Litigation and Alternatives
(Music) [00:07]
I can’t believe how much time we wasted on this project. [00:10]
Yeah, well, you can thank Non-Linear Pro for that. It’s just a garbage editing system. [00:16]
Yeah, thank god we didn’t buy it. [00:18]
Quick Takes Video didn’t buy the Non-Linear Pro editing system, but there are questions about a lease. [00:24] And it’s no small matter, as Janet is about to find out. [00:28]
You’ve got a hell of a nerve sending me a bill for $5,000. Look, I didn’t lease that junk for three months. [00:34] It was here on a trial basis for three weeks, and it didn’t work. I should send you a bill for wasting my time. [00:39]
Look, I can’t help it if you hire idiots who couldn’t run a donut shop, let alone an editing system. [00:44] Look, I have Janet Mason’s signature on a lease, which clearly stipulates that you’re liable for the minimum length of three months. [00:52] So listen, you either pay us, or you’ll hear from my lawyer. [00:56]
No, no, you’re going to hear from my lawyer. I may sue you for loss of staff time. [00:61] Janet, will you come in here for a minute? [00:70]
Janet, why did you sign a lease for that jerk from Non-Linear Pro? It was supposed to be a trial. Now why did you sign anything? [00:79]
Hal, I didn’t sign any lease. [00:81]
Well why is he telling me that you did? [00:83]
Hal, honest to god, the only thing I signed was a slip when the system was delivered. One of the delivery men just handed me a clipboard. [00:90]
Did you read it? [00:91]
No. Oh god, Hal, I’m so sorry. What have I gotten us into? [00:99]
Unless you want to pay this guy 5,000 bucks, what you got us into may turn out to be a legal mess. [01:05]
Will it cost us more than he says we owe him? [01:07]
I don’t know. But I know I’m not going to let this guy extort 5,000 bucks from me. [01:11]
Hal, I thought it was a delivery slip. [01:15]
Yeah, I know. I know. I understand. Look, let me call Henry Feingold and see what he says. You go back up there and keep things moving. [01:22]
(Music) [01:34]
(Phone rings) [01:38]
Okay, put him on. Hal? How are you? Good. So what’s up? Any light stands fall on anyone lately? [01:47]
You know, the only people who can laugh about that accident are the lawyers? Yeah, they made money, I lost it. [01:52]
Hey, hey, take it easy, I didn’t mean to hit a nerve. You got out of that for the medical bills and two weeks’ pay. That was very little, and you should appreciate that. [01:61]
I’m sorry Henry. I… I’m just made as hell. [01:65] Look, here’s the deal. I needed to upgrade my editing equipment, but there’s a lot of stuff out there. So I called this company that had a booth at the RTNDA, [01:73] well that’s the Radio and Television News Directors Association, yeah, in L.A. last year. [01:78] Well, they sent a salesman over. Now, I’d intended to look at several systems, but this guy’s stuff looked really good. [01:85] So we made a deal that I’d try it out for a month and see if I liked it, and then we’d decide whether to lease or to buy. [01:92]
When you say “deal,” do you mean you drew up an agreement in writing, or just talk about it? [01:98]
We just talked about it! It was a trial! It was a test, for god’s sake! I didn’t think I had to sign my life away! [02:03]
You didn’t. I just want to keep the facts straight. Now go on. [02:07]
Okay, so when the stuff came in, Janet, you know, the gal who runs my post-production? Well, yeah, she signs whatever they stuck in front of her nose. [02:15] Now it turns out she didn’t even read it. Yeah. Now the salesman, uh… Jack SOMETHING… is claiming what she signed is a three-month lease. [02:25] He’s demanding I fork over five k. I’m not gonna do it. The system was garbage. It was pure garbage! [02:32] We called them to take it away before the trial was even over! [02:35]
Okay. Can Janet testify that she thought she was signing a delivery slip and not a lease? [02:40]
Look, she’ll say whatever we want her to say. She owes me one for getting us into this mess. [02:44]
She will say whatever is the TRUTH. Calm down, Hal. [02:48] Sounds to me like this salesman isn’t making his quota for the month, and this so-called lease makes him look better. The whole thing may blow over. [02:56]
Well, so what do I do, just wait to get served? [02:59]
No. Why don’t you and Janet write down everything you can remember about this deal. [02:63] Janet should also list specifically what was wrong with the editing system. If you two write it out, it will save billable hours. [02:70] I won’t have to sit down, question you, transcribe it, etcetera. Then I’ll write a letter to the salesman. [02:76] Incidentally, I will need his full name, address, all that. [02:80]
Okay. Thanks, Henry. [02:85]
What did he say? [02:86]
We have to write down everything we remember. And you specifically have to make a list of everything that was wrong with the Non-Linear system. [02:93] Then Henry’s going to write a letter. [02:95]
Do you really think we’re going to get sued? [02:97]
(Sigh). Who knows. Look, try not to worry too much about that. Just take a little time, maybe talk to Ted. [03:05] And put down everything you remember that was wrong. [03:08]
Hal, I’m—I’m just so sorry. [03:12]
(Nods) [03:15]
Yeah well Henry, that guy who owns that company, yeah, Non-Linear Pro, yeah, one Jonathan Bradley, has filed suit. Says we defaulted on a lease payment. [03:25]
You’ve got a couple of options here, Hal. Do you want to come over to my office tomorrow at ten? [03:29] Bring the complaint in. We’ll talk. Okay. [03:33]
(Music) [03:49]
Oh, Hal, you’re looking very dapper. [03:52]
Practicing for a court appearance. [03:54]
