Commercial litigation refers to the type of litigation in which a business owner might become involved. A brief list of examples of commercial litigation might include the following areas: employment matters, corporate disputes, partnership and joint venture disputes, contract disputes generally, construction contract and mechanic's lien matters, Uniform Commercial Code issues, fiduciary and shareholder issues, real estate matters generally, insurance coverage disputes, zoning and other municipal issues, banking matters including guarantees and truth in lending issues, and ERISA issues. As a general rule, no business owner wants to be involved in commercial litigation. It normally means that something has gone wrong. Commercial litigation is often time consuming and expensive. It can also be confusing. This article will attempt to eliminate some of the confusion resulting from the business owner's unfamiliarity with commercial litigation procedure. This article is an overview and cannot anticipate every commercial litigation contingency.
When something does go wrong in your business, contact your attorney early and keep in touch. Sometimes the attorney can help to resolve the dispute without litigation. In almost every instance, the attorney can advise you in a way that will result in a better litigation position once suit is filed. If the business owner is the party considering filing suit, there may be statute of limitation issues (i.e., time limits established by statute within which suit must be filed or it will be barred). You may also have the option of suing in state or federal court. You and the attorney will want to discuss the types of documents involved in the dispute and will begin gathering and organizing those documents. The attorney may also wish to identify and interview potential witnesses as early as possible, in order to take advantage of the witnesses' best recollection of relevant events.
The party filing suit is known as the plaintiff (or sometimes the petitioner) and the party who is sued is known as the defendant (or sometimes the respondent). The plaintiff starts the suit by filing a complaint, which may be in one or more separate counts. The complaint may seek legal relief in the form of money damages or equitable relief in the form of an injunction. The complaint may demand a jury trial. The complaint will consist of factual allegations which, if proven, will entitle the plaintiff to legal or equitable relief.
The plaintiff is required to give notice of the suit to the defendant in the form of a summons. The summons will be served by a deputy sheriff, a private process server or, in some cases, certified mail. The summons may be served on the business owner personally, a registered agent of a corporation, or another agent. The summons will be accompanied by a copy of the complaint and will state the time period within which the defendant must respond to the factual allegations stated in the complaint. Because of these time limits, it is imperative that the business owner contact legal counsel immediately upon receipt of a summons and complaint.
If the complaint is in proper form and states sufficient factual allegations to state a claim which, if proven, would entitle the plaintiff to relief against the defendant, the defendant will file an answer to the complaint. If the complaint is verified (i.e., the plaintiff has sworn under oath that the factual allegations in the complaint are true) the answer must also be verified. The sole purpose of the answer is to admit or deny the factual allegations stated in the complaint. In this way, the court and the parties know what facts are in dispute and what facts are undisputed and therefore need not be proven at trial.
Many defendants want to try to win their case in the answer. They want to tell their side of the story. As noted, however, that is not the purpose of the answer. Be assured that there will be time later in the litigation to tell your side of the story.
If the complaint is not proper for a variety of reasons, the attorney will file a motion to dismiss the complaint. A motion is a formal request to a court to take some type of action in the litigation. If the complaint contains multiple counts, the attorney may move to dismiss some counts and may answer other counts. In state court in Illinois ( and in some federal courts) the attorneys for both parties will appear at a hearing before a judge to argue the motion. The parties do not have to attend this hearing, but are welcome to attend.
A complaint might be improper because it fails to include all necessary factual allegations to entitle the plaintiff to relief against the defendant, assuming the facts alleged can be proven. A complaint might also be improper because the claim alleged is barred by a statute of limitation or by a prior judgment, has been released or discharged in bankruptcy, is the subject of another suit between the same parties, or is barred for a variety of other reasons. If the motion to dismiss is granted and the defect in the complaint can be remedied, the court will give the plaintiff a chance to file an amended complaint. The defendant will then evaluate the amended complaint and will either file an answer or another motion to dismiss. Indeed, there are times when a case goes to trial on a third or fourth amended complaint. If the defect in the complaint or amended complaint cannot be remedied, however, the court will dismiss the complaint with prejudice. This means that the plaintiff does not have a chance to file yet another amended complaint. In that event, the litigation is over in the trial court, although the plaintiff may file an appeal.
