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NEGOTIATING THE LOWER LEVELS OF DANTE’S INFERNO IN 2012 - THE LITIGATION PROCESS

Introduction

One of the least understood aspects of the litigation process is the litigation process. On the one hand, clients who ask that suit be filed against a defendant, believe that the case is inexorably and irrevocably going to end up at a trial at some point in the future (even though almost 99% of superior court civil cases settle before a complete trial occurs). Then again, there are clients who believe that the act of filing suit will produce a check in the next week or ten days. On top of that, concerns over cost – near and dear to every client’s heart – cause many clients to either not prosecute their rights, pick the wrong kind of lawyer or be left with the feeling that they paid too much irrespective of whether or not a favorable outcome was achieved in the litigation. It’s an old joke among lawyers who try cases that obtaining their final payment is not at all dissimilar from a contractor’s attempts to obtain his retention. For, if the client wins the case, his attitude is: “I won the case; I didn’t need you.” And, if the client loses the case, the client says: “Why should I pay? I lost the case?”

Therefore, in an attempt to assist our readers, many of whom will be future plaintiffs or future defendants, with understanding the litigation process, Scribbles once again attacks this subject in this recently revised article.

Inasmuch as there are numerous different trial courts and systems, including administrative forums such as the American Arbitration Association, the intent of this article will be to essentially homogenize court experience – State District Court, State Superior Court and Federal District Court – with an emphasis on the State Superior Court, inasmuch as most construction cases get filed in the State Superior Court.

  1. PREPARATION FOR LITIGATION

To a great extent, this applies to preparing for a case in which your company is going to be a plaintiff. At the same time, following many of these suggestions will enhance your company’s position as a possible future defendant in construction litigation over claimed breaches, extras, differing site conditions and other subjects. Please note: no amount of preparation is going to assist the defendant in evading responsibility for paying a bill that he actually owes!

That bears repeating. Despite what one reads in the popular press (or sees, especially, on TV or in the movies), litigation over construction contracts is not some kind of process involving “hocus-pocus”! There might be elements of “hocus-pocus” involved in the trial of criminal matters and in the trial of negligence matters. The thrust of a criminal matter is for a prosecutor to prove his case beyond a reasonable doubt. What constitutes a reasonable doubt may be a matter that is capable of a difference of opinion among reasonable people. Be honest now. How many of you thought OJ was innocent. That, uh, in his first big case.

Attempting to establish whether or not a party has been negligent – breached a duty to another person, causing damage – is again a matter calling for a judgment upon which reasonable people could differ. From our own files, you be the judge! Is the manufacturer of a circular saw liable for negligence when the switch of a twenty-one year old saw which has been handled and stored rather carelessly fails, causing personal injury? Should the manufacturer of an above-ground pool be liable for serious neck injuries when a grown man who has had a few drinks dives into the pool, breaks his neck and the pool has several “Do Not Dive” labels firmly attached to the pool liner? Should a construction worker be entitled to compensation when he electrocutes himself (but not fatally) incurring great physical injury and damage when he is attempting to steal copper bus bar which he thought had no current passing through it?

Should an electric door manufacturer be liable for an injury to an elderly woman who was seriously disabled, ‘walked like a crab’ and took far longer to negotiate the door than anyone might reasonably belief to be possible (or necessary)?

Then, there are cases from the newspaper. Should an eighty year old woman recover two million dollars from McDonalds because she claims not to have known that coffee is hot?

The point is that in criminal cases and in negligence and product liability cases, the trier of fact – usually a jury – comes up with an answer on a case-by-case basis which other reasonably-minded people could disagree with. This uncertainty puts the ‘rock’ into rock and roll. Or, for those litigants and their attorneys attempting to anticipate a possible jury finding, between a rock and a hard place.

Actions involving construction contracts are contract matters. The contract between the parties defines what the parties’ rights and liabilities and responsibilities are going to be. This is one of the principal reasons why lawyers usually do not choose a jury in a construction matter: there really is not going to be a factual issue that reasonable minds are likely to differ on. For instance, if the contract calls for the installation of a certain number of widgets for a certain set price, the contractor will be liable in damages for not installing widgets and will be entitled to recover the contract price for the installation of the widgets for which he is not paid. It is true that sometimes factual issues can enter into these discussions. For example, if the contractor properly installs the widget and the widget either fails or is not the proper mechanical device for the desired installation (due to the choice of architect or engineer of that widget, including the approval of the submitted widget as ‘an equal’), is the contractor liable?

In the main, however, there is not as wide a range of possible outcomes as there would be in either a criminal matter or in a negligence or products liability matter. The significance of this point is that when you are attempting to decide whether or not to perform an act (or not perform an act) and consider the ramifications of such performance (or non-performance), common sense and predictable outcomes are more likely to be found in contract litigation than in other forms of litigation, such as in criminal and negligence and product liability litigation. All this is is a long-winded way of saying that it is less likely in construction litigation that even the best lawyer will be capable of turning an apple into an orange (or a sow’s ear into a silk purse). So, one of the first things to have in your frame of reference when evaluating the suitability of litigation as a possible mechanism for a particular job is that outcomes are more likely to be predictable in contract litigation than in other forms of litigation.

Since no contractor really knows which of its jobs is going to go to litigation, following a few simple rules will put that contractor in the best possible position when one of those jobs ends up in litigation.

In construction litigation, there are several things which can be very helpful for the successful trial of a case. The following suggestions apply more in claimed breach of contract litigations than in mere collection cases.

