complete stop, making warranties incredibly important. A warranty is a contract between two parties, so both are legally bound to uphold their end of the deal. When a breach of contract occurs – whether it is related to a warranty or not – businesses have the right to pursue legal action against the breaching party.

Houston Breach of Warranty Lawyers

The Houston breach of warranty lawyers at Feldman & Feldman understand how important warranties and contracts are to your business. That’s why we aggressively fight for clients who have faced financial consequences as the result of a breach of contract. Contact us today to schedule an appointment with one of our experience trial attorneys.

High-Speed Rail Facing New Legal Challenges

Texans have long hoped for a high-speed rail to make travel easier and quicker. High-speed rail projects have faced significant legal hurdles in past years, but one unique hurdle is halting the high-speed rail project to connect Dallas and Houston.

One of the biggest hurdles for high-speed rails across the country is they cannot run on the type of train tracks already present. This means new tracks have to be laid for high-speed rails, which led to the first legal hurdle. In order for new tracks to be laid, land on which to lay the tracks has to be acquired. While the government can use its eminent domain authority to take land, many landowners put up a fight. This is not uncommon for projects of this type, but landowners are trying a new argument that could stop the project in its tracks.

A judge in Leon County, Texas recently ruled that the company trying to build the high-speed rail is not railroad company, and therefore it cannot force landowners to sell their land to make way for its tracks. The company does not operate any railroads or own any trains, leading the judge to determine it does not have eminent domain authority. This is where the dispute becomes complicated. Companies depend upon eminent domain in order to develop tracks necessary not only for operation, but also to help them meet the legal definition of being a railroad company. However, eminent domain is not granted unless a company is already legally a railroad company.

What To Do When Legal Challenges Arise

The high-speed rail isn’t the only project facing nuanced legal challenges. Everyday business owners find themselves embroiled in legal disputes that hinge on hyper-technical legal definitions and court rulings. When these legal challenges arise, it takes an experienced business attorney to successfully navigate and resolve the dispute.

Texas Business Attorneys

At Feldman & Feldman, we’ve successfully handled many complex commercial litigation issues. We utilize our experience to find strategic solutions that work best for our clients. Whether we are representing clients in court or around the negotiating table, we aggressively fight to protect their interests. If you would like to schedule a consultation with one of the Texas business attorneys at Feldman & Feldman, contact us today.

Was There A Breach In Fiduciary Duty In The Taco Cabana Empire?

When Felix Stehling opened the first Taco Cabana restaurants in 1979, he likely didn’t anticipate how quickly the restaurant would grow. While Stehling had a number of successful restaurants and businesses before Taco Cabana, the little taco shack would be the one that cemented him in the culinary history books. Sadly, the current status of the Taco Cabana empire is nowhere near what it used to be, and Stehling’s stepson alleges that’s due to a breach of fiduciary duty.

Stehling passed away in December 2012. At the time of his death, his assets were valued at approximately $20 million. Fast forward seven years, and there is little left. Stehling’s stepson and heir has filed a lawsuit against Stehling’s longtime investment advisor claiming the fortune was squandered by over-leveraging the assets to generate cash.

While the investment advisor has been accused of fraud and self dealing, he has pointed to other causes for empire’s decline. The planner blames the trouble on the 2008 financial crisis and poor investment decisions made by Stehling in the years leading up to his death. However, what makes this fiduciary liability case particularly interesting is an arbitration agreement over twenty years old.

When Stehling hired the investment advisor in the 1990s, he signed an arbitration agreement. The financial advisor has asked a judge overseeing the case to dismiss the claim stating all disputes must be resolved through arbitration as agreed to in the original contract. For his part, Stehling’s stepson has fought against arbitration proceedings because the agreement was only between the investment advisor and his stepfather. He never agreed to such an agreement.

Fiduciary Duty With Financial Advisors

Fiduciary duty has a broad and complicated legal definition. Because of this, disputes between financial advisors and their clients can be come complicated. Matters can be complicated further if the parties agree to arbitration agreements like the one used by Stehling.

If you believe your financial advisor has breached his or her fiduciary duty, do not wait to call Feldman & Feldman today. Our fiduciary duty attorneys are experienced trial lawyers and litigators that can help you hold fiduciaries accountable for financial losses they cause. Contact us today to schedule an appointment.

New Apartments Fighting Condo Owners Associations

Houston is an unusual city for many reasons, but one of the most visibly apparent reasons is that there are no zoning requirements. This means that grocery stores can go up next to houses, but it also places a higher burden on homeowners and condo owners associations. Because there are no zoning requirements, these organizations are often the only thing standing in between a new development and residents. This is the case for the condominium owners association at the Cosmopolitan apartment complex, which is fighting the development of a 39-story building.

The Dinerstein Cos. is a development company in the process of building a 39-story luxury apartment building. The project, called Arise Post Oak, has been embroiled in litigation since its inception. When the project was first proposed, residents next door at the Cosmopolitan apartments objected to the building. Residents claimed the new building would be too high and wanted the building’s size to be cut in half.