A defendant in pending litigation has a right to file a counterclaim against the plaintiff or a cross claim against a co-defendant (in some courts both types of filings are called counterclaims). This right is automatic if the defendant files the counterclaim or cross claim with the answer to the complaint. Afterward, the defendant needs the permission of the court, which is regularly granted so long as it is still fairly early in the litigation. A defendant in pending litigation also has a right in some circumstances to bring other defendants into the litigation by filing a third party complaint. A third party complaint is appropriate to bring in as a third party defendant a person who may be liable to the existing defendant for all or part of the plaintiff's claim against the existing defendant. As in the case of a counterclaim or cross claim, an existing defendant has an automatic right to file a third party complaint with the answer, but thereafter must get court permission.
The procedural effect of the filing of a counterclaim, cross claim or third party complaint is the same as the filing of the initial complaint. In other words, the attorney for the counterdefendant, cross defendant or third party defendant must examine the factual allegations in the document and file either an answer or motion to dismiss within a specific time period.
The plaintiff has the burden of proving the claims set out in the complaint. The defendant files an answer admitting or denying the factual allegations of the complaint. If the case goes to trial, the defendant obviously has a right to put on a defense to the claim stated in the complaint. There are certain defenses, however, that the defendant must specifically set forth in the answer (or afterward with court permission) in order to preserve those defenses. These are known as affirmative defenses. The defendant has the burden of proving affirmative defenses. Examples of affirmative defenses are payment, release, satisfaction, discharge, fraud, duress, illegality, failure of consideration, and any defense which by other affirmative matter seeks to avoid the legal effect of or defeat the claim set forth in the complaint, counterclaim, cross claim or third party complaint.
The pleadings are the complaint (or counterclaim, cross claim or third party complaint) and the answer. If the complaint and answer disclose that there is no issue of fact to be tried, one or more parties may move for a judgment on the pleadings. To be successful, the attorney filing the motion must convince the court at a hearing that his or her client is entitled to a judgment on the face of the pleadings. A motion for judgment on the pleadings is not often used because the complaint and answer ordinarily disclose at least one issue of fact between the parties.
In many courts, not long after the filing of an answer to the complaint, the attorneys (and sometimes parties) appear before the judge at a preliminary pre-trial conference. This conference enables the court at an early stage of the litigation to better manage the case. The court might set a discovery timetable (more on discovery in the next section), might set dates for disclosure of expert witnesses, and might set a trial date. In a complicated case, the court might instead set a second preliminary pre-trial conference for the purpose of monitoring the progress of the case. Depending on the particular judge, the preliminary pre-trial conference might be a time that the judge explores the possibility of settlement between the parties.
Discovery refers to the formal methods by which one litigation party acquires documents and information from another party and from non-parties. Modern litigation is characterized by full disclosure, such that parties have the opportunity to become fully educated as to the facts of the litigation before trial. The discovery process enables the parties in advance of trial to assess the real value of their claims and defenses, thus promoting more realistic settlement discussions and expediting the ascertainment of truth at trial. Examples of discovery methods are requests for documents, subpoenas for documents, interrogatories, depositions, and requests to admit.
Two exceptions to the full disclosure required by modern discovery methods are the attorney/client privilege (or other privileges recognized by law) and the work product doctrine.
Matters that invade the attorney/client privilege need not be disclosed in discovery. The attorney/client privilege applies to corporate clients as well as individual clients. There is a question, however, of which corporate employees are covered by the privilege. Illinois has adopted a "control group" test to determine whether communications between an attorney and corporate employees are privileged. Under this test, an attorney's communication with an employee will be privileged only if the employee is a member of top management or an adviser to top management whose role is such that a decision would not normally be made without his advice or opinion. The control group test has been rejected in federal litigation as being too restrictive. Ultimately, the attorney will guide the determination of what corporate employees should be consulted on what issues.
