Episode 3 – Stand, Fight, Win! LIVE: Real Lawyers, Real Answers – Settling Cases | Aldavlaw.com

Hello it's Wednesday it's 1:30 p.m. and we all know what that means Albertson and Davidson are live hi I'm Keith Davidson I'm Stewart Albertson and we're happy to be here with you on another Wednesday afternoon where hopefully we can go through some topics that you'll find interesting as trusting will beneficiaries and if you have any questions feel free to weigh in on either Facebook or YouTube or streaming live on both Facebook and YouTube and you can pose your questions there if you'd like and I already made a mistake all right we decided to try something new this time we are going to actually have segments for for our presentation so that we can go over the issues and hopefully make it a little bit more understandable for you so let's start with our first segment which is gonna be the beneficiary's corner in the beneficiary's corner we're gonna be talking about issues that directly affect beneficiaries and some of the issues that we come across more representing beneficiaries and today we want to talk about the uphill battle to contest trust and so I think there's a lot of misconceptions out in the world as to what children are able to do and what they're not able to do when it comes to contesting trusts so let me give you a hypothetical and then run us through an answer Stuart and see what you think about it so let's say that I'm a I'm I'm a son I am a son so I am a son of my mother's son and let's say I took care of her for years and years right now I'm confused can you explain how your your mother son yeah true story okay my stiller self anyway so I'm my mother's son and took care of her for years and years and I was always there for I we had a pretty good relationship was a little rocky and then a year before her death we get into a big argument and she storms out leaves the house that doesn't come back goes to live with friends and I'm disinherited and naturally I'm thinking well that's not fair I spent my whole life taking care of my mother and she disinherited me at the last minute so naturally I should be able to get a share of the estate correct well no and that's I think that's the problem trust contests I think that many people that don't have experience in trust contests and most people don't when they first get involved with one they look at it from a fairness standpoint and the law in California does not look at who you choose to give your assets to from a fairness standpoint I would even go as far as to say if you and your mom had not gone in a fight and you had been there for her for 30 years waiting on her doing everything you could for her and then she passed and she gave everything to charity you'd can't just come in and say hey that's not fair hey court in California I took care of my mom for 30 years I want to get something out of her estate the way the law looks at it it says what did your mom intend to do with her assets and so there's a distinction between what's fair and what your mother intended and of course sometimes in fact most times the intent of a parent is fair okay so so other people that reinforces that fairness idea well I know my neighbors when you know their parents passed away everybody got everything equally so why is it that 90% of the state's going to my loser sister and I'm the only one that went out and got a medical degree and became a doctor and I'm successful and how come I'm only getting 10% of the case of the of the estate that's just not fair and so the question is is well it's not a fairness analysis it's an intent analysis what did your mother intend and of course that leads into other questions which you didn't ask me but that leads into questions of well what is intent is it somebody else putting that in your mind to do that intent and we call that what do we call that that's undue influence right right and it's interesting too so what if what if what if the argument my mom and got it and I got into what if that was my mom's fault it doesn't change the analysis it doesn't change the analysis and and so you know you you have less hair than I do although I'm catching up I'll be honest I've got a pretty good bald spot my son points it out to me all the time but we pull our hair out and the reason we do is because we hear these same things from clients all the time and we don't get frustrated with the clients because they're new to this but when we hear it from people that don't know each other over over again these are things that are in the culture these are values that people think as to a state and and to trust and what inheritance should look like and this kind of goes back to the 1500s when there was primogenitor right I mean that's where the oldest son always got everything no matter what right and didn't matter what anybody intended at that time other than the intent to have a baby like when your mom intended to have you as a child if you pointed out earlier right you are your mother son I apparently so we've at least established that much there are some jurisdictions other countries where kids have a right to inherit you have to leave your child something which apparently happens in France we've learned or I learned a couple months ago in talking with a client but that's not the case here so there's no obligation to leave a child anything at all and so what you're saying essentially is parents can be unfair they can be unfair now let's throw a little caveat exception in there what happens if we have a minor child or we have a dependent adult child that's over 18 but they've got some type of cognitive disability so then there's there are legal obligations to support those children child support that sort of thing but even that isn't an inheritance right right so child support is an amount of money that you have to pay to support a child it doesn't necessarily I mean it does relate to the value of your state I suppose in terms of ability to pay but it doesn't necessarily mean that you're gonna get an equal share of the estate depending on how big the estate is right that's right so I mean it's kind of a mixed bag to some extent right the thing that's interesting to me too is let's talk a little bit about the difference between influence and undue influence so let's say my mom went she lived with some friends and she said I can't stand my son anymore and I don't want to leave him a penny of my money because he was mean to me and that's just what I want to do and what if the friends say well if that's what you want to do then you really should go see a lawyer and make that happen because if you don't put it in writing it's not gonna work it's not going to happen he's going to give everything and my mom says well that's what I'm gonna do I'm gonna go see a lawyer is that undue influence it likely is not undue influence because they didn't take what they wanted to happen to the estate put it inside that person's head and get that person to act in that manner and so they they were just suggesting under your hypothetical hey you probably should go see a lawyer if you really feel that way about it that there is some influence that takes place there I think the other cases we see a lot are the second third and fourth spouses and in this case we'll say it's a it's a third spouse that's a woman and she's younger and she's married an older man in those cases the man generally at some point is gonna amend his trust and likely gonna give everything to his spouse and the children of the man come to us and they see us and they go isn't that undue influence right and we say well she probably certainly influenced him as a spouse does but it's not undue influence and so those are that's hypothetical I just stated that's one of the most difficult cases we see because the spouses because their spouses right and so the assumption is spouses do influencing each other but not only that but everybody influences