A dispute over a commercial loan in a recent case served as the background for a very important lesson in any type of civil litigation. That lesson is that it is also essential to make sure that you are using the correct vehicle for the outcome you want to achieve. In the loan litigation, a lender’s failure to pursue the proper remedy resulted in an unsuccessful outcome both in the trial court and the Court of Appeal. In any commercial litigation, it is important to be strong on the facts, the law and the rules of procedure, which is why it pays to have representation from an experienced South Florida commercial litigation attorney.
The origin of the case was a loan a Palm Beach County entity made to an Orange County property company. As part of that loan transaction, several individuals signed personal guarantees for the loan. The property company allegedly defaulted on the loan and the lender sued the borrowers and all of the individual guarantors in Florida. As the lender began its Florida lawsuit over the loan, it was already involved in litigation with one of the guarantors, T.D., regarding its business dealings with that individual. That ongoing lawsuit, in which T.D. was suing the company for breach of fiduciary duty, fraud and conspiracy, was taking place in New Jersey.
After the lender sued in Florida, T.D. filed a countersuit. In his counterclaim, T.D. alleged several causes of action – and they were almost exactly identical to the causes of action T.D. had alleged in his New Jersey lawsuit. The lender asked the judge in Florida to dismiss the guarantor’s counterclaim on the basis of priority. The trial judge rejected the request and allowed both the lender’s claims and the guarantor’s counterclaims to proceed forward.
The lender took its case to the court of appeal but lost again. The appeals court noted that the problem for the lender was not necessarily that its contentions lacked merit, it was that it did not use the correct tools to seek the outcome it desired. The lender asked the trial judge to enter an order dismissing the counterclaim. The specific problem with dismissal was that it was not the procedurally correct remedy for the lender to request. The lender could have asked the trial judge to stay the counterclaim. The lender could have also asked the trial judge to sever the guarantor’s counterclaim from the lender’s lawsuit. The lender, though, didn’t request either of these things from the trial judge.
Because the lender did not make the correct request, the appeals court decided that “it cannot be said that the trial court departed from the essential requirements of the law in denying” the lender’s motion to dismiss.
For helpful advice and aggressive advocacy in your commercial lending or other commercial litigation matter, contact the skilled South Florida commercial and business attorneys at Stok Folk + Kon. Our experienced team has been skillfully helping clients protect their business 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:
What You Need to Obtain an Injunction as Part of Your Florida Commercial Litigation Case, Florida Business Lawyers Blog, Aug. 24, 2018
How the Optimal Use of the Florida Rules of Civil Procedure Can Benefit You in Your Commercial Litigation Case, Florida Business Lawyers Blog, Aug. 2, 2018