Sanns Mediation World of ADR

I have written before about the power and effectiveness of a sincere apology to help resolve a dispute. Now from West Virginia, a completely different way to resolve a dispute: a slap.

Stewart Altmeyer, a prosecutor in Kanawha County, was suspended without pay for one month for agreeing to drop a larceny charge in exchange for allowing the alleged victim to slap the defendant.

In a mediation, I (or most of my colleagues) do not allow violence to be the outcome of any mediation.

Tags: Commercial Mediation, Divorce Mediation and Law, Off Beat // Add Comment »

New York is the only state that does not have a no-fault cause of action for divorce.  A cause of action is what needs to be proven for your divorce action to prevail.  Most states have an irreconcilable differences cause of action, where one side does not have to prove the other side committed some unsavory act such as adultery or cruel treatment.

New York currently has four fault-based grounds for divorce:

1. Adultery (which is still a criminal offense in the Empire State and hard to prove since you cannot testify against your spouse)
2. Cruel and inhumane treatment (so as to affect the physical or mental health of the charging party such that it is not safe to remain in the marriage)
3. Abandonment (one spouse intentionally leaves the other or refuses sexual relations for more than one year)
4. Incarceration of one spouse for more than 3 years

In addition to these, the parties can agree in a written separation agreement to live apart for one year.  The agreement must contain the terms of the separation and ultimately the divorce.  This is the closest NY comes to no-fault.

Davis v. Davis, a recent NY case stated that mere social abandonment was not sufficient to prove constructive abandonment.  The wife in this case did not plead sexual abandonment.   The appellate court saw the pleadings as nothing more than a way to get around NY’s lack of a no-fault ground for divorce and that the courts would not usurp the legislature’s power to determine law for the people of New York.

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The case of Anonymous vs. Anonymous (so captioned by the court to protect the identities of all involved) recently asked and answered this question.  This case involved a wife who filed for divorce in November 2008.  The husband filed a counterclaim, alleging that the wife was having an affair.  In February 2009, the court entered a protective order requiring the husband to keep 1000 feet away from the wife’s residence and place of employment (excepting visitation and church attendance). In August 2009, the husband hired a private detective to spy on his wife.  The detective followed her to a hotel where the detective recorded proof that the wife was having an affair with their priest.  The matter became a little more public when the husband told another priest during a confessional of the affair, causing the church to launch an investigation (during which the DVD was given to church officials).  While the wife did not contest the affair, she asserted she was being harassed and that her husband had violated the protective order by hiring the detective.

Family Court Judge Debra J. Kiedaisch ruled that “under the circumstances, the hiring of the private investigator, in and of itself, was not an unlawful intrusion upon the rights of the wife secured by the order of protection.”  She said that the husband had the right to “gather evidence up to the date of trial in defense of the matrimonial action and in support of his own counterclaims.”

“If the husband had the wife followed and recorded … for the purpose of gathering embarrassing material to deliver to her employer with the intention to cause her to lose her employment,” that might rise to “conduct which alarms or seriously annoys another person, and serves no legitimate purpose” — second-degree harassment under New York law — Kiedaisch wrote.

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Filings for arbitration at the Financial Industry Regulatory Authority (FINRA), the self-regulation body of Wall Street, are up 43% in 2009 over the previous year.  Nearly all brokerage agreement specify FINRA arbitration as the only way to resolve a dispute between a client and broker or an employee and broker.  In years where the stock markets are down, arbitration filings tend to increase as investors seek redress for their losses.  The average time from filing to award decreased from 13.0 months in 2008 to 11.5 months in 2009 — a 12% decrease. Investors received a monetary or non-monetary award in 45% of the cases in 2009, up from 37% in 2008.

FINRA also has an mediation program.  Filings in their mediation program were also up (23%) and average turnaround time dropped 33% from 135 days in 2008 to 91 days in 2009.

I arbitrate cases for FINRA, among other bodies.

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Analogies between a finder of fact (a judge or jury) and referees or umpires (the arbiter of a game’s rules) are often made.  It is open to debate whether the analogy firmly holds.  However, it is often interesting to discuss whether any “neutral” decider of an outcome (game rules or rules of law) have biases.

When a party enters the courthouse or arbitration room, each party expects (and hopes) that the person(s) making the decision as to who is “right” is being impartial and fair. It is certainly open to debate how to define fair, which is usually in the eye of the beholder.  Each time I went through arbitration training (to be a private judge), the class is asked to perform an exercise.  The class is broken up into groups of three people.  One person plays the arbitrator, one person the complainant and the other the respondent.  Each group is given the same exact fact pattern and the parties make their cases.  After a specified period of time, the arbitrator makes their ruling which is turned into the person running the training.  Every single time I’ve done the exercise, the distribution of rulings in the room fall out from one  end of the possible spectrum to the other with everything in between.

