Monthly Archives: March 2014

Don’t Do It . . .

21 Friday Mar 2014

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I have written in the past of the importance for party to a lawsuit to organize documents to present to his or her attorney. This streamlines the process for both the client and attorney, regardless of whether the documentation is gathered before filing a claim or is to be used in the defense of the claim.

This is a process a person should do, but certainly is not required to do.  There are certain things a party to lawsuit should never do, one of which is to destroy documents that relate or refer to a claim or defense.  There is perhaps no greater wrong a litigant can do just before or in the course of a litigation.

Courts do not tolerate this behavior and have a variety of sanctions they can assess against a party that destroys evidence, regardless of whether the evidence is an actual item, document or an electronic file (including emails).  For those instances where the destruction is deemed by the court to be intentional or willfully and/or grossly negligent, courts will dismiss complaints or strike answers and defenses.  In other instances courts will issue orders calling for an adverse inference.  An adverse inference is an instruction to the jury that they may draw a negative inference as to the content of the destroyed items or why the items were destroyed.  By way of example, if a party is being sued for defamation (communication of a false statement that harms another) and the person being sued deleted emails, the court may instruct the jury they may make the adverse inference the emails were deleted because they contained defamatory content.

When it comes to documents stored on a computer or emails on a server, before pushing the delete button, before cleaning your hard drive or accidentally misplacing a computer, think twice, because what you believe will protect you will most likely be the undoing of your case.

Attorneys in most states are required to issue what is called a “Litigation Hold”, which is an instruction to any party, either contemplating a lawsuit or named as a defendant in a lawsuit, to maintain any and all documents relating to the case and to make sure things such as email auto deletion programs are turned off.   Parties to a lawsuit, however, should use common sense and not wait for their attorney’s instruction to do the same.  Before deleting or destroying anything, speak to your attorney first to avoid summarily destroying your case or defense.

If you have questions regarding any of the issues addressed in this blog, please email or call The Law Offices of Barry M. Bordetsky at (800) 998-7705 or email at barry@bordetskylaw.com.

You Agreed to What?

14 Friday Mar 2014

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If you were asked to sign an agreement containing the language below, you would think a joke was being played on you:

BY SIGNING BELOW YOU ARE GIVING YOUR LIFE

SAVINGS TO [FILL IN LEAST FAVORITE PERSON]

          X_______________________________________________

You would think the joke continued if above the signature block on the next page of the agreement contained the following:

BY SIGNING THIS AGREEMENT YOU ARE AGREEING TO:

          (i)          KL**AJSDF;

          (ii)         LK AKJKJADFE; and

          (iii)        KAJD-KJT

          X_______________________________________________

As much as these examples may bring a smile to your face because of the respective absurdity or incongruity of each, they, or more detailed examples of the same, can be found in any number of breach of contract cases.

With respect to the first, many people haphazardly review a document before signing it, not taking the time to read each and every paragraph or appreciate the significance and legal consequence of each term. What inevitably takes place, most likely at the signer’s deposition, is the signer testifies: “I didn’t think this was going to be enforced.”   The reason contracts have many paragraphs is because the party or parties intend each and every term and paragraph to be enforceable against the other.   By signing an agreement, the signatory is agreeing to each of the terms set forth in the document.

The second example comes into play more often than not in business transactions involving individuals.  The irony here is for each person that reads the above unintelligible example thinking “who would sign an agreement with language they don’t understand”, three others have just signed contracts containing language the signers did not read or simply do not understand.

Courts have made it very clear a party is responsible for and will be held accountable to the terms and corresponding obligations set forth in an agreement that is signed by the party.  Naiveté and ignorance are not proper or acceptable defenses.

Take the time to read documents put in front of you that require your signature. If you do not understand a term or reasoning for the inclusion of a paragraph, ask as many questions as you need to so you understand the content. If asking the questions you still do not feel comfortable with the answer or you still do not have an understanding as to how that term or paragraph will effect you, do not sign the agreement.

Otherwise, the last laugh may very well be at you.

 

If you have questions relating to this topic or other contractual matters, please contact The Law Offices of Barry M. Bordetsky by calling Barry M. Bordetsky at (800) 998-7705 or emailing at barry@bordetskylaw.com.

 

Where Are You Going: Arbitration or Court?

11 Tuesday Mar 2014

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The charge goes out from the client: Sue Them!   Doing the due diligence before drafting a complaint the attorney discovers an agreement between the parties that permits the claim to be filed before an arbitration forum or court.

So where to go?  Choosing which forum to commence the proceeding can prove critical to the case.  The importance of the forum analysis cannot be overlooked.  Factors to be considered include the amount of time it will take to have the trier of fact (judge, jury or arbitrator) render a decision, the type of discovery that will take place in each forum and the costs associated with each forum.

