Cause of Action for Tortious Interference with a Business Relationship

Posted by David Adelstein on June 11, 2017
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Business relationships are important.  It is all about relationships in all walks of life!  What if someone interferes with your business relationship?  What if that interference is intentional or unjustifiable?

There is a cause of action known as tortious interference with a business relationship. Monco Enterprises, Inc. v. Ziebart Corp., 673 So.2d 491 (Fla. 1st DCA 1996) (“Tort liability for interference with prospective contractual relationships is generally recognized.”)

A plaintiff asserting this cause of action must PROVE the following elements:

(1) The existence of a business relationship;

(2) The defendant had knowledge of the business relationship;

(3) The defendant intentionally and unjustifiably interfered with the business relationship; and

(4) The plaintiff has been damaged as the result of the intentional and unjustifiable interference.

Southeastern Integrated Medical, P.L. v. North Florida Women’s Physicians, P.A., 50 So.3d 21, 23 (Fla. 1st DCA 2010); Harllee v. Professional Service Industries, Inc., 619 So.2d 298, 299-300 (Fla. 3d DCA 1992).

An action for tortious interference with a prospective business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered.” ISS Cleaning Services Group, Inc. v. Cosby, 745 So.2d 460, 462 (Fla. 4th DCA 1999).  

The claim requires a tortious interference with present or prospective customers or relationships and not the community at large; for this reason, the claim requires an “actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered. Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812, 814 (Fla. 1994); see also Ferguson Transp., Inc. v. North American Van Lines, Inc., 687 So.2d 821 (Fla. 1996) (plaintiff must prove business relationship with identifiable customers to support claim for tortious interference with a business relationship).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Restrictive Language in Employment Agreement

Posted by David Adelstein on June 04, 2017
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Woo-hoo! I got a real good J-O-B! Great pay. Great benefits. Great location. Doing what I want to be doing with my skillset. My new employer wants me to sign an employment agreement, but I have signed such agreements in the past, so this is no big deal. Or, is it a big deal?

There are many professions that want certain employees to sign an employment agreement that includes a restrictive covenant, i.e., anti-compete or anti-solicitation language. The employer does not want to train the employee, give the employee access to its trade secret information, customer lists, internal marketing material, pricing lists, or other business data only for the employee to leave and use that acquired information to start-up his/her own business or work for a competitor. From a common sense standpoint, this makes sense. No one wants to invest in an employee that leaves and takes what he/she learned to a rival company or to start a competitor.

All too often, the employee does not really understand the implications of the restrictive covenant language he/she is signing. The mindset is if I don’t sign the employment agreement I will not be hired and the money or opportunity or location is way too good to pass up. All of this may be 100% true.  But, this does not mean you should not truly appreciate the implications of such language or try to negotiate the language to more favorable terms (if possible).  The fact that you are in a position asked to sign an employment agreement means you have had other jobs in the past or are viewing this job as a stepping stone opportunity. You know there is a lot that could happen: you don’t like the job, the job isn’t what you thought it was, a better opportunity surfaces, you want to make a job change, you want to start your own business, etc. Life happens which is why the job you are in today may not be the job you are in a few years down the road.

In a recent case example, Collier HMA Physician Management, LLC v. Menichello, 42 Fla. L. Weekdly D1228b (Fla. 2d DCA 2017), a doctor signed an employment agreement with a physician group that operates hospitals that provided during the course of the agreement and for a 12-month period after the agreement is terminated or expired, the doctor agrees not to work for specifically named physician groups or hospitals identified in the agreement (that were within the same geographical area). (Yes, medicine is a business too!).  

The doctor became dissatisfied with his job and went to work at a hospital included in the restrictive covenant language.   His prior employer moved to enforce the restrictive covenant language by filing a lawsuit for injunctive relief – to prohibit the doctor from working for the hospital identified in the restrictive covenant language in the employment agreement.

As often is the case, and many times justifiably so, the doctor challenged the enforceability of the restrictive covenant language. Restrictive covenants in employment agreements in Florida are governed under Florida Statute s. 542.335 to ensure that the language is reasonable in time, area, and business, and they don’t operate to unreasonably restrain competition or trade. (Check out this statute here.)  

