When seeking discovery of pre-judgment financial information in a lawsuit, plaintiffs often receive defendant objections to production and disclosure. These defendants usually raise issues of privacy and privilege, or simply indicate that financial discovery is somehow inappropriate because the Court has not yet entered judgment. However, a party’s finances are not excepted from discovery if relevant to the disputed issues in the underlying action. Friedman v. Heart Institute of Port St. Lucie, Inc., 863 So. 2d 189, 194 (Fla. 2003). For example, the Florida Supreme Court holds that financial documents and information are discoverable under claims for breach of real estate purchase contracts, to confirm the parties’ contentions on the value of the property compared to the purchase price, to see if assets were moved to avoid compliance with the sale contract, and for anything else relevant to claims or defenses thereon. Bd. of Trs. of Internal Improvement Trust Fund v. Am. Educ. Enters., LLC, 99 So. 3d 450, 458–59 (Fla. 2012) (allowing financial discovery on real estate purchase, as “the financial information . . . may lead to evidence to resolve . . . the parties’ contentions regarding the value of the property as compared to the purchase price.”); Friedman, supra (allowing discovery of defendant’s financial records/transfers to see if transfers were to avoid recovery on home sale contract); see also Behm v. Campe Lumber Co., 834 So. 2d 285, 287 (Fla. 2d DCA 2002) (reversing where trial court denied homeowners discovery relating to payments supplier received from builder, as such appeared related to claims and defenses); Fla. Gaming Corp of Delaware v. Am. Jai-Alai, Inc., 673 So. 2d 523, 524–25 (Fla. 4th DCA 1996) (affirming discovery of financials for breach of real estate purchase contract, as it relevant to damages calculation).
Discoverable financial documents from such a real estate purchaser include: bank documents, cash flows, balance sheets, income statements, auditor reports, tax returns, budgets, and other financial documents over numerous years. 99 So. 3d at 458–59 (Fla. 2012). Similar documents would be discoverable in investment and contractual disputes where claims or defenses raise issues of financing and value. Discovery of financial information should be proper where a defendant has opened the door to full discovery on her financial ability to close on a transaction; her financial ability to enter a contract in good faith; whether she had that ability at any time during a transaction’s negotiation and purchase process; how feasible, possible, reasonable, or just the transaction was or is (Bd. v. Am., 99 So. 3d at 458–59); whether the defendant transferred any assets to create an alleged impossibility or unfeasibility (Friedman, 863 So. 2d at 194); and whether the defendant’s financing was related to any alleged duress or she used finances to relieve that duress. If financial documents on all of these matters or others are relevant to the claims and defenses, then financial discovery before judgment should be proper.
If you have any questions on obtaining financial information on parties pre-judgment, please contact Bernhard Law Firm at www.bernhardlawfirm.com, 786-871-3349, firstname.lastname@example.org.