Why?  Everyone had the same exact case to argue.  Shouldn’t “justice” be consistent?  In reality, several things happen.  First, not every party presents the case the same exact way.  Some people are more effective than others, just as some lawyers are better skilled than others. In a real case, anyone who speaks (lawyers, witnesses) can have good and bad days.  Trials are performances.  Second, every single human being has biases.  We grow up with things we like or don’t like.  We have all had good and bad experiences with things, people and scenarios.  These create the filters through which we see the world.  There is also a theory many attorneys ascribe to which states that whomever the jury or arbitrators likes better in terms of attorneys and litigants will win the case. Likability trumps “rightness”.

Getting back to the sports (referee) analogy, there have been some recent studies showing bias in referees.  And I am not referring to the Tim Donaghys of the world who seek personal gain from their on-the-court rulings.  In the Netherlands, two professors discovered that soccer (the other football) referees are more likely to call ambiguous fouls on taller players.  A study out of England showed that referees favored home teams in their calls, especially in disciplinary sanctions (yellow and red cards).  From the world of Tae Kwon Do, referees tend to award more points to competitors wearing red uniforms.

In the U.S., college basketball referees tend to also favor the home team by calling fewer fouls.  The college refs also try to level the playing field for the teams by issuing “make up” calls, calling more fouls on the team in the lead, and trying to even up the number of fouls between the teams regardless of the aggressiveness of the level of play of each team.  A 2007 study also found that white NBA referees tend to call more fouls on black players than white players.

Even just looking at the games you watch, do you agree with each decision the referee or umpire makes regarding your team?  How about instant replay, the analogy of an appeal in court?  Does the referee get it right even when they have a TV with 20 angles and slow motion to look at each play?  Sometimes not.

So what does all of this tell you?  Try to resolve the case without having someone else decide it for you.  That’s what mediation helps the parties accomplish.  The outcome is on your terms and is unaffected by the biases of others.

Please contact me if you would like to further discuss how mediation can help facilitate a resolution to your lawsuit, divorce or family dispute.

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On January 18, 2010 departing NJ Governor Jon Corzine signed into law bill S2091, which mandates that any palimony agreement must be in writing and with the advice of independent counsel for both parties.  Palimony is the common term for a promise of support by one person to another in a relationship where the parties are not married to each other. This law aims to overturn several court cases which established even implied oral support promises could be enforceable.

Previously, the NJ Supreme Court had established the concept of palimony.  In Devaney v. L’Esperance, 195 N.J. 247 (2008) and in re Estate of Roccamonte, 174 N.J. 381 (2002), the New Jersey Supreme Court upheld the concept of palimony agreements between two unmarried cohabitants.  In Devaney, the court held that “cohabitation is not an essential requirement for a cause of action for palimony, but a marital-type relationship is required.”  In Roccamonte, the court held that an implied promise of support for life is enforceable against the promisor’s (cohabitant’s) estate.  Those decisions are consistent with the court’s prior decision in Kozlowski v. Kozlowski, 80 N.J. 378 (1979), which said a promise of lifetime support by one cohabitant to another in a marital-like relationship would be enforced, if one of the partners was induced to cohabit by the promise.  The court stated the right to such support is found in contract principles and that the contract may be either express or implied.

The takeaway:  if you want palimony in NJ, get it in writing and have it reviewed by your attorney.

Tags: Divorce Mediation and Law // 1 Comment »

I have written previously about how homeowners and lenders can use the court’s foreclosure mediation program to help resolve a foreclosure matter.  Here are a few tips on how homeowners can use the mediation process more effectively:

• Get into the process as early as possible.  Waiting until the morning of the sheriff’s sale is probably too late.  Since the bank will not accept payments while the loan is in arrears, the amount in arrears can drastically increase.  If the homeowner is not saving this money, they will be unable to address the arrears, making a modification impossible.
• Be prepared.  Have all of the documents which have been requested by the bank.  You are trying to prove you are eligible for a loan modification of some sort.  Not having the proper documentation will not help your case.
• Show the lender you can be responsible in trial payments.  Banks will often set up a trial payment plan so that the homeowner can prove financial responsibility to the bank.  Make sure you can make the payments as agreed to.  If you don’t, you will be unlikely to ever be given another chance.  Send any payments by a service which can be tracked (i.e. certified mail, priority mail, Fedex, etc.).
• Be aware that not all homeowners will be able to save their homes.  There are other alternatives for those homeowners rather than going through foreclosure.  The lender may allow you to stay in the home through the end of the school year.  They may be willing to offer cash for the keys.

Remember, the mediation is your one chance to get the bank to discuss solutions for you.  Take advantage of that moment.

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The plaintiff and defendant in a New York medical malpractice lawsuit has come to a putative settlement agreement just before the jury rendered a verdict.  The parties failed to get the settlement on the record prior to the jury verdict and the settlement was invalidated and the verdict upheld.

