Assignment 2: Legal Problems Managing a Small Business Part II

Read the scenario and the questions that follow.  Note that this scenario is a continuation of the scenario from Week 3, Assignment 2.  Identify the legal issue(s) and apply legal concepts and possible arguments for each question.  Prepare a solution for each question using laws, cases, examples and/or other relevant materials.  Identify potential ethical issues and propose a solution for each issue.  Support your answers with information from the textbook and at least two outside scholarly sources.  By Tuesday, October 1, 2013, prepare a 6 to 9 page paper that identifies the legal issues and potential solutions and answers all questions presented, supported by relevant legal authority.  Properly cite all sources using APA format.

This assignment primarily requires application of the concepts learned in Weeks 4 - 5; however, some concepts from Weeks 1 - 3 may also be included.

Scenario

After being laid off from the construction firm where he has worked for 20 years, Dad started his little handyman business.  With a downturn in the economy, Dad found that people repaired things instead of replacing them, so his services were always in demand. Chad worked with his father (Dad) in the afternoons and on the days he didn't have classes in construction management at the university, since his father needed some help with the growing business.

By the time Chad graduated from college, the handyman business employed three additional full-time workers and picked up a few day laborers as needed.

Dad and Chad were carrying a large Jacuzzi tub through a customer's house when the homeowner's dog jumped up on Dad, causing him to fall and drop his end of the tub.  Unable to control the tub, Chad dropped his end of the tub and it went crashing into the homeowner's brand new $5,000, 65" Sony Smart - 3D television. Dad suffered a back injury and was unable to work for six weeks. 

The handyman business owns two work trucks and two vans, each registered to the business and sporting the company name, phone number and website. Joe, one of the full-time employees, often drives one of the vans home at night in case he needs to take care of an emergency repair. One night Joe stopped off at Mike's Pub to have a couple of beers before going home. On the way home, Joe ran a stop sign and hit Tracy Jackson.  Jackson's car sustained $4,000 in damages and she missed two weeks of work recovering from her injuries. After Joe was released from the hospital one week later, he was arrested for DUI.

Third Bank loaned $50,000 to the handyman business. Chad, Dad and their friend Bill agreed to be co-sureties for the loan. The handyman business defaulted on the loan and Third Bank plans to sue Bill for payment of the loan.

The handyman business agreed to install two new heating and air conditioning units in a 3,000 sq. ft, two-story home. The parties agreed to a price of $8,000 for the purchase and installation of the units. Because the homeowner's wife just lost her job, Dad agreed to let the homeowner pay for the units in installments of $1,500 a month. Two months later, the homeowner files for bankruptcy. Dad demands payment of the remaining amount due or threatens that he will repossess both heating and air conditioning units. 

Linh Pak was born in Vietnam in 1962 and recently became a U.S. citizen. Linh speaks fluent English with a mild Vietnamese accent. Her accent does not interfere with her ability to communicate with others. Linh applied for a job with the handyman business; however she was not hired for the position.  

Assignment

Based on the different situations described in the scenario, create a 6-to-9-page Microsoft Word document that includes the answers to the following:

• Is the business selected in Week 3 still the best type of organization for Dad and Chad? If yes, provide reasons for your selection.  If no, then select the appropriate type of business organization for the handyman operation and provide support for your selection.
• Explain the liability of the homeowner, Chad, and Dad for the Jacuzzi tub accident and the types of insurance the parties should have. 
• Explain whether the handyman business or Joe is responsible for Jackson's injuries. Assume each party maintains insurance coverage on their vehicles. Which insurance company will be liable for payment of Jackson's claims? 
• Is Third Bank required to seek payment from the handyman business before demanding payment from the co-sureties?
• Can the bank collect the full amount of the loan from Bill? If Bill pays the loan, does he have a right to contribution from Dad and Chad? If so, how much can Bill recover from Dad and Chad?
• What are the rights of each party- the homeowners and the handyman business -to the heating and air conditioning units and payments owed when the homeowner files bankruptcy?  
• On what grounds might Linh have a discrimination lawsuit against the handyman business? Provide support for each ground selected and then provide arguments that the handyman business may make to refute each claim.
• Consider any ethical concerns Dad and Chad may face related to the topics covered.
• Conclude your paper by providing suggestions for Dad and Chad to help prevent future occurrences of these types of legal and ethical problems.

Attachment:- 352854_2_SU-BUS3055-W4-A2-Campbell-K.docx