each other right so everybody can influence one another I've been trying to influence you to dress better I'm not haven't been successful but I can attempt to make that influence right right that doesn't necessarily mean that I'm gonna be successful now to compare that to undue influence let's say I somehow coerced you into wearing an outfit that you would never wear you know bright you bright pink like one of your outfit yeah like one of my outfits right because I'm stylish so you would never wear that but the if you were where if I somehow convinced you to do that and it was never your intent to do it you didn't want to do it that then crosses the line and undue influence it does and I think to add to that what if I was going undergoing chemotherapy treatment I was hospitalized at the time so I'm sick I'm not feeling well you're the only friend I have you're the only friend that will take care of me so I really rely on you a lot so you're in a very powerful position and you know you come along and I think most people don't understand that these undue influence cases it's not me undue influence it's not like me grabbing on to you saying you're gonna do this and you're gonna do it now it's me saying to your mom huh you know Keith hasn't come around to see you lately you know if I was your son Keith I would have come around to see you he must not appreciate you and then you just keep taking that person further and further and further chipping away at it shipping away at it it's a really nice type of undue influence if you think about it right and so these people when they become in a position of power like caretakers towards the end of one's life if somebody's changing your diaper they have a lot of power over you because your diaper is either gonna get changed or not depending on how nice you are to that person right if part of being nice in their mind is you giving them their entire your entire estate through a trust document yeah you're probably gonna be swayed into signing something like that so when we're looking at undue influence we're thinking about literally putting somebody else's intent the bad person's intent inside the elders brain is that kind of a good way to say it's kind of gross to say it that way but well but the point is you're trying to impose your will on them not their will and then they actually follow through with an act that they normally would not do but for what you imposed upon them okay so now that is interesting because that kind of gets us back to this argument of my mother never would have done this right so now if we have other factors showing that there was probably undue influence imposed now what about me coming in and saying look look at my track record look at my relationship with my mother my mother never would have done this does that present some evidence of undue influence if there was one factor that I would like to see in more of our clients cases that have been disinherited by trust document it's a good relationship with their parents and why is that that is so fundamental and I know most people don't save the Christmas cards that they received over the years and the gifts and they don't save you know their calendars about all the time they went to you know Thanksgiving dinner and those kind of things but if people have that as evidence when they come in to see us it helps us a lot because it shows a pre-existing good relationship and it doesn't make sense that the decedent your mom in this case just a short year before her earth would completely write you out of her trust or will I would say one thing further I'll bet you dollars to donuts that your mom had you in her previous estate plan right and gave you her assets and that also is very helpful because it shows a pre-existing plan in place to benefit you one other thing I would say is that sometimes you'll see your mom and you'll see her being maybe you'll even see some of the undue influence by the neighbors who she went to live with because she got that fight with you right right you'll out of good-nature want to help her get away from that and you end up making you look like a greedy heir because you go when I talk to your mom about what are they taking you to get a trust done mom you're really doing this out of concern for your mom but it turns out looking like you're trying to save the inheritance for yourself and so you have to if your mom did move out and let's say you came to me and you said what can I do to resolve this matter I would say give your mom the best sunset years of her life invite her to dinner if she doesn't go with you fine send her cards let her know you love her you never know she might change her mind and want to see you again and rekindle that relationship that's one of the most important things you can do while your mother or father is still living if you're in a situation where you think somebody is exercising undue influence over them so then you can show that you have that relationship and what we really need to see then is a good relationship a history of a good relationship and we like to see where documents are changed close in time to death could that seems to indicate that something was happening very quickly which seems suspicious and you do have to have some factors of undue influence some actions that a bad person took to coerce a parent into doing something right so just the fact that my mom was unfair or irrational or not very nice to me then and of itself isn't going to quite cut it and I think the other thing that I'll say just to kind of wrap this up is you have to remember that when you're contesting a trust you have the burden of proof right so you have to overcome the documents as they are written and that might be the hardest thing for people to understand is that the law presumes that these documents once they're signed are valid they're not and you have to prove otherwise that's right we carry the burden of proof and that means we have to get a judge to go along with our theory of the case we've spoken to quite a few judges on this one judge I think he's a bit draconian in his analysis but he did say that in at the time he was on the bench he only invalidated 5% of the invalidity cases that came in front of him the trust contest that came in front of him I don't think that's quite that low in in what really happens in the court so I think that we're probably more like 30% of the time the courts will invalidate although you probably have yet to figure that a majority of the good cases probably settled before trial and that's true that is true so you know he was telling us that that if he invalidate it was after trial so there there just may have been some bad facts and what cases go to trial bad cases that's true a lot of times all right so we're gonna now move to our practice pointers section and my understanding is the key that you have done some pulled out the old notebook and actually read a few things like tube to edify yourself on a particular subject and that would be one of my favorite things to do and that's to sue attorneys and so when we're talking in the trust in a state arena how are we suing attorneys and what was the case about why don't you fill us in yeah we're going over in appellate case today and it's Cristina Cortes versus John Sherwood and both of those names sound like people out of movies characters out of movies they'd be good movie character names and this is coming to us from the first Appellate District it's a case out of San Francisco County and it was decided just earlier this year August of 2018 and so it's fairly common I think for people to well number one not like lawyers okay we get it you know a lot of people don't like lawyers and it's very common I think for people to want to sue a lawyer who has some role in a trust or will matter someway somehow right and so this case had to do where the parents actually were quite wealthy but for some reason and I don't quite