Initially, a good and detailed set of superintendent’s daily reports is very important in construction litigation. Having done this for a while, we are equally aware of the fact that good daily reports are something that are hard to obtain from superintendents who are busy and -- more accurately -- simply do not wish to prepare them. The point is that daily reports are what are called in the law “business records” and can go into evidence as to all matters contained therein without the need to prove individual facts, which can be otherwise very time-consuming and complicated. Such facts could include how many men were on a job on a particular day for a particular subcontractor or for the general contractor. What the temperature and the precipitation was on a particular day also can go into evidence directly from the daily reports. (This type of information can be very significant in claims involving delays, job interruption, requested time extensions, an inability to perform temperature-sensitive activities such as painting and claims involving multiple mobilizations and re-mobilizations.)

Since very few contractors in our experience properly handle issues pertaining to extra work -- obtaining written change orders before performing that work, as an example -- indicating on a daily report the hours of labor attributable to a claimed extra work item, including detailing what materials were used for the extra work item, can be very important in future construction litigation.

If a picture is worth a thousand words – easily the case in construction litigation – a video recording as to issues pertaining to differing site conditions and delays can be worth one hundred thousand words. Really, taking pictures and the making videos is a simple proposition and only involves the discipline of doing it. In our practice, we have encountered one particular general contractor (now out of business) who, through one of its best project managers, made it a point of making a video tape of each of its jobs once a week. Those videotapes may clearly and consistently demonstrate what the status of a particular job or trade is as of a particular date – for better or worse. So, for example, if one is attempting to defeat a claim for delay, having evidence such as pictures and videos (even better) demonstrating the level of preparation of dependent or subsidiary trades as of any particular point in time can be very important and useful for purposes of trial and litigation. Since the defense of concurrent delay can minimize delay claim liability for a potential defendant, in a job that is moving slowly, a mechanical subcontractor’s having pictures (or videos) of the level of performance and completion as to the other mechanical trades0 as of any particular period of time can be very useful, even necessary.

Let’s define some terms. The terms ‘trial’ and ‘litigation’ refer to two entirely different matters. Litigation is the process of handling a formalized claim upon which suit has been filed or arbitration demanded. The litigation process is the lengthiest portion and the most expensive portion of the average court case. Keeping in mind that recent statistics suggest that the vast majority of all Superior Court civil cases are resolved short of a complete trial, as a matter of statistics, the average court case is not likely to go to trial. For example, in our experience, having filed hundreds of payment bond cases, we have never actually tried a case against a payment bond surety. Insurance companies are professional risk managers, meaning, in other words, that they manage money and they manage risk. Despite the fact that an insurance company can and will give a payment bond claimant a run for its money, the larger and more reputable insurance companies go to trial rather rarely on this type of claim. Generally speaking, the cases which actually get tried – go to trial – are those cases where either one or both of the parties view (or price) the case unrealistically or where the defendant, not planning an imminent bankruptcy, simply does not have the money to pay the claim. So, litigation is the entire court process up to the point of trial. And, trial is the actual hearing during which rights and obligations and damages are determined.

Two more items to comment on within the category of preparing for potential litigation.

First of all, all of our faithful readers who are ‘contractors’ raise your right hands now! Do not feel silly: we will know! We have spies everywhere! (It’s commonly known that most modern computers have webcams already installed. Enough said?)

The root word of ‘contractor’ is the, uh, ‘C- word’, meaning ‘contract’. Contractors are not afraid of the rigors of competition. They are not afraid of the rigors of any particular job, as hazardous as contracting activities often can be, both physically, mentally, emotionally and financially. What they are afraid of is paperwork and the “C- word”, which is, after all, the root word of the word ‘contractor’. In other words, the, uh, contract.

For any construction contracting activity of any significance, a contractor should have a written contract. That bears repeating. For any construction contracting activity of any significance, a contractor should have a written contract. For any construction contracting activity of any significance, a contractor should have a written contract. For any construction contracting activity of any significance, a contractor should have a written contract. Can you sense a pattern forming here?!?

Keep in mind that a written contract does not have to be a fifty page AIA or AGC form. A contract is simply one or more pieces of paper signed by the two parties to the contract (the parties to be charged with the endeavor) fundamentally stating the scope and price of the activity. For most construction contracts, this could be summarized in one or more paragraphs. And, from a legal standpoint, what constitutes an actual ‘contract’ is not the title of the document. Court cases have held that a letter of termination could actually be the final document necessary to indicate the existence of a written contract in terms of creating the contract. Some industries - such as the trucking industry - have problems obtaining written purchase orders. This is also quite prevalent among our equipment rental companies and some material suppliers, particularly with regard to concrete, sand, gravel and often paving. What we recommend to our customers is to give their customers/clients documents titled “Order Acknowledgment” or other similar relatively innocuous titles. For, if the document is signed by the parties to be charged and contains the scope and the price, whether it is labeled “Purchase Order” , “Contract”, “Order Acknowledgment” or something else will be irrelevant from a judicial standpoint. Judges in interpreting documents don’t look to the titles: they look to the substance of the document.

