Thursday, September 30, 2010

Who Won?

(reprinted from my mediation blog)

Now that another one of those trials of the century that Los Angeles seems to enjoy about once a decade has concluded (I'm talking about the McCourt divorce trial of course), everyone wants to know who won.  Technically, since the judge has not ruled yet, and still has 90 days to issue a decision, there is no winner yet. The real answer is that neither side won, or perhaps that it doesn't really matter all that much which side prevails on the legal issue before the court: that issue being the meaning and enforceability of a document purporting to grant Frank McCourt sole ownership of the Dodgers.



How can I be so cynical as to suggest that it doesn't matter who wins?  First, because there may be a number of ways for the judge in this case to split the difference so that neither side comes out the clear victor.  Second, because of appeals.  The parties have the ability to continue to litigate this case for years to come, regardless of which side wins at trial.  But it is not clear that the business of baseball has time to wait for the results of all those appeals.  Therefore, there will be pressure to resolve the ownership issue long before the legal process is finally concluded.  Third, because of the parties' financial situation.  Even if Frank retains ownership of the Dodgers, his other financial obligations, including of course to his ex-wife, may compel him to sell the team.  If they are forced into joint custody over the boys in blue, sale becomes even more likely.

So what did the trial accomplish?  I am not an expert on the legal issues--I only know what I read in the papers--but the main effect of the trial seems to have been to publicly humiliate both parties and tarnish their reputations.  T.J. Simers summed it up in the LA Times sports pages (the Dodgers' season is long over, so all Dodgers fans can do is watch the trial) this morning:
"Frank's lawyers successfully drove home the point that Jamie is just not credible. Jamie's lawyers successfully drove home the point that Frank is just not credible. They've got that right."
Court-watchers have concluded that Jamie probably came out ahead at trial.  That may be because Frank started out with what appeared to be a stronger legal position, while Jamie had the always difficult burden of proving that the document at issue was not enforceable or did not mean what it was thought to mean.  She seems to have succeeded at least in muddying the waters considerably, and could succeed in getting the agreement tossed out entirely.  Frank's case, on the other hand, might have been as strong as it ever was before the first word of testimony was uttered at trial, and if he loses, he may still be able to fall back on his interpretation of the documents and argue that nothing that was said at trial means anything.

How often does this sort of thing happen in real life?  A lot more often than people think.  Clients who approach me with a problem that potentially needs to be resolved in court are generally preoccupied with the merits of the dispute.  Who is right and who is wrong?  Which side's position going to stand up at trial?   My answers to those questions are usually filled with contingencies, and then I have to throw in some practical questions.  How is the other side likely to approach a potential lawsuit?  How much is at stake as compared to the amount that the case will cost to litigate?  Once we start talking about those questions, the issue of who is right and who is wrong starts to recede in importance.  I'm not saying that the merits of a case do not matter.  The strength of each side's position is what drives the dispute, and often determines the value of the ultimate resolution, whether by settlement or verdict.  What I'm saying is that procedural concerns are just as important as the merits, and also that trials do not always reach a nice, neat conclusion that vindicates the position of of side or the other.

I have tried cases in which one side prevailed and the other side walked away either empty-handed (if the plaintiff loses) or faced with the prospect of a large payment (if the defendant loses).  But I have also tried cases in which the outcome of the trial did not seem to accomplish very much at all.  That can happen where the plaintiff wins the empty victory of an unenforceable judgment, or where the amount the plaintiff wins was less than the cost of litigation, or where the defendant prevails at what he considers an excessive cost, or where the result of trial is essentially a draw. 

What will happen next in the McCourt case?  They are going to mediation again of course, the only place where they can reach a result better for both sides than the alternative of endless litigation. 

(LA Times photo)

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