Litigation tip: Read the Jury Instructions Before Filing Suit

So you're feeling great because you landed a new client, maybe a general contractor who builds the most expensive facilities in the world. That sounds like a good client. The client hires you to file a lawsuit against an owner who failed to pay millions of dollars in retainage at the end of a billion-dollar project. You start by digging up the last Complaint you filed for breach of contract, tweak the names, dates and dollars, and file the lawsuit. Right? Wrong.

Before filing a lawsuit, you should take a deep breath. While many of us file lawsuits frequently, they are a big deal and you want to do it right. As such, you should consider reviewing sample jury instructions and perhaps consulting a "causes of action" practice guide before you do so much as put a caption on your Complaint. Most courts have sample/pattern jury instructions, and there are countless practice guides out there that break down your potential claims.

Wait a minute, why would I start by looking at the jury instructions? Don't I just worry about them in the unlikely event my case actually goes to trial or arbitration? NO. Jury instructions will guide you to the claims which might apply to your dispute. For example, your review of the jury instructions might make you realize the strength of additional claims to be asserted for your client, such as claims for tortious interference with contract, unjust enrichment, quantum meruit, or even fraud. In addition, the jury instructions outline the specific elements of the claims that you will need to plead (which will help you avoid motions to dismiss, for example). The jury instructions can be used as a navigation guide through all phases of the lawsuit, from the pleadings, through discovery, and all the way through trial or arbitration.

Does anyone have other ideas on starting points for drafting complaints? Some attorneys suggest you should even draft your jury instructions before you draft the complaint. I don't personally go that far, but maybe I should.

There are also various ABA Forum publications that you can utilize. For example, check out the Construction Damages and Remedies book here. For some pattern jury instructions, click here (California) and here (8th Circuit).

Trial Tips from Practice Masters

Earlier this week, the "Your ABA" publication included an article entitled "Preparation and Attention to Detail Can Pay off at Trial."  This article arose out of a video seminar of about an hour long that can be downloaded for free by any ABA Member.

The article and seminar focused on general trial strategy related to "the little things" in the case and in presentation generally.  Discussion during the seminar ranged across all areas of trial and included everything from how to handle surprise testimony that pops up at trial for the first time (common sense tip: if it is truly a surprise to you, request a brief recess so that you can consult with your colleagues or client or call someone who can help you with the issue) all the way to how you should dress for various days of court (one panel member suggested wearing brighter ties/clothes on days when the attention should be on you, such as opening statements, closing arguments, and key cross examination days).

One of the most helpful tips from the article that I saw came in the very last sentence:

[Andrew J.] Smiley [managing partner and lead trial attorney at the New York firm of Smiley & Smiley LLP] says you have [to] look at trial like a chess match, anticipating your opponent's next move.  "You should anticipate what can go wrong and plan how you'll handle it," he adds.

The mark of a great trial lawyer is being able to make the times when you truly are surprised by testimony -- whether from opposing witnesses or your own -- and turn those times either into advantages for your client or at least not making it appear that you are caught flatfooted.  While there is no substitute for experience, watching others in action can help guide you in the right direction.

Now, here's my question for all of you: Many of us have now tried a number of cases, whether to juries, judges, or arbitral panels. If you could go back and tell your younger self one or two tips to improve your trial skills far earlier in your career, what would those tips be?

A Blueprint for a Successful Construction Mediation, by Judge Nancy Holtz (Ret.)

Division 1 Member, Nancy Holtz, shares with The Dispute Resolver her insight on a blueprint for a successful construction mediation. 

Project: Settlement. Construction mediation is no different than any other type of mediation. However, it can present additional challenges since there are frequently a multitude of parties, as well as numerous collateral issues which can impede settlement. Let’s take a look at the critical path to getting the case settled.

The Program. For almost every construction case, the best pathway out of the dispute is through settlement rather than through adjudication by judge, jury or arbitrator. Point out to your client that in choosing mediation over litigation, your client is retaking control of his business – and life. Because as litigation unfolds, your client will quickly and unhappily experience a complete lack of control over what happens. But with mediation, your client will have control over the timing, process and outcome of the dispute. Your client’s business will have no interruption occasioned by assisting in discovery, attending depositions, and, worst of all, attending and testifying at trial. There will be no bad blood between business entities with whom your client wishes to continue to work. Bear in mind, people in the construction industry are used to having a fair amount of control over their part of a construction project. So, the idea of regaining control of their fate regarding the legal dispute is very appealing.