At first blush, the restrictive covenant at-issue does not appear to be unreasonable. It was for a period of 12-months, was limited to a geographic area, and made specific reference to those hospitals or physician groups the employee could not work for during this restrictive period.

The doctor, however, argued that the agreement should not be deemed enforceable because of a change in the corporate structure of the employer, particularly due to a parent company merger.

The doctor made this argument because s. 542.335(1)(f) provides:

The court shall not refuse enforcement of a restrictive covenant on the ground that the person seeking enforcement is a third-party beneficiary of such contract or is an assignee or successor to a party to such contract, provided:

1. In the case of a third-party beneficiary, the restrictive covenant expressly identified the person as a third-party beneficiary of the contract and expressly stated that the restrictive covenant was intended for the benefit of such person.

2. In the case of an assignee or successor, the restrictive covenant expressly authorized enforcement by a party’s assignee or successor.

The doctor claimed that the restrictive covenant could not be enforceable because the corporate change in ownership meant that the agreement was being enforced by a successor entity and the employment agreement states that no third-party beneficiaries could enforce the agreement. The appellate court shot down this argument because the entity enforcing the agreement was the doctor’s former employer (the physician group). The corporate change (merger) regarding the parent company did not impact the validity of the restrictive covenant. The parent company was not enforcing the employment agreement, nor could it.  And, the name of the employer did not change—the parent company’s merger did not result in a new successor entity being formed for the employer.

From an employee’s perspective, there are many reasons and circumstances to challenge the enforceability of restrictive covenant language in an employment agreement.  This does not mean, however, that you should ignore any risk associated with this language when signing the employment agreement.

From an employer’s perspective, there are many reasons and circumstances to enforce the restrictive covenant language in an employment agreement.  This does not mean, however, that you should ignore any restrictive language that may be unreasonable or contrary to Florida Statute s. 542.335.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Malicious Prosecution Arising from Judicial Proceedings–There are Consequences

Posted by David Adelstein on May 27, 2017
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There is the sentiment that parties can say and do whatever they want in a judicial proceeding and all actions will be exempt and immune under a litigation privilege. Such sentiment is misguided. There are consequences for malicious / bad faith conduct and statements that cause damage to the adverse party including a claim for malicious prosecution.   The litigation privilege does NOT bar a claim for malicious prosecution because, as mentioned above, there are consequences for malicious conduct. See Debrincat v. Fischer, 2017 WL 526508 (Fla. 2017).

This issue was recently confirmed by the Florida Supreme Court where the Court explained that a claim for malicious prosecution exists when there is the following:

(1) an original criminal or civil judicial proceeding against the present plaintiff was commenced or continued; (2) the present defendant was the legal cause of the original proceeding against the present plaintiff as the defendant in the original proceeding; (3) the termination of the original proceeding constituted a bona fide termination of that proceeding in favor of the present plaintiff; (4) there was an absence of probable cause for the original proceeding; (5) there was malice on the part of the present defendant; and (6) the plaintiff suffered damage as a result of the original proceeding.

Debrincat, 2017 WL at *2 quoting Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1355 (Fla. 1994).

As the Court reasoned, there would never be a claim for malicious prosecution if the litigation privilege barred malicious or bad faith conduct that occurred in the original proceeding.

Another recent case, AGM Investors, LLC v. Business Law Group, P.A., 42 Fla. L. Weekly D886b (Fla. 2d DCA 207), also involved a claim for malicious prosecution (and related tort claims) against a party and law firm.  Here, the Second District went a step further to state that “tortious conduct will not be protected by the litigation privilege as being preliminary to future litigation unless that future litigation was actually contemplated in good faith and under serious consideration.” AGM Investors, supra (finding that law firm’s recording of condominium assessment liens was not absolutely protected under the litigation privilege unless such action was necessarily preliminary to future lien enforcement litigation contemplated in good faith).

