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What to Look for in a Trial Attorney

When describing lawyers, my Contracts professor in law school used to say, “You shouldn’t judge an entire profession by three or four hundred thousand bad apples.”[1] But with the bushels of bad apple lawyers, there are also many very good and conscientious attorneys who strive to do what is best for their client. So how do you find a good trial attorney who puts your interests above his or her billable hour requirement? Here are some general things to look for when searching for the right trial lawyer for you and your lawsuit.

Before I jump into some specific traits, let’s make it clear that any lawyer you hire must have at least two basic qualifications: competency and experience. This doesn’t mean your attorney had to go to an Ivy League school to get their degree. Rather, it means he or she must be persuasive and believable. There are lots of great attorneys without the shiny academic credentials who are as sharp as a tack in the courtroom—that’s who I want arguing for me if my company or good name is on the line. Additionally, nothing compares with actually having gone through several full trials. You want someone who has been in the trenches and knows what to expect, but can also react appropriately when the unexpected inevitably happens.

Assuming these bare minimums, first evaluate what kind of case you have. Is this a situation where you need to continue a business relationship after the lawsuit is over (with a supplier or a major tenant, for example), or have all ties been severed with the other side and you must win for your business to survive? Look at your case honestly from a business perspective because not all cases call for General Sherman’s March to the Sea during the Civil War—that kind of case is extremely expensive and, while you may get the satisfaction of burying your opposition, you will certainly end up with a bill to your lawyer for hundreds of thousands of dollars.

Not all trial lawyers are suited for the slash and burn lawsuit, either. By the same token, not all fire-breathing litigators have enough finesse to win your case without so angering the other side to still keep a necessary business relationship with the opposition after the dust has settled. You are the one who has to carry on the business after the lawyers are out of the picture, so you need to make an early decision as to what you want the relationship with the other side to be after the lawsuit is finished. Then hire the trial attorney with the disposition and skill set to get you there.

Second, make sure the lawyer’s personality doesn’t annoy you; after all, you are going to be dealing with this person for the next couple of years and shelling out tens of thousands of dollars so you need to hire someone you like—or at least tolerate. Litigation is contentious enough without feeling like you are fighting against your own attorney. You do not want someone who tries to bully you into taking positions or making arguments just for the lawyer’s entertainment. Remember: you hired the attorney; he or she works for you, not the other way around. I’m not saying you and the attorney have to start hanging out in each other’s social circles. I am saying that you are trusting your future to this person so find someone who respects you and your input.

An important subpart to this second point is trust. Find someone you trust, someone who will listen to your input and then tell you what you need to hear and not necessarily what you want to hear. Sometimes the strategy you want to take may not be in line with what the law or procedure allows. This is why you need an attorney with enough experience to tell you when something should or should not be done. You will be relying upon your counsel to help you out of your current predicament. Make sure you trust his or her advice.

Third, your lawyer should not make your dispute personal—especially in a commercial setting. Doing so takes away the objectivity he or she needs to represent you properly. Of course, you don’t want your trial attorney so unemotional that you are unsure if your interests are being protected. However, there is a fine line between taking a personal interest in a client’s case and making the client’s case the attorney’s personal mission. If you notice your lawyer is more focused on “sticking it” to the other side’s counsel rather than advancing your interests, you have a problem. Shakespeare correctly said, “And do as adversaries do in law, Strive mightily, but eat and drink as friends.”[2] Litigation is inherently full of conflict and tempers flare easily, but the dispute between your lawyer and opposing counsel must be kept professional and not turn into something personal.

Finally, any attorney you hire must remember that the law is a service profession. Lawyers are supposed to serve you when a problem has become too entangled to separate on your own. A trial attorney’s job is to see that your interests are protected in the most efficient and least expensive way possible; not to bill you for every last nickel. If your lawyer has forgotten the service aspect of this profession, you probably hired one of those bad apples and should look for new counsel.


Footnotes

[1] Professor James Gordon, J. Reuben Clark Law School at Brigham Young University, fall semester, 1995.

[2] The Taming of the Shrew, Act 1, scene 2. For a more humorous example, consider the relationship between Sam Sheepdog and Ralph E. Wolf in the classic Looney Tunes cartoon series. See, e.g., Double or Mutton (Warner Bros. Entertainment, 1955). They were friends before clocking in, ate lunch together, and were social after work, but during the workday, their goal was to defeat the other side. Importantly, neither one took the professional attacks personally.

