Litigating in Overtime - How to "undo" a final judgment and reported decision.

The law exists to give us finality. Litigants seek final dispositions of their business disputes, whether by mediation, arbitration, trial or appeal. Future conduct is often guided by a final decision by a court. As a law firm, we work hard to achieve litigated outcomes that benefit our clients. Recently, our work lead to a reported decision from the Maryland Court of Special Appeals. We both won for our specific client, and obtained broad statements of law that would guide similar cases involving others. The case was done, except that we were not done with the case.

My client was sued in the Circuit Court for breach of an alleged contract. The Plaintiff demanded significant money damages. Our client prevailed in the trial court, persuading the judge that a trial was not necessary. Our client received a summary judgment.  On appeal, the Court of Special Appeals affirmed the trial court-- issuing a reported decision.

Reported decisions are important. They represent a small percentage of cases decided on appeal. A reported case becomes part of Maryland’s permanent body of judge-made law. A reported case goes beyond resolution of the dispute between those particular litigants. A reported decision guides the future conduct of all similarly situated persons in Maryland, until the case is over-ruled or the law is modified by yet another case. This is how Maryland’s common law grows and evolves.

Trial lawyers, like us, really do enjoy winning. And we enjoy it just a bit more when the win also results in a reported decision.

In our recent case, however, our opponent filed a timely motion for reconsideration to the Court of Special Appeals, tolling the issuance of the Court’s mandate.  While the motion was pending, and before an opposition was due, counsel for the losing party made a settlement offer that would greatly benefit our client. But to accept the offer would require that we work with the other side to vacate a reported decision.

How does that work? My client was eager to accept the offer -- who wouldn’t want a check, despite being sued?  But the hangup, I thought, was: how do you vacate a reported decision?

The answer, it turns out, lies in Md. R. 17-404(f), which permits the Court plenary authority to dispose of cases that are resolved through the CoSA ADR division.  And so, with the assistance of the director of the CoSA ADR division, we submitted a consent order which was vetted and approved by the Chief Judge.  Within a matter of days, a consent order was issued by the CoSA vacating the reported decision, withdrawing the decision for reporting, and remanding the case with instructions for the Circuit Court to vacate its order and dismiss the case with prejudice.

Final judgment, then, need not impede a favorable settlement. A winner might do just a little better, and a loser might avert complete catastrophe, by continuing settlement negotiations right through the very end of a case.

I am ready to re-embrace arbitration.

For 30+ years arbitration has been the Boston Red Sox of my law practice- a second favorite. I have participated in hundreds of arbitration proceedings, as my clients often make contracts requiring this mode of dispute resolution. Given a choice, though, I have grown to prefer court trials, before judges and juries.

The extra administrative costs imposed on clients to commence arbitration in complex or high value matters is often far greater than the costs of initiating and prosecuting court action. Filing fees in arbitration are often based on a sliding scale tied to the value of a claim. A court filing fee is slight, regardless of the value of the case. Coupled with the ongoing administrative fees charged by some organizations the cost to merely access the arbitration process can be exorbitant. The discovery process in arbitration is not all that much shorter or less expensive then court cases- documents must still be produced, depositions taken, and experts retained in both forums.

Hearings and trials can be crowded affairs. While discovery can be conducted piecemeal, over time and with varied participants in varied locales, hearings and trials are mostly convened in crowded government buildings. Just getting to the courtroom can be an ordeal. Many local jurisdictions are now imposing mandatory temperature monitoring and completion of health screening questions upon entry. The courtroom itself can then be as crowded as any church on Sunday.

But my favored courtrooms are ill-equipped for post-COVID dispute resolution. The buildings we admire for their historical details, and those we tolerate despite their dated or cramped layouts, are simply not conducive to social distancing. It is going to take years, and bundles of tax dollars, to retrofit these facilities for modern and safe dispute resolution.

So that we may serve our clients, now and for the immediate future, all lawyers who rely heavily on litigation must reassess whether the courts remain the best forum for dispute resolution in complex civil matters.

I am ready to re-embrace arbitration because the most readily controlled facet of the process is location. An arbitration can be conducted in any mutually agreed location, of any size, and can be readily mixed with remote broadcasting. The forum can be tailored to the specific needs of any party, witness, lawyer or arbitrator. 

Every case includes persons suffering some manner health issue that compromises their immune systems. During the halcyon days of last December, most personal health issues would have been unworthy of a mention in the context of a case. Today and until we are all vaccinated, however, the relative health of all participants in a legal dispute must be acknowledged, respected and accommodated.

