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- Dioguardi Flynn LLP Newsletter Winter/Spring 2009
- Dioguardi Flynn LLP– Best of Arizona Business January 2009
Dioguardi Flynn LLP ranked number 3 for law firms with 24 of fewer attorneys in the 2009 Best of Arizona Business — Arizona Business Magazine, January 2009.
- Mark Dioguardi appointed co-board member of FPRAZ and MCCF
Announcement printed in the Maricopa Lawyer, July 2010:
In an effort to establish a secure financial future for public radio stations, KJZZ 91.5 FM and KBAQ 89.5 FM, the Friends of Public Radio Arizona (FPRAZ) and the Maricopa Community Colleges Foundation (MCCF) enter into a new partnership and appoint Mark Dioguardi as their first co-board member. Dioguardi is one of the founding partners of the law firm of Dioguardi Flynn LLP, a general business law firm supplying business litigation and transactional legal services. He grew up in the Valley and has practiced law here for 30 years. In addition to serving on the FRPAZ and MCCF boards, Dioguardi has served on a number of other community-building boards and projects.
- New shopping center leases could help grocer survive Chapter 11
Excerpt of article printed in the Phoenix Business Journal, October 2, 2009:
Bashas’ Supermarkets Inc. is finding early success in reworking some of its shopping center leases — a key to the Chandler-based grocery chain’s ability to emerge from Chapter 11 bankruptcy.
Mark Dioguardi, a real estate attorney with Scottsdale-based law firm Dioguardi Flynn LLP, agreed that landlords need to consider what could happen to their centers without a grocery store anchor. He noted the glut of retail space in the Phoenix market and the lack of new or expanding stores by other retailers. “They have no choice but to do a deal with Bashas’,” Dioguardi said.
- Opportunity Corridor Knocked by Recession
Excerpts of the article printed in the Phoenix Business Journal, September 22, 2009:
Four years ago, Phoenix Mayor Phil Gordon announced he wanted to rehabilitate run-down areas along the 12-mile stretch from the Arizona Capitol through downtown Phoenix to Arizona State University in Tempe. Dubbed the Opportunity Corridor, it was to be filled with new office, residential, biomedical and industrial developments. Today, inopportune times have stalled those plans. Van Buren and Washington streets east of downtown still are dilapidated and, in some cases, are worse off because of the recession and real estate crash. “It’s just in the tank,” said Mark Dioguardi, a real estate expert and attorney with the Scottsdale law office of Dioguardi Flynn LLP.
Like much of the Phoenix commercial real estate market, Dioguardi said the Opportunity Corridor is plagued by foreclosures, unsold vacant lots, shuttered businesses and almost zero transactions, financing and construction. “There is nothing going on anywhere, including distressed properties,” he said.
Van Buren Street, once considered Phoenix’s red-light district, has not been spared by the downturn. Sections of Van Buren east of downtown, toward Phoenix Sky Harbor International Airport, are littered with vacant lots, empty buildings, graffiti stained structures and “for sale” signs. A number of used-car dealerships, including a former DriveTime location, closed as car sales dropped, and the local immigrant population left because of immigration enforcement and the lack of jobs.
Dioguardi said demand for industrial space is down, but it is faring better than other segments, especially retail. That could mean the industrial sector might rebound more quickly, which could help get the Opportunity Corridor off the ground.
- Top Commercial Real Estate Attorneys to know in 2009/2010
Mark Dioguardi of Dioguardi Flynn LLP was listed as one of the top attorneys to know in the 2009-2010 Top People to Know edition of the AZRE Arizona Commercial Real Estate magazine regarding commercial real estate in Arizona. Mr. Dioguardi’s accomplishments include helping real estate investors, developers and lending clients navigate through four recessions over the last three decades.
- Mark Dioguardi on the Decline in Consumer Confidence
Printed in the Phoenix Business Journal, December 5, 2008:
Mark Dioguardi, a partner with the law firm Dioguardi Flynn LLP, said a revived real estate market along with government spending on construction and public works will help consumers and the economy.
