When you are involved in a commercial litigation case, there are several possible negative outcomes that can occur. Obviously, there is the possibility that the other side will win. Sometimes, though, even in a case that eventually ends with a successful final result for your side, the mere process of going through litigation against a particular opponent has the potential to be injurious to your business interests. For example, the pre-trial process can possibly leave you vulnerable to invasive discovery requests. When it comes to not only getting the final outcome you deserve, but also getting protection from improper disclosure demands, you need a skilled South Florida commercial litigation attorney on your side.
A Plantation-based software development company found itself in exactly that kind of potential predicament recently. It had sued an Arizona gaming company in Broward County for breach of contract after, allegedly, it had rendered its services and the gaming company had failed to pay for those services.
In reaction to the filing, the gaming company sought quite a bit of the software company’s financial information through discovery. The types of information the gaming company sought included the software company’s “profit margin, estimates, projections, cost analysis or formula to determine profit for agreement.” The gaming company also asked the software company to hand over all documents related to those financial topics. The gaming company claimed that the disclosures were necessary as part of its pursuit of a counterclaim against the software company, alleging that the software company understaffed the gaming company’s project.
The software company contested the discovery demand and lost in the trial court but emerged successful in the appeals court. The appeals court was persuaded by the software company’s arguments that its profit forecasts and the salaries of its employees simply were not relevant to the substance of this breach of contract lawsuit.
Florida law acknowledges the important of keeping sensitive financial information private. Not only does that apply to an individual’s personal financial information, but also to a business entity’s sensitive financial matters. The law requires striking a balance between a litigant’s right to engage in discovery and an opposing litigant’s right not to make intimate financial disclosures that, if made public, could cause irreparable harm to the disclosing party.
In this case, each side alleged that the other breached the contract. The software company alleged that it completed project as required under the agreement and the gaming did not pay the agreed-upon price. The gaming company asserted that the software company did not devote the appropriate amount of staff to the job, which was itself a breach of the agreement. As both claims were breach of contract claims, each required the proponent to demonstrate that the two sides had a valid agreement, that a breach of the contract occurred and that the breach caused it to suffer damages. The private financial information of the software company and its employees was not relevant to any of those three essential determinations. As a result, the information was not discoverable and the software company was relieved of its obligation to turn over any of that information.
Commercial litigation can carry with it many risks, some of which may occur even prior to trial. Be sure you are prepared and safeguarded by having diligent counsel on your side. The experienced South Florida commercial litigation attorneys at Stok Kon + Braverman have been effectively representing our business clients and protecting their interests for many years.
Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.
More blog posts:
My Contract Partner Has Breached Our Express Oral Contract. What Rights Do I Have in Florida?, Florida Business Lawyers Blog, Feb. 1, 2019
A Rose is a Rose is a Rose, But When is a Sale Not a Sale in a Florida Commercial Contract?, Florida Business Lawyers Blog, Jan. 10, 2019