Litigation

Ansell.Law’s Seth Rosenstein Secures Summary Judgment in Pivotal Americans with Disabilities Act (ADA) Litigation

Ansell Grimm September 25, 2024

As noted in a recent article published by Ansell.Law Partner Seth M. Rosenstein, nuisance Americans with Disabilities Act (ADA) cases have cost American businesses millions of dollars, and settlement is often the path of least resistance. It is often the case that an aggressive defense of the claims – particularly when the claims are frivolous – benefits both the business or property owner defending the action, as well as the greater community, by deterring vexatious litigation primarily focused on lining counsel’s pockets.

In one particularly egregious ADA case, the plaintiff claimed that he traveled from Lower Manhattan to Midtown for the purpose of having a document notarized — and that he was unable to access the defendant’s building as a result of a single, small step from the sidewalk. The plaintiff conveniently ignored numerous issues with his case, particularly those stemming from a dearth of facts and crucial information from his cookie-cutter complaint. This is hardly surprising as plaintiffs in ADA cases often profit from the sheer number of cases filed, and the complaints filed in these actions tend to be identical to one another.

The Ansell.Law team aggressively defended this action, and after reviewing the extensive and meticulously detailed moving papers drafted by Rosenstein, the Honorable Lorna G. Schofield of the United States District Court for the Southern District of New York questioned the “tester” plaintiff’s intent to return to the subject property and found that he had “not shown a sufficiently concrete intent to return under the heightened standard” of the Second Circuit’s standard set in Calcano v. Swarovski North America. Put another way, the court rejected the plaintiff’s laughable assertion that he (i) traveled to Midtown Manhattan to notarize a document, (ii) frequently needs documents notarized or has a specific document requiring notarization in the future, and (iii) intended to return to Midtown Manhattan for notarization services in the future. The property owner could have rolled over and negotiated a settlement of questionable claims, but instead, it elected to fight – and ADA plaintiffs will think twice before bringing an action against the owner in the future.

If you or your business have been named as defendants in an ADA case, please contact Ansell.Law Partner Seth M. Rosenstein to discuss the path forward.

Amendments to New Jersey’s Open Public Records Act May Prejudice Those Involved in Legal Disputes and Undermine the Law’s Purpose

Ansell Grimm September 4, 2024

By David J. Byrne and Nicole D. Miller

Every level of government possesses a treasure trove of information. Each New Jersey municipality and state agency is supposed to keep copious records relating to things like interactions with the public, police reports, permit applications, zoning variance requests as well as internal documents reflecting governmental decision-making. For many, many years, by virtue of New Jersey’s Open Public Records Act (“OPRA”), some of those records have been open to the public.

Recently, New Jersey’s legislature amended OPRA. Unfortunately, those amendments may make it much harder for parties anticipating, or involved in, legal disputes to get access to evidence they need to support their claims or defenses.

How OPRA Relates to Litigation and Legal Disputes

While not obvious at first glance, the recent amendments to OPRA are extremely significant to individuals and businesses involved in litigation, other legal proceedings, or potentially exposed to either.

Legal proceedings often involve “discovery.” “Discovery” is the process of requesting, and exchanging, information and documents relevant to the dispute. Discovery also often involves subpoenas or requests to third parties that may have documents or information that neither litigant possesses.

Sometimes, a local governmental body or state agency is such a third party. There are many types of matters in which governmental records can play a critical role: land use, real estate and/or development-related disputes and construction defect litigation, to name a few.

The Problem With the Recent Amendments to OPRA

Before the recent amendments to OPRA, a party involved in litigation could use OPRA to get such records. Now, such a party may be limited to the use of subpoenas.

For example, the revised OPRA, which goes into effect on September 3, 2024, provides, in part, that:

Parties to a legal proceeding are not entitled to government records via OPRA if the record sought is within the scope of any court order in that proceeding or is within the scope of a pending litigation discovery request.

