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What Is The Litigation Process In Real Estate, And How Are Disputes Settled

by | May 14, 2021 | General Legal

Discussing civil litigation is somewhat difficult, because no one really wants to have anything to do with it. Sometimes it is the only method for resolution of legal difficulties. In real property law, contracts, construction, and water issues, we have found some specific methods can help permanently resolve disputes at the lowest cost.

We always give you a legal opinion letter regarding your matter if there is a dispute. This legal opinion letter is our first product when disputes come to our attention, because it is the only way to truly measure what facts may be necessary and how the law applies to those facts. The legal opinion letter is very important, because for a client to be able to make decisions, they need to know the strengths and weaknesses of their legal position. After we inspect documents at the recorder’s office, and gather facts from our client we apply the law of the jurisdiction to those facts to come up with the letter. Finally, putting our legal opinion into writing for the client using language a client can understand assists the attorney in assessing whether the full range of options for a given dispute have been addressed. In short, our legal opinion letter turns into a template for the causes of action and the elements of each claim that need to be proven in court.

Once we advise the client through the legal opinion letter, and usually there are some discussions that come out of the letter, we are set to go with the template for the entire legal matter. In some cases, a client will decide not to take legal action, because they have a losing case, and facts sufficient to uphold their claims have not occurred. Sometimes a client will decide to pursue some legal claims, and not to pursue others. Finally, for legal opinion letters that may immediately trigger a complaint, we attempt to provide some estimated ranges of cost for various stages of the litigation.

We attempt to resolve legal matters without a court’s intervention. We can’t share with you the secret sauce by which we accomplish this, because we don’t want our competition to get too many hints. However, I can tell you that we attempt to avoid court action not only because of the expense of litigation, and the stresses and strains it puts on a household and its relationships, but because part of our desire is to leave the neighborhood better than we found it. We can only leave the neighborhood better than we found it if we do not stir up trouble but instead be a peacemaker. Being a peacemaker is part of our overall philosophy of law. We believe law is meant to settle disputes, and not to generate disputes. There are enough unavoidable disputes without having lawyers generate fees by drumming up disputes where none existed before.

I mentioned before that we provide some ranges of potential costs of litigation. Given a particular dispute, we also try to estimate how long it may take to run through the court system. We only have knowledge of the time it may take to run the case to through a trial, so we cannot estimate time periods for appeal, if one or the other party decides to appeal the trial judgment. Currently, civil cases may take up to a year to a year and 1/2 or longer to get to trial. This is an extraordinary amount of time, not only because of the costs, but because the stresses and strains of a lawsuit are ongoing the entire time.

There is light at the end of the tunnel, because approximately 85% of civil lawsuits settle before trial. This is because during the discovery process parties will find out more facts than were initially available to either side alone. One party will ask the other party for documents to be analyzed substantiating the other party’s case. One party will ask the other party to make admissions about certain facts. One party will ask another party to answer open questions and to state a story about a particular fact or set of facts. If both parties are doing this, which in almost every case they are, this discovery process accounts for a lot of the expense of litigation.

Therefore, if during this discovery process one party or the other finds they have a vastly superior case, or that their case has no merit, the settlement process may become an immediate option within a few months after the complaint is filed.

The settlement process for a civil lawsuit ends up in a contract between the parties. This contract releases the claims the parties have against each other in exchange for things that will resolve the case to the satisfaction of the parties. These things may be the execution of certain legal documents to be put into the public record, such as road agreements, or water agreements. These things may include the repair of roads, or promises to plow snow in the winter in a particular way. In most cases they involve one party paying the other some amount of money. The amounts of money can vary, but the amounts traded in settlement will almost always be less than the cost of moving forward to trial in the case. This is usually true, except if one party has such a superior case that there is no doubt about the damages, and that point sometimes a payment of damages early will avoid going to trial. In this way, a party with a losing case can avoid the cost of going to trial . . . plus the cost of damages.

Civil lawsuits usually settle at three points in the process. 

The first point is after the complaint and summons are served on the other party. The party receiving the summons and the complaint decides they don’t want to have anything to do with the lawsuit, and so settlement talks begin in the settlement contract is drawn up relatively quickly. 

The second point is either during or just after the discovery process. At this point, both parties have given information and documents under oath to the extent that the question of who has the superior case can be answered. There is no absolute way to know whether a case would win in court, and some people call court actions a roll of the dice for this reason. Therefore, given the unknowns about a court trial and a court’s or a jury’s decision, after discovery, most parties feel as if it is better to control their own destiny by coming to a voluntary settlement agreement as opposed to waiting to see what happens in court.

The third point at which lawsuits settle is directly before trial. At this point, there has usually been a mediation session, the discovery process is closed, and the only thing that lies ahead is the trial itself. As facts come the light, they must be admitted into evidence for the trial, and some will not get into evidence. Then, they must be weighed by the judge or the jury for their truthfulness and their impact on the legal matter. Sometimes documents mean a lot. Sometimes documents mean little. Sometimes a witness looks like a born liar on the witness stand, and sometimes a very trustworthy-looking person can lie through their teeth and get away with it. Luckily for civil cases, judges spend about 80% of their time on criminal cases, so they are very good at spotting liars. In the end, one party decides they would rather not be subject to a trial, and settlement occurs.

We have found the approach I have laid out in this article to be the most efficient approach for resolving disputes at the lowest cost.

At Timely Contract, our primary legal services include: real estate contract review, real estate contract drafting, legal opinions for title insurance exceptions, and research, due diligence, and legal opinions for properties.

At Timely Contract we have local real estate attorneys who have experience throughout Idaho, including: Boise, Post Falls, Coeur d’Alene, Lewiston, Moscow, and Sandpoint.

We also have local real estate attorneys who have experience throughout Montana, including: Missoula, Billings, Bozeman, and Kalispell.

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