One of the first goals of a mediator is to gain the trust of the parties; to convince them to put aside their fears and anxieties about even attending the mediation and about what might occur there.

       Sometimes, the best way to learn how to gain someone’s trust is to be put into the very position of having to trust someone else. That is, similar to a doctor becoming a patient to learn how a patient feels, the mediator should become one who suddenly must place her trust in someone else.

       Serendipitously, I had such an experience a few weekends ago. My husband and I were going out of town (by car) for the weekend and somehow I managed to leave my wallet on the kitchen counter. I realized this about an hour later, when it was too late to turn the car around to retrieve it.  Suddenly, I was in a panic and felt very helpless: I had no cash, no debit card, no credit card, no check book, and no driver’s license! (It was far from being a “priceless” moment!) If on my own, I was absolutely destitute, and could not even drive!

       But, after a few moments, I viewed the situation  very differently. I felt “liberated” as though I did not have to worry about anything such as driving or paying for anything. Everything would be taken care of. . . by someone else.

       Why? Trust. I trusted my husband to take care of everything for the whole weekend. Any errands that had to be run, he would have to go with me as I could neither drive nor pay for anything. My schedule was totally in his hands for the weekend. I had to totally rely on him. And, I trusted him completely. 

       To say the least, it was an interesting and unique feeling. But, through it, I learned what it was like to have to totally rely on someone else: how vulnerable it can feel to have your daily schedule ( or fate?) determined by someone else. I also learned a lot about trust and working cooperatively to get things done. The experience highlighted many things I had taken for granted and thus, never thought much about. Pretty much like when the doctor becomes the patient, she sees things from a whole new perspective.

       So, when parties come to my mediation, I now more fully understand the vulnerability they probably feel because of the new, strange and thus uncomfortable situation in which they find themselves. My goal is to “liberate” them from their momentary panic if not vulnerability by gaining their trust. My goal is to convince them that during the mediation, they can totally rely on me, and that is okay to do so: nothing “bad” will happen.

       If you want to learn a lesson in trust, put yourself in a vulnerable position. I did, totally by accident, and am a much wiser person for it!

       . . . Just something to think about.

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       In many mediations, I have faced the dilemma in which one side provides crucial but confidential information to me in a separate session (i.e. caucus), admonishing me “not to tell the other side.” I sense that the information is extremely relevant and may make the difference in reaching a settlement. But, I know “my lips are sealed” unless I can convince that party to change her mind and either allow me to disclose the information or have her do so directly to the other side! Do I have any other options?

       This question was recently answered in ethics opinion SODR-2009-2 issued by the ABA Section of Dispute Resolution Committee on Mediator Ethical Guidance (“Committee”). The scenario posed was quite similar to the one described above:

      “I’ve been involved in two separate mediations where an employer has sued a former employee for the unauthorized taking and/or duplication of the employer’s sensitive electronic data shortly before the employee left his job with the employer. In the course of speaking with both employers in separate caucus, I’ve been advised, in a rather off-hand manner, that the employers have initiated some form of referral of the case for prosecution to the police/district attorney regarding the alleged unauthorized taking/duplication by the employee by the employer’s sensitive electronic data.”

      . . .

      “The dilemma for me, as a mediator, having been made privy to this very sensitive information, is what, if anything, I should say on this subject to the former employee and his counsel?. . .” (Id. at p. 1).

       As might be expected, the Committee responded by essentially stating, “not much.” Pursuant to Standard V(B) governing “Confidentiality” of  the Model Standards of Conduct for Mediators (2005), the Committee noted that the mediator is precluded from “directly or indirectly” (emphasis original) disclosing confidential caucus information either to the employee or his counsel without the consent of the employer. Thus, because of the prohibition against even “indirect” disclosure, the mediator is prohibited from conveying the information through a series of “reality testing” questions, that indirectly or impliedly suggest that criminal prosecution might be an issue. [eg: “Do you know whether your former employer has referred these types of cases to the police or prosecutor for possible criminal prosecution” (Id. at p. 6)]? Rather, the mediator may ask only very generalized “reality testing” questions such as, “if you do not settle this matter in mediation, what likely options exist for both you and the employer to resolve the issues arising from your departure from  your job?” Or: “What risks do you face if you do not settle this case?” (Id.).

       Of further concern to the mediator who requested this opinion was her “very strong sense of moral obligation to the employee to alert him to a very real risk of a possible forthcoming criminal prosecution. . .” (Id.). The mediator was concerned that the employee could not make a “free and informed choice. . . as to . . . outcome” without knowing all the facts, that is, the possible criminal prosecution.

