I've Been Sued!
I’ve Been Sued! Now What?!
I’ve been told this, in one way or another, many times (often in much more colorful fashion). Usually the person on the other end of the phone is experiencing a whole host of emotions at once – anger, disappointment, embarrassment, rejection, fear, etc. – especially if this is the person’s first time being sued. A big part of what we do is represent small businesses. Small businesses are unique. They are often times owned and operated by an entrepreneur whose vision, tenacity and sometimes blind faith have taken the business from a fleeting idea on the back of a napkin to a real business. Entrepreneurs live, eat and sleep their businesses. The business is very much an extension of the entrepreneur, and so it is no surprise that the entrepreneur takes it very personal when the business gets sued. But, ask any business owner that has been in business for a length of time and they will tell you that invariably, at some point your business will be involved in some sort of litigation.
The purpose of this article is to pull the curtain back on the litigation process to hopefully eliminate some of the confusion and relieve some of the anxiety associated with being sued (or having to sue someone else). Please understand that this is very basic overview and that the litigation process in your case will depend upon the facts, circumstances, budget, jurisdiction and complexity of your particular matter. This article is written primarily from a Tennessee law perspective, but is not generally applicable to so-called small claims courts or arbitration matters which typically have a simplified process for quicker resolution of cases.
Litigation is simply where one party files a lawsuit against another party. A lawsuit is typically initiated by the filing of a Complaint with a court. Typically, the Complaint sets out the general basis for the suit and what or how much is being demanded. The “plaintiff” is the person suing, and the “defendant” is the person being sued. The Complaint is usually “served” on the defendant by a sheriff or process server.
Once the Complaint is filed, the defendant is required to file an Answer. Typically, the Answer will follow the Complaint line-by-line and deny or admit the various statements contained in the Complaint. It will also state generally the defenses that the defendant may have. The defendant also may at this time file a Counterclaim against the plaintiff, a Crossclaim against a co-defendant or a Third Party Complaint against a third party. If the defendant does so, then each party being sued is required to file its own Answer.
The next major stage in the process is discovery. This is the part of the process where the parties are allowed to request information from each other, and to some extent, third parties. Although the requested information must generally be relevant and not unduly burdensome, parties have a great deal of latitude with what they can request and what information they must disclose. The discovery phase of the process is almost always lengthy and time consuming.
The primary means of discovery are written questions and depositions. The three most common types of written questions are Interrogatories, Requests For Production of Documents and Requests For Admission. Each of these is comprised of a list of questions which request information or copies of documents. A deposition is essentially a formal “interview” of a person in front of a court reporter who creates a transcript of the proceeding. Persons that are often deposed include the parties, eye witnesses, a physician, etc.
At some point during or after discovery is complete, often times the parties attend a mediation. The parties and their counsel will typically all go to the office of a mediator. Mediators are persons who are licensed by the court system to aid in resolving disputes. Each party will be placed in a separate room. The mediator will then go back and forth between the rooms discussing the case and attempting to reach an agreed upon settlement of the dispute. Tennessee courts require mediation in most cases.
At any time during the litigation, a party may need to ask the court to do something. A party does this by filing a motion. The most commons motions are discovery motions, which typically ask the court to require one person to disclose documents or information that the party has refused to disclose. Other common motions are motions to dismiss or for summary judgment. A defendant may file such a motion asking the court to dismiss a case because the case lacks any factual or legal basis. Courts in Tennessee are very reluctant to grant such motions – primarily due to the very high standard to which such motions are held. A defendant filing such a motion must basically prove that the plaintiff can not prove its case. The difficulty here is that it puts the defendant in the position of having to prove a negative, which is often times impossible to prove short of a trial.
If the case is not settled in mediation or otherwise disposed of, once discovery is complete, the case is set for trial. Due to the backlog of cases in the courts, trials often must be scheduled many months in advance – particularly jury trials and/or those that will take several days or weeks to complete. In most cases, either party has a right to demand a jury trial. A jury trial typically has four basic phases: jury selection, opening arguments, testimony and closing arguments. A bench trial, i.e., one in which the judge makes all decisions, typically has three basic phases: opening arguments, testimony and closing arguments. In a jury trial, the jury makes decisions as to facts and the judge makes decisions as to law. For example, the jury would decide whether or not someone was negligent, but the judge would decide what state’s negligence laws would apply.
When a case goes to trial a party gives up a great deal of control in that the decision rests on the arbitrary thoughts, preconceptions and prejudices of the judge or jury. The reality is that judges and juries are made up of humans and do make mistakes. For this reason we encourage clients not to simply “give in,” but to at a minimum carefully consider the inherent risks of going to trial and giving up this control.
Following the trial, the Court will enter a judgment. Either the Court will find for the defendant outright, or will enter a judgment for the plaintiff for an amount of money and/or order the defendant to do (or not do) something. It will then be up to the plaintiff to attempt to collect the judgment that it has been awarded. This collection process in and of itself can be quite burdensome, particularly if the defendant simply has no significant assets or income in which to go after.
The appellate process is beyond the scope of this document as it involves its own unique set of rules, procedures and courts. It is important to keep in mind, though, that a party may appeal a final judgment to an appeals court in instances where the party believes it can show that the trial court made a mistake in its application or interpretation of the law and that the Court’s mistake made a difference in the outcome of the case.
The most important thing that you can do if your business is being sued or you are considering whether you need to sue someone else is to hire an attorney that you trust. If that is you, please call us.
We want to help you and your business win.