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ARTICLE:
Liability of Corporate Officers
by EDWARD
LOWRY
14.101 Introduction
This chapter will discuss the litigation of contract cases
in general terms. There are a myriad of different types of
contract cases and it would not be possible to treat all of
them in the space available. This chapter will, therefore,
concentrate on litigation issues and techniques that are more
or less applicable to a broad range of contract cases.
The longer one practices law, especially in the area of
commercial litigation, the more convinced one tends to become
that the best rule of thumb for each stage of a case is more
ideas/fewer words. While many contract cases, such as actions
for judgment on promissory notes, are frequently simple and
straightforward, many other cases tend to be complex and confusing.
In virtually all cases, brevity and clarity are worthy goals
that enhance the chances for success. Juries, and even judges,
are constantly befuddled and irritated by unnecessarily complex
presentations which bury the points to be made in a jungle
of droning words and documents. Whether one is dealing with
pleadings, motions, examination of witnesses or argument before
judge or jury, brevity and clarity in combination can only
be achieved through careful advance planning and revision.
When attorneys are not sure where they are going, they often
tend to bathe the search in words. Ultimately, there is a
great risk that everyone, including the attorney himself,
will either become confused or miss many of the most important
points because they were asleep when were made. The fear of
leaving something out can drive a healthy neurosis in research
and gathering of evidence, but it needs to be put away when
the delivery of the case begins.
Most cases, no matter how complex, can be reduced to a reasonably
simple theme that can be used to organize all pleadings, theories
and presentations of evidence. At its heart, a cause of action
for the collection of a debt is simply: the defendant owed
money to the plaintiff and failed to pay it. It does not need
to be any more complex than that. At its heart a defense of
unclean hands is simply: the plaintiff behaved badly and,
under those circumstances, the law says that he cannot come
into court and expected to be treated fairly. A breach of
contract brought about by someone's ineffectual performance
is really about "behaving responsibly" or "following
through on one's commitments" or, in more recent terms
"walking the walk, not just talking the talk." The
simplest possible expression of one's point at the beginning
and throughout the case prepares the trier for what to expect,
describes the fairness of the position, and reinforces it
as each development unfolds. The law aspires to be a logical
expression of society's rules. A simple explanation has the
best chance of being appreciated as logical.
The following discussion and the forms contained in the
appendices will endeavor to follow this admonition as each
phase of a contract case is examined.
14.102 Establishing a Litigation Filing System:
An effective system for organizing files and information
is essential to the control and use of information. Appendix
A is a portion of one firm's Commercial Litigation Handbook
dealing with the opening of litigation files. It may not be
exactly what you choose to use, but it has served that firm
well for many years and may be useful to you in developing
or refining your own system. The old style of trying to keep
everything in the same file is a ticket to frustration. It
multiplies the time spent just finding something and runs
the risk of making the object searched for unavailable in
time to use it. This is especially true when one needs to
locate something during a hearing or trial. A mad and unsuccessful
search for a pleading or document does subtle but often profound
damage to one's cause. At the very least, pleadings and documents
should have their own separate files in which they are numbered
and indexed. As documents are gathered, indexed and placed
in a master documents file, the periodic creation of indices
to documents arranged in chronological order often reveals
patterns and trends in the documents that are otherwise unnoticeable.
This also facilitates the grouping of documents that are related
to each other. In addition to pleadings files and a master
documents file, other features of a commercial litigation
file system discussed in Appendix A include subject matter
document files, working document files, and files containing
documents produced to and from the opposition and other sources
during discovery.
14.103 Initial Pleadings:
All good pleadings begin with research. No matter how familiar
the territory, it is a healthy habit to look again at the
controlling statutes and the status of the case law in the
area. The more the key words of a statute and principal case
law can be accessed and directly quoted, the more likely it
is that the pleading, whether motion for judgment or responsive
pleading, will survive the tests invoked by the opposition
before and during the trial and on appeal. Looking again also
tends to be the best check against forgetting those small
portions which can derail or assure the success of a theory
of the case.
And now a few words about excess allegations. Allegations
which are not pertinent to setting forth a proper cause of
action or defense should be viewed with a wary eye. It is
always tempting to seek to score points with argumentative
allegations in a pleading. When tempted to do this, one should
always keep in mind that a party is largely stuck with what
he pleads. While amendments may be possible, they are not
assured and having to amend is not the best way to impress
the court or the opposition of the strength of your case and
your advocacy. The court will surely sooner or later read
the pleadings and unnecessary allegations may or may not make
some positive impression. The jury will never read the pleadings,
so all the eloquence in the world will never move them. The
danger of excess is that it will make flexibility difficult
as discovery unfolds new facts. Very often, what appears early
in the case to be a reliable fact or theory becomes tainted
or proves wrong. Simple allegations also may be more persuasive
than saturation pleading, giving the impression that the pleader
has a compellingly straightforward case. Of course, no rule
of thumb should be slavishly followed and different circumstances
dictate different approaches. Suffice it to say that one should
always ask the question, can this be said more clearly and
succinctly?