Arbitration includes a generally expedited process where a claim is heard within a year or eighteen months after the filing of the claim.  Conversely, a court proceeding can last from one to three years. Generally no depositions or interrogatories are permitted in the arbitration process. In English, this means unlike a court proceeding a party in the arbitration process has no idea what the other party is going to say when called to the stand. Arbitration attorneys often call the process trial-by-ambush.

An advantage seen in the arbitration process, particularly for individuals as opposed to corporate parties, is the decreased cost associated with the diminished discovery permitted in the forum.   Discovery for an average commercial matter can be the most expensive part of a proceeding. Some, however, do not see the cost benefit of limited discovery.  If the potential claims are believed to be in the range of hundreds of thousands of dollars, then spending tens of thousands of dollars to ensure you acquire the relevant information to prove your case can be seen as money well spent.

Where a party chooses to litigate a case in court, the judge is randomly selected upon the filing of the complaint, where parties to an arbitration will select the arbitrators. This judge in the court case will determine issues ranging from discovery to substantive motions filed by the parties.  In most jurisdictions this will be the same judge that presides over the trial.  In the event a court renders a decision, whether on a pre-trial matter or on the decision from the trial, a party has a right to appeal the issue to an appellate court.

Like a judge, arbitrators rule on various motions including discovery motions such as motions to compel, motions to exclude as well as motions to dismiss certain causes of action.  These are heard prior to the arbitrators ruling on the merits of the case. Importantly, unlike a court proceeding, these decisions by the arbitrators are not immediately appealable.  Moreover, after arbitrators render their final decision, it is very difficult for a party to overturn, or vacate, the arbitration award.  Said differently, the appeal process in arbitrations is substantially more difficult than in court proceedings.

The decision of the forum is critical and should not be disregarded as inconsequential.  Prior to any filing, take the time to determine which forum is better for your matter.

The Law Offices of Barry M. Bordetsky represents parties before courts and arbitration forums. If you have any questions, please contact us by telephone (800) 998-7705 or by email at barry@bordetskylaw.com.

Help Your Attorney Help You

10 Monday Mar 2014

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All too often a party retaining a law firm moves forward with the belief the litigation costs will be minimal because the issues, from the client’s standpoint, are simple, straightforward and should not require a lot of work.  Except all too often simplicity is a mirage of a complicated and often times very expensive litigation.

Clients that provide the attorney with a clear road map of what did or did not happen do themselves, their attorneys and their case a great favor.  This process is done with the client preparing a written description of the facts as he or she sees the situation.  For every point supported by documents, provide those documents.  Don’t take this the wrong way, but it is our jobs as attorneys, playing devil’s advocate, to test your story, try to poke holes to test the points raised if for no other reason than to determine the viability and/or liability potentials of your case.  We will use your description and supporting documents to do that; don’t let us learn the case from the other side’s attorney.

This process begins before the first meeting with your attorney.  Take the time to go through your files and prepare for the meeting just as you would prepare for any other meeting where tens of thousands of your dollars are at stake.  And to be clear, this is the money that you could spend on your attorney to gather and review documents in the course of your case if you do not take care of the initial due diligence.

The lesson here:  avoid or minimize this cost by doing the necessary legwork.  Go through your files and copy (keep a copy of everything) all documents relating to the matter, putting the documents in chronological order to provide to the attorney.  Take the time to review your emails, utilizing relevant keyword searches that relate to all aspects of the issue and keep a log of the keyword searches.  Put the emails in chronological order and include the complete email string together with any attachments that were included in the message.  A key point: it is not your job to decide what is or is not important to a matter.  Give the attorney everything, tell the attorney everything.

What will this work do for you?  By providing an organized package of documents to your attorney (don’t write on the documents!) with a corresponding description of the facts and circumstances relating to your matter, explaining how the documents relate to the issue at hand, you provide a road map for your attorney to follow and understand your case at a much more cost efficient basis for you.  Give your attorney as much ammunition as possible to fight for you.

Prepare The Defense On Day One

08 Saturday Mar 2014

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In today’s environment an informal customer complaint must be taken as seriously as a formal filing with FINRA.   Upon receipt, a swift and comprehensive investigation of the alleged wrongdoing should be commenced.  Lay the groundwork for any third party’s review of your files.  Whether it’s FINRA’s or claimant’s counsel reviewing your files, the firm should demonstrate that it takes the claims seriously and is/was working both with the broker and the customer to: (i) resolve the issue; and (ii) ensure the complaining acts to do not repeat themselves.

When the formal statement of claim does arrive from FINRA, the clock starts to run on the time to submit an answer and prepare for an upcoming arbitration hearing.   FINRA is putting  pressure on arbitrators to expedite the proceedings.  The days of pushing back hearings a year and a half after the initial pre-hearing conference are a thing of the past.

