Some courts, De Falco notes, are reluctant to grant summary judgments. If any facts in the case are in dispute, the judge will likely say these issues must be resolved at trial—but only if there is merit to the case.
Alternative dispute resolutions and settlement conferences
Courts have more lawsuits filed than they can hear. Since PACA trust lawsuits deal with monetary disputes, there is a push to have parties negotiate and settle outside of court. This is where alternative dispute resolution (ADR) or settlement conferences come in. There are three classifications of ADR: early neutral evaluation; mediation; and arbitration.
As you might expect, early neutral evaluation happens early in a case, usually even before the discovery stage. Both sides agree to meet with a neutral third party to evaluate the case. The third party hears the facts and makes a nonbinding decision. If both parties agree to the decision, they can settle the case and avoid the costly discovery process and trial.
Mediation usually takes place after discovery. Once relevant facts, documents, depositions, etc. are gathered, both sides attend a settlement conference to find a solution and avoid going to trial. One or a panel of trained mediators will hear the facts of the case and propose a settlement. Like early neutral evaluation, the proposed mediation settlement is nonbinding and either side may choose to walk away and go to trial.
“A good mediator will tell you the risks and costs involved,” explains De Falco. “This is the time to control your own destiny. In a settlement, everyone may go away a little unhappy.” But if the parties work with the mediator, they can avoid the time and cost of a trial. Both De Falco and Quesenbery agree that a good mediator can make or break the process.
“The mediator has no authority to do anything except try to get you to agree,” Quesenbery points out. “Usually what goes on is the parties sit down and discuss the dispute, and try to reach common ground. If there’s no money there, there’s just no money. By the same token, if you’ve got a bank or individuals being held liable, there is a real incentive for them to agree. Both sides need to try to be reasonable, otherwise everybody wasted their time and effort.”
Arbitration is more like a trial than either of the other two ADR types. De Falco says arbitration has the same kind of timeframe proceedings as a court, but is being done privately with a third party, like a representative from the American Arbitration Association, to listen to the facts of the case.
Like mediation, one or more arbitrators will hear the case, which may include witnesses and other evidence. But instead of proposing a settlement like in mediation or early neutral evaluation, arbitration produces a decision based on the facts. Either side can decline to participate in arbitration unless they entered into a contract agreeing to be bound by the decision of an arbitrator.
De Falco cites “principle” as being a major factor in the failure of ADR. “Everyone has the right to have their day in court, but this comes with a cost. Frankly, some of the parties don’t like each other, so being in the same room doesn’t bring a compromise.” However, he adds, “you must go through the process—most courts require you to go through some kind of sit down with the other side to try to resolve the dispute.”
