Suits, settlements – attorneys offer advice for win-win case | Legal Affairs
Lawsuits can be complex and involve a series of moves from both parties. A plaintiff first needs to consider whether a lawsuit is worth pursuing, then be prepared for responses such as counterclaims and results such as settlements.
Jay Kelley, managing partner at Elk & Elk in Mayfield Heights; Steve Jett, litigation partner at Buckingham Doolittle & Burroughs in Cleveland and Akron; Alex Gertsburg, managing partner at Gertsburg Licata in Brooklyn Heights; and Brian Eisen, president of The Eisen Law Firm in Beachwood, discussed these common aspects of lawsuits.
“Two things are important,” Kelley said of what to keep in mind when considering pursuing a lawsuit. “First is timing. They have to make certain that they’re aware that each claim has its own time limit for being brought, so you want to make sure you consult someone sooner rather than later.”
The second important thing to keep in mind is what the loss or damage is that one is looking to replace, he said. A person should be certain that the value of this loss justifies a lawsuit, he added.
Kelley
Kelley recommended that when meeting with an attorney to discuss whether a lawsuit is worth filing, a client should ask about the attorney’s experience with their specific type of case.
“Make certain that the individual has experience handling the specific claim that you are inquiring about,” he advised.
Kelley said clients should find out what the available economic recoveries are for things like wage loss, medical bills or property damage; and what the legal fees and expenses are.
“The most common reason for a lawsuit that we see is people feel like they don’t know exactly what happened when it involves medical malpractice,” he said. “They come in with investments in an unanswered question as to ‘How did this unfortunate situation come to be?’”
Though it doesn’t always seem fair, people may have to make the “difficult” decision not to pursue a lawsuit in circumstances where the possible recoveries do not exceed the costs of hiring experts, he explained.
“It may not make sense, sometimes, to pursue that case because you’re going to spend more in pursuit of the file than the client can take back, especially after paying for their medical bills and things,” Kelley said.
Jett
Jett said a counterclaim is part of an answer to a complaint.
“When you’re sued, the first filing is the complaint and then the response to that can either be what’s known as a 12(b)(6) motion to dismiss, or it can be an answer, or it can be an answer and a counterclaim,” he explained.
There are two types of counterclaims, Jett said. The first is a compulsory counterclaim, which arises out of the same facts and circumstances as the original complaint.
[READ: Firms outline what they look for when making hires]“If you have a claim against the plaintiff that arises out of the same facts and circumstances as those alleged in the complaint, then you have to bring it as a compulsory counterclaim or you lose it,” he said.
The second type is a permissive counterclaim, Jett said. This comes about if there is a situation in which someone is sued, but they have an unrelated claim, or a claim that is related but not as “focus-ly” related as a compulsory counterclaim.
“The goal of the courts and the rules is to try to get everything resolved in one case, as opposed to piece dealing it,” he said. “So that’s why you have the counterclaim.”
There are a myriad of claims, both contractual and tort claims, that a person might raise in a counterclaim, he pointed out.
“One party sues another party for breach of contract and then the defendant in the case will say, ‘Well, wait a minute, I didn’t breach the contract. You did,’” Jett said. “That happens more often than you think and so I will file a counterclaim against the plaintiff and say, ‘No, that wasn’t me that breached the contract. It was you that breached the contract.’”
A defendant might file a counterclaim because they don’t want to lose the claim, he said. They may assert a counterclaim as a litigation strategy.
“Counterclaims can be very valuable tools, not only because they’re claims that you want to assert and they’re valuable to you monetarily or otherwise, but there might also be strategic reasons for asserting a counterclaim,” Jett said.
Gertsburg
Gertsburg said a settlement is an agreement by disputing parties to resolve their dispute amicably.
“I suppose it’s possible for there to be a settlement agreement to resolve a potential dispute that hasn’t risen yet but which the parties believe may arise at some point in the future, so a release of claims would be something like that,” he noted. “But, in most cases, there’s an active dispute and the parties are working to resolve it through a settlement agreement.”
The most common reasons why settlement agreements are reached are logic and pragmatism, he said.
“The enemy of a good settlement agreement is irrationality and emotions, so what drives settlements are the parties getting cool-headed and realizing they want to save money and save time and energy and avoid distraction,” he explained.
Litigation is very public, Gertsburg pointed out. The accusations appear in public records that anyone can find by going to the clerk of courts or conducting an online search. This being available to the public is, in itself, distracting and stressful.
“The parties, when they are smart, they want to end that,” he said. “There’s the uncertainty that comes from litigation. When you are fighting with someone in a court, you are submitting your dispute to a judge and a jury. The judge may not know anything about your industry. The jury may not know anything about the industry, about the parties, about the nuances of the dispute. So, submitting your dispute to a group of strangers and hoping that they get to the right result is inherently uncertain.”
With a settlement agreement, one buys certainty and peace, he noted.
“It may not be a perfect peace,” Gertsburg said. “I used to work for Judge (John) Manos, who’s probably the judge with the greatest reputation in Cleveland history, and he used to tell me, ‘Alex, the best settlement agreements are the ones where both parties walk away unhappy.’”
What gets both parties to reach the settlement agreement is the logic that, with the settlement agreement, they are buying peace and certainty, and can get back to their everyday lives, he said.
“The biggest reason that parties settle is to stop bleeding money,” he pointed out. “Litigation is like a casino. The longer you’re gambling, the more you’re spending money, or losing money. Litigation is really no different. The longer you’re in it, the more you’re spending on legal fees, on witness fees, on documents that have to get reproduced and distributed. All the costs of litigation just keep rolling the longer you’re in it.”
Aside from uncertainty, other contributing factors to parties reaching a settlement agreement are the damages at the end of the case, he said.
“Depending on which side of the ‘V’ you’re on, the versus, you don’t know whether you’re going to be getting the money that you think you’re getting if you’re the plaintiff and you won’t know how much you may be losing if you’re the defendant,” Gertsburg said. “So putting a cap on that, stopping the bleeding and stopping the uncertainty, all goes into the reasons for settling the matter.”
Eisen
Eisen said a settlement is a voluntary agreement to end a lawsuit and each side gives the other something of value.
“Most often, one side pays the other money and the other side drops the lawsuit and agrees never to sue again for the same conduct,” he said. “It is often said that the mark of a good settlement is that both sides are a little unhappy.”
The primary advantage of a settlement is control, he noted. The parties control the outcome, rather than leaving the fate of a case up to jurors who are strangers to them. The uncertainty of what jurors might do is the driving force behind most settlements.
“With apologies to Forrest Gump, a jury is like a box of chocolates – you never know what you’re gonna get,” Eisen said. “A jury trial with an uncertain outcome, however, is often better than a certain settlement that does not substantially achieve the client’s key goals.”
In most cases, and specifically with medical negligence, most plaintiffs are looking for the “three A’s,” which are answers about what happened to them or their loved one, accountability for those whose carelessness caused an injury, and action so the same thing doesn’t happen to someone else, he explained.
He advised that sometimes the best way to achieve a favorable settlement is to ignore a settlement. When one focuses on preparing a case for the courtroom, once it is ready to go, it makes their settlement position stronger and usually leads to more pleasant terms.
“Having just finished leading a family seder, the concept of dayenu is fresh in my mind,” Eisen said. “Dayenu roughly means ‘it would have been enough.’ If God had brought us out of Egypt, but not carried out judgments against the Egyptians, dayenu – it would have been enough. Settlements are often reached when the parties, and their lawyers, stop thinking about getting everything they want and start thinking about what would be enough.”
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