Form ’R Substance: What Drives Resolutions?
by Dennis Walker
“58 percent of all statistics are wrong.”
Some years ago, in Denver District Court, we worked out the resolution of a civil case in the hallway. The judge was attending to motions. He gave us time before the start of our trial. We felt that the commercial dispute might settle at the last minute. Liability was somewhat clear, but damages were difficult to predict and the defendant was in financial distress.
We tried to be creative. For a claim of $50,000, the defendant was willing to pay $30,000, but he needed time. He would pay $500 per month over 60 months. The plaintiff was willing to accept a discount in light of the defendant’s financial situation. Some incentive for the compromise was needed. The parties saw the solution in a stipulation to pay $30,000 at $500 per month for five years, provided the defendant would be liable to pay $50,000 if there was a default and a failure to cure.
The defendant then stressed his credit situation. He wanted to avoid a money judgment because that would interfere with his business. Within minutes we had a plan. Judgment could be avoided if the defendant lived up to the deal, but the right to obtain judgment would always be there if things went bad.
In open court, we described the settlement on the record. We explained the terms, but the trial judge declared he would not accept it. He said there was no way he was going to allow this case to be “on his docket” for 60 months. Either the suit would be dismissed now or a judgment could be entered.
We explained that in our deal there would be nothing for the court to do. The stipulation would control whether dismissal or a judgment would be entered during the next 60 months. No trial would ever need to take place.
The judge emphasized that case statistics for unresolved civil actions were regularly examined and were the subject of concern. It would not matter that significant court resources would not be used later. The fact that there would be an “open” civil action compelled the court to disapprove.
The parties were forced into a dilemma. A settlement agreement with a dismissal now could compel the plaintiff to re-file later to enforce the settlement and incur more expense and delay. A judgment now would adversely affect the credit of the defendant and potentially hinder his ability to perform over 60 months. Faced with the plaintiff’s unwillingness to dismiss, the “solution” became a stipulation for the immediate entry of judgment with a stay of execution to allow the defendant to perform. I remember the look of frustration and anxiety on the defendant’s face as he accepted this “alternative.”
We wondered whose interests were being served by a concern about “open” case statistics. Because of the trial court’s disapproval, the defendant was forced to stipulate to a judgment and suffer financial impact. There did not seem to be room for considering the case “closed” pending dismissal or judgment.
Since then, I have seen “open” case statistics and related policy considerations drive litigation. Delay reduction orders are entered in most cases. They call for the completion of service of process or default judgments within about 60 days after the filing of the civil action. However, disputes often go into productive negotiations immediately following the filing of suit. Motions to modify delay reduction orders are often needed to gain court permission to defer case management.
Maybe “open” cases linger in instances where little progress and some court resources are misused, but that does not seem likely.
Parties may seek a court’s help to advance the progress of any case under Colorado Rule of Civil Procedure 16. There does not seem to be a likely issue about problematic “delay” in the vast majority of actions. What seems evident is that “delay reduction orders” are assumed to eliminate undue delay, but don’t contribute to the goal of a just, speedy, and inexpensive determination of actions.
In case management, it appears that more and more hurdles of a procedural nature have been added. Lawyers seem to devote less time to the art of advocacy and more time to procedural mechanics. Each new step adds to the expense of litigation and to an atmosphere of complication. The greater the procedural hoops the better it is for those on the slow side of a case.
Have we let a few bad actors dictate a mindset where advocates are distrusted? Why not give lawyers flexibility to manage their own cases?
Form ‘R Substance is an occasional column dealing with tensions between substantial rights and procedures.
Dennis Walker practices in Cherry Creek in a group of 10 lawyers. He emphasizes civil litigation and business.