Contract Counterclaim Template - PowerPoint

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					Chapter 3: The Litigation/Trial
                       Process


         David Baumer
          Spring 2003
                           The Trial Process
• Litigation is expensive and risky for various
  reasons
  – Damage awards can be highly variable
     • Juries can be overpowered by emotion and award
       sums far in excess of ―actual‖ damages
     • In addition, things could leak out during litigation
       that could generate adverse publicity
        – Often caused by ex-employees
  – For these and other reasons, companies often
    take many measures to avoid court appearances
             The Adversarial Process

• If both parties have standing, it means
  – They have real current interests at stake
• In general the plaintiff has the burden of
  proving by a
  – Preponderance of the evidence that his or her
    version of events are accurate and
  – Deserving of a verdict in his or her favor
   Value of a Lawsuit: Plaintiff
– The value of a lawsuit is based on
   • Expected values, which may have large variances,
     and
   • Reducing to present value, when any damage
     award is actually received
   • Adjustments should be made for
      –   adverse publicity
      –   cost of litigation
      –   loss of future business relationship
      –   risk aversion—probably should imagine the worst
   Value of a Lawsuit: Defendant
• Businesses are frequent targets for litigation
  – For business to business suits, there should be
    significant savings if the parties settle
     • These savings can be realized if the parties have
       similar expectations as to the outcome of the case
     • In many cases court litigation can be avoided
       altogether if the parties have agreed in a contract to
       arbitrate and have waived their right to sue in court
     • The decision as to how to deal with nuisance suits
       should take reputation into account
                     Stages of Litigation
– In most cases when a person has a potential
  claim against another person, a settlement
  occurs, rather than litigation
   • Settlements can occur at any stage in litigation
– Litigation begins with pleadings
   • Followed by motions
   • If motions to dismiss are denied then discovery
     begins
   • Following discovery there is a pretrial conference, a
     trial and then more motions and possible appeals
                                          Litigation
• Litigation may appear linear but it is actually
  iterative
• Pleadings
   – The complaint is a short statement of facts which the
     plaintiff claims entitles him to a court remedy, if proved
       • Pleadings provides general notice to the defendant as
          to what the suit is about
       • Once the complaint is filed the defendant is served
          with a summons
       • Occasionally defendants evade lawsuits by evading
          service of summons
                Pleadings and Motions

• After the def. is served
  – He or she is required to file an answer within
    20 or 30 days or else lose the case by default
  – Def.s may also file a motion to dismiss
     • May allege that the pl. failed to allege a cause of
       action--even if all the statements in the complaint
       are proved the def. is not liable to the pl.
     • If the motion is granted the case is over unless the
       pl. appeals and wins a reversal
                               Pleadings: Answer

• In most cases the def. files an answer
  – It is common for def.s to issue of general denial
    of all the allegations contained in the complaint
  – In some answers, def.’s file affirmative
    defenses
     • In an affirmative defense the def. alleges additional
       facts that she claims exonerates her
     • Def.s have the burden of proof with respect to the
       facts alleged in support of the affirmative defenses
                                 Counterclaim
– When a def. files a counterclaim, she is
  claiming that the pl. is liable to her
   • Counterclaims have the same characteristics as the
     complaint, i.e., short statement of facts that provides
     notice to the other party
   • If the def. files a counterclaim, the pl. must file a
     reply, which has the same characteristics an answer
   • When there are multiple plaintiffs and defendants,
     there could be cross-claims between the pls.and
     defs.
                         Electronic Filing
– Has the potential to be much more efficient
  than paper filing
   • In the past, firms had to hand carry motions to the
     courts
   • Searching documents was laborious
   • Copying records was expensive
– Has the potential to eliminate much of the
  advantages associated with location of law
  offices relative to the courthouse
                                          Discovery
• Purpose of discovery is to allow parties to discover
  the facts necessary to prove or disprove allegations
  made in the pleadings
   – Enables one side to become aware of the other side’s
     evidence
   – Promotes settlements, especially when one side discovers
     its evidence is weaker than expected
   – During discovery the def. often files motions for a
     summary judgment (MSJ)
        • If the motion is granted, the case is over unless the pl.
          wins a reversal on appeal
        • MSJ should be granted if there is no genuine issue of
          fact
                                        Discovery

