Legal Mess. Who's to blame?
Question: If an out-of-state sign company calls a local company and asks them to remove and destroy a closed local business's sign, would most do it without checking to see who actually owns the sign?
Here's a real life scenario that's got a local sign company in hot water.
The local franchisee of a medium sized franchise chain (few hundred locations) closes his two stores and is in a legal dispute with the franchisor company. Franchisees are supposed to debrand closed stores within 30 days. In the past, the franchisor sent someone out to cover up any remaining signs.
This time the franchisor calls the sign company that handles their installations nationally and says they want the exterior signs removed and destroyed. That sign company calls a local sign company and has them go remove the exterior signage of the closed stores and destroy them (without the franchisee's knowledge or permission).
Here's the deal: the franchisee spent $40,000 installing the signs and has proof of ownership. The bank that provided the SBA loan to build the businesses has liens on the signage.
I don't think the local sign company had any awareness of the dispute or considered ownership issues - they just thought they got a nice, simple job from a reputable out-of-state sign company and a national franchise company, and now they've got a local business owner filing police reports for theft and destruction of property and ripping them on Facebook and a local bank no doubt considering a lawsuit.
Was this an innocent, understandable mistake that any sign company might have made, or did the local sign company make a huge, rookie blunder?
Don't sign companies check to see whether they've got the legal right to do what they're being hired to do... and that their customer actually owns the sign they are paying them to destroy?
Thanks for your opinions...
I am sooooo not a lawyer...
But... this is the internet so I won't let a little thing like that stop me
First of all we would never do anything on a phone call. If it isn't in writing, it never happened. So we are very clear on our estimate that we send out BEFORE we do any work as to what we will be doing. Especially if it is an out-of-the-area client. It would have said something like "Remove and dispose of existing signage at xxx address" The company would have to approve that estimate to proceed, which I think **might** limit our culpability at least some. I would think the bank would be more interested in the franchisor who ordered the destruction of the signs. And I would think a court would be too.
I'm very curious as to how the police handled the theft report.
Not an attorney, but I would like to "think" liability is on the shoulders of the big national sign company since they are the ones that were likely hired directly by the franchise. The local sign company was hired as a sub-contractor of the larger sign company to do the work, but I would bet the invoicing is going through the big sign shop from the franchise company.
Put it another way, what if a big sign company hired a smaller sign company to install a sign at a shopping mall and told them all they need to do is install and that the big shop would make sure all was good with the landlord and permits? Again, it never hurts to check - but I bet most wouldn't argue the point if that is what they were told....
That said, always CYA...ask questions, get things in writing, period.
Treat me good, I'll treat you better,
Treat me bad, I'll treat you worse!
The two different stores were in two different municipalities. The police department for the smaller one was pretty dismissive. The second police department (larger, medium sized city) took it very seriously and wanted to meet with the franchisee's attorney and get documentations, etc.
The franchisor has a legal department, attorneys and a contract saying disputes have to go into arbitration in their state, blah blah blah. The franchisee and bank might find it easier to go after the local guy who actually was hired to steal and destroy someone else's property. I don't know.
Does the estimate that the client has to sign off on contain some language that says they swear they have the legal right to have you perform the job they're hiring you for?
Like so many other questions around here..........
Who did the removal and destruction of said signs ?? It will be on them for the most part. If they did not do their homework properly and just blindly start doing things without written and proper authorization, I think they will be held liable. That's not to say no one else had a part in this, but they will be mentioned probably first or second for the illegal removal. With some good lawyers and lotsa money, they can probably soften the initial blow, but it ain't gonna be pretty.
Everybody should believe in something.... I believe I'll have another drink
Merchant Member to the Trade
as a company that does installs / removals for other sign companies we ALWAYS ask questions and get everything in writing (any/all permits, work orders, releases, etc...)
Nothing is done verbally even if the conversation is recorded.
Like the others have said the paper trail is going to point up the ladder to the big sign company and the franchise company
be VERY exact in what you are doing and take plenty of photos showing what you are doing before, during and after the project.
the small company needs to become proactive at this point, make the situation public and release all documents that show they were following the instructions of the hiring company.
Ignorance of law excuses no one, and a lawyer will have to be hired and hopefully the small sign company has paperwork to show when dealing with this in court if it goes that far.
we do work for serveral national sign companies that hold contracts with large corps. in the paperwork they provide to us, it is clearly stated who is liable for what. did this company provide paperwork to you?
