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CHAPTER 3
TRIALS AND RESOLVING DISPUTES
BASIC TRIAL PROCEDURES—A dispute resolved through the court system may proceed
through these basic stages: pleadings, discovery, pretrial, trial, appellate, and enforcement. It is
an adversary system with a relatively neutral judge compared to many nations.
Pleadings Stage—To begin a suit, plaintiff serves defendant with the first of the pleadings, the
complaint. The complaint must establish jurisdiction, a statement of the facts, and statement of
the remedy being sought. Wynn case illustrates the basic points raised in a complaint.
Responses to the Complaint—The defendant must file a responsive pleading, which includes
the following likely alternatives: motion to dismiss, answer, and counterclaim.
Motion to Dismiss—Asserts that the court does not have jurisdiction or some other procedural
defect in the plaintiff’s action. A motion to dismiss for failure to state a cause of action (a
demurrer) states that even if the plaintiff's claims are true, the law provides no remedy for the
complaint.
Add. Case: Lama Holding v. Smith Barney (Ct. App., NY, 1996)--Lama owned 25% of Smith
Barney which merged with Primerica. Lama agreed to the merger and sold all its stock to
Primerica. Later, Lama learned that a change in federal tax law the year before increased its tax
bill by $33 million compared to what it would have been under prior tax rules. Lama sued Smith
Barney and Primerica, claiming they had a duty to inform it of the tax consequences. The trial
court dismissed the complaint with prejudice; Lama appealed.
Decision: Affirmed. “Accepting … plaintiffs’ factual allegations as true, there is no actionable
fraud or misrepresentation. Plaintiffs’ tax liability was not caused by an act or omission by
defendants, but rather by [a change in federal tax law] six months prior to the [merger]....
Plaintiffs ... fail to allege how defendants could possibly have known of Lama’s ignorance of the
change in the tax law....”
Add. Case: Sander v. Dow Chemical (Sup.Ct., Ill., 1995)--Sander sued 26 chemical companies
for alleged injuries caused by exposure to the companies’ products. After two years of filing
defective motions, failing to meet court deadlines, failing to properly notify all companies of the
claims, and missing court appointments, the trial court granted the defendants’ motion to dismiss
plaintiffs’ case with prejudice. The appellate court held that it was not within the trial court's
power to dismiss plaintiffs’ cause of action. Dow and other defendants appealed.
Decision: Reversed. “Plaintiffs restated stricken allegations in their amended complaint,
presented the complaint after the court-ordered deadlines, and ignored the court’s order
directing plaintiffs to respond to Monsanto Corporation’s motion for a protective order.” The
Answer—Must be filed by defendant if the suit is not dismissed; it responds to the plaintiff; it
may admit the complaint, in which case the plaintiff wins, or the answer may deny the claims.
Counterclaim—Defendant may refute plaintiff’s charges and assert his own claim against
Reply—While in most states the pleadings end with the defendant’s response, some state court
Add. Info: Settlement—A study in the J. of Empirical Legal Studies found that 80-92 percent of
cases settle rather than going to judgment at trial and, on average, the defendant paid less by
settlement than by risking jury verdict. Defendants tend to prefer settlement more than plaintiffs,
but plaintiffs, by rejecting settlement, tended to have a larger error rate—getting less at trial
than if settlement has been accepted.
Discovery Stage: Obtaining Information before Trial—During this stage, the parties use a
variety of procedural tools to obtain information.
Purpose of Discovery—Discovery serves to: (1) prevent surprises at the trial; (2) preserve the
testimony of witnesses who might not be available at the time the trial is brought; and (3) to
encourage settlement since each side has pretty much the same information.
Add. Case: Mobilisa v. Doe (Ct. App., Ariz., 2007)--Ludlow was CEO of Mobilisa, a wireless
company. Confidentiality is important. He sent a message to a girlfriend. Six days later,
Mobilisa’s managers received a copy of that email with a note: “Is this a company you want to
work for?” The message came from theanonymousemail.com, owned by TSB. Mobilisa sued
John Doe as defendants for violating federal laws regarding electronic communications. The
company sought to subpoena the records of TSB to obtain the identity of John Doe who sent the
anonymous email. The trial court granted Mobilisa’s request. TSB appealed.