Additionally, an attorney's "work product" is privileged against disclosure. If material is compiled by or for a party in preparation for trial, it is not subject to discovery if it contains or discloses the theories, mental impressions, or litigation plans of the party's attorney.
Discovery can be very time consuming and expensive. The attorney and client should work closely together to develop a discovery plan for the particular litigation at hand.
Either party may request documents from another party relating to the case. This is done by a request for documents, which is often the first discovery method used in commercial litigation. The requesting party will state various documents or categories of documents requested from the other party, who is obligated to comply with a proper request. In a complicated case, the business owner may be required to spend many hours locating and copying hundreds or perhaps thousands of documents. Organization of documents produced or received in response to a request for documents is obviously a key consideration in the proper management of commercial litigation.
A party in litigation may also wish to review documents in the possession of a non-party. This is accomplished by a subpoena for documents, which in Illinois litigation may be served by certified mail with a subpoena fee required by statute. The subpoena will state various documents or categories of documents which must be produced by the non-party. Often, the attorney issuing the subpoena will agree that the non-party may mail clear copies of the requested documents in compliance with the subpoena. Sometimes, however, the attorney will wish to see the original documents before making copies. The business owner can be particularly helpful to the attorney by identifying non-parties who may have documents relevant to the case and by assisting in defining the categories of documents that should be subpoenaed.
Interrogatories are formal questions which one party may require another party to answer under oath. They are particularly useful for identifying basic information about the case, including dates, identification of witnesses, location of documents, identification of corporate officers and directors, and so forth. Interrogatories must be drafted to avoid an unnecessary burden or expense on the answering party. Recognizing past abuses in the use of interrogatories, many court rules limit the number of interrogatories that may be served on another party. If interrogatories are not restricted to basic background information, the answers are likely to be of limited utility because in virtually every instance the attorney for the responding party will draft the answers to the interrogatories.
A deposition is an opportunity for an attorney for one party to question another party or a non-party under oath about the subject matter of the case. A deposition is taken before a court reporter who produces a transcript containing all questions, answers and other colloquy. Depositions normally take place in a law office. The deponent (the person answering the questions) has a right to have his or her attorney present at the deposition. Attorneys representing all parties in the litigation have a right to attend the deposition and a right to ask questions of the deponent. All parties also have a right to attend the deposition. Whether a party should in fact attend a specific deposition varies from case to case and will be decided after proper consultation between attorney and client. In commercial litigation, the attorneys often spend a good deal of time in depositions examining the deponent about documents related to the case.
The attorney for a business owner who must give a deposition will spend time preparing the business owner for the deposition. Depending on the type of case and the particular knowledge of the business owner, preparation time might take two hours or two days. In some cases, the attorney may find it useful to subject the prospective deponent to questioning in the role of the opposing attorney. Sometimes the attorney may wish to videotape a mock deposition and then critique the videotape with the business owner. In every case, the lawyer will offer helpful suggestions to assist the deponent in sitting for the deposition.
Deposition testimony is particularly important because it pins down a witness to a particular set of facts as of the date of the deposition. If the witness is a party to the litigation, his or her deposition testimony may be introduced at the trial as substantive evidence. If the witness is a non-party, and the witness's testimony changes at trial, the credibility of the witness may be impeached at trial by disclosing to the court or jury that the witness gave a contrary statement at the time of the deposition. (Answers to interrogatories may be used at trial in the same way but, for reasons stated, are likely to be of less utility.) Accordingly, it is particularly important that a deponent treat a deposition seriously and prepare for the deposition as if preparing for trial.
