Mediation vs Arbitration in Probate Disputes, with Jeffrey Stephen Kravitz

0:02 If there is one part of the pro probate business that can be frustrating unless you're paid for the litigation is litigation or the disputes and they can seem to drag on for years. like many real estate agents I have a whole pile of transactions waiting to get into listed closed but for various disputes that aren't being resolved. Now one way things are resolved is through the court system which is very long very expensive. Nobody's happy with those resolutions, but there are alternatives. And today we have an alternative dispute resolution expert who handles both mediations and arbitrations, perhaps some other formats as well. Jeffrey Kravitz. Jeffrey, thanks for joining us today.

0:39 Thank you. It's a pleasure to be here. I appreciate it. So, first off, you know, you were you were saying before we recorded something that I think I need to hear over and over again because the distinction is very important. What's the difference between mediation and arbitration particularly as it relates to real estate and or particular as relates to probate?

0:57 Sure. A mediation is a dispute resolution mechanism where I meet with the parties sometimes on Zoom, sometimes in person, and we try to get to the heart of the matter and resolve situations. I'm not a judge. I'm something of a counselor. I'm something of a psychiatrist. I'm something of a magician. And what I try to do is to work my magic so that people are able to come to peace despite having been in a dispute. The difference between that and an arbitration is in an arbitration I am the judge. I am the person who is resolving the situation and my word is law which means that it is very difficult for someone to take an appeal from an arbitration. Absent corruption absent my being demented my decision binds the parties now and forever. No, that's because they've agreed to that to enter in the process.

2:09 Absolutely. You don't arbitrate without it being the will of somebody to arbitrate. In other words, the default in the United States is the court system,

2:18 Right? So, the parties have to have either a written agreement or a handshake agreement where they say, "Let's get not get involved in the court system. It's going to take five years to resolve the situation. let's go to a private arbitrator and have him or her come to a reasoned decision as to how we should resolve the problem. And in my case, that's done through what's known as the American Arbitration Association, which is a 100-year-old dispute resolution organization.

2:53 Mechanically, how is arbitration different than the court system? In essence, you're the judge. So in that process it's similar. I'm sure you need to get information on which to make your decision as a judge does though your procedures are probably different. And while the judge is busy, you know, a successful arbitrator is also busy. So what are the differences for an arbitration versus just pursuing the legal process?

3:17 Sure. Let me give you a hypothetical which is often a fun way to resolve to take a look at a situation which is let's assume that you're in a probate dispute. It's between you and your brother or sister and everybody's unhappy with what Ma and Pa did in terms of disposing of their earthly goods and you look at the court system and you do a little bit of research maybe on AI and you find that it's going to take you a year and a half to get resolution on the dispute

3:52 At least and you're not going to be happy about it among other things. Let's use the hypothetical and say that Ms. Gomez has two children. one of them is going off to college. one of them got a partial scholarship to a school and she needs the money for tuition for her two children. And she turns to her husband and says, "You know, I think we're just better off going to an arbitrator. he's not going to be either better or worse than your average judge. He's probably going to be better. And the reason he's going to be better is because judges are terribly overloaded under the current system. The arbitrator is going to give me a lot more time and a lot more reasoning than any judge could possibly do. So,

4:45 I think anybody who questions that should go to a probate hearing. I used to go every day pre-COVID and I go regularly still. and you feel like you're in a train going downhill. The judge is just and they're polite about it. They're apologetic about it. They're as nice as they can be about it, but the reality is they've got every day 30, 40, 50, you know, hearings, the 8:30 call they got to get through. And everybody almost everybody leaves the process feeling rushed and obviously you have a lot of money involved or a lot of emotion involved. you want to be heard and I think the judges do a great job considering the volume they have but they don't get to choose their business where in your case if you get too busy you can decline cases or defer them to when you're not so busy the judges can't do that they get intake no matter what happens

5:34 Yeah that's true there's there are other advantages as well let's let's just take one let's assume that Ms Gomez goes to me as the arbitrator

5:44 And she's retained counsel her counsel calls me up and says, "You know, we got a scheduling problem. Miss Gomez has her daughter's soccer game next Thursday afternoon at 4. I know that we set a hearing, but is it possible to continue the hearing?" That becomes a laborious process if you're going to the court.