Decision: To compel discovery of an anonymous internet speaker’s identity, the requesting party
must show the speaker has been given notice and had the opportunity to respond. Hence, TSB
Add. Case: Ingram v. Adena Health System (Ct. App., Ohio, 2002)--Ingram claimed to have
suffered from malpractice during surgery performed by Dr. Prior. In suing Prior for malpractice,
Ingram requested material concerning Prior's history of drug and alcohol abuse. Prior
contended that the information is protected against discovery under the physician-patient
privilege. Trial court held that material was relevant background information that Prior had to
produce. Prior appealed.
Decision: Affirmed. Prior must disclose the names of any drugs to which he was addicted and
the names of health care providers who treated him for drug or alcohol abuse; that information
Tools of the Discovery Process—These allow relevant information and witnesses to be gathered
before trial. Discovery, per FRCP, should not be “unduly burdensome.” Tools include:
Depositions and Interrogatories. A deposition is the sworn testimony of a witness recorded by a
court official. Written interrogatories are written questions submitted by opposing party. The
party receiving the interrogatories must prepare written answers, usually with the aid of an
attorney, and sign them under oath.
Expert Witnesses. May be used to help establish claims. The Supreme Court has been
increasingly insisting (since the Daubert case) that expert opinions be based on prevailing
scientific opinion or the testimony be stricken.
CASE: Barabin v. AstenJohnson (9th Cir., 2012)—Barabin suffered from exposure to asbestos
years ago. He worked with equipment using asbestos-containing materials provided by
AstenJohnson (AJ). AJ contested the reliability of Barabin’s expert. The trial judge did not hold a
Daubert hearing regarding qualification and left that determination to the jury, which awarded
Barabin more than $10 million. AJ appealed.
Decision: Vacated and remanded for new trial. The district judge is to be the gatekeeper under
Questions: 1. Why did the trial judge not hold a Daubert hearing?
Rather foolish mistake as the procedure on this is quite clear. One reason for appeals courts is to
2.Since Barabin’s expert may be disqualified, what can he do?
Hire a qualified expert—in this area there are many as there have been numerous
Add. Case: Cooper Tire v. Mendez (Sup. Ct., TX, 2006)—Mendez was driving when the rear tire
on his minivan came apart. Four passengers were killed; two survived. A nail had punctured the
tire. Mendez sued for product defect. Jury awarded $11 million. Cooper appealed.
Decision: Reversed. The case was based on expert testimony that must be rejected. Even if the
expert was qualified, he presented an unreliable theory contrary to established knowledge of tire
Add. Case: Kumho Tire v. Carmichael (Sup. Ct., 1999) Background: Carmichael sued Kumho
for liability due to tire failure that caused a fatal accident. The case was based on the testimony
of a tire expert who found the tire to be defective based on his inspection. District court held the
expert’s methodology to be unreliable. Plaintiffs appealed and the 11th Circuit reversed, holding
that under the Daubert rule, the expert testimony could not be excluded. Kumho appealed.
Decision: Reversed. The gatekeeping obligation of judges imposed in Daubert applies to all
expert testimony. The judge’s inquiry into the methodology used by the expert was reasonable,
Sanctions for Failing to Respond to a Discovery Request. Judges have wide powers to sanction
parties that fail to comply with discovery orders. They can even issue contempt of court citations
and order default judgments.
Add. Case: Archibeque v. Atchison, Topeka & Santa Fe RR (10th Cir., 1995)--Archibeque sued
the RR for injuries she claimed to have suffered in an unwitnessed incident. In response to the
RR’s “request for complete medical records and a complete list of health care providers that had
treated her in the past, she listed a variety of providers and a corresponding list of the medical
conditions. ... There was no reference to lower back or tailbone injuries prior to [the date of the
accident].” She “signed a sworn verification as to the truth of her answers, and signed a
statement that the medical records provided were complete.” RR discovered that before the
incident she had received medical treatment from doctors for lower back pain. The RR filed a
motion to dismiss her case based on her failure to cooperate during discovery and for perjury.