I spoke to the local owner who has been in the business for 10 years. He says he has done removals for franchise companies like McDonald's, Burger King, etc. many many times and never had a complaint or problem. Even though he took his Facebook page offline this morning because the franchisee posted a bad review on it, I don't think he realizes that there could be a big storm brewing and it ain't gonna be snow raining down on him.
hell hath no fury like a failed franchisee who just lost their business, maybe their home is on the line... I think the big companies that called him had their acts together before they called but this is an upstart franchise company with a few hundred locations... I'm afraid the local sign guy is gonna pay the price for them overstepping their authority...
I'm not the sign company owner but I spoke to him. It didn't sound like he had more than an approved estimate - no disclaimer that said they had the legal right to remove the signage. I think he wrongly assumed it was going to be the same as it had with the big companies...
Master of Arts
Thankfully all the companies I do sub work for spell everything out very clearly in writing.
1. Show up on site at such and such date, so and so time.
2. Present sign-off sheet to local company manager, explain to them the scope of the work.
3. Call to check in with national company.
4. Do work.
5. Have local company manager inspect work completed, get final sign-off.
6. Call to check out with national company.
7. Present invoice, and photos.
Boy, that sucks. No matter what it's going to cost the local sign company. Unless the franchise owned the signs or had a right of removal (including the can) which doesn't sound like the case there is trouble coming. They may have had the right to remove the branding but not the the actual sign. Even then it might require a court order.
This isn't exactly the truth. The trick is not to go into the situation looking like a complete idiot. If a random person contacts you via phone call and does the whole process through a gmail account, you're probably going to get in trouble. If a real sign company contacts you and they provide enough information where you feel it's a legit job, you're going to be hard pressed to find a judge that puts the blame on the guy "just doing his job". They also have in their favor that the act is standard for the industry.
Originally Posted by Johnny Best
The trick at this point is to get out of this situation as soon as possible. This means giving up the contractor to the franchisee ASAP. I'd email every last piece of information about the job. Don't admit guilt. Keep it simple. "I was contracted to this job. I was contacted by a reputable company. This is a service I do regularly for other companies and it seemed typical."
I wouldn't expect to get paid though. Unless he was paid up front, I'd say there is a 0% chance of getting paid.
Of course it all depends on state laws, but taking the sign is a tort of conversion in common law in most states. The signco won't face criminal charges, but civil liability is sure. I've worked with repossessor firms for printing equipment. To repo in California we have to have a written order from the secured lender, with title evidence, and a licensed repo agent must oversee the repo action. We can't enter into fenced areas or buildings without sheriff or p.d. Running on verbal info on the behalf of an unknown party is just asking to be sued. Intentional acts like that are not covered by GL Insurance.
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Originally Posted by rossmosh
Good luck with that line of sh!t.
While the law doesn't forgive ignorance, it also doesn't excuse being absent minded and/or negligence. If you don't know what you are doing, no judge, jury or arbitration board will find in your favor, regardless how sympathetic you try to make it look. At a very low end of doing business, you might be able to fool some business owner, but not any legal minded people. Getting into a situation looking like an idiot is just what that poster was saying..... ignorance won't get you a thing in your favor.
Again, you wanna throw everyone under the bus, which isn't a bad idea, but throwing so much crap at the fan in hopes that something will stick and get you off the hook..... I doubt it will work that way, but perhaps you'll find a buncha people who will look the other way, because this shop didn't know what they were doing......?? Nah, not gonna happen.
As for conducting business in a usual/typical fashion..... who goes off half-cocked and does this kinda stuff without permits, written authorization and all the other legal mumbo-jumbo ?? Someone who doesn't know what they're doing, that's who.
As for getting paid, let's just hope the guy doesn't hafta pay out the wazoo to protect what's still his.
Everybody should believe in something.... I believe I'll have another drink
Merchant Member to the Trade
You and I see the world differently based on what I've seen. You're a black and white guy. Right and wrong. Very little middle ground. There's nothing wrong with that but that's not how even the law is interpreted. I'll give a for instance of a similar scenario.