6:06 Yes. Try to get a continuence. And let's assume that the judge is under pressure and says, "You know, council, I really appreciate parents and their ability to attend their kids soccer games." By the same token, we're awfully busy around here. I simply cannot accommodate you. So that is another advantage of arbitration,

6:27 Which is you more closely are able to control your calendar. Yeah. How about the process of information? And you know you have discovery and depositions and interro inter interrogatories filings petitions. How's the process different? Obviously the court prescribes its rules. I imagine you must have either a set of rules or you follow some of the same rules. How does that work?

6:53 I follow the commercial rules of the or the probate rules of the American Arbitration Association. And one of the things that they try to do is to limit discovery. I sent spent 47 years knocking heads with people in discovery disputes. In retrospect, 99% of them could have been resolved more informally and probably should have.

7:16 So there are limitations on the number of depositions that you can take in an arbitration. There are oftentimes limitations on the number of written requests that can be made in the number of subpoenas. The whole idea is to try to streamline the process so that we come to an equitable result without years and years of fighting. I have two examples for my people my son's age. one a friend one a friend's kids and unfortunately they've been involved in divorces and in each case their legal fees not the legal fees of their soontobe ex- spouse but their legal fees exceed $400,000 there's there's really no call for that and you know God love the lawyers on those things. I don't know how much money is involved, but if they had gone to mediation and arbitration, I can't guarantee it, but I could tell you that in all likelihood, it would be far less expensive.

8:16 Yeah. No, I see that. I mean, I see also, you know, when clients call me that they want to litigate something, I' I've interviewed a number of, you know, probate litigators, and the kind of the common guidance I've received is if it's a contingency, there has to be at least a million dollars that you believe the client has a reasonable chance of getting at least. And that number probably is going up, not down. and if they're paying cash, they need to have at least $100,000. And know that they might need to go you know, twice deep that to get to their trial. And so, if you don't have that kind of money, then you probably can't get started in litigation.

8:56 I think those are pretty good rules of thumb. And I think that you're wise to advise people not to get started with something unless they're willing to see it all the way through. And I can't tell you the number of cases that I had as a litigator where the client would come to me and say, "You know what? I need to sue Harry, but we got to resolve it. So, let's frighten him and let's go to litigation. And I invariably told the people that you never file a complaint without the supposition that you're going to trial,

9:28 Right? And the reason is once that complaint is filed, the other side gets unhappy. Maybe they have more resources than you, but I can guarantee you that the last way to settle a case is to go into it with the idea that you're going to settle a case.

9:44 That's sage advice. I you know, I've never thought of it that way. And I think that the other thing I've seen is until you get to trial, it's just a battle of resources because the wealthier side always will just paper the thing with a million interrogatories and discovery motions and motions and hearing dates and the other side has to keep writing a check to cover their costs. And at some point, you know, if you have more money side, you're hoping they're just going to say, I give up and or settle way less just to get out of the situation. And so the cost of the litigation process once you start however that said in order to get to arbitration you have to have both sides agree to bypass the civil system and go to arbitration either. So are arbitrations typically agree to before the filing of a motion or is it as a result of a motion then both parties get together and say well let's just arbitrate this dispute rather than file it.

10:42 It usually goes before that. what you usually have in a commercial situation is a written agreement that provides that rather than going into the court system you're going to go to arbitration

10:56 Like most realy contracts that I write have that provision we try to get the clients to prove that that's correct and in most cases the costs are split if you're dealing with a sexual misbehavior case the go to is that the employer pays all the fees of the arbitration

11:21 Otherwise the employee would not have a chance of being able to prevail because it gets expensive. So what percentage of arbitrations are contractually required versus both parties choosing that as an alternative. I'd say at least 85% of them

11:36 Makes sense is actually required because if they're if they're at that point they already hate each other so much the [laughter] green arbitration they agree to anything they agree on what day it is right

11:45 Absolutely so the other piece is the mediation and so again just draw the distinction between mediation versus arbitration

11:55 The distinction is that in mediation I do not have the authority to do anything. The only thing I can do is if I've been appointed by the court and you have a party who comes in bad faith, gives me the middle finger, gives the whole situation the middle finger, I can go back to the court and say these people are misbehaving. But short of that, it is solely dependent on my powers of persuasion for the matter to settle. I handled one yesterday. It was a seven-figure case. I can't go into details obviously, but it had interesting issues. Interesting to me because I was the mediator. Not interesting to them. Aggravation times 10 to both sides. So it was a long hardfought battle by each but by the end of a full day we resolved it to the satisfaction of each side

