What is an Adversary Proceeding in a Florida Bankruptcy?
An adversary proceeding is a lawsuit within the bankruptcy. It is treated very similarly procedure wise to state court lawsuits. There are all types of causes of action available and most require a filing fee to initiate the case. When the debtor is a party to the lawsuit, the debtor does not typically pay for any type of filing fee. What about if the debtor is a Plaintiff? Even so, the debtor is not charged with paying a filing fee. Many times debtors look to bring automatic stay violations or discharge injunction violations.
In these actions, the debtor is the Plaintiff looking to sue a particular creditor for such violation. A summons is required, and an answer to the adversary complaint should be filed within a specific amount of time, usually 30 days. Failure to answer the complaints could result in a default judgment. What does that mean? It means any defenses or counterclaims are waived and all allegations are deemed admitted. There are ways to set aside a default judgment, but that should be avoided if possible. There is usually a pretrial conference and the Federal Rules of Evidence and Procedure are deemed to govern the case. It is imperative that all parties involved know the procedural rules before getting involved with this type of case. Discovery is permitted also. What is discovery? Discovery comes in many forms: request for production of documents, request for admission, depositions, interrogatories, etc. To simplify the term, it means one party is trying to get information about the other party. Now, there are protections and objections that can raised to certain discovery. For example, a party cannot ask for communications between opposing counsel and his or her client. That is protected by the attorney-client privilege. There is an additional protection often used to protect certain documentation from being turned over to the opposing party and that is the "work product" rule. This rule protects property that the opposing counsel or party prepared in anticipation of litigation. This is generally not discoverable. Discovery requests that are burdensome are also objectionable if they are timely brought. If the only the way the information can be obtained is by opposing counsel providing then it the court may not find the request to be that burdensome.
After the pretrial conference and discovery has concluded, a trial or evidentiary hearing will most likely be set. During the trial, witnesses and exhibits are used by both sides in trying to prove or disprove the case. The bankruptcy judge rules (unless a jury trial which is rare) and the losing party may have the ability to appeal to the 11th Circuit Court of Appeals.
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Greg Gilbert
Keith Maynard
