Demand letters are useful instruments for creating data, dispute decision, and way more. However, they will backfire and result in legal responsibility for the sender and even its lawyer for threats or calls for which can be legally improper. At present, we’ll cowl a number of the fundamentals of when demand letters go too far.
What’s the objective of a requirement letter?
Many issues fall below the umbrella of a “demand letter” for functions of this publish: a stop and desist letter, discover of default, discover of breach, discover of violation, demand to treatment, and so forth. Demand “letters” are typically written, however for the needs of this publish, I additionally embrace non-written calls for (i.e., a phone name).
In a typical demand letter, the sender calls for that the recipient cease doing one thing or take a corrective motion. Recipients usually ignore these letters or reply and declare they didn’t do something flawed. Even in these circumstances, placing a celebration on discover of wrongdoing could also be useful to create a file. It might additionally fulfill a contractual requirement earlier than the sender can take formal authorized motion.
For the remainder of this publish, I need to have a look at two examples of when demand letters go too far: extortion and lawyer ethics violations.
When demand letters can turn into extortion
Extortion is usually a legal offense relying on the state. I observe in California, the place extortion is in our penal (legal) code. Right here’s what the legislation says partially:
(a) Extortion is the acquiring of property or different consideration from one other, together with his or her consent, or the acquiring of an official act of a public officer, induced by a wrongful use of pressure or concern, or below colour of official proper.
(b) For functions of this chapter, “consideration” means something of worth . . . .
In plain English, if somebody makes use of a wrongful menace of pressure or concern to acquire one thing of worth, that’s extortion. One clear instance of potential extortion could possibly be the menace to wrongfully report somebody to the police for against the law in the event that they didn’t adjust to a requirement. See Mendoza v. Hamzeh, 215 Cal.App.4th 799, 805 (2013):
“The menace to report against the law could represent extortion even when the sufferer did actually commit against the law. The menace to report against the law could in and of itself be authorized. However when the menace to report against the law is coupled with a requirement for cash, the menace turns into unlawful, no matter whether or not the sufferer actually owed the cash demanded.”
This can be a potential minefield for the hashish trade. Hashish is federally unlawful and may even be unlawful on the state degree. Our dispute decision staff has seen numerous examples the place events and even attorneys have made calls for that threaten to report conduct to the authorities (that is particularly harmful for attorneys, which I talk about under). This kind of menace can result in legal responsibility for the occasion making a requirement that they in any other case wouldn’t have confronted.
Improper demand letters can violate authorized ethics guidelines
On high of normal prohibitions on extortion, attorneys are not permitted to make use of threats of administrative or legal penalties to achieve benefit in a civil continuing. That is true even earlier than the demander information a case. So on high extortion points, threatening to report somebody to an company or have them prosecuted can result in extra legal responsibility for a lawyer.
So what’s correct in a requirement letter?
Nearly all demand letters make some sort of “menace.” Some are okay, and a few are usually not.
Let’s say a hashish landlord calls for that its tenant pay hire, and threatens to sue for damages if it doesn’t. That’s normally a reliable demand. It nearly actually can be extortion if the owner threatened to burn down the tenant’s home if the tenant didn’t pay.
Right here’s a much less clear reduce instance: the identical landlord came upon its tenant was violating hashish laws on the premises. It despatched a requirement to treatment and threatened to report it to the police and hashish company and sue it if it didn’t. The menace for a swimsuit for damages might be reliable in lots of circumstances. However the threats to report could possibly be prohibited by state lawyer ethics guidelines.
The underside line right here is that there are areas the place calls for are clearly improper. Typically, it may be laborious to inform the place to attract the road. A very good lawyer will have the ability to stroll a consumer by way of one of the best plan of action in making a requirement. And a superb lawyer will even have the ability to assist a consumer work out what cures they’ve when receiving an improper demand.