“We need to create jobs by creating things we need and will add value to our society. People should be put to work building and rebuilding our nation’s roads, bridges, dams, schools and other infrastructure, as well as sustainable energy supplies,” said Dioguardi, whose firm specializes in real estate, bankruptcy and commercial litigation. “This will rev up demand and spending for goods and services, and pull us out of recession.”
- 2008 Centers of Influence Award to Mark Dioguardi
Mark Dioguardi of Dioguardi Flynn LLP has been recognized by Arizona Business Magazine as a 2008 Center of Influence. Mark is one of ten attorneys so honored in the Valley.
For almost 30 years, Mark Dioguardi has been involved in the Valley’s community affairs, law, philanthropic and government arenas. As co-founder and co-managing attorney of the law firm of Dioguardi Flynn, he oversees day-to-day operations and has spearheaded the firm’s growth strategy. In his career, he has handled an estimated $4 billion of real estate, financings, venture capital and equity transactions.
- Mark Dioguardi on the Fannie Mae Freddie Mac, Fed Bailout
Excerpts of the article printed in the Phoenix Business Journal, September 12, 2008:
Business Journal: What is the downside of the takeover?
Mark Dioguardi: “The main downside is the probable cost to the taxpayers. The net effect on banks is unclear, since we do not know if they own more Fannie Mae/Freddie Mac bonds (which are helped by this action) or Fannie Mae/Freddie Mac stock (which is hurt by the takeover). Is it an upside or downside that the biggest beneficiaries of the bailout will be the governments of China and Japan, which are the two largest owners of Fannie Mae and Freddie Mac bonds?”
Business Journal: Do you think the federal decision was the right one, the only choice?
Mark Dioguardi: “Implementing the takeover was the right decision. The implicit guarantee of Fannie Mae and Freddie Mac’s solvency was made years ago, and that guarantee had just not been officially implemented until Sunday, so investors in Fannie Mae and Freddie Mac bonds had justifiably relied on the expectation that the government would make good on its guarantee. Removing any uncertainty about whether the government would live up to that promise will now add stability and liquidity to our capital markets. The economy is in bad enough shape without the ramifications of a shutdown in the residential mortgage market that might have occurred but for the takeover.”
- 2.0 minutes on Entrepreneurship with Mark Dioguardi
Interview of Mark Dioguardi as printed in the Phoenix Business Journal, May 9, 2008:
Dioguardi Flynn LLP is a business and litigation law firm Dioguardi co-founded with John Flynn. Dioguardi also has invested in and played key roles in launching a number of businesses, including a national bank, where he served as chairman of the board.
What is one of your business goals for 2008? “To help start and capitalize at least four new companies. These will probably be in the solar, insurance, technology and real estate fields.”
How do you recruit and retain quality employees? “We give them support and opportunities to grow into roles with as much responsibility as they want to master.”
What is a significant goal you achieved in the past 12 months? “Being a founding director and principal shareholder of a national bank, which has already become a major vehicle for capital investment in our community that was otherwise lacking.”
What is one thing your company does better than any other? “Our law firm is very good not only at providing top legal services in both the transactional and litigation areas, but also in helping our clients through our full-service business counseling.”
How do you foster teamwork? “Communication. Sharing information with your teammates about the challenges faced, and not tolerating people on the team who will not communicate.”
How do you build repeat business? “By being responsive and results-oriented, and helping our clients to grow and prosper beyond just handling their legal or financial needs.”
What do you know now that you wish you had known when you started your business? “Building a successful business is all about having the right people on your team who know how to serve our clients.”
What mistake have you learned from? “Failure to treat everyone with an equal amount of respect, no matter your initial evaluation of them, which could be wrong.”
