Alternative Dispute Resolution
The attorneys of Clark Hill have extensive experience in alternative dispute resolution procedures and assist clients frequently in resolving their disputes promptly, cost-effectively and with an eye toward achieving a creative business solution, typically not available through the litigation system. There are a number of ADR procedures available, including arbitration, facilitation, evaluation, collaborative divorce, divorce mediation, and mini-trials. Through the considerable expertise of Clark Hill attorneys, gained both by serving to represent clients in ADR proceedings, and as moderators helping to fashion the solution in the process, Clark Hill helps its clients determine the appropriateness of ADR as early in the dispute as possible, and thereafter, helps to structure the ADR proceedings to best fit the particular need.
Alternative Dispute Resolution Services (ADR) offered by Clark Hill attorneys can be an effective alternative to the traditional method of resolving disputes through the litigation system. Clark Hill attorneys apply their considerable skills, multi-year experience, and seasoned knowledge to settle disputes promptly, and more cost-effectively, than in typical court proceedings. ADR proceedings can also provide participants such benefits as confidentiality and creativity of solution, which typically are not available through litigation.
ADR proceedings are designed to reduce the cost of litigation by streamlining the hearing process, using persons knowledgeable in the subject matter of the dispute, and strictly defining the information to be exchanged by the parties. Through these efforts, the length of the proceeding can be significantly shortened, reducing the high cost of discovery, motions, depositions, and trial, which are associated with traditional court proceedings.
ADR proceedings are private, confidential proceedings. Frequently there is no record made of the proceeding and the resolution can be drafted to safeguard proprietary, or even simply delicate information. The proceedings are not open to the public, as is required in virtually all court matters. As a result, parties can resolve their disputes and their differences in private, and hopefully preserve a business relationship.
ADR proceedings are scheduled to accommodate the schedules of all parties and are not dependent upon finding available time on crowded court dockets. Moreover, ADR proceedings can be conducted in private, comfortable conference rooms at Clark Hill's offices or any location selected with the mutual consent of the parties.
Virtually any dispute is capable of being resolved by the use of ADR. Clark Hill attorneys have acted as ADR facilitators, moderators, and representatives in matters as diverse as construction disputes, child custody proceedings, valuation of a dissenting shareholder's stock interest in connection with a corporate merger, personal injury accidents, eminent domain proceedings, labor disputes, sexual harassment disputes, and professional liability matters, as well as complex business matters. Additionally, ADR techniques are extremely flexible and can be modified to address the parties' specific concerns. Typical ADR procedures include the following:
Facilitation or Mediation
Here, the facilitator acts as a neutral party to work toward a settlement between the parties by finding common ground for discussion, encouraging fair settlements, brainstorming for creative solutions, and otherwise providing the objective view of a knowledgeable third person to try to resolve stalemates. This is generally initiated even before, or shortly after, litigation commences. Recently the Michigan Supreme Court amended the Michigan Court Rules to allow parties in litigation to choose facilitation as a means of attempting settlements directly, rather than using the Court mandated evaluation process. A number of Clark Hill attorneys have completed the Supreme Court 40-hour Facilitator Training Program.
Evaluation involves requesting one or more neutral parties to put a settlement value on a case following presentations by the parties of their respective positions. The evaluation procedure is typically more informal than court proceedings. The evaluations provide the parties with their objective assessment of the relative strengths and weaknesses of each party's position, and terms upon which the case should settle. Often, the evaluation figure, which is non-binding, is a springboard for further settlement discussions should the parties not accept the evaluation. Very frequently, evaluation is combined with facilitation services to maximize the opportunity to resolve the dispute. A number of Clark Hill attorneys serve frequently as Case Evaluators.
This is the most widely known and traditional alternative to litigation, in which a single arbitrator or panel of three arbitrators, chosen by mutual consent of the parties, hear and decide the dispute. This process can be binding in the same way as litigation since the award of the arbitrator(s) can be enforced by the courts. It differs from court litigation in that there is typically far less formal discovery, or information exchanged, if any, between the parties prior to the arbitration.
Mini-Trials are structured negotiations, in which each party's best case is presented to the chief executive officers or other senior managers of both parties, and a moderator, in a joint session. There is often an exchange of information including documents, and witness interviews or depositions in advance of the presentations. Parties, or their attorneys, if participating in the proceeding, present the matter as if at trial, with the CEOs or Senior Managers and moderator playing the part of judge and jury. The evidence is offered in summary fashion. After hearing each party's best evidence and arguments, the CEOs or Senior Managers meet and attempt to resolve the dispute, with a better understanding of the strengths and weaknesses of their respective cases.
Clark Hill attorneys have extensive experience in the area of ADR. Its members include former judges at both the trial and appellate level who are able to offer the unique perspective of having been the finder of fact in hundreds of legal disputes. Its attorneys have taken leadership roles in the various committees of the American and State bar associations advocating alternative dispute resolution programs as an alternative to court litigation. Clark Hill attorneys have a national reputation in acting as moderators of ADR proceedings and frequently lecture on ADR topics at Judicial Institutes in providing ADR educational materials to Michigan judges at all levels of the Michigan Judicial System. Our attorneys have also trained other lawyers in the field of ADR procedures. Clark Hill attorneys are panel members of the American Arbitration Association panel of Commercial, Construction and Employment Arbitrators and Mediators, and have been certified as Master Arbitrators and appointed to the Large Complex-Case Panel of Arbitrators.
