A good piece of advice I once received when I was younger was: “Don’t write an email you wouldn’t want copied to the cover of the New York Times”. In the past, it would take days of depositions in a lawsuit to get a handle on what someone said or thought to prove a legal point. Now, emails (combined with searching techniques) can provide a first person narrative usually by people who have no inclination their email conversations will be exhibits in an unexpected and un-filed lawsuit. Sometimes, and entire lawsuit comes down to one email. That was the case in a recent 5th Circuit opinion.
The lawsuit itself is fairly interesting if you follow the litigation surrounding the WaMu collapse and takeover by JPMorgan Chase Bank. The lawsuit concerns a developer who was contracted by WaMu (pre-takeover) to acquire land, build a WaMu location and then rent it to WaMu for 20 years. Prior to acquiring the land but while the developer was under contract, WaMu was taken over by the FDIC.
There has been significant litigation concerning the WaMu leases since the takeover and assignment to Chase which I don’t intend on getting into here. In fact, the lawsuit is worthy of its own blog post for those of you interested in this “obscure but heavily litigated” matter (as the 5th Circuit put it). Among one of the more interesting holdings is that the FDIC can be held liable for negligent misrepresentation because “it is reasonable to rely [on the statement] when the federal agency which oversees the banking industry…tells you that your banking lease may be lawfully rejected”.
In any event, the purpose of this post is to illustrate that a lawsuit and its appeal can boil down to one single email.
The email in question was sent by an executive of the developer to Chase requesting that the lease be rejected quickly so that the developer could cut its losses and be done with it. The developer, having relied on the FDIC’s representation that the lease could be rejected, believed that rejection was the only outcome.
As it turns out, the FDIC was wrong. In fact, the agreement between WaMu and the developer was assumed by Chase. When the developer figured it out, he sued Chase for damages for breach of contract (as opposed to being stuck with nothing when the FDIC repudiates a lease).
In the 5th Circuit opinion, the Court of Appeals quotes the email directly five times in support of its holding that there was not mutual termination, which was one of the two issues on appeal. (The developer won the appeal). There is no other evidence directly cited by the 5th Circuit to support its holding.
In short, the entire case has now been determined based primarily on one email an executive sent out in the ordinary course of his day. There is no legalese in the cited portions of the email. In fact, the executive didn’t use the proper legal terms for what he was requesting from Chase and the FDIC. I haven’t spoken with the executive, but I think it’s a safe bet that he did not write the email thinking the 5th circuit’s opinion would one day turn on a few quick sentences.
The take home lesson here is likely already known by everyone reading this. You have no doubt heard this over and over again. Don’t write an email you would not want to be public. This post is to illustrate that even the most mundane of emails may win or lose a lawsuit you have no inclination will be filed. In short, you never know when your last email will be the one pasted into a Federal Appeals Court opinion.
Central Southwest Texas Development, LLC v. JPMorgan Bank, NA, et al., case no. 12-51083, pending in the United States Appeals Court for the Fifth Circuit. Opinion Entered March 2, 2015.