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Archive for the "Litigation Strategies " Category

What Clients Should Know When Preparing for a Deposition

A deposition is a question-and-answer session with the parties to the lawsuit and the other side’s attorney. Typically, a lawyer will ask the same or similar questions of a witness during the deposition as he or she will ask during the trial of the case. The purpose is to determine what type of witness the person would be if the matter were to proceed to trial. In doing this, lawyers are looking at the credibility of a witness if his or her story differs between the deposition and trial.

Deposition preparation and evaluation of the deponent is critically important in cases. In order to adequately obtain information that is being solicited from the witness, an attorney always must prepare for the deponent. In a deposition, lawyers meet with parties in a case, as well as experts and other witnesses, to ask questions before trial and take statements under oath. This formal questioning is part of the discovery phase, which lawyers use to gather facts to prepare their cases. While depositions are a routine part of litigation, understanding their purpose and how to prepare for them is crucial.

Additionally, lawyers use depositions to determine the strength of their case. Depositions are one of the few times that an attorney gets to evaluate witnesses and use that assessment to determine whether settlement of the case is an option, or if the matter should continue through other motions and trial proceedings. 

South Carolina Auto Liability Case May Set New Bar For Awarding Damages

Questions before the South Carolina Supreme Court could change whether negligence in causing a car accident now may be considered in awarding damages for injuries allegedly caused by a vehicle’s design flaw.

The answers to questions of state law certified in the federal products liability case Donze v. General Motors hinge on the South Carolina Supreme Court’s decision on whether comparative negligence, which apportions damages based on fault, applies in crashworthiness cases.

For years, South Carolina plaintiffs have been able to successfully argue that the circumstances of what caused an accident are irrelevant when considering liability based on crashworthiness, which is the degree to which a vehicle will protect its occupants from the effects of an accident – often referred to as the second collision.

Under the crashworthiness theory in South Carolina, a manufacturer can be held responsible for a design flaw of the vehicle that enhances or aggravates the injuries above and beyond those from the initial collision.

Not On My Land? Clarifying the Elements For a Prescriptive Easement

Imagine finding that a neighbor, or a company, or even the public has acquired the right to use part of your property without compensating you. A recent ruling in South Carolina sets new case law and provides important guidance for issuers of title insurance, parties impacted by property litigation and anyone who may be seeking advice about the validity of an easement, which is a right to cross or use someone else's land for a specified purpose.

In Simmons v. Berkeley Electric – a property dispute over whether utility companies had the right to use a individual's land for water and power lines – the South Carolina Supreme Court held that the Court of Appeals erred in recognizing two methods, adverse use and claim of right, of proving the third element of a prescriptive easement. (A prescriptive easement is earned by regular use; it is not something that is purchased, negotiated or granted, and the user does not gain title to the land.)

This ruling concluded that when analyzing the third element of a prescriptive easement, South Carolina courts should apply a new test for adverse use, which is the practice of using property without the authorization of the owner.

Attorney-Client Privilege: Use with Care

A bedrock principle of our legal system is the protection that the law gives to communications between an attorney and the client.

Like most legal rights, however, attorney-client privilege has limits. Every word shared between a client and attorney isn’t protected. If you’re talking to a lawyer about a sensitive matter, don’t take attorney-client privilege for granted. The law provides exceptions, case law sometimes offers muddled guidance and opposing parties may litigate vigorously over what is covered. Your attorney can advise you as to how it applies to your circumstances, but here are some guidelines about relying on attorney-client privilege and waiving it. 

Protect Your Loved Ones from Elder Financial Abuse

It’s a fact of life: as we get older, our powers of discernment diminish and our judgment of others – particularly their trustworthiness – often makes us vulnerable. Sadly, there’s a legal component to outliving our good judgment.

Elder financial abuse takes many forms, and the common denominator is theft. Sometimes a family member is involved. Sometimes it may be a caregiver who is a constant companion or someone met at church who seemingly just wants to help an older person manage his or her affairs. Families may seek legal help in regaining control over a loved one’s personal affairs or recovering squandered funds. Banks and others caught in the middle may seek legal help when they are unsure if granting a request for a joint account or other shared authority over finances is in the best interests of an older person. Lawyers called in on these types of cases often find that it is difficult to recover misappropriated assets, so if you suspect something is awry in an elderly person’s life you should seek legal counsel as soon as possible. 

