Tag Archives: summary judgment

So, you want to start a business ? Tips for Avoiding a Debacle

     Now that the economy is up and running again, it is time to talk about business.  This is the time for business people start to talk about starting new businesses and investing.  There are many options for creating entities which will provide protection to investors in connection with  new businesses. An entity that is often used by investors is something called the de facto partnership. This  occurs when two or more people get together to start a business but never really decide whether to form a legal entity. In fact,  what often happens is that the business formed by two or more people rolls merrily along until something goes wrong. That is when the lawyers are called and a request is made to figure out, after the fact,  what the parties intended and how the assets and liabilities of the business should be apportioned.

     Perhaps we can all agree that this is less than an ideal circumstance. Competent business people should decide in advance, together with their counsel and tax consultants, the best entity to form in order to provide the maximum legal and tax protection. The Florida Legislature, however,  has recognized that many people simply do not have this level of foresight. Instead, what often happens is that a business is begun with only a trade name or a DBA (“doing business as” name). In cases in which the partners decide to go their separate ways, there is often a disagreement among the partners as to how to divide assets and/or profits and  it often becomes the job of counsel, with the assistance of the Court, to figure out who gets what.

     In Florida,  a business that is carried on by individuals as co-owners for profit is generally considered to be a partnership. Things get sticky when it comes time to figure out what percentage of ownership interest each party has. After all, not all things in life are equal. For example, many businesses are started with the capital of one partner and the “sweat equity” of the other. How profits are split in this business can be difficult to determine, particularly at the outset.  If the business has a track record, Courts may look to how the parties have treated one another historically. If there is no track record, it becomes more of a “he said, she said” contest. Under these circumstances, Courts will listen to the oral testimony of the parties. That means summary judgment likely will not be granted before trial.

     Using litigation as a vehicle to determine the rights and liabilities of the parties under these circumstances can be time-consuming and expensive. Accountants may  have to be called to testify regarding the finances of the business.  A value will have to be placed upon the value of the business and the contributions of the sweat equity partner. This too will require expert testimony. The bad thing about expert testimony is that it costs money. Imagine that you will have to pay counsel to litigate the case and then pay another person – the expert – to review the facts and testify. What was an expensive proposition to begin with becomes even more expensive.

     So what is the solution?  Competent business people should give careful consideration to forming a corporation, limited liability company or a partnership with a written partnership agreement prepared in advance. This type of planning and forethought will often prevent problems later on. After all, if their was a clearly drafted written agreement defining the rights and liabilities of the parties what is there to argue about?

     Unfortunately, there are some people who simply do not agree with this philosophy and would prefer to simply wing it (you know who you are).The person who prepares a written agreement in advance is the same person who changes the oil in their car on a regular basis. The person who ignores this is the same person who never changes the oil in their car, allows the engine to seize up and causes their car to suffer major repairs.

     What type of business person are you ?

 

 

 

 

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Summary Judgment

     Sometimes lay people and even practicing lawyers do not seem to understand what a Summary Judgment is and how to get one.   In some Courts, obtaining a Summary Judgment is difficult, if not impossible.   Other Courts love Summary Judgment and use it as a mechanism to reduce case load.   This article will provide some tips about how to get Summary Judgment and how to avoid having such a motion granted against your client.

1.            Where Summary Judgment Works and Where it Does Not.

     There are certain cases which do not lend themselves to Summary Judgment.   Examples of such cases include the typical negligence case, medical malpractice and cases involving the interpretation of a contract where there is an ambiguity which is required to be explained by oral testimony.   Judges are reluctant to grant Summary Judgment in these types of cases because of the likelihood of reversal.   Remember that State and Federal trial Judges have someone looking over their shoulders at all times – – the District Courts of Appeal or the Eleventh Circuit.   Accordingly, most Judges carefully scrutinize whether the case at issue is really a Summary Judgment case.

     Cases in which you are more likely to receive a Summary Judgment include uncontested foreclosure cases, cases involving the interpretation of a contract which is unambiguous, garden variety business disputes and collection matters.   Summary Judgment in these types of cases are more often granted because the Court perceives that the Defendant really has no defense and would not have anything substantive to testify to at trial which would alter the outcome of the Court’s Summary Judgment decision. 

