Attorney/Mediator - Steven Sepassi

THE VILLAGE ELDER

Recently I underwent knee surgery to repair a torn meniscus. I was told the torn meniscus was a result of “wear and tear,” code phrase for “you’re getting old!” Being the youngest in my family, and never having had any other surgery in my life, “getting old” was a shocker. Why am I telling you this story? Because, it seems as if, unwittingly, I have become the village elder, and with that comes a bag load of varied experiences, legal and otherwise.

Many times in mediating cases I come across parties, or some times attorneys, who are so attached to their positions that they do not see the real life consequences of their decisions. In mediating at least two cases involving real estate professionals as defendants, who had been sued for intentional misrepresentation (among other causes of action) the defense took a hard position. In response to various demands from plaintiffs, these defendants pretended that they were judgment-proof, and that the outcome of the trial did not matter to them. I pleaded with defense counsel about this unreasonable position, but I was told: “that’s my client’s position, and I tend to agree with him.”

I tried in vain to alert the defense counsel to the consequences of their decision; that having a judgment of “misrepresentation” could have unintended consequences on the defendant’s real estate license. When all else failed, I was left with no choice but to rely on my own experience and alert the defense to the following (of course I did not share this with the other side):

California Business & Professions Code Section 10177.5 states: “When a final judgment is obtained in a civil action against any real estate licensee upon grounds of fraud, misrepresentation, or deceit with reference to any transaction for which a license is required under this division, the commissioner may, after hearing in accordance with the provisions of this part relating to hearings, suspend or revoke the license of such real estate licensee.”

So, basically, a judgment of fraud or misrepresentation, even in a civil case, could lead to the loss of one’s real estate license. There are similar Business & Professions codes that deal with other professional licenses in California.

The defense was completely unaware of this, and when I pointed that out to them, their position quickly changed, and they agreed to reach a reasonable settlement with the plaintiff.

Now, what did my getting old have to do with this? If I had not had the knowledge and experience (gained by age!) about the Business & Professions Code as it applied to real estate professionals, the defense would have stuck to its position, which would have resulted in an outcome undesired by all parties. So, my getting old, and gaining experience as part of it, helped diffuse at least a couple of cases that I can think of.

Next time, when in a mediation where your client takes a hard line position, think about the consequences, intended or otherwise, and make sure your client does not shoot him or herself in the foot!