Design-Build. The beauty of mediation is that the parties can create whatever dispute resolution process they feel will be most effective. Formats to consider include mediation, mediation-arbitration, or arbitration-mediation.

Seek Bids for the Job - The Mediator. A construction mediator should possess the characteristics of any good mediator: skill, fairness, and common sense. But, because of the challenges of construction mediation, more is needed. No one wants a mediator who thinks The Eichleay Formula is a Robert Ludlum book; but, to resolve a tough construction dispute, you will want a mediator who has certain traits beyond some level of fluency in construction law. An effective construction mediator must have highly developed interpersonal skills, tenacity, and boundless energy for the marathon sessions which can occur.

A mediator should be flexible and be able to move between approaches – facilitative and evaluative – depending on the circumstances of the mediation and needs of the parties. Specifically, you will want a mediator who can speak to questions of evidence and other legal issues which may arise if the case goes to trial.

Erect the Scaffolding. A candid pre-mediation telephone conversation is crucial to the success of the mediation. Although dubbed a “pre” mediation call, it is in fact the beginning of the mediation because you will begin to describe the case from your perspective during this conversation. This is also the time where you should talk about the trial date, what settlement discussions have already occurred, and any particular challenges you anticipate. For example, are there issues regarding insurance coverage; in multi-defendant cases, is there a question of apportionment among the defendants; what to do about a non-participating defendant; and, whether a defense-only mediation session might be helpful. There may also be personality issues to address. Finally, you should discuss opening statements which, on occasion, can be unduly lengthy, provocative and even counterproductive.

The Project Documents. A good mediation summary should distill the significant information into a format which is persuasive and manageable. An unfiltered data dump of plans, photos, and technical information does not provide the mediator with the most effective tools to question and challenge the other side’s position.

Assembling the Team. The oft cited advice of bringing the people with authority to settle is a good starting point. Beyond that, consider bringing people who are knowledgeable on anticipated areas of controversy. You may want to bring someone at a senior management level who is above the fray of having worked on the project himself. Such a person can bring great knowledge without the protective feelings of ownership regarding the project. You, as advocate, need to move beyond the role of warrior and become a diplomat. As the attorney at a mediation, you should be part of the solution-not part of the problem.

No Hard Positions on Hard Hats. The construction industry is populated by people who take great pride in their work. So, if your opening statement includes claims which might be taken as insulting, such as shoddy workmanship, try to soften your words a bit. A successful mediation needs buy in from all participants. Harsh statements attacking the integrity or competence of a party are sure ways to harden positions.

Loss of Productivity. Be careful if you choose to bring an expert. An expert should attend a mediation to help educate and elucidate - not carry the day for your side. The goal of mediation is to move the parties beyond their positions and focus on their interests. So, do not waste valuable time having the expert expound on why your client’s position is 100% unassailable.

Also, sometimes even powerful evidence presented at mediation can be a waste of time. Such evidence is not particularly valuable if it is so technical that it will never be understood by a fact finder or, worse still, will never pass evidentiary muster. Never forget that this is a legal dispute headed for court if it cannot be resolved. To make the session productive, focus on those items which will be admissible and persuasive to the ultimate fact finder. That is what will elicit movement on the other side.

Delay Damages (Don’t). Do not spend the whole session trying to jam a week’s worth of evidence into a single day in order to prove the liability part of your case. Regardless of the strength of your case, your interest now is to get it settled. So, like it or not, you simply must move to the numbers and - working with the mediator - find the number that everyone can live with.

Be Ready for Change Orders. Come to the mediation with a settlement range in mind, but, be prepared to be flexible. Those last moves beyond your hoped for end point may be tough but will be worth it when the case settles.

Terminations for Convenience. It can be tempting to take the easy route and walk out on a mediation when it is not going well. But remember, rarely is your client better served by a trial. The brief moment of righteousness upon walking out will soon be eclipsed by the specter of a lengthy expensive trial looming in your client’s future.

Concurrent Delays. As the parties near resolution, there are some obstacles which tend to crop up all at once. You may have some terms which you consider minor but which the other side might balk at. Do not wait until the very end of negotiations to raise these terms. When you present additional terms after the other side thinks they have struck a deal, it can derail the process. In fact, you may be providing the other side with new leverage. So, raise these issues earlier rather than later in the negotiations.

