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ADR in the Spirit of the Season

Last December I conducted a pre-trial conference in a contract case filed in the trial court where I sit periodically as a Senior Judge. A sub-contractor sued the lessee of a property and the general contractor after the sub-contractor had completed 95% of his work and the general contractor had stopped paying him.  The sub-contractor’s business was installation of doors and windows; the lessee’s was operating a café and bike repair shop on the premises.

The facts and legal arguments on both sides were compelling.  The plaintiff had done substantial work which redounded to the benefit of the café owner. The plaintiff claimed that his signature on a release and waiver document presented to him by the general contractor’s employee had been forged.  On the other hand, there was no privity of contract between the defendant-lessee and the plaintiff, and the lessee suspected that the general contractor already had paid the plaintiff in full after proper execution of the waiver and release.  Each side intended to call the agent of the general contractor in support of its position.  Neither side could locate him.  Apparently, like the general contractor, he had absconded.  Put plainly, that left the sub-contractor and lessee to pick up the pieces and resolve or litigate the matter.

Once the significance of this situation sunk in to everyone, the parties, with the able assistance of their respective counsel, decided to convert the pre-trial conference into a settlement conference.  It continued through a series of joint and separate caucuses. During them, it became clear that the plaintiff felt aggrieved because he had not been paid in full for the excellent work he had done, and had been denied a chance to finish it. As an established business owner, he typically did not do business that way and was concerned his reputation might suffer if he lost the case after trial.  He came to understand, though, that his legal argument as to unjust enrichment was weak.  At the same time, the lessee had concerns that, if his legal arguments as to lack of privity of contract and unjust enrichment were misunderstood or rejected by the trial judge, he could not afford to pursue the case through the appellate process.  His business had been open for only a year, and his cash flow was poor. He didn’t want his considerable investment of time and money to end with this case. Moreover, he already had expended additional sums to hire a company to finish the work the plaintiff had begun.

Gradually, the parties abandoned their legal positions and began to develop empathy for each other—a change that never would have transpired in court during trial. The plaintiff stated his interest in concluding the matter and closing his books on it before the end of the calendar year and in moving forward with his business reputation intact.  The defendant expressed the same desire and thought a non-disclosure provision would satisfy his concerns. And, his cash flow issues were paramount, which the plaintiff, a more experienced business owner, understood.

Ultimately, the case settled.  Why? Because the settlement conference created a safe space and process in which each party could see the other simply as a person with underlying interests similar to his own and  greater than the issues that initially had divided them. The power of the mediation process to transform conflict into common ground was on full display. As counsel explained,  neither wanted to hurt another small business owner. 

Best of all:  at the end, the two men stood up, shook hands, and wished each other well.



Nancy Shuger

Nancy B. Shuger is based in Maryland.  After retiring as a trial judge in 2011, she launched her mediation business. Her practice is multicultural, focusing primarily on family, small business, workplace, and congregational matters. She is experienced in, and enjoys, working with self-represented parties.  MORE >

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