TRIAL CALL

James D. Crosby – Business Trial Lawyer – jcrosby@hcesq.com

10 Best Things At Trial.

James D. Crosby, Attorney/Partner - Henderson, Caverly, Pum & Charney, LLP

Recently, I was walking to my car after an Inn of Court program and talking with a newly admitted attorney about trials. I truthfully told him, as I always do in these situations, that trials are the best part of this business. They really are. He asked why, and I told him – competition, need to think on your feet, creativity, great when you win, interaction with jurors, ….., you know, the standard stuff! Driving home, I started thinking about exactly what it is about a trial that makes it so special – what are the best things about a trial, the best moments in a trial? And, you know, we live in a “10 Best Things” world these days – 10 best cities, 10 best colleges, 10 best movies, 10 best lattes, 10 best phones, laptops, vacation spots, diet foods, cocktails, songs, celebrity facelifts/mugshots, Kardashian selfies, . . . , 10 best anything! So, here goes, and not in any particular ranking, my ten best things at trial. (Note, while some do, not all these things happen at every trial. But, when they do, they are the best! Also, I have not included winning as a best thing. It is, for any trial lawyer, the best possible thing at any trial. After all, it is all about the winning, isn’t it? But, winning is too easy and too obvious to list. So, disregarding the absolute best possible thing at any trial, winning, here’s my list.)

  1. That precise moment when you stand up to give opening statement. What I like about that moment when you stand to give opening statement is that it all comes back to you. It’s a very singular moment. No matter who was involved in trial preparation, no matter how many lawyers handled the case, no matter who argued the motions and took the depositions, no matter how many lawyers are sitting with you at counsels table, no matter what happened in the case before that moment, when you stand to give opening, it is all on you, it’s on your shoulders, you are all alone. All the talking, thinking, arguing and worrying about the case over the last year or two is over – it’s time to go. All eyes are on you – this is important, you have to be prepared, you have to be ready, you have to perform. Trials are a collective effort. Even the smallest of trials involves a number of people working together to pull the whole thing off. But, opening statement is a uniquely singular and solo moment in that process and, at least for me, standing up to start opening is always a best part of any trial.
  2. When direct examination of your client or witness goes as intended. Like many trial lawyers, I find direct examination more difficult than cross. Getting the needed testimony from a client or witness without leading, in a persuasive manner, without inviting objections through poorly worded or argumentative questions, and without boring a jury, can be difficult. When critical testimony comes in smoothly on direct, in a clear and concise manner, and the jury is paying attention, it’s a good moment.        
  3. When your opponent asks your client one question too many. Not much to say here. Ego and hubris can get the best of any trial lawyer. You are killing the cross, controlling the witness, the pace and rhythm of the questioning is perfect, you own the witness, you own the courtroom, you own the case, Gerry Spence and David Boies have nothing on you; then, you go too far, you break the cardinal rule on cross, you ask that one question too many and, worse yet, you ask that dangerous open-ended question. The witness sees the opening, steps in and kills you with a long, well-rehearsed answer, wiping out all your previous good work on cross. The jury, immediately wide awake, sees the misstep, and listens. We’ve all been there – hopefully, not very often. It’s not good. But, it’s qualifies as a best thing at trial when it happens to the other side!
  4. When the jury concludes your opponent is largely wasting their time. I think jurors punish lawyers who waste their time. My experience is that most people don’t want to serve and will do most anything to avoid jury service. But, when picked for a jury, most people take their obligations seriously and will do their best. But, they want to be there only as long as is necessary to get the evidence, hear the arguments, and make a decision, and not a minute longer! If you are prepared and ready to go with each phase of the case, make your arguments and examinations clear and concise, and diligently move your case along, jurors will like it. It will reflect preparedness, credibility, and confidence in your case and client. Conversely, if you are unprepared, unfocused, and just generally slow and meandering in your actions at trial, jurors will hate it. You will be wasting, or at least perceived as wasting, their time at a job they didn’t want in the first place. I have seen it a number of times where an attorney does a long, slow, meandering, seemingly unprepared examination, asking the same question, or making the same point, a number of times as if the jury didn’t hear or understand the first, second or third time he hit the topic. At some point, you can almost feel it – the jury will collectively just get fed up with the whole thing. You can see it in their expressions, movements and body language. At that point, your opponent has lost something in the jury’s eyes that is hard to regain – credibility. When that happens to your opponent, it is a best thing at trial.
  5. When your impeachment actually works. We often think, often more than we should, that the impeachment of a witness with a prior inconsistent statement will be a watershed moment at trial. The witness says one thing at trial, you immediately show his deposition video where he says something completely different. Witness is a liar – it’s on tape – case closed! But, I find it’s rarely that clean, that effective. The prior statement is at bit unclear, or it does not directly contradict the court statement, or the jury is just not as impressed with the inconsistency as you are, or the witness artfully explains away the inconsistency to the satisfaction of the jury. Clear, effective, meaningful impeachment of a witness is a rare thing at trial. When it happens during your cross, it’s a best thing at trial.
  6. When the objection tide turns. Objections in front of jury are a ticklish thing. You don’t want to object too much, as you may be perceived as wasting the jury’s time, or attempting to hide the truth, or attempting to unfairly obstruct your opponent’s case. My view – jurors don’t like objections. This is especially true if your objections are not well-taken and not sustained. But, sometimes the converse will happen. Well-timed, well-taken, objections will not only keep evidence and improper argument away from the jury, they will also reflect preparation, confidence and credibility. When you are regularly lodging objections and winning, the jury will see it, and it will imprint upon you and your client a degree of preparation, confidence and, perhaps, insight they will start to see as lacking in your opponent. The tide turns and starts to flow in your direction. At times, it will get to the point the jury seems to expect your winning objection as soon as a question is asked. When we try cases, we wrap our own credibility around that of our clients. If you are continually winning the small skirmishes and evidentiary objections in front of the jury, it will serve to enhance your credibility and, in turn, that of your client.
  7. When your opponent’s tech fails. The video doesn’t work, the PowerPoint freezes, the wrong document shows on the screen, the hard drive freezes, etc. May be a bit callous to say, but this is always entertaining to watch when it’s not happening to you!
  8. When the jury files back into court after reaching a verdict. No matter the case, this is always a dramatic moment. What are they thinking? Are they looking at us? Are they looking at the other side? Smiling, frowning, happy, sad, pissed off? Here goes, what is going to happen? Always great drama – always a great moment.
  9. The look on your client’s face when the verdict is read and it’s a win. It’s awful when the verdict is bad – the absolute worst! All trial lawyers have been there. But, when it is good, there is nothing better than the look on your client’s face. Joy, release, affirmation, exhaustion, gratitude – all played out in an instance across your client’s face. Truly, a best thing at trial.
  10. When you speak with jurors after the trial. Talking to jurors after a trial, win or lose, is a must in my book. You have shared a unique experience with them, and they usually want to talk. And it is, almost always, interesting, fascinating and fun. They are usually not shy to critique your performance, or that of your opponent. They most always have based their decision on things you did not deem significant, and they are quick to assess credibility. Much can be learned about your conduct in court and, more broadly, about the dynamics of juries in general. Plus, it is usually quite fun to speak with jurors, especially when they have given your client a victory. Post-trial chats with jury members – always a best thing at trial!