Ah, it may never come to that. The first thing we have to decide is how we’re going to answer this complaint. [03:60] Do you want to file a cross-complaint? [03:62]
Well, the system didn’t perform as they promised, and at least one of my editors wasted three weeks of his time trying to make it work. [03:69] Now that’s about 120 hours I can bill out at 300. That’s nice chunk of change when you’re trying to pay the overhead. [03:76]
You want to countersue for $36,000? [03:79]
Sure, why not? I mean, in for a penny, in for a pound. In addition to all the lost hours, and I know you understand billable hours, [03:86] Janet cut herself on a sharp corner on a piece of that junk. And that got infected, it turned out to be a big emergency, and there was a whole lot more lost time. [03:94]
Well, is she okay now? [03:95]
Yeah, no, no, she’s fine. [03:97]
This escalates the stakes, and our chances of settling this easily and cheaply may become more remote. [04:03] On the other hand… the threat of such high potential liability might make them more eager to settle. [04:10] We just don’t know what the impact will be. Are you prepared to take the risk? [04:16]
Well, that’s a good question. Because this system was a piece of junk. Now why should I pay $5,000 just to try it out? [04:27] How about something like arbitration? [04:29]
(Music) [04:41]
The primary alternatives that we’re looking at would be arbitration and mediation. [04:45] Generally, those share a couple of advantages. First, they’re cheaper. [04:50] You don’t have to get lawyers involved in them. [04:54] Secondly, they offer a lack of publicity. [04:58] I don’t think either of the parties in this case really wants the world to know what’s going on. [04:63] Once you get involved in litigation, then you’re looking at a lot of adverse publicity. So it offers that advantage. [04:71] Now, when you choose between arbitration and mediation, probably in this case arbitration is going to be a more likely alternative, [04:81] because of the fact that with these two parties, they don’t get along. [04:86] They’re probably not going to have any kind of future relationship. [04:90] They just want a quick settlement to the problem. [04:93] And so what an arbitrator will do is in essence act like a judge, in that he’ll hear both sides of the case and he’ll make a decision. [05:02]
Finding an arbitrator is not difficult. [05:06]
What you do is you go to a service that provides arbitrators. The main one today is probably the American Arbitration Association. [05:14] And you contact the American Arbitration Association, and you tell them, “We have this kind of a dispute.” [05:21] And give them as many facts as you can about the nature of the dispute. [05:24] And then what they will do is they will look through their files of arbitrators. And they will find people that they believe have knowledge that would enable them to resolve that kind of dispute. [05:34] Then they send both of the disputing parties a list of seven of these arbitrators. [05:40] Now, if it gets down to that one arbitrator, and both parties say, “Well, I don’t like him, I can’t stand that person” for some reason it didn’t work out, [05:48] they can actually try again, and they’ll get a new set of arbitrators. [05:52] And if they reject that one, they get one more shot, and that’s it. [05:55] If you’re smart enough back at the beginning, and you put your original contract in writing, [05:59] you may want to include what we call a binding arbitration clause in the contract itself. [05:66] And so when you agree to the terms of the contract, you also agree if there are any disputes arising under this contract, [05:73] we agree to resolve this through arbitration. [05:77]
While arbitration appears to be the best option for Hal and Jack, there are alternatives. [05:83]
Now, if the parties thought they might be able to get along together in the future, or might need to get along in the future, [05:90] then they might want to go to mediation, because with mediation, the mediator tries to work with each of the parties individually at first, [06:01] hear their side of the story, try to figure out why it is these parties can’t—were on such opposite ends of the spectrum. [06:08] And then once he gets to understand the two sides of the story, then he’ll try to get the parties talking to one another face to face, [06:16] and he’ll try to get the parties themselves to come to some sort of mutual understanding. [06:22] A mini-trial is kind of a new alternative. [06:25] Um, it was actually in the late 70s that it was… I guess that’s not so new anymore. Late 70s it was developed. [06:32] And, um, with a mini-trial, it’s kind of a compromise between arbitration and mediation. [06:40] Each side has their couple of executives who are going to be sitting on the deciding panel. [06:49] And along with those executives is a representative from the American Arbitration Association, for example, [06:58] or whoever you’ve chosen to run the mini-trial. [06:60] Then executives from each of the two corporations present what they see as the problem [06:69] and what they see as the ideal solution. [06:72] And then the two executives who are the decision makers will make a decision. [06:80] And now you can set up your mini-trial in a couple of different ways. [06:84] One way you can set it up is that the neutral party is just there to try to observe [06:91] and try to keep the conversation going between the two decision makers. [06:95] Another way that you can set it up is that the two executive decision makers will have a set amount of time during which they try to come up with a decision. [07:05] And if they can’t come up with a decision after a certain amount of time, then the neutral party will make a decision for them. [07:13]