Case was dismissed; she appealed.
Decision: Affirmed. A court may dismiss an action because a party “fails to obey an order to
provide or permit discovery.” Trial courts consider the degree of prejudice to the defendant, the
Orders for the Production of Documents. Allows a party to gain access to information in the
possession of the other party, such as business records.
Add. Info: Record Retention: Companies should have formal records retention policies. Failure
to do so can lead to violations of various regulations that require certain records to be kept for a
certain time, and can lead to the exposure of more information than necessary in the event of
litigation. All records, including e-mails, should be kept according to a strict list of need to know,
so that it is clear where all copies are. This leads to lower costs when records are needed for
litigation, and makes record destruction easier and complete when the time for keeping is over.
Improper record keeping leads to inferences of avoiding production, which may be due to
sloppiness, or even default judgment. Keeping records too long, perhaps because some people
kept records who did not need to have them, can force the records into evidence when that could
have been avoided. See http://smallbusiness.findlaw.com
Add. Case: In re Weekley Homes (S.Ct., Tx, 2009)--Weekley Homes, a homebuilder, hired
Enclave, a developer, to buy 136 lots in a subdivision. With Weekley, Enclave agreed to sell 74 of
the lots to HFG. Enclave failed to perform properly and HFG sued. HFG subpoenaed documents
from third parties, including Weekley, which provided documents. HFG believed Weekley may
have made material misrepresentations about the property related to Enclave’s performance, so
Weekley was added as a defendant. HFG requested the court allow it to use forensic experts to
access Weekley’s computers to create images of the drives so it could search for relevant
documents and emails. Weekley opposed the motion, noting that the forensic experts would have
access to private conversations, trade secrets, and privileged communications stored on hard
drives. The trial court granted HFG’s motion; Weekley sought mandamus relief from the court of
appeals, which denied the petition. Weekley appealed to the Texas high court.
Decision: HFG was not entitled to access the computer hard drives in the absence of a
demonstration of the particular characteristics of the electronic storage devices involved, the
familiarity of its experts with those characteristics, and a reasonable likelihood that the
Requests for Admissions. Used to establish admission of facts about which there are no real
disputes between the parties.
Mental and Physical Examinations. May be required when the mental or physical status of a
party is at issue. These are done under strict conditions.
Discovery: Impacts on Business—It is the general consensus that a factor driving litigation costs
is discovery abuse. An executive preparing and then responding to a discovery request such as a
deposition, can be away from his/her official responsibilities for some time. While the courts
makes efforts to protect them, it is not uncommon for the company's chief executive officer to
subpoenaed to give a deposition—despite the fact that he may have limited knowledge of the
specifics of the dispute relative to other employees more directly involved.
Add. Case: Wauchop v. Domino’s Pizza (N.D. Ind., 1992)--A wrongful death, personal injury
action by the family of a woman killed in an accident involving a delivery used by a Domino’s
Pizza franchisee. Plaintiffs sued: 1) Domino’s; 2) Thomas Monaghan, president of Domino’s; 3)
the franchise owner; and, 4) the Domino’s delivery vehicle driver. Plaintiffs charged Domino’s
with negligence based largely on its 30-minute delivery guarantee as it caused delivery
personnel to drive dangerously. Twenty deaths were attributed by the media to driving practices
brought about by the guarantee. Plaintiffs filed a default motion against Monaghan because he
refused to allow them to take his deposition.
Decision: The court denied plaintiffs’ request for entry of default because of the severity of the
sanction. “As the plaintiffs recognize, default is a severe sanction, and should be employed
sparingly. The court believes that a final opportunity to comply with the notice of deposition
should be afforded before retreat to that severe sanction. Therefore, the court will not enter
Summary Judgment—If after discovery one of the parties determines that there are no
disagreements about the facts to their dispute, the party may move the court for summary
judgment. By this motion, the judge is being asked simply to apply the law to those facts and
resolve the case.
