Recently, I posted a blog on the timing of mediation, noting that sometimes a mediation occurs early in the life of a case and before all of the preparatory work has been done resulting in the parties realizing that more discovery is required to reach a compromise. I noted that while the matter does not settle, the mediation is not unsuccessful because it provided the opportunity for the parties to determine the exact issues and missing links of information for investigation, clarification and resolution.

I conducted a mediation recently that exemplifies this point. According to Plaintiff, she was the victim of a “bait and switch”. According to defendant, plaintiff suffered no damages, and thus, has no case- it lacks merit. Needless to say-quite divergent views of the same case!

The facts are simple enough; Plaintiff contacted an automobile broker (not a party to this lawsuit) to locate a high-end automobile. The broker contacted a dealer who advised that it did not have the automobile in stock but could special order it from the manufacturer. According to plaintiff, she faxed a credit card authorization directly to the dealer so that it could charge the deposit against the credit card. According to the defendant dealer, it never received the authorization, and it never obtained any deposit from plaintiff. Plaintiff was told via the broker that it would take 4-6 months for the 2010 model in the color combination she requested to arrive from the manufacturer. Plaintiff agreed to wait.

According to plaintiff, when the vehicle arrived several months later, she was told for the first time that the model year had changed; it would now be a 2011 model; that her requested color combination (i.e. exterior color /interior color) had been discontinued such that the vehicle had a different color interior and exterior than requested and that the price would be higher since it was the new model year. According to defendant, it did not learn that the model year would be different until it arrived at the dealership; the vehicle had the interior and exterior color as requested and the dealer offered the 2011 model to plaintiff at the price of the 2010 vehicle (i.e., it was absorbing the increase in price.).

Plaintiff did not come to the dealership to inspect the vehicle, or drive it. She simply rejected it, through the broker. Both parties agree that Plaintiff and the dealership never spoke directly to each other; all verbal communications were solely through the broker.

Believing that she had been the victim of a “bait and switch” (i.e., the dealer sold plaintiff a vehicle it did not possess, strung her along for 4-6 months and then tried to sell her something different at a higher price), she sued the dealer under California’s Unfair Practices Act (Business and Professions Code Section 17200 et. seq.) and Consumer Legal Remedies Act (Civil Code section 1750 et.seq.).

Defendant scratched its proverbial head, wondering what were Plaintiff’s damages as she admitted in discovery that she had not put down a deposit. Defendant was not willing to pay any sums to compromise as it failed to see the harm. To Defendant, this matter had no merit. To plaintiff, the defendant had acted unfairly and should be enjoined from these “bait and switch” tactics.

It was during the mediation that these divergent facts came out. Neither side had deposed the other so that Plaintiff was not aware that defendant was taking the position that the vehicle was in the requested color combination and that it was being offered at the price originally suggested. Similarly, the defendant dealer learned for the first time that plaintiff was claiming that the dealer tried to sell the vehicle at the 2011 price, at no time offered to sell it for the original 2010 price suggested or that the vehicle was in a different color combination.

Most importantly, it became apparent how the broker was the lynchpin to all of this. While the defendant dealer’s counsel had spoken to the broker who confirmed the dealer’s facts, it was not clear that plaintiff’s counsel had spoken to the dealer to obtain her story. Thus, plaintiff’s and defendant’s counsel could not compare the stories that the broker told each of them, to determine the creditability of the broker: was she playing both sides against the middle? Revising history to make herself look good? Did she increase the price on her own to obtain a higher commission? Who knows: only more discovery will tell.

This was clearly one of those mediations, where each party hoped to settle without incurring too much in time and attorneys’ fees and costs, only to realize that their respective stories were too divergent to allow for a compromise that both could live with: Plaintiff wanted an injunction prohibiting defendant’s “unfair” practices while defendant wanted a dismissal without paying any sums in compromise.

How this will turn out? Only further discovery and time will tell!

…. Just something to think about!

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