The McTexLaw Email Alert for June 15, 2002

New on The McTexLaw Business Owner's Resource Center:

IMPLIED AGREEMENT TO ARBITRATE ALL EMPLOYMENT DISPUTES

Not taking action is a very dangerous thing, at least for employees in Texas. In this case an employer changed the at-will employment relationship with its employees by simply sending notices to its employees that it was adopting an "alternative dispute resolution program." The employee never signed it, could not negotiate it, and yet still lost his right to trial by jury via a classic Catch-22. In re: Halliburton Co., et al, Case No. 00-1206, Texas Supreme Court, decided May 30, 2002. Click the headline to read more about this powerful and useful precedent for employers, and ask yourself, how helpful are your employee policies?

New on The McTexLaw Commercial Real Estate Resource Center:

PREMISES LIABILITY: DARKNESS IS NOT OBVIOUS

The wait since 1996 is over, at least partially. The Texas Supremes have ruled 6-2-1 that a lawsuit against Cameron County and the Texas Dept. of Transportation can go to a jury. At issue is whether they are liable for a fatal accident on Texas' longest bridge for failure to maintain lighting on the bridge. This case is already stirring up quite a bit of controversy and concern. Do you now have a duty to protect people from darkness? County of Cameron v. Brown, et al., Case No. 00-1020, Texas Supreme Court, decided May 23, 2002. Read the full article by clicking the headline.

THE (LACK OF) ODDS MADE ME DO IT

In yet the latest case of "I can't control myself so it must be your fault", Mr. Williams of Indiana is an admitted compulsive gambler. His idea of appropriate curative action is to sue the Aztar Indiana Gaming Company in federal district court. This casino has a "self-exclusion policy" where you can actually voluntarily sign up to have yourself barred from the casino. Although Mr. Williams did so, unfortunately, somebody at the casino just didn't get the idea, because they kept mailing him promotional offers, causing poor, defenseless Mr. Williams to relapse into compulsive gambling. At least that's Mr. Williams' story, and he's stickin' to it. His case is nearing trial, and the entire casino industry is watching it carefully.

Casinos are interested for a reason. Tobacco cases and other industry-wide cases are winding down. And Ralph Nader is out of Corsairs and Pintos. What to do with all that pent up plaintiffs lawyer adrenaline? Target casinos. It's already begun. Several cases have been filed around the country. But if I were on Mr. Williams' jury, I couldn't help but wonder how long it'd take the casinos to win back any judgment he received. Seems to me, in these cases, money would only add more fuel to the gambler's inferno. I think we should instead have trials to determine how many hours of community service it would take to use up all of Mr. Williams' time he would otherwise use to gamble.

On May 16, 2002, Scott Harshbarger, currently president of the public interest group Common Cause, predicted the gaming industry will be the next industry hit with tobacco-like cases-and settlements. He just might have an inside scoop. As the attorney general for Massachusetts, he was one of the first to go after Big Tobacco. And he sees many similarities. The biggest similarity is profits. Casinos have really big vaults. And an estimated 2% of the population are compulsive gamblers.

Moral to the story: if you have money, you are a target. The more money you have, the bigger target you are. Asset protection planning is either a good idea or absolutely critical, depending on your luck. For every lawsuit lottery winner, there is a lawsuit lottery loser. Welcome to success, American style.

KRISPY KREME REJECTS ESTATE PLAN

I have never understood the excitement about Krispy Kreme's arrival in Dallas/Fort Worth. Where I grew up, it was just another doughnut shop-but it was the one with the most icing. Krispy Kreme's corporate headquarters is in Winson-Salem, North Carolina, that bastion of yet another vice, Big Tobacco.

Thanks in part to its growth here in Texas, I'm sure, Krispy Kreme has outgrown its old 52,000 square foot headquarters building, growing from 196 employees in October of 1999 to 269 in February of 2002. Now they want upwards of 100,000 square feet, at an estimated cost to build of $8 to $9 million. After a fairly exhaustive search, they chose to become the first tenant in a newly announced commercial development on land owned by the Whitaker family estate, pending re-zoning of the land.

Mr. and Mrs. Whitaker left these 96 acres to their four children. Alas, the Fab Four can't seem to get along any better than the Beatles, and their differences have now likely cost them the Krispy Kreme project. In June of 2001, the four kids agreed to spend up to $180,000 to develop this property, in order to get the Krispy Kreme HQ. The agreement lasted until February of this year, when Louisa sued the other three kids, claiming the costs would greatly exceed $180,000. The other three have countersued, and believe it's a ruse by Louisa to break away from the June agreement and extort more money for herself. Aren't family feuds the best?

Morals to the story:

  1. There is almost always a better way than giving several different individuals title to one piece of real property. We call this "tenants in common." Krispy Kreme has a different term for it. All owners must agree before anything can be done with it. And Mr. and Mrs. Whitaker's estate planning goals have been completely frustrated by it.
  2. If you must deal with tenants in common, negotiate a provision in your agreement that requires them to pay all your costs and fees when they decide to get boneheaded. Include incidental and consequential damages. Make the liability joint and several. And keep a contingency plan in place at all times.

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