This story is yet another cautionary tale of a posturing attorney, showing that such tactics are unnecessary and unsupportable.
It can be hard for some to view a court dispute with the dispassionate eye of a business person looking only at the bottom line. Some attorneys, intentionally or not, fuel the litigation fever with unrealistic promises of what can be accomplished. I have suggested repeatedly here and elsewhere that when an offer of a walk-away comes, an attorney and his client should take a very hard look at that offer. The tendency is to say, “if I was willing to walk away, I never would have sued in the first place.” But litigation is fluid and changing, and while it might have made perfect sense for a party to file an action to, say, fight over ownership of a business, that may no longer be the case if the business has cratered in the interim or you went off and started a new business. (At a minimum, the moment opposing counsel sees that I am representing the other side, they should inform their client to immediately dismiss. Just saying.)
This was a sad case, involving two brothers and business partners (we’ll call them “Brother P” and “Brother D”) fighting over ownership of a restaurant. When the client, Brother D, came to us, the court case was already very old, the business had died, and the parties had reached a settlement agreement that should have disposed of the action. Our client had already agreed to pay money to settle the case, in exchange for ownership of the restaurant, but the other side was required to dismiss the complaint and that had not been done. As I said, the restaurant was already dead, but our client had opened in a new location, and Brother P was now making claims against the new restaurant.
From its inception, the case made almost no sense. Brother D was the heart of the business. He was the cook, and the restaurant was so popular only because he was using recipes passed down from their mother. Brother P was a silent partner, and had no knowledge of the food business or the recipes being used. The restaurant was a money maker, so Brother P was reasonable in wanting to walk away with some money, but he had leverage, since the restaurant really could not run without Brother D.
We were retained, and immediately filed a cross-complaint seeking to force Brother P to honor the settlement agreement and dismiss the complaint. But we offered to settle immediately under new terms. Because Brother P had never dismissed the complaint, the matter had drug on and Brother D had incurred additional attorney fees. We also saw no reason why our client should be paying anything to the other side since they had breached the agreement, so we took the position that money was no longer on the table. “Just dismiss the complaint and walk away,” we told opposing counsel. But she refused to do the right thing, claiming she was going to get a multi-million dollar judgment against our client. She ran up significant attorney fees for her client, seeking a highly unlikely judgment.
The case then went to a second settlement conference. We advised the judge we were willing to walk away if Brother P would just dismiss the action. Opposing counsel was outraged. She advised the judge that she was going to win millions of dollars for her client, and that any suggestion that her client would ever dismiss was ridiculous. She stormed out of the settlement discussions, and ran up more attorney fees for her client.
The tactics she employed were so ridiculous. Early on, when he was still trying to placate his brother, Brother D had stipulated that he would not use the same recipes in his new restaurant that had been used in the old restaurant. Afterwards, counsel for Brother P ran into court seeking a contempt order, claiming that Brother D had violated the stipulation. Her evidence, you ask? (Thanks for engaging.)
She produced a declaration from a witness, claiming that he had visited the new restaurant, and the food tasted just like the food had tasted at the old restaurant. But she failed to realize that I would be afforded the opportunity to cross-examine the alleged witness on his declaration.
“Can you describe the décor at the restaurant?”
“Is there a stage in the restaurant?”
“I don’t recall.”
“What did you order at the restaurant?”
“You ordered that off the menu?”
“And it tasted just like the lasagna at the old restaurant?”
“Have you had lasagna at other restaurants?”
“Doesn’t lasagna taste pretty similar, regardless of the restaurant?”
“No, only at these two restaurants. I could tell he used the same recipe.”
There was one big problem with this testimony, aside from his inability to describe the restaurant and the implausibility of the concept that he would be able to tell if the same recipe was used. We entered the restaurant’s menu into evidence, and it turns out the restaurant doesn’t even serve lasagna. It was clear the witness either worked for or was trying to curry favor with Brother P for some reason, and had never eaten at the restaurant. You’d think he would have at least popped in to check the menu in case he was asked about what he had eaten.
On the eve of trial, the posturing attorney realized her case was a POS (or didn’t want the gravy train to end yet), and brought a motion claiming that her client now needed to file a new complaint with new causes of action. She asked for a trial continuance so she could amend the complaint, and then conduct discovery on her latest causes of action. Case law is very clear that motions to amend pretty much must be granted, so the judge followed the law, and the attorney went off to bill more hours on the case.
Stick a fork in it.
On the eve of the new trial date, the attorney again appeared in court, only this time on a motion to be relieved as counsel because her client had run out of money and could not keep up with the invoices from the attorney. The motion was granted, and her client, Brother P, was left to represent himself. With the posturing attorney out of the case, Brother P agreed to dismiss the complaint and walk away with nothing — not the millions of dollars sought by his attorney, or even the amount set forth in the original settlement agreement. The case was resolved exactly as we had proposed on day one, but only after opposing counsel had run up huge fees. I have no way of knowing the exact amount of those fees, but at the time opposing counsel brought her motion to be dismissed, I learned that Brother P owed $150,000 to his attorney, meaning that he had been billed far more than that for the representation.
Our client took little joy from the victory. He was now estranged from his brother, whose health and finances had been devastated from the years of pointless litigation.
This case illustrates a point of negotiation that some posturing attorneys never learn. Posturing is not an effective form of negotiation. If an attorney repeatedly claims that she is going to get a judgment that I know is unobtainable or uncollectible, then it’s not a viable threat. Through reasonable negotiations, the originally agreed settlement amount might have been returned to the table, but making big threats only made negotiations impossible and accomplished nothing but high attorney fees for her client.
I once saw a documentary on divorce attorneys. It was a total hit piece, and one example they used to illustrate how evil divorce attorneys could be was one where the attorneys had billed over $100,000 fighting over custody of the dog. I don’t do family law, and had no dog in the fight (see what I did there?), but I could see the false logic of that example. An attorney can’t bill $100,000 fighting over a dog, unless the attorney has marching orders from the client to spare no expense fighting over the dog.
Thus, while opposing counsel seemingly was scum for the way she handled this case, that scum entry on her score card of life requires an asterisk, because for all I know she was begging the client the entire time to stop spending so much money and just settle the case. Attorneys can offer advice and counseling, but ultimately the client drives the bus. I have fired clients when it was clear to me that they were not acting in their own best interests. But it is not always an easy call to make, since they will then be required to bring in new counsel and incur the expense of getting them up to speed. And the new attorney may have no interest in minimizing the legal costs. Should an attorney take the two additional depositions the client wants him to take, even though he disagrees on the value of doing so, or fire the client, even though that will likely cost the client more than the two depositions?