Recovering Lost Profits by Avoiding Limitation of Liability Provisions

By Daniel Mestasz

Lost profits are often the largest component of damages in breach of contract cases. Limitation of liability provisions, however, typically preclude those damages and other consequential damages. These provisions are in many types of contracts, particularly service contracts, supply contracts, and contracts governed by the Uniform Commercial Code. If a client has been damaged by a breach, avoiding that provision can be critical.

Like a rock thrown into a pond, a single breach can ripple through a company’s operations and damage its other relationships. For example, where a supplier sold defective paint to a dealer, the court did not limit the damages to replacement paint. Rather, the dealer was entitled to the profits it would have made on the contracts cancelled by its contractor customers, as well as its lost goodwill. Isenberg v. Lemon, 84 Ariz. 340, 349–50, 327 P.2d 1016, 1022–23 (1958). Similarly, where a city breached a towing contract, the towing company was entitled to lost profits on the sale of parts from the abandoned cars it would have recovered, lost profits from towing services, and damages for lost goodwill. All Points Towing, Inc. v. City of Glendale, 153 Ariz. 115, 735 P.2d 145 (App. 1987). See also Short v. Riley,150 Ariz. 583, 585, 724 P.2d 1252, 1254 (App. 1986) (where defendant wrongfully withheld liquor license in connection with restaurant purchase, plaintiff was entitled to any lost profits while operating the restaurant without the license).

Thus, where a breach causes lost profits or other consequential damages, it is important to see if the contract has a limitation of liability provision. If it is there, Arizona law presents some options to avoid it.

First, a party who has breached a contract in bad faith may not rely on a limitation of liability clause in that contract. Airfreight Express Ltd. v. Evergreen Air Center, Inc., 215 Ariz. 103, 158 P.3d 232 (App. 2007).

In Airfreight Express, the defendant contracted to provide maintenance repairs on an airplane so that the plaintiff could perform under an air cargo contract with Air France. Following a settlement agreement that required the defendant to make repairs, the plaintiff sued for breach of contract, alleging that the defendant made faulty repairs for the purpose of letting its sister company appropriate the Air France cargo business from the plaintiff. The court reversed the trial court’s summary judgment ruling that a limited liability clause precluded the plaintiff from recovering lost profits that it would have earned under the air cargo contract.

The court held that a bad faith breach precludes reliance on a limited liability clause, as held by courts from other jurisdictions and consistent with Corbin, the Restatement, and Arizona law. Id., at 110–11, citing 15 Grace McLane Giesel, Corbin on Contracts § 85.18 at 471 (2003) (a limited liability provision “is not effective . . . if the party acts fraudulently or in bad faith”), Restatement (Second) of Contracts, § 195 (1981) (prohibiting contracts exempting parties from intentional or reckless tort liability), and A.R.S. § 47–2719(C) (“Consequential damages may be limited or excluded unless the limitations of exclusions is unconscionable.”). The court further explained that as “a matter of public policy, a party should not benefit from a bargain it performed in bad faith.” Id., at 111.

Second, under the U.C.C., and “[p]ursuant to A.R.S. § 47–2719(B), a limitations of damages clause in invalid ‘[w]here circumstances cause an exclusive or limited remedy to fail of its essential purpose.’” Nomo Agroindustiral Sa De CV v. Enza Zaden North America, Inc., 492 F.Supp.2d 1175, 1181 (D. Ariz. 2007), quoting A.R.S. § 47–2719(B). In Nomo, a tomato grower sued its seed dealer for lost profits after its plants died from a virus. The court held that under Section 2719(B) and (C), the dealer could not rely on a limitation of damages clause to limit damages to the purchase price of seeds because it failed of its essential purpose (2719(B)) and was unconscionable (2719(C)). The court reasoned that parties to a sales contract cannot disavow minimum adequate remedies, which would include lost profits for defective seeds that resulted in a lost growing season:

The comments to [Section 2719] state: ‘[I]t is of the very essence of a sales contact that at least minimum adequate remedies be available. If the parties intend to conclude a contract for sale within this Article they must accept the legal consequence that there be at least a fair quantum of remedy for a breach of the obligations or duties outlined in the contract.’ [citing comment 1] . . . A farmer’s lost growing season and the accompanying loss of expected profits due to defective seeds clearly is not compensated by simply replacing or refunding the price of the defective seeds.”

