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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.

ndebord
August 11th, 2009, 09:18 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.

This is a legal system? This is Kafka.

Judy G. Russell
August 12th, 2009, 12:26 AM
Wow. That's wild. Can't happen in the Third Circuit, because the District Court won't issue the final judgment (required for an appeal) until attorneys' fees have been set, so that the entire case and all issues are appealed (and appealable) at once. And oh MY what a malpractice case P has against P's own lawyers, who missed (it seems) every single solitary opportunity to protect P from this.

Judy G. Russell
August 12th, 2009, 12:28 AM
This is a legal system? This is Kafka.No, it's not. It's malpractice. Note that the plaintiff took the appeal before the attorneys' fees were fixed. Then didn't appeal the attorneys' fees award. Then didn't move to stay or quash the execution sale. In other words, there were at least four different procedural avenues the plaintiff had -- in the trial court -- to prevent this, plus the plaintiff could have gone to the appeals court for relief if it had been denied by the trial court.

Bad lawyering, not bad legal system.

sidney
August 12th, 2009, 03:32 AM
Then didn't move to stay or quash the execution sale

Actually, that's the one thing that they did do, and lost, and as I read this missed two other things they could have done about the execution sale that might have got it stayed or quashed, and missed an appeal of the denial of the motion to stay or quash:

On May 8, 2008, Plaintiff filed a motion to stay or quash the execution sale. Plaintiff raised various jurisdictional and due process arguments before the district court, but never alleged an inability to pay the judgment of attorneys’ fees or post a supersedeas bond. The district court denied Plaintiff’s motion to stay or quash the execution sale. Plaintiff did not appeal this decision.

Judy G. Russell
August 13th, 2009, 12:02 AM
Actually, that's the one thing that they did do, and lost, and as I read this missed two other things they could have done about the execution sale that might have got it stayed or quashed, and missed an appeal of the denial of the motion to stay or quash:Okay, I misread it. "All" they did was fail to appeal (and you can ask the appeals court for a stay even if it's been denied by the trial court).