In 1996, plaintiff Mahmoud Diarassouba underwent surgery to repair a chronic condition in his left knee.  Shortly thereafter, he experienced pain and discomfort in his right knee which he blamed on the surgeon and anesthesiologist for improperly repositioning the right leg during the long operation.  The condition became chronic.  In 2003, a jury found in his favor for $1.5 million.  The verdict was thrown out due to improper admission of some testimony and a retrial ordered.  The case was tried again in 2007 and while the jury deliberated, plaintiff’s counsel advised the defense counsel his client would accept a $150,000 settlement.  Defense counsel agreed.

Moments later, the judge informed the parties that they jury had a verdict awaiting them.  Plaintiff’s counsel asked the judge if the settlement could be read into the record prior to the jury verdict being read.  The judge replied in the negative.  “Once I have a verdict, I take the verdict, and then the parties are free to do what they agreed to,” the judge said. “An agreement is an agreement, counsel.”  Defense counsel remained silent. The verdict rendered by the jury was for $1.45 million.  The defense then moved to enforce the settlement which the judge granted.  Plaintiff appealed.

Last week, the appellate court ruled that the settlement was invalid.  They found that there was no written, agreed to settlement as required by the court rules.  Neither was it placed on the record in open court.  Further appeals are expected.

I have frequently advocated for my clients to settle early in litigation.  Many cases settle on the courthouse steps.  Waiting until the last possible moments to settle is not a wise course of action, as this case illustrates.  Thirteen years later, the parties in this case do not have any resolution.

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Part of being an effective mediator is having a good understanding about how people make decisions.  After all, a mediator is assisting people in making decisions.  We all like to think we are making rational decisions.  However, that is not always the case (despite our best efforts to the contrary).

Professor Daniel Ariely (Duke University and MIT) conducts extensive research on human behavior and has written a fabulous book on this topic, Predictably Irrational.  He looks at how free! really isn’t free and how morality disappears when we’re emotionally (or sexually) aroused.

In game theory, there is a game called the Ultimatum Game.  One person is given an allotment of money, say $1000, and is told to offer a certain portion of it to another person.  If the other person accepts, they both get that amount of money.  If the second person declines, neither party gets the money.  Rationally, the second person should accept anything offered to them as any dollar they receive is more than they had previously. Studies done by Professor Ariely and his collegues have shown that most people will not accept less than 30% of the total pot.

There are a number of theories as to why the second player would act seemingly irrationally.  One is that the second player is making a “fairness” judgment:  it’s not fair that the first player is getting more than 70% of the money thus they should get nothing (while the first player gets nothing either).  Another is that the second player is setting themselves up for a better payout just in case there is a second round of the game (while there is no guarantee that there will be).

To test this further, the experimenters went to a bar where they were likely to find drunken (and hence “more rational” people who focus more on short term goals, versus the longer term goal of a better second round).  They found that most drunks would turn down deals for less than 50% of the money.

There is an interesting parallel to negotiations (and mediation discussions).  Parties to a negotiation often will get lost in the emotions of the conflict and instead of seeing their own best interests are taken care of, they become more interested in “hurting” the other party even though it hurts them as well.  If fighting over a fixed pot of money, anchoring (the first offer made by each side) becomes that much more important.

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Arbitration is an alternative to a court making a decision on an issue in dispute by having an arbitrator, or private judge, make a decision on a matter. The benefits of arbitration include a quicker and less expensive trail to a decision. The disadvantage is that the ruling of the arbitrator cannot be appealed, except on very narrow grounds. Those grounds include an award procured by fraud, corruption, or undue means; evidence of partiality or corruption among the arbitrators; the arbitrator(s) were guilty of misconduct that prejudiced the rights of a party; or the arbitrators exceeded their powers. Some parties try to argue “manifest disregard of the law” as a way to vacate an arbitration award, but this ground is not specifically mentioned in the Federal Arbitration Act (FAA), which governs arbitration award vacature by courts.

The US Supreme Court recently ruled in Hall Street Associates LLC v. Mattel Inc. that manifest disregard is not among the grounds for vacature and thus cannot be used to vacate an award of an arbitrator — even if the parties agree to allow this ground for vacature by a court in their private arbitration agreement.

In November 2009, the 10th Circuit handed down an opinion which not only upheld Hall Street, but also awarded counsel fees as a sanction to the respondent of the appeal. The case is DMA International Inc. v. QWest Communications International, Inc. The court said, in part, “[U]njustified, protracted attempts to vacate arbitration awards destroy the ‘promise of arbitration’ and will not be tolerated….Thus, one who ‘assumes a never-say-die attitude and drags the dispute through the court system without an objectively reasonable belief that it will prevail’ does so at the risk of being sanctioned.”

The take-away: understand that an arbitrator’s award is likely final and has limited grounds for appealing a decision you do not agree with. If you want to limit your risk, build in a high-low scenario which limits awards in both directions or an upside-downside.

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