A request to admit is a quasi-discovery device. Before trial, one party may request another party to admit facts or admit the genuineness of documents. If a fact is admitted, it need not be proven at trial. If a document is admitted as genuine, it need not be "authenticated" at trial, although the opposing party may still object to its admission into evidence for other reasons. Careful use of a request to admit can help streamline trial preparation. Obviously, the request to admit is not proper in the case of legitimately contested facts.
The purpose of a trial is to resolve disputed questions of fact. Toward the end of the discovery phase of the litigation, attorneys on both sides of the case will commonly review the case to determine whether, in their judgment, there are genuine issues as to any material facts. If not, attorneys for one or more of the parties will file a motion for summary judgment, asserting that there is no genuine issue as to any material fact in the case and asserting that their client is entitled to a judgment as a matter of law (i.e., without a trial). As with other motions, a judge will normally decide the motion after a hearing in court, which the parties are not required to (but may) attend. If the court grants the motion for summary judgment, the case is over in the trial court, although the losing party may file an appeal. Instead of filing a motion for summary judgment which relates to all parties and all issues in the case, the attorney may consider filing a motion for partial summary judgment or a motion for summary determination of major issues, both of which seek to remove parties or issues from trial but do not resolve all issues as to all parties.
A motion for summary judgment is similar to a motion for judgment on the pleadings, which was discussed previously. The difference is that, while the motion for judgment on the pleadings is strictly limited to an examination of the face of the pleadings, a motion for summary judgment is not so limited. In support of a motion for summary judgment the court may consider affidavits, answer to interrogatories, answers to requests to admit, and even deposition transcripts. The court must determine whether there is a "genuine" issue of fact that justifies a trial. The party filing a motion for summary judgment bears a heavy burden, because of the drastic nature of the remedy sought. Still, a motion for summary judgment is an important weapon in the commercial litigator's arsenal and one which an increasing number of courts encourage.
When discovery is over and the trial date is at hand, attorneys (and sometimes parties) will appear before the court at a final pre-trial conference. In some courts, the only purpose of the final pre-trial conference is to resolve last minute scheduling and procedural problems before trial. In other courts, particularly federal courts, the final pre-trial conference constitutes an extremely important hearing before trial. Attorneys for each party will have prepared and exchanged a variety of documents before the final pre-trial conference: witness lists, exhibit lists, statements of uncontested facts, narratives of facts which each party expects to prove at trial, short briefs concerning important evidence issues likely to arise at trial, perhaps a comprehensive trial brief, and sometimes proposed jury instructions if the case is to be tried to a jury. If there are prejudicial facts which an attorney believes constitute improper evidence and wishes to exclude completely from trial, the attorney will file a motion in limine (which literally means a motion at the threshold of trial). The court is likely to rule on any motions in limine at the final pre-trial conference. At the conclusion of the conference, the court will enter a final pre-trial order which will serve as a road map for the trial.
The significance of being in a court that requires an elaborate pre-trial conference is evident. Preparation for the final pre-trial conference is a lengthy and expensive process. The reward, of course, is that the attorneys will be far along in their trial preparation at the end of the conference.
Most commercial litigation is settled before trial. Settlement is often preferable to trial. Business owners make money pursuing their commercial interests. Do not be reluctant to discuss settlement candidly with your attorney. If capable and experienced litigation counsel are involved, and if the parties on both sides are sophisticated, there is often a basis for settlement that best serves the interests of all parties. Settlement discussions are most vigorous and serious, it seems, at the very start of the case and during the time from just before the final pre-trial conference to just before trial (or even during trial).
Obviously, not all commercial litigation can be or should be settled. Sometimes trial is necessary to establish a principle. Other times trial is appropriate because the matters at issue have significance to the client beyond the facts of the particular case. Still other times the case must be tried even though settlement, although preferable, cannot be accomplished for a variety of reasons. It should go without saying that commercial litigation counsel will vigorously pursue the business owner's interests in litigation, whether the case is resolved by settlement or trial.