Id.

A limitation of liability provision may not be the end of the world for companies devastated by another’s breach. Defeating that provision may be the first step to recovering lost profits and other consequential damages.

Do you Have an Antitrust Claim?

By Craig LaChance

Monopoly man and Mr. BurnsMost people have, at best, only a vague understanding of antitrust law. They know it has something to do with monopolies and competition.[1] Perhaps they recall something about antitrust from an American history course—e.g., Standard Oil, 19th century railroad conglomerations, trust-busting politicians. Occasionally, one hears of antitrust in the news when the Justice Department nixes a merger of say, airlines or cable companies. The general perception is that antitrust seeks to keep companies from getting too big and driving smaller firms out of business. This was, in fact, the intent when Congress enacted the first antitrust laws in 1890. But things have changed in the intervening century. Size, market share — indeed, even predatory business practices — are no longer determinative in an antitrust case. Just because a large company has tried to drive a smaller competitor out of business — i.e., to exclude the competitor from the market — may not mean the company has violated the antitrust laws. Exclusionary conduct is a necessary but not a sufficient condition of an antitrust claim. In addition to exclusionary behavior, an antitrust claimant must prove, above all else, that the behavior harmed consumers.

Consumer welfare has always had some role in antitrust policy. Initially, however, it was a bit player. As historian Richard Hofstadter has noted, when Congress first enacted antitrust legislation it had three goals in mind.[2] The first was economic. Classical economic theory held that competition produces the maximum amount of economic efficiency, so antitrust policy sought to ensure a competitive — that is, lots of players — market. The second goal was political. Huge concentrations of wealth and power were viewed as a threat to democratic government.[3] Corporations had grown so big so fast many feared business could become more powerful than civil government. Antitrust’s third goal was social and moral. Competition was believed to engender discipline. The American character had been “forged by competitive individualism.”[4] To foster this discipline, Congress needed to ensure the game was not rigged.
220px-I_Like_a_Little_Competition
But as time went on, two of those goals — political and moral — fell by the wayside. Corporations, of course, continued to grow and continued to exert political influence. Yet by the middle of the 20 Century, the public was less concerned about size. The initial shock over the power and size of big business wore off. What’s more, what “really made bigness palatable more than anything else is the remarkable performance of the economy since the beginning of the Second World War.”[5] Likewise, the notion that American character required the discipline of entrepreneurial individualism lost salience. Acquiring specialized skills and advancement through a bureaucratic career, often in a big corporation, became the ideal.[6]

This left only antitrust’s economic goal, but even the nature of that goal changed. The initial meaning of this economic goal was confused, but the general notion was that competition meant a market with a lot of players. The more rivals, the more competitive the market. Thus, in a sense, antitrust policy sought to ensure that the market had a certain number of competitors. But as economists studied antitrust policy, they came to believe that the number of competitors did not necessarily mean more efficiency. As two preeminent antitrust scholars put it: “A market with three sellers but an output of 100 units per day is more competitive than one with ten sellers but an output of 80 units per day.”[7] Thus, economists and judges reconceptualized competition in terms of consumer welfare. A market is competitive when it maximizes consumer welfare, that is, the market is characterized by low prices and high quality. Accordingly, the real goal of antitrust policy is to maximize consumer welfare.[8]

So what does this mean for the antitrust claimant? How does one bring an effective antitrust suit? A competitor’s size or market share alone will not cut it. Additionally, improper, even predatory, actions by themselves may not be enough. Just because you have been harmed by the acts of a competitor — i.e., lost market share — does not necessarily mean you have an antitrust claim (although you may have common law claims for unfair competition). The market is rough; firms lose business to more successful firms all the time. To assert an antitrust claim, a company must prove that a large competitor’s acts have actually harmed consumers. This means there must be proof that prices for a product have gone up, that quality has declined, that consumer preference has been thwarted. Absent this kind of evidence, an antitrust claim will likely falter.