• Tools of discovery
  – Depositions--out of court questioning of
    witnesses, including parties
  – Written interrogatories--only allowed against
    other parties
     • Allows for more in-depth questioning requiring use
       of documents
  – Subpoena--one party requests that the other
    party produce documents
                                             Discovery
– Other tools of discovery
   • Requests for Admissions
      – Often used when the def. files a general denial
      – Used to narrow down exactly what the other party is
        saying is wrong
   • Physical and Mental Examinations
      – If the physical condition of either party is an issue, the
        other party can request a physical or mental examination
   • Refusal to cooperate during discovery is subject
     to sanction by the court, including dismissal of
     the case
                    Pretrial Conference
• At the end of discovery, before the trial, the
  judge will call for a conference between the
  parties
  – At the pretrial conference, the judge will try to
    get the parties to settle
  – If the judge is unsuccessful in achieving a
    settlement, the judge will try to get the parties
    to stipulate to uncontested facts so that the
    focus of the trial can be on the contested facts
                                                       Trial
– Jury trials cost more money, so parties often
  waive their right to have the case tried before a
  jury
   • During voir dire jurors are questioned for possible
     bias
      – Attorneys also have a certain number of preemptory
        challenges, which are challenges without stating a reason
– In civil cases, there can be less than 12 jurors
  and verdicts that are not unanimous
                                                     Trials
• Beginning with the pl., each side makes an opening
  statement
   – In the opening statement, a party states the facts it intends
     to prove to the jury
   – Proof often takes place through testimony, though there
     are other forms of presenting evidence
• Motion for Directed Verdict
   – Often filed by the def. when the pl.’s case is weak
       • In the motion the def. claims that there is no
         credible proof of one or more of the elements of the
         cause of action
       • If the motion is granted the case is over unless the pl.
         wins a reversal on appeal
                                                    Trial
– Closing arguments
   • Each side summarizes the evidence in a way that is
     favorable to their contentions
– Jury instructions
   • Each side will propose its own version of jury
     instructions that is slightly slanted in their direction.
     If too one-sided, the judge will use the other side’s
     proposed instructions as a template
   • Jury instructions are a frequent basis for appeal
                                           Verdict

• Most juries do reach a verdict, especially in
  civil cases where unanimity is not required
  if both sides agree
  – It is a mistrial if there is a hung jury which
    takes place when the
     • There is disagreement among jurors and unanimity
       is required, or
     • The required majority is not achieved
                      Post Trial Motions
– When it is apparent that the trial court judge
  made a mistake, he or she may grant a motion
  for new trial
   • Rather than having the decision of the trial court
     reversed on appeal
   • Misconduct by attorneys could be grounds for
     declaring a mistrial
   • Also a judge may disagree with the jury verdict and
     grant a motion for a new trial
                       Post Trial Motions
– Motion for J. n.o.v.
   • If the motion is granted the judge is saying the case
     should not have gone to the jury, even though the
     judge allowed the jury to render a verdict
   • By allowing a case to go to a jury and then granting
     a J.n.o.v., there is a jury verdict if the decision to
     grant the J.n.o.v. is reversed
   • Allowing a case to go to a jury, but granting a
     J.n.o.v. conserves judicial resources
                                          Remedies
• As indicated previously, settlements can occur at
  any time, even after the jury verdict
   – The pl. may settle for something less than the jury award,
     but the def. agrees not to appeal
• In most cases successful pls. are awarded
  compensatory damages
   – There are limits on recoveries for damages that are
     deemed too speculative
   – Contract pls. are awarded what they would have received
     had the contract not been breached
   – Tort pls. are awarded economic and non-econ. damages
                         Damage Awards
– Punitive damages
  • Are generally not awarded in contract cases even if
    the breach of contract is deliberate
  • For intentional torts, the pl. may be able receive
    punitive damages, which are designed to punish the
    def. and deter other similarly situated defs.
  • Punitive damages can be awarded if the def. show a
    reckless disregard for the safety of others
  • Punitive damages should bear some reasonable
    relationship to compensatory damages
                  Equitable Remedies
• A pl. may be able to get an temporary injunction,
  even before the trial takes place
   – Must be able to show that
       • Irreparable damage will take place if the def. is not
         stopped and
       • The pl. is likely to win if the case goes to trial
       • If the pl. wins at trial, the injunction may be made
         permanent
   – Contract pls. may request specific performance if
     monetary damages are inadequate and the consideration is
     unique, or has special value to the pl.
      Appeals to Higher Courts
• Appeals are generally based on errors of law by the
  trial court judge
   – Legal errors could take place based on
       • Motions, the granting or non-granting of motions
       • Jury instructions
       • Admission or non-admission of evidence
• Appellate courts can
   – affirm the verdict of the trial court
   – reverse the trial court
   – reverse the trial court and remand the case for a new trial
                                       Judgments
• When a case has been decided, the doctrine of res
  judicata applies to prevent retrials of the same case
  in another state
   – State courts accord decisions made by the courts in other
     states comity
• In most cases when the def. loses, he or she writes
  out a check to the pl
   – Sometimes the pl. has to obtain a writ of execution to
     enforce the judgment
       • Wages can be garnished or bank accounts seized
       • Liens can be placed on real property

				
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