I represent people who are in dispute. People who are upset with one another, who have been injured by one another, or who have been defrauded by one another. Parties in lawsuits against one another, across the table at mediation from one another, and parties in negotiations with one another. Sometimes the issues are narrow, sometimes they are complicated. Sometimes there are two parties, sometimes there are multiple parties. In short, disputes come in a variety of shapes and sizes. But here are a couple of common themes: one, many disputes can, and should, be avoided. And two, since you may not be able to avoid every dispute, you should take steps to protect yourself in the event you become involved in one. Here are eight simple, inexpensive steps that you can take to keep yourself out of the courtroom, and to protect yourself if you ever find yourself in one.
1. Buy proper insurance.
This is so easy! Most insurance is inexpensive and easy to purchase. And yet, I see so many people who simply aren’t properly insured. The number one culprit is uninsured motorist coverage. When you buy car insurance, one line item of that insurance is “uninsured motorist coverage.” This is insurance that protects you if you are in an accident with an uninsured (or underinsured) driver. Think about the other drivers out there. So many of them don’t have insurance, or only have minimum limits of $25,000. Let’s say you are in an accident with one of these drivers. Maybe he rear-ends you, or hits you while you are taking a walk, or side swipes you while you are on your bicycle. Even if the injuries are not catastrophic, the medical bills could still be overwhelming. Let’s say you are in the hospital for two weeks with a badly broken leg. Maybe you have a couple of MRIs and a surgery, and incur medical bills of $150,000, pain and suffering, and lost wages.
If the at-fault driver had proper insurance, at least there would be a source from which you could recover your damages. But if the driver is uninsured, or only has minimal coverage, you may be in trouble even if you think you have sufficient insurance. Let’s say the at-fault driver has $25,000 in coverage, and you have uninsured motorist limits of $100,000. In Tennessee, you don’t get the benefit of both of those amounts – i.e., you can’t “stack” them. Rather, your total coverage is limited to $100,000. So, back to your damages. You have $150,000 of medical bills, $20,000 of lost wages, and significant pain and suffering that might be valued at $300,000 if your case went to trial. Unfortunately, unless the at-fault driver in your case has significant personal assets for you to pursue (and that is typically unlikely), the most you will ever recover is $100,000. After your attorney takes 1/3 or so, and after your health insurance company is repaid for the medical bills it paid, there might be little or nothing left over for you. Fortunately, there is a simple fix for this. You can simply increase your uninsured motorist limits. This is typically inexpensive and easy to do.
And the flip side of this? What if you are the one who injures someone? A quick moment of distraction and all of a sudden you have rear ended someone. Do you have proper coverage? If not, your personal assets could be at risk. The answer is simple – increase your limits. Consider purchasing umbrella insurance to give you further protection. You will likely find that the cost of this is far less than you might imagine. I have represented people who didn’t have sufficient insurance. Sometimes it’s by choice. But more often than not, they simply didn’t know the questions to ask. They thought they were protected, but they weren’t. So, Number One on my list of easy things you can do to protect yourself and your family – schedule an appointment or phone call with your insurance agent or carrier. Ask about increasing your limits. Ask about the different types of coverage available – for your home, your car, your business, your professional liability protection, etc. You may be surprised how simple and inexpensive it is.
2. Get a will.
Get a will, and make sure it is a proper will. Litigants spend tens of thousands of dollars in probate disputes fighting over homemade wills that were not properly prepared or witnessed, wills that they printed off of the internet, or estates where there was no will at all. Yet often the cost of obtaining a typical estate planning package – a will, a power of attorney, and a healthcare power of attorney – is very modest. Just think of all the questions you are leaving for someone else to figure out if you pass away or become incapacitated without these documents – who will raise your children? Who will get your
heirlooms? How will your life savings be divided? Will you be kept on life support? If you have assets, if you are married, if you have children, you may find that the cost of the basic estate planning documents described above will one day save you or your family time, money, and heartache.
3. Have a written contract.
You would not believe how many people come to see me who should have had a contract, but either (a) didn’t have one or (b) had a terrible one. If you are hiring someone to work on your house, get a contract. If you are doing into business with someone, get a contract (perhaps in the form of a partnership agreement or an operating agreement). If you are buying property, get a contract. If you are renting property, get a contract (in this case, a lease). Getting a written contract is not a sign of distrust or a statement that litigation is expected – rather, it is a way to clarify the rights and obligations of all parties, and to provide for what does happen in the event of a dispute. A contract is not only critical if the parties come to be in dispute about primary deal points – i.e., the cost, timing, or deliverables. A contract is also critical as to the points you may never have thought about – if there is a dispute, can the winning party recover his or her attorney’s fees? Does your dispute have to go to court, or to arbitration? Is mediation required? Are there confidentiality concerns?