understand how this played out giving our community property laws but the husband was worth 2 billion and somehow the wife was worth a couple 1020 million let's say and so wife dies first and a survivors trust is created with her share of the estate which originally was valued at two million but apparently that was for estate tax purposes and later on it ended up being sixteen or twenty million it is true that the states can be valued lower for estate tax purposes in order to try and you know save on taxes but to go from two million to 20 million doesn't make any sense to me so I'm not quite sure what was going on there something something wasn't quite right and clear the IRS missed that because they audit each one of these estates or maybe they didn't file a 706 in this case I don't know yeah I don't know if it's a two million they may not have I'm not sure but it the whole thing seemed a little sketchy well obviously the beneficiary here felt the same way because she didn't understand why mom's trust was so low which I would have to agree with her I'm reading the facts as the appellate court lays them out I'm wondering the same thing but she's told by the father who actually wasn't her father that was a stepdad but by the husband don't worry about it when I pass away you're gonna be a very wealthy woman meaning that she's going to get a share of this two billion estate and so naturally she didn't worry about it because what are you gonna do you mean you can't you know if you if as you have said many times before to her you're not going to go and sue Robert if he's worth two billion because then you're gonna be disinherited all together and I don't want to do that so she kept asking for all this information on the mom's Trust and the lawyer for Robert kept saying don't worry about it this is all there is and then finally they decided to just terminate the trust that was set up on the moms estate for whatever reason and just distribute out 16 million dollars to I think it was two or three beneficiaries okay well that's fine but she still had questions about was the right amount of assets put on mom's side because this was the largest date and mom's side seems pretty small and the lawyer said don't worry about it you're gonna be a very wealthy woman when Dad dies you know just sign off on it so she does she doesn't get a lawyer she just signs off on it so dad dies and and guess what happened she didn't get anything you imagine that I didn't know all right we kind of saw that con it's kind of what we do so yeah so she gets disinherited she's got nothing so now she's standing there saying wait a minute I didn't contest what was done a mom's trust because that lawyer told me don't worry about it I'm gonna be a wealthy woman so she files a lawsuit in part against Robert Roberts estate Roberts disease but she sues his estate that makes sense he was trustee of all of these trusts so he certainly has some blame there but she also sues the lawyer and her claim against the lawyer is that he conspired with his client to trick her out of to sign off on this one trust and then be disinherited from the bulk of the estate so what is your thought just without knowing the legalities of this we already know the legalities of it but what are your thoughts just off the top your head about whether or not this lawyer did the right thing here is he a good guy is a bad guy well I don't know if he's a good or a bad guy but as far as doing his job as a lawyer his allegiances were to his client and if his client wanted him to do something as long as it wasn't against the law then he should fully advocate for his client and so if his client had told him to tell whoever that everything's going to be okay then that's what the lawyers entitled to do in fact the lawyer would be going against the attorney-client relationship if they were to say anything other than what their client wanted and do you still feel that way even though Robert was a trustee I think so I mean I I think that wished and I haven't read the case but is she was she vested at that at the time that he says it's for their mom's estate but not for Roberts no he's talking about Roberts estate and so she's not a vested beneficiary and so while he may be a trustee of the entire trust he he got her to agree to whatever on mom's does she share in mom's side yes okay so she got her money and maybe maybe in Dad's mind she was taken care of at that point there were 16 million dollars it went three ways yeah so she got a lot of money yes she'd get two billion dollars but yeah that's interesting right what does it mean to be a very wealthy woman so one person might think it's five million and somebody else thinks it's five hundred million right so more is better Rimes the money right yeah it's it's interesting point you make it's really really important that we kind of drive this point home that you just said which is a trustees attorney represents the trustee not the beneficiaries and I think that's a common misconception as a lot of times people think that trustees attorney represents somehow the trust or the beneficiaries or something like that they don't they represent the office of trustee which means this lady should have gone out and got her own attorney to advise her on this stuff of course she didn't because they told her don't worry about it you're gonna be very rich so she didn't worry about it but unfortunately that left left her open to this type of action so she Souza's a lawyer and at first the trial court kicks the suit out shiri files a first amended complaint and the second time the trial court lets the complaint go forward and so the attorney appeals and the appellate court says no the trial court had it right the first time this lawsuit cannot go forward because under Civil Code section 117 14.10 you first have to go to court and get a court order before you can sue a lawyer for conspiring with his or her client so I I want to I want to jump in right here and again without the benefit of having read this case I want to make sure we're being very clear here we can sue lawyers all day long for committing malpractice legal malpractice in a case we don't have to get a court order to do that is that right if you're the client if you're the client of that lawyer then yeah you can file a lawsuit against that lawyer okay what a practice and what if you're an intended beneficiary of an estate plan can you sue the estate planning lawyer for legal malpractice yes so what we're getting at is standing as long as you have the the legal right to bring that lawsuit you can just go ahead and bring it no court order required so then clarify for me why is it here we have to get a court order before we sue a lawyer because we're suing a lawyer who wasn't the beneficiary's lawyer right so it's a different lawyer and we're suing that lawyer on a conspiracy theory so what we're saying is the trustee Robert he lied to me he defrauded me the lawyer helped him defraud me and therefore the lawyer is also liable personally on a claim of conspiracy conspiracy to commit fraud okay well I've got a question for you now I'm gonna throw you off where you're headed here but my question is we know we got the financial elder abuse down to you in California and it says that if somebody take does a wrongful taking from somebody that's over 65 years of age it's considered financial elder abuse it also says that if somebody assists someone in a wrongful taking and would a lawyer who assists this trustee in committing fraud are they liable under the financial elder abuse statute number one and number two do you have to get a court order before you sue that lawyer they could be liable so this what I'm talking about now is it doesn't go to whether they're liable or not they could definitely be liable even in this case Robert could have been liable for conspiracy but you probably do have to get a court order first because if what you're suing