Settlement Is Always Better

From the Blog of Phyllis G. Pollack.

       About a year ago, I was requested to mediate a case that was on appeal. The parties were a real estate agent (“agent”) and the real estate company (“company”) for whom the agent worked. The company had made cash advances to the agent for which the agent had signed promissory notes. When the agent terminated her employment with the company, she still owed the money.
 

      Pursuant to the terms of the agreement, the company sent the claim for collection. When that proved unsuccessful, the company filed a petition for binding arbitration.
 

      During the arbitration proceedings, the agent contended, among other things, by way of a counter-claim that she had been denied one or more commissions lawfully due to her, had been sexually harassed and that during the collection process, the company had violated federal law by reporting to the credit agencies that the debt was valid rather than disputed.
     

        The arbitrator found for the company in all respects. The company then had the petition confirmed by the trial court. The amount of the award against the agent was approximately $80,000.
 

      The agent filed for an appeal from the judgment confirming the arbitration award against her.
     

       At this point, the parties agreed to mediate the matter, and the appellate court sent the matter to me for mediation.
 

      The mediation date was set; the parties submitted their briefs which I reviewed. I also spoke with counsel to learn more about the matter.
     

       On the morning of the mediation, (approximately two hours prior to its start), I received an e-mail from the office of the attorney for the agent; the agent could not make it as she was sick. she had been to a doctor and was under doctor’s “orders” not to do anything stressful for a week or more.
     

      Needless to say, subsequent attempts to reschedule this mediation were futile. Reading between the lines, I gathered that the agent did not really want to attend the mediation and confront the issues. Evidently (and as I was told) she had done this with other hearings in this matter; she was  stalling and delaying to avoid “dealing” with things.
 

      So. . .the appeal proceeded along. I recently received a copy of the unpublished appellate decision. The agent lost. The appellate court confirmed the arbitration award, finding no error.
     

      To stay the enforcement of this judgment in California, the agent had to post a bond of one-and- a half times the judgment or, approximately $120,000.
 

      As a result of the appellate decision, the agent now faces an adverse judgment of approximately $80,000 plus approximately $12,000 in accrued post-judgment interest (at 10% per year) plus the costs of the appeal and the attorneys’ fees of not only her own attorney but those of the company’s as well since it was the prevailing party. And to collect (once the matter is remitted to the trial court), the company simply has to file a motion in the trial court to be paid from the appeal bond.
 

      Why do I entitle this blog “Settlement Is Always Better?” Because, if the agent had been willing to attend mediation and confront the issues, in all likelihood, the company would have been flexible in the amount it would have accepted in settlement and in the payment terms. It probably would have agreed to accept less than the approximately $80,000 due and to allow the agent to pay it over a period of time. In short, the agent could have resolved this matter for a lot less money, in a lot less time and with a lot less anxiety, heartache and angst. (She, also would not have an adverse judgment appearing on her credit report).
 

      While we all have demons that we do not like to face and at times, avoid facing, in the long run, it is better and often cheaper to face them sooner rather than later. It is usually less costly and more satisfying to participate in the resolution of our own disputes rather than to avoid and delay, thereby allowing strangers (here, an appellate court) to make the decision for us.
     

       . . . Just something to think about.  

                        author

Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE >

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