Take the Extra Step in Product Warnings to Protect Your Company from Liability

For years, the assumption in South Carolina law has been that a manufacturer doesn’t have to warn about something that is obviously dangerous, such as a power saw. Do you really need to tell users to keep their hands away from spinning blades? The more challenging concept is: how do you effectively warn about a product that is beneficial when used properly, but that may have dangerous or unintended outcomes if used improperly?

A basic principle of product liability warnings is the concept of the “sophisticated user.” A professional carpenter who uses power tools in his job should be aware of the inherent dangers of a powerful, spinning cutting blade. In comparison, a skilled worker may – or may not -- be expected to appreciate the dangerous qualities of flammable or toxic substances that sometimes are integral components of the job site or the task at hand.  

Loan Servicers Must Continue to Follow Both Federal and State Rules in Foreclosures

Banks have now had two years of experience with the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB), the agency that implements the parts of the law that apply to mortgage servicers.

The foreclosure crisis and accompanying recession are in the rearview mirror, but the stringent consumer protection rules attached to the law continue to set tight boundaries for how banks handle loss mitigation. Dodd-Frank was a response to a period when many mortgage servicers were unresponsive to consumers as a result of being overwhelmed by the volume of defaults. As a result, the law severely tightened protections for borrowers, requiring mortgage loan servicers to follow strict procedures and documentation in loss mitigation.

Creditors’ Rights Trump Ownership Restrictions in LLC Operating Agreements

A recent South Carolina Supreme Court decision affirms the supremacy of creditors’ foreclosure rights, and sounds a cautionary note for LLCs. The state’s high court said that LLCs can’t use an operating agreement to force a creditor to sell a distributional interest it obtained via judicial foreclosure. 

The ruling came in Levy v. Carolinian, LLC, a case involving an LLC that owns an oceanfront hotel. One of the members, who owned about a quarter of the LLC, found himself on the wrong end of a judgment for $2.5 million. Creditors obtained a charging order – essentially a lien – against their debtor’s distributional interest in the LLC. The creditors then foreclosed on its charging lien and purchased the member’s distributional interest at public auction. 

Your Right to be Free of Your Neighbor’s Water

Almost any change that people make to the natural landscape can alter the flow of surface water, and that often creates problems that grow into legal disputes. It’s an area where property rights, nature and engineering intersect in unpredictable ways.

A new subdivision, parking lot, expansion of a building or even change in the use of rural land can result in water washing out a neighbor’s lawn, flooding homes, attracting mosquitos in standing pools, depositing silt on a golf course, polluting a backyard pond or rendering crop land less profitable. While we typically see these problems emerge in urban developments, disputes can arise anywhere water flows. 

Precise Communication is the Antidote to Accounting Malpractice Claims

In my experience as both an attorney and a formerly licensed CPA, true accounting malpractice is rare. But, when there are claims, they can be expensive. It’s incumbent on accountants, as well as clients, to take steps to minimize the misunderstandings that can lead to litigation. 

Records Retention - Do You Have a Plan?

For many small businesses, deciding what documents to keep and for how long is a function of storage capacity. As servers and filing rooms reach capacity, businesses look for documents to discard. 

This is not the way to manage your documents.

Communication is the Key to Managing Litigation

Communication is essential to a good relationship between an attorney and client in litigation. One thing we don’t ever want to hear from a client is that she went into a meeting and was asked about the status of a lawsuit and didn’t know what to tell her directors or partners. Our philosophy is that clients should always know where their litigation stands.  

That doesn’t necessarily mean daily phone calls — more is not always better. While some business leaders want to know about everything that happens in their case, others just want us to hit the high points. They’re busy people running a business, and they tell us not to bother them with anything except important developments. 

Both styles work, and it’s important for the lawyer and client to establish right at the beginning what kind of communications process they are going to use.

Protect Your Intellectual Property with Employment Agreements

In an era when confidential information can be secreted out the door on a thumb drive, business owners can’t depend on the goodwill of employees to keep their intellectual property safe. If you have any form of IP – and almost every business does – we recommend that you protect it with employee agreements. 

While many businesses have unique intellectual property concerns, here are some of the topics we often see emerge. 

What to Expect When You are the Target of a Lawsuit

It’s frightening for most business owners to receive notice of a personal injury or premises liability lawsuit, and one of the first questions lawyers are asked is whether to settle the suit and for how much. The good news is that a majority of suits settle, usually within the limits of insurance coverage, and those plaintiffs who insist on going to trial generally have weak cases.