Public agencies are not required to respond to a request if it “does not identify specific individuals or job title or accounts to be searched, a specific subject matter, and is not confined to a discrete and limited reasonable time period.” This creates a Catch-22 for requestors who likely could only obtain such detailed information from the very records they are seeking.

As noted, these amendments may unnecessarily increase the costs associated with procuring records from the government by forcing the use of subpoenas. These amendments also appear to undermine the public’s “right to know.” After the amendments to OPRA become effective in September, we will have a better sense of their impact on legal proceedings and the public in general.

If you have questions or concerns about OPRA and these recent amendments, please contact Nicole Miller or David Byrne at Ansell.Law.

Anthony D’Artiglio Recognized in 2025 Edition of Best Lawyers

Ansell Grimm August 15, 2024

Ansell.Law is pleased to announce that Anthony D’Artiglio has been named in the 2025 Edition of The Best Lawyers in America®. Recognized for his work in business litigation and bankruptcy, D’Artiglio is named among New Jersey’s Ones to Watch.*

D’Artiglio is a partner and the litigation team leader in our Woodland Park office. He litigates a wide range of commercial matters from inception through trial, including commercial lease disputes, class actions, Consumer Fraud Act claims, corporate/shareholder disputes, employment disputes, and secured property actions. He also regularly represents creditors in bankruptcy matters. His diverse practice includes Bankruptcy, Controlled Substances and Regulatory Law, and Labor & Employment Law matters.

Best Lawyers’ listings, published since 1983, are based on merit and comprehensive peer review. Their methodology captures the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical and legal practice areas.

*No aspect of this advertisement has been approved by the Supreme Court of New Jersey or the American Bar Association.

Outnumbered or Outrageous: Understanding Shareholder Oppression in New Jersey

Ansell Grimm July 8, 2024

By Seth M. Rosenstein

The concept of majority rule is not only a defining characteristic of democracy but also the way decisions are made in a wide range of contexts every day. No matter the issue – whether choosing between candidates for public office or deciding what toppings to put on a pizza, those on the winning side will be happy with the result, while those in the minority may be disappointed or even angry about the outcome. This same dynamic applies in closely held New Jersey corporations every time shareholders have to make decisions involving their company.

Being a minority shareholder (i.e., one who owns less than half of a company’s voting shares or otherwise does not control the business’s operations) often means your views and preferences, while perhaps considered by the majority, will ultimately be set aside after votes are tallied.

While being in the minority may be undesirable, it isn’t inherently unfair. If agreed-upon rules are followed, and if votes and decisions are made in good faith and not with the intent or effect of harming minority shareholders or infringing upon their rights, that is just the way the chips fall. But when majority shareholders abuse their power and act in inappropriate, illegal, or “oppressive” ways, most jurisdictions, including New Jersey, provide minority shareholders with mechanisms to protect and remedies to vindicate their rights and shield themselves and the corporation from majority misconduct.

Understanding the difference between shareholder oppression and the simple frustration that comes with being outvoted can spare a company and its owners from disruptive and destructive litigation that can pose an existential threat to the business’ ongoing viability.

What Is Shareholder Oppression in New Jersey?

Under Section 14A:12-7(c) of the New Jersey Business Corporation Act (the “Act”), minority shareholder oppression in a closely held corporation (defined in that section as one with 25 or fewer shareholders) sufficient to justify court intervention occurs when the directors or those in control have acted “oppressively or unfairly toward one or more minority shareholders in their capacities as shareholders, directors, officers, or employees.”

Since the statute does not define the terms “oppressively” or “unfairly,” it is left to New Jersey courts to determine what exactly constitutes conduct that falls within those two terms. The seminal case in this regard is the 1993 New Jersey Supreme Court decision in Brenner v. Berkowitz. After noting that “Mere disagreement or discord between the shareholders is not sufficient for a violation of” Section 14A:12-7(c), the Court stated that “oppression has been defined as frustrating a shareholder’s reasonable expectations.”

