A Tale of Two Lawsuits

MAY-JUNE 2015|BY GEORGE S. KOUNOUPIS J.D.
In A Tale of Two Cities, by Charles Dickens, there is a quote: “It was the of best times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…it was the season of hope, it was the winter of despair.”

To a small business, one in which the owners have scraped together their hopes and dreams and staked their children’s future, a lawsuit can be all of these things. I grew up with lessons in economics taught by my Greek parents. In the 1960s my father (a Sparta city hall civil servant), and my mother (a nurse for IKA), left for the United States to put all of their sparse savings into a restaurant business, joining my uncles. I believe that the experience of Greek-American immigrants in the U.S. is particularly enlightening and should not be dismissed. In no other place have Greeks created so much entrepreneurial wealth with so little government help or support.

The “economics of the cash register,” anxiously counted by my parents at the end of the day, did not have much room for excesses because a pile of bills had to be paid first, including payroll for a number of people who depended on the restaurant for their wages. There was no room for large legal bills, or bureaucratic and regulatory expenses, since the cash register was nearly empty when all wages and costs were paid.

Fear and uncertainty are great disincentives to any small business and I doubt if my parents would have formed a business in the United States if people were saying about it what people are now saying about the Greek legal system and business regulation. Small and medium enterprises provide job growth and drive economies. The nervous entrepreneurs who have struggled to get together capital to invest in a new business want to compete but cannot accept risk to their very existence—risk from those they perceive with power to destroy them.

And so, it is with this background that I sit in my law office years later and have before me two lawsuits. While a lawyer would say these are “lawsuits,” a “real” person would say that these are about people’s livelihood. It is the good lawyer who can see beyond the cold, faceless, dehumanizing law books and courtrooms to the scared, vulnerable people behind the disputes. Just as with economics, the law should be practiced by individuals with a feel for the human condition. Law should serve people, not force people to stare into the dead, vacant eyes of bureaucrats and lawyers who rotely recite regulations, while human beings squirm and beg for some practical or common sense understanding.

In the first case, the client was an executive of a Greek company who had been sent to the U.S. on promises of a long-term contract aimed at developing the U.S. market. He uprooted his family and moved to the U.S., changing schools for his kids and selling his former home in Greece, only to be terminated for no reason months later. We filed a suit in New Jersey, which consisted of putting down in a Complaint the basic facts on which our case was based. Right at the start, if our legal theory was meritless we would face serious sanctions as the Plaintiff’s lawyers.

The other side “answered” formally in 30 or so days, saying that he was a bad executive, and filed (at that time) its own counterclaims for having “overpaid” our client. We knew, 60 days post-filing what the other side’s case would be about. The judge ordered 3 months “discovery” to exchange documents and interview witnesses under oath, in what is called “depositions.” The judge set the trial eight months from the filing of the Complaint. Four months after required exchange of documents and questioning of each other’s witnesses under oath, we knew that the other side had no real proof that our client was a bad employee. Since the required discovery of documents and witnesses had taken place outside court, both sides could assess their chances at trial. Each side could also essentially predict how the judge would rule on the law, since numerous former precedents and detailed decisions by other courts in similar cases were published and had to be followed. Six months after the filing of our Complaint the judge ordered mediation. A good settlement was achieved to avoid a trial since the documents and witnesses to be presented at court were known in advance. There was uncertainty as to whom the court or jury would believe on certain disputed facts, but this was not enough to motivate the parties to take that risk. As to appeals and remand for retrial, a clear and material error of law by the judge would be necessary. Given the published opinions, the chances of an appeal could easily be measured. If our Complaint had not presented a recognized legal case or if, after discovery, we had not produced any facts to support our claim, our case would have been long dismissed, perhaps three months or six months after the Complaint filing (in Motions to Dismiss and Summary Judgment Motions—both pre-trial). The client got justice in a timely and economic way—because justice delayed is justice denied.

But as I told you, there is a second lawsuit in my office. The client, a manufacturer of goods, had entered into a contract with a Greek company and the Greek buyers, dissatisfied with the agreement, sued him in Greek court. The client was upset, insisting that he did nothing wrong and that such lawsuits were bad for business and highly disruptive. He had utilized another lawyer to defend him in Greece but in the two years that had passed since he was sued he knew little about the case or his legal defense. His Greek lawyer assured him that these things would be found out 20 days before the trial, which loomed now eight months out. The client insisted that he had proof and witnesses completely proving that the other side’s contentions were false, but he was told that there was no way to dismiss the case before trial. In fact, he told me he had his own claims against the other side. I told him that such “counterclaims” could only be filed 30 days before the trial, and that this would mean a further delay of the trial. A settlement was out of the question, because settlements generally do not happen in Greece. I told him that I wished that I could sit down with the judge and the other lawyer and say to the other side: “Look, I have seen all the documents you are going to produce and I have questioned and taken statements of all your witnesses—and you will likely lose. You know exactly how the judge will rule because they must follow the published opinions. Why not settle, since at trial we will seek our full damages plus interest and attorneys fees?” This could not happen in Greece. Moreover, I had to tell the client that we would likely not be heard on the trial date, being 22nd on the list, with prior “adjourned” cases ahead of us. Another delay was likely (going on 2 ½ to 3 years now) for trial. As to the panel of judges, who knew as to their real world or business experience or whether their decisions could be predicted based on prior, similar cases? Even after trial, I further explained (2-3 years out), a long road of appeals was likely with a potential for remand and retrial—so that the whole thing had to be done all over again. The client was upset not only because of the legal fees but also because the delay would deprive him of essential money he needed to run business operations, pay wages and make a living for his family. The client had come to his “winter of despair.” He questioned, now, the wisdom of doing business in Greece. Which system would make you more comfortable if you were a foreign investor? I know the one my late Greek parents would choose.

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