fbpx
Cash money in a suitcase

What Happens When Someone Sues Your Business In Florida?

It goes without saying that no one in business wants to get sued. Some people in business may even believe that they’re not at risk of being sued. This may be because they own a small business, or they’ve been in business for years without any legal troubles. Or perhaps they haven’t been in business long enough to know better. Naiveite or wishful thinking aside, the stark reality is that the threat of potential litigation looms over all Florida businesses.

In fact, the U.S. Small Business Administration (SBA) estimates that roughly one third to one half of small businesses in the United States are sued each year. The SBA also estimates that more than 40 percent of small businesses have been threatened with litigation, and the vast majority of all businesses face litigation during their existence.

But what happens when or if someone sues your business in Florida? In this week’s article, the business and commercial litigation attorneys at Capital Partners Law provide a comprehensive look at the entire process from start to finish.

There Is No Lawsuit Without A Complaint

As Florida businessmen and women likely know all too well, being threatened with a potential lawsuit is not unusual. Disgruntled customers, clients, vendors, and even partners may make verbal threats of this nature in a heated exchange or moment of frustration. Although this is undoubtedly stressful and unpleasant, a verbal threat to sue carries no legal weight.

To sue a Florida business, the aggrieved party must file legal paperwork (a “Complaint”), in the appropriate court, stating the legal reason(s) for the lawsuit and the damages (i.e. compensation) sought. In Florida, business lawsuits are typically filed in county or circuit court, depending on the amount the aggrieved party (the “plaintiff”), is seeking as compensation for its losses. If the plaintiff is suing a Florida corporation, Fla. Stat. § 47.051 mandates that he or she does so “in the county where such corporation has, or usually keeps, an office for transaction of its customary business, where the cause of action accrued, or where the property in litigation is located.”

After the plaintiff files the petition or complaint, a copy of that document and a summons is officially delivered to the business, which is referred to as “service of process.” In accordance with applicable Florida statutes, the person who is officially “served” with these documents depends on the business structure, however it is typically the registered agent for the business. Once service of the complaint and summons occurs, a defendant has 20 calendar days in which to file a response with the clerk of the court.

Filing The Answer

If you don’t already have a business lawyer, this is the time to hire one. Keep in mind, in Florida it is mandatory for a business to be represented by an attorney in litigation (except for lawsuits filed in small claims court). Therefore, even if a business owner wanted to represent his or herself in Florida, they are not permitted to do so. Moreover, an experienced lawyer who is well versed in Florida business litigation can properly review the circumstances of the case and craft a defense strategy accordingly.

The first step in this process is drafting a response to the summons and complaint. This response may be in the form of a pre-trial motion (such as a Motion to Dismiss) or it can be in the form of an “Answer,” which responds to each and every allegation in the Complaint. As detailed in FL. R. Civ. P. 1.110, an Answer must include short statements explaining the defense to each claim made in the complaint. It must also include denials or admissions to any allegations made therein. Drafting and filing a proper response to the Complaint is crucial to your case, since failure to do so within 20 days may result in a “default” against you, which ultimately leads to a judgment against the business. A default essentially admits all of the allegations in the Plaintiff’s Complaint – something you obviously want to avoid as a business owner involved in litigation.

Exchanging Information Through Discovery

The next step in the litigation process is called “Discovery.” This is the process where the attorneys for the plaintiff and defendant exchange relevant information. The methods for doing so are specified in FL. R. Civ. P. 1.280. Among other things, this rule allows a Florida business lawyer to obtain information from the other party through:

  • Sworn statements (depositions)
  • Written questions and answers (interrogatories)
  • Requests for production of documents or other items
  • Requests for permission to enter upon land or other property for inspection and other purposes
  • Physical and mental examinations (if applicable)
  • Requests for admission (written statements that the recipient must admit, deny, or give reasons for the inability to accept or deny)

In addition to governing how business lawyers can obtain information, this rule dictates what type of information  is subject to discovery.  Accordingly, attorneys can obtain information on any matter relevant to the pending lawsuit as long as it is not privileged. This includes “the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter.”

The rule also allows attorneys to obtain the following through discovery:

  • Electronically stored information (with certain limitations also specified by law)
  • Material prepared for trial
  • Expert opinions and facts

Upon completion of this process, a determination can be made regarding how the case should be resolved. This may be through alternative dispute resolution (mediation or arbitration), settlement, or trial.