“In determining whether a shareholder’s expectations are reasonable and whether the corporation or controlling shareholders or directors unreasonably thwarted them,” the Court went on to say that “courts should consider even non-monetary expectations of the shareholder.” In other words, oppression is not simply a matter of dollars and cents and can constitute a wide range of actions that can be “burdensome, harsh, or wrongful” to the minority shareholders.

Actions That Can Constitute Shareholder Oppression

Such actions that could warrant retaining legal counsel and triggering court intervention may include:

Forcing a minority shareholder to sell their shares at unfairly low prices.
Freezing out a shareholder, making their shares essentially worthless through corporate restructuring.
Locking a shareholder out of the company’s property.
Refusing to allow a shareholder to inspect the company’s books and business records.
Terminating a minority shareholder’s employment.
Creating a redemption plan for stock that only favors the majority shareholders.
Engaging in transaction(s) that cuts minority shareholders out of fair compensation.
Refusing to notify shareholders of official shareholder meetings.
Trying to alter minority shareholder terms to reduce their rights.
Falsifying company records or books.
Paying for personal expenses of majority shareholders with corporate funds.

Remedies for Shareholder Oppression

If a court determines that a majority shareholder is acting oppressively towards a minority shareholder in a closely held corporation, the Act provides several possible remedies to protect the minority’s rights and interests, including appointing a custodian or a provisional director to manage the corporation’s affairs, ordering a sale of the corporation’s stock, or entering a judgment dissolving the corporation.

While the Brennan court noted that “Most acts of misconduct or oppression will warrant some type of remedy,” it also stated that “only the most egregious cases will warrant the drastic remedies permitted by the statute.” Outside of statutory remedies, the Court held that the Chancery Court (where such matters are brought and heard) has broad discretion under its inherent powers of equity to fashion an appropriate remedy based on the nature of the conduct and harm inflicted as well as a consideration of all the surrounding facts and circumstances.

Thus, in addition to the remedies outlined in the act, the equitable remedies that a court may order in cases of shareholder oppression include:

Canceling or altering problematic provisions of the corporation’s articles of incorporation or the bylaws.
Canceling, altering, or enjoining any resolution or other act of the corporation.
Directing or prohibiting any act of the corporation or the shareholders, directors, officers, or other persons party to the action.
Providing for the sale of all the property and franchises of the corporation to a single purchaser.
Requiring dissolution at a future date, effective only if the parties do not resolve their differences before that time.
Appointing a receiver or special fiscal agent to continue the operation of the corporation for both majority and minority until differences are resolved or until oppressive conduct ceases.
Retaining jurisdiction for the protection of minority shareholders without the appointment of a custodian, receiver, or similar official.
Ordering an accounting or ordering access to corporate records.
Enjoining continuing acts of oppressive conduct, e.g., by reducing unjustified or excessive salary or bonus payments to controlling shareholders.
Requiring the declaration of a dividend.
Permitting minority shareholders to purchase additional shares.
Rescinding a corporate act that is unfair to the minority.
The performance, prohibition, alteration, or setting aside of any action of the corporation, its shareholders, directors, or officers of or any other party to the proceedings.

If you have questions or concerns about minority shareholder oppression and how to protect your interests when it occurs, please contact Ansell Grimm & Aaron Partner Seth M. Rosenstein.

Ansell.Law Secures Motion to Dismiss Avoiding Frivolous Litigation for Firm Client

Ansell Grimm June 5, 2024

In a land use dispute where a litigious neighbor filed a complaint seeking to effectively appeal zoning permits issued for construction that has long since been completed – some for more than a decade – Litigation Department attorneys Anthony J. D’Artiglio and Brian J. Ashnault, with assistance from Land Use Department Co-Chair Jennifer S. Krimko, successfully moved to have the Complaint dismissed in its entirety with prejudice.