Additionally, with regard to a written contract, in order to even have a remedy – to be able to sue - under some circumstances, one needs the written contract. The Uniform Commercial Code states that an oral contract for the sale of goods above nominal amounts are not unenforceable. Massachusetts statutory law states that any contract that cannot necessarily be performed in one year or less is also unenforceable in the absence of a written contract. Under Massachusetts law, no mechanic’s lien can be filed in the absence of a written contract. (This is the number one reason why potential liens brought to our offices are not filed.) While a written contract may not be strictly necessary for the purposes of collecting against the payment bond, the absence of a written contract can prolong the case inasmuch as it is a common practice for creditors to “load up” bonded jobs with bills from unbonded jobs and the bonding company - while born at night, just not last night – take pains to look at such situations.

Lastly, in terms of preparing for litigation - and a goodly portion of our litigation is chasing changes, extras, delays and differing site conditions – getting written evidence of a change or factors leading to a delay is an absolute prerequisite to litigation on these matters, completely apart (and in addition) to what the changes clause in your contract may provide. Now, we can hear vibrations through the digital unpaper that you are reading: “But I never get written directions to do extra work”. Or, “They won’t give me that paper even if I were to ask for it.” Since no relationship is more sacred than that between a reader and his/her Scribbles, let’s be honest and add, rather quietly, and without undue additional comment, another (and the real) reason: “I hate to do paperwork”. Or, “If I just do the work, maybe I will get paid for it anyway” Or,”Gee, I really do hate to do paperwork”. Once again, a theme might be developing.

While we can never with good conscience advise contractors not to follow the express written direction in your contracts for how to give proper notice and pricing information as to suspected/requested changes, if you don’t want to/can’t go to the full extent of what is required, as in other areas of your life, something rather than nothing, if not sufficient, might be helpful.

Thus, if you are directed to do changed work or extra work but your contracting party fails/refuses to give written direction of that fact, please keep in mind that there is Massachusetts case law that says that a general’s superintendent does not necessarily have inherent authority to create/order changes – i.e. extra work - with regard to construction subcontracts. Therefore, if for some reason you can’t/won’t follow the changes procedure in the contract, send a fax (if your machine produces good transmittal reports) or an email to the project manager/officer/owner of your contracting party advising that you have been directed to perform extra work, that it will cost this, that it will be performed on such and such a date and that if you have any of this wrong, for them to send you a fax or email within the next two or three business days. That is not perfect but creates a situation where the other side if it fails to contradict your fax or email creates a situation where it may have “waived” the changes clause procedure or be “estopped” to later claim that it did not authorize what was described in your fax and/or that you didn’t follow the change order procedure. For, the law imputes an obligation to take the action that a reasonable man would take in any set of circumstances.

In summary, in talking about preparation for possible and future litigation. You want to make sure that you have a written contract or some group of documents that will indicate fundamental assent as to scope and price signe8d by the party to be charged - that’s you and the party you intend on suing. You have some form of written memoranda as to changes and differing site conditions. You have some form of superintendent’s daily reports. (If your super has time enough to drink four cups of coffee a day and have lunch, he has ten minutes to write up reasonably decent daily reports. If not, don’t pay him and hire someone a bit more reasonable.) Lastly, you have pictures, videos and other forms of demonstrative evidence that document your problems and situations.

Now, it is time to go into the lower levels of the Inferno ...

  1. THE LITIGATION PROCESS: PLEADINGS

First of all, the deadlines for most key events in a Superior Court case are established by a computer according to certain formulae. The Superior Court computer thinks that construction cases are on the slowest of the three available tracks–the so-called ‘average track’, a three year track to trial (more usually four or five years, depending on the county.) Some lawyers attempt to speed up the procedures of a Superior Court case by coding construction cases as “service, labor and materials”, which is a fast track or one year track case (actually, two to three years.) I believe that one does this at one’s peril inasmuch as clearly contract cases, construction cases and cases against payment bonds are specifically designated as being three year or average track cases. At the same time, experience has demonstrated that neither clerks’ offices nor judges generally get worked-up (or even interested) in tracking order errors or faux pas.

A case commences by the filing of a complaint which is a list of the charges and claims by the party feeling it is aggrieved. This is called a ‘pleading’. This should be prepared by an attorney, as there are numerous substantive and procedural requirements necessary to frame a complaint which will survive a motion to dismiss. In addition, under Massachusetts law, corporations must be represented by attorneys in court except in small claims matters. At such point as this document is served upon the defendant – the party being sued – that party has twenty days to file an answer to the complaint in writing and file the same with the Superior Court. Failing to do so means that the plaintiff on the twenty-first day can apply for a ‘default’, which is a ministerial act performed by the clerk’s office–not by a judge–meaning that no longer can the defendant contest liability. In other words, the defendant will lose the case as to all issues of liability. At the point that a defendant has been defaulted, the only remaining issue is what amount of damages the plaintiff is entitled to. At this point, the plaintiff is usually directed by the clerk’s office to file a motion for default judgment or to appear on a motion for assessment of damages.

While it is possible to set aside a default for good cause, many judges take the position that a defendant seeking to set aside a default must demonstrate that there is, in fact, a triable (genuine) issue of material fact and/or of law. In other words, that the defendant actually has something that looks like a defense. This is not something that a defendant has to do if it files an answer on time. Technically, the rules require a defendant (and his/her/its attorney) when filing an answer to demonstrate that there is an actual genuine issue of material fact and/or of law. It is for this reason that it is a good idea to make sure that the answer is filed in twenty days. Because a certain, increasingly important idea in the court system is moving cases along – and having acceptable clearance (closure) rates as to cases on a monthly or other periodic basis – the rules on removing defaults have gotten tougher and tougher and harder and harder to do.