Considerations for Whether, When and How Much to Pay to Settle Litigation

Most lawsuits never go to trial, but it is still difficult for a business that is the target of litigation to know whether and when to settle, and for how much. 

It may be especially challenging for a defendant to take the initiative to settle when it feels it occupies the moral or legal high ground. However, while it may not seem fair, every defendant starts losing money the day the complaint is filed. Unless a defendant has a viable counter claim or a contractual agreement that the loser pays the winner’s fees and costs, the best a defendant can hope for is to lose only the cost of defense. For this and other reasons, it is often the best business decision to settle, even when in the right. But how much should a defendant pay to settle and at what point in the litigation, and at what number is it better to try the case? 

Be Careful What You Sign: Red Flags in Commercial Contracts

When businesses sign a contract, they’re usually focused on the opportunity it represents – a new customer, a better supplier or a partnership that expands their reach. Unfortunately, when we, as lawyers, see some of these same contracts, it’s after the air has gone out of such expectations and a deal has soured. 

While our best advice is to have every contract reviewed by your attorney, we realize that most businesses aren’t going to do that for every agreement. If there is a lot of money – or risk – involved, consider asking your attorney to review a contract – a process that usually isn’t time consuming for legal counsel familiar with your business. 

However, in those cases where you choose not to make a call to your attorney, here are some things to watch for based on our experience. 

How to Pick a Lawyer

Just as we all need a family doctor who we can rely on, every small business eventually finds that it needs a relationship with a lawyer. As with the family doctor, many small business owners find it beneficial to develop rapport with one lawyer as a point of contact. While the relationship attorney may sometimes direct the client to someone with specific experience, it’s reassuring to begin the conversation with someone who understands your business and industry – and remembers the names of your kids.

I frequently go shopping for other lawyers myself, so I have some experience in this area. In my case, I’m usually looking for a lawyer or firm in another state who can handle a matter for a client. Even as a lawyer, it’s not always easy to judge if another is going to be a good fit, so I understand how business owners may find it difficult to pick an attorney. Here’s my test for picking a lawyer. 

How to Collect Business-to-Business Bad Debts

Uncollected business-to-business debt is a huge problem for most small companies, and unlike consumer debt, there are no laws in South Carolina that directly address either the rights of creditors or debtors. Hardly a day goes by that we don’t hear from a client seeking advice on how to collect on a long-overdue commercial debt. Here is a list of best practices to help collect bad commercial debts, and to avoid ending up with these tough-to-collect liabilities in the first place.

Don’t Automatically Include Arbitration Clauses in Commercial Contracts

For years, mandatory arbitration clauses have been almost automatically included in many commercial contracts, because they’ve been regarded as cost-effective detours for matters that might otherwise work their way through the courts. Over the last few years, we’ve adopted a more critical view of arbitration, and now regard it as a good strategy for some clients, but not for others.

How to Write a Workable Non-Compete Agreement

Employers invest time, training and trust in key employees, and they don’t want to see them walk out the door and help a competitor. Non-compete agreements can protect your investment in employees – but only if they’re written with reasonable restrictions. 

Don’t Misunderstand the Memorandum of Understanding

Can a city change its mind about development partners after signing a memorandum of understanding (MOU)? 

That question bounced around in South Carolina courts for a decade, and the state Supreme Court issued the final answer last summer. A city – or any party – may back out of an “understanding” that doesn’t include a definitive agreement. 

Managing Lawsuits that Go Beyond State Borders

Just because a lawsuit originates in a particular state does not mean that all relevant information or people will be neatly located in that same state. For instance, what if you file a claim in South Carolina against a North Carolina-based business, and the records you need to review and the people you need to depose are also in North Carolina? If the case were filed in federal court, the court’s subpoena power would extend to all fifty states. However, if the case were filed in state court, the South Carolina court would not have subpoena powers beyond the state’s borders.

Arbitration:  Should I Stay (in Court) or Should I Go (to Arbitration)?

In South Carolina, 33 out of 46 counties are “mandatory mediation” counties, and circuit court litigants in these counties are required to participate in mediation of their lawsuits prior to trial (with certain limited exceptions).

Advice to Opposing Counsel: Do Your (Legal) Homework

Recently, a widely watched television show composed of a panel of diverse women discussed the recent decision of the United States Supreme Court in the case of Burwell v. Hobby Lobby, Inc. The Hobby Lobby case involves three closely held corporations’ challenges to the Affordable Care Act’s mandate that they provide insurance coverage for four contraceptive drugs or devices that operate after the point of conception.