Mark McInerney and Ellen Hoeppner recently obtained dismissal of a contentious lawsuit filed against Clark Hill’s client United States Steel. In October 2014, the plaintiff filed a lawsuit against U. S. Steel, alleging disability discrimination, interference under the Family and Medical Leave Act, and workers’ compensation retaliation. The plaintiff’s claims all stemmed from a workplace injury plaintiff suffered in July 2013, in which the tip of his finger was caught in a machine and nearly severed. Over the next two days, the plaintiff twice failed to appear at U. S. Steel Plant Medical for evaluation as directed, and misrepresented his medical condition by telling Plant Medical personnel that his finger had to be surgically “cut off” due to infection. When the true facts came to light, U. S. Steel determined the plaintiff’s misconduct warranted termination.
These relatively straightforward facts, however, were made very complicated by a zealous plaintiff’s attorney, who propounded a theory of wide-spread discrimination against disabled employees because such employees posed a liability risk to the company for the purposes of workers compensation and OSHA reporting. Mark and Ellen filed a Motion for Summary Judgment, carefully separating the unsupported theories from the undisputed facts. The Court dispensed with oral argument, and on the strength of the briefs, United States District Judge Linda Parker recognized the theory for what it was, and dismissed the plaintiff’s case.
Christopher Hossack and Heather Seiferth, with the assistance of paralegal, Therese Mayo, defeated a wrongful death claim filed against one of Clark Hill’s national architect/engineer clients in which the Plaintiffs demanded $3,000,000 to settle our client’s alleged liability. The final settlement demand against all defendants in this litigation was $20,000,000, as the deceased was a young man who left minor children behind at his passing.
Clark Hill’s client was responsible for drafting, auditing and enforcing safety programs during construction administration work for a mine owner preparing to re-open a copper mine in rural Arizona. As the construction work was winding down, our client’s services were reduced and the mine owner assumed more responsibility for the completion of construction. On a day when our client’s safety technicians were directed by the mine owner to stand down, the deceased, a rookie miner who had only worked six days in this mine allegedly stepped into an un-barricaded chute and fell to his death. Plaintiffs sought to hold our client, along with the mine owner and its other contractors, jointly and severally liable for failing to enforce safety rules and MHSA mine safety standards on the day of the accident. The mine owner also demanded indemnification from our client under its contract.
Shortly before trial was due to start, Chris and Heather persuaded the trial court to reconsider a summary judgment motion that had previously been denied. The motion argued that our client could not have proximately caused this accident because the chute was properly barricaded and marked on the client’s last site visit, and no employee of our client was present on the day of the accident. After the second argument, the trial judge ruled from the bench to dismiss all claims against our client. Not only was this architect/engineer firm spared the expense and risk of a three week jury trial, but also the mine owner’s indemnity claim was extinguished by this ruling.
The firm was contacted by an attorney in Canada. His client owns an architectural company in Canada. One of the architects was looking for license reciprocity in Nova Scotia to do work for a large project they were awarded recently. To comply with that province’s reciprocity rule, the client needed proof of his architect licensure from the states wherein he is licensed – MI and AZ. And he needed it yesterday! We got the call late Wednesday October 7th. Doug Folk got AZ to send the licensure information to Nova Scotia on Thursday the 8th, and Val Lawver had to work a little harder with MI, but got them to issue it late Friday – and it was Fed Ex’d Monday the 12th. The Nova Scotia License board met Tuesday the 13th in the morning – and everything was in – reciprocity approved!
Our client, Daniels Building Company, was the successful awardee of a U.S. Department of Veterans Affairs construction contract to renovate existing kitchen and food storage areas at the Battle Creek VA Medical Center in Battle Creek, MI. The procurement was set aside for award only to service-disabled veteran-owned small businesses (“SDVOSB”) approved through the VA’s Center for Verification and Evaluation (“CVE”). After announcement of the award, a disappointed unsuccessful offeror filed a SDVOSB status protest challenging whether Daniels Building was actually a SDOVSB and thus ineligible for the contract award. Daniels Building engaged Clark Hill to defend this protest, which if sustained could have potentially destroyed our client’s business due to its dependency on federal SDVOSB set-aside contracts.
The protestor alleged that, through two separate joint ventures with two different companies with no connection to the VA’s procurement award, that Daniels was (1) controlled by a large company and thus no longer small; and/or (2) was controlled by non-veterans in conflict with the VA’s regulations. The protestor also alleged that Daniels Building fraudulently obtained its SDVOSB certification by intentionally filing false information with, and withholding key information from, the VA. The Clark Hill team of Bret Wacker, Stuart Schwartz and Nicole Tersigni prepared, in the mandated 5 day response period, a detailed brief demonstrating Daniels Building is in fact owned and controlled by a service disabled veteran; and that the protestor’s attempts to defame and discredit Daniels Building Company were without basis in fact or law. The VA agreed with Daniels Building that its joint venture relationships had no bearing on the ownership or control of our client, and that the protestor’s evidence was not compelling enough to overturn Daniels Building Company’s SDVOSB certification. Our client is now able to move forward with contract performance at the Battle Creek VA Medical Center.