The plaintiff filed a complaint against his neighbor and the Borough of West Long Branch, asserting claims of enforcement, writ of mandamus, and violation of the plaintiff’s substantive due process rights. At its core, the Complaint alleged that four permits issued to his neighbor should not have been issued, and the work performed in conjunction with the permits exceeded what was permitted.

On behalf of the defendant neighbor, the Ansell team filed a motion to dismiss the Complaint relying on arguments including that the plaintiff was actually seeking an out-of-time appeal of the permits, not enforcement of the Ordinance as plaintiff asserted. Regardless, the Ansell team argued that such claims were long out of time under the principle of laches, even if they were considered as enforcement claims. Additionally, the Ansell Team argued that the remaining counts were deficient for various reasons warranting dismissal.

Following oral arguments, the Court issued a lengthy oral decision dismissing the Complaint in its entirety with prejudice. The Judge addressed and accepted each of the Ansell team’s grounds to dismiss the Complaint for every count. Accordingly, the frivolous litigation filed by the plaintiff designed to harass his neighbor was disposed of at its earliest stage.

Anthony is a partner and litigation team leader in the Firm’s Woodland Park office. His varied practice includes commercial lease disputes, class actions, Consumer Fraud Act claims, corporate/shareholder disputes, employment disputes, secured property actions, and creditors’ rights in bankruptcy matters.

Jennifer co-chairs the Firm’s Land Use Department. She devotes her practice to all areas relating to real estate, representing a wide variety of clients — from individuals to large developers — in all phases of governmental approvals before municipal, county, and state agencies.

Brian’s practice spans a range of commercial and civil litigation matters including condemnation, land use, commercial lease disputes, breach of contract claims, and collections.

After a Hard-Fought Trial, Ansell.Law’s Lawrence H. Shapiro and Kelsey M. Barber Obtain $389,000 Judgment for Stepdad After Stepson Falsely Claimed Money Was a Gift, Not a Loan as Agreed.

Ansell Grimm May 3, 2024

When a stepson attempted to take advantage of his loving stepfather’s generosity by claiming that a $389,000 loan was actually a gift he did not have to repay, Lawrence H. Shapiro and Kelsey M. Barber of the Firm’s Litigation Department successfully vindicated the stepdad, obtaining a judgment in his favor for the entire loan amount, plus interest.

The heated dispute arose after the stepdad and his wife decided to downsize and sell the family home, where the adult stepson and his college student brother lived. As the stepson and his brother needed a new place to live, the stepdad kindly offered the stepson $389,000 to purchase a townhome.

At all times, the stepfather intended the money to be a loan, an arrangement that was repeatedly acknowledged by the stepson in contemporaneous emails and text messages in which he discussed repayment plans, asked for forbearance when money was tight, and offered to forward rent payments his brother was making to pay for his share of the townhome. Notwithstanding the clear agreement and understanding of the parties, the stepson refused to sign a note and mortgage at the closing of the townhome.

The suit came about after the stepfather and mother got divorced. The stepson used the end of their marriage as an excuse to renege on his obligations by claiming the loan was, in fact, a gift.

During the two-day trial, the Ansell team was able to conclusively demonstrate that the money was a loan through the contemporaneous documentation and by completely undermining the stepson’s credibility as a witness. Accordingly, the Court entered an Order for Judgment in favor of the stepfather for the full loan amount plus interest.

Fighting Back Against Frivolous Lawsuits and Meritless Claims

Ansell Grimm April 10, 2024

By Seth M. Rosenstein

Businesses and individuals facing the prospect of litigation often ask legal counsel whether they can sue or be sued over a particular set of facts and circumstances, and the proper response is generally that “Anybody can file a lawsuit against anyone about anything.” That is not to say that every claim or suit has merit or should be pursued; far from it. But the reality is that the courthouse doors swing wide open for even the most absurd litigants asserting baseless and frivolous claims.

Want to sue your dentist for supposedly putting listening devices in your fillings? No one will stop you. Want to fight a lawsuit by alleging that the plaintiff’s true identity as an alien from a galaxy far, far away bars their claims? The court clerk will accept your filing with no questions. In both state and federal courts, the bar for filing a lawsuit or pleading is essentially non-existent.