      Summary Judgment can be granted in these types of cases if a Plaintiff can show that there is no genuine issue of material fact.   Summary Judgment should also be granted in a case in which the Plaintiff has not been able to articulate an issue showing that he or she is entitled to relief.   In other words, Summary Judgments can be granted in a case in which, after discovery, a Defendant can demonstrate that a Plaintiff cannot prove a state of facts upon which the case can be won.  

2.         Partial Summary Judgment.

     Partial Summary Judgment is a terrific way to narrow the issues before trial.   Defense lawyers love to plead affirmative defenses.  Some defendants will plead as many as twenty affirmative defenses.   Plaintiff’s counsel would be well advised to make an effort to “summary out” some of these affirmative defenses in order to narrow the issues before trial.   If you are successful at this, you will be able to streamline your case, eliminate the testimony of otherwise irrelevant witnesses and save your client money.   Thus, even if you have a case which cannot be won on Summary Judgment it would be wise to use the Summary Judgment mechanism to narrow the issues and focus the trial.

3.         Requirements for Summary Judgment.

     There are a few basic requirements that must be met before a Court will grant Summary Judgment.   You must be able to submit factual testimony in admissible form.   This means that you are required to either submit a client affidavit, a sworn statement or deposition transcript excerpts to support your motion.  If you do not provide this type of information, your adversary will be able to legitimately claim that your motion is based on “hearsay.”   Thus, the party moving for Summary Judgment must carefully document all of the facts which support the motion.  Remember that lawyers cannot testify and what the lawyer says during the Summary Judgment argument is not evidence.

4.         Keep it Simple.

     One rule of thumb when it comes to Summary Judgment is the thicker the motion the more likely it is to be denied.   In order to grant Summary Judgment, the typical trial court judge wants to be able to quickly understand the facts and see that those facts are supported by relevant documents, affidavits or testimony.   If the package you submit to the Court, before the Summary Judgment hearing, is three feet thick, there is a greater likelihood that your motion will be denied.   Imagine that you are a Judge with 5,000 cases and a lawyer submits to you 2,000 pages of reading material in connection with a Summary Judgment Motion.   It would certainly be easier for the Court to simply deny the motion rather than read  all that material.  

    And what is the effect of a denial of Summary Judgment?   The impact will be that you will have to either settle the case or go to trial. In most circumstances there is no interlocutory   appeal and, accordingly, the trial court’s decision will likely not be reviewed at least for a substantial period of time.   Most lawyers and their clients, after losing Summary Judgment, will likely settle and the Court is aware of this.  Thus, even if your motion is well taken, after submitting a mountain of paper it is likely that the trial court’s decision to deny the Summary Judgment Motion will not be subject to immediate review.  

5.         Watch the Deadlines.

     In state court practice, the Florida Rules of Civil Procedure have set out a series of deadlines for Summary Judgment practice.   Generally, you are required to give the non-moving party at least 25 days notice prior to a hearing on your Motion for Summary Judgment.  Fla. R. Civ. P. 1.510.  Conversely, the party opposing the Motion for Summary Judgment must file written opposition no later than 5 days prior to the hearing on the motion (if the response is served by mail) and 2 days prior to the hearing on the motion if the response is served by hand-delivery or fax.   The lesson here is simple – – you should have a clear understanding of when the hearing on Summary Judgment has been scheduled, regardless of whether you are a moving party or non-moving party, since there are important deadlines which apply to you.   If you miss the deadline by having your motion heard prematurely, or by filing your opposition late, you run the risk of losing the motion.  

     Federal Court deadlines are different and follow the Local Rules which require a briefing scheduling in connection with the filing of the motion, opposition and, ultimately, a reply.   U.S.D.C. S.D. Fla. Local Rule 7.1 The Federal Court briefing schedule is, generally, a better and more efficient system which some State Court judges have adopted.   Do not be afraid to make this suggestion to a State Court judge after you have filed your Motion for Summary Judgment and file a Motion for a Briefing Schedule.   Often the Court will comply with your request, particularly if it is agreed to by opposing counsel.