       The Committee responded by noting that Standard I(A)(2) acknowledges that the “mediator cannot personally ensure that each party has made free and informed choices.” (Id. at  p. 7). If the party is represented by counsel, that obligation falls upon counsel. If the party is not represented by counsel, then Standard I(A)(2) advises the mediator to point out “the importance of consulting other professionals to help them make informed choices” and allows the mediator to postpone the mediation for that purpose. (Id.)

       Alternatively, the Committee noted that Standard VI (A)(4) governing the Quality of the Process encourages the mediator to “promote honesty and candor between and among all participants.” This allows the mediator to encourage the employer to reveal the referral for potential criminal prosecution either directly or through the mediator.

       In sum, the Committee concluded that caucus communications remain confidential unless the Model Standards provide otherwise. Where the mediator is concerned that the other party is not making an informed decision due to the lack of crucial but confidential information, the only technique the mediator may use is very generalized “reality testing” questions and hope that the party’s counsel  has been astute enough to pick up on and review all the issues with her client.

       . . . Just something to think about.

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As many of my readers are aware, I mediate “lemon law” cases or matters brought under California’s Song-Beverly Consumer Warranty Act (Civ. Code §1790 et seq.). (“Song-Beverly Act”).

On June 8, 2009, Division Three of the Fourth Appellate District (i.e. Orange County) for the Court of Appeal of the State of California decided two appeals involving August B. Doppes and his 2001 Bentley Arnage.
The first appeal, Doppes v. Bentley Motors, Inc., Case No. G038734, focused more on the discovery abuses by Bentley’s counsel than the breach of warranty issues. But, it is interesting because the appellate court, in essence, imposed a civil penalty and granted the fraud claim as sanctions for discovery abuse. Further, the appellate court reaffirmed the lodestar approach in awarding attorneys’ fees.

The second appeal, Doppes v. Bentley Motors, Inc., Case No. G039922, involved the award of prejudgment interest on the repurchase of the Bentley under the Song-Beverly Act. But, more on this later.

In the first appeal (Case No. G038734), the issue before the appellate court was whether the “trial court [had] abused its discretion by failing to impose terminating sanctions against defendant for misuses of the discovery process.” (Id. at 2). The appellate court answered “yes,” finding that Bentley had engaged in “repeated and egregious violations of the discovery laws that not only impaired plaintiff’s rights but threatened the integrity of the judicial process.” (Id. at 2).

It seems that in April 2002, plaintiff August B. Doppes purchased a 2001 Bentley Arnage that had an “obnoxious odor” in the interior, causing the automobile to be out of service for 171 days. When Doppes demanded that Bentley replace or repurchase the vehicle in accordance with the Song-Beverly Act, Bentley refused. During the course of the litigation, Bentley withheld documents pertaining to its extensive knowledge about this odor concern, the other customer complaints, the fact that the odor emanated from corrosion protection wax, was prevalent in all of its model year 2001 four door cars, and related issues. (Id. at 4). Although, internal documents revealed that as early as June 2001, Bentley was aware of this concern, during discovery, it failed to provide such crucial but potentially damaging documents and continued to stonewall to the time of trial. However, the discovery referee, out of moderation, recommended issue sanctions rather than terminating sanctions. But, during trial, it became apparent that Bentley had engaged in further stonewalling and “hide the ball” tactics by not producing crucial e-mails and customer complaint files. Yet, the trial court still hesitated to issue terminating sanctions and allowed the jury to decide thecase.

Thereafter, the jury found that Bentley had violated the Song-Beverly Act and had concealed a material fact but found that neither the violation nor the concealment had been intentional. The jury also found that Bentley breached its express and implied warranties. The jury awarded Doppes the sum of $214,300 as reimbursement for a new vehicle  plus $100,000 for breach of the express and implied warranties. The court entered judgment for Doppes for $214,300 concurrent with the return of the vehicle to Bentley but to avoid double recovery, did not enter a judgment for the additional $100,000. The court also awarded prejudgment interest at seven percent per annum. (More on this later.)

After detailing the discovery abuses, the appellate court affirmed the judgment under the Song-Beverly Act and breach of express and implied warranty claims. But, as sanctions for the discovery abuse, it reversed the finding by the jury that Bentley did not commit fraud and did not intentionally violate the Song-Beverly Act. It remanded with directions, (1) to strike Bentley’s answer and to enter Bentley’s default on the fraud cause of action and to hold a default judgment prove-up hearing, and (2) to also enter a finding that Bentley intentionally violated the Song-Beverly Act such that civil penalties (typically two times the amount of actual damages) (California Civil Code §1794(c)) and other relief may be imposed against it at a subsequent hearing.