As noted previously, the purpose of a trial is to resolve disputed questions of fact. In a jury trial, the jury is the fact finder. In a bench trial, the judge is the fact finder. Jury trials are lengthier and more expensive than bench trials for a number of reasons. The jury selection and jury instruction phases of trial are obviously not necessary in a bench trial. Moreover, there will be times during a jury trial when the attorneys' arguments to the judge on a point of evidence or procedure must be held outside the presence of the jury, in order to avoid prejudice. This means that the jury must be excused and then brought back into the jury box after the argument is concluded.
Whether a jury trial or a bench trial, all trials have a common procedure. The client, or a representative of a corporate client, will be present in court throughout the trial. This section of the article will acquaint you with the structure and procedure of trial.
1. Jury Selection
The first step in a jury trial is jury selection. The procedure various substantially from court to court. A civil jury normally consists of either six or twelve jurors and one or two alternate jurors. Sometimes only the judge will be permitted to question potential jurors. Other times, the judge will allow the attorneys to question potential jurors as well. Potential jurors can be excused for cause if the judge is convinced that they cannot be fair and impartial in the case at hand. Otherwise, attorneys wishing to exclude potential jurors must use one of a limited number of peremptory challenges. Ultimately, the jury consists of those individuals who have not been excused for cause or by the exercise of a peremptory challenge.
2. Opening Statements
Once the jury is selected, the attorneys will make opening statements to the jury. The attorney for the plaintiff goes first, followed by the attorney for the defendant. Opening statements give the jury an overview of the case from the perspective of both the plaintiff and the defendant. The attorneys for both parties state to the jury in a non-argumentative fashion what the case is about and what they expect the evidence to show. At the conclusion of opening statements, the jury has a framework of the case that will permit a more sensible understanding and consideration of the evidence as it is actually introduced during the course of trial.
For the most part, evidence consists of the testimony of witnesses at trial and the introduction of documents at trial. Other evidence might consist of fact stipulations of the parties, facts subject to judicial notice (e.g., that August 3, 1993, was a Tuesday), or the reading of pre-trial deposition testimony.
Witnesses may be compelled to appear at trial by serving a subpoena and the appropriate witness fee required by statute. Witnesses may also be compelled by subpoena to produce documents at trial. A special type of witness is the expert witness. If a commercial case involves an issue beyond the normal comprehension of a lay person (i.e., someone untrained or unskilled in that particular field), the court will permit expert testimony on the issue. Normally, if such an issue exists, both the plaintiff and the defendant will retain their own expert witnesses. Indeed, some commercial cases become a "battle of the experts."
The admission of evidence at trial is governed by rules of evidence that have developed over the centuries and, in some states and some courts, have been codified. The rules of evidence are complicated and can be quite confusing to the outsider (and to non-trial attorneys as well). Examination of the rules of evidence is obviously beyond the scope of this article. Suffice it to say that, for the most part, whenever attorneys make objections at trial, they are seeking to exclude evidence. In fact, much of the attorney's arguments to the judge during trial will concern evidentiary issues.
4. The Plaintiff's Case
Once the opening statements are done, the attorney for the plaintiff presents the plaintiff's case. This consists of examining witnesses and introducing documents. The attorney examines the witnesses on direct examination, which means that the attorney may not "lead" the witness. The attorney must ask open ended questions that do not suggest the answer. The attorney on direct examination may not put words in the witness's mouth. Exceptions to this rule concerning direct examination exist for adverse or hostile witnesses, which may be examined as if under cross examination.
When the plaintiff's attorney has finished direct examination, the defendant's attorney may conduct cross examination. Here, the attorney is permitted to lead and is permitted to attempt to put words in the witness' mouth. Indeed, the best cross examination is characterized by control of the witness. The attorney asks questions that must be answered "yes" or "no," rather than questions that invite a narrative response. After cross examination, the plaintiff's attorney has a chance for redirect examination, the defendant's attorney a chance for recross examination, and so forth until both attorneys have completed their questioning of a particular witness.
