Chase Bank PPP Loan Fraud

Tauler Smith LLP Sues Chase Bank & SBA for PPP Loan Fraud

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Chase Bank PPP Loan Fraud

The business fraud attorneys at Tauler Smith LLP recently filed a lawsuit against Chase Bank for PPP loan fraud. The civil suit alleges that JPMorgan Chase committed fraud by helping its rich clients at the expense of small business owner clients. Paycheck Protection Program (PPP) loan funds made available in response to the coronavirus pandemic were supposed to be distributed on a “first come, first served” basis. But that’s not what happened. Instead, Chase Bank gave preferential treatment to their larger clients, while making misrepresentations to small businesses that ultimately resulted in loans being delayed and denied when the funds ran out. Tauler Smith LLP is representing the plaintiff in this case, as well as other small businesses who were denied PPP loans.

To learn more about the PPP fraud lawsuit filed against Chase Bank, keep reading.

Tauler Smith LLP Files Lawsuit Against Chase Bank for PPP Loan Fraud

The plaintiff in the civil suit is Outlet Tile Center, a California business with six (6) employees. Outlet Tile Center provides flooring for homes and businesses, and they do their banking with Chase. The business fraud lawyers at Tauler Smith LLP filed this lawsuit on behalf of the plaintiff, who was denied an opportunity to receive much-needed financial help because of the defendants’ fraud.

Click here to view the lawsuit.

Chase Bank Accused of Unfair Business Practices

In response to the coronavirus pandemic, the United States Congress passed several laws that affected businesses. For example, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and appropriated $340 billion in funds to be distributed to small businesses who needed help covering payroll. According to the lawsuit, by the time Chase Bank’s online portal opened to small businesses, the bank had already personally solicited and submitted all of the loans for its rich clients.

JPMorgan Chase & Co. received significant fees for all PPP loans they processed, so they had an incentive to push through loan applications of their rich clients. In just two (2) weeks, Chase made over $700 million in fees. Moreover, Chase had no incentive to review any of the applications and verify if the information was accurate. According to a government report, the average approved loan for Chase through this program was over $500,000. These were not the kinds of small businesses that were supposed to be receiving help through the CARES Act.

U.S. Small Business Administration Accused of PPP Loan Fraud

The other named defendant in the case is the U.S. Small Business Administration (SBA), a federal agency that exists for the purpose of supporting small businesses throughout the country. One of the ways in which the SBA provided financial assistance to small businesses during the COVID-19 pandemic was through the Paycheck Protection Program (PPP), which received additional funds through the CARES Act. The SBA allowed companies to apply for emergency PPP loans so that they could maintain their workforces even as coronavirus was causing many offices to shut down for an extended period of time. The idea was that the companies would use a certain percentage of the funds to pay their employees, and then the federal government would relieve them of the need to repay the loans.

Billions of dollars were allocated for the loans, and they were meant to help small businesses. Unfortunately, a lot of larger companies found ways around the restrictions and ended up taking a lot of that money – at the expense of the smaller businesses for which the loans were originally intended. In fact, just two (2) weeks after the PPP loans were made available, the funds had already been exhausted. This meant that many small business owners never had an opportunity to get the financial assistance they desperately needed during COVID. A lot of those small businesses were forced to close permanently, and their workforces were laid off.

Contact the California Business Fraud Lawyers at Tauler Smith LLP

If you are a small business owner who was defrauded by Chase Bank or any other entity committing unfair business practices, the attorneys at Tauler Smith LLP can help you. Call 310-590-3927, or send an email to schedule a free consultation.

PPP Loan Lawsuit

Payment Protection Program (PPP) Lawsuit

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PPP Loan Lawsuit

California law firm Tauler Smith LLP is representing small businesses that did not obtain funding through the Payment Protection Program (PPP). These PPP loans were intended to benefit small businesses impacted by COVID-19, but many small business owners did not receive the funds they were promised. If you were denied a PPP loan, our experienced business fraud attorneys can help you file a lawsuit.

Small Businesses Denied PPP Loans May Be Able to Sue

The U.S. Small Business Administration (SBA) was supposed to distribute PPP loans to small businesses who needed the funds to cover payroll and avoid layoffs during the coronavirus pandemic. These loans had favorable terms, and they were administered by the government and banking institutions under the CARES Act. On April 16, 2020, the government announced that the program ran out of funding. In some cases, this was due to fraud by the financial institutions that were processing the loans.

Contact the California Business Fraud Attorneys at Tauler Smith LLP

If you are a small business owner who applied for PPP funding through a lender and have been denied funding, you may have standing to file a lawsuit to obtain the funding that was promised. To learn more about potentially being a plaintiff in class action litigation, fill out the questionnaire below. A member of our team will then contact you. (The information you provide below is confidential and will not be shared with anyone outside Tauler Smith LLP without your prior consent.)

Weddings Canceled by Coronavirus

Wedding Cancelled by Coronavirus? Here Are Your Legal Options

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Weddings Canceled by Coronavirus

As wedding season approaches, couples across the nation are faced with the grim reality that their weddings have been involuntarily canceled due to the global coronavirus (COVID-19) pandemic. This problem can be compounded when the chosen wedding venue refuses to refund the deposit or allow the couple to get out of the original contract. Consequently, we are likely to see an onslaught of lawsuits against wedding venues and vendors in the year to come, particularly breach of contract claims by brides-to-be against wedding venues and vendors for refusal to refund advanced payments for a wedding that never occurs.

