Anatomy of a Lawsuit David B. Vornehm

1. Anatomy of a LawsuitDavid B. Vornehm ACEC – Indiana Annual Conference June 28, 2012

2. Introduction

3. Pre-Suit Considerations Image from Google Images

4. Pre-Suit Considerations What Circumstances Produce Lawsuits? • Litigation/arbitration can arise from multiple circumstances • errors in plans and specifications • requests for information • change orders • events causing delay • job site injury • third-party injury at project site with design ramifications

7. Pre-Suit Considerations What Circumstances Produce Lawsuits? • The sources of litigation are unpredictable • Take steps to manage risk and prepare for litigation • Implement effective risk management programs • Contracts

8. Pre-Suit Considerations Demand for Services or Money = Claims • The earlier a “claim” or “circumstance” is reported, the better • Need not be threat of litigation or arbitration • Reporting claims does not automatically lead to premium increases • Get help; trying to keep your client happy can lead to a major headache • Loss prevention program can give you access to counsel and may not trigger your deductible obligation

9. Pre-Suit Considerations

10. Pre-Suit Considerations Your project contract should not be buried in a desk drawer or hidden in some backwater data file; it is a living document • In the event of a dispute, lawsuit, or arbitration, the first thing looked at is the language in the contract • Your written agreement defines the rights, obligations, and remedies of the parties • The language in the contract is superior to industry standards, course of conduct, and fairness

11. A Lawsuit is Filed. Now What?

12. A Lawsuit is Filed. Now What? • At some point your business will likely be affected by a lawsuit • In 2010, 179,879 civil court filings in Indiana. Another 276,295 filed in small claims court. • Whether your firm is a party or not it can get sucked into the litigation whirlpool • Contact by lawyers or investigators • Non-party production requests • Depositions

13. A Lawsuit is Filed. Now What? • Steps to take when lawsuit initiated • Report to your professional liability and/or comprehensive general liability insurer(s) • Preserve both hard copy and electric file materials to avoid spoliation claims • Investigate, but retain counsel first so as to establish privilege

14. A Lawsuit is Filed. Now What? • Develop early strategy by working as team with counsel • What are your objectives? • Teamwork is advantageous • You are the client of the attorney retained by your insurer • Use your attorney and claims representative as resources

15. A Lawsuit is Filed. Now What? • Conduct an effective investigation • Hiring a lawyer is not enough • Help your attorney with the technical aspects of the case • Get on the same page

16. A Lawsuit is Filed. Now What? • You cannot tell the players without the program • Plaintiff – Party initiating the Complaint • Defendant – Any adverse party named in the Complaint • Counter Claimant – A Defendant who has a claim directly back against the Plaintiff • Cross Claimant – A Defendant who has a claim against another Defendant • Third Party Plaintiff – A Defendant who brings a claim against a third party not already named in the Complaint • Third Party Defendant – Any adverse party named in the Third Party Complaint

17. Responding to the Complaint –Strategy Implementation

18. Responding to the Complaint –Strategy Implementation • Ties to Contractual Relationship • Follow the relationship – Direct or Indirect? • Are you a stranger to the Plaintiff?

19. Responding to the Complaint –Strategy Implementation • Answer and Affirmative Defenses • Answer – the pleading that responds to a Complaint, Counterclaim, Cross Claim or Third Party Complaint • Due within 20 days of receipt of Complaint and Summons, unless served by mail in which case 3 additional days (T.R. 6(C) and (E)) • Typically may request 30 day enlargement of time to respond

20. Responding to the Complaint –Strategy Implementation • File Appearance with Answer • Trial Rule 8(B) governs Answer • A paragraph by paragraph response to the Complaint • Need to have Complaint in hand to prepare and/or review a draft Answer • An Answer shall state in short and plain terms the defenses to each claim asserted and shall admit or controvert the allegations set forth in the Complaint.

21. Responding to the Complaint –Strategy Implementation • A general denial of all allegations of the Complaint is permitted if made in good faith. • Practice Tip – Potential Pitfall for Bad Faith Claim • Rule 11 – attorney and party are representing good faith basis for maintaining the defenses • Rather specifically admit and/or deny each allegation or paragraph to be safe.