A. The Plaintiff's Initial Pleadings: A useful guideline
for setting out a motion for judgment for breach of any contract
is as follows:
- Identify the parties
- Define the relationships between and among the parties
- Describe the contract and all modifications, written or
oral
- Set forth the controlling legal principles
- Describe the breach(es) of contract concisely
- Describe the demand(s) made for curing the breach(es)
- Anticipate and negate defenses where possible
- Allege that the breach(es) caused damage
- Identify and quantify the damages
- Address the issues relating to interest
Many of these elements are obvious and require no discussion.
Others, however, contain pitfalls and opportunities which
deserve some analysis.
1. Defining the relationship among the parties: The manner
in which the relationship between and among the parties is
described affords an early opportunity to link or separate
the parties in the mind of the reader depending upon your
goal. The distinction may be subtle, but such small things
as discussing them in the same or separate paragraphs may
suggest linkage or separation.
2. Describing the contract and all modifications: Care should
be given to identifying all necessary elements of a contract:
offer, acceptance and consideration. It is surprising how
often an essential element is left out resulting in, at the
very least, an embarrassing need to amend pleadings. To some
extent this type of analysis involves jumping ahead and analyzing
potential defenses, some of which might be: lack of mutuality,
duress, vagueness, statutes of limitation, the parole evidence
rule, waiver and subsequent modification. By making a list
of possible defenses in the particular action, one can frame
the description of the contract and following events in order
to negate many of the defenses before they are raised.
3. Identifying and quantifying damages: This effort contains
many pitfalls. Perhaps the most frequent is the fact that
the damages may not be fully subject to quantification until
the happening of a later event, or may be ongoing. Where this
is the case, one should fully describe the damages and quantify
them to the extent this can be done up to the date of filing.
Where possible, the pleading should also contain a clear reference
to the information necessary to make a final computation when
judgment is entered. Examples of this are: a per diem interest
figure for an unpaid promissory note; or a per diem figure
for the cost of maintaining property which is the subject
of a specific performance suit pending a decision by the court.
Where it is not possible to define the damages with specificity
at the pleadings stage, as in a case where the damages are
ongoing and variable from day to day, it is permissible and
advisable to incorporate into the prayer for relief a statement
such as "the Plaintiff moves the Court to enter judgment
in his favor against the defendant in the full amount of his
damages determined at the trial on the merits of this case..."
Where there is a jurisdictional floor for damages, such as
in federal courts or state circuit courts, be sure to allege
that the damages exceed the jurisdictional amount.
4. Interest: Interest should also be specifically requested.
The rate of interest, where it is not specified in an instrument,
should be stated to be "at the applicable statutory rate."
That rate should not be specified in the pleading since it
is subject to change at the will of the legislature. Also,
the statutory rate of interest on liquidated claims may from
time to time differ from the judgment rate of interest that
will control after judgment is entered. In a case involving
a promissory note or other instrument that specifies an interest
rate, one is virtually always entitled to that rate up through
the date the obligation became due and payable. Depending
upon the language used in the instrument, however, there may
be a different default rate of interest. Also, depending on
the language of the instrument, the rate of interest may convert
to the statutory judgment rate of interest after judgment
is entered.
B. Causes of Action: As may be seen by referring to the
sample pleadings in the appendices to this chapter, contract
cases do not want for applicable causes of action. While an
action to recover payment of a promissory not may have a single
count, any complication even slightly more complex than that
could result in a number of alternative counts. In a case
where the plaintiff contracts to purchase real estate and
the defendant refuses to close, it is not unusual to have
any of the following claims exchanged between the parties.
The plaintiff might bring a petition for specific performance
asking in an alternative count for damages for breach of contract
if the defendant is not ordered to convey the property. The
defendant might well answer alleging abandonment, waiver,
estoppel and misrepresentation as affirmative defenses and
asserting a counterclaim alleging fraud in the inducement
to enter the contract and a prior breach by the plaintiff
attempting to change the terms of the contract, resulting
in damage to the defendant.
In a contract for the construction of a home where the contractor
and owner have a falling out resulting in the owner firing
the contractor, a typical action might begin with the owner
suing the contractor for the cost of revising and completing
the work, adding in allegations of fraud in the inducement
because the contractor expertise and results that the owner
now believes he never had, and seeking to pierce the veil
of the contractor's corporation to obtain a judgment personally
against the owner of the company. The contractor may well
file a counterclaim for the unpaid work on the house and lost
profits occasioned by not being allowed to complete the contract.
