GOING THROUGH THE MOTION

A high-school student had sued the school district after suffering injuries during football practice. The school district had filed a Motion for Summary Judgment (“the Motion”) and was certain it would prevail. Over objection, the court had “ordered” the parties to engage in mediation. Understandably, defendant was an unwilling participant in the mediation process and refused to consider making anything other than a “nuisance-value” offer while the Motion was still pending.

Rather than send the parties packing, I decided to explore whether the Motion — instead of being an impediment to resolution — might be used as the actual mechanism to achieve resolution. After all, if the Motion was heard and granted, plaintiff’s only recourse thereafter would be a costly and time-consuming appeal; if the Motion was heard and denied, defendant’s bargaining position thereafter would be severely compromised.

Given the uncertainty generated by the Motion itself, it struck me there might be a creative way to manage each party’s risk by crafting a settlement whose monetary terms were literally contingent upon the outcome of the Motion.

After further negotiations, the parties reached an agreement that the court would hear the Motion as scheduled, but would not be informed that the parties had negotiated a settlement whose terms were contingent upon the outcome of the Motion.

The parties further agreed that defendant would pay plaintiff “X” dollars if the Motion was granted, thereby guaranteeing plaintiff would at least recover something to compensate him for his injuries, and that defendant would pay plaintiff “Y” dollars if the Motion was denied, thereby capping defendant’s exposure while assuring it would never face a costly and uncertain trial.

Several weeks later, the Motion was heard and — to defendant’s surprise — denied. Admittedly, plaintiff received less than the full value of his claim, but he had successfully insured against the very real risk of an adverse outcome that might have left him with nothing.

Sometimes, the parties may just be “going through the motions” if they engage in mediation while a Motion for Summary Judgment is pending, but sometimes actually going through the Motion can be an effective way to reach a settlement.

As always, I would be pleased to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.

Best regards . . .

Floyd J. Siegal

Comments are closed.

Subscribe to Resolution Strategies

To subscribe to Resolution Strategies, simply add your email below. A confirmation email will be sent to you!