Add. Info: The criteria for granting summary judgment were summarized by the Connecticut
Appeals Court in Cummings & Lockwood v. Gray (1991):
i) such a judgment may be granted if there is no genuine issue as to any material fact;
ii) the moving party has the burden of proving the non-existence of any material fact; the
evidence must be viewed in the light most favorable to the non-movant; and the test is whether
the moving party would be entitled to a directed verdict on the same facts;
iii) a material fact is one that will make a difference in the outcome of the case; and
iv) once the movant presents evidence supporting a motion, the non-moving party must show a
genuine issue of material fact by submitting evidence disclosing the existence of the issue.
Pretrial Conference—The pretrial conference is intended to be a forum for planning the course
of the trial. In some court systems, judges use the pretrial conference as a forum to encourage
settlement. Judges have strong powers to pressure parties to settle.
Add. Case: G. Heileman Brewing v. Joseph Oat Corp. (7th Cir., 1989)--Before trial, a
magistrate ordered Oat to send a “corporate representative with authority to settle” to a pretrial
conference. Counsel for Oat appeared, but no corporate representative. The district court held
that the failure of Oat to send a principal violated its order. The court imposed a sanction of
$5,860 upon Oat pursuant to the Federal Rules that represented the costs and attorneys’ fees
incurred by Heileman in attending the pretrial conference. Oat appealed, claiming that the court
did not have authority to order litigants represented by counsel to appear at a pretrial settlement
conference.
Decision: Affirmed. Pretrial conferences discuss ways to cut the need for litigation and to
narrow issues for trial if it occurs. Conferences are an integral part of the judicial process and
Add. Case: E.I. DuPont Co. v. Florida Evergreen Foliage (Sup. Ct., Del., 1999--A Florida
plant nursery sued DuPont, alleging that a DuPont fungicide was defective and damaged the
nursery’s plants. The parties signed a settlement. DuPont paid $2.3 million in exchange for the
nursery executing a release. Later, the nursery sued DuPont for fraud in the settlement, claiming
that it withheld information about the fungicide that it had a duty to reveal at the time of the suit,
which may have resulted in higher damages. Since Delaware law governed the suit, the federal
court in Florida asked the Delaware S.Ct. if the settlement, which stated that it ended all legal
claims, precluded the suit for fraudulent inducement.
Decision: “A party alleging fraud in the settlement of a tort claim may elect rescission and
restoration to the status quo ante or, alternatively, may bring an action for the recovery of
special, or expectancy, damages with retention of the settlement proceeds.” The nursery may
return the money from the settlement and start the litigation over or keep that money and begin
International Perspective: British Courtroom Procedure
While from the same origins, British courts are different. Solicitors handle much legal work;
barristers largely do litigation. They may work as a team. U.S. attorneys specialize, but in
England, it is a more formal separation based on specialty. British barristers are expected to be
low-key in the courtroom; none of the bombastic engaged in by some U.S. litigators. Barristers
object less to what the adversary is saying than is likely in the U.S. After evidence is provided, a
British judge summarizes the evidence for the jury before instructing it on the law, something not
done in the U.S.
Trial Stage—If the dispute is not settled by dismissal, summary judgment, or settlement, it will
be set for trial. Non-criminal cases are often backed up for years due to criminal litigation.
The Jury—The 6th and 7th Amendments (and state constitutions) provide for the right to a jury
trial in criminal and common law cases. In federal court, the amount in controversy in common
law cases need be only $20. There is no right to a jury trial in cases seeking only an equitable
remedy rather than monetary damages. There is no right to a jury in civil cases involving
statutory enforcement.
Add. Case: Comm. of Enviro. Protect. v. Conn. Building Wrecking (S.Ct., CT 1993)--The CT
Enviro. Comm. sued Wrecking, a disposal company, seeking injunctive relief and civil penalties
for violations of state environmental laws. The trial court found for the state, enjoining
defendant from depositing waste on a site, ordered the removal of existing waste from it, and
imposed civil penalties of $900,000. The company appealed arguing that it had not been granted
its right to a jury trial.
