sidney
August 11th, 2009, 08:30 PM
I just came across a story of a court case that is making my head spin - It reminds me of the joke about the guy who got both law and medical degrees so that he could get hired as the lawyer of patients suing him for medical malpractice and win no matter what the result.
Here is the Federal Appeals Court decision [PDF] (http://www.ca10.uscourts.gov/opinions/08/08-4035.pdf), which I'll summarize:
Company P (the plaintiff) sued Company D (the defendant) over some financial contract issue, whose details are not important for this story.
D successfully defended the suit, got it dismissed in summary judgement, and was awarded some $87,500 in attorney's fees and legal costs.
P appealed the summary judgment, but did not appeal the separate judgment against them for defendant's legal costs, and also did not pay it and did not post a bond for it pending the outcome of the appeal that they did file. As a result, the Court enforced their jugement by ordering an "execution sale" which according to a definition I looked up is "a sale of property by the sheriff under authority of a court's writ of execution in order satisfy an unpaid obligation".
What was sold was P's right to sue D in this case. As I understand it, they sold the speculative chance of winning on the appeal, in a forced sale to attempt to get the money to pay D's legal costs that they incurred in successfully defending their case. P did file a motion to quash the execution sale, but they lost that one too and did not appeal it.
Even though this execution sale was to raise money for the $87,500 that P owed D, the highest bidder in the sale offered only $10,000. However, that was good enough, because that highest bidder was ... Company D!
This Appeals Court decision found that Company D was within their rights to have the appeal dismissed on the basis that they, not Company P, now had the sole right to pursue or not pursue the suit. That was true even though if Company P had been able to win the appeal they would no longer have owed the $87,500 that was the basis of their being forced to sell their right to sue Company D.
Here is the Federal Appeals Court decision [PDF] (http://www.ca10.uscourts.gov/opinions/08/08-4035.pdf), which I'll summarize:
Company P (the plaintiff) sued Company D (the defendant) over some financial contract issue, whose details are not important for this story.
D successfully defended the suit, got it dismissed in summary judgement, and was awarded some $87,500 in attorney's fees and legal costs.
P appealed the summary judgment, but did not appeal the separate judgment against them for defendant's legal costs, and also did not pay it and did not post a bond for it pending the outcome of the appeal that they did file. As a result, the Court enforced their jugement by ordering an "execution sale" which according to a definition I looked up is "a sale of property by the sheriff under authority of a court's writ of execution in order satisfy an unpaid obligation".
What was sold was P's right to sue D in this case. As I understand it, they sold the speculative chance of winning on the appeal, in a forced sale to attempt to get the money to pay D's legal costs that they incurred in successfully defending their case. P did file a motion to quash the execution sale, but they lost that one too and did not appeal it.
Even though this execution sale was to raise money for the $87,500 that P owed D, the highest bidder in the sale offered only $10,000. However, that was good enough, because that highest bidder was ... Company D!
This Appeals Court decision found that Company D was within their rights to have the appeal dismissed on the basis that they, not Company P, now had the sole right to pursue or not pursue the suit. That was true even though if Company P had been able to win the appeal they would no longer have owed the $87,500 that was the basis of their being forced to sell their right to sue Company D.