The Secrets To Avoiding And, If Necessary, Winning Litigation–Part 2

(This is the second of a two-part article on avoiding and, if necessary, winning litigation.  Part 1 may be found here).

Secret No. 2

The second secret to avoiding and, if necessary, winning, litigation is rather simple to articulate–be prepared.  It is simple to articulate, and difficult to practice.  This is because what I mean by “be prepared” is to be prepared for anything and everything.

Years ago I read Robert J. Ringer’s book “Winning Through Intimidation” and one of his vignettes, in particular, caught my attention.  He was in the real estate business.  He had a large deal he was working on, and when it came down to the closing, the client (or the other party, I can’t remember which) refused to pay him his commission.  The kicker was that there was nothing he could do about it because he did not have a written, signed commission agreement in place.  In short, he was not prepared.

Be prepared for the complaints and be prepared to address them, in a way that is perceived as being fair.  That perception is influenced by three things—have you listened, really listened, to the complaint; have you provided a fair process for the complaint to be aired; and have you addressed the concern rather than the position.  If people feel that you have really listened and really understood where they were coming from, and the process has been fair, they are more than willing to accept a result that might include you saying “No.”  Process fairness appears to be more important in this country than substantive fairness.  There may be a lot of reasons for that, such as problems with agreeing on what would constitute substantive fairness in a particular situation, but the reality is that we focus generally on the fairness of the process and not the result.

Preparedness also helps in winning any litigation in which you might find yourself.  I once represented a trust that held two promissory notes from an individual.  The trust had sold a fully furnished residential piece of property on owner finance terms, but for some reason, the purchaser wanted the furnishings sold separately from the house, so there was a note for the furnishings and a note for the house.  The problem, of course, was that the note for the furnishings was not secured by a deed of trust, but merely a security interest in the furnishings.  So, guess which note the purchaser paid and which one the purchaser defaulted on?  So, knowing that we were probably heading to litigation, I was able to convince the purchaser to sign a forbearance agreement.  That forbearance agreement contained two items that were critical later—an acknowledgment that the note had been properly accelerated and a waiver of any claims up to that point.  Well, of course, we had to sue to collect on the note.  Given that the debtors had already acknowledged they had defaulted and that the note had been properly accelerated, those matters weren’t really an issue.  Moreover, when the defendant counterclaimed for violations of the Texas Debt Collection Act, I was able to show that the action he complained of occurred prior to the date of the forbearance agreement in which he released any claims he had.  So, the DCA claim was simply not viable because he had already released my client from any claims.

You probably have run into this preparation issue many times.  The other side in a negotiation throws you a curveball and you’re like “Where did that come from?”  You should be so prepared that you are NEVER surprised by what someone does because you have already thought it through.  I like to look at it like a flow chart—if I do X, their potential responses will be A or B.  If their response is A, my reply options are C or D.  If their response is B, my reply options are E or F.  You get the picture.  You’re never surprised.  If they do X, you simply implement the response that you HAVE ALREADY THOUGHT ABOUT.    In litigation, there are plenty of attorneys who simply file suit or file some motion within a lawsuit without ever thinking through the potential results and being prepared for each and every one of those potential results.  It’s important to understand what people are going to do, why they are going to do it, and what will put you in the best possible position to respond to their actions.  And if your response is based on your preparation and you can show the other side how their position is not viable, you may potentially talk them out of suing you because they understand that they will not win.