At the time an answer is filed, a defendant must file a counterclaim which arises out of the same transaction. In other words, what claims does the defendant have against the plaintiff? Example. Subcontractor sues general contractor for work on a certain subcontract. If the general contractor has a claim against the subcontractor for the very same contract, this must be asserted either with the answer or within the next twenty days after the answer has been filed as a ‘compulsory counterclaim’. Otherwise, it is waived.

At the time of filing the answer, a defendant may also- but is not required to- file claims against the plaintiff which do not refer to the matter that the plaintiff has filed claims on. Thus, for example, if the plaintiff sues on “Job A”, the defendant can -- but is not required -- to file a counterclaim for its claims on “Job B”. Good practice and reasons of economy would suggest that in most cases, this would be a good idea.

At the time a defendant files its answer, a defendant may then file a ‘third party complaint’ as to any other party who may possibly owe some responsibility for the plaintiff’s claim to the defendant.

This initial stage of the proceedings where the respective claims and defenses to the claims are asserted by and among the various parties to the litigation - the so-called “pleadings stage”- achieves the purpose of setting forth before the court what the claims and the defenses to the claims are going to be.

  1. THE LITIGATION PROCESS: DISCOVERY

The next part of the case – and, ordinarily, the most expensive part of the case - is the so-called “discovery phase” of the litigation process. It is during this phase that the parties to the litigation attempt to develop from the other side and from third parties witnesses, evidence, facts and documents which pertain to the claims and the defenses to the claims. There are several discovery mechanisms. The first is for one party to ask written questions of the other party which have to be answered by that party under oath. These are called interrogatories. Knowledgeable attorneys have so-called “pattern interrogatories” for a wide variety of cases they customarily handle, which should mean that the cost of propounding this kind of discovery on repetitious-type cases should be somewhat less than doing it for the first time.

Ordinarily accompanying a set of interrogatories is a set of document requests. Massachusetts practice rather liberally allows a party to look at the other party’s documents pertaining to the claims and defenses involved with the litigation. This form of discovery - as pertains also to the other forms of discovery - does not necessarily refer or limit itself to only documents or facts or evidence which are exactly legally relevant to the issue at hand. The standard for most discovery is that the discovery is ‘reasonably calculated to lead to the discovery of admissible evidence’. This is a rather broad standard and is ordinarily very broadly interpreted by both state and federal court judges in favor of the requested discovery.

Sometimes, a party may not wish to part with a certain fact or document, such as, for example, an estimate for a job. During the course of a case, there can be some discovery as to the defendant’s possible ability to pay a judgment. Again, a defendant may not wish to reveal this type of information. This reluctance - when forced - helps to settle cases.

A particularly effective but under-utilized discovery/trial limitation device is “requests for admissions”. With this discovery/trial limitation device a party can ask another party to either admit or deny that certain stated facts are true. A party can also ask another party to acknowledge the genuineness of documents, signatures and attached copies. Requests for admissions are under-utilized in most litigation. They have certain very key advantages. Unlike interrogatories, which cannot exceed thirty in number, a party can request an unlimited number of requests for admissions of the other party. Secondly, requests for admissions have to be specifically signed by the party - not only by the attorney. This forces the party to get involved in the case - important for concluding litigation matters - and to sign the requests for admissions under the pains and penalties of perjury. While people do lie in life, it has been our experience that people are less likely to lie in court documents and proceedings because of the threat of prosecution for perjury, which is a very real possibility in the more egregious cases.

Lastly, requests for admissions have an advantage inasmuch as the facts are taken as admitted within thirty-three days of service of the facts. A party who submits interrogatories cannot get any benefit from the party served with the interrogatories without filing some form of motion/paper to compel or requesting other court action. Similarly, a party not producing documents has nothing bad happen to it/its counsel/its case until such time as the propounding party takes an additional action, which, again, would involve the serving and filing of court papers. Requests for admissions are unique in that the matters for which admissions are sought are automatically deemed to be admitted within thirty-three days of service if no response is made. Many counsel do not know this and find themselves in a situation somewhere down the road with having to deal with all or many key elements of the other party’s case already taken as admitted for the purposes of the litigation. This also helps settle cases!

As part of discovery devices, under certain circumstances, a party can move for permission to inspect physical things, including going onto land for making various observations, measurements, etc. Not germane to construction litigation, but oftentimes in personal injury litigation, a party can move for a court order to have an important person in the case - usually the defendant - examined by a neutral physician as to claimed physical and mental problems.

An overused discovery device - extremely expensive, at that - is to take the deposition of a person or of a party. A party can take the deposition of a party to the case or a party can take the deposition of individual people not involved with either party by serving upon the counsel of record notices of deposition. In a deposition procedure, the attorney calling for the deposition can literally ask questions of the person being deposed until he/she runs out of questions! We have sat through any number of depositions which rather conveniently lasted eight hours even though all of the important questions could have been asked in one or two hours. Keeping in mind a lawyer’s hourly rate as well as a certain amount of time to prepare for the deposition and increasingly high transcript costs (six or seven hundred dollars per day), one can see where the use of depositions in litigation - often required for more complicated litigation - adds to the price of the litigation.

Yet, depositions frequently can be used/are used to put cases away. For example, the only significant legal issue in an indemnity agreement case by a surety against an indemnitor may be whether or not the person’s signature on the indemnity agreement is genuine. Once that fact is established by admission, by answer to interrogatory or by a deposition answer, the case is ripe for summary judgment - discussed later. Sometimes, people who have made inconsistent (false) statements prior to deposition will refuse to go to deposition because they are not willing to lie about the subject matter of their prior statements in person. We have seen many cases that have ended because of the fact that a party witness simply refused to be deposed and, therefore, had to settle his/her case.