Remember, just like anything else, there are potential consequences to decisions and actions made with malice / bad faith, even if such conduct was made prior to or during the course of an original judicial proceeding.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Motion for Summary Judgment – No Genuine Issue of Material Fact

Posted by David Adelstein on May 21, 2017
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A motion for summary judgment is a dispositive motion that is popularly filed before trial. However, it is a motion that is denied far more than it is granted because of the burden imposed on the party moving for summary judgment in order to prevail on the motion.  

Summary judgment is appropriate ‘if the pleadings, depositions, answers to interrogatories, admissions, affidavits, and other materials as would be admissible in evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’” Lin v. Demings, 2017 WL 1534824, *1 (Fla. 5th DCA 2017) quoting Estate of Githens ex rel. Seaman v. Bon Secours-Maria Manor Nursing Care Ctr., 928 So.2d 1272, 1274 (Fla. 2d DCA 2006).   A motion for summary judgment is not designed to determine the credibility of a witness or even weigh the evidence; that is what trial is for. Id.

Think about the key issue moving for a summary judgment: “there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.”   The burden is on the party moving for summary judgment to establish that there is irrefutably no genuine issue of material fact. Lin, supra, at *1; ALX Maxim I, LLC v. Katsenko, 2017 WL 1683126, *1 (Fla. 2d DCA 2017). If there is a genuine issue of material fact, or even the slightest inference or doubt that a material factual issue exists, that doubt must be construed against the moving party and the motion denied. Id. quoting Taylor v. Bayview Loan Servicing, LLC, 74 So.3d 1115, 1117 (Fla. 2d DCA 2011); Lee County Department of Transportation v. The Island Water Association, Inc., 2017 WL 1403359, *2 (Fla. 2d DCA 2017).  This is why more motions are denied than granted. 

When drafting a motion for summary judgment, it is important that the party truly consider those material factual issues applicable to the legal argument supporting the summary judgment. For example, when drafting a summary judgment, I always have a solid understanding of the law I am going to be relying on. Based on this law, I focus on identifying those specific material facts relative to the issue. It is these facts that that will support the basis of the legal argument(s). A good motion for summary judgment is not an instantaneous motion. It requires time organizing and itemizing those specific facts and crafting legal analysis around those specific facts.   These facts will help determine whether moving for a final summary judgment or a partial summary judgment as to liability or damages or an issue in the case.  Plus, even if a party loses a motion, at a minimum, they want to be in position to inform the court about their case and theory.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Fraud in the Performance of a Contract

Posted by David Adelstein on May 14, 2017
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Claims for fraudulent inducement and fraudulent misrepresentation are claims that are oftentimes pled despite there being a contract being the parties. Besides these claims being fact-based and challenging to prove in certain instances, they are harder when there is a contract between the parties. Fraud is only actionable if it is separate and distinct from the contract. In other words, fraud needs to give rise to a tort claim independent of the contract; a breach of contract is not fraud because the fraud is not independent of the contractual breach. See Peebles v. Puig, 42 Fla.L.Weekly D1080a (Fla. 3d DCA 2017).

The Peebles case illustrates this situation.   Here, a real estate agent was under contract with a developer to sell high-end condominium units; in exchange she would get a commission. Her employment contract was later assigned to an exclusive brokerage firm for the developer. Purchasers of these high-end units wanted to re-sell their units to other buyers. The real estate agent understood and was told by the principal of the brokerage firm (who was also a principal of the developer) that she would get commission on the re-sale of such units. As such, she helped re-sell more than 20 of these units. The brokerage firm later argued she was not entitled to such commission on the re-sale of units, which resulted in this lawsuit for unpaid commissions. One of the claims asserted was a fraudulent representation claim against the principal of the brokerage firm / developer based on what he represented to the agent that induced her to re-sell units. (Notably, the brokerage firm filed for bankruptcy at some point making the fraud claim against the principal the likely only avenue of actual monetary recovery.)