- Mark Dioguardi – One of Valley’s Top Ten “Leading Lawyers”
Mark Dioguardi is one of only two real estate attorneys ever named by the Phoenix Business Journal as one of the Valley’s “Top Ten Leading Lawyers”. Excerpts of the article printed in the Phoenix Business Journal, January 20, 2006:
Mark Dioguardi knew as a teenager what he wanted to do for a living. “My stepfather was a real estate developer and he’d rant and rave about attorneys on a regular basis,” Dioguardi remembers. “So I decided to be one.” Never mind that the Phoenix commercial real estate market was in the tank. Dioguardi and a few fellow lawyers opened their own firm in 1986 financed with plastic, aka personal credit cards. “We found a garden office near 32nd and Camelback and worked till midnight seven days a week,” Dioguardi says. For a while, cash flow barely amounted to more than a trickle. Clients were politely asked to pay their bills immediately. “Fortunately, they were very good sports,” he says.
He’s particularly proud of his legal work that facilitated the development of the Springhill Suites by Marriott at Ninth and Van Buren streets. “It was a catalyst for cleaning up a very blighted area and making downtown more viable for other investors,” he says. Not that it was easy. “There were a lot of private owners, including two holdouts. One property we never did acquire and the other one the city agreed to condemn. If the city had not taken a proactive approach, we would not have had the resurgence that we see in downtown today.” he says. The continued redevelopment of downtown remains a passion. “My first job was downtown and it was really desolate,” says Dioguardi. “We had one place to go to lunch, the Matador.”
- John Flynn on Employee Blogs
Ask the Experts column in the Arizona Republic October 11, 2009:
Question: Our executive secretary writes a blog called “Take this job and …” She uses a pseudonym, but anyone who knows our company would surely recognize her examples and anecdotes in her workday gripes. Nothing’s derogatory or hostile, but it’s not good for image. Can this person be reprimanded or asked to resign?
John Flynn of Dioguardi Flynn LLP answers:
In Arizona, employment is “at-will” and may be terminated by either the employee or employer for any reason, provided the reason doesn’t violate the law. There appears to be only conjecture that this employee is undertaking the blogging activity. Any employer that learns an employee is blogging negatively about its operations, management or personnel (as opposed to “assuming such activities), must proceed cautiously before terminating or disciplining the employee. The employer needs to determine if the employee is engaging in National Labor Relations Act “protected activity.” - Arizona Top Ten Plaintiff’s Verdict Winners for 2008
John P. Flynn and Peter Moolenaar of Dioguardi Flynn LLP, and co-counsel, Michael Jason Lee of San Diego, California represented Media Services Limited in a Maricopa County Superior Court lawsuit alleging claims against Defendants (an off-shore Internet billing and payment processing intermediary and its principals) for breach of contract, fraud, negligent representation, unjust enrichment and conversion. At the conclusion of a two week jury trial, attorneys Flynn, Moolenaar and Lee were successful in piercing the corporate veil and prevailing on all counts alleged against Defendants to secure a verdict in excess of $10,000,000. Media Services Limited v. An, et al., CV 2004 005095. The case was featured in the June, 2009 edition of Arizona Attorney magazine regarding the top ten civil verdicts of 2008 in the state of Arizona.
- John Flynn on Employees Who Quit Without Notice
Ask the Experts column in the Arizona Republic, January 11, 2009:
Question: I am a company owner. My employee left work after working his scheduled shift, but he abandoned his job and never returned. The employee also left behind personal property. What are my responsibilities regarding the employee’s last paycheck and the personal property he left behind?
John Flynn of Dioguardi Flynn LLP answers:
An Arizona employer must pay wages earned to the employee up to and through the termination date no later than the next regular pay period, unless the wages are undetermined at the time of termination, such as bonuses or commissions. I recommend you send a letter with the final paycheck to the former employee (preferably via certified mail) confirming the job abandonment, the wages paid, and include your company’s normal termination documentation. That letter should also confirm the personal property left behind and instruct the former employee to contact an identified representative to arrange for retrieval before a reasonable date certain, after which the employer will dispose of the property. If the property hasn’t been retrieved or a retrieval date/time scheduled, the employer doesn’t have an obligation to indefinitely store the property or incur any shipping expense. Finally, always make certain you have a solid paper trail in your file. - John Flynn on Access to Employment Files
Ask the Experts column in the Arizona Republic, December 9, 2007:
Question: My husband and I both applied for positions with a company for which we’d worked more than seven years ago. My husband was offered a position, but it was rescinded when his old employee file was found to contain a “not eligible for rehire” statement. I’ve applied for three different positions and not heard anything. I’ve called the HR department several times to request an appointment to view my old file and have not heard from them. Is it illegal for them to refuse us access to our old employment files? The company has been sold (twice!) since we worked there, too, so should that “ineligible” note still hold?
