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Legal Form of Business
Frydoun Sheikhpour under his company, Fry’s 57 Freeway (FFF) Limited bought and started renovations of a gas station that was located in Diamond Bar, California in 2008. FFF adopted the retail sales agreement (RSA) that the gas station previously had. The RSA asserted that the gas station was to exclusively sell Shell gasoline. In addition to this, Shell was to be the sole supplier of gasoline for this gas station supplying a minimum of 300,000 gallons per month. FFF was also to take up the incentive upgrade program for the gas station at the time of sale that was valued at $500,000. In 2010, Shell transferred to Anabi Oil Corporation (AOC) its rights of the RSA with FFF. Problems soon started developing when FFF refused to pay AOC for the supply of gasoline with unpaid invoiced amounting to $20,000. Additionally, the company also stopped the renovation project which was part of the RSA terms and an incentive that encouraged Anabi Oil Corporation to enter into a 10-year contract with Shell. AOC sued FFF for failure to make payments and damages due to the breach of adhering to the stipulations of the RSA.
Litigation of the Case
As asserted by Carver (2004), the process of litigation in the state of California commences when the plaintiff files a claim before the state court and presents a copy of the claim to the defendant. The complaint should have a clear description of what the defendant did or failed to do resulting in harm to the plaintiff. Additionally, the complaint should also clearly state the legal basis that the plaintiff has to hold the claim against the defendant (Kerbeshian, 2014). In our case, AOC should present before the court of law a claim that clearly, states establish FFF’s contractual obligation to be exclusively buying Shell gasoline from the plaintiff.
The claim should explain that they have unpaid invoices amounting to $20,000 and that the defendant has failed to adhere to the renovation incentive program that had a value of $500,000. The defendant is also given the chance to respond to the claims. In this case, the FFF will be given time to respond to the allegations laid against them. Additionally, the defendants can also present a counterclaim against the plaintiff by stating that they experienced harm through the plaintiff’s acts (Nolan-Hadley, 2011). The plaintiff can also respond to the counterclaim by filing a reply. In the course of these exchanges, amendments to the original claims filed by the plaintiff could be made.
Discovery is the next step of litigation and involves the parties trying to gather evidence and additional information from each other with regards to the case (Bass, 2005). In the current case, the plaintiff can ask the defendant for their accounting and banking records as evidence to show that their expired invoices had been received and never settled. Additionally, the parties can pose to each other formally written questions known as interrogatories to gather any additional information on the case. Finally, the attorneys of each party can question witnesses from either party to gather more evidence and also to check the consistency of their stories. Motions are the final step of this stage where each party asks the court to rule in a certain manner based on the law and the facts of the case (Dayton, 2011). In this case, for instance, the plaintiff can request the court to order the defendant to produce the RSA, accounting records and bank statements as proof to show their failure to make payments and to adhere to the stipulations of the contract.
During the trial stage, the plaintiff and the defendants present to the judge a brief containing their arguments and the evidence that they have for the case. Additionally, both the plaintiff and the defendant for this case can question the credibility of the jury (if the case will be a bench trial) through a procedure known as ‘voir dire’ (Dayton, 2011). It is after this that both parties will present their opening statements that showcase their outline of the case. After this stage, the plaintiff and the defendant are allowed to present their witnesses and any additional evidence (such as unpaid invoices and the RSA in the case of the plaintiff in this case) to support their arguments. Finally, both parties present their closing arguments where the jury (if it is a bench court) or the judge comes to a decision. In some cases, the verdict reached by the judge might not be satisfactory to one of the parties resulting in an appeal. Appeals are presented to a higher court where judgment is only made on legal error and not factual evidence (Dayton, 2011). If an error is not found on the trial case, then the court of appeal will affirm the existing judgment of the case. However, if it finds that there was an error, it will direct for a new trial to be conducted.
Alternative Dispute Resolution (ADR)
There are alternative means through which parties can resolve their dispute outside the court system (Bass, 2005). In the current case, the settlement will be the most effective ADR since the dispute at hand is direct and both parties can save a lot of time and money in terms of legal fees if they opt for this option over litigation. In the current case, the defendant can agree to pay the plaintiff the accrued sum of the unpaid invoices, and the damages suffered from regards to the renovation project that was valued at $500,000. Through settlement, the parties can also agree to continue with the RSA at hand or modify it to fit their current situations. However, settlement might fail to work out especially in an event where the defendant might be reluctant to pay the plaintiff damages, comply with the terms agreed upon, or avoid agreeing to the settlement idea generally. Additionally, decision arrived at might biased. In such a case, justice would not have been served (Bevan, 2005).
Bass, S. (2005). The Expanding Role of Arbitration and Judicial Concern: A Need to Redefine Ground Rules. Labor Law Journal, 4(1), 7-15.
Bevan, A. (2005). Alternate Dispute Resolution. London: Sweet & Maxwell.
Carver, T (2004). ADR: Why it Doesn’t Work and Why it Does. Harvard Law Review, 5(1), 155-164.
Dayton, K. (2011). The Myth of ADR in Federal Courts. Iowa Law Review, 6(2), 38-41.
Kerbeshian, L. (2014). ADR: To be or ? North Dakota Law Review, 12(2), 122-136.
Nolan-Hadley, J. (2011). Alternate Dispute Resolution in a Nutshell. Labor Law Journal, 4(1), 11-25.