I Was Sued, and I Didn't Like It (by Sherman Knight)

At dinner parties, when people would ask what I do for a living, I would respond in a joking way, “I make people’s lives miserable.” They would quickly come back with, “Ah, you must be an attorney.”

As a practicing trial attorney for two-and-a-half decades, I never understood just how accurate my description was. I didn’t try to make lives miserable, it’s just the result of a process they taught us in law school known as litigation.

Then it happened: my wife and I were sued over the remodel of our home. I was about to experience what “miserable” really means.

During construction, I was too busy to inspect the work. I was not too concerned because I had hired someone that was highly recommended. Near the end of my remodel, there were some things that bothered me, so I hired a different builder to come in and inspect the home. The list of defects he found left me dazed.

I provided the list to my builder and withheld further payment. Two weeks later the builder left the job, filed a mechanics lien, and sued my wife and me.

Initially, I knew we were going to cream this guy, so I shrugged it off. After all, I am an attorney and an architect and have represented both contractors and homeowners in hundreds of construction defect cases over the years. Nevertheless, as time passed, doubt began to creep in.

My wife did not like the idea of being sued, especially after she was served at her office. She was not happy. Although I tried to convince her that the contractor did not stand a chance, I was surprised how the lawsuit affected our relationship. If we lost, the total bill could be over $150,000 (his claim, his attorney’s fees, and my attorney’s fees), and I would still have to repair the defective work out of my pocket. When I explained the cost if we lost to my wife, our relationship further soured. Over the next two years, doubt continued to build as the builder went through three different attorneys, each one seemingly starting over with new and different demands.

Although I was sure of the outcome, the possibility of losing $150,000 and how that might affect my wife, my kids’ college education accounts, and countless other possibilities never left my mind. I was surprised how much I thought about the matter. I was distracted at work and my stress level climbed as trial approached. When I had free time, the lawsuit was the only thing on my mind. Dreams about the dispute woke me up in the middle of the night. I had concerns with the judge appointed to the case and wondered if the judge would see through the other side’s lies. I remember thinking, why is this lawsuit affecting me like this? I do this for a living. For the first time, I understood what my response, “I make people’s lives miserable,” really meant. 

A week before trial, a mediation resolved the dispute when the builder’s insurance company wrote a check. Although the lawsuit was over, the stress on the relationship between me and my wife was not. It took a while before things returned to normal. The emotional turmoil for two years was not worth the impact on my family and the lost time and costs will never be recovered. Given the amount of personal stress I went through, I can’t begin to imagine the stress and emotional turmoil that a non-attorney would suffer through. There must be other options.

In hindsight, I saw that before the lawsuit was filed, I had everything I needed to mediate. My second builder provided a report and an estimate for repair. I took some pictures. The builder was there every day. He knew what transpired and what it would cost to fix it. Two years of discovery, motions, and trial preparation did not change the outcome that early mediation may have obtained.

Early mediation would have alleviated most of my misery. And saved a lot of money. As young minds in law school, we are taught the process of litigation. The process is fairly rigid and has little room for a creative response. As attorneys, we are taught to become forensic thinkers and leave no stone unturned. Between the rigid process and forensic thinking, the law is expensive.

Early mediation is less expensive, but in every case there still needs to be enough discovery to make a good presentation. While early mediation may leave some stones unturned, the risk is acceptable when the chance of missing something is outweighed by the saved time, reduced emotional distress, and expense.

This is most obvious when the value of the dispute is too large to ignore but so small that any recovery will disappear in cost and legal fees. In these cases, the forensic training received by attorneys, which forces them to leave no stone unturned, is simply not cost-effective.

Early mediation is a natural fit if there is a desire to preserve a relationship before the parties become so polarized that resolution is difficult and the parties become combative. When two neighbors are longtime friends, their friendship may be saved when early mediation resolves disputes over something shared such as a fence or property line. Employee/employer relationships can be saved where the employer wants to retain the employee or the employee wants to keep their job.

There are also relationships that might not be so obvious to attorneys. Contractors have special relationships with subcontractors that always finish on schedule and with little fuss. Contractors want to maintain a relationship with owners that might have repeat business. If continuing the relationship is important, early mediation will foster an atmosphere of working together, rather than fighting over and defending your position. The tone of early mediation is very different, often looking for creative solutions that are never available in late mediation.

Other early-mediation cases might include: 

  • When a party just wants it over with. No more discovery, no trial, no appeals. This is usually someone who has been to trial before.
  • When a party cannot afford the lost time of litigation.
  • When a party does not have the emotional or physical strength to handle several years of litigation.
  • When the parties cannot afford litigation.
  • When neither party has the ability to recover attorney’s fees.
  • When a party has skeletons they wish to remain hidden.
  • Commercial leasing — landlord/tenant disputes.
  • When one of the parties is looking for an apology.
  • When one of the parties seeks something other than just money.
  • Warranty issues on new construction. If the roof leaks, solve it now!

 

Even when early mediation is unsuccessful, it still provides a reality check of the strengths and weaknesses in your case early in the litigation, which will allow the parties to make better, less emotional decisions, before they become financially and emotionally vested in continuing the case.

In addition, early mediation provides benefits that normally do not occur in litigation. Counsel has a unique opportunity to learn about the case. Spending an entire mediation with their client, talking to them about the case and listening to argument and evidence provided by the opponent, provides insights in the case that typical discovery does not. Mediation is not a discovery tool, since doing so would violate the letter and the spirit of the “good faith” rule. Yet, it cannot be denied that the information learned in a single day of mediation will benefit the parties in the form of refined discovery, early witness evaluation, and streamlined trial preparation.

Currently, early mediation is rare because it requires thinking outside the box, something the rigid and forensic process known as the law does not encourage. Nevertheless, it only takes two things to make early mediation happen: the two attorneys (or parties) who see the benefits of early mediation. Without their vision, the parties may be doomed to draining their bank account, endless months of emotional turmoil, and destroyed relationships.

Every attorney should experience being sued. They will discover what the word “miserable” really means, change the way they counsel their clients, and look for the possibilities of early mediation in every case.

 

For three decades, Sherman Knight was both a licensed architect and attorney, where a good portion of his practice concerned construction defects. He is now retired and owns Knight Dispute Resolution, where he acts as a mediator or arbitrator. He can be reached at sherman@knightdisputeresolution.com.

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