the lawyer for is assisting his client in in the financial other abuse so if you have a lawyer out there that's just doing their own financial elder abuse and they're just you know taking stuff from old people and they're not doing it on behalf of a client hey sue away you can sue all day long but if you're really suing Robert but you also want to drag the lawyer into it too because the lawyer helped Robert do this because he was Roberts lawyer then you have to get a court order giving you permission to file that lawsuit before you file it and what the what the court wants to see before they give you permission to sue is what's your evidence is there a substantial likelihood of winning on the merits and so then you go in and say well this is what happened and like on your example financial elder abuse if you have a lawyer who honestly is helping a client do financial abuse and they're doing it for their own financial gain so they're trying to benefit both the client and themselves financially from that financial elder abuse you're gonna be allowed to file that lawsuit because any time a lawyers doing something for their own financial gain that lawsuits gonna go forward whether or not you win the lawsuit that's a separate question so it seems to me that we run into this all the time in these kind of cases and in the cases that we work on there seems to be procedural rules that you have to follow and then there's the substance of the case which we would call the substantive law of the case of the substantive facts of the case right so walk us through the distinctions there I mean if you win on procedure does that mean you were right on the facts no no so what the only thing that this case says is before you can even file your lawsuit you have to get permission from the court which comes in the form of a court order so I'm saying a court order that's a procedural rule it's just a procedural rule and all it's meant to do is stop people from filing lawsuits against people's attorneys just to clog up the court system and cause problems or to hurt the attorney or to hurt the attorney or in what the case says is it also would drive a wedge between the client and their own attorney if you allow that to happen and that's really the danger of it and so we don't want opposing parties to be able to drive a wedge between the client and the lawyer except in cases where it's it's truly warranted so the procedural requirement is you have to get court permission once you have that court permission the court says yes we're gonna allow this one to go forward now you're suing on the substance so now you're looking at the underlying lawsuit the way you would any lawsuit and you'd say okay where's the evidence and can we prove this so just because the court allowed the suit to go forward doesn't mean you win it just means that you're you've been given the right to file and maintain that lawsuit and the default rule is you cannot sue your opponent's attorney unless you have grounds to do that and it has to be convincing so that's what this case really stands for is you can sue for malpractice but don't think that you're gonna sue the other side's attorney and we get people that do ask that quite a bit and naturally you would because you know if an attorney is helping somebody else commit financial elder abuse you do kind of feel like shouldn't they be sued as well well it really depends on did the attorney benefit themselves by doing that or were they just giving legal advice and that legal advice was then used in a way that that the client went out and did financial other views because you can give legal advice to a client without realizing that you're helping with a fraud right right answer sure why sure well that this is a great case and the one thing I was saying in closing on this segment is that there's procedural rules that you must follow as a lawyer and then there's the substance of the case and I think that many of us from first grade second grade third grade all the way through elementary school we're very good at arguing substantive issues we're very good at arguing fairness and right and wrong but we're not so good at following rules I don't think that ever changes as we get older and I think if I were advising a young lawyer who's just starting a practice make sure you spend a lot of time on the procedure because there's many times where we'll win a motion yeah where we would be dead in the water if we actually got to the facts of the case but we win it because the lawyer didn't take the time to go through the Rules of Civil Procedure to figure out exactly how they're supposed to do this and it sounds like this lawyer in this case should have filed a very it sounds like a very simple filing with the court which is a gatekeeper to make sure that we're not filing frivolous lawsuits against lawyers too cause you know the problems that you identified and it allows the person then to get to the substance of the case as long as they follow the rules yeah I think that's right and I think the problem is I don't know why they didn't go back and do this after the fact because once once the trial court dismissed a lawsuit the first time you think you would have gone back and asked for that order I'm assuming it's because the statute of limitations had already ran and so they probably were just fighting what they had but what you say I mean I totally agree with what you said I mean know the rules look at them make sure you follow the procedural hurdles they will get you every time if you don't know them and they always seem to spring up there's a trap you know when you least expect it because you really have to go back and look at those rules every time and we do that every day right and I know we're going a little over on this segment the one example I can think of on a procedural problem is that we had a motion for summary judgment filed against us years ago right and and the way that this was styled and filed there's a rule and the rule doesn't make a whole lot of sense to me I'm sure it's there for a reason it says that when you put in your moving papers what exactly you're stating the facts that you're going after there's a way you outline them you have copy and put the coffee and paste it but it must be identical in the separate statement right here the lawyer got a little bit lazy or maybe he didn't know the rules and they recast some of the facts as they were alleging were that you know couldn't go to trial and here I'm standing there in front of the court ready to argue what I thought was a losing motion for summary judgment and the court said even before I take argument here I'm just missing or overruling the motion for summary judgment because it's not procedurally correct it's procedurally defective therefore you all are headed to trial and it's just because the wording here wasn't the same as the wording there that's in end of story and of course the case settled after that so you know so those are you got to pay attention to the rules because they will bite you for sure yeah all right let's move on to our next segment which is going to be asked and answered so this is a segment where we're going to be talking about questions that we certainly get a lot and we probably answer a lot and so today we're going to be talking about settling cases because settling cases is a big part of every lawsuit because a vast majority of civil lawsuits will settle before trial that's just that's just a reality of it we're not necessarily trying to get cases to settle before trial although sometimes we are but the reality is most cases if you're gonna get a result it's going to come in the form of settlement so I guess the question is why do cases settle and how did they settle how do you position a case to favourably settle settle because if you're gonna settle your lawsuit you want to be on the most favorable terms you can get right that's right and so when I was a