Unfortunately, to obtain information from non-parties - outside witnesses, experts, etc.-deposition may be the only available discovery device inasmuch as requests for admissions, requests for production of documents and interrogatories are solely devices to be exercised between and among the actual parties to the case: the plaintiff, the defendant, the third party defendant, etc.

In the Superior Court, the discovery phase of the typical construction case lasts for about two years. Thus, two of the three years scheduled for a Superior Court case in a construction matter are dedicated to pre-trial preparation which is, substantially, devoted to investigation of facts and documents - the discovery devices outlined above.

  1. THE LITIGATION PROCESS: MOTION FOR SUMMARY JUDGMENT

After the pleadings have been concluded and after all or most of the discovery is done, the next step in the process is to try to evaluate the case as to whether or not a trial is, in fact, necessary. Parties have an opportunity to file what is called a motion for summary judgment, which is an attempt to consider the sufficiency of the case based on affidavits and briefs. The advantage of using the summary judgment procedure is that if the case is appropriate for summary judgment, further pre-trial and trial expenses are avoided or, possibly, minimized. Additionally, while such a motion is pending, depending on the potential strength of the motion, this might present a further opportunity for settlement discussions. The key idea to keep in mind when considering summary judgment is whether or not there are outstanding any genuine issues of material fact. There are two key words in that last sentence. The first key word is ‘genuine’. That means that there is a real issue as to a specific fact that is important for the decision of the case. The second key word in that sentence is ‘material’. The idea of a material issue of fact is an issue that pertains to the very basis of the claim or the very basis of the defense. Every case has disputed factual issues of one kind or another. A material factual issue is a factual issue necessary to either establish a prima facie (on its face and legally sufficient) claim or defense to the claim.

In the event that there is a genuine issue of material fact, the judge considering the motion for summary judgment (no testimony is allowed, with only a consideration of the submitted papers) is obliged to deny the motion for summary judgment. Indeed, the cases interpreting the summary judgment standard state that an opposing party to a motion for summary judgment needs only a ‘toehold’ to avoid the issuance of summary judgment against it.

Most cases by a surety against indemnitors for reimbursement of surety expense and loss payments are resolved at the summary judgment stage. Also, in some instances, this is an appropriate vehicle to test the sufficiency of a claim (by the plaintiff) or of a defense to a claim (by the defendant).

There are other mechanics involved in filing for summary judgment. Very aggressive attorneys will seek to move for summary judgment in an effort to either get summary judgment, force a settlement or get the case assigned to a trial somewhat quicker. For, judges hearing summary judgments sometimes will place a case on an earlier trial list than would otherwise be the case as a kind of consolation prize for not issuing summary judgment. Or, the judge might consider the filing of a motion for summary judgment as a representation by the parties that the case is ripe for trial. Of course, filing summary judgment in a marginal case might cause the party opposing the summary judgment to seek to settle the matter at that time because there is a certain expense involved in preparing the various papers that are required to oppose a summary judgment motion, including detailed affidavits and briefs, which are papers prepared by lawyers indicating the legal and factual reasons why such a motion is either appropriate or not. A court has inherent authority – rarely exercised – after considering the summary judgment motion to make decisions limiting the further issues for trial of the case by granting partial summary judgment. Courts seldom do this as in the Superior Court system, judges are rotated in and out of sessions and in and out of different courts on a regular basis. There simply isn’t the incentive nor the time for a judge to attempt to parse through the pleadings, discovery responses and four to six inches of briefs and affidavits in an effort to limit the future trial issues but not decide the case at that point in time. Lawyers believe – whether it is completely true or not – that judges are evaluated by their supervisors, in part, as to how many cases a judge concludes each month. While limiting the issues for a case at trial may save many days of trial for the ultimate trial judge, under such a system of evaluating a judge’s performance, there would be little incentive to do so. In addition, like all of us, during the last several years of extremely hard times, the whole court system, including personnel, has been seriously minimized. There is even less time (and energy) available for non-essential steps to a case – such as a marginal motion for summary judgment – than there might have been before.

On top of that, contractors need to keep in mind that construction cases are generally greatly disliked by trial judges. In fact, Suffolk Superior Court used to have a specific list of construction cases, segregating them from their list of other civil cases. Construction cases are disliked because they are extremely detail-oriented, require an inordinate amount of time to try, have too many witnesses and exhibits and are, quite frankly, boring (from a judicial standpoint). Judges hate to tie up juries on construction cases. This is because judges are concerned that a court will “lose the jury” to the sheer length, detail and boredom created by a construction case.

It is for these reasons that knowledgeable construction attorneys seldom pick to have their cases heard by juries. Of course, there are always exceptions to prove the rule. But, on average, the more days a jury is forced to hear and evaluate a construction case, the more likely it is that some party (or attorney) will be punished by a jury.

What might be of value for the reader to keep in mind is that with construction cases in Superior Court, perhaps more than with other types of cases, there will be some pressure by the Court to: (1) not send the case to a jury; (2) exhaust all possible methods of ADR; and, (3) to settle the case on some basis. This leads us to our discussion of mediation.

