Tag Archives: contracts

TEN REASONS TO SEND THAT CONTRACT ON YOUR DESK TO A LAWYER

  1. THE PERSON WHO DRAFTED THE CONTRACT IS COUNTING ON THE FACT THAT YOU WILL NOT SEND THE CONTRACT TO A LAWYER
  2.  THE CONTRACT IS LIKELY TO HAVE LANGUAGE THAT A LAY PERSON MAY NOT UNDERSTAND.
  3.  THE CONTRACT IS LIKELY TO HAVE BEEN DRAFTED BASED UPON PRIOR LITIGATED CASES WHICH A LAY PERSON COULD NOT POSSIBLY KNOW ABOUT IT.
  4.  THERE ARE PROBABLY AMBIGUITIES IN THE CONTRACT WHICH COULD HURT YOU LATER.
  5.  BECAUSE YOU ARE PROBABLY NOT THINKING ABOUT WHERE YOU COULD BE SUED IN THE EVENT THAT THINGS GO WRONG.
  6.  YOU MAY NOT HAVE CONSIDERED HOW TO END THE CONTRACT
  7.  YOU MAY NOT KNOW WHO IS SUPPOSED TO SIGN THE CONTRACT FROM THE OTHER SIDE.
  8. YOU NEED ADVICE ABOUT WHETHER HAVING AN ARBITRATION CLAUSE IS A GOOD IDEA.
  9.  YOU SHOULD UNDERSTAND WHAT A PREVAILING PARTY ATTORNEYS’ FEE PROVISION DOES.
  10.  YOU DON’T KNOW WHAT YOU DON’T KNOW.

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How to Settle a Commercial Case (And How Not To)

Settlements can be achieved at the strangest times. There are settlements which can be made over the telephone, in the office, on the courthouse steps, or while you are driving in your car. Seldom does a settlement occur at the optimum time. The key to achieving an enforceable settlement, whenever and wherever it may occur, is understanding how to properly document it.

1. When to Make a Settlement Offer and Demand (and when not to).

There is an art form to settling cases. Part of the art consists of, as poker players say, “when to hold em and when to fold em.” This takes experience and generally cannot be described in detail in the context of this article. However, there are several general rules which bear mention.

The worst time to discuss settlement is generally after a ruling on the Summary Judgment Motion. If you have won the motion, chances are that your opponent is likely not in the proper frame of mind to discuss settlement. If you lost the Motion, it is likely that you or your client will not be in the proper frame of mind. Try discussing settlement after the motion has been fully briefed but before argument and before it has been ruled upon. At this time, there is often uncertainty in the air. Uncertainty is one factor which often convinces litigants to resolve disputes. After all, a settlement will remove the uncertainty and take the decision out of the hands of the Court or the Jury which is often desirable.

I like to discuss settlement after an important deposition has gone well for my client’s case. Most lawyers know, instinctively, whether the deposition has helped their case or hurt their case. During depositions, the parties are often all together in the same room. This is often a good time to discuss a potential resolution of the case. However, as mentioned, settlements can be discussed in a variety of contexts and there is no hard and fast rule as to when to make a settlement offer or demand.
2. How to Make a Settlement Offer.
Written settlement offers are often helpful. However, there should always be a legend at the top of the letter which indicates “Privileged and Confidential Settlement Communication.” Similarly, I like to include the phrase in the body of the letter which says: “this settlement shall not be enforceable unless a written agreement is signed by all parties.” This statement will likely eliminate the possibility that opposing counsel may argue that there was a “meeting of the minds” as to “all material terms” and, therefore, the settlement, which has yet to be signed, is enforceable. The settlement cannot be enforceable if there is a caption on your letter or email which indicates that no such enforcement can take place until a settlement agreement is signed by everyone.
3. Are Client Signatures Required ?