12:59 You know and a mediator you know kind of plays a role that traditionally you know before we had systems of courts and laws there was some sort of elder in a community that people would go to and you know I'm I'm Jewish our tradition was we had a rabbi or a council of rabbis and they would bring their arguments to them and they would you know attempt to mediate the conflict and they had respect for the person in the middle enough to bring that and I see in probate court often there's a mandatory mediation the judge will say you know before we go to trial they're going to require it and I often hear one side of the other say well the other party wasn't serious they weren't open-minded they just they had to show up so they did but it seems to me that if you respect the person who's the mediator no matter which no matter which side you're on. You'd want to hear their opinion of your case. If nothing else, just to make a good business decision. Why would you not want somebody to at least assess where you stand before you start spending any more money and time on something?

13:58 That's that's aptly put. And I vowed that when I migrated from litigation to mediation, I was going to tell people what my view was of the case. Forgive me, but there are mediators who sit tell a bunch of war stories and eventually simply split the baby between the two parties. I don't find that valuable and frankly I had no interest in doing that. All right? And I will have parties say to me, am I going to win my case? And I will say, listen, when I was in private practice, I would never answer that question because there are too many vagaries. But I will tell you whether I'd rather be seated on your side of the table or the other side of the table, which gives them a gross sense as to what's going on. The mediation yesterday, I had to kindly tell someone that he was not going to present well in front of a jury and his lawyer being his warrior knew it. But it's very difficult to tell your client that their personality is not going to be particularly appealing to a jury of 12 lay people,

15:16 Right? It's hard to put on big boy pants and had to say, "Look, you may be a lovable guy to your family and to your friends, but there are aspects of your personality that are simply not going to present well should you have to go to court." Again, whether somebody wants to hear that or not, I'm sorry, likes hearing that or not is irrelevant. You would want to hear an independent voice of somebody who's experienced in the field, it just to get more information to make a good assessment. And anybody who's serious would always want more information. and the answer is yes. That's a rational view. but we're not al always rational creatures. There are people who only want to hear their side of the case,

16:01 Right? which obviously makes it more difficult for me to resolve the situation. One of my go-tos under those circumstance is to say, "Let's play a little game. I want you to present to pretend that you're the guy or woman on the other side. What are they saying about you?" And even the most hardened litigant at that point usually is able to play the game. and to insert themselves into the personality of the person that they're

16:35 Suing or being sued by. and at that point, it's almost like a light dawn. and it really helps in trying to resolve the situation.

16:48 You know, we do the same thing in real estate. you know, often the number one thing determines a property selling is the price. And sometimes the seller insists on listing for more than it's worth, which means it probably won't sell. We can never tell the client it's priced too high. They don't want to hear that. And now they're arguing with us. The proper way is always to say, "Well, based on the number of showings and the activity we have, what's the market telling you about the price? [gasps] I'm not telling you anything. What's the market saying?" And in your case, you're giving them information that perhaps their attorney is not, but now you have information from at least one, you know, unrelated party. It's not necessarily that you are observant of every judge's possible decision or every jury's possible decision, but you're one person. At least it's it's an opinion. And so that kind of leads me to how does the client know that they should review your history and be respectful. It seems to me that the more they respect your experience and your skills, the more likely they are to hear what you have to say. if they just assume you're not able to, you know, not able to, practice law, but you're a mediator or whatever, there, you know, we all have conclusions we make that are wrong about people or assumptions. then obviously be very hard for you to have any credibility with the with the either party.

18:07 Well, there are a couple of ways. these days everything is electronic. so I have a website that we can direct people to which gives a precises to my background and it either resonates with people or it doesn't.

18:26 Okay. or I will do free telephone consultations with their parties with their attorneys and speak to see whether I'm the right person

18:43 For the dispute. and I am I am level up with people and I say, "Hey, look, if you're looking for me to come in and play softball with your clients, that's not something that I do and it's not something, frankly, that that that is valuable for anybody,

19:01 Right?" and I employed that yesterday and I started out with parties who were really contentious and I said, "Look, I'm going to ask you very tough questions because you go to trial, the other side is not going to play catch with you."