If your wedding was canceled by coronavirus, you do have legal options. Your first step should be to speak with an experienced California business dispute lawyer who understands the relevant statutes and who can help you get out of the contract.

Legal Claims for Couples Whose Weddings Were Canceled Because of COVID-19

Finding out that you can no longer have your wedding at the venue you chose is already devastating enough without the possibility that you may be forced to pay for the wedding anyway. Fortunately, there is some hope for couples who need to get out of written contracts. For example, some wedding contracts may contain force majeure provisions, which means that you may be able to rescind your wedding contract if it is impossible to execute. Along those same lines, your wedding contract may be considered an unenforceable contract because it is against public policy.

What Is the Law on Wedding Contracts in California?

Wedding contracts create special circumstances around would-be newlyweds. The United States government has declared a national emergency. Certain states, such as California, have issued orders implementing “shelter in place” of all residents, ordering closure of all nonessential businesses, and prohibiting gatherings of more than 10 people. These rules have arguably created a public policy that weddings cannot go forward during the crisis.

Generally, a legal claim fails if it is based on an agreement that violates law and is contrary to public policy. In Kashani v. Tsann Kuen China Enter. Co., a California Appellate Court ruled that the law “has a long history of recognizing the general rule that certain contracts, though properly entered into in all other respects, will not be enforced if found to be contrary to public policy.” Given the public prohibition in California regarding gatherings of 10 or more people during the COVID-19 pandemic, anyone attending, hosting, or working a wedding would be acting contrary to public policy by threatening public health. Consider the legal implications for a bride who hires a wedding photographer, only to later find out that the wedding was canceled because of coronavirus. Legally speaking, that bride might not be obligated to pay the photographer.

Contact the Los Angeles Business Dispute Lawyers at Tauler Smith LLP

The challenge with wedding vendor contracts is the prevailing industry standard, whereby all services are typically pre-paid in full. Given the unprecedented circumstances created by the COVID-19 pandemic, the best move you can make right now is to speak with an attorney who understands California contract law, particularly as it relates to businesses.

The Los Angeles business dispute lawyers at Tauler Smith LLP can advise you regarding your rights and obligations. We can also help you navigate the complex legal process. Call us at 310-590-3927 or send an email.

COVID-19 & Broken Contracts

Coronavirus and Broken Contracts

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COVID-19 & Broken ContractsThe COVID-19 pandemic has left a trail of thousands of broken contracts in its wake, and this has come in a wide range of industries. From event cancelations to broken supply chains, coronavirus has caused millions of dollars in commercial losses and business interruption. Moreover, coronavirus and broken contracts could be a familiar theme in the coming months, as travel restrictions, event postponements, school and business closures, quarantines, supply-chain disruptions, cash flow problems, and worker shortages are expected to increase. This has left many California business owners to wonder: who is liable for the disruption caused by COVID-19? The answer could lie in what is known as the “force majeure” provision found in many contracts.

To learn more about the legal consequences for businesses that are forced to break contracts because of the coronavirus, keep reading.

What Is the Force Majeure Provision in Contract Law?

One provision often contained in comprehensive contracts is that of “force majeure.” Typically, force majeure provisions are included in contracts to excuse a breach if unforeseen circumstances prevent a party’s performance of the contract. This often means an act of God, such as hurricanes, war, earthquakes, etc. The force majeure doctrine is also commonly referenced as “impossibility of performance.”

Force majeure is literally French for “superior force,” and the concept originated in the Napoleonic Code of 1804. The breaching party to an agreement was condemned unless their non-performance or delay in performance resulted from a cause that could not be imputed to them, such as a superior force or a fortuitous occurrence.

What Could Force Majeure Mean for Broken Contracts Caused by COVID-19?

For most businesses, coronavirus is an unforeseen circumstance out of their control. But these cases can still result in litigation because the application of force majeure to any particular contract must be done by applying the law of the relevant jurisdiction. In California, the law recognizes that parties may not be held liable when unforeseen circumstances prevent them from fulfilling their contractual obligations, regardless of whether or not the contract has a force majeure clause. The leading California Supreme Court case defines force majeure as an “insuperable interference” occurring without the party’s intervention that “could not have been prevented by the exercise of prudence, diligence and care.” Insuperable in this context means “impossible to overcome.” Although the case dates back to World War II, it has been cited as recently as 2015 as proper guidance for the interpretation of contracts in California.

Support for this court decision comes from the State of California definition of “force majeure.” In its standard Judicial Council contracts, California defines force majeure as “a delay which impacts the timely performance of work for which neither Contractor nor the State are liable because such delay or failure to perform was unforeseeable and beyond the control of the party.” The standard contract goes on to specifically list “quarantine or epidemic” as such a circumstance. Thus, quarantines resulting from the coronavirus pandemic would render this provision operable and could excuse any California businesses that are forced to break a contract because of COVID-19.

Contact the Los Angeles Business Dispute Lawyers at Tauler Smith LLP

Many contracts do not contain specific language in force majeure provisions. Thus, each contract must be carefully analyzed with the law of the jurisdiction in order for businesses to understand their options. Force majeure is one of many tools that business owners and individuals can use to mitigate the fallout from the current crisis. If you are a business owner who was forced to break a contract due to coronavirus, you have options to escape ruinous consequences.

The Los Angeles business dispute attorneys at Tauler Smith LLP can help you. Call 310-590-3927 or send us an email.