John Flynn of Dioguardi Flynn LLP answers:
In the context of a private employer in Arizona, an employee has no stand-alone legal right to review his or her personnel file, as that documentation is considered the employer’s property. However, certain contracts of employment will, at times, provide a current or former employee with a right to inspect and copy personnel-file information.It is important to remember that Arizona is an “at-will” employment jurisdiction. As such, an employer or employee may terminate an employment relationship at any time provided that termination decision is not undertaken in violation of applicable state law.
A corollary to this point is that a former employee has no right to be considered for re-hire by the former employer. Of course, if the “not eligible for rehire” decision was actually based upon a discriminatory reason – for example, the employer doesn’t want to re-employ you because you are older than 40 or Native American, respectively violating the Age Discrimination in Employment Act and Title VII of the Civil Rights Act and its Arizona counterpart – then the decision would be subject to attack.
However, the fact that the prior employer was sold one or more times does not impact the propriety of an “ineligible for rehire” decision.
- John Flynn on Independent Contractors
Ask the Experts column in the Arizona Republic, October 28, 2007:
Question: I was, until a month ago, working at a small trucking company where the owner treated everyone as an independent contractor to avoid employment taxes. I worked in the owner’s office, using his equipment for duties during daytime hours. I also drove out of state occasionally, as I was the relief driver. The owner had control of all aspects of the business. There were no benefits, and the self-employment penalty tax I had to pay certainly gouged into my earnings. Could the Department of Labor or the IRS reclassify me as an employee? Would I be able to recover any taxes I had to pay?
John Flynn of Dioguardi Flynn LLP answers:
If an employer wrongfully classifies an employee as an independent contractor and does not withhold income taxes, Social Security, and Medicare from compensation, the employee may request a determination of status filing IRS Form SS-8. The IRS defines workers as independent contractors, common-law employees, statutory employees or statutory non-employees. You can See IRS Publication 15-A for information, but the largest category is common-law employee. The IRS has a 20-factor test to determine whether a worker is a common-law employee. Here, the fact that you worked in the owner’s office, used his equipment and were subject to his control of the business suggests you may have been a common-law employee. Therefore, you may want to consult a tax professional about filing a Form SS-8 and amend your tax returns accordingly.
Dioguardi Flynn LLP
Dioguardi Flynn LLP Winter/Spring of 2009 Newsletter with featured articles:
Has your Lender Illegally Called your Loan Due, by Mark Dioguardi:
As a result of banks’ high concentrations of loans in the real estate sector, and the ensuing real estate depression, banks are failing. More banks will likely fail before the recovery begins. These economic stresses cause otherwise nice people to do strange things, including employees of banks and other lenders.
Regulatory pressures have been translating lately into a phenomenon whereby many lenders are looking for ways to call their real estate loans due. In fact, lenders may at times be tempted to call loans due when they have no legal right to do so. But an aggrieved borrower should not just throw in the towel. Consultation with an attorney who is knowledgeable in the area of lender liability may determine that the borrower has recourse.
The possibility that a borrower might have a legal remedy in such a confrontation will be heavily dependent on the specific facts of the case. These circumstances need to be carefully examined and explored.
The first area of inquiry should be with the loan documents themselves. Not all loan documents are created equal. The form of loan documents can vary significantly from lender to lender, and their respective attorneys. And “standardized” form loan documents generated by computer programs can be rife with provisions inappropriate to a particular situation. In either event, the loan documents may not fit the circumstances, or may by their express terms provide the borrower with defenses or remedies.