Decision: Affirmed. The Constitution does not require a jury trial in such enforcement actions.
The Connecticut constitution guarantees a jury trial in all cases for which “there was a right to
a trial by jury at the time of the adoption of that provision,” which was 1818. Wrecking claimed
that enforcement actions existed at common law in 1818, in debt cases, and could be tried to a
jury. It cited Tull v. U.S. (1987) in which the U.S. S.Ct. held that the 7th Amendment guarantees a
Decision to Use a Jury. The parties consider several factors in deciding whether to use a jury
including (1) the judge’s perceived temperament, (2) the complexity of the evidence, (3) and the
degree emotion could play apart in the decision.
Selection of the Jury. The clerk of court sends notice to citizens to appear for jury duty. How
much control parties have over selecting from a jury pool varies quite a bit from state to state and
among judges. Jury consultants may be used in complex cases. Juries are selected from a pool by
voir dire. Persons may be disqualified by challenges by the parties under court rules.
Add. Case: Parodi v. Washoe Medical (S.Ct., Nev., 1995)--When Swisher was in Washoe for
medical problems she fell out of her bed and died. Her estate sued for negligence. During voir
dire the judge “injected ... unwarranted levity into the proceedings.” He told one juror that she
was “eligible for this fun” and told a joke “about the solemn oath to which jurors are sworn.”
Jury returned a verdict for Washoe. Plaintiff appealed.
Decision: Reversed; new trial ordered before another judge. Too much humor is judicial
misconduct. “A trial judge is charged with providing order and decorum in trial proceedings.
What may be innocuous conduct in some circumstances may constitute prejudicial conduct in a
Add. Info: Some scholars advocate professional juries. They cite two problems: 1) cases are
becoming increasingly complex; some are too difficult for juries to understand; 2) for parties to
explain complex issues, trials are becoming longer and longer. They contend that juries made up
of experts could resolve many of these problems.
The Trial— Judges may run trials differently if no jury is being used, such as eliminate opening
statements and closing arguments. In a jury trial the following steps are typical:
Opening Statements. The trial begins with the opening statements in which both attorneys
present their positions with the plaintiff going first.
Presentation of Direct Testimony. Plaintiff’s attorney calls witnesses to give testimony.
Plaintiff’s witnesses are questioned by plaintiff’s attorney on direct examination. Defendant’s
attorney questions the witnesses in cross-examination, which may be followed by re-direct and
even re-cross examination. After presenting its evidence, the plaintiff rests. The defendant then
presents its evidence (or it may ask for a directed motion).
Closing Arguments. Both sides summarize the evidence for the jury before it deliberates.
Plaintiff goes before and after the defendant in most courts. There are time limits on the
arguments.
Instructions to the Jury. The judge instructs the jury on the applicable law, summarizes the facts
and issues, and states which parties must meet the burden of persuasion. The jury is under
supervision of the bailiff.
Reaching a Verdict. In civil trials, jury find for the party that showed a preponderance of the
evidence. If no decision is reached, the jury is hung and a mistrial may be declared. Judges do
not like such results. Not all states require unanimous jury verdicts. Juries may deliberate
damages after they deliberate the initial verdict.
Motions for a Verdict—Parties may request a favorable verdict at various times during trial.
Defendant may ask for a directed motion on the grounds that the plaintiff has not presented
sufficient evidence to support the claims. The judge rules on the motion. If denied, the case
continues. Either party may make a motion for a directed verdict after the cases have been
presented. When a verdict is directed for the defendant, the plaintiff's case is thrown out before
the matter can go to the jury. The judge is ruling that as a matter of law there is no basis for
allowing the issue raised by the plaintiff to be tried by a jury. A court can also direct a verdict for
a plaintiff where as a matter of law there is no question but that the plaintiff wins and that the
defendant cannot articulate a defense. The loser of a jury verdict can move for judgment n.o.v.,
which asks the judge to hold that the verdict is not supported by the evidence. The losing party
can also move for retrial based on jury or attorney misconduct.