When the plaintiff's lawyer is out of witnesses and has no more documents to introduce, the plaintiff announces the completion of his or her case by "resting."
5. Motion for Directed Verdict
In most cases, at the conclusion of the plaintiff's case, the defendant's attorney will move for a directed verdict in favor of the defendant. These motions are rarely granted. The standard applied in Illinois is that the court should direct a verdict only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors the moving party that no contrary verdict based on that evidence could ever stand. If the court does grant the motion for directed verdict, however, the trial is over.
6. The Defendant's Case
If the defendant's motion for directed verdict is denied, the defendant's attorney will have the opportunity to call witnesses and introduce documents on behalf of the defendant. The procedure in the defendant's case parallels the procedure in the plaintiff's case. Thus, direct examination is followed by cross examination, then redirect and recross examination, and so forth until all witnesses have been examined and all documents have been introduced. When the defendant is done, the defendant rests.
The plaintiff then has a limited opportunity to present rebuttal evidence, responding to points raised for the first time in the defendant's case. Finally, the defendant has a limited opportunity to present rebuttal evidence.
After all of the evidence is in and both parties have rested, the attorney for the defendant is likely to make another motion for directed verdict at the close of the case. These motions also are seldom granted, for the reasons previously stated.
7. Closing Arguments
When all the evidence has been received, the attorneys for both parties have an opportunity to present closing arguments to the jury, which is the last opportunity they have to speak directly to the jury. Closing argument gives each attorney the opportunity to argue the evidence and attempt to persuade the jury to render a verdict in favor of either the plaintiff or the defendant, as the case may be. The plaintiff's attorney goes first, followed by the defendant's attorney. Then, because the plaintiff has the burden of proof in the case, the plaintiff's attorney is permitted another, final opportunity for closing argument. The "burden of proof" in a civil case means that the plaintiff must prove the issues in his or her case by a "preponderance of the evidence." This means that the plaintiff must prove that a particular issue is more likely true than not true.
8. Jury Instructions
Before closing arguments the attorneys meet with the judge for the jury instruction conference. The jury instructions inform the jury as to the procedures to be followed in reaching their verdict and instruct the jury on the law relevant to the case. The attorneys for both parties submit proposed jury instructions to the judge, who ultimately decides which forms of instructions are proper and should be given to the jury. The jury instruction conference is held before the closing arguments so that at the time of closing arguments, the attorneys know specifically how the jury will be instructed.
After closing arguments are completed, the judge reads the jury instructions to the jury, in the form previously approved at the jury instruction conference. The judge then sends the complete set of jury instructions to the jury room, along with all documents received in evidence, so that the jury may begin its deliberations.
9. Verdict and Judgment
The decision of a jury is called the verdict. Unless all parties agree otherwise, the jury verdict must be unanimous. Jury deliberations in a commercial case might take as little as two hours or might last for two days or more. Once the jury has reached its verdict, the judge reads the verdict in open court and the jury is excused. Following the jury verdict, the judge enters judgment on the verdict. The judgment is the official order of the court stating the winner of the trial and the specific relief awarded. It is the judgment that is capable of enforcement and collection by a successful plaintiff.
Following trial, and in anticipation of filing an appeal, the losing party may file a post-trial motion. The purpose of the post-trial motion is to identify and argue issues in the case that the losing party contends were errors resulting in an unfair trial. The losing party might ask the court to enter a judgment in his or her favor, notwithstanding the jury's verdict for the other side. The losing party might also ask that the judgment be vacated and that there be a new trial. Post-trial motions are not often granted, but are a necessary procedural step to preserve issues on appeal.
The losing party in a civil case has an automatic right to one appeal. In state court in Illinois, the appeal is begun by the filing of a notice of appeal in the trial court. The appeal will be taken to one of five appellate courts sitting throughout the state. The notice of appeal starts the running of various time deadlines that comprise the appellate process.