6.         Opposing a Motion for Summary Judgment.

     In State Court, it is a relatively simple process to oppose a Motion for Summary Judgment.   Usually, all it requires is the filing of an affidavit or some relevant deposition testimony.   However, counsel would be well advised to file a memorandum of law in opposition.   One time worn tactic for opposing Summary Judgment is actually the reverse of the advice given in this column for filing a Motion for Summary Judgment – – make it as long as possible.   Thus, counsel opposing a Motion for Summary Judgment may easily choose to paper the court file with a mountain of papers in opposition.   Sometimes the Court sees through this but some Judges make it clear that if the case is too complicated, or intricate, Summary Judgment will not be granted.

     Our state court judges sometimes appear reluctant to grant Summary Judgment and will do so in only the clearest of cases.   The Federal Courts, however, with their burgeoning dockets and the outside pressure to reduce caseload, appear more willing to summary out non-meritorious claims.     While lawyers who are passionate about their work look for opportunities to try cases, the plain fact is that it is likely that there are too many trials clogging the court system.   If counsel were more diligent about Summary Judgment, many trials could be shortened or eliminated altogether.  Summary Judgment is a vehicle which should be carefully analyzed in each case since most clients would prefer to have their cases adjudicated summarily rather than fund a full scale trial.

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Summary Judgment

Sometimes lay people and even practicing lawyers do not seem to understand what a Summary Judgment is and how to get one.   In some Courts, obtaining a Summary Judgment is difficult, if not impossible.   Other Courts love Summary Judgment and use it as a mechanism to reduce case load.   This article will provide some tips about how to get Summary Judgment and how to avoid having such a motion granted against your client.

1.            Where Summary Judgment Works and Where it Does Not.

There are certain cases which do not lend themselves to Summary Judgment.   Examples of such cases include the typical negligence case, medical malpractice and cases involving the interpretation of a contract where there is an ambiguity which is required to be explained by oral testimony.   Judges are reluctant to grant Summary Judgment in these types of cases because of the likelihood of reversal.   Remember that State and Federal trial Judges have someone looking over their shoulders at all times – – the District Courts of Appeal or the Eleventh Circuit.   Accordingly, most Judges carefully scrutinize whether the case at issue is really a Summary Judgment case.

Cases in which you are more likely to receive a Summary Judgment include uncontested foreclosure cases, cases involving the interpretation of a contract which is unambiguous, garden variety business disputes and collection matters.   Summary Judgment in these types of cases are more often granted because the Court perceives that the Defendant really has no defense and would not have anything substantive to testify to at trial which would alter the outcome of the Court’s Summary Judgment decision. 

 Summary Judgment can be granted in these types of cases if a Plaintiff can show that there is no genuine issue of material fact.   Summary Judgment should also be granted in a case in which the Plaintiff has not been able to articulate an issue showing that he or she is entitled to relief.   In other words, Summary Judgments can be granted in a case in which, after discovery, a Defendant can demonstrate that a Plaintiff cannot prove a state of facts upon which the case can be won.  

2.         Partial Summary Judgment.

Partial Summary Judgment is a terrific way to narrow the issues before trial.   Defense lawyers love to plead affirmative defenses.  Some defendants will plead as many as twenty affirmative defenses.   Plaintiff’s counsel would be well advised to make an effort to “summary out” some of these affirmative defenses in order to narrow the issues before trial.   If you are successful at this, you will be able to streamline your case, eliminate the testimony of otherwise irrelevant witnesses and save your client money.   Thus, even if you have a case which cannot be won on Summary Judgment it would be wise to use the Summary Judgment mechanism to narrow the issues and focus the trial.