In the last part of its opinion, the appellate court discussed the award of attorneys’ fees noting that under the Song-Beverly Act, a prevailing buyer is entitled to recover attorney fees “reasonably incurred” and based on “actual time expended”. California Civil Code §1794(d). The court noted that, in essence, this statute is compatible with the lodestar adjustment method of calculating fees which requires “the trial court first to determine a touchstone or lodestar figure based on actual time spent and reasonable hourly compensation for each attorney.” (Id. at 37). Using this formula, the court determined that, in the main, the trial court did not abuse its discretion in awarding fees.

In the companion appeal, Doppes v. Bentley Motors, Case No. G039922, the appellate court affirmed the award of prejudgment interest at the rate of 7% per annum from the date of purchase in April 2002 to the date of entry of judgment in March 2007. Bentley appealed arguing that the Song-Beverly Act does not provide for the award of prejudgment interest, citing Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal. App. 4th 718 (Duale) in support.

The appellate court distinguished Duale because there, the amount of damages owed to plaintiffs was not calculable prior to trial. The appellate court reasoned that the Duale appellate court “. . . did not hold prejudgment interest may never be recovered in a Song-Beverly Consumer Warranty Act case, but only that prejudgment interest was unrecoverable under section 3287 [Civil Code §3287] in this particular case because, under the facts, the amount of damages could not be resolved except by verdict.” (Id. at 7).

In contrast, in this case, the amount was known - $214,300 – prior to verdict. Noting that there is nothing in the Song-Beverly Act that bars recovery of prejudgment interest, the appellate court determined that under Civil Code §3287,  plaintiff was entitled to prejudgment interest.
With these two opinions, the appellate court provides much food for thought, including the use of the Song-Beverly Act’s civil penalty provisions as a “terminating” sanction for discovery abuses and the allowance of prejudgment interest from the date of purchase on a vehicle that is repurchased under this Act. Without doubt, these points will be much discussed within the “lemon law” community.

. . . Just something to think about.

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       An important aspect of any dispute, be it one filed in court or simply a neighborly spat, is the expectations of the parties. Are they unrealistic or do the parties know exactly what is what and what they can expect as part of a resolution?

       When the expectations of the parties are not realistic because no one has discussed the realties with them, any attempt at alternative dispute resolution will end in disaster.

       This, again, happened in one of my mediations recently. It involved a case filed in court. Plaintiff hired an attorney to prosecute her claim against defendant. The plaintiff’s attorney duly filed and served the complaint. After the defendant was served, it turned the complaint over to its counsel who analyzed it and concluded that the otherwise applicable state statutes did not apply. Plaintiff did not have a cognizable claim. Defense counsel wrote plaintiff’s counsel to share her analysis but did not receive a response. So, several weeks later, defense counsel, again, wrote plaintiff’s counsel, sharing her analysis. Again, no response.

       The matter meandered along. Finally, the court ordered that the parties attend mediation. So, the parties scheduled a mediation with me. Defense counsel sent me a brief setting out the same analysis that she had given plaintiff’s counsel on several occasions over the past few months: plaintiff had no claim cognizable under state law.

       I started the mediation with a joint session. Plaintiff explained the substantive issues. Then defense counsel presented her analysis. As she spoke, I could see from plaintiff’s face that this was all new to her; she had not been told that her case was subject to dismissal because the otherwise applicable statutes were not applicable. After some discussion on this point, the parties broke into separate sessions.

       When I met separately with plaintiff, I could see she was clearly perturbed. She had come to the mediation with a particular mindset in terms of what she would accept to settle her case, only to find out for the first time at the mediation, that she had no case, and that any settlement would involve minimal amounts, nowhere near the amount she had in mind when she walked into the mediation.

       The mediation went downhill from there. Plaintiff needed to process the new information and until she accomplished this, she was unable to accept the “new” situation and make a demand. Eventually, she got so angry at the situation, that she stormed out of the mediation, slamming the door behind her.

       Several months ago, I read a book entitled The Science of Settlement by Barry Goldman, MA, JD (ALI ABA 2007) in which he discusses all of the psychological factors involved in negotiations. He devotes an entire chapter to “Preparation”, discussing the myriad of mind games we each play with ourselves in negotiating with others. His opening paragraphs are on point:

      “Negotiating a deal is like painting a room.. It’s all about the prep. The part where you put the paint on the walls is easy. It’s the scraping and sanding and taping that takes the time and effort.”

      “Negotiating without preparation – trusting your instincts or “going with the flow” – is a dreadful mistake. . . .”