Add. Case: Carruthers v. BSA Advertising (11th Cir., 2004)--Carruthers sued BSA for
disability discrimination in employment. She failed to file certain motions on time and was not
allowed to file them late. At the end of the presentation of her case at trial, the judge granted
BSA judgment as a matter of law because she failed to show that she was qualified as disabled
under the ADA.
Decision: Affirmed. The appeals court considers all evidence in the light most favorable to the
non-moving party (the plaintiff). Given the evidence she presented, no reasonable jury could find
Add. Case: May v. Hall Co. Livestock Improvement Assn. (S.Ct., Neb., 1984)--May fell at a
racetrack owned by Hall County. She sued for injuries. At the close of the plaintiff’s case, the
trial court sustained defendant’s motion for a directed verdict. Although the evidence established
May’s injuries, it did not provide a factual basis for finding the defendant responsible. Plaintiff
appealed, contending that the evidence presented was sufficient to sustain a jury verdict against
the defendant.
Decision: Affirmed. “The plaintiff failed to produce any evidence which could have reasonably
satisfied the jury that the physical harm suffered by the plaintiff was caused by a condition or
activity on the defendant's premises. Giving full weight to all of the plaintiff’s evidence and all
Add. Case: Powell v. Allstate Ins. (S.Ct., Fla., 1995)--Powell sued for damages he suffered
when injured in a car accident. The policy of the other driver, who was at fault, had a $10,000
limit. Powell sought additional damages from Allstate, his insurer, under the uninsured motorist
provision. He was awarded $29,320 by the jury. After the trial, one juror alerted Powell’s
attorney and the judge to the fact that racist remarks were made during jury deliberations. The
award could reflect racial bias. Powell requested a new trial, which was denied. He appealed.
Decision: Powell may deserve a new trial based on the information supplied by the juror. The
motion was remanded and the trial court ordered to investigate whether or not the offensive
Remedies in Civil Litigation—The remedies available are classified as equitable remedies or
monetary damages.
Monetary Damages—Monetary damages include the following categories, although different
states used different terminology in some instances.
Compensatory Damages. Intended to return the injured party to his position if the injury had not
occurred.
CASE: Naples v. Keystone Building and Development (Sup. Ct.. CT, 2010)—The Naples hired
Keystone to build a $620,000 home. After they moved in, major problems were revealed. Various
repairs did not do the job. Expert estimated repair cost at $130,000. Trial court awarded $60,000,
saying costs were unclear. Naples appealed.
Decision: Reversed. Compensatory damages put the parties in the same position they would
have been in had the contract been properly performed. Here, that would be the cost of
Questions: 1. Suppose the Naples are awarded all damages requested but have the work done for
less than the amount awarded. Should the difference between the award and the actual cost have
to be returned?
Unless fraud can be shown to have occurred at the time of trial, that would not happen. The
2. Do you think it would be reasonable for the Naples to receive compensation for the time cost
of their troubles?
That is not covered in this situation. The direct costs of repair work are covered, but not the cost
of aggravation of dealing with the problem. There could be no mental distress or other such
Punitive Damages. Also called exemplary. When the defendant’s behavior has been willful and
Nominal Damages. When the plaintiff wins but there are no actual damages, a token may be
Add. Case: Davis Construction v. Noll (Ct. App., Ohio, 1993)--Davis contracted to build a
house for Noll for $124,425. Noll paid a non-refundable deposit upon signing the contract and
agreed to pay an addition $25,000 on April 30—subject to his selling his house. Later, Noll told
Davis that he was no longer interested in building. Davis sued for breach of contract; the trial
court awarded him $5,000. Davis appealed, arguing that he should have been placed in the same
position that performance would have placed him—the $18,000 in profit lost because of Noll’s
breach. Davis testified that he used a fifteen percent profit margin in arriving at the construction
price.
Decision: Affirmed. Expectancy damages are (a) the loss in the value to the aggrieved party of
the other party’s performance caused by the breaching party’s failure or deficiency, plus (b) any
other loss, including incidental or consequential loss, caused by the breach, less (c) any cost or
