Juries are fickle, especially in civil cases, where we give them the right and the power to award money in the form of compensatory damages, and, in rare cases, to assess punitive damages. Money becomes a proxy for justice. Yet standing in well of a civil court asking for money always reminds me of Jesus chasing the moneychangers from the Temple.
“The Scriptures declare,” Jesus said, “‘My Temple will be called a house of prayer,’ but you have turned it into a den of thieves!”
In the United States, civil litigants operate under what is known as the American Rule. This rule requires that losers bear their own costs. Thus, if you are sued and win, you will nonetheless be required to bear the costs of your defense. There are exceptions, of course: the costs of defense can be shifted to the person bringing the action in cases in which the action was so wholly lacking in merit as to be frivolous or vexatious. But such cases are rare.
I recently tried a civil case that still has my head spinning, a week after the verdict. I represented Ms. Piao.
Laura Piao’s daughter attended the Hopkins School in New Haven in 2008. Hopkins is well known both for its academic excellence and for its athletic programs. Ms. Piao complained to school administrators that her daughter was being treated unfairly; a couple of hours later, her daughter was in a single-car accident a third of a mile from the school. Ms. Piao was suspicious about what caused the accident, fearing sabotage.
The New Haven Police Department concluded there was no foul play. So did one accident reconstruction expert. Then another expert concluded that a tire on the car had been cut, thus causing the accident. Ms. Piao hired a private investigator to find the culprit. That investigation fizzled and died when the investigator found a tire expert to examine the tire, and that expert concluded the tear in the tire was caused as a result of the car’s collision, not as a result of being cut.
In the end, the investigator and Ms. Piao ended up in litigation.
The investigator brought a pre-judgment remedy application in the state court, seeking an order encumbering some $20,000 of Ms. Piao’s assets, a sum sufficient to pay the unpaid portion of his fees, interest, and attorney’s fees. The contract between the parties gave him the right to seek attorney’s fees if Ms. Piao breached her obligation to pay.
Ms. Piao, who had moved to Georgia, then brought an action in federal court against the investigator, claiming that the investigator had breached his contract and that he had violated what the law refers to as the implied warranty of good faith and fair dealing. She claimed that she had paid him $13,550, but had received few, if any, meaningful answers to the questions she asked.
The investigator responded by filing counterclaims, accusing her of breaching her contract with him by not paying the outstanding balance. He also filed a defamation claim against her contending that the statements she had made about him online and elsewhere were both false and had damaged his reputation.
Normally, such private disputes as these do not find themselves in the federal courts — they do not raise federal questions; they are resolved in state courts. But citizens of different states can sue one another in what are known as diversity actions.
By the time the case got to trial, in 2014, the trail for who, if anyone, had cut Ms. Piao’s daughter’s tire had long since grown cold. The dispute was centered entirely on the relationship between a private investigator and his client.
Law students spend a year studying the formalities of what makes a contract. In essence, contracts are simply promises the law will enforce. The parties must have a meeting of the minds on the material, or important, terms of the agreement. Each must commit to perform certain acts in the course of satisfying their contractual obligations. Each must give to the other something of value, what the law calls consideration, in exchange for their performance. A party not fulfilling a material terms of the contract is said to have breached, and the aggrieved party is entitled to damages. Contracts can be verbal or in writing.
The law does not enforce all contracts, of course. Some, as in a contract to perform an act of violence against a third party, are against public policy. Don’t turn to the courts for recovery of the money you paid Louie to kneecap your ex, if Louie fails to perform as promised.
Contracts have express terms and implied terms. An express term is easy to spot: I promise to do certain things by a certain date in exchange for a fee. All other things being equal, I have breached if the date comes and goes without performance.
Implied terms are harder to spot, but they are no less real. The law imposes a duty of good faith and fair dealing on the parties. You can’t shake hands with one hand to close a deal while keeping your fingers on the other hand crossed and hidden behind your back.
Paradoxically, in the Piao case, the jury concluded that the parties had performed their contractual obligations, but that the investigator had nonetheless breached his implied duty of fair dealing. My client was awarded modest money damages, in effect, a refund of a portion of what she had paid the investigator.
And what of his claims of defamation? The jury rejected that claim, finding that while she had said derogatory things about him, what she said was substantially true. In other words, damaged though his reputation might be, it was the truth that hurt him. He was awarded nothing.
So who won the case?
On the balance sheet, Ms. Piao came out the victor: the investigator must give her money. He came away with nothing.My client prevailed against an investigator who treated her poorly. But she still has no answers about her daughter’s accident. Somehow, it felt less like justice than it did a bitter roll of the dice.