When you decide to pursue litigation against your former commercial contract partner, you hope to achieve either a successful settlement or a favorable judgment from the court. However, sometimes securing a settlement or a judgment is not the end of the road, but just a step along the way. In some cases, securing a judgment leads you to the next step of collecting that judgment, which can also involve the need for skilled counsel to provide diligent litigation representation and detailed knowledge of the law and procedures. One option that may be available to your business is persuading a court to transfer and assign your opponent’s right to a legal claim from that entity to your entity, as happened in one case recently decided by the Fourth District Court of Appeal.
The underlying lawsuit that started it all was a dispute between two competitors in the yacht painting business. MYD Marine Distributor, Inc. sued International Paint Ltd. and Donovan Marine, Inc. for antitrust violations, restraint of trade, and breach of contract. MYD lost. Not only did it fail in its claims, but also the court awarded Donovan its attorneys’ fees and costs, which ended up totaling $550,000.
After more than a year and a half, Donovan had collected a mere $120,000 from MYD and decided to attempt a new approach. Donovan went to court and asked the judge to turn over to it some of MYD’s intangible assets, including MYD’s right to pursue a legal action against an entity called Lauderdale Marine. The Lauderdale case was, at that point, pending before the courts. Donovan alleged that Section 56.29 of the Florida Statutes allowed it to take possession of the right to prosecute the case against Lauderdale and keep the proceeds of the action. As support for its position, Donovan argued that MYD still owed it $465,000, that MYD’s pending case against Lauderdale was the only asset MYD had left, and that MYD had done such a poor job of pursuing the Lauderdale action that it was at risk of being dismissed for a lack of prosecution.
The trial court agreed with Donovan. The MYD case against Lauderdale, which Donovan was asking to transfer to itself, was one in which MYD had accused Lauderdale of “breach of contract and breach of the implied duty of good faith and fair dealing.” Under Florida law, these kinds of cases are “freely transferrable and assignable.”
MYD appealed but was unsuccessful. MYD claimed in its appeal that its case against Lauderdale was worth far more than the $465,000 it still owed to Donovan, so transferring the rights to the case in their entirety from MYD to Donovan would be unfair on multiple fronts. If Donovan settled the Lauderdale case for $465,000, MYD would be unfairly deprived of whatever value the Lauderdale case had in excess of that $465,000 sum, and Lauderdale would receive a windfall by getting to keep that extra money.
The problem MYD had with this argument was that it had insufficient proof to back up the claim. MYD gave the trial court nothing to indicate what the likely value of the Lauderdale case was, and there was also nothing before the appeals court that “demonstrate[d] that the value of MYD’s lawsuit against Lauderdale Marine so far exceeded the amount of Donovan’s outstanding judgment that assignment of the lawsuit to Donovan was inequitable.” Without that proof, MYD’s argument was doomed to fail.
Whether you are pursuing or defending a commercial litigation case, there is often a chance that you may secure a judgment at the case’s conclusion and need to pursue additional action to collect that money. The diligent Florida commercial litigation attorneys at Stok Folk + Kon have the skills and the experience to help you pursue your rights at every step along the way.
Contact us online or by calling (954) 237-1777 to schedule your consultation.
More blog posts:
Proceed With Caution When Deciding Whether to Reject an Offer of Judgment in Your Florida Commercial Litigation, Florida Business Lawyers Blog, Sept. 13, 2016
Federal Court in Florida Favors Subcontractor in Dispute Over Assessment of Delay Damages, Florida Business Lawyers Blog, April 15, 2016