By: T. Keaton Turnipseed, Esq.
August 15, 2024
Having exhausted the pre litigation methods for resolving a non-disclosure dispute, we turn our attention to the formal litigation options.
Arbitration.
What do you do if settlement cannot be reached via informal discussions or mediation? You arbitrate or litigate. Beginning with arbitration, in short arbitration is a private court. The parties will hire arbitrators who will decide the case. Like mediators, arbitrators are former judges or attorneys with a great deal of experience in the area at issue.
It is important to note that unlike the mediation provision, which is mandatory to recover attorney’s fees, the arbitration provision only takes effect if the buyer and seller consent by initialing in the space immediately below the arbitration provision. If they do, then any dispute between the buyer and seller arising out of the purchase contract must be resolved by binding arbitration, not a lawsuit.
Often times arbitration generally is less formal than civil court with potentially different and more lax discovery rules, different evidentiary rules, and different motion procedures. The specific rules likely very even between individual arbitrators.
Discovery, the prehearing fact gathering process, is available to all parties and responses can be compelled by the arbitrator. Once the parties have conducted their investigations and are ready to seek a decision, the arbitrator schedules an arbitration hearing, much like a court trial, at which the arbitrator will conduct the hearing, evaluate the evidence presented and party and witness testimony, hear legal arguments by each party’s attorney. After all the evidence has been presented, the arbitrator will render a decision typically called an “Arbitration Award”. Importantly, arbitration is binding, there is no right of appeal, and there is no Trial by Jury. So, a party that loses at Arbitration generally has no recourse if they dispute the result or the Award.
While every case is unique there are some potential upsides to arbitration compared to civil litigation. The biggest is arguably the speed at which an arbitration can be conducted. In civil court the parties will not get a trial within 4 odd years depending on the county and the complexity of the issues. However, the average arbitration can be completed on a much more expedited timeline. Arbitration may also be cheaper in some cases because the parties are not forced to pay attorney fees for as long.
Civil Suit.
A civil suit begins with the filing of a complaint in the county where the property is located. The complaint lays out the causes of action the plaintiff buyer alleges against each defendant, if there are multiple. Once the defendant or defendants have filed their answer to the complaint, which addresses the statements in the complaint and pleads defenses, or a demurrer, which challenges the sufficiency of the complaint, the parties are off to a very slow race. The race is very slow because most if not all courts are impacted with cases. As such, trials often take place 4 to 5 years after the complaint is filed. This timeframe is a consideration when going through the pre litigation processes and when choosing to arbitrate or not.
But what goes on in the years before trial? The answer is quite a bit. First on the list is discovery. discovery comes in both written and oral form. Likely the most familiar discovery tool are depositions, oral discovery. Both parties also have and should engage in written discovery as well. Written discovery allows the parties to ask each other written questions including requests for documents and requests for admissions to name a few. The answers are then used to build each side’s case.
Also available are motions. Sometimes one party can win prior to a trial by filing a Motion for Summary Judgment or eliminating causes of action by filing a Motion for Summary Adjudication. These motions may be difficult to win as courts are reluctant to dispose of cases on the papers alone, however, if a cause has the correct facts and is property handles these motions may be on the table.
It is also important to note that settlement is still on the table. As such, some effort should still be made to settle pretrial, especially with the information discovery adds. Assuming there is no settlement, trial is the light at the end of the tunnel where the parties will go before a judge or jury and have their dispute decided for them.
The information presented in this article is not to be taken as legal advice. Every situation is different. If you are facing a legal issue of any kind, get competent legal advice in your state immediately so that you can determine your best options.