The dispute between the condo association at the Cosmopolitan and Dinerstein reached a fever pitch in 2016 when Dinerstein asked a judge to declare its rights to develop the land. The condo association was claiming the building would be a nuisance. Under Texas law, both public and private entities can file a nuisance lawsuit if another building, company, or individual is interfering with their right to the use of and enjoyment of their property. The lawsuit has gone through a number of appeals and remains pending.

Business and condo owners associations can learn from the lawsuit that this type of litigation is not only extremely common in Houston, but is also incredibly complex. These legal battles can draw out for years and end up being extremely costly for both sides. Whenever these types of disputes arise, only experienced legal representation can help resolve matters quickly and efficiently.

Houston Commercial Litigation Lawyers

At Feldman & Feldman, we understand the complexities of commercial litigation. Our attorneys work closely with clients to understand their needs and protect their rights. Contact us today to schedule an appointment with one of our experienced Houston commercial litigation lawyers to see how we can help.

Neiman Marcus Facing Creditors In Court

The cost of litigation is a huge challenge for businesses of all sizes. Large companies can threaten litigation in an effort to force opposing parties to drop claims against them. This is not only an extremely unfair practice, but it is against Texas law. Retailer Neiman Marcus has been accused by creditors of filing frivolous lawsuits in an attempt to stifle legitimate claims made by creditors.

Neiman Marcus is over five billion dollars in debt, which has created a contentious fight between the retailer and its creditors, specifically Marble Ridge Capital. Creditors have accused Neiman Marcus of moving around its assets to protect them from creditors. Marble Ridge Capital filed a lawsuit against the company, which in turn filed a countersuit claiming Marble Ridge was spreading harmful and incorrect information about the company. Now, both companies are waiting for a judge to decide whether or not Neiman Marcus’s countersuit can be dismissed under Anti-SLAPP laws.

Anti-SLAPP laws are meant to protect individuals and companies from frivolous lawsuits. What makes the lawsuits against Neiman Marcus and Marble Ridge Capital interesting is that their outcome could set a precedent for future creditors and debtors. If debtors are allowed to bully their creditors by filing additional lawsuits, it could give debtors an unfair advantage.

Getting Help With Anti-SLAPP Lawsuits

Anti-SLAPP lawsuits exist to ensure individuals and companies with more resources don’t trample over the rights of others. No one should be able to use his or her power and influence to deny someone else’s day in court. At Feldman & Feldman, our attorneys are experienced at helping individuals and businesses fight against larger adversaries. We use Texas Anti-SLAPP laws to dismiss frivolous lawsuits that were only filed to intimidate our clients.

If you or your business needs help with a legal matter, do not wait to contact one of our experienced lawyers today. We have extensive experience in a wide array of litigation matters, and we can protect your interests. Our attorneys can craft a personalized and efficient strategy to obtain a successful resolution for your case. Call us today to schedule a consultation.

New Law Could Prevent Crypto-Currency Fraud

The word “fraud” usually conjures up ideas of identity theft, writing bad checks, or selling a misrepresented item. However the reality is new types of fraud are constantly occurring in inventive ways. One of the most recent types of fraud is crypto-currency fraud; with the increasing interest in crypto-currencies, fraud is rising in this area. A new law aims to prevent crypto-currency fraud in Texas.

House Bill No. 4371 is relatively brief compared to other bills, but it could have huge implications for Texans. The bill, which was recently introduced to the Texas Legislature, would create new regulations for crypto-currency transactions. Specifically, the bill would require the identification of any individuals looking to send crypto-currency payment. This means anyone receiving crypto-currency would be responsible for verifying the identity of the sender.

This requirement might not seem like much, but it’s actually incredibly powerful. Imagine the login credentials for your bank account get stolen and the thief uses it to transfer money out of your account to another account. Sounds like a nightmare, but there are laws and procedures in place to identify, investigate and prosecute this crime. The same cannot currently be said of crypto-currency. Because it’s an extremely young form of currency, lawmakers have yet to catch up with the protections necessary to keep users safe from fraud when using crypto-currency as a payment option.

Getting Help After Fraud

While the new bill could help make crypto-currency safer, the reality is fraud still occurs. Businesses can be particularly susceptible to fraud, which can have monumental consequences. Business fraud occurs anytime an individual or company intentionally falsifies records or perpetrates lies with the intent to deceive. What makes fraud particularly devastating is the volume of victims involved. While victims of fraud might feel helpless, they can seek to protect themselves and pursue justice by filing a lawsuit.

Houston Fraud Attorneys

Many victims of fraud do not come forward because they are embarrassed, but there is no reason to put any blame on yourself. The Houston fraud attorneys at Feldman & Feldman can work with you to investigate the situation and file a lawsuit against the deceptive party to obtain compensation for the money lost and damages caused by the fraud. If you’ve been a victim of fraud, no matter what type, the Houston fraud attorneys at Feldman & Feldman are equipped to investigate your claim and pursue compensation. Contact us today to schedule a consultation.