Originally Posted by Gino
Project manager calls up a decking company and says "Come over and build this deck for me. Here are the plans. Permits are filed. We're good to go. I just want you to build it." Decking company and project manager agree on a price and Monday morning, decking company shows up to do the job. Project manager is off site, but that's common enough. They crank out the job, to specification, as drawn by a local architect. Based on their years of experience, they're comfortable with the construction as it should have no problem passing an inspection and is built to code. Wednesday afternoon rolls around and the job is done. Project manager isn't on site all week, but you know you did a good job and based on your terms, you'll get a check in a week. Then you wake up on Friday morning and have a ton of emails and voicemails from the home owner flipping out how they didn't agree upon that design and the deck is the wrong material and basically the job is completely wrong.
Now is the decking company at fault? Well it's easy to argue that the decking company could have done more. They could have insisted the project manager be on site. They could have insisted on the home owners signing off. They could have made sure the material was signed off by the owner. They could go above and beyond to make sure they have every angle covered. But guess what, that's not the real world. This isn't a circumstance where the decking company were building a structure that they knew was not to code and not safe. It's not a circumstance where materials were substituted or the wrong materials were purchased. It's not even a circumstance where you had to modify things a bit because the drawing wasn't realistic. Here's a guy that did what he thought was right.
Well maybe these two scenarios aren't perfectly parallel but they're close enough. Sign guy was hired to do a job. They weren't asked to do something inherently illegal or dangerous. They weren't asked to do something out of the norm. They were asked to do a job they do "regularly" but a reputable business. I'm not going to argue that this company could have done more to protect themselves. Not getting a signed contract is less than ideal and making sure terms are clear is also not advisable. The thing is, even if you have a contract, that doesn't mean you won't get sued and have to spend money on a lawyer. It just gives you a leg up in the courtroom. But the reality is, any judge that looks at this case is going to see a couple of businesses doing their job. They're going to focus in on the relationship between the franchisee and the franchisor. Those guys are fighting each other and I'd be shocked if the judge did more than give a stern warning to this sign business to be more careful and get a written, signed contract in the future.
back to the original post Im going to flip this around to "if it happened to me"
I would make sure there was a papertrail and make sure it was agreed upon by all parties. I would ask for payment up front being that it is the nature of this business. I would go out do the deed and bring signage back to shop and inform the job was done
It is not my job to determine who owns what or who wants what. I am dealing with one company and one company only. IF, for any reason an attorney/law enforcement contacted me I would not deal with them but simply refer them to the company that signed off on me doing the work. I see no reason for the sign co that removed to have to go to court
We do installs and removals regularly for other sign companies that have national accounts. None of these sign companies order work to be done with just a telephone call, though they may phone us to ask if we are interested in the job. They then email or fax a request for a quotation, or they send us the particulars of the job, including an address, the exact signs to be removed, often a local contact name and number, along with their requirements for sign-offs, final photos, completion date, etc., and the amount they are willing to pay.
Either way, they always send a Purchase Order that spells out the scope of the job. We can't get paid without the purchase order number.
I can't imagine a sign company that handles national accounts ordering a local sign shop to remove 40,000 dollars worth of signs with just a phone call. To attempt to order a job like this with a phone call would seem to be a red flag that something is not quite right. If nothing else, I would want some paperwork with the exact address on it. We have removed the wrong sign before, making my boss look like an idiot.
Surely there is more to this story than we know.
At any rate, the local sign company will obviously talk to a lawyer. A lawyer will get the needed information to help the local shop owner. I would hope that the local sign guy still has possession of the signs in his boneyard.
Just curious. Do any of you get requests to remove and "destroy" signs? How do you go about destroying them?
We scrap out aluminum a couple times a year. Last year the boss gave everyone a fifty dollar bill from the proceeds. We sometimes repaint and resell used cabinets. We have old faces hauled off by some junk people we hire once in a while. Channel letters tend to pile up in the back till it becomes a problem.
Brad in Kansas City
This has sort of happened to me with a Chevy dealership. GM shut them down and the bank reprocessed the building. The owner was very upset that we were called out to destroy his pylon signs and other signage. However it didn't matter if he paid for them, it's still owned by Chevy/GM because it's their trademark,logo,name. All he could do was cry like a baby over getting rid of them.
So the sign shop doing the removal isn't at fault. It's between corporate and franchise owner. I did 3 Pylon signs for a Lexus dealership, they paid $120,000 for them, however Lexus still owns the right to them. They changed their branding and it forced the dealership owner to have all 3 signs torn down, destroyed and new ones put up against his will.
