Putting On An Alter Ego Phase Of An Elder Abuse Trial Before The Liability Phase

May 3, 2024

Good news! The long-awaited moment has come. You have finally been assigned to a trial judge to have your matter heard by a jury of your client’s peers. But … wait … not so fast! You wisely have alleged multiple theories against your facility defendant’s corporate overseers including, but not limited to, alter ego. The trial court has determined that the alter ego phase of the trial should go before the liability phase. The trial judge turns to you and asks when you will be ready to proceed with the alter ego phase? Are you ready for this?!?

Contrary to what some might believe, trial judges and for that matter plaintiffs’ counsel and defense counsel are all over the map in terms of their position as to whether the alter ego phase of trial should happen before or after the liability phase. For reasons that we will not discuss in this particular blog, we believe that, if given the choice, plaintiffs’ counsel should request that the alter ego phase take place after the liability phase.

But the larger point remains – you will not be the decider of when the alter ego phase happens. The trial judge will decide that and many trial judges believe that the alter ego phase should proceed first.

If this happens, the last thing you want is a lengthy delay in the proceedings to allow you to start preparing for the alter ego phase. Delays are always the friend of the defense and risk raising the ire of your trial judge. To avoid this, unfortunately you will need to prepare for the alter ego phase pre-trial just as you prepare for the liability and punitive damages phases.

What will a pre-liability alter ego phase of an elder abuse trial look like? You know by now that alter ego is not for the jury, but will be a bench trial. You will have the burden of proof. Thus, you will be the person putting on the evidence. What will your evidence entail? To determine this, you will first need to be thoroughly versed in the law of alter ego. In fact, as would be the case with a liability phase, you should file a “trial brief” outlining the law. Trial courts greatly appreciate trial briefs, and you will in this case too because the law of alter ego is convoluted. The Supreme Court speaks of alter ego as a two-factor test: (1) whether there is such a unity of interest between the entities at issue that their separateness has ceased to exist and (2) whether not treating the entities as alter egos will bring about an inequitable result.
In addition to this, however, trial judges and practitioners alike regularly apply the 20 Associated Vendors factors to determine whether a plaintiff has met her or his burden of showing alter ego.

Once you understand the law, you next need to think about what evidence you will present. In general, evidence consists of witness testimony and exhibits. For witness testimony, you generally will be thinking about percipient witnesses employed by the defendants and then your economic expert. As to your economic expert, needless to say, you will want him or her to offer all opinions they plan to present in the alter ego phase during their pre-trial expert deposition to avoid Jones/Kennemur exclusion issues. As to defendants’ witnesses, in our experience some or all of this can be presented via video. Trial judges in particular are quite capable of reviewing video evidence and video evidence certainly will streamline presentation of your case. Assuming you present defendants’ witnesses via video you will need to present a Notice of Intent with this video testimony that will be a subset of the Notice of Intent you will present relating to the entire trial. We do not suggest that you prepare this ahead of time given the uncertainty about whether the alter ego phase will go first. However, you should be prepared to provide this subset of the Notice of Intent as soon as possible as the defense will have a right to make written objections and this may slow the process.

As to live witnesses, you should make the date of appearance of defendants’ witnesses on your Notice to Appear on the initial date of trial rather than at some later date. If you do this, you can then reach an agreement with the defense that these witnesses will trail from day to day until they are called. This will avoid any defense argument that they do not have to present their witnesses in the alter ego phase because your Notice of Appear summoned them for a later date. Similarly, you should subpoena relevant third-party witnesses to the first day of trial and then reach a standby agreement that essentially has them on call from the first day forward rather than starting at some later time.

As for exhibits, again the documents you plan to use should be a subset of the overall exhibits you have put on your exhibit list in anticipation of the overall trial. You will also need to think through how you will lay the necessary foundation, if any, to get the exhibits into evidence. The bench trial nature of this proceeding should make this process easier for you. Typically, there should be a stipulation that documents defendants have produced in discovery are authentic. Defense counsel often will stipulate this and, even if they don’t initially, the trial court is likely to badger them into reaching this agreement. From there, to have them admitted you generally need only show admissibility over hearsay objections and general relevance. Hearsay objections generally are easily overruled as nearly all documents produced by defendants in the alter ego context constitute party admissions or verbal acts. Relevance should be evident from the face of the document or can be established by your expert or defendants’ witnesses.

In our experience, plaintiffs’ presentation of evidence in the alter ego phase typically takes 2-3 days.

In sum, trying the alter ego phase of an elder abuse trial before the liability phase is not the end of world, but we you should carefully consider how you will meet your burden of proof in an alter ego trial before being assigned to trial.

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