However, once a frivolous lawsuit or claim is filed, those who must waste their time, money, and effort fighting back have powerful ways to hold such parties – and their attorneys – accountable for abusing the judicial process and help them recoup the fees and costs attendant to defending claims that lack any factual or legal merit. Court rules at the state and federal levels include provisions specifically designed to deter and address frivolous claims and provide remedies to the parties on the receiving end.

Aggressively Fighting Back Against Frivolous Claims

Our litigation practice group aggressively avails itself of those rules when a client is served with a meritless complaint, whether in New Jersey and New York state courts or in federal court. If we believe a suit was filed in bad faith, in violation of an attorney’s ethical obligations, or for improper purposes, we take all steps required to ensure that sanctions against the offending litigant and their attorneys can be sought to make our client whole. We have a solid track record of success fighting back against frivolous litigation, which, as noted, is all too easy to pursue, at least initially.

There is an important distinction, however, between a frivolous claim and a weak one. In every lawsuit that goes to trial, one party will prevail, and one party will lose. Just as the two contestants who lose on each episode of “Jeopardy!” can hardly be called dumb, a claim or defense will not automatically be deemed meritless simply because it was unsuccessful. To be considered frivolous, it must meet the definition of that term in the applicable court rule.

New Jersey’s Frivolous Litigation Act

New Jersey’s Frivolous Litigation Act (FCA) and Rule 1:4-8 of the state’s Rules of Court are prime tools that empower legal counsel and the courts to address meritless lawsuits and claims.

The FCA provides that a party who prevails in a civil action, either as plaintiff or defendant, may be awarded all of its reasonable litigation costs and attorney fees if the judge finds that a complaint, counterclaim, cross-claim, or defense of the non-prevailing person was frivolous.

For a claim or defense to be considered “frivolous” such that the filing party can be held liable for the other party’s attorneys’ fees and costs, the judge must find that:

The complaint, counterclaim, cross-claim, or defense was commenced, used, or continued in bad faith, solely for the purpose of harassment, delay, or malicious injury; or
The non-prevailing party knew or should have known that the complaint, counterclaim, cross-claim, or defense was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification, or reversal of existing law.

Holding Attorneys Accountable

As “officers of the court,” attorneys have legal and ethical obligations to the judicial process. The rules that codify these obligations and the potential penalties for violating them are designed to ensure attorneys have “skin in the game” when they file a lawsuit.

Under Rule 1:4-8 of New Jersey’s Rules of Court, an attorney must ensure, based on their reasonable investigation, that any papers they sign and submit to the court have a plausible basis in fact and law and are not being presented for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

When an attorney violates this obligation, a court can hold them accountable by imposing monetary penalties and other professional sanctions directly on them and their law firm.

New York Remedies For Meritless Lawsuits

New Jersey’s definition of frivolous litigation and the penalties a court can impose on parties and attorneys are similar to those detailed in Section 130-1.1 of New York’s court rules.

As is the case in New Jersey, a New York judge can make an award of costs or impose financial sanctions against an attorney and/or a party upon the motion of one of the parties, but can also decide to impose sanctions on its own without any such request. A judge in New York, at their discretion, can sanction an attorney or party for conduct that:

is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;
is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or
asserts material factual statements that are false.

Federal Rule 11

Rule 11 of the Federal Rules of Civil Procedure provides the mechanism through which litigants in federal court, as well as the court itself, can hold parties and their lawyers accountable for abuses of court processes and the judicial system. If the judge does not entertain the possibility of sanctions on their own, an aggrieved litigant may file a motion for the entry of appropriate sanctions pursuant to Rule 11(c)(2) that describes the specific conduct that allegedly warrants such penalties.