3.         Requirements for Summary Judgment.

There are a few basic requirements that must be met before a Court will grant Summary Judgment.   You must be able to submit factual testimony in admissible form.   This means that you are required to either submit a client affidavit, a sworn statement or deposition transcript excerpts to support your motion.  If you do not provide this type of information, your adversary will be able to legitimately claim that your motion is based on “hearsay.”   Thus, the party moving for Summary Judgment must carefully document all of the facts which support the motion.  Remember that lawyers cannot testify and what the lawyer says during the Summary Judgment argument is not evidence.

  

4.         Keep it Simple.

One rule of thumb when it comes to Summary Judgment is the thicker the motion the more likely it is to be denied.   In order to grant Summary Judgment, the typical trial court judge wants to be able to quickly understand the facts and see that those facts are supported by relevant documents, affidavits or testimony.   If the package you submit to the Court, before the Summary Judgment hearing, is three feet thick, there is a greater likelihood that your motion will be denied.   Imagine that you are a Judge with 5,000 cases and a lawyer submits to you 2,000 pages of reading material in connection with a Summary Judgment Motion.   It would certainly be easier for the Court to simply deny the motion rather than read  all that material.  

And what is the effect of a denial of Summary Judgment?   The impact will be that you will have to either settle the case or go to trial. In most circumstances there is no interlocutory   appeal and, accordingly, the trial court’s decision will likely not be reviewed at least for a substantial period of time.   Most lawyers and their clients, after losing Summary Judgment, will likely settle and the Court is aware of this.  Thus, even if your motion is well taken, after submitting a mountain of paper it is likely that the trial court’s decision to deny the Summary Judgment Motion will not be subject to immediate review.  

5.         Watch the Deadlines.

In state court practice, the Florida Rules of Civil Procedure have set out a series of deadlines for Summary Judgment practice.   Generally, you are required to give the non-moving party at least 25 days notice prior to a hearing on your Motion for Summary Judgment.  Fla. R. Civ. P. 1.510.  Conversely, the party opposing the Motion for Summary Judgment must file written opposition no later than 5 days prior to the hearing on the motion (if the response is served by mail) and 2 days prior to the hearing on the motion if the response is served by hand-delivery or fax.   The lesson here is simple – – you should have a clear understanding of when the hearing on Summary Judgment has been scheduled, regardless of whether you are a moving party or non-moving party, since there are important deadlines which apply to you.   If you miss the deadline by having your motion heard prematurely, or by filing your opposition late, you run the risk of losing the motion.  

Federal Court deadlines are different and follow the Local Rules which require a briefing scheduling in connection with the filing of the motion, opposition and, ultimately, a reply.   U.S.D.C. S.D. Fla. Local Rule 7.1 The Federal Court briefing schedule is, generally, a better and more efficient system which some State Court judges have adopted.   Do not be afraid to make this suggestion to a State Court judge after you have filed your Motion for Summary Judgment and file a Motion for a Briefing Schedule.   Often the Court will comply with your request, particularly if it is agreed to by opposing counsel.

6.         Opposing a Motion for Summary Judgment.

In State Court, it is a relatively simple process to oppose a Motion for Summary Judgment.   Usually, all it requires is the filing of an affidavit or some relevant deposition testimony.   However, counsel would be well advised to file a memorandum of law in opposition.   One time worn tactic for opposing Summary Judgment is actually the reverse of the advice given in this column for filing a Motion for Summary Judgment – – make it as long as possible.   Thus, counsel opposing a Motion for Summary Judgment may easily choose to paper the court file with a mountain of papers in opposition.   Sometimes the Court sees through this but some Judges make it clear that if the case is too complicated, or intricate, Summary Judgment will not be granted.

Our state court judges sometimes appear reluctant to grant Summary Judgment and will do so in only the clearest of cases.   The Federal Courts, however, with their burgeoning dockets and the outside pressure to reduce caseload, appear more willing to summary out non-meritorious claims.     While lawyers who are passionate about their work look for opportunities to try cases, the plain fact is that it is likely that there are too many trials clogging the court system.   If counsel were more diligent about Summary Judgment, many trials could be shortened or eliminated altogether.  Summary Judgment is a vehicle which should be carefully analyzed in each case since most clients would prefer to have their cases adjudicated summarily rather than fund a full scale trial.

 

 

 

 

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