It is also not unheard of for the contractor to add a count
for defamation based on statements made about the contractor
by the angry owner. It does not take long for the magnitude
of the case to exceed in cost anything either party could
recover in the litigation (except, perhaps, where the contract
contains an attorneys fee provision).
While it is appropriate to bring all meritorious claims available,
one should not be caught up in a contest to see who can articulate
the most causes of action. Too often claims are added to pleadings
which are at best a stretch. The possible repercussions from
this include: denigrating the strength of claims which are
more sound; irritating the court; and squandering valuable
resources which would be better applied to other phases of
the case. Perhaps the most over used claim in what are essentially
contract actions is fraud and misrepresentation. Actual fraud
is the intentional and knowing misrepresentation of a material
fact, with the intent to mislead, with the intent that the
other party rely on it, where the other party does rely on
it and where the other party is damaged as a result. Constructive
fraud, on the other hand, does not require any knowledge on
the part of the declarant that the representation was false
when made. It only requires that the statement be one of material
fact, that it be made with the intent that the other party
rely on it, that it be false, that the other party rely on
it and that the other party be damaged as a result. It is
also important to note that under either type of fraud the
representation must be one relating to a fact in existence
at the time of the statement and not an expression of future
intent, and cannot be simply an expression of opinion or sales
"puffing." Given the fact that contract claims are
limited to economic loss, many attorneys are tempted to add
in fraud claims in order to enhance the chance for tort types
of consequential damages. More and more courts frown on stretching
contract actions out of shape in this way. What is essentially
a warranty claim sounding in contract should not be gratuitously
characterized as fraud.
C. The Defendant's Responsive Pleadings: The initial analyses
conducted by the defense, after a thorough interview of the
client and key witnesses, are the legal sufficiency of the
motion for judgment or complaint on its face, and the accuracy
of its factual allegations.
If the legal theories are deficient in any respect, then,
of course, a demurrer, motion to dismiss pursuant to FRCP
Rule 12(b)(6), or other applicable plea in bar is normally
in order, even if the result would only be to limit and not
eliminate the opposing pleading. Even where the chances for
success are not particularly high, such motions may offer
an early opportunity to educate the court with respect to
certain weaknesses in the plaintiff's case. If the motion
is unsuccessful, the court or rules of court will provide
additional time to file an answer or grounds of defense. Yet,
it is not always the case that a demurrer or 12(b)(6) motion
should be filed just because it could be filed. On occasion,
especially where speed is important to the defendant or where
there is an advantage to forcing the plaintiff to face the
weakness of his pleading later in the pre-trial phase of the
case, it may be better to go ahead and file an answer or grounds
of defense, by-passing the demurrer or 12(b)(6) motion. Since,
with the exception of certain jurisdictional matters, a motion
for summary judgment can be used for virtually anything that
could be raised in a demurrer or other preliminary motion,
there are occasions on which a quick start will aid the client
and perhaps allow one to "steal the march" on the
plaintiff by dictating some of the pace of the case. Another
advantage may occur where delaying the decision to raise the
challenge to the pleadings will allow time for discovery which
may aid the chances for the motion later. No single rule of
thumb is adequate to replace analysis and internal debate
over the potential results of various strategies. The need
here, as elsewhere, for careful planning is why trial practice
is still an art and not a science.
In actions at law in Virginia state courts, one other factor
should also be kept in mind if you are considering filing
preliminary motions before filing a grounds of defense. If
there is an available counterclaim there is a danger of losing
the right to file it. Rule 3:8 of the Rules of the Supreme
Court of Virginia requires that a counterclaim must be filed
"within twenty-one days after service on [the defendant]
of the notice of motion for judgment." There is no provision
altering this deadline where other preliminary motions have
been filed first. As a consequence, the ability to file a
counterclaim may be lost if it is not filed at the same time
as the preliminary motions, even if the grounds of defense
is going to be filed later. Of course, one still has the option
of filing the counterclaim as an independent action and moving
to have it consolidated with the subject case. The down side
of doing this is that it requires extra time and expense and
a risk that some court would refuse to consolidate the actions.
It also runs the risk of being ousted by a statute of limitations
that expired after the plaintiff filed his initial pleadings.
Oddly enough, the rule in equity is different. Virginia Rule
2:13 provides that "[a] defendant may, at any time when
he would not be in default if he had not filed a pleading,
or thereafter by leave of court, file a cross-bill which seeks
relief against the plaintiff..." This would indicate
that a cross-bill can be filed within twenty-one days after
the filing of an order disposing of preliminary motions or
such other date as the court, by order, requires an answer
to be filed. FRCP Rule 12 is like the Virginia rule in equity
matters. The filing of a 12(b) motion suspends the need to
file any other responsive pleading until the court rules on
the motion, after which the parties have 10 days to serve
other responsive pleadings.