Another cause for delay at the end is the task of reducing the settlement to writing. Even when everyone is exhausted and content with a handshake, do not leave until the basic terms of the settlement are memorialized in a binding agreement. Your mediator should provide the parties with a Memorandum of Understanding to use once a settlement is reached. But, you should come to the mediation with any particular language which you want to be included in the Memorandum of Understanding already prepared. You will want to address any liens and logistics of releases of those liens. Consider the collateral effect of this settlement. Do you want language relating to any warranties or on any ongoing insurance litigation. These are all items which can be anticipated and you should have language ready to include in the Memorandum of Understanding if at all possible. It is much wiser to have an enforceable Memorandum of Understanding when the mediation breaks than hope the necessary terms will all be included in a later drafted settlement agreement and release.

Punch List. If the case does not settle at mediation, the project is still not over. Construction mediations can take more than one session – in person or by phone. Keep working with your mediator. With the right plan you can complete Project: Settlement within an acceptable budget and your client will thank you for it.

Significant Amendments to the Rule Governing Subpoenas in Federal Court

On December 1, 2013, significant amendments to Federal Rule of Civil Procedure 45 took effect. Tony Lathrop of the Litigation Blog has posted a detailed summary of the revisions. They include, among other things:

• Changing the issuing court for subpoenas to the court where the action is pending (previously, the issuing court had varied depending on the purpose of the subpoena);
• Clarifying that the limit on compelling a person to travel more than 100 miles to attend trial applies to parties and party officers;
• Explicitly authorizing the enforcement court (where the witness is located) to transfer subpoena-related motions to the issuing court (where the action is pending).

A redlined version of the amendments is available in Appendix C to the September 2012 Summary of the Report of the Judicial Conference Committee on Rules of Practice and Procedure (starting at page 119 of the Adobe file).

Draft your Lawsuit to Trigger Insurance Coverage

As most people reading this blog post are aware, construction lawsuits can trigger seemingly countless insurance coverage issues. For example, were the alleged damages caused by an “occurrence” as defined in the contractor’s insurance policy? If so, did the damages begin and/or end during different years, thereby triggering multiple insurance policies? In addition, did the damages stem from more than one “occurrence,” thereby potentially leading to an increase in applicable policy limits?

Furthermore, the “exclusions” found in a contractor’s insurance policy can be critical. For example, most standard Commercial General Liability (CGL) policies exclude coverage for damages stemming from the insured’s errors or mistakes of a professional nature (e.g., damages which would likely be covered by an Errors & Omissions or other malpractice-type insurance policy). In addition, CGL policies typically exclude coverage for damage to “your work” or “your product.” 

When you are drafting a complaint, it is important to draft it in a fashion which triggers an insurer's duty to defend, if at all possible; some contractors are judgment proof so, in the absence of insurance, your client might not otherwise have any recourse from a practical standpoint. Insurance can be a game-changer. 

Of course, all claims must be asserted in good faith and there will be times when you cannot draft allegations sufficient to trigger insurance coverage. However, in many instances, a complaint can be pleaded properly and in good faith to trigger an insurer's broad duty to defend and corresponding duty to indemnify. For example, if you represent an owner suing a general contractor, you can avoid issues regarding the "your work" and "your product" exclusions by including allegations that the defendant's negligence caused damage to the work and/or product of another contractor(s) or caused damage to the owner's property. Sometimes, you must be creative; however, being creative can require you to take a close look at your allegations because they must be asserted in good faith and without violating your ethical obligations. In addition, you can trigger multiple insurance policies by alleging a continuing loss over several years. If you believe in good faith a loss started three or four years ago, plead it. Don't limit yourself. 

Furthermore, be careful with the manner in which you describe the defendant-contractor's actions. For example, coverage might be denied if you allege that the damages resulted from the contractor's decision to use a certain process or particular type of design or material, because the contractor's decision could be interpreted as an intentional act. If so, coverage might be denied due to the lack of an "occurrence" which is typically defined as an "accident," and might also be denied due to an "intentional acts" exclusion, which, as the name suggests, excludes coverage for damages stemming from an insured's deliberate actions. 

While each dispute is different, most if not all complaints should be drafted with an eye towards insurance coverage. It is much easier to draft a broad complaint and trigger coverage than it is to sue a contractor, find out its insurer denied coverage, and then try to amend your complaint to trigger the insurance policy. Do it right the first time.