23. Responding to the Complaint –Strategy Implementation • Affirmative Defenses – Trial Rule 12(C) • Those defenses for which the Defendant carries the burden of proof at trial • Accord and satisfaction • Arbitration and award • Discharge in bankruptcy • Duress • Estoppel • Failure of consideration

24. Responding to the Complaint –Strategy Implementation • Affirmative Defenses (cont.) • Fraud • Illegality • Injury by fellow servant (employee) • Laches • License • Payment • Release • Res judicata (claim/issue already adjudicated)

25. Responding to the Complaint –Strategy Implementation • Affirmative Defenses (cont.) • Statute of Frauds • Statute of limitations • Waiver • Lack of jurisdiction over subject-matter • Lack of jurisdiction over the person • Improper venue • Insufficiency of process or service of process • Same action pending in another court in state

26. Responding to the Complaint –Strategy Implementation • Any other matter constituting avoidance, matter of abatement or affirmative defense • Identification of non-parties • If the pleading mistakenly designates a defense as a counterclaim or a counterclaim as a defense, the court shall treat the pleading as if there had been a proper designation

27. Responding to the Complaint –Strategy Implementation • Effect of not responding to allegations: • If response is required, then allegation deemed admitted (except amount of damages). • If no response required or permitted, then allegation deemed denied or avoided. • If claim is based upon written document, Trial Rule 9.2(A) requires the document be attached. • Trial Rule 9(B) requires specificity of circumstances if claiming fraud or mistake.

28. Responding to the Complaint –Strategy Implementation • Generally request trial by jury per Trial Rule 38 when filing your Answer. • May request jury trial within 10 days of filing your Answer. • Answer is a critical pleading affecting your rights throughout the litigation including trial.

29. Responding to the Complaint –Strategy Implementation • Motion to Dismiss - Trial Rule 12(B) • Timing – 20 days within service of Complaint • Following defenses may be made by motion: • Lack of jurisdiction over the subject-matter • Lack of jurisdiction over the person (W) • Incorrect venue (W) • Insufficiency of process (W)

30. Responding to the Complaint –Strategy Implementation • Defenses raised by Trial Rule 12 Motion (cont.) • Failure to state a claim upon which relief can be granted including failure to name real party in interest • Failure to join party needed for just adjudication under T.R. 19 • Same action pending in another state court of the state (W) • Some defenses waived if not raised (W).

31. Responding to the Complaint –Strategy Implementation • T.R. 12(B)(6) motion tests the legal sufficiency of a claim, not the facts supporting it. • Grant of T.R. 12(B)(6) motion is proper if it is apparent that the facts alleged in the Complaint are incapable of supporting relief under any set of circumstances. • Facts alleged in the Complaint must be taken as true.

32. Responding to the Complaint –Strategy Implementation • Asserting T.R. 12(B)(6) Motion, if you rely upon matters outside the Complaint, it is converted to a motion for summary judgment. • State courts typically set T.R.12 motions for oral argument. • If Motion granted, Plaintiff typically has 10 days within which to repleaded (T.R. 12(C)(2). • If Motion denied, Defendant has 10 days to file Answer (T.R. 12(C)(1)).

33. Responding to the Complaint –Strategy Implementation • Motion for Judgment on the Pleadings – Trial Rule 12(C) • Timing – after “the pleadings are closed”; but so as not to delay the trial • Motion is based upon the truth of the allegations asserted in the Complaint and the Answer. • T.R.12(C) motion also attacks the sufficiency of the pleadings.

34. Responding to the Complaint –Strategy Implementation • Movant is deemed to admit all well-pleaded facts in favor of non-movant and all reasonable inferences are drawn in favor of the non-movant. • Additional evidence is not needed to rule on the motion; otherwise, converts to summary judgment motion. • If facts are in dispute, the motion will be denied. • No right to replead unless really a T.R. 12(B)(6) motion.