In responding to factual allegations, clarity remains important
in order to avoid accidental admissions. For this reason,
it is advisable to answer each numbered paragraph of the motion
for judgment or complaint in a separate paragraph of the same
number. If part of the allegation made in a paragraph is admitted
and part denied, that should be spelled out. It is sloppy,
dangerous and inappropriate to deny an entire paragraph when
only a portion of it is believed to be inaccurate.
The pleading of affirmative defenses and counterclaims follows
guidelines similar to those relating to motions for judgment
and complaints. In addition, certain peculiarities pertain
to them alone. It is good to remember that, even where a claim
cannot be raised by counterclaim or cross-bill because the
statute of limitations has run as to that claim, it may nonetheless
be raised as an affirmative defense and be effective for purposes
of set-off or even nullifying the claims of the motion for
judgment or complaint. Affirmative defenses have a much larger
scope of includable material than do counterclaims and cross-bills,
including within their ambit any matter that would bar or
negate all or a portion of, or provide set-off against the
claims in the plaintiff's pleading. It is important to also
include in affirmative defenses all theories of recovery that
are or could be in a counterclaim or cross-bill. In the event
the theory of recovery is dismissed as a part of the cross
bill because of the statute of limitations and perhaps for
other reasons, it may still survive in the form of an affirmative
defense.
The following are the "magnificent seven"affirmative
defenses in contract cases. They are by no means exhaustive,
but in my practice they have been the most frequently occurring:
- Statutes of limitation
- Laches (in chancery matters)
- The parole evidence rule
- Anticipatory and other breaches by the plaintiff which excuse
non-performance on the part of the defendant
- Waiver, estoppel and abandonment
- Failure of consideration
- Unclean hands (in chancery matters)
D. Other Pre-Trial Motions: Pre-trial motions generally
have the aim of: limiting or eliminating issues before trial,
resisting or obtaining access to discovery, and resolving
issues of jurisdiction and venue. The most frequently used
pre-trial motions are:
- Demurrers and Motions to Dismiss Under FRCP 12(b)(6)
- Motions to Dismiss
- Pleas in Bar
- Statute of Limitations
- Lack of Jurisdiction over the Subject Matter
- Lack of Jurisdiction over the Person
- Motions to Compel Discovery Responses
- Motions to Quash Discovery Requests
- Motions for Protective Orders
- Motions in Limine
1. Demurrers, Motions to Dismiss Under FRCP Rule 12(b)(6)
and Motions for Summary Judgment: Demurrers and motions to
dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure have been discussed for the most part above.
They are designed to test the sufficiency of the plaintiff's
pleadings where the defendant believes the plaintiff has failed
to state a cause of action for which relief can be granted.
These pleas are designed to be a test of the pleadings only
and ordinarily may not be based on evidence or any other matter
not evident on the face of the pleadings, therefore no discovery
should be necessary before briefing and arguing these motions.
Motions for Summary Judgment, on the other hand, are designed
to achieve judgment before trial based on the evidence adduced
during discovery and evidence proffered to the court. They
are premised on the assertion that, given the evidence available
to the court before trial, reasonable men could not differ
as to the facts of the case, and the court should rule then
as a matter of law.
There exists, however, a pitfall for the unwary in the realm
of demurrers and 12(b)(6) motions. By leave of court in state
courts and pursuant to a provision of FRCP Rule 12, these
motions can be converted to motions for summary judgment in
which the court may consider evidence outside the pleadings.
This rarely happens in state court, but it can provide the
occasion for being caught unprepared in federal court where
affidavits and accompanying documents can be submitted as
a matter of course. If this is done by one party and the other
party does not or cannot act quickly to provide counter affidavits
and documents, one could find himself all of a sudden in a
summary judgment proceeding with little recourse.
It should always be kept in mind that the federal courts
are far more prone to dispense with cases at the pre-trial
stage. Since deposition testimony and affidavits can readily
be used in support of motions, a case can be postured for
final decision well before any scheduled trial. The federal
courts have little patience for a protest that one intended
to produce his evidence at trial and the FRCP Rule 56(e) specifically
provides that summary judgment is appropriate where a party
fails to respond to affidavits in support of such a motion.
Where one party proffers evidence in support of a motion for
summary judgment, prudence dictates that the other party quickly
proffer evidence to support his own side of the case.
2. Pleas in Bar: A plea in bar is one that raises a point
of law which, if applicable, would bar the plaintiff from
bringing the action. Some of these are as follows:
a. Statutes of Limitation: In Virginia, with certain limited
exceptions, the statute of limitations for written contracts
is five years and for oral and implied contracts it is three
years. It is important, however, to be aware that the Uniform
Commercial Code contains some of its own limitations of actions.
The most notable for contract purposes is the four year statute
under Article 2 for actions relating to the sale of goods.
