THIS ISSUE'S HEADLINES

Experts Envision Future Trends in Small Business

Statute of Limitations versus Contractual Time Periods — An Important Difference

Wedding “Disasters”: Are Negative Online Reviews Defamation?

Quirky Courts & Cases: Foreign-born United States Citizen Fights for Right to Marry


EXPERTS ENVISION FUTURE TRENDS IN SMALL BUSINESS

In the January 1, 2017 edition of Business News Daily, staff writer Adam C. Uzialko spoke to leading business executives in multiple industries about their ideas, trends and predictions for small business in 2017. The expectation by those offering a prediction is that we will see a relatively strong performance in the economy, which should also spur opportunity for investment by small business owners. Below is a snapshot of some of the executives’ interesting predictions.

Kyle Golding, chief strategic idealist at The Golding Group, predicts that small businesses will begin to narrow their focus in 2017, rather than continue the so-called “shot gun” approach to profiling their expertise. In a separate topic under the category of “Finance and investment,” the author highlights crowdfunding as playing a key role in financing small business, and quotes Michael Banks, founder of FortunateInvestor.com as saying, "Crowdfunding will continue to be an invaluable resource for entrepreneurs. Crowdfunding platforms allow entrepreneur to easily validate and fund a new product or service all while growing their customer base."

Another trend reviewed by the author is the flipping of properties in the real estate market. “Home-flipping is making a comeback and big bank lenders are starting to extend credit lines to companies specializing in home-flipping. From what we can predict, the housing market will continue to stay strong in 2017, especially in commercial real estate and home-flipping,” reports Dean Sioukas, founder of Magille Loans.

In the marketing software category, Adam Binder, founder of Creative Click Media, believes that marketing strategies will change. Mr. Binder predicts that "In 2017, marketing automation will be more important than ever before. Taking the manual labor out of essential marketing functions, such as email blasts and social media posts, marketing automation will help companies reclaim valuable time. It will allow marketing teams to refocus their energy on bigger projects, as well as monitor campaign success and customer engagement more efficiently."

In other tech areas such as cloud computing and cybersecurity, Dan Sommer, the senior director of Olik, believes that for small businesses there “has been an accelerated move towards the cloud, meaning that organizations are no longer keeping their data in just one location, and are instead using a hybrid approach of cloud and on-premises data." In the cyber space, Marcin Kleczynski, CEO of Malwarebytes, stressed that cyber security will continue to grow in importance for small business given the increase in hacking across the globe.  Emphasizing his point, he explains, “With the growth of financial and budget planning applications, increased pervasiveness of new payment methodologies such as Apple Pay, and the growing pervasiveness of cryptocurrencies like Bitcoin, there will be increased attacks against applications, plugins, digital wallets, and the companies holding authentication data allowing access to these digital currency streams.”

The article also predicts that start-up businesses will grow in 2017 citing David Rusenko, co-founder and CEO of Weebly, who reports that with an “increase in on-demand legal services, website creation, automated financial software, marketing tips and tools and more, businesses will be more easily able to be operated by just one or two people.”

Among several growth industries noted in the article is the cannabis industry, which started as a cottage industry and now all signs point to a rapidly growing business opportunity. Brendan Hill, co-founder of Paper & Leaf, predicts that the growth in the cannabis industry will accelerate in 2017. "Like every industry heading into 2017, cannabis is primed for disruption—from software and data analytics platforms to producer technology and social media platforms, tech businesses in the cannabis industry are reading themselves to reap massive benefits as more states turn green. Look for these companies to expand as large markets such as California, Nevada, and Florida open their doors to cannabis."

To read the entire article, log onto 40 Small Business Trends and Predictions for 2017. For more information about your business, contact Managing Principal Gary R. Pannone at 401-824-5100 or email gpannone@pldolaw.com.  

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STATUTE OF LIMITATIONS VERSUS CONTRACTUAL TIME PERIODS — AN IMPORTANT DIFFERENCE

In a recent Rhode Island Supreme Court decision, OSJ of Providence, LLC v. Aly T. Diene, No. 2016-14-A, the court determined that the expiration of a guaranty in a contract did not operate to shorten the applicable statute of limitations to recover for breach of that guaranty. The defendant was the corporate officer of a restaurant that entered into a five-year lease agreement with the plaintiff. As part of the lease, the defendant executed a personal guaranty that expired on the last day of the twelfth full month following the initial commencement of rent obligations.

The restaurant thereafter defaulted on the rent payments within the specified twelve month period. The plaintiff demanded payment from defendant pursuant to the personal guaranty. After not receiving full payment pursuant to the demand, the plaintiff filed suit against the defendant. The trial court entered judgment against defendant pursuant to the personal guaranty.