With assistance from Kristi Gauthier, Ed Hammond, Peter Domas and Bishop Bartoni, Kevin Hendrick and Nicole Tersigni successfully defended an insurance priority dispute, resulting in an extremely favorable judgment for firm client, United States Steel Corporation’s ERISA-governed Retiree Benefits Plan. U. S. Steel Retirement Plan was joined as a third-party defendant in a pending dispute by a No-Fault Automobile Insurance carrier, which had been sued by a healthcare service provider for unpaid patient attendant care fees. The No-Fault Carrier claimed that the obligation to pay for these services under Michigan No-Fault law fell to U. S. Steel Retirement Plan, which covered the patient (who was a former U. S. Steel employee). Ed, Bishop, Kristi and Peter lent their expertise to Kevin and Nicole in interpreting alleged conflicting insurance priority provisions and explanations of benefits. Kevin and Nicole crafted a legal argument that ultimately led to summary disposition in favor of U.S. Steel Plan, and against the No-Fault carrier, saving U.S. Steel Plan from payment of the healthcare fees, and also reimbursing U.S. Steel Plan for benefits it had earlier paid by mistake, out of priority. As the No-Fault carrier had rejected the Case Evaluation award prior to the filing of cross motions for summary disposition, it also appears that attorney fees are recoverable for our client. Kristi and Ed on Employee Benefit law, Bishop on Michigan No-Fault law, and Pete on Health Care issues, proved to be unbeatable resources.
In a pro bono case, Nicole Tersigni (under the supervision of Jordan Bolton and Stuart Schwartz) successfully prosecuted our clients’ primary breach of contract claim, and successfully defended our clients’ fraud claims through summary disposition proceedings. In short, our clients hired the defendant contractors to remodel our clients’ modest 900 square foot home, so the main level would be accessible to their severely disabled son. The defendant contractors took our clients’ money, completed a portion of the work, then walked off the job, claiming fraud in the inducement. After taking a significant supporting role in discovery, and a lead role in getting the defendant contractors’ counterclaims dismissed as a sanction for their discovery abuses, Nicole took a lead role in the briefing related to competing motions for summary. The Court dispensed with oral argument, granted our clients’ motion on their breach of contract action, and denied the defendant contractors’ request to dismiss our clients’ fraud claims.
Congratulations to Nicole Tersigni of the Construction Practice Group for her successful bid protest before the U.S. General Accountability Office on behalf of firm client Daniels Building Company (“DBC”). DBC, a service-disabled veteran-owned small business, was blocked from bidding on a multi-million dollar U.S. Department of Veterans Affairs (“VA”) contract opportunity for construction services in Ann Arbor, Battle Creek, Detroit, and Saginaw, Michigan, due to ineffective publishing of the contract solicitation by the VA.
This protest offered significant challenges to achieve the client’s objectives. Under prior GAO precedence, all potential offerors for federal contracts are deemed to have constructive notice of any solicitation posted on the Government’s FedBizOpps website. In addition, the U.S. Court of Federal Claims has held that such constructive notice cannot be rebutted. With guidance and assistance from Bret Wacker of the Government & Public Affairs Practice Group, Nicole crafted an argument that the VA’s publishing of the solicitation on Fed BizOpps was so flawed that it was legally invalid from the start. Nicole submitted evidence that the VA knew of the flaws, which it attempted to mitigate by selectively mailing copies of the solicitation to certain favored contractors in direct contravention of the Competition in Contracting Act and the Federal Acquisition Regulations. Upon receipt of the protest, rather than risk an adverse decision with potentially widespread impact, the VA chose to take corrective action by re-opening the procurement, allowing DBC to compete for this valuable opportunity.
Sullivan v. Pulte Home Corporation 232 Ariz. 344, 306 P.3d 1 (2013) – Held that a subsequent purchaser’s construction defect claim is not barred by the economic loss doctrine or statute of repose, but purchaser may not have a cause of action for negligent construction.
Flagstaff Affordable Housing Limited Partnership v. Design Alliance, Inc., 223 Ariz. 320, 223 P.3d 664 (2010) – As between a design professional and its client, contractual remedies for recovery of economic loss will bar tort claims seeking the same damages, which enables proper risk allocation through contract negotiations.
Albano v. Shea Homes Ltd. P’ship, 227 Ariz. 121, 254 P.3d 360 (2011) – Held that Arizona’s statute of repose is not tolled by the filing of a class action complaint in construction defect litigation.
1800 Ocotillo, LLC v WLB Group, Inc., 219 Ariz. 200, 196 P.3d 222 (2008) – Confirmed that contractual limitations of liability are not against public policy and may be enforced as agreed by a design professional and its client.