Footnotes

[1] That the U.S. refers to this area of law as antitrust and not—like the rest of the world—as monopoly or competition law is an accident of history. Monopolies were particularly flagrant in late 19th century America. Richard Hofstadter, “What Happened to the Antitrust Movement,” in The Paranoid Style in American Politics and Other Essays, 195 (Harvard 1964). American business first colluded and combined by means of a simple common law trust. Instead of mergers, corporations in a particular industry would place shares of their businesses in a trust with a trustee managing the conglomeration. See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application, vol. I,  (Aspen 3d ed. 2006). Thus, to oppose this type of collusion was to be “anti-trust.”

[2]  Hofstadter, supra n.1 at 199.

[3]  See Louis D. Brandeis, Other People’s Money: and How the Bankers Use It (Martino 2009), which has a chapter entitled “The Curse of Bigness.” Brandeis’s views were common at the time. As his biographer writes, “ Brandeis opposed large businesses because he believe that great size, either in government or the private sector, posed dangers to democratic society and to individual opportunity.” Melvin I. Urofsky, Louis D. Brandeis A Life, 300 (Pantheon 2009).

[4]  Hofstadter, supra n.1 at 209.

[5] Id. at 215. Also, any worries about big business threatening government were likely offset by the simultaneous growth of government.

[6] Id. at 219.

[7] Areeda & Hovenkamp, supra n. 1, vol. I, ¶ 100, 3.

[8] Robert H. Bork, The Antitrust Paradox: A Policy at War With Itself, 427 (Free Press 1993).

Theory and Practice in the Courtroom: Hearsay in Business Litigation

By Daryl Williams

Exclusion of hearsay in the courtroom is like a knee-jerk reaction by opposing counsel and a similarly quick response by the judge. “What did he say?” is a question opposing counsel and the judge will think calls for hearsay if the guy talking is not a party to the lawsuit. So, the trial lawyer thinks, he will recast the question to “What did you understand?” Is that not hearsay if the only way the understanding came was by listening to what that non-party individual said?

How about this: the president of a company fires a superintendent after he hears from various employees that this superintendent was speaking to others in a derogatory manner about customer employees and behaving in a manner that did not meet the standards of the company. The superintendent sues for wrongful termination so the company’s lawyer asks the president on the stand why he fired the superintendent. The reason the superintendent was fired, of course, is because the president believed what he heard about the superintendent.

Q. Why did you fire him?
A. Because I was not happy when I heard bad reports from a customer.
Q. Who?
A. Joe Schmow.
Q. What did Mr. Schmow tell you?
OBJECTION: Hearsay.

Is it hearsay? Can the president relate what he was told that formed the basis of his decision? After all, that is why he fired the superintendent.

Some judges are going to rule that this is blatant hearsay and inadmissible, but others are going to let it in. Moreover, the courts ruling will be affected by—this is human nature—the court’s view of the case. The judge, even one on the bench for fifteen years, may disregard the technicalities of the hearsay rule if it suits him, the following is an actual transcript:

BY COUNSEL: Well, your Honor, again, we’re not using any of this evidence for the truth of the matter, other than this is the truth of the basis upon which we made a decision, which is not a hearsay problem.
THE COURT: All right. You can try to say that out loud to the jury if you want, but I’m going to laugh when you say that to me. You can split that hair and have somebody actually make that mental gymnastic leap. Good luck. I understand the damage that it does . . . .

The question, then, becomes how the lawyer educates or confuses the judge as to the nature of hearsay. Not being prepared for this type of nuance can be the difference between winning and losing. The trial lawyer has to remember that the trial judge does not try very many commercial cases, and those that he does try usually do not involve this sort of nuanced issue.

Daryl Williams quoted regarding aviation industry lawsuit

Daryl Williams, a partner at BWG, was quoted in an Arizona Republic article regarding an aviation industry lawsuit involving the Glendale Municipal Airport.  Nearly 20 pilots have filed a lawsuit in Maricopa County Superior Court against the airport, alleging breach of contract, broken promises, changing contracts, and loss of property value.  Daryl is the attorney for hangar owner Valley Aviation Services.

Daryl has particular expertise in this area.  He is a pilot who regularly flies his own plan in connection with his commercial litigation practice.  He also has extensive experience handling legal matters for aviation industry clients.

To contact Daryl about his aviation or commercial litigation legal practice, call BWG at 602-256-9400.