Firms must be smart, and by doing so, they will save money and perhaps more importantly, avoid grief and liability.  Upon receipt of a statement of claim, a full profit and loss should be completed.  Provide your counsel with: (i) account statements; (ii) new account documents; (iii) client and broker files; and (iv) an analysis of net out-of-pocket losses and turnover rate.  As knowledge is power, providing defense counsel this information will permit a comprehensive response to the claims.  Additionally, the broker must have a “tell all” with counsel, explaining the relationship with the client,  leaving no stone unturned.  Let the attorney make the decision as to what is and what is not important to the case.  Remember, prior to the arbitration hearing, two out of the three arbitrators will have no contact with the parties outside of the pleadings.  The statement “you don’t get a second chance to make a first impression” lies true with the submission of the answer and you must give your attorney all the ammunition to submit a strong defense on your behalf.

Broker-Dealers Must Act to Protect Themselves

07 Friday Mar 2014

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Today broker-dealers are under constant fire.  The pressure comes from various sources: (i) the industry wanting to ensure investors they are being protected; (ii) FINRA enforcement investigations; and (iii) clients demanding positive returns regardless of the trading strategy they selected and approved.

Firms today must be aggressive, and such aggressiveness must begin on day one.  This day is not when a firm receives a customer complaint, but rather, the day the investor becomes a customer of the firm.

From the brokers, supervisors and back office personnel, everyone must be on the same page realizing that every ordinary act required in the opening and continuing of an account can prove to be crucial in defending the firms.  The simplicity of the acts is often overlooked.  For example, make sure account documentation is properly completed.  Client contact with the firm should be documented on a daily basis.  (Brokers often complain about the time it takes to scribble the notes.  Compare that time to working with defense counsel and spending three to five days at an arbitration hearing.  Suddenly the 30 seconds becomes very worthwhile.)  Also, supervision of brokers, such as documenting the comparison of investors’ trading to trading objectives, will provide a layer of protection if, and when, necessary.

The Law Offices of Barry M. Bordetsky works with brokers and broker-dealers when faced with both customer complaints and regulatory issues from FINRA.  If you have questions, please reach out to Barry M. Bordetsky at (800) 998-7705 or barry@bordetskylaw.com

Ask the Questions…Again and Again.

06 Thursday Mar 2014

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You’re ready to invest in the stock market. If your name is not Warren Buffet, there is a lot to know, a lot to learn.  You decide instead of doing it on your own you will work with a stockbroker.  Fortuitously, your telephone rings and on the other side of the call is Jane Stockbroker.  And boy does she have a product to sell you, one that she has researched, she tells you, and one that she believes is going to be something that would be a perfect fit for you.

You listen to her pitch and everything sounds great.   Ms. Stockbroker is going to ask you some questions, as she is required to do to determine if the trade she has in mind is appropriate for you.  She is going to ask you questions as to your history of investing in the market, your income, risk you want to take with your investments and what your investment goals are for your money.

She then is going to tell you everything great about her and the proposed security she is recommending.  And here is where the customer makes his or her first mistake: the response is silence.  Silence because the customer is embarrassed to ask questions that fearing a show of ignorance.  Perhaps silence because the customer does not have the money to invest that Ms. Stockbroker is recommending be made for this absolutely fantastic opportunity.

Ms. Stockbroker has certain responsibilities that are governed by various state and federal regulatory entities.  You too, however, have a responsibility, and that is to yourself.  Remember this: Ms. Stockbroker wants to work for you, not the other way around.  Take the time as you would with any interview for someone working for you to ask the questions.  Why are you so hot on this stock? What about it jumps out at you? What historically has the stock done?  How stable is the company?  What do you get out of this, or said otherwise, what are your commissions?  While Ms. Stockbroker has certain responsibilities with the relationship, so do you, and you must do your do diligence before investing with Ms. Stockbroker.

Of particular importance in this interview process is to learn about Ms. Stockbroker.  How long has she been working in the stock market?  Where did she start?  Does she concentrate on certain areas of the market, perhaps the healthcare or technology sector?  Has she ever been sued by a client? Has she ever been in trouble with the regulators?  How many people in a similar situation like you does she work with and for how long has she worked with them?

You want to get to know Ms. Stockbroker and find yourself comfortable with her.  Make her earn your trust by starting slowly and if the relationship continues, continue that slowly.   Ms. Stockbroker can provide a service that can benefit you, but make no mistake, it is a relationship you control, and your failure to ask the questions, every question you want for as long as you have the relationship, can cost you more than a relationship, it can cost you your retirement.

The Law Offices of Barry M. Bordetsky handles matters such as these. If you have questions regarding your securities account, please visit our website at http://www.bordetskylaw.com or contact Barry M. Bordetsky at (800) 998-7705 or barry@bordetskylaw.com.