**        Had to add one more! When the trial is over, and you are having drinks with opposing counsel. When this happens, it’s the best thing. We are not enemies – this is not, or at least it should not be, personal between the lawyers. We are professionals, advocates fighting for our clients in a case. When the fighting is done and the case is over, we are still lawyers practicing together in a community and will surely see each other in the court hallways, if not in court, again. There is always another case, always another client. But, professional relationships and reputations are long-term deals. We shouldn’t lose sight of that perspective in the heat of any particular case. Some of my best professional friends are past opponents, and those friendships are bolstered by our stories, over drinks or dinner, of our past battles – as it should be!

I could have gone for 20. There are great moments in any trial, win, lose or draw. But, these 10 stand out for me. Coming soon – 10 worst things about trial!

In Agam V. Gavra, 2015 WL 1843009, the Sixth District Court of Appeals recognized a “losing contract” limitation on reliance damages in California breach of contract cases, and laid out the respective burdens of the parties in such cases. For its discussion of reliance damages alone, this case will be useful to any California attorney litigating contract cases. And, its recognition of a “losing contract” limitation on reliance damages provides an opening to breaching parties to limit exposure for their own breaches.

The case involved a partnership agreement for the purchase and development of land in Los Altos Hills. The deal apparently spoiled with the collapse of the housing market and the Great Recession, leading to litigation. The losing side on breach claims appealed, contending, in part, the trial court misallocated the burden of proof on breach of contract reliance damages.

In its opinion, the Sixth District first noted the traditional definition of reliance damages in California:

One proper “measure of damages for breach of contract is the amount expended [by the nonbreaching party] on the faith of the contract.” (Mendoyoma, Inc. v. County of Mendocino (1970) 8 Cal.App.3d 873, 879 (Mendoyoma ); 1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 883, p. 970 [“[One] measure of contract damages is the amount of the plaintiff’s expenditures, together with the reasonable value of his or her own services, in preparation and performance in reliance on the contract.”].) As our Supreme Court explained in Buxbom v. Smith (1944) 23 Cal.2d 535, 541, “ ‘[w]here, without fault on his part, one party to a contract who is willing to perform it is prevented from doing so by the other party, the primary measure of damages’ “ includes “ ‘his reasonable outlay or expenditure toward performance.’ “ That the nonbreaching party’s damages include his or her “outlay incurred in making preparations for the contract” has been the law in California for over a century. (Cederberg v. Robison (1893) 100 Cal. 93, 99 (Cederberg ); see also United States v. Behan (1884) 110 U.S. 338, 345–346 (Behan ) [nonbreaching party’s damages include “actual outlay and expenditure”].)

