Early Settlement Panel

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Yesterday, I blogged about the illusory "final offer", noting that most cases settle.  The reason for that is that there is a realm of reason, a range if you will, where cases with similar facts and circumstances, should resolve themselves based upon experience, statutes, case law, Guidelines, etc.  In most cases, absent wide valuation disparities, esoteric issues, bona fide custody disputes, including relocation, and/or really unique sets of facts and circumstances, the range is a relatively small one.  These are not personal injury cases where a carrier is offering $0 and the plaintiff is seeking millions. 

 

What do you do when you get a settlement proposal that is so out of left field that it borders on , or perhaps is, bad faith?  Do you ignore it?  Do you respond with an equally outlandish proposal in the other direction?  Or do you respond with a proposal in the realm of reason?

Maybe you don’t really want to do that.  Why?  Because, as noted in my last post, you will be going to an Early Settlement Panel (ESP), mediation, and/or an Intensive Settlement Conference (ISC).  The risk of negotiating with a reasonable position vs. the other side’s unreasonable position is that the impartial may suggest "splitting the difference."  Splitting the difference may be fair when both party’s proposals are within the reasonable range.  It clearly is not fair when one party’s proposal is outlandish.  Moreover, even if the unreasonable negotiator comes down substantially, perhaps even more than you come up (or vice versa), you will suffer the wrath of their righteous indignation because they "gave more." 

 

Also, I previously posted about a mediator saying that he was creating "settlement anxiety" to try and move parties to get the case settled.  While this may be fair if parties are either equally reasonable or equally unreasonable, is it fair to try to push the reasonable one when the other party is unreasonable?  I think not. 

 

In a case that I settled this year, the first proposal from the other side was clearly punitive and clearly bad faith.  We chose not to respond and I advised the adversary as such.  He begged us for a counter proposal.  We decided to make one that, while not bad faith, was extremely aggressive in the other direction.  What happened next?  We started negotiating within the realm of reason and the case got settled.

 

I am not saying that that strategy will work in every case but it worked in that one, as I suspected it might.  Negotiations can be complicated.  Great thought should be given as to the strategy to employ based upon who you are dealing with and how they are negotiating. In an advertisement in a recent  Super Lawyers publication, a firm stated that they were known for "winning" divorce cases.  That is funny since few are tried and seldom is there a clear "winner."  You don’t want to let the other side "win" a negotiation because they started with an absurd position and you felt compelled to negotiate on their terms.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com .

This is my final offer!!!  Don’t you just love the ultimatum, the line in the sand, the threat of Armageddon if capitulation is not immediately at hand?  I sure do.  Is it because I love to go to trial?  Don’t get me wrong, I enjoy trial but that is not the reason. 

 

Seldom does it mean that a reasonable counter proposal won’t be considered it it doesn’t materially alter the terms being discussed.  Usually it means that your are getting pretty close to a settlement so that the proclamation can alert you and your client that now may be the time to do a deal.  In a recent case that I just settled, almost comically, each side probably sent 5 "final offers." 

 

And why is a final offer seldom a final offer?  Because 99% of all cases settle.  Because the system is geared to promote settlement.  Because before you go to trial, you will go likely go to custody and parenting time mediation, an Early Settlement Panel (ESP), mandatory economic mediation (sometimes several sessions), and an Intensive Settlement Conference (ISC) with the judge, or many.  Often, your first trial date is not a real trial date, but rather another day to bring the parties (and perhaps experts too) in to try and cajole or finesse and strong arm a settlement.  Even on your real trial date, perhaps before and often during the breaks of a trial, the judge will encourage settlement and/or the circumstances of how the trial is going may encourage settlement. 

 

So keep giving us your "final offers."  Sometimes, our client will accept them.  Other times, we will make a counter offer and await your next final offer until one day, the case will be settled or tried to conclusion.