      “Obviously, you need to know your file. . . . “The best way to sound like you know what you are talking about is to know what you’re talking about.” . . . .”  (P. 9)

       On several occasions in the past, I have written about the importance of preparing for mediation. In each blog, I have stressed that the parties need to be fully informed about all of the issues and the consequences of any decisions made at mediation, including acceptance or rejection of offers and demands. I have noted that each party needs to know the exact parameters of the dispute, and thus the potential existence or non-existence of liability and thus the possibility for damages. I have suggested that prior to a mediation, a party needs to learn what mediation is all about, what to expect, to review the issues and to analyze them. I have implored that prior to the mediation, investigate the facts and law and assess the strengths and weaknesses of not only your position but that of the other party. Step into the shoes of the other party and view the dispute from her vantage point. How does your side of the dispute look from the other person’s side of the table?

       All too often, I have witnessed parties attend mediation, believing that settlement is possible without any real knowledge of the facts and the law. Their expectations are unrealistic. As Mr. Goldman notes above, it is a “dreadful mistake” to approach mediation by simply “winging it.” Parties need to mentally process issues, i.e., to prepare. Our minds must work through the issues to reach a conclusion. We cannot just walk into a mediation, be given a reality check by the mediator or the other party and mentally process such disparate information  so quickly that we are capable of accepting a totally different reality in a nanosecond. Our psyches will not allow us to suddenly accept a settlement proposal that we thought to be anathema an hour earlier. We are not computers: we are humans and so require time to absorb and accept new ideas. Without preparation, unrealistic expectations will exist and will be the recipe for failure to reach resolution at a mediation. The effort will be futile and a valuable opportunity will be wasted.

       So once again, I urge - - do not take mediation lightly. Come prepared and you will have a great chance at settling. Come unprepared and you will be doomed to failure.
 

      . . . Just something to think about. . . .

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       I am a baby boomer which means that my mother is a member of The Greatest Generation. Like other members of that generation, my mother is up in years so that us baby boomers must now be the “parents” to our parents.

       Last week, my siblings and I had to be “parents” and make a lifecycle decision for our mother. We placed her into an assisted living facility so that she would be safe and secure from her own frailities and from what life can and will throw at a very senior citizen.

       Needless to say, it was a very difficult task. We were moving our mother from the only home she has known for 60 years into a new environment that she is unable to totally grasp due to the frailities that come with age. She does not understand that we are doing this to keep her safe and secure, but, rather she is scared and frightened. Her life, as she knows and can still grasp it, is being turned upside down for no “apparent” reason.

       So, she was driven to her new “home” without warning, She immediately recognized what it was as we had been there many times to visit my father before he passed on. She refused to get out  of  the car. All of our cajoling – both that of my siblings, myself, and the staff were for naught. This scene went on for many minutes.

       After awhile, one of the residents, a gentlemen with southern charm (whom I will call Mr. Jones) came out and started conversing with our mother. He explained his circumstances; how he, too, had come to be there against his better instincts, but that he had found out in the short while that he had been there, what a nice place it was: the staff was great, the other residents were friendly, there were lots of activities and things to do and in sum, everything would be fine. He implored her just to walk through the door and take a look; she did not have to stay but at least give it a chance, a try. He asked if she needed help and made it easy for her by having a wheel chair brought and positioned for her to easily get into, all the while imploring that there is no harm in just taking a “look” and seeing what was inside the front door. With Mr. Jones’ kind and sensitive words to my mother, she finally got into the wheel chair and allowed herself to be wheeled inside and take a look at her apartment.

       On May 1, 2009, I wrote a blog entitled “Just a Mediator” in which I described the many roles of a mediator, the first of which is to gain the trust of the parties and help them overcome their initial fears and anxiety about even attending a mediation. The second role is to manage their emotions.

       Mr. Jones did just these things. By being a resident himself, he conveyed the empathy that I, and my siblings, all baby boomers, could not. As a fellow member of the Greatest Generation, he could relate to her in ways that I and my siblings could not. He could and did use that common experience (“been there, done that”) to gain my mother’s trust and to calm her fears and anxieties about what awaited her on the other side of the front door. He attempted to manage her emotions by telling her that he, too, unwillingly left his home, did not like it one bit but understood that coming to the facility was the right thing to do. He tried to convey to her that he truly and deeply “knew” how she felt because he, too, had traveled the same “road” to arrive at this same place.

       Mr. Jones’ words struck me. I remained silent and physically backed away, letting Mr. Jones use his commonality to build trust with my mother , calm her fears and anxieties, and convince her that it was okay to go inside and, at least, take a look.

       I know that mediation skills are useful in everyday life, and I have often used my own life experiences to build commonality, and trust with parties, but, to see it played out with such southern charm, sincerity and empathy was something entirely else. In all of my mediation training, I have not seen these skills so well displayed and exemplified. They are skills that only a member of The Greatest Generation could have. Us baby boomers aren’t there yet.

       Life is a lesson, and I just learned one.

       . . . Just something to think about.

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