  1. THE LITIGATION PROCESS: MEDIATION

Mediation is a more-or-less non-adversarial process whereby the parties go in front of a non-judicial neutral for four to six hours (each side pays the mediator about fifteen hundred dollars each for his fee) and through a controlled series of meetings, the parties try to work out a solution to their dispute. They jointly pick, choose and hire the mediator. The mediation usually occurs in his office, often, but not always, in Boston. The mediator is not part of the judicial process and anything said at the mediation is privileged - by statute - and can not be referred to by either party if the case goes on to court thereafter. This encourages a free and frank expression of ideas without worry as to what the other side will do with that information later in the case. What normally happens is that the mediator will require each party to prepare before the meeting a mediation memorandum explaining the case and its position to submit before the hearing, exchanging copies with the other side. Generally speaking, such a memorandum would be similar to a trial brief but quite a bit shorter (and cheaper to prepare).

On hearing day, there is an administrative-type meeting at the beginning of the hearing, going over the process of mediation, explaining generally what will happen during the mediation. Each side is given the opportunity to make an opening statement, which will be made by each attorney. There is nothing like testimony from witnesses, although you will have ample opportunity to address the mediator during the subsequent break-out sessions. There is not generally anything new there in the opening, as what will be said will already have been said in the mediation memo. The opening process takes about ten minutes per side. Generally, neither side responds to the other party's opening statement. At this point, the parties are separated and sent to different rooms and do not actually get together again until either there is a settlement or it is clear that there won’t be a settlement and further details relative to the mediation, if applicable, need to be agreed-to.

At this point, the mediator commutes between the two rooms, conveying to each side the other side's offers and demands. I have had cases where the surety really pushed for a mediation and then the first offer was "zero". Like court, this is a process that is wearing on the parties. After all, you are going to sit in a small conference room for four to six hours with essentially nothing to do for most of the day. The mediator will point out to each side flaws and difficulties with its case. This can be useful for the parties as it gives each party the perspective of an experienced construction lawyer who might react to the case in a way that a judge might react to a case. At this point in time, each party has its own view of its position which may not be completely realistic. So, a good mediator’s response to any party’s claim or defense is a good opportunity to get some idea how a third party experienced in construction will receive the case.

The mediator does not actually ‘decide’ the case but points out to each side the flaws in its own position and works to fashion some kind of solution. So, in a very real sense, one doesn't try to get the mediator "on our side" or to "decide for us". This process is nothing but a kind of ‘controlled’ settlement meeting. No ‘decision’ is issued. This is, also, completely non-binding. If this doesn’t work, then the parties can continue on with their case in all regards, including going to trial. If nothing else, mediation acts as some very cheap discovery in that it focuses the parties' attention on what the other side sees as the real issues in the case. The case I referred to earlier where the surety offered nothing to start the mediation process points to some of the advantages of the mediation process. By the end of that first day of mediation, the surety was offering something less than decent money but better than an insult. Even though no one specifically asked him to, the mediator (a former superior court judge, definitely not inexpensive!) kept with the case and the parties and sent out emails and made phone calls for a couple weeks after the mediation. The case ended up settling for an appropriate number within two or three weeks of the actual mediation.

By my own experience, if both sides agree to a mediation, there is a good chance the case might settle. There is a distinct sense as to mediations generally that the case will settle somewhere in the middle. I have had cases settle for a lot more than that and for a lot less than that. Experienced attorneys tend to stay away from organizations such as the American Arbitration Association. Those of us who do this work have a list of six to ten construction attorneys who regularly conduct mediation hearings. There is a lot less formality in using one of these attorneys and, generally speaking, somewhat less costs.

  1. THE LITIATION PROCESS: PRETRIAL HEARING

The next step that takes place in the usual process of the trial in the Superior Court is that the case will be scheduled for a pre-trial conference at which time the actual trial date will be set. Before one gets one’s pre-trial conference time, ordinarily the parties have to prepare a rather lengthy pre-trial memorandum, which gets filed before the actual conference. The ostensible purpose of the pre-trial memorandum is to get the lawyers talking to one another – something lawyers often have difficulty in doing, litigation being an adversarial process – and to evaluate the possibility of settlement. Also, what is required in a pre-trial memorandum can often be time-consuming to prepare and offers additional incentive to parties and to especially the lawyers – who have to prepare them – to look into other possibilities as to the conclusion of the matter.

An ordinary pre-trial settlement memorandum will require the following: (1) any stipulations of fact which can be agreed to in advance; (2) a concise summary of each party’s factual contentions; (3) a statement of the disputed issues of fact and law as to each party; (4) names and addresses of prospective witnesses including a description of what the expert witnesses are likely to say and what the individual fact witnesses are likely to say; (5) a list of any pending motions or other motions which may require action before trial; (6) a discussion of settlement discussions and prospects; and (7) an estimate of the probable length of trial. The average pre-trial memorandum will include at least those items. Since all of the counties use slightly different forms, it may be that additional information may also be required. Most of the pre-trial orders specifically require the counsel to meet prior to filing the pre-trial memorandum to see to what extent settlement is possible. (This almost never happens.) Preparing this memorandum is going to require several hours of a lawyer’s time.

Again, at the pre-trial conference, the judge is likely to inquire as to whether or not the case can be settled and what efforts have been extended in that direction.

At the pre-trial conference, usually – but not always (e.g. Worcester) – a ‘firm’ trial date is established.