The first step after the notice of appeal is the preparation and filing in the appellate court of a record of all proceedings held in the trial court. Next, the parties brief the issues to be decided by the appellate court. The losing party (called the appellant in the appellate court) files the first brief. The winning party in the trial court (called the appellee in the appellate court) then files a brief responding to issues and arguments raised in the appellant's brief. Finally, the appellant may file a reply brief.
Once the briefs have been filed, the appellate court will set the case for oral argument. There, the attorneys for both parties will make an oral presentation of their arguments to the appellate court, which consists of a three judge panel. Again, the attorney for the appellant goes first, the attorney for the appellee goes next, and the attorney for the appellant has an opportunity to reply. The appellate judges during oral argument may ask questions of the attorneys, which is common. After oral argument, the appellate court takes the case under advisement and, normally within two to six months, decides the appeal by means of a written opinion. A majority of the three judge panel determines the decision of the court. The entire appellate process from the filing of a notice of appeal to the issuance of a written opinion takes about one year.
There is no further automatic right to an appeal in Illinois beyond the appellate court level. The losing party in the appellate court has a chance to try to convince the Illinois Supreme Court to accept the case. The losing party does so by filing a petition for leave to appeal. In that document, the losing party attempts to persuade a majority of the court why the case is important enough to be deserving of supreme court attention. Fewer than one in ten civil cases are accepted for further review by the supreme court. If the supreme court does accept the case by granting the petition for leave to appeal, there will be another round of briefs and oral argument much in the same manner as was done in the appellate court. The Illinois Supreme Court consists of seven members, all of whom sit on every case unless there is a conflict. Ultimately, the supreme court will decide the case by a majority vote and will issue a written opinion. The entire process in the supreme court, from the filing of the petition for leave to appeal to the ultimate written opinion, also takes about one year, and sometimes longer. If the trial took place in federal court, rather than state court, the same general considerations apply on appeal. The appellate court to which federal court judgments in Illinois are appealed is the Seventh Circuit Court of Appeals sitting in Chicago. That court also hears cases in panels of three. The losing party before the court of appeals has a right to attempt to convince the United States Supreme Court to take the case. The losing party does so by filing a petition for certiorari. The United States Supreme Court takes fewer than one civil case out of one hundred. Thus, except in the most unusual circumstances, the case is for all practical purposes over at the federal appellate court level.
If the plaintiff wins a money judgment at trial, and holds the judgment through appeal, the plaintiff is faced with the prospect of collecting the judgment. Sometimes the losing defendant pays without problem; sometimes not. If the defendant has filed an appeal, the defendant will be required to file a bond in order to stay enforcement of the judgment pending appeal. In that event, the plaintiff will collect the judgment from the appeal bond if the defendant fails to pay the judgment following an unsuccessful appeal.
If the defendant has not filed an appeal, or if the defendant has not filed an appeal bond, the plaintiff will pursue a variety of collection methods, including foreclosing a judgment lien against real estate, filing a non-wage garnishment complaint, or instituting wage deduction proceedings. The plaintiff may also require the defendant to appear in court for supplemental proceedings (sometimes called citation proceedings) to answer questions under oath concerning the nature, extent and location of the defendant's assets which may be used to satisfy the judgment. The court during supplemental proceedings has very broad powers in the form of turn-over orders and the like. Sometimes, there just are no assets to collect, and other times the plaintiff's judgment forces the defendant into filing bankruptcy. The plaintiff's recovery in the event of bankruptcy will depend on the nature and amount of the defendant's assets and liabilities. Normally, the plaintiff can expect to recover a small percentage of the judgment, but sometimes will recover nothing.
All commercial litigation is different, but a common procedure applies in every case. There are procedural nuances, of course, that are beyond the scope of this article. Familiarity with the essential elements of litigation procedure, however, can make the business owner's litigation experience at least more understandable, if not more enjoyable.