As with its corresponding state court rules, Rule 11 is designed not only to address the misconduct at issue but also to put future litigants on notice that they face the same possible fate for filing frivolous matters. Specifically, the rule provides that sanction imposed “must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.” If imposed upon the motion of an aggrieved litigant and warranted for effective deterrence, sanctions can include directing payment to the movant of part or all of their reasonable attorney’s fees and other expenses directly resulting from the violation.

No matter the forum, a frivolous claim or lawsuit is a scourge upon the civil justice system that has real, tangible, and harmful impacts on the parties that must respond to such filings. Accordingly, we do not hesitate to put opposing parties on notice of frivolous claims and pursue all available remedies on behalf of clients needlessly drawn into a bogus lawsuit.

If you believe you or your business are the target of a frivolous lawsuit, please contact Ansell.Law Litigation Partner Seth M. Rosenstein.

2024 Edition of Super Lawyers and Rising Stars Recognizes Ansell.Law Attorneys

Ansell Grimm April 3, 2024

The 2024 New Jersey Super Lawyers and Rising Stars list recognizes nine Ansell Grimm & Aaron attorneys.* Fewer than 5% of New Jersey attorneys are named to the annual Super Lawyers edition. “Rising Stars” are the legal profession’s up-and-coming attorneys, either under age 40 or practicing for ten years or less. These exceptional attorneys comprise fewer than 2.5% of New Jersey lawyers.

The attorneys appearing on the 2024 list of New Jersey Super Lawyers are:

Allison Ansell – Family Law

Mitchell Ansell – Criminal Defense, DUI-DWI, White Collar Crimes

Lawrence Shapiro – Business Litigation

Andrea White – Family Law

Attorneys recognized as 2024 Rising Stars are:

Brian Ashnault – Business Litigation

Anthony D’Artiglio – Business Litigation, Bankruptcy

Layne Feldman – General Litigation

Nicole Miller – General Litigation, Real Estate

Jonathan Sherman – Real Estate

*No aspect of this advertisement has been approved by the Supreme Court of New Jersey or the American Bar Association.

Interdepartmental Teamwork Overcomes Challenge to Client’s Use Variance Approval

Ansell Grimm March 18, 2024

In a client success, shareholder Jennifer Krimko obtained approval for the client to operate a community center and academic tutoring space in Rumson, New Jersey. On the heels of this victory, Litigation Department attorneys Anthony D’Artiglio and Layne Feldman protected that approval following an objecting neighbor’s appeal to the Superior Court. Through an aggressive defense, the approval was upheld, and the objector’s appeal was denied, allowing the clients to continue operating their business serving the local community. Collaboration with the Land Use Department provided nuanced insight into the case and helped secure another victory for the client.

As an associate in the Firm’s Commercial Litigation Department, Layne has a diverse complex commercial and civil litigation practice. She handles commercial lease disputes, Consumer Fraud Act claims, corporate/shareholder disputes, and secured property actions.

The Cost of Victory: What Business Owners Should Consider Before Filing a Lawsuit in a Commercial Dispute

Ansell Grimm January 17, 2024

By Seth M. Rosenstein

A wise person once said, “Litigation is the basic legal right which guarantees every corporation its decade in court.” While likely said facetiously, the fact is that business litigation often comes at great expense to the company and individuals involved.

The costs of vindicating and protecting a company’s rights – in time, money, disruption, reputation, and commercial relationships – along with the inherent risk and uncertainty involved in all litigation, can lead even a victorious plaintiff to ask whether their victory was worth the destruction it wrought.

Undoubtedly, there are situations where litigation is a company’s best or only path forward in a commercial dispute, whether it is with a customer, competitor, or business partner. Sometimes, a lawsuit is the last resort after other attempts to reach a resolution have failed or the only way to bring the other side to the negotiating table. Other times, quick intervention by a judge is necessary to prevent irreparable harm to the business. In those situations, your company will want and need an experienced and strategic litigator who stands ready to vigorously pursue your claims.