young attorney I remember that I would try to call the opposing counsel as soon as I lawsuit was filed against my client or perhaps I had just fought filed a lawsuit against their client and I would call and I'd be very reasonable and I'd say we both know what the facts are in this case we both know how the law applies why don't we just go to an early mediation and resolve this case you've been practicing long enough now to know you shouldn't be reasonable you shouldn't be reasonable and that's what the rule is you can't be reasonable and I think there's something else you have to do I say that that litigation is not a sprint it's a marathon right and I think in the Civil War I think you've pointed out several times that the Civil War that the north would win a battle and then would make terms or the south would make terms to the north - you know in the war but the North felt really good about winning that battle and they were to reject the overture to settle and then the south would win and another skirmish and then the north they go oh maybe we should have taken that settlement and then they would they would say to settle and they're just there wasn't enough of a catharsis in that war there wasn't enough over the issue that people were fighting over they hadn't fully gone through the feelings and developed those feelings about what they were going through what that case was about you know people in in litigation do the same things when we come and we file a case you're gonna have to go through this process and I call it bloodletting right it's not a better way to say it and I think I need to show you these on youtube because I know you're you're too upstanding of a person to watch these on YouTube but I watch them they're these guys that will stand over a table and they take turns smacking each other so you know I have not seen that let me do the part here take you it forth so the one guy will smack the guy in the face with an open hand and then the other guy gets to smack the guy and they go until somebody gives up and somebody does ultimately give up because it's painful for both sides and that's a great analogy for litigation it's painful for both sides but for some reason we have to go through that smacking to the face process on both sides but the bloody each other's noses up a little bit and then settlements happen and like you said 97 98 percent of cases subtle but how do you settle as soon as possible which may not be soon to most people and then how do you create the best settlement for your client and I think that's going from A to B in the litigation process and making sure you're checking off the things that need to be done you need to do discovery you need to do depositions you need to file motions when you have to you have to file motions to compel as nasty as they are and as frustrating as they are you have to go through this process but once you go through this process then good things tend to happen what your thoughts on that yeah I mean absolutely and I guess I was gonna ask why do you have to do those things I mean is it are you doing those things you're doing depositions you're serving subpoenas are you doing those things to obtain information in part I guess or are you doing it to position the case and either for settlement or trial and so there's a little bit of both I guess there and the thing about you know why do cases settle the reason they settle is that you know people run out of steam they just can't keep going and it's not just financial it's emotional I mean lawsuits take a tremendous emotional toll on everybody and on the parties especially because there's so much unknown and there's a lot that we just can't predict in the law we can't predict what the outcome is gonna be even in the best of cases there's no such thing as a slam-dunk lawsuit where you're just gonna go in and win the day because that just doesn't exist right and how many times have you heard somebody tell us oh I've got a slam-dunk lawsuit and then you start kind of going through the facts of the case and all this and you realize it's not so slam-dunk I don't know that there is such a thing I mean even the best of cases still is not a slam-dunk lawsuit and it's because people ultimately are gonna make a decision on this case it's it's some person or group of people if you gave a jury is going to make a decision and those people have their own life experiences they have their own viewpoints they may have been through a case like this before and they have their own ideas of how things should be decided and it's not always rational at least from our point of view well and I would say that any case that doesn't settle and you know we do our fair amount of trial work but any case it doesn't settle there's some failure that's happened there's some misunderstanding misunderstanding of the issues in the case there's a misunderstanding of the law and how it applies to those issues and we've seen it where you know we've had judges pull us back into chambers right before a trial and they'll say what's this case about they kind of under know about it and we'll hear the opposing counsel tell their side of the issues at stake in the case and it's the first time we're hearing about them in case I've never even heard this case before and yet we've done discoveries we send their positions and I think judges you know they pulled her hair out too because we lawyers are like kids I mean we tend to fight pretty hard then we come in to waste a jury's time to waste the judges time and we're not even clear on the issues that were litigating and so I've had one judge send me out into the hallway with the other lawyer to identify the issues that we were gonna present at trial because we were so far off on what are both of our trial briefs had to tell the judge right and so that's why I'm saying I think if a settlement doesn't happen in most cases there's failure on both sides right we maybe we didn't communicate the case well enough maybe we didn't educate the opposing counsel if they didn't understand the case well enough because we do run into personal injury attorneys that that do trust an estate litigation on the side you know to help out during the the times where their contingency fees aren't coming in and those are frustrating cases because you have someone that doesn't know when you're trying to help them or when you're trying to trick them right any necessary try to trick them but everything you're trying to help them with they think that there's something some leg up you're gonna get on them right and so they have to say no to everything and so you end up taking the case to trial you gotta settle these cases for the clients but don't settle them prematurely make sure you go through the process get the facts lined up and by the way we do feel like when people hire us as this is all we do I feel like that gives us the ability to show the opposing counsel we know what we're doing here and while we certainly are open to reasonable settlement discussions if you force us to go to trial we certainly will yeah we don't have any problem doing that and I I guess that's that's kind of interesting that's another reason why you take these depositions serve these subpoenas get the information is that you can really help to evaluate the case for all purposes but especially for settlement all right so once you sent in as I've sat through a few depositions we've been doing this long enough now where you really get a feel for it and you know that this is either a good case or a bad case or this is a good witness or a bad witness and how that fits into the overall valuation of the case and the thing that I've noticed is that when you do have qualified attorneys on both sides of a case that know what they're in this area it's not uncommon for those two attorneys to value the case around the same amount that's correct and so it may not be exactly but if you were to take a range it'd