A jury returned a verdict in favor of the real estate agent on her fraud claim against the principal. However, this was reversed on appeal because the agent’s damages (lost commission) were not independent of the breach of her employment contract.   The Third District explained: “As reprehensible as the jury may have found Peebles’s [principal] actions to be, those actions neither converted Puig’s [real estate agent] claim for contract damages into a claim for tort damages, nor imposed on Peebles personal liability for PADC’s [brokerage firm] contractual obligations.” See Peebles, supra.  Stated differently, the real estate agent’s claim was based on alleged fraud during the performance of her contractual duties. However, her damages were not independent of the contract; her damages were predicated on lost commission. Thus, her damages were based on a contractual breach and not separate and distinct conduct giving rise to independent damages.

This appears to be a case of lawyers doing a good job trying to maximize the collection of payment for their client through the pursuit of a fraud claim.  While the facts where there to support the terrible conduct of the principal, the facts simply bolstered a contractual breach, but not an avenue to pursue independent personal liability.   

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Admitting a Business Record Under the Hearsay Exception

Posted by David Adelstein on May 06, 2017
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If you have perused this blog, then you know if there is a new case discussing the business records exception to the hearsay rule, I am writing about it.   The reason being is that it comes up in many business disputes. Lately, there has been a trend where this business records exception comes up in mortgage foreclosure cases where the borrower argues that the lender failed to properly introduce key evidence (such as payment histories) under the business records exception. As a result, the evidence was inadmissible hearsay warranting a reversal of a foreclosure judgment.

The recent opinion in Evans v. HSBC Bank, USA, 42 Fla. L. Weekly D1033a (Fla. 2d DCA 2017) is but another example of the business records exception coming up in a mortgage foreclosure case.   At trial, the lender offered the testimony of an employee of a loan subservicer to introduce the borrower’s payment history from different servicers. Her knowledge came from reviewing records. However, she confirmed during examination that (i) she really did not create the payment history of the borrower, (ii) another servicer created most of the payment history, (iii) the payment history was transferred over to her company, (iv) she did not know who created most of the entries on the payment history, and (v) she did not know the procedures used to incorporate other payment servicer’s records into her company’s records. Notwithstanding, the trial court admitted the payment history into evidence over the borrower’s objection that the payment history was inadmissible hearsay not satisfying the business records exception to the hearsay rule.

As you know from prior articles, hearsay is an out of court statement (written or oral) offered for the truth of the matter asserted.   Thus the payment history (a written out of court statement) is hearsay.   But, there are exceptions to the hearsay rule to introduce certain hearsay evidence. One applicable exception is the business records exception.

To admit a business record under the exception, a party must lay the right foundation that:

  • the business record was made at or near the time of the event;
  • the business record was made by or from information transmitted by an individual with knowledge;
  • the business record was kept in the ordinary course of business; and
  • it was a regular practice of the business to make such a record.

Of course, there is more to this with many cases discussing these foundational requirements. In this case, the witness could not properly lay the foundation since she did not know the procedures of prior loan servicers or even the procedure to incorporate their business records into her company’s business records. There was no testimony establishing the reliability of such records that is the hallmark to admitting evidence under a business records exception to the hearsay rule.   Based on this lack of reliability, the appellate court reversed the trial court’s ruling.

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Strict Construction of Restrictive Covenants

Posted by David Adelstein on April 29, 2017
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Restrictive covenants are to be strictly construed.   Restrictive covenants show up in Declarations or Covenants recorded in the public records that restrict a landowner’s (or unit owner’s) use to do something with his/her property.   Just keep in mind that a restrictive covenant will be strictly construed in favor of the landowner. See Leamer v. White, 156 So.3d 567, 572 (Fla. 1st DCA 2015). Hence, the precise language of the restrictive covenant is important because of the requirement of strict construction.

An example of such strict construction can be found in the recent opinion of Santa Monica Beach Property Owners Association, Inc. v. Acord, 42 Fla. L. Weekly D984a (Fla. 1st DCA 2017).   This case dealt with property located in a subdivision near the beach. A restrictive covenant was recorded in the public records relating to the subdivision that provided:

“Said land shall be used only for residential purposes, and not more than one detached single family dwelling house and the usual outhouses thereof, such as garage, servants’ house and the like, shall be allowed to occupy any residential lot as platted at any one time; nor shall any building on said land be used as a hospital, tenement house, sanitarium, charitable institution, or for business or manufacturing purposes nor as a dance hall or other place of public assemblage.”