35. Discovery Phase

36. Discovery Phase The Trial Rules • Generally any information which is relevant to issues raised in the pleadings and is not privileged can be discovered • Relevancy for purposes of discovery is much broader than relevancy at trial • Broad nature of discovery mandates preservation of records, including electronic data, to avoid, spoliation claims

37. Discovery Phase The Trial Rules (cont’d) • Insurance coverage and consulting experts are subjects of limited discovery • Privilege acts as an absolute bar to discovery • Bad news: you may be required to respond to discovery requests multiple times (supplementation requirement) • Length of discovery period is controlled by the Courts

38. Discovery Phase Discovery Methods, Written and Oral • Interrogatories • Written questions that may be served on any party to litigation that must be answered under oath • Generally used to obtain background information, tie down theories of liability or defense and ascertain damages • Thirty days to respond, subject to extension • Because answered under oath, they are admissible into evidence • Number of interrogatories may be limited by Court’s Local Rule or CMO • Option to produce business records rather than answer an interrogatoryseeking the identity of documents

40. Discovery Phase Discovery Methods, Written and Oral (cont’d) • Requests for Production • Written requests asking for the production of documents that may be served on parties or non-parties • Boundary lines of discoverable documents and defined by relevancy and privilege • Thirty days to respond, subject to extension • Production of electronic data has become a battle ground requiring a balancing act between the party requesting the data and the party or non-party producing the data • Number of requests generally is not restricted • You can ask the requesting party to examine documents/ electronic data at your office, but you cannot hide the thimble

42. Discovery Phase Discovery Methods, Written and Oral (cont’d) • Request for Admission • Written requests served on a party asking that the party admit specific facts and/or agree to the authenticity and/or admissibility of documents • Thirty days to respond and are deemed admitted if you fail to meet the deadline • Generally used to tie down specific facts or to authenticate documents • Any matter admitted is conclusively established unless the Court allows withdrawal or amendment of admission

44. Discovery Phase Discovery Methods, Written and Oral (cont’d) • Request for Inspection • Written request to party or non-party to enter upon and to conduct an inspection, photography/video and/or conduct testing • Generally terms of inspection are worked out by the parties and lawyers • Requests can also extend to physical examination and/or testing of a person in personal injury cases

45. Discovery Phase Discovery Methods, Written and Oral (cont’d) • Depositions • Oral examination of any person (party or non-party) conducted under oath and recorded by a court reporter • The deposition process • The boundary lines of deposition questions are based upon relevancy and privilege • In Federal Court the length of depositions is limited by a rule of procedure; no comparable rule in State Court • Depositions are spontaneous, and therefore, are an effective means of gathering evidence (limited interference by lawyers)

46. Discovery Phase

47. Discovery Phase Discovery Methods, Written and Oral (cont’d) • Depositions (cont’d) • Under Trial Rule 30 (B)(6) a deposition may be conducted of an organization and the testimony binds that organization • Deposition preparation is critical, even if the deponent has deposition experience • You have a limited opportunity to review and amend your testimony • Because deposition testimony is under oath, it is admissible into evidence (use of deposition at hearing on trial) • Deposition testimony may also be used to support motions, particularly motions for summary judgment

48. Discovery Phase Methods for compelling and curbing discovery • Discovery disputes occur more frequently than anyone wants and are expensive • The Trial Rules and judges encourage parties to resolve discovery disputes on their own • For those disputes that cannot be resolved there are tools to compel and curb discovery

49. Discovery Phase Methods for compelling and curbing discovery (cont’d) • Motion to Compel • Motion filed with the Court asking that the Judge order that party’s discovery be allowed • Can be utilized to resolve discovery dispute or when discovery requests are ignored, circumvented or unnecessarily delayed • A party or non-party can be subjected to a motion to compel • Party filing motion to compel may also request that sanctions be awarded, including attorney fees

50. Discovery Phase Methods for compelling and curbing discovery (cont’d) • Motion for Protective Order • Motion filed with the Court asking that Judge protect a party or non-party from discovery in whole or in part • Can be utilized to address over zealous discovery or when propriety, confidential or otherwise sensitive information and/or documents are the subject of discovery • A party or a non-party may seek a protective order • Protective order may address the timing, methods, location and/or terms and conditions under which discovery will be conducted