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 

Several years ago, I posted a blog entitled "Some Times You Just Have to Try a Case."  In that post, I discussed that there are some times where a litigant simply refuses to settle making a trial inevitable.  Are there times, however, when a trial might be less costly, quicker and preferable to long, drawn out, and perhaps insufferable negotations.  I have dubbed these mind numbing, perhaps bad faith negotiations, where sometimes you take one step forward and two steps back and sometimes, no issue is ever resolved, and sometimes, you make an offer about alimony and the response is about equitable distribution – death by a thousand paper cuts.  Whether intentional or not, you wonder whether a trial would have just been bettter.

I ponder that after recently concluding a case that, while having one little twist, which we got past several months ago, then endured numerous mediation sessions, numerous Intensive Settlement Conferences at the Courthouse and even more than one scheduled uncontested hearing where even the final changes had final changes, plus new changes.  In fact, I have recently had several cases where it took an inordinate amount of mediation sessions to resolve simple cases.  In one reasonably simple case, the parties went to mediation 6 or 7 times, before attorneys attended and even then, it did not settle despite the outcome being obvious.  In another, after 9 mediation sessions (7 with lawyers present), the case remains unsettled though only small dollars in the big picture remain in dispute. 

In your garden variety case, the inordinately drawn out process only serves to either wear a party out and forces the righteous client to give up to either move on or stop the bleeding of legal fees.  Otherwise, they incur a large legal bill just to get to the place they should have been had the other side acted reasonably (presuming for the second that they have negotiated fairly and reasonably.)

While I understand the desire to avoid trial at all costs for all of the usual reasons – finality, having control of your own destiny as opposed to putting the decision in the hands of a stranger, etc.- if the process comes to a place where all things considered, you cannot do worse if you go to trial, maybe a party should consider pulling the plug on these expensive snails pace and/or bad faith drawn out negotiations,  Perhaps the threat, if it is a real threat and you actually start doing what is necessary to prepare for trial, will stop the nonsense and get the other side to end the case once and for all. 

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Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 There is no secret that New Jersey is suffering a significant crisis with respect to judicial vacancies. This year alone has seen a significant number of retirements without replacements being named.  The effect on the family courts, and in particular, the divorce docket, has been catastrophic.   I was at a meeting of family lawyers just recently at which the assignment judge of a county in the southern part of the state was kind enough to come and discuss directly with the bar the situation.  And while I deeply appreciated the fact that he did, and the efforts that the judges are making to accommodate the needs of the public, the fact of the matter is that the situation is untenable throughout the state.  In some counties, the situation is so bad that there are no, I mean no, trials for contested divorce cases.  In others, a case will not reach a judge for final disposition for three years,  In several counties, judges have upwards of 500 cases to handle.  Only a superhuman can give a matter the attention it deserves when having that type of case load.  

The purpose of this blog is not to pass blame, nor to comment of the swirl of political posturing that goes on when this subject comes up. Rather, despite the fact that the vast majority of judges that I know are working late nights and weekends, they simply can’t keep up effectively.  And that means that attorneys and litigants have to find an alternate method to resolve their cases in order to save money and get on with their lives and those of their children. Any good family lawyer will have an honest conversation about the cost ridden road to the Courthouse.  Certainly, there are times that judicial intervention is necessary and as lawyers, we are prepared to take a case to the judge. However, alternate dispute resolution is an important piece of the puzzle.

There are several effective methods of alternative dispute resolution that must be considered by litigants.  Some of these are woven into the court system.  Some are complimentary to the system. Before filing for divorce, talk with your lawyer to determine whether mediation, or arbitration is a viable option for your situation.  

Mediation can occur any time during the process, and can happen with or without attorneys. Many times litigants will agree to go to a mediator to resolve their differences and then the mediator will prepare a memorandum of the agreement that the parties have reviewed by their respective counsel.  Sometimes, someone may be uncomfortable going through mediation without legal counsel.  In that case, going with a lawyer can be a cost and time effective method to settle the case. When you go with a lawyer, you can make sure that your rights are protected, and you do not agree to anything without having the opportunity to discuss the ramifications.

