By the time a dispute between business partners escalates to litigation, it’s a fair bet that those partners – who once worked cooperatively in a productive business relationship – no longer like each other very much.
If those partners have worked together for an extended period, they may also know (or at least believe) things about each other’s personal lives and prior business dealings. Sometimes, those things aren’t very flattering. An angry entrepreneur may be tempted to introduce evidence into a business dispute that his erstwhile partner cheats on his taxes, or perhaps on his wife.
While all may be fair in love and war, litigation is more complicated. The default rule on the admissibility of character evidence in Georgia is that:
“Evidence of a person’s character or trait of character shall not be admissible for the purpose of proving action in conformity therewith on a particular occasion.”[1]
Huh? By way of example, this statute basically stands for the proposition that evidence of a litigant’s marital infidelity generally cannot be introduced into evidence to prove that he also cheated his business partner out of his proportionate share of company profits. While both acts might make the guy a jerk, they are not sufficiently related to one another that the probative value outweighs the prejudicial effect.
The reason for the rule is to guard against the use of socially unacceptable bad behavior (like cheating on a spouse) that is unrelated to the matter in dispute to unfairly prejudice the jury.
‘But prejudicing the jury against my business partner because of his unrelated bad behavior is exactly what I want to achieve,’ many litigants will exclaim! Alas, the law does not allow for this; generally, anyway. Like most rules, there are exceptions and much creative lawyering goes into getting evidence like this admitted into court. Just as much effort is expended into keeping it out.
The complexities of evidence law and the exceptions to the general prohibition on the admission of character evidence are beyond the scope of this post. If you’re interested, an excellent article titled Character Evidence in the Civil Setting and published in the November 2020 Georgia Bar Journal was written by The Honorable Jane Manning, a judge in the State Court of Cobb County.
At the risk of grossly over-simplifying what can be an arcane and byzantine evidentiary analysis, the more relevant the character evidence one seeks to introduce is to the alleged conduct at issue in the case the more likely it is to be admissible to prove character. Alternatively, where the evidence simply tells a salacious story and makes the guy look like a jerk, the less likely the evidence is to be admitted.
If you find yourself embroiled in a dispute with a business partner that leaves you thinking unkind thoughts, please let me know if I can help.
[1] O.C.G.A. § 24-4-404(a).
Healthy business relationships are an essential component of business success. When disputes cause business relationships to sour, declining productivity and revenues are sure to follow. Bill works with business owners to bring successful and efficient resolution to a wide variety.