But even after the dogs of litigation have been unleashed, most commercial lawsuits settle or are otherwise resolved before trial for many of the same reasons cited above – the expense, disruption, and risk involved in entrusting the outcome to a judge or jury.

That is why, regardless of the perceived strength and merit of their claims, business owners should think carefully and consider the possible negative implications of litigation before telling their attorney to run to the courthouse and file a lawsuit. Here are three things to factor into your decision-making before pursuing business litigation:

Even the Most Straightforward Lawsuit Can Take Your Business Down a Long and Winding (and Expensive) Road

Lawyers are sometimes accused of making simple matters needlessly complicated. But for attorneys representing defendants in business litigation, making things complicated is often a feature, not a bug. Part of the defense’s strategy, especially when faced with a strong or straightforward claim, can include using any means to make litigation as drawn-out, convoluted, costly, and painful as possible for the plaintiffs.

Unfortunately, the wheels of justice are extremely amenable to a commercial defendant who wants to slow a plaintiff’s roll. The system isn’t designed for speed to begin with, and even if your attorney does everything in their power to speed your case along, there are plenty of ways a defendant can stretch your simple case out for years.

They may file multiple motions regarding various issues, most of which will require the submission of briefs and the time needed to prepare them. A lengthy briefing schedule could be followed by a hearing or ruling even further into the future, all delaying the suit’s progress until the motions are resolved.

Discovery, the process of requesting and exchanging documents, gathering evidence, and taking witness depositions, also offers ample opportunity for delay and added costs. It can take a while and cost lots of money to produce a voluminous amount of material in response to a party’s request. Depositions may be held in distant locations and involve significant travel costs (including fees for the attorney’s travel time) and complicated scheduling conflicts. You may also need to retain paid experts to testify or prepare reports.

But it is more than fees, expenses, and delays that can make discovery costly for a business plaintiff. Owners, executives, and employees who would otherwise be doing their jobs may need to divert their time, effort, and productivity toward handling document requests or preparing and sitting for their depositions. These disruptions should be factored into your litigation calculations as well.

Of course, the end of your case may not be the end of your case if one side appeals the judgment, which can keep the attorney’s fees meter and litigation clock running and even lead to another trial.

There Are No “Slam Dunks” in Business Litigation

Just as there is no crying in baseball, there are no slam dunks in business litigation. When you put your fate in the hands of a judge or 12 random people sitting on a jury, there is no guarantee they will see your case the way you and your lawyer do. There is always – always – a risk of an adverse ruling, no matter how strong your case appears to be.

Not only may your company lose on its claims (while still being on the hook for attorney’s fees and costs), but it may be exposed to liability and a judgment if the defendant files and prevails on a counterclaim. And if a contract or statute provides that the losing side in litigation must pay the winning side’s attorney’s fees and costs, the monetary hole can be even deeper.

A Judgment Is Not a Check

For all the risk of losing that is inherent in litigation, there is an equally inherent likelihood your company will prevail on its claims and obtain a substantial monetary judgment against the defendant. But no matter how many zeros that judgment contains, it could ultimately be worth far less – or nothing at all.

First, subtract all the amounts your business paid its lawyers from your judgment. That could shave tens or hundreds of thousands of dollars off that top-line figure. And those fees may keep coming if your attorneys have to spend time and effort trying to collect the amounts due from the defendant. Judgment debtors can engage in plenty of moves and tricks to hide assets and make collection efforts as difficult as possible.

Of course, nothing makes collecting on a judgment more challenging than an insolvent judgment debtor. If the defendant is actually broke, even the most talented litigator cannot get blood from a stone.

Again, as noted, sometimes litigation is the right or only way to resolve a business dispute despite the risks and costs it may involve. But before shooting first, you should ask your lawyer questions about the best path forward for your company, which may include pre-litigation demands, negotiations and non-binding mediation.

If you are involved in or anticipate a business dispute, please contact Ansell Grimm & Aaron Litigation Partner Seth M. Rosenstein.

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