Now, for the uninitiated, a “firm trial date” is more laughable than your check being in the mail. For, there is simply no way of knowing when a case is going to get reached for trial. This is for three reasons. First of all, it is not uncommon for judges to schedule as many as five (or more) trials for the same day based on the expectation that some of them will settle and for one reason or another someone will seek a continuance of the other trial dates (which continuances are not easily given). And, secondly, a particular session’s being available on any given date assumes that the cases called on the previous days have themselves been resolved. Thirdly, although a particular session may have had a judge in it at the time of the pretrial conference, for a whole host of reasons, when the actual trial date comes, there may be no judge for that session. This leads to the unenviable position where parties and their attorneys have to prepare to get ready to try a case on a certain day, send out subpoenas (expensive, having to be served by constables), annoying all of the witnesses and disrupting their lives, only to find out that on the so-called ‘day of trial’, the Court is not ready. This can happen many, many times and it is something utterly beyond the control of the attorneys.

One thing that happens at the pretrial conference or shortly thereafter is that the court will issue a ‘pre-trial’ or ‘trial’ order. This will indicate what additional activities have to take place before the actual trial. So, for example, in a jury-waived case, the parties will ordinarily be required to ‘pre-mark’ potential exhibits. Each side will be required to prepare extensive requested findings of fact, which, essentially, is a party’s writing what it hopes the judge’s decision will actually be. Each side will be required to prepare requested findings of law, which are statements of law with authorities applicable to the issues in the case.

For a jury case, before the trial starts, the parties will typically be required to submit ‘jury instructions’ (as to the law). They will also be required to prepare ‘jury questions’, which is a document that attempts to logically lead the jury through deciding the issues to be found in the case.

A variety of other documents may be required, the exact content of which may vary from court to court.

  1. THE LITIGATION PROCESS: TRIAL

Assuming you have gotten this far, your case is going to actually get tried. The case will be tried in front of either a judge sitting in a jury-waived session or in front of a jury which will act as the fact finder. In either case, the attorneys make opening statements, present witnesses, cross-examine witnesses, introduce evidence (both testimonial and documentary) and make closing remarks to the fact-finder.

In the case of a jury trial, the jury will deliberate until they have reached a verdict. In the case of a ‘bench trial’ or jury-waived trial, the judge will give you a decision when he or she is good and ready to do so! The decision might be several months down the road, possibly even longer. If either or both parties are unhappy with that decision, there are various appellate options which go beyond the scope of this particular article and which will take additional time and will cause the incurrence of additional expenses.

A case typically starts with each party making an ‘opening’. This is a guide to what each party expects the evidence to be. It is not supposed to be any kind of argument concerning the merits. That comes with the ‘closing’, which is each party’s chance to argue to the judge or to the jury the merits of its case.

After the opening, evidence is given in the matter, which can consist of oral evidence (testimony), written evidence (documents) and demonstrative evidence, which can be things such as models or poster boards with diagrams of, for example, the relative position of each car in a motor vehicle accident. The judge sits, essentially, as a referee between the parties – particularly in a jury case – to make sure that only appropriate and admissible evidence is received. The judge will also make rulings on various ‘motions’ and on various legal issues that come up during the trial. In a jury case, there will be a number of ‘side-bars’ in which the lawyers and judge discuss these issues, presumably outside of the hearing of the jury.

  1. THE LITIGATION PROCESS: ATTORNEYS’ FEES AND COSTS

If our faithful readers have read the above, that question has been answered already: it is impossible to tell how much the case is going to cost in terms of attorneys’ fees and costs.

It is like a husband asking a wife how much she is going to spend at the supermarket. She might go for a gallon of milk and a loaf of bread, which by today’s prices might be ten dollars! But if she goes for two weeks’ worth of groceries and buys a lot of meat, she can spend three or four hundred dollars.

It is important to keep in mind that Massachusetts follows what is called ‘The American Rule’ as to attorneys’ fees and costs. That rule simply says that each party to litigation bears its own litigation expenses, including attorneys’ fees and expenses, unless the contract between the parties provides otherwise and/or suit is initiated under a statute providing for attorneys’ fees, such as MGL C. 149, s. 29 (general contractor’s payment bond on public work) or under MGL C. 93A, s. 11 (unfair and deceptive trade practices). Here is what the cases say on this point:

As stated by the Supreme Judicial Court in the case of Preferred Mutual Insurance Company v. Gamache, 426 Mass. 93,95, 686 N.E.2d 989 (1997):

“The usual rule in Massachusetts is to prohibit successful litigants from recovering their attorney's fees and expenses except in a very limited class of cases. This rule is known as the "American Rule." See Waldman v. American Honda Motor Co., 413 Mass. 320, 321-323, 597 N.E.2d 404 (1992). Our traditional approach has been to prohibit recovery of attorney's fees and expenses in a civil case in the absence of either an agreement between the parties, or a statute or rule to the contrary, and this principle has been applied to deny recovery of attorney's fees and expenses in declaratory judgment actions. See Fuss v. Fuss (No. 1), 372 Mass. 64, 70-72, 368 N.E.2d 271 (1977); Wachusett Regional Sch. Dist. Comm. v. Erickson, 354 Mass. 768, 238 N.E.2d 369 (1968).”

In the case of Donaldson v. Boston Herald-Traveler Corp., 347 Mass. 274, 280-281, 197 N.E.2d 671, 676,, the Supreme Judicial Court stated:

“While, as an original proposition, further examination might be desirable, the general principle has become firmly established in this Commonwealth that no recovery may be had for counsel fees in the very action to redress a plaintiff's wrong, as distinguished from other counsel fees which the plaintiff has been compelled to pay. Goldberg v. Curhan, 332 Mass. 310, 312, 124 N.E.2d 926, and cases cited. MacNeil Bros. Co. v. Cambridge Sav. Bank, 334 Mass. 360, 363, 135 N.E.2d 652. See Bright v. American Felt Co., 343 Mass. 334, 337, 178 N.E.2d 855.