be kind of interesting I've never done this and I probably would never do it because I'd have to disclose things to the other attorney that I wouldn't want disclosed but wouldn't it be interesting if you had the attorneys write something out on a piece of paper before a mediation starts saying what do you think the value of this case is worth and then I'll bet you anything that when it settles they'll be within the range of each other and that's a good mediator is the same way to a good mediator knows in their head about what the value of a case is and they'll guide you there I think successfully but if you have a bad set of attorneys on the other side who don't really understand what they're doing in this area the reason why that's such a huge disadvantage is because they can't properly value the case and so they either over value it or they undervalue it now sometimes that's to our advantage right because if they're willing to over value it and give us more money than we even think it's worth hey great we're not gonna tell you you're wrong but if they if they think that the case is great and so they push it to trial when really it's a terrible case that they probably should settle because they're probably going to lose then they miss out on that opportunity for their client right so I mean having somebody who really knows this area is important not just be able to navigate through the procedure of trusts and wells but also to be able to evaluate the case and give you an idea of what they're worth right right and and just a little bit of a war story a brief one you and I did a mediation several months ago where we went against one of these lawyers that didn't practice in the trust in a state arena and it was it wasn't a very good case and for whatever reasons we were sitting there at mediation they had agreed to mediate and we made a an offer and it went over to the other side and within just a few minutes their offer came back and it was more than we were hoping for to begin the case right that's surprised both of us and of course then we continued to negotiate all day and we got a very nice return for our client those don't happen often right but when they do it's fantastic for the client it's really interesting how the opening bid and a mediation tells you a lot about what's going to happen at that mediation I think most people see an opening bid and their natural reaction is to be insulted that's an insulting number I can't believe they would offer me so little or whatever but it's very telling and so you know having a case where the opening bid is 20 grand is very different from a case where the opening bid is 40 grand I don't even know anything else about that case I just know that those two opening bids tell me that those two cases are a world of difference when it comes to trying to get a good settlement from it because it there's more to work with and so you kind of can gauge what's going on with the other side so you kind of know if you have your work cut out for you or not based on those opening bids but I think the mistake a lot of people make is they they're not they don't really think about that opening bid right so if you're going to get a good settlement for your client you don't want to come out ridiculously high and and try to bluff the other side but you also need to make it high enough so you have plenty of room to negotiate so there's a little bit of an art to that negotiation - well the opposing counsel - if they're listening to this they need to realize don't come out too low because if you come out too low we're gonna be here all day long you need to come out with something reasonable the one point I'd also make as if I could do some things over as a when I was a little bit younger and doing mediations I used to hold things back from the mediator because I thought these were such important issues that I was gonna save them for trial and that's a huge mistake first of all there aren't any Perry Mason moments at trial for the most part right most of those issues are already known give the mediator the best ammunition you can at the mediation because they are these are people that have been on the bench for years and years and years they were practicing lawyers previous to that they're very smart they're very quick on the uptake because they've seen so many of these cases if you give them good ammunition they go into the other side and make that other side feel so small like they're gonna be crushed at trial so take the opportunity to settle today so don't be afraid young lawyers old lawyers middle-aged lawyers don't be afraid to give the best points you have in your case to your mediator so that they can go to the other side and explain why they're going to lose at the time of trial good mediator will take that information and use it to your benefit and I know a lot of times people will say is the mediator on my side or feels like the mediators on the other person's side the mediators on nobody's side the mediators on the side of settlement because they take great pride in the percentage of cases they settle and a good mediator will take the information you have and use it to their advantage but even if you're using a mediator who isn't great who's you know you know maybe we want a lesser mediator let's say it's still the lawyers job to help that mediator give them what they need to be able to push the other side where the other side needs to go to be able to resolve the case because if the mediator isn't willing to kind of be very direct with the parties and their attorneys about what they've how they see the case what the how they see the value of the case it's never gonna settle and and you know that really harms the losing party in that case so if there's one party that that really needs to settle and in most cases there usually is they're gonna miss out on that opportunity because the mediator just isn't doing their job and really pushing both sides to where they need to go but arming the mediator is so important we can do a whole segment on just how to work with a mediator I think that be it's not something that we've ever talked about before but it'd be kind of interesting how to work with a mediator and every mediator is very different and they all you know some of them are easier to work with than others and they all have their own style but they all want to settle the case that's the one thing that they take great pride in I think yeah and I think also too for clients and lawyers alike mediation is not about who was right and who was wrong right it's not even about the facts of the case other than the facts to show the other side how they're gonna lose at trial what the what mediation really is it's horse trading as you say it it's and I say it's an apple pie in the middle of the table and the apple pie is how are we gonna split this apple pie up if there's only two parties is it going to be a 50/50 division is it gonna be 25 75 that's what the whole point of a mediation is forget about the issues talk about what are you willing to take to be done with this how much are they willing to give you and ultimately the best mediations that I've ever been a part of both sides have been just a touch unhappy at the end right you don't get everything there is a compromise that does take place but with that compromise comes finality the case is over and you're assured to get whatever it is you agree you're going to get and so we spend a lot of times with our clients on mediation in fact there's a new law January 1 2019 where we're gonna have to disclose how the mediation process works the confidentiality of the mediation process to clients in detail format this is a new law it's required now we must follow it and I think it's a good thing we should have you and I've already done that anyway with our clients we sit down and make sure they have a full understanding of the mediation process now we're gonna have to formalize