It is often said that to resolve disputes, the respective needs and interests of each party must be met. Indeed, this is the thesis of Getting to Yes by Fisher and Ury, the seminal book on negotiation strategy and resolving conflicts.
Although the parties did not set out to do so, the settlement they reached in my mediation the other day exemplified the goal of meeting each party’s needs and interests. Like most of my mediations, it involved an automobile; plaintiff (I will call her “Jane”) claimed it was a “lemon.” She had leased the vehicle and had ten (10) more months on the lease. She claimed it was a “lemon” because the vehicle had had some issues with the engine early on, but, seemingly, those issues had been resolved. However, Jane still felt uncomfortable or uneasy driving the vehicle and wanted to be finished with it. She had taken it in for repairs so many times that she hesitated to drive the vehicle for fear of breaking down. As a result, the vehicle, although two years old, had less than 10,000 miles on it which for Los Angeles is a miracle as the average yearly mileage is about 15,000!
At the outset of the mediation, Jane requested that the defendants (consisting of both the dealership which sold her the vehicle and the manufacturer) repurchase the vehicle; that is, re-pay her all that she paid under the lease and pay off the residual or remaining value of the vehicle to the leasing company. The defendants declined, contending that the vehicle was fine now; whatever was wrong with the engine early on had been fixed and other then needing a new battery, the vehicle was operating as intended. As part of the lawsuit, the defendant manufacturer had recently inspected the vehicle and found nothing wrong with it. So, defendants declined to repurchase the vehicle and instead offered minimal cash to plaintiff for her inconvenience and to pay her attorneys’ fees. In response, Janef countered with a “cash and keep” offer, in an amount much higher then what defendants had offered. Defendants responded with another minimal offer, ever so slightly higher than their first offer.
In response, Jane and her counsel decided to get creative. What Jane really wanted was to get out of the present lease and to enter a new lease for another model sold by the same manufacturer and dealership. Thus, she suggested that the defendant dealer agree to take back the vehicle and make all of the remaining payments due under the lease and that the defendant manufacturer pay a certain cash sum to plaintiff to cover her attorneys’ fees and plaintiff’s “inconvenience.” Jane would then enter a new lease transaction- at arm’s length- with the same dealer for the different model vehicle that she really wanted to lease.
At first this offer seemed to be a non-starter. In reality, it met everyone’s needs and interests. The dealer realized that for not too much money, it could take back a vehicle with low mileage and because of its pristine condition and low mileage, re-lease it or certify it as a pre-owned vehicle and recoup its outlay this way; thus, it would be out very little money at the end of the day, but, more importantly, it would be out of a lawsuit as well. The manufacturer realized that by spending a little more in cash than originally planned (and which otherwise would be spent on defending the lawsuit) it, too, could get out of a lawsuit; it was prepared to pay plaintiff some monies when it came to mediation- it was simply a question of how much.
As for Jane…. She got out of a lease for a car that she did not want and obtained the ability to enter into a new lease for the car that she really wanted. With a little creativity, everyone’s needs and interests were met and everyone walked away pleasantly surprised at reaching a settlement in a matter they thought would not settle when they walked into the door!
By Phyllis G. Pollack