The Legislature must be taken to have been aware of this principle. Had the statute been intended to embrace all counsel fees as damages, we are of opinion that an express statement to that effect would have been made.”

So, a couple of things to be learned here. First of all, having an attorneys’ fee provision in your contract (or credit application) may be necessary if you wish to collect counsel fees in your litigations. This requires prior preparation and thought on your part at the contract negotiation and preparation stage. And, secondly, even suits under statutes providing for counsel fees, generally, but not always (e.g. payment bond claims against the general contractor’s bond on public jobs) require there to be some kind of judgment, order or decree. Typically, such are not generated until after a trial (or after a successful motion for summary judgment). And, as has been stated earlier, the vast majority of superior court actions settle without having to go through a complete trial.

The real questions, from the standpoint of experience, are as follows: (1) is this a litigation which should be filed or tried; (2) are there less costly methods of resolving the dispute; (3) do you have a lawyer who wants to try all of his/her cases or one who is interested in concluding the case as quickly as you are interested in doing so?

There are, of course, other factors. Is your opponent reasonable? Is your opponent’s attorney reasonable? One of the most effective collection attorneys we have ever dealt with handles his matters as follows. He will call us or we will call him on a new matter and he will start to talk about his children. Since we both have been at this business for a period of time, now he is talking about his grandchildren. He talks about planting his flowers. He talks about virtually anything else he can think of except matters pertaining to the law or to the matter at issue. This takes perhaps ten minutes for the first phone call of each new matter. Sometimes one feels like the fighter Roberto Duran, only wishing to cry out “No mas”!

Then we begin to discuss the matter. Since he is virtually always a plaintiff’s attorney, we will discuss why the bill has not been paid. If there seems to be any reluctance to pay the bill in that there is a colorable backcharge or offset, he almost always and immediately offers to accept half.

The foregoing is a bit of an exaggeration. (And, no, we do not intend on giving you his name!) But keep in mind that King Solomon was seen as being wise in solving a dispute by offering each of two possible mothers half of a baby! The concept of arbitration is widely believed to result in a finding for the plaintiff of at least half a loaf. Then again, remember that your spouse is often referred to as “your better half”.

In some instances - certainly, not in every or even in most instances - half a loaf or something greater early on in the dispute can be better than what the court system will do for you andto you after some years. The old joke is about a public contractor who went broke because he was the low bidder once too often. If he is not the low bidder, then he doesn’t get the work

(and have the income stream). But if he is the low bidder too often, he is not charging enough. A realistic attitude in handling disputes over time, dealing with the disputes not from a position of anger and not doing litigation “for the principle, not the money”, is likely to save you money over time.

  1. THE LITIGATION PROCESS: CONCLUSION

It is hoped that the foregoing will provide an introductory course in Litigation 101 for the uninitiated and a reasonably comprehensive refresher course for the veteran. It is important to keep in mind that the litigation process is ‘a process’. It is a methodology of resolving civil disputes that was set up prior to your dispute and will exist after your dispute has been resolved, one way or another. Your lawyer throughout this process is your guide, your interpreter and, hopefully, your zealous advocate. Your job- and your desire - in that relationship is to make sure that he or she is an effective advocate, which, in most cases, will involve resolving the dispute reasonably early.

It is necessary to keep in mind that this process is heavily regulated by various court rules, statutes, regulations and court cases. In other words, your lawyer may have little to say about some of these steps, as they are required by the process.

In handling litigations, use common sense. If you owe the bill, pay it or enter into a payment plan, if you can. At least, make payment of as much of the bill as possible, particularly as to that part of the bill that is uncontested. For, if you contest only a portion of the claim but don’t pay the undisputed portion prior to the trial, the judge (or jury) will be less likely to accept your arguments as to the disputed portion of the claim being defended. Keep good records on your jobs. Document changes and delays before disputes reach this stage. Take periodic pictures and videos. Don’t let judges or arbitrators, who are not contractors, decide too many of your disputes. Remember that the litigant does not control the litigation process: the clerk’s office and court own the process.

Know something about the litigation style of the attorney you hire. A good question to ask is how many trials does this attorney have a year. There are some construction attorneys who seem to try a plurality of their cases. While this might seem ‘aggressive’ in your first case or two, this is both expensive and can likely result in the fact that the party you sue (or who sued you), whether you win or lose, will likely be less interested in continuing a business relationship as to future jobs. Litigations are only a manner of resolving disputes. They can often be handled in such a way as to maximize the possibility of the restoration of the relationship after the case is over. This is a lot less likely if you have Attila the Hun as your lawyer!

In conclusion, there is the Chinese proverb: “Win your lawsuits and lose your money”. Confucius is claimed to have said: “I can try a lawsuit as well as other men, but the most important thing is to prevent lawsuits.” A critique shared by our editors: “Suits at court are like winter nights: they are long and wearisome.” (Thomas Deloney, English ballad writer and pamphleteer, Jack of Newbury, 1597).

If you have read this article thoughtfully, taking into consideration the various advice and suggestions contained herein, you should, over the long run, spend a lot less money on attorneys and litigations and control the results to a greater degree as to the disputes your company will engage in which can not be avoided.

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  • We have over 50 years of combined legal experience.