Also, related causes of action that often appear as alternative
theories carry their own limitations, such as fraud and breach
of fiduciary duty, which are governed by a two year statute
of limitations. Furthermore, while the statutes of limitations
governing contract causes of actions begin to run from the
date of the breach, that governing fraud, mistake and recission
due to undue influence runs from the date of discovery of
the fraud, mistake or undue influence, or the date on which
by the exercise of due diligence it should have been discovered.
When faced with a plea to the statute of limitations, it
is advisable to immediately analyze whether or not further
discovery or the introduction of evidence is necessary for
the proper determination of the issues presented. Issues relating
to the statute of limitation can be handled on the pleadings,
by an evidentiary hearing or at trial; consequently, one should
not automatically consent to having the matter decided only
on the pleadings. Furthermore, if the evidence relating to
the decision is voluminous and/or closely related to the overall
evidence to be presented at the trial, it may be advantageous
for the party resisting the motion to suggest to the court
that the issue be left for the trial.
b. Lack of Jurisdiction over the Subject Matter: A plea in
bar based on lack of subject matter jurisdiction applies whenever
the court in which the action was brought is a court of limited
jurisdiction which does not include causes of action of the
type brought (for instance, an action for breach of an employment
contract could not be brought in juvenile and domestic relations
court) or where the action is in rem and the property lies
outside the bailiwick of the court.
c. Lack of Jurisdiction over the Person: A plea in bar based
on lack of jurisdiction over the person applies whenever the
defendant neither resides within the Commonwealth nor has
done business in the Commonwealth in such a manner as to subject
the Defendant to jurisdiction and service under the Long Arm
Statute. While space here does not allow a full discussion
of the intricacies of the Long Arm Statute, it should be noted
that Virginia is a "minimum contacts" state in which
very little contact is necessary in order to subject one to
the jurisdiction of its courts.
3. Motions to Compel Discovery Responses: Where the opposition
refuses to answer or to provide complete answers to discovery
requests, the appropriate way to address the situation is
by filing a motion to compel responses. This is an expensive,
time consuming and frustrating way for parties to have to
handle discovery. Every effort should be made to work out
discovery disagreements short of holding a hearing on such
a motion. Often questions are asked without adequate thought
to the scope of information requested. Just as often, objections
are filed on the barest pretext when a substantial answer
could be provided, coupled with an objection to a portion
of the request. In very few instances will attorneys who are
focusing on the issues be unable to reach an informal accommodation,
especially when experience indicates what the court is likely
to require of each of the parties if a hearing is held on
the matter. The good will of the court is capital that should
be spent very carefully. The party who can reflect a good
faith effort to reach an accommodation with the opposition
will virtually always be appreciated by the court.
4. Motions to Quash Discovery Requests: The flip side of
the motion to compel is the motion to quash. If discovery
requests are onerous and cannot be worked out with the proponent
of the request, one may file a motion to quash specific discovery
requests. This motion may also be used to bring before the
court objections to subpoenas directed to non-parties. A motion
to quash should only be used where the discovery request is
improper. Burdensome and onerous discovery requests are better
handled by a motion for a protective order.
5. Motions for Protective Orders: A motion for a protective
order is most often used in circumstances where the discovery
request:
1. Seeks confidential or trade secret information. This
would include sensitive financial information, matters of
potential personal embarrassment that are at most tangentially
related to the subject matter of the case, manufacturing techniques,
and the like. The normal result of such a motion is for the
court to enter a protective order limiting the use of the
information to the trial of the case and requiring the information
to be kept under seal and returned at the end of the case.
If the information is extraordinarily sensitive and would
irretrievably reveal information to the opponent that would
injure the responder competitively in the marketplace, a court
will sometimes limit access to the information to counsel
and, perhaps, certain expert witnesses.
2. Is overly broad, thereby including information which
is neither relevant nor designed to lead to the discovery
of admissible evidence. More often than not this is simply
handled as an objection, leaving the decision of whether or
not to file a motion to compel in the hands of the proponent
of the request. Where that is done, however, it is the better
practice to respond to the extent the question would be deemed
not to be overly broad. If the court agrees with the objection,
it will likely enter an order limiting the discovery request
to as narrower scope.
3. Is unduly burdensome, such that, while the request may
be at some level relevant or have the potential to lead to
the discovery of admissible evidence, the burden of a complete
response is out of proportion to the benefit to be received
by the proponent of the request. This, of course involves
a balancing by the court of the competing interests. As with
an objection to over breadth, if the court agrees with the
objection, it will likely enter an order limiting the discovery
request to as narrower scope.