Owners of property within the subdivision were advertising and using their property for short-term vacation rentals (so others could rent their residential property). The governing association contended that this violated the restrictive covenant because this was a business purpose and not a residential purpose. The problem, however, was that the restrictive covenant stated nothing about vacation rentals or that such rentals constituted a prohibited business purpose. Since the restrictive covenant is to be strictly construed, the court stated:

Finally, even if the restrictive covenants were susceptible to an interpretation that would preclude short-term vacation rentals, the omission of an explicit prohibition on that use in the covenants is fatal to the position advocated by the Association in this case because “[t]o impute such a restriction would cut against the principle that such restraints ‘are not favored and are to be strictly construed in favor of the free and unrestricted use of real property.’ ”  Indeed, the need for explicit language in the covenants is particularly important where the use in question is common and predictable, as is the case with short-term rentals of houses near the beach to vacationers.

Santa Monica Beach Property Owners Association, supra (internal citation omitted).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Denial of Right to Depose Material Witness

Posted by David Adelstein on April 23, 2017
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Depositions are an integral part of a dispute’s “truth seeking” discovery process. This is where parties can depose a witness under oath and explore key factual issues and parties’ positions, both from a liability and damages perspective.   Certain depositions can be introduced for purposes of substantive evidence at trial.   Other depositions can be used for purposes of impeachment in case a witness changes his/her position or story at trial. The significance of a deposition of a material witness in a civil case cannot be understated.

 

If an opposing party wants to limit or prevent a deposition from moving forward, that party will file a motion for protective order based on its good cause reasoning to restrict that deposition. The burden is on that party to support its good cause reasoning. If the court grants the motion for protective order, an appellate issue arises. “When a party has been denied the right to depose an alleged material witness without finding of good cause to preclude the deposition, the trial court departs from the essential requirements of law.”   Akhnoukh v. Benvenuto, 42 Fla.L.Weekly D882 (Fla. 2d DCA 2017). This gives the denied party the right to move for a writ of certiorari: “Certiorari jurisdiction generally exists to review the denial of a motion to compel the deposition of a material witness.” Id. (further explaining that a witness can be material even if relevant information can be obtained from a party).

 

For instance, in Akhnoukh, the plaintiffs obtained a protective order that prevented defendants from deposing plaintiff’s minor son (who was not a party). The son was the only passenger in the car at the time of the accident; he was eight year’s old at the time of the car accident and eleven year’s old at the time of the protective order. The defendants wanted to take the minor’s accident since he was sitting in the front passenger seat and an eyewitness to the accident and could shed value on the moments before the accident, the impact of the accident, whether the mother was wearing a seat belt, and the mother’s activities after the accident. Nonetheless, the trial court granted the protective order. The appellate court, however, quashed the motion for protective order:

 

The trial court did not require Benvenuto [plaintiff] to establish good cause for the protective order. She based her argument on her [minor] son’s age, lack of maturity, and experience but provided no evidence. She also did not provide any evidence of how the taking of the deposition may be detrimental to her son. The trial court made no findings of good cause and departed from the essential requirements of law in prohibiting the deposition.  Thus, we grant the petition and quash the trial court’s order granting the motion for protective order. The trial court in its discretion may take protective measures if necessary for the minor’s well-being, such as requiring that the deposition take place before the court or a magistrate.

Akhnoukh, supra.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Litigating the Amount of Contractual Attorney’s Fees

Posted by David Adelstein on April 14, 2017
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Recovering attorney’s fees is a vital component of many claims. Parties that have a contractual or statutory basis to recover attorney’s fees want to know they will get a judgment for reasonable attorney’s fees if they prevail in the underlying action.   This oftentimes results in litigating the amount of fees.

There is authority that when parties seek fees pursuant to a statute, they are not entitled to fees associated with litigating the amount of fees. See State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830 (Fla. 1993).