19:16 They're going to be looking to strike you and take you down, right? So, if you don't explore those questions now, right? And I'm not going to tell you're going to lose, but I am going to give you the tools so that you can do a risk analysis and come to a conclusion as to whether it is worthwhile for you to continue litigating the case or whether it makes sense to resolve it. Now,

19:41 And I must tell you, there is a lot [snorts] to be said for finality and being able to get on with the rest of your life. So, how does a matter come to you that's a mediation as opposed to arbitration? Is it that is it courtappointed? I know there's a panel of mediators that the court directs people to sometimes. Is it the attorneys get together and each kind of talk about who they know and agree on? What's the process where it goes from this dispute that's typically been filed or some sort of a getting ready to file to one or both parties saying let's talk to Jeffrey about being a mediator?

20:21 Sure. A couple of ways. number one, based on my years of litigating in the Los Angeles community. I'm well known in certain quarters and people will come to me frankly for my reputation. second, I am on a federal panel. and oftentimes I am appointed by the court and it's very lovely. If I resolve a matter, I have people come back to me for other private mediations. And the third way is through my platform which is called ARC, which is one of the services here in town. They take care of my bookkeeping, but they also send me referrals at times.

21:08 Nice. And but I imagine if you're meeting there's two parties, right? So, you know, I know you now and if I had a mediation matter, I'd be inclined to give you a call and say, "Can you help me?" But the other party may have no idea who you are. How does that work out? How's it come to be that that both sides kind of agree on you as opposed to, you know, again, I could think you're the world's greatest mediator, but I'm already disagreeing with this person on something else. So, the odds of agreeing on something seem to me to be remote. Again, there's not one answer to that question, but what usually happens is that one side will propose me as a mediator. as I mentioned, I encourage the other side to give me a call so that they can kick the tires.

21:51 Got it. I have the electronic presence so that they can go online and u see what who I am and what I've done. but the third thing which oftentimes comes into play is that I have been in situations where I represent the plaintiffs and I have been in other situations where I represent the defendants. So it is not as though people can say he's a honk for one side or the other.

22:22 Got it. Fascinating. Jeffrey, I really appreciate you kind of walk me through the mechanics and as somebody who I used to go to court every day. now I go, you know, regularly or online of course as well regularly. you know, it amazes me because you see the people up front and it feels like one of those oldfashioned Mexican fights and then you find out they end up resolving it with a mediator. amazing how's that happen and so I certainly would encourage I also feel like when the when the judge refers people to mediation as a mandatory process that often times one or both parties don't take it seriously and I think why would you not why would you not want to get somebody's input and you know an expert even if it's not binding just to get some feedback it would be like free consumer testing I guess in a sense or inexpensive consumer testing compared to going to court so again I appreciate you walking through this for those who are interested in reaching out to him. Jeffrey Stephen Kravitz is with alternate alternative dispute resolution. He's an expert in that. ARC alternative resolution centers. [email address shown on screen] and the website is ARC4ADR.com. All kinds of great resource information on there. Jeffrey, thank you so much today for walking us kind of through the process and some of the details of both mediation and arbitration. Let me give you a real quick story before we end because

23:45 Yeah. It was so interesting. I got to mediate over a diamond. Wow. And the diamond was in the jewelry district downtown Los Angeles. And one side thought it had been sent over as a sale and the other side thought that had been sent over as a consignment. And the gentlemen involved were from two different countries, foreign countries. And I brought in translators for each of them so that we could get a common understanding as to what was going on. And what we determined through that mechanism was not that they were people of bad will, but that there was a linguistic problem between the two different languages that they spoke. And once we solved that puzzle, we resolved the dispute, they shook hands, they gave each other a hug, they walked out much happier than they had been before.

24:47 Well, I think I think at your core, you know, getting people to listen to each other and talk. I so often I feel like they're with attorneys, they're forced to separate, but if they could actually listen to their party and hear what the real dispute is, there's a chance to resolve it and use the mediator kind of play that role. you get in the middle and listen to both sides and try to point to where there's common ground. So, congratulations on that one. That sounds interesting. And so, at the end of the day, I can imagine linguistic difference on the term of sale or consignment. I can imagine those are technical terms that different languages would have different. It wasn't argument about what the carrot weight was. It was an argument about the clarity of the diamond. It was just really he used this word in his language it means that, but in this language it means that and they didn't get along.

25:30 Super. Thank you. Yes. Thank you so much. I really appreciate your time today. Take care. And for the rest of you, this was probate weekly. We get together every week with attorneys that handle probate, litigation, administration. In this case, one handles mediation and arbitration of probate disputes and other real estate disputes. No question. If you have a chance to go that route rather than litigation, it's worth exploring. If I can help in any way, I'm at Bill Gross Probate on social media. And as always, make today your best day ever. Thanks so much.