6. Motions in Limine: A motion in limine is used to request
that the court enter an order barring the opponent from introducing
certain evidence at trial or limiting the scope of what the
opponent can introduce into evidence at trial. This is another
one of those underused motions. Often, it is apparent that
certain evidence which is not relevant, or which is so prejudicial
as to outweigh its value as relevant evidence, is likely to
be introduced at trial. If one waits until the opponent attempts
to introduce it at trial before objecting, it may be too late
to avoid letting the jury hear at least some of the objectionable
material. A motion in limine allows the issue to be handled
before the trial begins. It is certainly easy to overuse this
motion and courts generally do not like to have the entire
trial "vetted"before it begins. Nevertheless, the
limited strategic use of such motions can have a significant
impact on the case. Even if the court is not prepared to grant
the motion at that time, it has been sensitized to the issue
in advance and there will be a better chance that the court
has had a chance to think the issue through before finally
ruling on it.
14.104 The Discovery Process:
Like manners, good discovery begins at home. Unless there
is a compelling reason to the contrary, such as time constraints,
it is best to obtain and analyze all available information
from the client before beginning discovery requests directed
toward the adversary. Providing the client with the same kind
of lists one might include in interrogatories and requests
for production of documents is a helpful way to organize this
effort. Going through this exercise and analysis of the information
gathered will inform your knowledge of the case and the skill
with which you search out information from the opposition.
Once discovery of the opposition is commenced, it is advisable
to hone in first on the central issues that the case will
likely turn on. After the basic information is gathered by
use of interrogatories and requests for production of documents,
the strategic use of requests for admissions can posture the
case very well for either summary judgment or controlling
the pace and direction of the trial. The simpler and more
straightforward you can make each request for admission the
better. Long, compound requests run the high risk of being
denied simply because a small part is deniable. Each element
of the cause of action should be a separate request. For example:
4. The defendant offered to purchase the plaintiff's cow.
5. The offer was made on January 1, 1998.
6. The plaintiff accepted the defendant's offer.
7. That acceptance occurred on January 1, 1998.
8. The subject cow was the plaintiff's Black Angus cow named
Gertrude, serial number 167284.
9. The purchase price agreed upon was $12,000.
10. The closing date agreed upon was January 15, 1998.
11. The closing location agreed upon was Plaintiff ‘s
farm located at ....
12. On January 15, 1998, the Defendant did not appear at
the closing location or otherwise tender payment of the purchase
price.
13. The Plaintiff and the subject cow were at the closing
location on January 1, 1998.
14. The Defendant has never tendered payment of the purchase
price.
15. By letter dated January 16, 1998, the Plaintiff made
demand on the Defendant to forthwith tender payment of the
purchase price and stated that the Plaintiff remained ready,
willing and able to tender performance of all that was required
of him under the contract.
16. The Defendant never responded to that letter.
It is also helpful to ask in an accompanying interrogatory
for the defendant to state why he denies any request for admission.
The answer may reveal ways in which to file supplemental requests
to further narrow the issues.
Another critical use of requests for admissions is for the
facilitation of the introduction of documents at trial. This
is done by delivering the opponent a stack of photocopied
documents which you intend to use as exhibits at trial and
then asking the opponent to admit that: 1) they are true copies
of the original documents, 2) they were gathered or prepared
in the ordinary course of business, 3) they were gathered
or prepared by persons whose responsibility it was to gather
or prepare such documents, 4) the signatures contained thereon
are genuine, and 4) they are unaltered. This can also be handled
by stipulation. Having to spend substantial amounts of time
at trial authenticating documents is expensive, tiresome and
irksome and more often than not puts the judge and jury into
a trance from which they are likely to miss the entire import
of the documents. Bored judges and juries can very easily
take their frustrations out on the party they blame for the
delays. Conversely, a crisp and tailored presentation, with
enlargements of key documents or portions of documents can
have a major positive impact on the case.
Requests for stipulations are also useful in the same way
requests for admissions are. They can be used to pre-authenticate
documents, narrow issues, and limit the need for live testimony.
Courts look very favorably on attempts to stipulate and, conversely,
tend to frown on refusals to stipulate obviously incontestable
matters. Few attorneys make good use of requests for admissions
and stipulations at trial. With leave of court, they may be
introduced at almost any stage of the evidentiary portion
of the trial along with answers to interrogatories. They can
be used single or together. Often they are most strategically
used during the questioning of a specific witness in order
to lead him in the desired direction or to make it difficult
for him to evade admissions on other facts. It does not take
much imagination to realize that in a contract case, which
tends to have very discreet and identifiable issues, admissions
and stipulations can radically reduce the items which must
be focused on at trial.
14.105 Necessary or Indispensable Parties:
It is advisable, whether one is the plaintiff or the defendant
in an action to analyze whether or not there are any necessary
parties to the action other than the ones initially contemplated.
Under Virginia law:
Where an individual is in the actual enjoyment of the subject
matter, or has an interest in it, either in possession or
expectancy, which is likely either to be defeated or diminished
by the plaintiff's claim, in such case he has an immediate
interest in resisting the demand, and all persons who have
such immediate interests are necessary parties to the suit.