A dispute where there is no contract can devolve into an extremely expensive contest. On the other hand, it is typically not that expensive to have a proper contract prepared. Preparing a contract can also cause you and the person with whom you are contracting to address points early on and to work out any potential disputes in advance. Of course, the only thing worse than not having a contract is having a contract that is poorly written.
4. Hire a surveyor.
Good fences make good neighbors. But building your fence on your neighbor’s property makes for a good lawsuit! I’m often amazed that property owners will spend small (or large) fortunes to build fences, pools, garages, houses, barns, and other structures without knowing exactly where their property line is. But they do, and if they get it wrong, the consequences can be significant. Surveys, on the other hand, are typically not very expensive, especially if you do not need a drawing or plat, but rather, just need your property line staked and marked. Surveys are often so reasonably priced, in fact, that I would recommend getting one any time you are buying property, building on property, planting or removing trees along a property line, or doing anything else that could involve a property line. And, if you choose not to have a drawing or plat, have stakes placed and then take pictures and/or video showing their placement – stakes have a way of going missing over time!
5. Check licenses.
Many of the transactions you enter will involve a person on the other side who is required by the State of Tennessee to be licensed. Your doctor and your lawyer are two obvious examples. But many other professionals, such as your realtor and your contractor, must have active licenses to conduct business with you. Despite this requirement, I have seen many instances where homeowners have hired contractors who are not properly licensed, or who do not carry sufficient monetary limits for the work that they are going to do. Licensure status is a matter of public record and it is easy to confirm whether a professional is licensed, whether their license is active, and whether their license is sufficient (e.g., whether a contractor has a sufficient monetary limit) for your job.
6. Communicate (but be careful).
Everything you put in a text message or an email could be evidence at a trial. You should remember this before writing something that you wouldn’t want read in a courtroom. Responding in haste, or in anger, can lead to written communications that are at best difficult to put into context and at worst highly damaging to your case. However, the lesson is not to avoid communication. In fact, a lack of clear communication lies at the heart of many lawsuits. Whether you are dealing with a customer, a business partner, a realtor, a contractor, or someone else with whom you are interacting or doing business, texts and emails provide you with a wonderful opportunity to memorialize key events and expectations. It’s one thing to testify in court that you and your business partner discussed a particular term. It’s much better if you have a clear, thoughtful writing that you can point to.
7. Don’t be a jerk.
This may be obvious, but it is sound advice. Walk away when you are angry. People end up in litigation for things like assault, battery, interference, trespass, and defamation when they say or do things out of anger. Contract and business disputes that could be worked out suddenly escalate and become intractable because someone blows up. A minor accident can lead to a lawsuit because you fail to deal with your opponent reasonably and sanely. A boundary line case can spiral out of control if two neighbors decide that they hate each other. In short, be nice, take the high road, and give people the benefit of the doubt. This is not only a good way to live your life, but it’s also good legal advice. What I mean by this is that the law is based in reasonableness. Laws are often drafted with the “reasonable person” in mind. I tell my clients that credibility is everything, and it is. If you find that you are in a serious dispute – you’ve been injured, you’ve been defrauded, you and your business partner have irreconcilable differences, then you need a lawyer. But sometimes, perhaps, there are things you can let pass. Forgive and forget. Concede a little. Work things out. Life is short. Don’t be someone who lives to litigate. Litigation should be a last resort. And if you have to litigate, be the reasonable one, the one who did things the right way.
8. Have a lawyer.
What do I mean by “have” a lawyer? Why not “get” a lawyer? Well, if you are in the middle of a business crisis, you may not have time to start interviewing attorneys. Maybe it would be better to talk to a lawyer before you build the fence near the property line rather than after. If you “have” a lawyer in your life – maybe someone who has prepared a will for you, or drawn up the operating agreement you used when you launched your business, or counseled you through a difficult situation in the past, then when you encounter that moment of crisis you will already have someone to call. Someone you trust. Someone who knows you, your family, and your business. These are obviously just general tips, and this blog post should not be mistaken for legal advice. For any particular legal question that you may have, you should of course consult an attorney.
My practice is devoted to civil litigation and dispute resolution. I routinely deal with the types of cases described above – things like wrongful death, personal injury, tort, defamation, and business tort cases; will contests, contract disputes, partnership/LLC/business disputes, and business divorces; real estate, boundary line, easement, home disclosure, construction, and title insurance cases; and consumer protection, fraud, and timeshare fraud cases. My partners work in other areas, focusing their practices on things like wills and estate planning, business/transactional matters, and liquor licensing/hospitality matters. If you have any legal needs and you think that our firm might be a good fit, I invite you to give me a call so that we can determine if it is something that I can help you with, or if it is something that one of our other attorneys might be able to handle for you.
John O. Belcher is a founding member of Belcher Sykes Harrington, PLLC and dedicates his practice to civil litigation and dispute resolution. The information above is just a general summary and does not constitute legal advice. If you would like to discuss any particular legal issue, don’t hesitate to contact Belcher Sykes Harrington, PLLC.