Continue Reading Another day, Another Judge lost

Previously I blogged about the fact that cases have a life of their own and will only settle when both parties are ready.  As I was trying to settle a case today that is scheduled to start trial in Morris County next week, I was reminded of a related issue.

In this case, we have had a hard time getting the other side to negotiate.  They have taken a position that we don’t think is reasonable nor supported by the facts or the law.  That said, we have made proposals to try to resolve the case.  In fact, at each time we have been required to negotiate (at the Early Settlement Panel, mandatory economic mediation (several sessions) and at an Intensive Settlement Conference), we have made proposals.  In some ways, it was against my normal practice to not bid against myself, but the client wanted to at least try to stir some movement. 

At each point, rather than provide a counter proposal, the other side has tried to wow us with, to put it nicely, "fuzzy math" in order to justify why they are right and we are wrong.  They have never, however, moved off of their proposal on support in any significant way. 

I finally had to tell the opposing counsel to just give me a number without the explanation or argument because I wasn’t going to buy their theory, ever, and the theory didn’t make a difference if the number was acceptable.

In fact, this is not unusual when trying to settle matters.  That is, sometimes the theories and explanations will bog things down.  The bottom line is that if  the parties agree on the number or a certain resolution of a non-financial issue, in many instances, it matters not at all how or why you got to that number.  In fact, the explanation may just start the argument again. 

Sometimes, it is more important to just give a number than explain how you got there.  If the number is fair and within the realm of reason, and the parties can live with it, it is sometimes better to be settled then win the debate which may only prove more costly.

While statistically, 99% of all cases settle, some cases take longer than others to get there.  Moreover, some cases require the assistance of a third party to help one or both party or attorney get past whatever it is that is holding the case up from resolving itself.

I, for one, have been skeptical of mediation in a number settings.  The first is at the onset of a complex matter where one party is pushing for mediation and there hasn’t even been the most basic exchange of information at that time, much less formal discovery.  I have even seen cases where the party with the documents will not provide them in advance of mediation and will only bring them to mediation and take them with him at the end.  The second setting that gives me cause for pause is when parties attend mediation without counsel and there is a great imbalance of power between the parties (consistent with the imbalance of power that permeated the parties’ relationship).  In these instances, unless there is a strong mediator that will protect the disadvantaged spouse, I have often seen such mediations result in a "settlement", but one where the disadvantaged spouse got a "deal" that was neither fair nor reasonable, if not unconscionable.  The problem in these cases is that often, once there is an "agreement", the person that got the great deal refuses to concede anything.  Thus, a method meant to avoid litigation can often create litigation. 

However, in this day and age in New Jersey, the court mandates mediation at two junctures of the case (unless there is a domestic violence restraining order.)  The first is early on in the case when the parties go to custody and parenting time mediation conducted by court staff.  This is meant to ferret out the true custody dispute.  That said, I make sure that my client is prepared before they attend this mediation because it often results in a resolution of the issues and I want that resolution to be one that my client actually has considered in advance and is comfortable with.  As such, we often prepare a parenting plan, in advance, which deals with the regular parenting time, legal custody, holidays, vacations, etc.

The second mandatory mediation is economic mediation which takes place after an Early Settlement Panel.  Attorneys usually are required to attend with clients.  This is often the time when a case that is more than your run of the mill case will settle.  By this time, it is expected that most, if not all of your discovery will be done. Unlike the Early Settlement Panel where the panelists have a short time to consider the issues, the mediator can spend more time to flesh them out and more importantly, facilitate a dialogue and negotiation. 

In some cases, the impartial voice of the mediator helps one or both parties get past an issue that they are stuck on.  Put another way, when either the client’s attorney has told the client time an again of a probable result, or if the attorney is presenting the strongest position regarding an issue as an advocate, the mediator, who has no axe to grind, may be just what is necessary to put the issue to bed.  In other cases that I have seen, sometimes one of the attorneys doesn’t handle exclusively family law matters and/or is otherwise less confident.  In these cases, the mediator essentially can let the attorney know that the deal is fair.

