Business Litigation Lawsuits: Common Causes of Action

In Los Angeles business litigation attorneys use a variety of names: commercial litigation attorneys, corporate litigation attorneys, breach of contract litigation attorneys, or even just business trial lawyers. However, regardless of how they label themselves, they all use the same legal causes of action. Here are some of the more common causes of action in most business litigation lawsuits.

Breach of Contract

Breach of Contract: Most business relationships are founded on a contract. Partners use a partnership agreement. Suppliers use a purchase order. Landlords and tenants use leases. All of these agreements are contracts and, when someone breaches that agreement, a breach of contract cause of action arises. In a breach of contract lawsuit, the plaintiff must establish that a contract existed, that the plaintiff performed his or her part of the contract, but that the defendant breached the contract (i.e., did not perform) and the plaintiff was damaged by the breach.

Related causes of action include: interference with contract (when a third party intentionally seeks to disrupt an existing contractual relationship between two other parties), interference with prospective economic advantage (a broader tort encompassing the intentional interference with another’s business relationship).

Breach of Fiduciary Duty

Breach of Fiduciary Duty: Sometimes business people are in a special relationship with another business person where they repose trust and confidence in that person. This special relationship may create a fiduciary relationship. The most common example of a fiduciary relationship is between partners or among corporate board members. Breach of fiduciary lawsuits are often stories of business betrayals—a partner stole a partnership client for himself or a Director on the corporation’s board of directors was caught self-dealing. Similar to a breach of contract lawsuit, the plaintiff in a breach of fiduciary lawsuit must prove that a fiduciary duty existed, that it was breached and that the breach caused the plaintiff damage.

Fraud

Fraud: A fraud lawsuit is premised on a lie. The lie may be an actual misrepresentation or it may be a concealment of something that should have been revealed. In a fraud lawsuit, however, the plaintiff must establish that he or she actually reasonably relied on the misrepresentation and was then damaged. If you knew the person was lying to you, you cannot sue for fraud. If a reasonable person would not have believed the lie, you cannot sue for fraud. Even if they lied to you but you were not damaged, there is no viable cause of action for fraud.

There are ancillary causes of action that are also used. For example, partnership and shareholder lawsuits will often seek an accounting of how money was spent in the partnership or corporation. Co-owners in property will often seek a partition of the property, which is a forced sale when co-owners no longer wish to own property together. Landlords may need to file an unlawful detainer action to regain possession of their premises from a tenant who is not paying.

Business litigation in California is a complex field that also involves numerous statutes, both federal and state, as well as other regulations. Of course each lawsuit has its own particular facts and complications. However, any business dispute will typically involve one or more of these causes of action. The value of an experienced business litigation attorney is that he or she can listen to the facts of a particular dispute and figure out which causes of action and statutes apply.

Los Angeles business litigation attorney Laine T. Wagenseller handles a variety of business lawsuits. He is the founder of Wagenseller Law Firm, which specializes in real estate and business litigation. For more articles on corporate and business litigation issues, please visit www.wagensellerlaw.com. You can contact Mr. Wagenseller at (213) 286-0371 or ltw@wagensellerlaw.com.

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