Mediation of A Lawsuit 2645


Angry DefendantHostile Harry owned several carpet stores and was being sued by a carpet manufacturer for non – payment of a group of invoices. He already felt under pressure because he knew he did owe a certain amount to the carpet manufacturer.

He was tense going in because he feared he would be taken advantage of. He was embarrassed and was uncomfortable in the position he found himself.

He had his guard up and did not want to come out on the short end of things. Harry is the defendant in this case.

The decision maker for the carpet manufacturer (the plaintiff) was George, Vice President of Credit. He felt the facts were in his favor and felt he would win if the case went to trial. He wanted to get as much as possible of the money that was owed to his company, as quickly as possible. He felt no particular need to compromise and did not really care to prevent the case from going to trial. In other words he felt he was “right”.

Harry’s objective was to reduce substantially the amount he owed to the carpet manufacturer and he hoped to receive a payout plan on that reduced amount that he could afford. He also wanted

to recover the ability to buy carpet directly from the manufacturer.

The mediation conference was attended by:

  • Harry, and his attorney, Bob
  • Anne, who was attorney for the plaintiff (the carpet manufacturer)
  • George, Vice President of Credit and the decision maker for the carpet manufacturer,

And of course, me, Jerry Cosby, the Mediator.

Now, my objective, as always, is to facilitate a settlement between the two parties. I am not there to try to
discover which party is “right” or what the “real truth” of the matter is. My job is to try to guide the parties to
a position of compromise and, in the process, help them to remain calm and reasonable so they do not make an
emotional decision that would not be in their best interest.

The Mediation begins….

As the mediation commenced, Harry and his attorney Bob, went over the invoices the carpet manufacturer claimed were delinquent, the copies of which were supplied by plaintiff’s counsel. As they looked them over Harry acted as
though he had never seen them before. He squirmed and was very uncomfortable as they checked each invoice.  His
conversation gave me the impression that the overall economic slump was a large factor in his non – payment.

After an hour of studying the package of invoices Harry pulled out three of them. He claimed these were invalid and
declared he wanted credit for these. This was actually a defensive play on his behalf. He unconsciously was looking
for something to show that he was not entirely in the wrong and he wanted some evidence to show that fact. Harry
was barely holding on to his ability to be reasonable and wanted to find something to divert the pressure off of
himself.

Comes down to one real key issue

The mediation issues began to come down to one particular invoice and transaction. Harry told one scenario about
the invoice, claiming a mistake by the salesman from the carpet manufacturer had cost him money and “loss of face”
with his customers. He said he wanted credit for the carpet and some discount for his costs and “pain & suffering”.

George, from the carpet manufacturer, countered that the salesman claimed no knowledge of the incident, and there
was no record of any complaint by Harry to the manufacturer therefore the invoice was valid. George also went so
far as to characterize Harry’s claim as bogus and he would offer no discounts.

The situation deteriorates and the whole mediation is at risk.

When I told Harry of the VP’s response to his claim, he became very angry and gathered up his things in preparing
to leave. He started cussing and said he was getting shafted and wasn’t going to put up with being called a liar.
He instructed me to tell them to “go to Hell” and began his exit. The whole room immediately became filled with
tension and negative emotion and confusion.

Now Harry was a big man and was used to blustering his way through situations and getting his way. I would guess
that in his business situations Harry often used anger often to manipulate things to go the way HE wanted them to go.

But now he was on MY turf. In a mediation I am in charge. I am the “Doctor” and Harry is the “patient”. If I was
not an experienced Mediator who knew his way around highly volatile situations Harry would have walked out, he
would not have a plan to get this lawsuit behind him, and they would have gone on to trial.

Mediator intervenes and skillfully turns the situation around.

Rather than accepting his actions and words, I calmed him down by saying, “OK Harry, but first let’s sit down here
and look at this thing from your own selfish point of view. Forget about them… let’s see what is best for you”. Now
Harry did not immediately do what I asked but he continued to bluster and challenge me. For a few minutes it was
almost a power play to see which one of us would be stronger and prevail.

In this instance, I would not have been doing my job as Mediator if I had let Harry “take over” and bluster his way
through the situation because of his emotions and ego. Bottom line, we are there to reach an equitable settlement
that both parties can agree to. It really just doesn’t matter who called who a liar, or anything else. That kind of
stuff is really just distractions that will get the mediation off course. It takes a strong mediator to help his
clients get past this and get back to working on a settlement, which is really what we are all after.

It took several minutes of calm but very authoritative conversation with Harry for him to come around to
discussing a plan that was essentially in his own best interest.

Some common emotional drama

It was very predictable that Harry would become angry and overreact at the perceived insult from George. He had
been on the verge of a defensive outburst all day. But, the fact is that Harry knew that he did owe the carpet
manufacturer money on most of the invoices. He just didn’t like the place he found himself in, that of feeling “one
down”, and he was too close to it to find a way to make it right. He really wanted a way out that was fair to him
AND to the carpet manufacturer. But emotions and pride got the better of him for the moment.

That’s when I step in. That’s when my expertise shines and I can help my clients get past their emotions and come
to decisions that are good for them. Without my help, most clients are too involved in the situation and are not
able to move toward a solid, rational solution. And they often make declarations that are not in their best
interests.

I then started talking about the numbers, starting with the amount the carpet manufacturer was demanding. I ask
Harry if he agreed on this amount based on the invoices he had seen and believed to be accurate.  He said he agreed
that he owed this much but not this much, and so on and so on.

At the end of this exercise, we arrived at an amount that he felt was the real amount that he owed, based on his
own calculations and taking into account the credits and discounts he felt he was due. Going through this process
gave him back a sense of power and lessened his feeling of having no control over the situation.

Mediator guides client to reasonable offer of agreement

And I was able to guide him to a reasonable offer of a solution that would be good for him and help him get out of
the trap. And because he came up with the solution  himself  he was emotionally invested in it.

While I was doing that, his attorney was smiling at my response and ability to take control  and turn the situation
around. I then suggested that he let me offer to the other party, his “fair play” amount with terms of payment that
fit his own personal situation.

He did authorize me to go to the plaintiff and present his offer. Even though George felt the carpet manufacturer
was entitled to the entire amount that was due, he also recognized that agreeing to a lesser amount that actually
had the potential of being received from Harry was in the company’s best interest.

And after several negotiations back and forth the parties reached an equitable settlement to which both were in
agreement.

Final Outcome and Results

When the settlement was finally agreed upon and confirmed by both parties, Hostile Harry suddenly transformed into Happy Harry. His dark, serious, defensive countenance became light, open and he was even laughing! He felt like a huge burden had lifted and he felt hope for the future of his business and relationship with the carpet manufacturer. He expressed profound gratitude to me for helping bring about the agreement and admiration for my work as a Mediator .

This is a very common response and outcome. People often start the mediation process in a very serious, ominous mood, believing that “there is no way this case will settle”. Then when I am able to facilitate an agreed settlement they are very pleasantly surprised and relieved and even grateful.

Mediation is a very viable solution to conflict resolution. If you are facing a lawsuit or a potentially litigious situation or if you want to know more about Mediation contact Jerry Cosby at www.TexasMediationGroup.com