I have been involved in cases where the parties were more than $20 million apart and seemed headed for a trial that would have lasted several months.  However, after 8 to 10 days of hard work at mediation, the case settled, saving both parties tens if not hundreds of thousands in legal and expert fees that would have been incurred at a trial.

The bottom line is that most people truly want to settle their cases in a fair way.  We always hear anecdotally that cases that settle come back to court far less often than cases that are tried.  We also hear that people that settle their cases are far more satisfied with the result than if they tried the case.  In a trial, the litigant gives up control of their life to a judge that doesn’t know them and will only hear bits and pieces of their story – along with the hundreds of other cases they have.  Mediation with a skilled mediator, where the playing field is level, the parties both have all necessary information and the imbalance of power is kept in check, is excellent way to keep control of your life and resolve your matter in a fair and beneficial way.

Check back for future entries regarding arbitration and trial practice.  While most cases do settle, if litigation is required, we are skilled at handling matters that require a trial, as well.

In a recent unreported Appellate Division decision, the Court decided that a trial court judge abused his discretion by sanctioning the defendant’s attorney for failure to appear at an Early Settlement Panel, where his client, the other party and opposing counsel had appeared.  At first this may appear to be odd result but the facts of the case make it more clear why the result is just – and that a little courtesy by all involved could have prevented what turned into this debacle.

This case was pending in Middlesex County.  On the day in question, there had been extensive rainstorms and a portion of a major traffic artery in the New Brunswick area, was closed. Defendant’s attorney was caught in the resulting traffic jam so at approximately 9:30 a.m. he called his office and had them contact the chambers of the presiding judge of the Family Part to advise of the delay. As counsel did not have plaintiff’s counsel’s cell phone number, and, believing the judge’s staff would advise her of the delay, he did not call opposing counsel’s office. When by 10 am, the traffic issues had not improved, defendant’s counsel called the presiding judge’s chambers directly and asked that the matter be rescheduled.  The judge’s law clerk granted this request and counsel returned to his office.  No one, however, told plaintiff’s counsel.

After 10:00 a.m., she called defendant’s counsel’s office and was told that he was running late. Shortly thereafter, she called again and was told that he had been released by the judge and was on his way back to his office. Plaintiff’s counsel called a third time and actually spoke to defendant’s counsel – requesting that he return to the Courthouse.  When he refused, she made a application to another judge (the presiding judge was out that day), for counsel fees.  

 The judge noted that he had spoken to the presiding judge’s secretary "after the call," and knew counsel was stuck in traffic, however, he noted that the "only people that can grant an adjournment o[n] a matter that’s set down for an ESP is either [the presiding judge], who’s not here, his secretary . . . or me, the ESP judge." The judge determined defendant’s counsel’s excuse for his non-appearance was "inadequate," and he granted the application for counsel fees in the amount of $1100. 

The Appellate Division, however, held that the trial judge failed to properly follow the procedures governing a contempt citation, and that defendant’s counsel’s behavior was, under the circumstances, not contumacious or without just excuse.  The Order for fees was reversed.

The moral of this story is that all could have been avoided with a healthy dose of courtesy and communication all around.  Defendant’s counsel should have called his adversary’s office or had his staff do it – both to advise of the delay and then of the adjournment.  Moreover, if the traffic had abated by then, he could have returned to the Courthouse where everyone was waiting.  Plaintiff’s counsel could have been more understanding of the problem caused by extreme weather conditions coupled with the fact that someone in the presiding judge’s chambers had granted the adjournment.  Perhaps there could have been better communication by the Court staff that granted the adjournment so that the rest of the people waiting would not have waited as long. 

We should not lose sight that courtesy to our client’s,  their spouses and opposing counsel – especially is unique circumstances, is required.  It would not be surprising if events of that day cost each party more than the $1,100 in dispute.  And it may have all be avoided with just a little more courtesy and communication. 

For a copy of the case click here.