I just finished a complex fraudulent-transfer litigation case that focused a great deal of contentious light on some earlier estate tax planning. The tax planning involved an estate-freeze/ sale of an LLC interest to an (income-tax defective) Nevada trust. I purposely make no comment here about this particular case, other than it prompts me again to remind readers of the crucial importance of preventive planning to help avoid litigation.
The competitive challenge of litigation and controversy work fuels my enjoyment of lawyering. But, for all my clients I harp constantly on preventive planning to avoid getting into litigation. Litigation is nothing short of time-consuming war, with the odds of winning sometimes a crap shoot if the matter goes to a jury.
Individuals, who scoff at this preventive advice, with comments such as “I don’t care, let them sue me. They don’t have a case”. Or, “We will just file a lawsuit and see what happens”, likely set themselves up for costly failure.
A wonderful late friend of mine, who was a federal district court magistrate judge, told me many years ago: “During the 27 years I was on the bench, I never saw a case someone couldn’t lose.”
Below is my general observation about juries for this blog post.
At the end of a trial, the jury deliberates and makes conclusions about what the jury believes are the accurate, credible facts the jurors observed during the trial. Also at the end of the trial the judge reads the applicable law to the jury, on the notion the jury during its deliberation will apply the jury’s perception of the facts to the law. This is often called “the law of the case”.
The jury then renders its verdict essentially by the jury deciding during the jury closed-door deliberations how it will combine the facts with the law of the case.
The judge’s reading of the law to the jurors is referred to as “jury instructions”. Prior to the judge reading these instructions to the jury, the opposing lawyers try and convince the judge to use each lawyer’s own respective written blurb or summary for each point of the relevant law. This is called a “jury charge conference” or “jury instruction conference”. The conference takes place among the judge and opposing lawyers without the jury being present.
Now, here is an important jury point to ponder in the context of this blog post.
If you believe you have the weaker merits in a case (for example, less than 50%), you generally will try and keep your litigation case alive with a persistent move toward getting your case in front of the jury.
This weaker-merit posture involves you primarily crafting your lawsuit allegations and discovery, etc., in a way where the issues cannot be concluded with a pre-trial motion for summary judgment or motion to dismiss, etc.
Pre-trial motions are used extensively by litigation parties to try and convince the judge there are no materially disputed facts that warrant having the case continue on to a jury. Essentially, the pre-trial effort is an attempt to end the case before the jury factor arises.
This pre-trial motion approach, in general terms, means the judge may possibly decide and conclude the case without the case having to go before a jury. This also means, if the circumstances support a pre-trial conclusion, the judge addresses (not the jury) what and how the facts apply to the law.
Again, the weaker party tries to stall and derail this pre-trial effort.
On the other hand, if you believe you have the stronger merits in a case (more than 50%), you generally will try your best to get the case concluded with the pre-trial approach without the case going to a jury. By using the above pre-trial motions, such as motions for summary judgment, motions to dismiss, etc., or a combination of pre-trial motions.
Now, why do I refer to 50/50 juries?
My view is that most jury trials even the parties’ odds to 50/50. A jury, for example, may simply not like one of the parties. Or, the law that applies to the case (the jury instructions) might involve such a complex array of laws that the jury simply makes ad hoc conclusions in reaching their verdict without the ability to apply the law accurately.
So, if you believe you have 90% of the merits in a case, your odds before a jury drop from 90% to 50%. If you believe you have a 20% case, your odds essentially increase to 50%.
Preventive planning. Crucial.