Gaddess v. Norris, 102 Va. 625, 630, 46 S.E. 905, 907 (1904)
(citations omitted), cited with approval in Raney v. Four
Thirty Seven Land Co.,233 Va. 513, 519, 357 S.E.2d 733 (S.
Ct. 1987). Under the federal system, FRCP Rules 19 through
21 provide a framework for analysis of what parties may and
ought to be joined as parties. The continuation of the litigation
is encouraged by both jurisdictions unless the missing party
cannot be joined and would be substantively affected by the
outcome.
14.106 Trial Preparation
Organization, imagination, crispness of presentation and
delivery are the key elements of effective advocacy. The more
complex the case the more difficult this is to achieve. Consequently
preparation must be all the more intense in order to achieve
these goals when the trial occurs.
It is very useful to draft up a working narrative of the
case and legal principles involved early in the preparation
stages, and to keep modifying it as ones knowledge of the
case grows. This will assist in reviewing evidence, preparing
witnesses and developing a persuasive presentation of the
case. In a sense, one should be writing his closing argument
from the outset of the case. Good trial preparation depends
next on developing this narrative, form either the plaintiff's
or the defendant's perspective, into a thorough outline of
the case, including the controlling points of law, detailed
factual points and conclusions to be drawn from the facts
and the law. The next step is to apply the available evidence
to the outline, indicating which witnesses and documents are
available for proving each point in the outline. To the extent
possible the application of evidence to the outline should
include references to statements in depositions and specific
answers to interrogatories, admissions and stipulations. It
is only by marshaling the evidence in this or some similar
manner that one can be sure all points are adequately covered,
and the more complex the case, the more imperative such an
approach to trial preparation becomes.
The strategic use of blow-ups of portions of documents,
either in the form of photographic enlargements or projections,
can be a distinct advantage at trial. Each has its distinct
benefits. A photographic blow-up can often be left standing
on an easel or taped to a wall for the judge and jury to see
and be reminded of until the opposition thinks to remove it
or cover it up. A projection, especially where a transparency
is used can be written on with marker and easily erased to
emphasize portions of the document, chart or graph at strategic
moments.
The use of trial preparation check lists, such as the one
in Appendix B, will help to avoid overlooking critical steps
and will act as a convenient scheduling device. The use of
a second chair (either a fellow attorney or a paralegal) is
a great help for the trier of the case and allows that attorney
to focus more on what is happening in the trial. Appendix
C is a useful checklist of activities which can be assigned
to the second chair.
Another facilitator of trials is the use of bench books
for the judge containing pre-marked exhibits. All documents
which you believe you will be using as exhibits should be
included and, where possible, they should be pre-marked with
exhibit numbers. The judge or his clerk should be consulted
in advance, but most judges find this procedure to make their
life much simpler during the trial since he will have his
own copy of the exhibit in a very useable format.. It really
makes no difference what order the exhibits come in at trial.
Maintaining numerical order is not essential since the record
of the trial will reflect the order they come in. The judge
and/or court reporter will mark the original of each document
as it comes in and the judge can easily mark his own book
in order to keep up with which documents have been admitted.
14.107 The Trial
Here again, having and sticking to a well thought out plan
of attack is critical to a clear and cogent presentation of
one's case. The central focus of the trial is to lead the
judge and jury to conclude that there is only one logical
outcome of the case.
A. The Opening Statement. Contrary to popular belief, it
is not the closing argument that has the most influence on
how a case is decided. It is the opening statement. Most studies
on the subject suggest that juries more often than not vote
the way they are leaning at the end of opening statements.
In the opening statement it is often wise to begin with the
simplest possible description of the contract and the alleged
breach. Once that is fixed in the minds of the judge and jury,
there is time to go back and discuss the subtleties of what
one expects the evidence to show. From the defendant's perspective,
the same is true. A simple statement of the facts supporting
the defense theory of no liability and affirmative defenses
is important for purposes of orienting the judge and jury
and impressing upon the logic of the defendant's case. Creating
an expectation on the part of the jury as to what the evidence
will show and the conclusions to be drawn from it is the heart
and soul of an effective opening statement. It is in a real
sense a covenant between the attorney and the jury. For this
reason it is critical not to promise something that cannot
be delivered. That creates a sense of mistrust and betrayal.
It is far better to be able to come back during closing argument
and remind the jury that what one predicted the evidence would
show is indeed what it did show.
B. Witnesses. The effective preparation and questioning
of witnesses for one's own side of the case is perhaps the
least exciting, but most crucial aspect of trial work. The
object should be to enable the witness to tell the story in
their testimony with the least observable interference by
the lawyer. Direct examination is not a time for showmanship
by the attorney. The attorney should be the door through which
the witness brings his evidence. The reason is simple. The
average juror finds what the witness has to say to be more
credible than what the lawyer, the hired gun, has to say.
If it appears that the lawyer is spoon feeding the witness,
that credibility is diluted, if not lost altogether.