There are several misconceptions about settlements under Florida law. The first is that all of the relevant parties must sign settlement documents. While this may be a requirement for an enforceable mediation settlement, client signatures are not necessarily required in order to enforce a settlement achieved outside of mediation. See Fla. R. Civ. P. 1.730; Gordon v. Royal Caribbean Cruises Ltd., 641 So.2d 515, 517 (Fla. 3d DCA 1994) (holding that a settlement agreement reached in mediation must be in writing and executed by both parties in order to be binding); see also Smiley v. Greyhound Lines, Inc., 704 So.2d 204, 204-06 (Fla. 5th DCA 1998) (enforcing a settlement agreement despite one party’s refusal to sign the release); State Farm Mut. Auto. Ins. Co., 781 So.2d 500, 502 (Fla. 3d DCA 2001) (noting that when all parties have agreed to the essential terms of a settlement, it will be enforced). Since email can be the preferred mode of communication in the modern world, many settlements can actually be achieved by email and may be enforced by a Court. See Miles v. Northwestern Mutual Life Ins. Co., 677 F.Supp.2d 1312, 1315 (M.D. Fla. 2009) (concluding that an email constituted a binding and enforceable settlement agreement). The key is not necessarily the mode of communication but, rather, the ability to demonstrate that there has been a meeting of the minds as to all of the material terms.

4. The Material Terms of the Settlement

So, what are the material terms? Monetary settlements in collection cases tend to be straightforward and easier to document. For example, if your client is suing for the repayment of money the settlement can be easily documented by making a determination as to how much is to be paid, when, and what happens if the payments are not made. Complicated settlements arise when the parties are required to do things such as return products, calculate amounts owed based upon future events and exchange releases. The more extensive the settlement terms, the more likely the Court is to find that the settlement has to be in writing and signed by the parties.

However, the courts have held that a settlement does not necessarily need to be signed by the parties to be enforceable. Settlements can be enforced based upon an email exchange between the lawyers if the Court finds that all of the “material terms” have been included as part of the email exchange. See Warrior Creek Dev., Inc. v. Cummings, 56 So.3d 915, 917 (Fla. 2d DCA 2011) (finding that an email contained the essential and material terms of the settlement and thus enforcing the settlement agreement); Blunt v. Tripp Scott, P.A., 962 So.2d 987, 989 (Fla. 4th DCA 2007) (the party seeking to enforce a settlement agreement must show that the opposing party agreed to all of the material terms).

Generally, the mere fact that the parties have not agreed to the scope of a release is not enough to prevent enforcement of the settlement. See BP Products N. Am., Inc. v. Oakridge at Winegard, Inc., 469 F. Supp. 2d 1128, 1133 (M.D. Fla. 2007) (holding that uncertainty as to nonessential terms in a settlement agreement will not preclude its enforcement); Sands v. Wagner & Hunt, P.A., No. 09-60557-CIV, 2009 WL 2730469, at *4 (S.D. Fla. 2009) (noting that the “scope of the release” is not an essential settlement term). Conversely, lack of client approval can often be a valid reason for a Court to decline enforcement. See Sharick v. Southeastern Univ. of Health Sciences, Inc., 891 So.2d 562, 565 (Fla. 3d DCA 2004) (a party seeking to compel enforcement of a settlement must prove that the attorney has the “clear and unequivocal” authority to settle on the client’s behalf); see also Baratta v. Homeland Housewares, LLC, No. 05-60187-CIV, 2007 WL 2668585, at *2 (S.D. Fla. 2007).
5.  How to Conclude a Settlement

If you want to conclude an enforceable settlement, treat it as an urgent matter. This is because the longer each side has to negotiate the terms of the settlement, the longer they will negotiate. Trading one draft of the settlement agreement per day is a very inefficient way to conclude the deal. I like to have meetings with opposing counsel in which it is agreed, in advance, that no one will leave until the principals have all signed the settlement agreement or reached an impasse. In this manner, you will be able to see whether the parties are serious about settlement or are simply blowing smoke.

One way to document a settlement is to put it on the record in Court or at deposition. Many settlements are achieved at deposition, during a hearing or even at trial. If there is a court reporter present, it is usually a good idea to announce a settlement on the record and explain the terms in as much detail as possible. If clients are present, have them affirm the terms of the settlement by indicating their agreement on the record. In this manner, the client will not be able to change their minds and the settlement will later be immune from challenge.
In real life, even the best meaning people sometimes get cold feet and change their minds. The best way to prevent this is through signatures of all parties or an announcement on the record.

Litigation concerning the enforcement of the settlement can be time-consuming and expensive. Be forewarned, however, the courts will enforce settlements even when a client signature is not present and even when the scope of releases to be exchanged is in doubt. The key to the enforcement of settlements is the same as the law that governs the enforceability contracts – whether the parties had a meeting of the minds as to all of the material terms of the deal.

 

The Author gratefully acknowledges the assistance of Jacob Epstein in the preparation of this Post.