Some items that I might consider for future arbitration cases include:

The participants- Whether any person who will participate or appear has a particular health vulnerability that must be accommodated by particular hygiene protocols, space or distance technology. These issues might pertain to one, some or all participants.

The space- Where the space is located, how it must be accessed, and whether it is sanitary. The public library conference area may be less of a controlled environment than the conference center of a court reporting service or hotel, for example.
The technology- Where remote participation by video is necessary because of health concerns, whether it is secure and truly interactive, and can it be intentionally or inadvertently misused.

The cost- The very issue that often pushed me in the direction of a courthouse remains an important consideration. Extra health protocols, technology and spacing will only add to the costs associated with arbitration. This is simply not avoidable until every person has been inoculated against the disease.

The cost-benefit analyses done pre-COVID for existing cases are no longer reliable. Employed clients may be unemployed, entities may now be financially strapped, and the immediate financial needs and burdens for all have certainly changed. These factors, including the human cost of litigating in court versus a private arbitration, are now interacting in a way that requires a top to bottom review of how cases are valued and conducted to disposition.

I am ready to re-embrace arbitration as part of this practice wide re-evaluation.

Client authority, it's what makes lawyers go.

Client authority sustains lawyers. With client authority, a lawyer becomes an advocate, a deal maker, and the legal proxy for the client.  Without client authority, a lawyer remains a potted plant, unable to make an agreement or advocate a substantive position that is binding on the client or the client's case.

What happens when a lawyer acts beyond the express authority given by a client? This can happen where a lawyer knowingly ignores client instructions. But more often, it can happen where a lawyer is unclear on a client's instructions, or a client misapprehends a lawyer's advice and later withdraws authority.

Maryland's Court of Special Appeals gave practical advice to lawyers and clients on this subject in 4900 Park Heights Avenue LLC v. Cromwell Retail, LLC. The court was asked whether a settlement reached in the trial court could be enforced against a party claiming a lack of express authority between client and lawyer.

The case involved a commercial landlord and its tenant, and a dispute over the tenant's right to build a tall sign outside the leased building. The landlord had warned the tenant that recorded declarations restricted the tenant's rights to erect the sign, and that the tenant risked a lawsuit by the landlord for violation of the restrictions.  The tenant filed a lawsuit seeking a preemptive decision by the court that the intended sign was, indeed, permitted by the recorded declarations.

The case was hotly contested for over a year. One day before the scheduled trial the parties notified the court of a settlement. This meant the trial would not occur. The lawyers then arrived in court to announce the settlement "on the record." That means one or more lawyers for the parties describe the material terms of a settlement agreement so that the court's recording system preserves the agreement. In this case, the settlement was described by the landlord's lawyer, with the tenant's lawyer announcing his client's agreement to the settlement. Because the settlement included modifications to the declarations recorded in the land records, the parties advised the court that a more formal written document was to be drafted and signed by all parties. The court then issued a standard settlement order and sent the parties back to their offices to work out the agreement.

The negotiations over precise language of the settlement took several months, and the parties never did reach full agreement. This caused the landlord's attorney to bring the case back to court, seeking an order to enforce the settlement as it had been described and recorded in the record many months before.

In court, again, the tenant's lawyer advised that his client had not fully understood the broad reach of one particular concession in the settlement that had been put on the record. Through months of negotiation the lawyer had tried to further revise the term more to his client's liking- unsuccessfully.

The sticking point for the court was that the tenant's lawyer knew of his client's misapprehension on the same day as the settlement was put on the record. Instead of immediately notifying the court and all parties, counsel worked to massage the term into something less oppressive to his client.

The trial court made an order enforcing the agreement as it had been specifically stated on the record. The case wound up before the appellate court,which mostly affirmed the decision. On the issue of whether a confused client can authorize attorney action to make a binding settlement, the appellate court said "yes."  Where the lawyer unequivocally represented that he had client authority, the client did not show up in court to state differently, and where the misapprehension was not brought out for several months, all others were entitled to rely on the apparent authority of the tenant's counsel. The misunderstood settlement terms was thus enforced against the tenant.

In our own practice, we work hard to assure that clients understand the costs and consequences of substantive decisions. The lesson of this case is that where a misunderstanding arises, it is important to bring it to the attention of the court and all parties, thus permitting all to revisit the misunderstood item and to avoid the prejudicial passage of time.