Arbitration and Mediation in Florida Business Litigation Cases

Non-binding arbitration

Fla. Stat. § 44.103 allows any court, based on rules adopted by the state Supreme Court, to refer any contested civil action filed in a circuit or county court to non-binding arbitration.

This process, which usually takes 30 days,  is overseen by an arbitrator or chief arbitrator (when there is an arbitration panel). It includes an informal hearing, where the lawyer for each party  states his or her case. Unlike at trial, there is minimal presentation of testimony and evidence. However, any party with good cause may ask the court in the underlying action to authorize the arbitrator to issue subpoenas for the attendance of witnesses. When so authorized, the arbitrator may also issue subpoenas for the production of books, records, documents, and other evidence at the hearing. Finally, he or she  may ask the court to issue orders compelling such attendance and production at the arbitration.

In accordance with FL. R. Civ. P. 1.820, the parties will get the arbitrator’s decision in writing within 10 days of the final adjournment of the arbitration hearing. It is deemed final if none of the parties request a trial within 20 days after receipt of the written decision. In that case, the decision is sent to the presiding judge in the case. He or she will then enter an order(s) and judgment in the case.

Mediation

Generally speaking, mediation is a process in which a neutral third party facilitates a conversation between two or more parties involved in a legal dispute. By doing so, the mediator helps the parties identify and address issues of concern, as well as come up with a mutually beneficial resolution or settlement of the case. If an agreement is reached by the parties during mediation, a formal settlement agreement may sometimes be drafted during the mediation itself, which can then be enforced by court order.

Court-ordered mediation, which usually takes place within 45 days,  is governed by Florida statutes and Rules of Civil Procedure. For example, Fla. Stat. § 44.404 dictates that this type of mediation begins when the order is issued and ends when:

  • The parties sign a  partial or complete settlement agreement, intended to resolve the dispute and end the mediation, and the court approves it if required by law.
  • The mediator declares an impasse by reporting the lack of agreement  to the court or the parties.
  • The mediation is terminated, after party compliance with the court order to appear at mediation, by either agreement of the parties;  or by  one party giving written notice regarding its decision to terminate its participation in the process to the other party or parties. When this happens, the termination is effective only for the withdrawing party.

It is important to note that participation in court-ordered mediation is mandatory (FL. R. Civ. P. 1.720). If a party does not show up without a valid reason, a motion may be made to the court for the imposition of sanctions. These sanctions may include an award of mediation fees, attorneys’ fees, and/or costs.

It is also important to note that although the mediator does not dictate the outcome, he or she  is in charge of the process at all times.  That being said, attorneys are allowed to speak with their clients in private at any time during the process. The mediator is also allowed to meet with and consult any party or parties and/or their attorney(s) in private.

If the case is not resolved through arbitration, mediation, or through a settlement, it will go to trial.

What Happens At Trial?

A trial is an adversarial process in which a judge or jury decides the outcome of the case. If it is a jury trial, the process begins with jury selection. Once a panel of jurors is chosen, each attorney usually makes an opening statement. This is a summary of the legal issues in question and the arguments each side plans to make during trial. The attorney(s) for each party then call and cross examine any witnesses called to testify in the case. Once witness testimony is concluded and all evidence has been presented to the jury, attorneys for the plaintiff and defense will usually make closing arguments.

At this stage, various motions may also be made. For example, the defense attorney may ask the judge to dismiss the case, citing legal grounds for doing so. If the trial judge sees no reason to dismiss the case, jury instructions will be given and the jury will deliberate until it reaches a verdict. In a bench trial, where no jury is involved, the judge will review all of the evidence presented and render a verdict. In either scenario, a judgment for one party is issued accordingly. Either or both parties may appeal to a higher court if they are dissatisfied with the outcome.

Contact the Experienced Business Litigation Attorneys at Capital Partners Law Today

To learn more or speak with a knowledgeable Florida Business Attorney, contact Capital Partners Law today:


This article is provided by Capital Partners Law for informational purposes only. It is not intended as legal advice and does not form the basis for an attorney-client relationship. If you need legal advice, please contact Capital Partners Law or another licensed attorney.