Cross examination is another thing altogether. There the
object is to challenge the credibility of the witness and
leading the witness to one or more damaging admissions or
statements against the opposition's interest can have lasting
impact in the trial. In a contract case, it is usually more
effective to go after a limited number of points that the
attorney expects to be able to get from the witness on the
basis of discovery. All aspects of the witness' testimony
do not have to be met. A few telling admissions can change
the entire comprehension of the witness by the jury. A discovery-like
fishing expedition almost always leads to jury boredom and
often to answers the attorney would dearly love to erase from
the record and the jury's mind. Indeed, there is nothing wrong
with asking no questions of a witness, especially one who
has not hurt the attorney's case or from whom nothing is to
be gained in cross examination.
When questioning witnesses, key words from the party's theme
of the case and controlling points of law should be woven
into the questions. This is especially important in a contract
case where words such as "offer," "acceptance,"
"consideration," "repudiate," "refusal,"
and "mitigate" have great impact on the jury's findings
and the outcome of the case. If the jury has heard these words
repeatedly in a context favorable to one client, it will more
likely have decisional meaning to them when they receive their
instructions from the court.
It is just as important to have a persuasive order of calling
witnesses. Ideally, the first witness should not only be an
appealing and believable witness he or she should also have
as much comprehensive evidence to offer as possible. The sooner
the evidence presented can tie into one's opening statement,
giving it life and credibility, the better. For similar reasons,
the last witness called by a party should be memorable and
strong on as many major points as practicable.
C. Documents. In contract cases, there is an almost irresistible
urge to put in every document that could conceivable have
an impact on the case. This is usually born of a fear that
the one left out will be the one that would have won the case
or appeal. This is the time for some courage. Long, slow,
agonizing periods of document introduction, not only put everyone
to sleep, they breed animosity in the hearts of jurors who
would far rather be somewhere else. Where it is necessary
to put voluminous documents in, a few devices are helpful
in trimming the time involved in getting them into the record.
First, the use of requests for admission and stipulations
as discussed above can eliminate the need for putting a document
custodian or other witness on merely to authenticate the documents.
They may in some instances eliminate the need to have a witness
testify about them altogether. Second, some documents can
be batched into a single composite exhibit that a witness
can identify all at once. This is especially useful where
a batch of corporate minutes, checks, invoices, receipts or
form style reports are being introduced. It can even work
where it is necessary to introduce a chain of correspondence
on a certain subject in order to provide context in the record
for the few letters of importance the chain contains. Once
introduced, the individual items to be focused upon can be
addressed separately.
The most fruitful areas for objection to the introduction
of documents are authentication, hearsay, self-serving content,
reliability and the inclusion in them of irrelevant and potentially
prejudicial material.
C. Objections in General. Given the necessary complexity
of some contract cases, and the even more technical basis
for many objections, it is important when making an objection
to state it in layman's terms as much as possible so the jury
will follow what is being objected to and why it is being
made. For instance, if evidence is offered that should be
barred by the parole evidence rule, it should be kept in mind
that the jury does not have the faintest idea what the parole
evidence rule is. It might be helpful to phrase the objection
something like this:
Your honor, I object on the grounds that the question asks
for information outside the language of the contract. Where
the contract is clear, the words are supposed to be given
their plain meaning and the parole evidence rule bars the
use of outside evidence to try to change the meaning of the
contract. It is unreliable evidence.
The object is to show the fairness of the objection, and
the unfairness of letting the objectionable evidence in. Similar
difficulties with jury understanding are usually faced when
using the related objection that evidence is barred by a merger
clause in the contract and when objections are based on such
things as the hearsay rule, relevance, materiality, competence
of the witness and prejudice. Once a clear and relatively
short manner of expressing these objections is worked out,
it can be used over and over again with slight variations.
14.108 The Closing Argument.
The closing argument, or summation, is the climax of the
trial. Even though it is believed now to have less importance
than the opening statement, it is the last chance to influence
the jury by reasoning and argument. The argument should begin
and end with memorable statements. A return to the basic theme
of one's case, whether that be "taking responsibility"
or "living up to one's commitments' or whatever else
was chosen, and using simple logic to demonstrate how the
evidence supports that theme is effective. Again, the easier
it is for a juror to understand an argument, the better the
chance that the juror will take ownership of it and be persuaded
by it.
Where the case has been dependant on a large volume of documents,
this is the time to boil them down to a very few that have
significant impact. Standing them in front of the jury, with
critical language underlined or circled, gives them lasting
impact. Wherever possible the mass of documents which may
have seemed necessary for preserving the record should be
discussed categorically and their purpose quickly explained.
Frequent reference to the jury instructions is helpful,
both as an aid to the understanding of the jury and as an
invocation of the imprimatur of the court on the point being
made.
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Appendix A
| B | C
| D
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