On appeal before the Supreme Court, the defendant asserted that the statute of limitations barred the plaintiff’s action because the suit was filed after the twelve-month guaranty period had expired. The Court disagreed with defendant’s assertion. Rather, the Court appropriately noted that the guaranty obligated defendant to guarantee all payments within that twelve month period, not that plaintiff only had until the expiration of the twelve-month period to sue. The Court noted that the applicable statute of limitations was ten years from when the contract breach occurred. 

While not a novel concept, it does serve to reinforce an important concept, particularly for individuals that may have breached a contract in the past but have not yet been sued. You are never truly “in the clear” until the statute of limitations has passed. For more information on this issue or other legal matters, contact Attorney Patrick J. McBurney at 401-824-5100 or email pmcburney@pldolaw.com.

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WEDDING “DISASTERS”: ARE NEGATIVE ONLINE REVIEWS DEFAMATION?

Businesses depend on their good reputation, especially in the wedding industry.  If customers have a bad experience, it’s unlikely that they can simply switch to a different wedding vendor.  Instead, customers take to online review platforms like Yelp to express their dissatisfaction. Scathing reviews can be especially damaging to wedding vendors, who often only work with customers once, and rely on their positive reviews to drum up future business.

As a result, some wedding vendors have taken a hard stance against bad reviews, bringing defamation lawsuits against the reviewers.  In one case, a wedding coordinator sued a former customer who warned other brides online, “You will not get what you paid for and your association with the company will cause way more stress, tears, and sleepless nights than any bride should have to deal with.”  In another, an event planner specializing in music entertainment sued a groom’s mother who lamented online that “the singer was awful . . . the number of musicians promised did not show up . . . [and] the band leader had no personality whatsoever.”   Interestingly, a third case involved a wedding guest who posted a Google Review after attending a wedding at a particular venue and deemed it “the worst wedding experience of my life!”

But are defamation suits the best strategy to defend against negative reviews? Let’s look at the results: in the first case referenced above, the federal district court agreed that specific statements in the customer’s review were false, including a claim that the coordinator moved multiple times to avoid service.  Therefore, the customer’s statements were found to be defamatory.  Nevertheless because the coordinator could not show damages, she only received a nominal award of $1.00.  Similarly, in the second case, the business was able to show that the reviewer’s claim that only a handful of musicians showed up, was false.  However, the vendor failed to show damage to their business as a consequence, and could not show the statements were defamatory on their face to obtain special damages.  Without these showings, the reviewer ultimately prevailed.  And in the third case, the guest’s review was found to be protected First Amendment speech, since it was an expression of opinion on a matter of public concern (at least for those in the market for wedding vendors).

The lessons here are useful for wedding vendors—and any business—facing a negative review online.  Opinions may be hurtful, but alone, they are probably not actionable in a lawsuit. A customer is probably entitled to a negative opinion, whether they deem a wedding the “worst experience of their life” or a “disaster.”   By contrast, specific statements that can be proven (or disproven) may be a basis for suit, such as if a customer claims a baker only provided a two-tier wedding cake rather than a ten-tier wedding cake.  Even then, whether it makes sense to sue someone over a bad review depends on whether the potential award will make the suit worthwhile (and whether the business can withstand the optics of suing someone over an online review).  There may be other strategies, such as reaching out directly to a frustrated customer, or encouraging satisfied customers to write positive reviews, which can more effectively mitigate the impact of a negative review.  Still, if a damaging review contains blatant falsehoods, and there is a noticeable impact on business, it may be the unique case where a defamation suit is the best course to preserve a vendor’s good reputation. For more information on this legal area or other business matters, contact Attorney Samantha Clarke at 401-824-5100 or email sclarke@pldolaw.com.

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FOREIGN-BORN UNITED STATES CITIZEN FIGHTS FOR RIGHT TO MARRY

In spite of a wedding ceremony which was held before 350 guests, a Louisiana couple was, until recently, prevented from obtaining a marriage license because the husband was a foreign-born United States citizen, who did not have a birth certificate.

The groom, 32 year-old Viet Anh Vo, has lived in Louisiana since he was an infant, but was unable to get a marriage license under a 2015 state law that, he argued, discriminated against the foreign-born.  At issue is a requirement that marriage license applicants present a copy of their birth certificates.  Vo cannot get a birth certificate because he was a Vietnamese refugee born in an Indonesian refugee camp.

A federal judge recently blocked the law, after finding it to violate the Equal Protection Clause of the United States Constitution, and the fundamental right to marry.

Vo says the judge’s preliminary injunction blocking the law shows that “one person can actually make a change in the world.”  He says he hopes others can see now that they can fight for their rights as well.  The 2015 law’s Republican sponsor stated that the law was designed to crack down on people using sham marriages to gain visas and citizenship.

If you have legal questions or would like to speak to Attorney Sally P. McDonald, please call 401-824-5100 or email smcdonald@pldolaw.com.

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