When your business finds itself involved in commercial litigation, there are several important objectives you want to achieve. Regardless of whether you obtain a winning or losing judgment in your case, your business can still lose if the litigation process forces you to expose vital and secret business information to your competitors, or forces your clients to make disclosures that damage your relationship with them. It was this potential risk of harm that led the 3d District Court of Appeal recently to overturn a trial court’s order that would have forced several of an architectural firm’s clients to turn over massive amounts of information.
The case arose from a contractual dispute between the architectural firm of Kobi Karp Architecture & Interior Design, Inc. and a purchaser of real property at a foreclosure sale. Back in 2008, the firm contracted to provide construction administration services at a Miami Beach property. When the City of Miami Beach later decided that the building deviated from permit-approved plans, it demanded the submission of “as-built” plans. The new owner approached Kobi Karp regarding preparation of the plans, but the firm refused without receiving additional compensation.
The new owner who had no prior business relationship with Kobi Karp, sued. As part of the case, the new owner sent subpoenas to six of Kobi Karp’s clients, which had no ties to the building at the center of this lawsuit. The subpoenas sought all of the contracts, drafts of contracts, and pre-contract communications regarding contract terms between the clients and Kobi Karp. The firm fought the subpoenas, but the owner argued that the evidence was appropriate to establish customary practice in the industry. The trial court agreed with the owner.
The appeals court ruled differently. In order to reverse the trial court, the appeals court needed to rule that the information was not relevant and would, if disclosed, cause Kobi Karp irreparable harm. While evidence of custom within an industry is relevant in some cases, it is “inadmissible to vary express terms of a contract.” In Kobi Karp’s contract, it expressly stated that “as-built” plans like the ones the new owner sought were an optional additional service that the firm would only prepare if it received additional compensation. Since Kobi Karp’s contract contained express terms on the issue of “as-built” plans, the custom within the industry was irrelevant.
The appeals court also concluded that, if a subpoena forces the clients of a business to produce documentation that was both extremely voluminous and completely irrelevant to deciding the case at hand, “it is entirely reasonable that material injury of an irreparable nature will result.” Kobi Karp’s business relationship with those six clients very possibly could be irreparably harmed if they were forced to locate, collect, and turn over the extensive paperwork the building owner sought, the court opined.
Any time your business faces litigation, many different potential dangers await, regardless of the case’s ultimate outcome. To arm and protect your business, contact the Florida commercial litigation attorneys at Stok Folk + Kon. Our attorneys have the resources, the knowledge, and the skills to give you the confidence that your business is covered by capable legal representation.
Contact us online or by calling (954) 237-1777 to schedule a consultation.
More blog posts:
Litigation Against Employees Forces Florida Safety Appliance Company to Disclose Financial Documents, Florida Business Lawyers Blog, May 5, 2015
Florida Court Blocks Subtenant’s Request for Information About Tenant’s Commercial Lease Terms With Landlord, Florida Business Lawyers Blog, April 7, 2015