Sunday, February 08, 2009

Legal FAIL of the Day

Betanzos v. Premium Sound N Pictures inc (2006)

Sometimes, a lawsuit can backfire...

On November 25, 2002, Plaintiff (Mr Betanzos) was dismissed by his employer, the Defendant (Premium). He had been working for Premium for eight years [...]. He claims $81,700.00 from Premium ($74,200.00 in lieu of notice, $2,500.00 for his share in the profits of 2002 and $5,000.00 for loss of coverage under the Benefit Plan he was entitled to).

[...] At the time of the cancellation of the contract, Premium paid $25,800.00 to Mr Betanzos to buy peace. [...] Since he did not inform Premium of his intention not to accept the settlement before cashing the cheques and since he sued immediately after having done so, Premium considers he has acted in bad faith and claims, in its Cross-Demand, the reimbursement of the sum of $25,800.00 and an additional amount of $15,000.00 for legal fees.

Judge's ruling:
In the Court's opinion, the evidence is overwhelming and Premium was justified to dismiss Mr Betanzos. His performance was not what was expected of him and notwithstanding his having been told so on a number of occasions, the situation did not improve. As a matter of fact it worsened. [...]

In view of the Court's answer to this question,[...] Mr Betanzos' claim will be dismissed.


The evidence is clear: a verbal contract had intervened between the parties. It was a transaction and it had the authority of a final judgment between Premium and Mr Betanzos.

Mr Betanzos cashed the cheques of $20,000.00 and $1,800.00 in January 2003 without indicating beforehand to Premium that he was no longer in agreement with the transaction. Furthermore, immediately after having cashed the cheques, he sent a letter of demand and, a month later, instituted the present proceedings.

This is not behaving in good faith and this is not respecting the contract which was the law of the parties. [...]

The Court cannot condone such a behaviour. Mr Betanzos knew what he was doing: he had consulted a lawyer. He also knew that, for Premium, this was a final settlement: a transaction.

Since Mr Betanzos has not respected the contract of transaction, the Court will order him to refund $25,800.00 to Premium since the contract of transaction is a whole and cannot be severed.


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