The court described the well-recognized burdens on the parties in the context of reliance damages. The burden is initially on the non-breaching plaintiff to establish the amount which he was induced to expend in reliance on the breached contract. The burden then shifts to the breaching defendant to show the plaintiff’s expenses were unnecessary, such that his recovery of reliance damages should be reduced. Standard breach of contract stuff!

But, the Court then discussed a second limitation on reliance damages – the “losing contract” limitation – which allows the defendant to reduce or eliminate plaintiff’s reliance damages with proof the plaintiff would have suffered a loss even if the defendant had fully performed. The court noted no California court appears to have addressed the “losing contract” limitation upon awards of reliance damages. Citing a variety of out-of-state cases, the court discussed the “losing contract” limitation as follows:

Courts also have recognized a second limitation on reliance damages awards (aside from proof of unnecessary expenditures)—proof that the plaintiff would have suffered a loss even if the defendant had fully performed. “[I]n such a case the plaintiff should not be permitted to escape the consequences of a bad bargain by falling back on his reliance interest.” (Dialist Co. v. Pulford (Md.Ct.Spec.App.1979) 399 A.2d 1374, 1380.) Put differently, the plaintiff should not be put “ ‘in a better position than he would have occupied had the contract been fully performed.’ “ (Bausch & Lomb Inc. v. Bressler (2nd Cir.1992) 977 F.2d 720, 729 (Bausch & Lomb ).) Thus, much like courts allow the breaching party to prove the nonbreaching party’s expenditures were unnecessary, courts allow the breaching party “to reduce [the nonbreaching party’s recovery] by as much as he can show that the [nonbreaching party] would have lost, if the contract had been performed.” (L. Albert & Son v. Armstrong Rubber Co. (2nd Cir.1949) 178 F.2d 182, 189 (L.Albert ); (Holt v. United Sec. Life Ins. & Trust Co. (1909) 76 N.J.L. 585, 597 (Holt ) [“if he who, by repudiation, has prevented performance, asserts that the other party would not even have regained his outlay, the wrong-doer ought at least to be put upon his proof”]; Westfed Holdings, Inc. v. United States (Fed.Cl.2002) 52 Fed.Cl. 135, 155 (Westfed Holdings ) rev’d in part on other grounds, 407 F.3d 1352 (Fed.Cir.2005) [plaintiff “must show that the expenses submitted as reliance damages were incurred in reliance on the contract … while defendant may prove, in diminution of the amount of losses proved by plaintiff, any losses that plaintiff would have incurred in the event of full performance of the contract”]; Bausch & Lomb, supra, at p. 729 [“a reliance recovery will be offset by the amount of ‘any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been fully performed.’ “].)

The court’s holding laid out the respective burdens of the parties in the context of reliance damages to include the “losing contract” limitation.

Accordingly, we hold that, in the context of reliance damages, the plaintiff bears the burden to establish the amount he or she expended in reliance on the contract. The burden then shifts to the defendant to show (1) the amount of plaintiff’s expenses that were unnecessary and/or (2) how much the plaintiff would have lost had the defendant fully performed (i.e., absent the breach). The plaintiff’s recovery must be reduced by those amounts.

Agam v. Gavra is significant because it opens up a new avenue for defendants, in breach of contract cases where reliance damages are sought, to argue, if the facts so warrant, that plaintiff should not be able to recover some or all his claimed reliance damages because he would have done worse if the contract had been fully performed. As the court stated, under such circumstances, the plaintiff “should not be permitted to escape the consequences of a bad bargain by falling back on his reliance interest.” So, at trial, plaintiff proves he spent $1M in reliance on the now-breached contract and wants judgment in that amount for breach. To negate those claimed reliance damages, defendant can then attempt to prove that if he had not breached, plaintiff would have lost more than $1M on the contract and plaintiff should not be put in a better position upon breach than he would have been in the absence of breach. In effect, defendant puts on a “this is what would have happened to plaintiff if I hadn’t breached – I did him a favor” case! Interesting.

Agam v. Gavra – a must read for any California attorney litigating contract cases.

I am pleased to be named one of San Diego Magazine’s Top Lawyers for 2015 – for Complex Business and Commercial Litigation. Quite an honor to be included in this year’s list of fine San Diego attorneys. Thank you San Diego Magazine!

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