I'd blame Trump.
Not that he has anything to do with it but we are going to be hearing that a great deal for the next 4 years or so.
Figured I get an early start.
We own the signs!
ams: I'm not sure how it works with car dealerships (who technically owns the sign), but I can tell you that because a company owns the trademark does not mean that they own all physical property that displays their trademark. In this case, the franchisee has a franchise agreement that states that the franchisor has the right of first refusal to purchase the sign from them if they default. So they acknowledge that they would be obligated to pay for the sign, and if they don't want it the franchisee can sell it to another franchisee who has the right to display it.
Originally Posted by ams
Another aggravating factor is that the signs are part of the collateral for an SBA guaranteed loan. So if the bank calls the loan and no longer has the assets to sell off, guess who repays the bank for the money they are out? Yep, us taxpayers.
So technically, we taxpayers get to pay for the signs they destroyed ;)
Bachelor of Arts
I would say unless one sees a Court Order, stay clear.
Its just like if you make and install a sign for a customer, then the customer does not pay in agreed terms, you are not allowed to remove the signs.
So when you get served with a subpoena,you just pass it up the line and go about your business? IANAL, but I don't think that's a very good idea...
Originally Posted by visual800
[QUOTE=KevinW;1315421]So when you get served with a subpoena,you just pass it up the line and go about your business? IANAL, but I don't think that's a very good idea
your thinking too much about this. dont be so paranoid, signs 101 has you guys not thinking clearly. that would never happen
This has been an interesting thread.
If this thing goes to court, and surely it will if the bank has anything to do with it, a judge will sort it all out.
I hope the local sign guy doesn't get pinched. He seems to have acted in good faith and to have followed accepted industry practices.
Rossmosh makes an interesting point about how interpreting laws is not always black and white. This is true. The different US District Courts, for example, do not always decide the same way in intellectual property cases that are virtually identical. And a District Court is not obligated to decide a case in a certain way just because another District Court set a 'precedent.' And that's at the Federal level, where you would expect a certain amount of consistency.
Bachelor of Arts
Being that we don't know the full facts and what conversations/ contracts/ paperwork was entered into, pretty pointless to comment on this issue.
Correct, but since we are not all lawyers then we can go ahead and make rulings on the case. I say if the sign guy has cash, he will not when they are done with him. Plus lawyers fees on both sides added to his bill. Then he can go about suing the guys that gave him the job.
Originally Posted by S'N'S
Interesting conversation. I appreciate all the comments.
Originally Posted by signbrad
From his perspective, the sign shop owner thinks he acted in good faith and followed routine industry practices.
But from the irate franchisee's perspective (and maybe the bank's) - as chartle pointed out - he was a goon who took money from an out-of-state bully to steal and destroy the valuable property of a local businessperson and community member. Legal issues aside, imagine the damage to his business if they get a local news station to run a story on the dispute, and competing sign companies use it to their advantage. Even a company with a great reputation could get branded as the enemy of local business.
The sign guy's very sensitive to criticism (and rightly so). The franchisee left one comment on the sign company's Facebook page saying: "Hey maybe you should check to see who owns the signs before you take them and destroy them" and the owner took his whole FB page offline.
Personally, I think it would be a smart move to apologize and join forces with the franchisee in outrage against whoever hired him. It occurs to me that if local businesses make up your customer base, you better be clearly in the right if you're going to get into a public dispute with a local business. Otherwise, even if you win, you're gonna lose.
Originally Posted by Ideafarmer
No matter what you call it or how you phrase it, this would be admitting outright you were wrong. You'd be totally sunk and solely to blame. You can't be doing something you THINK is alright, find out differently and then take a different appraoch. This is what they mean when they say doing business in a reasonable fashion. How you conduct business is how you will be judged. If the judge, or whomever decides on this matter decides you worked outside of the normal business codes, ethics or legal manner..... you will find out quick enough.
I just don't understand the need to destroy these signs as part of the original request. That alone, would send up a red flag or two. Almost always....as in always, someone wants the stuff back, even if for scrap prices. Nope, someone acted too quickly and in a negligent manner, based on the limited facts we have thus far.
Everybody should believe in something.... I believe I'll have another drink
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