that in some written documents it's it's it's it's a good law I'm happy that the legislature and its infinite wisdom decided this is something we should be doing for mediations another thing for clients to sign but it's a good thing and I think clients do need to be aware of what is happening at a mediation I think mediation is one of the most mysterious aspects of lawsuits so it's hard we've got a lot to talk about on that subject but but I think we've we've covered it enough for today and we'll pick it up again another day so let's go into our final segment that's our closing argument so today's closing argument we're going to be talking about what's the best way to structure your contingency fee agreement if you're going to hire a lawyer on a contingency fee so maybe we should start by just talking about what a contingency fee agreement is so a contingency fee agreement is your agreement as a client with the lawyer that you will have to pay nothing to that lawyer in most cases and that lawyers going to take your case the lawyers going to pay all the costs out of their pocket but if the lawyer is successful by way of settlement or trial or appeal or whatever the success is in that case you're gonna share a percentage of the recovery the total amount recovered you're gonna share a percentage of that with your lawyer that's what a contingency fee is and maybe you can describe the hourly fee in con and just so we can have a full understanding of what the two two primary options are for hiring a lawyer yes so the hourly fee is where you hire a lawyer you pay them usually a retainer up front some amount of money to get them started on the case and then they just bill you based on the amount of time that they spend working on your case and to the extent that they spend any money on costs on your case you to pay for that - and you usually just pay on a monthly basis so every month you get an invoice and yet to pay for the attorneys time and all the costs and so a typical trust and will contest case you can expect that your costs are going to be somewhere in the neighborhood of eight to ten thousand on the low end and it could be fifty sixty seventy thousand on the high end or more depending on how big the case is and how many depositions and all these other costs they go into your case and when you talked about costs right there were you talking just about costs of the lawsuit or were you talking about attorneys fees as well yeah so the difference is the attorney's fees is for the time that an attorney spends working on your case it's just paying the attorney for the time for their time the costs are all the out-of-pocket hard cost that the attorney has to pay to an outside vendor so when you subpoena documents you have to pay for copies of the documents when you take a deposition you have to pay the court reporter when you file documents you have to pay the court filing fees so it's all the stuff that you have to pay to outside third-party vendors those are the costs and so in an hourly fee arrangement you reach into your own pocket as the client and you pay a lawyer for the cost of the case as well as the attorneys attorneys fees is that right and you pay that on a monthly basis so every month you have to invest more money into your case out of your own pocket okay and the typical trust contest case what's the minimum amount total of costs and fees and what's what are you probably looking at if you go all the way to trial just a ballpark cuz I know it's hard to get a number precise in these kind of matters yeah it's really hard because of course it depends on the amount of time you spend in every case is different but and what I usually tell people is the moment you file anything in court any type of lawsuit in court you should expect that you're gonna spend a minimum of thirty thousand dollars even if it settles extremely early which cases do not settle early as we already talked about if the case goes a little bit longer but it doesn't go to trial it settled before trial is probably fairly common that you're gonna be somewhere between 50,000 and 80,000 in that case it could be a hundred thousand it could be a hundred and fifty thousand again it just depends on the complexity of the case the amount of discovery you have to do the amount of depositions you have to do and then if the case goes all the way through trial then you can take that 80 to 150 range I gave you and double it and and and so this is expensive obviously to do litigation yeah so if I'm a client and I say you know I just don't have the ability to front even $80,000 that this is a typical case that's gonna settle a year from now so I want to hire you on a contingency fee basis what is the typical contingency fee in California and what are some things we've done as a firm to try to make it a little bit easier for people to retain us under a contingency fee agreement well you know I think we've learned recently that the typical fee especially in like the personal injury field is forty-five percent our typical fee tends to be around forty percent of the amount recovered plus reimburse us for our cost but obviously the benefit of contingency is you're not paying upfront and if we don't recover anything for you you pay zero now let me hit that last point for you and I want you to keep your thought process where you're going with that but let's say that we take a case on contingency and we work it for a year and a half and we go to trial and we lose and we've got let's say fifty thousand dollars of cost in the case we had to hire a forensic psychiatrist right we had to hire an expert in trust drafting and we lose that case not only do we have probably several hundred hours of attorneys time in it yeah we've got fifty thousand dollars of costs out of our pocket would the client under that contingency fee agreement os anything back nothing at all so the fifty thousand that we paid out of our own pocket for all those costs we would have to just absorb that that's that's too bad for us and all the time we spend it's too bad for us so the client would pay zero and that's the benefit of contingency is that the lawyer is taking the risk with the client that you're gonna prevail and obviously that gives us some pretty big motivation to want to win because we do not enjoy spending fifty thousand dollars and not getting it reimbursed back to us that's painful so we want to win so that's the benefit of a contingency the the downside of contingency is it tends to be more expensive if we do prevail and so you can imagine if you're paying us forty percent of your recovery it's a it's a big amount and if you're successful it's probably going to be more than what the hourly rate would be and so there's a there's a plus a minus two either approach one of the things that we've been using recently though that people seem to really like is what we call a stair-step contingency and so I don't know if you want me to describe that so typically what we do is we start at a lower percentage so maybe we'll start at 25% for the first 20 hours that we work on the case after 20 hours you step it up to 30 another 20 hours 35 in another 20 hours 40 and then it just caps out of 40 the reason we do that is a lot of people believe that their case is going to settle early they think that once we file a lawsuit whoever it is that we're going against is going to fold and is going to give up early M so we figure well that's fine if that happens then we're happy to take a shower percentage because we haven't done as much work and so that's how we structure it that way so the more work we put into the case the bigger the percentage comes becomes but if the case does settle early then great you get less how often do cases settle early never why because these are complex cases they have multiple pleadings multiple opposition's multiple rounds of discovery there's going to be some depositions and that takes months and months and