It is Business . . . It Is Not Personal

It Is Business. . .It Is Not Personal

By: Ian T. Kravitz, Esquire

Your Construction Law FirmTM

As Tom Hagen said to Sonny Corleone in the Godfather, it "is business, not personal." Words to live by. Often in our line of work, clients want their pound of flesh. They want to prove the other side wrong, and make them pay. We, as lawyers, do well from a financial perspective when parties make such decisions personal, instead of looking at them from a business standpoint. We get paid to litigate cases where in the end, nobody except for the lawyers wins from a business perspective. Something to think about when you are in what is a business dispute.

As an example, is the recent case Your Construction Law FirmTM was involved in. We represented a contractor who performed a remodel of a lavish home in Palm Beach. The Contractor remained unpaid approximately $40,000.00 at the end of the project, and the owner decided he was not going to pay. Suit was filed, and after several months of litigation, the parties went to mediation. At mediation, our client decided to make a business decision. In light of the weaknesses in the case, and the amount of money it would cost to litigate the matter through trial, our client agreed to accept payment of $18,000.00, representing the attorney's fees and costs incurred to that point in the litigation. Our client decided to just get out with what the suit cost, and move on to fight another day. All business. Nothing personal.

The owner however, made his decisions solely on a personal level. The only offer made by the owner at mediation was to pay $10,000.00 to the favorite charity of our client. He had money, and made it clear that he would cause our client to expend tens of thousands of dollars to proceed if they didn't roll over and take whatever he was willing to give. As you might expect, that offer was rejected, and the litigation continued.

The parties proceeded to trial, where the trial court entered judgment in favor of our client in the amount of $75,136.94, representing the principle amount sought, additional damages proven at trial, as well as interest. The trial court then entered a separate judgment for the contractor's attorney's fees and costs in the amount of $79,147.00, for a total judgment in favor of the contractor of $154,283.94. Then, in order to avoid having to tender payment in satisfaction of the judgments while the judgments were appealed, owner was required to deposit $180,000.00 into the court registry to secure the judgments.

Finally, after 16 months of appeals, the appellate court not only rejected such appeals, but awarded contractor the $25,000.00 incurred in defending those appeals. So instead of paying $15,000.00 to settle a case fairly early on, owner was on the hook not only for his attorney's charges, but was indebted to contractor in an amount exceeding $180,000.00, plus interest.

While it may not be a good law firm business model to advise contractors to settle in lieu of litigation, our obligations as "counselors" at law requires us to remind our clients that sometimes it is important to remember that it is business. While we can go to the mattresses for you and prevail, sometimes it makes more business sense to take the hit to your ego and look at things from a dollars and cents perspective. Always remember, that it is business. It is not personal. When you make it personal, business may suffer.