The summary jury trial began as both lawyers presented a synopsis of their case to the juries, who would not know until the end of the day that their verdicts were nonbinding. Also in the courtroom were two executives with authority to settle the case, Trebmal's Milstein and Dover's regional manager Thomas McManus.
After the juries began deliberations, yet another row broke out between the attorneys. Feliciano gave the jurors some documents; Kraus, as he had done before, accused him of not getting approval in advance. Angry words were exchanged. Feliciano took a step toward Kraus; Lambros flew off the bench and ordered Feliciano to sit down, then threatened to call a federal marshal. "I didn't want Feliciano to give Kraus a heart attack," Lambros said later.
The tension only grew as first one and then the other jury reported their verdict. The first jury ruled for the defendant, Dover. As the jurors were questioned, it became clear why. In essence, they felt that Trebmal was a sophisticated company that had chosen a relatively inexpensive elevator system and should therefore have to live with the consequences.
Then the second jury came in: another finding for Dover.
The Resolution
Most cases settle shortly after the summary jury trial, but not this one. Lambros set the real trial for the second half of September.
In June, Kraus prepared a settlement offer, which in August had not been accepted. He complained that the summary jury trial didn't give him enough time to set out his argument -- a peculiar assertion, since his suit is a relatively simple contract case, and summary jury trials have brought settlements to such enormously complex disputes as toxic pollution cases.
Judge Lambros remains stubbornly optimistic. "They are heading to trial with a sense of reality about their cases," he says. "And for the first time, they are in a settlement mode."
THE ANATOMY OF A DISPUTE
Negotiations
January 1, 1988
Include clause in contract for alternative-dispute resolution (ADR) technique.
Contract Signed
March 15, 1988
Dispute Arises
September 10, 1988
Top executives should discuss litigation versus ADR. Would litigation be cost-effective? Calculate legal expenses, management time, loss of ongoing business relationship.
Lawsuit Filed
January 1, 1989
Make sure you and your attorney are familiar with ADR. Propose use of ADR to other party.
$10,000
($10,000 spent to date)
Discovery Process
April 1, 1989
The discovery process, which includes depositions, interrogatories, and production of documents, can be very time-consuming. Given the increasing litigation costs, is it wise to continue? An early settlement saves you lots of money. Your lawyer should keep you appraised of the risks and rewards of proceeding with the litigation, as well as your potential legal bill.
$100,000
($110,000 spent to date)
Judge Sets Trial Date
September 1, 1993
Last chance to assess litigation's risks and rewards and find a businesslike solution.
$25,000
($135,000 spent to date)
Trial
January 1, 1994
If you've gotten this far, you either have irreconcilable differences with the opposing party, or you haven't managed the dispute very well. Probably the latter.
$40,000
($175,000 spent by end of trial)
ACT NOW, SAVE LATER
Building alternative dispute resolution into your contracts
It can be difficult in the heat of battle to convince the other side to use alternative dispute resolution methods. For your best chance at avoiding costly litigation, you should write an ADR clause into all your contracts from the beginning.
There are many different ADR techniques, but an ADR method chosen in advance may not be suitable for the type of dispute that eventually arises. Consider providing for a third-party neutral to intervene if you and your associate reach an impasse, reserving choice of the exact forum and rules for future negotiation.
John H. Wilkinson, a litigation partner at Donovan Leisure Newton & Irvine, in New York City, recommends that companies include the following provisions in ADR contract clauses:
* There will be a period of negotiation before the start of formal ADR. Specify which executives will conduct the negotiations. Although ADR is much less expensive than full-scale litigation, you may be able to avoid ADR as well.
* A third-party neutral will be appointed to resolve differences that arise in planning the ADR proceeding. If the opponents cannot agree on a neutral, an organization such as the American Arbitration Association, based in New York City, will appoint one.
* The parties will choose the form of ADR to use, the rules and format of the proceeding, and the extent of fact-finding before the proceeding begins. If they fail to agree on any of these points, the neutral will decide.
* The parties will agree that the proceedings will be confidential and will be used for no other purpose.
* Either side may initiate a lawsuit if settlement is not reached within a specified time after the start of ADR.
If your lawyer is unfamiliar with ADR, you can get general information as well as referrals from the Center for Public Resources, in New York City, or the American Bar Association, in Washington, D.C. Don't be surprised if your lawyer frowns on ADR; after all, a protracted court case means more money for your counsel.