It would not be entirely surprising to find an occasional lender who, being under regulatory pressure to reduce its concentration of real estate loans, might itself peruse a loan agreement in search of a justification to call a default and thereby accelerate the maturity of a loan. But lenders are under a duty to deal with their borrowers in good faith and could expose themselves to significant liability and damages if they do not deal with their borrowers in good faith. Additional legal principals of fraud, equitable subordination, breach of fiduciary duty, anti-trust, interference with contractual relations, and environmental laws, can all affect the outcome of a particular lender liability case, so it is important to consult a lawyer with experience in dealing with these issues before deciding on a course of action.
And while this article focused on real estate loans, most of the principles and dynamics mentioned in this article apply equally to other types of loans.
Documentation – An Investment That Always Pays Dividends, by John Flynn
The importance of documenting business relationships cannot be overstated in the context of the current volatile economic market, whether in regards to investing in distressed real property, resolving a dispute or hiring and terminating employees. When times are tough, people have a tendency to delay or avoid spending a relatively small amount of money to ensure documentation is in order.
The attorneys at Dioguardi Flynn LLP are experienced in working with our clients on the front-end to ensure the cost-effective deployment of financial resources, undertaken with the goal of avoiding significantly more expense down the road. Working with qualified counsel to ensure a proper employment agreement is in place will ensure the employer’s assets are protected. If a dispute arises, proper documentation will make increase the likelihood of a quick settlement or ADR/arbitration resolution. If an investment is being considered, experienced counsel should be engaged to analyze the transaction, undertake the requisite due diligence and make certain the transactional documentation is in place and includes a clear identification of the acquisition/investment, adequate representations and warranties are in place, and remedies are identified that ensure the investment and investor are properly protected.
At Dioguardi Flynn LLP we enjoy litigating cases on behalf of our clients. However, the stress felt by our clients is reduced ten-fold if we have had the chance to work with them at the outset to ensure the transaction or relationship has been appropriately documented. It is always easier to budget for and tolerate the minimal front-end legal expenditure, as opposed to financing a long-term litigation battle that has ensued because the documentation is inadequate or missing in its entirety.
Stretching Your Litigation Dollar – The Value of A Comprehensive Case Analysis, by Peter Moolenaar.
In challenging economic times the most valuable legal services are often performed at the inception of a matter. During the initial analysis of a file, skilled attorneys not only measure the strength and weakness of their client’s claims, but even more importantly, evaluate the realistic chance of recovering adequate monetary relief. It is no secret that protracted litigation is expensive and often shrinks the pool of collectible assets available for resolution of a dispute. In a viscous economy, an early evaluation of the financial wherewithal of the adverse party is often the most important factor in determining the appropriate litigation model.
Although most litigators pride themselves on their ability to skillfully prepare and present a case at trial (and to a certain degree the authors of this article are no exception), the reality is that the super-majority of all cases never reach trial. Most cases are settled through alternative dispute resolution (“ADR”)—typically, negotiation between parties and counsel or through more formal mediation. In down economic cycles, parties often turn to ADR earlier and in greater frequency.
Clients and counsel must conduct due diligence at the onset of a matter to identify whether certain economic factors—e.g., insolvency of the adverse party, changing market conditions and/or potential competing creditors—prohibit traditional litigation and necessitate adopting a litigation model that aggressively pursues early resolution via ADR. In the early stages, it is often the client that has the best insight into the financial vitality of the opposing party. Therefore, it is critical that clients and counsel work together to compile all available background information about the adverse party before implementing a litigation strategy. Failure to properly evaluate the financial environment of a matter increases the chance of ending up in the unenviable position of discovering, after incurring significant expense in protracted litigation, that the adverse party is judgment proof—insolvent or otherwise lacks sufficient resources to justify continued litigation.
The lawyers at Dioguardi Flynn are experienced in providing a comprehensive analysis, including evaluating the financial environment, and crafting a litigation model for each matter. Recently, we have been successful in resolving several disputes, which primarily arose from tightening market conditions, in the initial phases of litigation by using a combination of negotiation and early mediation. In each case, the preliminary analysis of the parties’ relative financial strength and impact of changing market conditions provided the framework for achieving a successful resolution.