Enforcing Settlement

You might not have guessed it, but litigating a lawsuit involves a balance between knowing when to fight and knowing when to strike a deal. If you fight over every minor issue, you might gain some traction and further your case, but you also run the risk of burning some bridges and souring your case in the Judge’s eyes. Conversely, if you are constantly entering to deals with the opposition, you may give up some of the advantages you have, ultimately weakening your case. The smart approach is to find the middle ground, depending on the issue, the Judge, the opposition and the facts of the case. While deals, compromises, and settlements are reached all the time, we recently found ourselves in the middle of a dispute over whether a settlement was reached to begin with.

Our client previously secured a loan modification from the Bank and for 18 months, he made his payments on time. Out of the blue, the Bank decided not to accept his payments anymore. Our client went to the local Bank office to plead with the manager, but they simply would not accept his mortgage payment. Sure enough, the Bank filed a foreclosure action and we stepped in to defend it. The Bank took the position that there never was a modification, to begin with, however, we were successful in so far as the Judge agreed that a modification was entered into between our client and the Bank. Unfortunately, the Judge decided to grant the foreclosure anyway, despite proof that our client stopped making his payments only because the bank stopped accepting them. Since the Judge made the wrong decision, we appealed the case.

While the appeal was pending, we decided to sue the Bank for violating several regulations regarding our client’s loan (Can you sue a credit card company for false charges?). These types of lawsuits tend to resolve themselves quickly because it’s very obvious who is right and who is wrong. In our case, we were right and the Bank reached out to our firm to engage in settlement negotiations. The Bank’s initial offer was to drop our appeal and our lawsuit against them, in exchange for some money. While dropping our lawsuit against the Bank for money was a fine compromise, our client did not want to drop the appeal (and rightfully so). We conveyed to the Bank that we would not be able to drop the appeal, but we could continue to negotiate the settlement of our lawsuit against the Bank. Through some miscommunication, the Bank felt that they had entered into an actual settlement with our client for both cases – which they had not. We tried to work with the Bank to hash out the issues, but they dug their heels in and insisted on having a Judge decide if a settlement had been reached or not.

Over the course of several months, both sides prepared for the hearing and finally, the day came when the Judge would hear the arguments. Thankfully, the Judge very quickly recognized that there was no settlement, no agreement between the parties, and the Bank was wrong to try and force a settlement where one didn’t exist. Knowing when to fight and when to work out a deal is important – here the Bank didn’t know when to quit and fought us over every minor issue regarding the supposed settlement and it backfired on them. The Judge very quickly denied their request and put this issue to rest.

It’s easy to think that a big bank, with all of its resources, can just steamroll over homeowners and fight them on every little issue. And while that tactic may work sometimes, having a seasoned law firm behind you to fight back, or to take a more strategic approach is important. If you believe the Bank is trying to strong-arm you into a deal you never authorized, or if your bank has filed a foreclosure action against you, contact us to set up an appointment to go over your options. For more information about foreclosure defense, contact us to see how we may be able to help you.