What about if a party seeks fees pursuant to a contract? Can the party recover attorney’s fees associated with litigating the amount of contractual fees?  The answer is it depends on the contractual attorney’s fees provision. The broader the scope the greater the chance a party will be entitled to attorney’s fees for litigating the amount of contractual fees owed to the prevailing party.

In Trial Practices, Inc. v. Hahn Loeser & Parks, LLP, 42 Fla.L.Weekly D848a (Fla. 2d DCA 2017), the Second District addressed whether a prevailing party is entitled to recover contractual attorney’s fees associated with litigating the amount of reasonable attorney’s fees.   The Court held yes based on the scope of the contractual attorney’s fees provision since contracting parties are free to contract on the scope and issue of attorney’s fees.

The provision at-issue read in material part:

…prevailing party in any action arising from or relating to this agreement will be entitled to recover all expenses of any nature incurred in any way in connection with the matter, whether incurred before litigation, during litigation, in an appeal, . . . or in connection with enforcement of a judgment, including, but not limited to, attorneys’ and experts’ fees.

The court held that this language in the attorney’s fees provision was broad enough to encompass fees associated with litigating the amount of fees.

Remember, contracting parties are fee to negotiate and contract on the issue of attorney’s fees.  Based on the provision, a prevailing party will be entitled to attorney’s fees for litigating the amount of fees.  This perhaps may make a party think twice regarding litigating the amount of contractual fees if the issue can get resolved without an evidentiary proceeding on the amount. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Designating a Representative(s) to Serve as the Corporate Representative for Deposition

Posted by David Adelstein on April 07, 2017
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Corporate representative depositions play an important role in the discovery of any dispute involving a corporate party. A corporate representative deposition requires the corporate representative to speak on behalf of the company – they are not speaking based on their personal knowledge, but as to the company’s position regarding designated topics. In fact, the designated corporate representative does not have to have the most knowledge about a particular topic to be the representative. See Fla.R.Civ.P. 1.310(b)(6). See also Sybac Solar, GMBH v. 6th Street Solar Energy park of Gainesville, LLC, 42 Fla. L. Weekly D771a (Fla. 2d DCA 2017) (“The corporation is not required to designate ‘the witness with the most knowledge’ of the designated subject matter; indeed the witness is not required to have any personal knowledge whatsoever. And there may be a good reason why a corporation does not produce the most knowledgeable witness for deposition. For example, the person with the greatest knowledge of the subject matter ‘may not totally embrace the corporation’s position.’” Instead, the corporation is required to prepare the designated witness to testify regarding the designated subject matter.) (internal citations omitted).

Typically, the corporation can designate the representative(s) it wants to testify about the designated topics. With that said, the Second District in Sybac Solar explained that a deposing party that does not like the designated representative(s) can move the trial court to depose another corporate representative of its choice subject to the discretion of the trial court to issue a protective order.  

In this case, the deposing party moved to compel the opposing party to designate a certain individual as a corporate representative. The trial court granted the motion. The opposing party appealed –through a writ of certiorari since orders compelling a deposition can result in irreparable harm that cannot be undone on a final appeal. The Second District reversed in part because the individual had interests that were adverse to that of the company and would not be a proper corporate spokesperson; thus, the individual could not be a corporate representative for those topics.

I find this case frustrating. An entity should be entitled to designate those person(s) it wants to speak on the designated topics. The entity has a duty to prepare the person(s) to speak about the topics and the entity’s position because the person may not have, and is not required to have, the most knowledge about the topic. As long as the person is sufficiently prepared, the story should end.   If the person says “I don’t know” or “I don’t recall” during the entire deposition or gives wishy-washy answers (based on their lack of preparation), than that it is a different story.  But assuming the person is prepared, if the opposing party does not like the answers they are not precluded from taking depositions of other persons, or even the designated representatives, based on their personal knowledge. Otherwise, everyone will move to depose the person they want to serve as the corporate representative (which is probably the person with the most knowledge) which waters down this rule.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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