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ATTENTION BUSINESS OWNERS – WHY YOU DO NOT WANT A JURY TRIAL

     The first thing that I do when a business owner presents me with a contract in a litigation matter is to look for that all important jury trial waiver provision.   When I see it, and it is most often at the very end of the contract, I breath a deep sigh of relief.   The Courts will enforce jury trial waivers which most business owners will happily invoke.   There are a myriad of reasons to avoid a jury trial if you are a business owner.   Here are just some of them.  

1.            Juries Can be Unpredictable.

     The reasons that juries are unpredictable is because people are unpredictable.   With a jury trial, you are asking to place your business life into the hands of complete strangers whom you have never met and whom you are only able to interview for a very short period of time prior to “selecting” these people to decide the  fate of your company.   There is no way to predict, with complete certainty, what a group of six people, who have never met one another, and who come from divergent backgrounds, will do after the presentation of evidence in you case.   Thus, it is normally a risk to place your case into the hands of a jury.

 2.            Jury Selection is an Obscure Science.

     If you are a litigator, you are often confronted with advertisements from “jury consultants” who claimed to have cracked the psychological code behind the selection of juries.   Their profession is not complete quackery.   Sometimes, jury consultants can be quite helpful.   They analyze the type of case you have, the background of potential jurors, and make efforts to predict how the jurors will react to the evidence.   Nonetheless, no one, not even a jury consultant, is able to predict the future.   Thus, you, as a business owner, would be misguided to believe that a jury consultant will be able to win the case for you.   Predicting human nature is a tricky business.

3.            Jurors Tend to Favor Plaintiffs.

       There is likely no way to prove that jurors favor Plaintiffs.   However, commonsense should tell you that someone who sits on a jury is there because they believe they are serving the public interest and would like to do the right thing.   Most often the right thing is to give something to someone who has nothing which in your case is most likely the Plaintiff.   Jurors have an innate sense of righting a wrong. Most often the wrong that has been committed has been committed by the Defendant not the Plaintiff.   Therefore, it is at least arguably true that a natural instinct for jurors is to make a Plaintiff’s award.   When a consumer sues a business, and there is no jury trial waiver in the contract, this can be a recipe for a problem.  

 

 4.            Business Lawyers Need to Be Extra Careful What They Say in Front of the Jury.

     The appellate courts routinely decide and reverse cases in which trial court lawyers say the wrong thing to jurors or show those jurors the wrong types of evidence which may inappropriately influence them.   It is almost as if the appellate courts presume that jurors are not as smart as judges and could be easily swayed by passion, prejudice or other inflammatory statements.  Therefore, when it comes to the introduction of evidence, the likelihood of reversal is higher with a jury because tricky appellate lawyers may successfully argue that the jury was “tainted” or inappropriately swayed by inadmissible evidence, passion or prejudice.   With a  bench trial, these arguments do not have the same force and they are often rejected on appeal.   Because of the higher chance for reversal, that is another reason to avoid jury trials.

5.            The Jury Might Get Stuck.

         If you have seen the movie “Twelve Angry Men”, with Henry Fonda, you will realize that not all juries agree on everything.   Sometimes, like in the movies, a disagreement will resolve itself and a unanimous verdict will be reached.   But what if this cannot be done?   What if the jury is  “hung”?   Guess what?   This means that you will likely have a “mistrial”.   And what happens with a mistrial?   That means a new trial.   And that means more money, more time and more aggravation.   This is yet another reason to avoid a jury because of the possibility that the jury may not be able to decide the case because they cannot agree.

6.            What happens if the Judge doesn’t Like the Verdict.

         Throughout a jury trial, the Judge’s responsibility is mostly to rule upon evidence, charge the jury with the law and keep everyone in line.   Most of the time, the Judge sits during a jury trial absorbing the evidence and trying the case as if he or she were there without a jury.   And that is exactly what they are most often thinking.   Because if the jury doesn’t get it right, the Judge has the right to throw the whole thing out.

         Imagine that you have just concluded a seven day jury trial and then the Judge decides that he or she does not like the verdict and enters a Judgment “notwithstanding the verdict.”   How annoying is that!   Accordingly, in order to avoid this unfortunate occurrence, it seems better to simply try the case directly to the Judge in the first place.                       

  In sum, business owners should avoid jury trials by including in their contracts “jury trial waivers” which will save time, reduce cost and, ultimately, reduce anxiety. 

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