months and it takes hundreds of hours to prove up these cases and that you know I do feel for people when they come in and sit down and they feel like I've got a million dollars in this trust and my the trustee won't give it to me why do I have to hire lawyers and I don't have money to pay the lawyers and why are you gonna take this fee so what we found is they because they believe the cases is is so strong and they really do believe that I don't want to discount their belief we're saying okay well we'll do a stair-step and that's just in case the case does settle early by the way just between you me and then anybody that's listening even when we've had cases that settled earlier than we thought they would we've been reasonable on the contingency fee that we have in that case I mean we truly are willing to take less if it settles early and that's why we do the stair step so if you happen to have you know that rare case that settles early hey great I think the number one reason why cases don't sell early is because the other side believes that they are 100% right that's right and I know that's shocking for people to hear we tell our clients this all the time because a lot of times people say well how could they keep fighting when they know they're wrong and the reality is they don't know they're wrong they think they're right and then people say well how could that be possible how could they think they're right when they're so clearly wrong well people have a wonderful ability to justify what they're doing and that justification ends up costing you more time money and effort in litigation because they simply believe that they are right and they're gonna prevail and our clients believe they are right and they're gonna prevail and so you always hear people say well at least the truth is on my side or justices on my side believe me both parties think that and and it's hard to get to to truly understand that sometimes because you it's hard to imagine that somebody could be wrong and still believe that they're right but that's what we're dealing with and that's why it's hard to get cases to settle early I think well and we spend a lot of time with our clients preview prior to mediation and at mediation making sure that they fully appreciate the other side feels they're just as right as you do and they're always blown away by that because they're so convinced in their legal position they're so convinced of the facts of the case and again I don't want to tell a client well you're just an idiot cuz they're not they truly do feel that way they feel that they've been wronged they feel like this trustees a nefarious person that their fraudulent and what they've done but I guarantee you it's a survival mechanism that we've seen time and time again that trustee figures out a way to spin the facts in their own mind to come to the conclusion that they actually were doing good things and you're the beneficiary you're the problem you're the one that caused all of this and so the minute we get a client to at least logically maybe not emotionally but logically assent to the idea the other side is also angry about this and feels that they're right it makes the mediation process much more productive yeah you figure if you're dealing with an opponent who knows that they're wrong and as a rational person they're probably going to fix it and make it right that's what rational people do when they know they're wrong right so that's not the business we're in we don't see those people because those people don't come to to file lawsuits because you don't need a lawsuit because the admin I'm imagine there's a whole world of people out there who just met you know are able to be rational reasonable and resolve their differences I've not seen them but because that's not what lawyers do lawyers get the opposite end of the spectrum we get to see all the people who are irrational unreasonable and don't want to resolve things and you know and that's why we got to get involved in and hopefully enforce their rights so most of the time we're representing beneficiaries most the time are going against trustees trustees have all the legal duties beneficiaries have no duties to the trustee and still the trustee will say I'm right and you're wrong you know and so that's just the reality of what we're dealing with and so it's our job to either convince the trustee to see the light or simply litigate it against them until they call cry uncle right they don't want to do it anymore that's right and that that generally will happen with a good mediator explaining the situation to them in a way that they understand there's some real liability on the table for them and settling the case today makes all that liability go away so to clewd on to conclude on the contingency part of this what is your preference would you rather a client hires us on contingency or hourly I don't care I hate that discussion I wish there was insurance like there is in medical care but when a client comes in I just want them to hire us and when we get past that business arrangement between us and the client and let me go to work that's really what I want to do so we do the contingency a lot of people are shocked at the percentages this is a reasonable amount in our mine because of the losses that come in contingency practice and the risk and the risk involved but if somebody wants to hire us hourly we're happy we just want to be your gladiator we want to fight for you we want to do well by you but we need to get past that business arrangement first what are your thoughts on them yeah the same I mean I don't really care if somebody hires us on contingency or hourly and I try to be very transparent about what the options entail there's pros and cons to each side I do think that on successful cases contingency is going to cost you more in attorneys fees than hourly but it also allows people who simply can't afford an hourly arranged to take action that's right and you know if Aizen of beneficiary shoes and I've heard this plenty of times I'd rather take action and stand up for myself and get something back and be able to show that I'm not just gonna sit here and be pushed around by a bad person I'd rather do that than nothing and so that's what contingency allows those type of beneficiaries to do is to still take action even though they couldn't otherwise afford to take action but there is a risk on contingency to us there is a lot of money that we have to pay out of our own pocket the percentages do I mean it sounds like a lot of money but in the scheme of things it's a lot of risk to take on too so I don't begrudge a client from hiring us either way and I encourage them to make the choice that's right for them okay I think we're getting close to the end I know you wanted a and with a comment but I do want to say that my New Orleans Saints are travelling up to the Minnesota Vikings and then Sunday and they're gonna come away six and one they're gonna vindicate themselves from that terrible loss the Minnesota miracle or whatever they call it from right last year in the playoffs oh oh did they lose to Minnesota here about that so I am looking forward to that game very much I don't know you might want to become a Rams fan I mean they're undefeated you know they're doing pretty good this year they are doing well and yeah who knows that's we'll see what happens comes Sunday yes we will so anyway I want to thank everybody for joining us for another episode of our live broadcast we will be here again next Wednesday 1:30 p.m. and we will be simulcasting on both Facebook and YouTube feel free to drop us a question or if you'd like to send us a question ahead of time that we can answer for you while we're doing our live broadcasts feel free to email either myself Keith at Hal Devlin or Stewart at al dev law comm and that's ste WRAT @ al d AV l aw calm thank you very much hope you have a great week and we'll see you next time so you.