Commercial Litigation
Commercial litigation is the area of law involving disputes based upon the rights, relations, and conduct of persons and businesses engaged in commerce. Corporations, partnerships, and individuals engaged in commerce in Utah often face lawsuits asserting breach of contract, business torts, unfair trade practices, negligent misrepresentation, fraud, enforcement of a personal guaranty, breach of fiduciary duty, non-competition and other claims.
These actions, generally characterized as commercial litigation, can be costly, disruptive and even fatal to your business or livelihood. The lawyers of Bangerter Frazier Group have significant experience in resolving a variety of business disputes in federal and state court, before arbitration panels and through mediation. Our trial expertise adds major value in this field of law, and is one of the strongest attributes of the firm.
This update summarizes common claims and defenses arising in breach of contract and commercial litigation lawsuits and identifies strategies to defend these actions. We strive to provide our clients current and effective strategies for preventing, defending and managing business litigation.
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Defending Commercial Litigation
Commercial litigation lawsuits can present a variety of contract law claims such as breach of an oral or written agreement, rescission, specific performance, or injunctive and declaratory relief. These complaints often contain related statutory, tort and common law claims such as fraudulent transfer, misappropriation of trade secrets, unfair competition, fraud in the inducement, non-competition, and intentional interference with prospective economic advantage.
Commercial litigation defendants must evaluate each claim asserted and analyze preliminary issues including personal and subject matter jurisdiction, service of process, choice of law, choice of forum and venue. Defendants must also identify and assert all viable affirmative defenses, detect any basis to support a motion to dismiss and determine whether any counterclaims exist that may be brought against the plaintiff. An understanding of third-party claims, joining of necessary and indispensable parties and available remedies is also important to commercial litigation practice.
If the applicable written contract contains a mandatory alternative dispute provision, such as a requirement to arbitrate all disputes between the parties, the defendant may file a motion to dismiss the complaint or to compel arbitration. See Sanchez v. Nitro-Lift Technologies, L.L.C., 762 F.3d 1139, 1146 (10th Cir. 2014);
Okwale v. Corinthian Colleges, 2015 U.S. Dist. LEXIS 20847 (D. Utah Jan. 29, 2015) (any doubts concerning the scope of an arbitration agreement should be resolved in favor of arbitration). Prevailing on such a motion early in a case, including one based upon a binding arbitration provision, can provide valuable leverage to a defendant and might give rise to a claim for breach of the contract at issue or possibly attorney’s fees from the plaintiff.
Commercial Litigation ST. GEORGE UTAH
Affirmative Defenses
Some of the defenses to a breach of contract-based complaint include: prior material breach of the plaintiff; statute of limitations; statute of frauds; failure to satisfy conditions precedent; lack of consideration; the parol evidence rule; waiver; estoppel; unclean hands; failure to mitigate damages and set-off. Most defenses must be stated in the defendant’s response to the plaintiff’s complaint or brought by way of a motion to dismiss or they can be waived.
Many contracts contain a default clause requiring notice of the alleged breach of contract and an opportunity to cure the breach. If the plaintiff failed to give the defendant notice and an opportunity to cure, as required by the contract, the complaint may be dismissed.
It is well-settled law in Utah that one party's breach excuses further performance by the non-breaching party if the breach is material. See Tooele Assocs. Ltd. P'ship v. Tooele City, 2012 UT App 214, P13 (Utah Ct. App. 2012). If the plaintiff committed a prior material breach of the agreement upon which the lawsuit is based, the defendant may avoid plaintiff’s claim.
The doctrine of unclean hands closes the doors of a court of equity to a plaintiff “tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the conduct of the defendant." See Albion Int'l, Inc. v. Am. Int'l Chem., Inc., 2012 U.S. Dist. LEXIS 124464, 40-41 (D. Utah Aug. 30, 2012)
The statute of frauds bars claims based upon certain alleged agreements not reduced to writing or signed by the parties and those that cannot be completed within one year. See Title 25, Chapter 5, Section 4 of the Utah Code. The statute of frauds may also preclude certain causes of action arising in tort. See Fericks v. Lucy Ann Soffe Trust, 2004 UT 85, P16 (Utah 2004).
The parol evidence rule operates "to exclude extrinsic evidence of contemporaneous conversations, representations, or statements offered for the purpose of varying or adding to the terms of an integrated contract." See DCH Holdings, LLC v. Nielsen, 2009 UT App 269, P8 (Utah Ct. App. 2009).
“Set-off” is a claim by a defendant that the plaintiff owes the defendant money which should be subtracted from the amount of damages claimed by plaintiff. "The right of setoff (also called 'offset') allows entities that owe each other money to apply their mutual debts against each other.” See Bermant v. Broadbent, 2006 U.S. Dist. LEXIS 89914 (D. Utah Dec. 12, 2006). Defendants sued in commercial litigation matters should evaluate any claims that may exist against the plaintiff that might reduce or exceed the amount of the claim made by the plaintiff.
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Bangerter Frazier Group
Bangerter Frazier Group represents organizations and individuals sued for breach of contract and commercial litigation claims. To learn more about Bangerter Frazier Group and its attorneys, please visit www.bfgfirm.com or call us at (435) 628-7004 to schedule a consultation.
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