In pre-litigation and litigation, we frequently have clients who are understandably anxious to resolve their disputes. They typically are concerned with the open-ended liability that can result from a claimed breach of real estate contract or a business deal gone bad — and the legal fees that inevitably will come from them. And as a result of that unknown exposure, they want swift finality to the matter. They are constantly on pins and needles to close this small chapter of their life.
A good settlement versus a quick settlement
Unfortunately, getting a good resolution frequently is inconsistent with the desire for a quick resolution. Patience, many times, is a virtue that pays good dividends. This does not mean we typically recommend litigation as a solution. Litigation is lengthy, unpredictable and terribly expensive, and is accompanied by the same sense of unease until that long course to resolution. But the other side can sense when you are anxious to put a dispute behind you — attorneys are especially good at dragging things out to achieve a more favorable resolution than the courts would provide to them precisely because of that desire of the opposing party for quick closure. Showing that insistence on a quick and final settlement can drive up the cost of a resolution exponentially. So, slow down. Relax.
Why the anxiety?
The nature of our legal system is that we frequently need to give “lawyerly” answers to what seem to be simple questions:
- Am I liable?
- What is the extent of my financial exposure?
These vague answers are so because many times the answer from a review of the documents and a review of the correspondence and oral exchanges leave a conclusion unclear. Many times — most times — clients don’t tell us the whole story. Sometimes, we are wrong. And even if we as attorneys can give a clear anticipated outcome and we are correct in our analysis, the Judge (or Arbitrator) may in the end not agree with us.
We read the documents and do our best to understand the facts, and conclude: “Your exposure should be limited to ‘X,'” but the Judge may later conclude it is “X” times 3.5. And that is so because we can be wrong or the Judge can decide the case incorrectly (in our opinion). Further, we conclude “the fees and expenses to get to that conclusion should be ‘Y,'” but opposing counsel and judges can make the odyssey much more expensive.
Perhaps my bedside manner makes clients uneasy because I do have and share “worst case scenario” war stories where liability and legal fees well exceed that which should reasonably be anticipated. But for every one of those legal calamities, we have 20 or 40 cases that resolve quickly and fairly, if not inexpensively.
I recently was consulted by a physician who had contracted to purchase a small investment property, and he had decided he contractually agreed to pay too much and wanted to back out of the deal. He was more or less crawling out of his skin to have resolution of the matter — and his total exposure if he was in fact found to be in breach of the contract was on the order of maybe $20,000. And this was the worst case for him.
But he was anxious, and called me four or five times in a two-day period stressing about this “what if” and that “maybe” scenario.
I asked him: “You are a doctor. What kind of doctor?” He responded: “I am an oncologist.” So I said: “OK, let me understand. Every day you have to tell someone — and their family — that they or their loved one has cancer. Is that right?” He says: “Correct.” And, I further inquired: “Yet you are stressed about a simple contract claim that might cost you $10,000 or $20,000 if you ultimately are sued, is that right?” “That’s right,” he responds, “But I see your point.”
Another case I have my client terminated a residential purchase contract because the strict terms of the financing contingency were not met — the bank had a higher interest rate and a higher down payment than the contingency contemplated. The buyer sent a contract termination letter and the seller responded with a rejection of that — but then just sat and sat and did not place the house back on the market — at least not right away.
I explained to the client that “these almost all work themselves out without litigation.” Further, he has an appraisal of the property at the purchase price. If that is the value that would be adopted by a court in litigation, then the seller has no damages anyway. Further, if they refuse to place the home back on the market, the seller will have violated his duty to “mitigate his damages,” weakening the seller’s claim in court.
Still, the client and his wife are anxious, concerned about the many possible outcomes to the suit. And we don’t as of this writing know exactly how it will turn out.
No one has cancer. No one lost an arm or an eye. No one is going to die. You are not going to end up in bankruptcy court as a result of this contract claim. Be patient and allow the other side to work out their “mad” and realize the cost and time that litigation will take. It will all be OK. That does not mean fighting until the last breath and last dollar is the best strategy, but being somewhat patient as a settlement works its way out can be advisable.