Frequently Asked Questions
People often ask Buffington Law Firm’s business, real estate, and trust litigation attorneys the questions in this section. We hope that you find this section helpful. If you have a legal problem, please call us for a free legal consultation with one of our experienced business litigation attorneys.
1. What do I do if I think that I have a legal claim?
This is covered directly in our Article on this website: “What to do if you think you have a legal claim. Avoid these pitfalls!” The link can be accessed here: What To Do If You Think That You Have A Legal Claim
2. Cost of Litigation — How much will my civil lawsuit cost me?
Of all the questions that our clients regularly ask us, this one is perhaps the most common, and it is a very reasonable question. The answer is that every lawsuit is different with respect to cost. Our Firm as a matter of policy will always provide a free consultation with an experienced Orange County business litigation attorney before a potential client retains us as their counsel, and during this consultation we do our best to give what I like to call a “Min-Max” analysis: i.e. our estimate of the probable estimated costs from the minimum to the maximum. No one ever knows for sure what a lawsuit will end up costing because a great deal of cost is determined by what the opposing side decides to do. Naturally, this is never perfectly predictable. Nonetheless, we can usually provide a cost estimate for a new case that will allow the client to plan and budget.
Our Firm always takes the approach that, in the case of a Plaintiff’s case (i.e. when our client is the party bringing suit) that the lawsuit is a financial investment by the client.Our job is to maximize your outcome. We recommend that you also read our article What To Do If You Have A Legal Claim.
Usually a civil lawsuit is a fight about money. Put simply, if our Firm does not believe that a lawsuit of this type is a good financial investment for the client (i.e. that the lawsuit will return substantially more money to the client than the legal cost and fees) we generally will advise the client not to pursue the case. A case in which $50,000 is at issue will be handled differently than a case in which $500,000 is in controversy. In fact, our policy from which we never waiver is that our Firm will not take a Plaintiff’s case that our experienced business litigation attorneys do not feel confident about taking to trial in a manner that is cost-effective to the client.
Most cases settle before trial. One of the main reasons for this is that both sides know that going to trial can be costly and there is almost always some uncertainty as to the outcome. Thus, a meritorious claim will often entail only modest attorney fees simply because the other side, seeking to minimize their own costs, is willing to settle early on in the case.
Defense cases represent a situation in which the client’s goal, and our objective as counsel, is to minimize the cost of the lawsuit to the client. Sometimes this involves recommending to the client that the case be settled at an early stage. Other times a vigorous defense all the way through trial is called for in order to protect our client. But in all defense cases the goal is the same: to minimize the negative financial impact to our client.
3. Who decides whether I should settle my case rather than go to trial?
You do. Under the California Rules of Professional Conduct, the decision whether, or on what terms, to settle a case is always the client’s decision, not the attorney’s. Rule 3-510 essentially requires the attorney to timely communicate the terms and fact of any settlement offer for the client’s evaluation and decision. Usually when this happens our client asks our advice as to the wisdom of settling the case, and we are always happy to discuss this important question at length. But the decision is always yours.
4. Controlling the Outcome — Why is it often a good idea to settle a meritorious lawsuit rather than go to trial?
According to a recent newspaper article here in California, 97% of all lawsuits are ended by a negotiated settlement rather than a trial and verdict. There are reasons for this. The first is cost. While a lawsuit need not be excessively expensive, it is obviously more costly to try a lawsuit all the way to verdict than to negotiate a settlement at an earlier stage. Both sides have this as an incentive to reach an agreement.
The second reason that settlement is common (and often advisable) is that settlement allows both sides to control the outcome. In a trial, both sides make their case and then the controversy is decided by either a Judge (for bench trials) or a jury. Put simply, these people are strangers who may, or may not, see the case in the same way that one or the other of the litigants sees it. Trials can be, and often are, unpredictable and their outcomes are not always what is expected or hoped for. Settlement allows you, as well as the other side, to control the outcome of the lawsuit.
A third reason that settlement can be a good alternative is collection. After trial and verdict in some instances collection of the judgment may be problematic or difficult. A typical settlement agreement provides incentives for the defendant to pay the agreed amount without any extra trouble by the Plaintiff. This is yet another way that settlement can allow you to control the outcome of your case.
How to Achieve a Favorable Settlement – Prepare, Prepare, Prepare. Our experience over the years has convinced us that there is one way to achieve a good settlement for our clients, which is to prepare for trial and make sure that the other side knows that we are doing it. It is a mistake to think that someone can file a lawsuit and then sit back and wait for the case to settle without doing any work. Some attorneys do this, but it rarely or never results in a good outcome for their clients. At our Firm we believe that one of the ways that our business litigation team achieves good outcomes for our clients via settlement is by making sure that the other side knows that we are prepared, if necessary, to try the case to verdict. It is sometimes necessary to take a case all the way to trial. But very often when the other side sees that our side is prepared to go to trial, this results in a favorable settlement.
5. What does it cost to retain your Firm?
Our usual required retainer to take a case is $5,000. This is not a fee; it essentially represents a deposit to be applied against future hourly work. In some cases the retainer amount is negotiable and for smaller cases it may be less. Abraham Lincoln, who was an attorney, once famously said, “A retainer is how the client knows he has a lawyer and how the lawyer knows he has a client.”
6. I have been served with a lawsuit. What do I do now?
In California if you are served with a lawsuit, you must file a responsive pleading with the Court within a prescribed period of time. The first thing that you should do if you are being sued is to seek legal counsel. Our Firm will always provide a free, in-person consultation for someone who has been served with a lawsuit. At this meeting we will listen to what you have to say about the case, review the other side’s claim, and give you our best evaluation as to your potential liability and a preliminary legal strategy for dealing with the claim. There is never any obligation to retain our Firm after such a consultation.
It is very important that you never ignore a lawsuit once you become aware of it. To do so can enable the Plaintiff to obtain a default judgment against you. This is essentially the same as their winning judgment without having to litigate the case. Always seek legal counsel once you are aware of a lawsuit filed against you.
7. What do I do if I receive a letter from a lawyer threatening me with a lawsuit?
Not infrequently, when a dispute exists between parties, one side retains a lawyer who then writes a letter threatening litigation. Usually this letter is calculated to upset the recipient and evokes fears of a ruinously expensive lawsuit and dire consequences. When this happens, our Firm recommends that you do not communicate directly, yourself, with the other side’s attorney. We believe that it is always a mistake for a non-lawyer to communicate directly with the opposition’s lawyer. Such communications are inherently unequal, and when this is done it signals to the lawyer that his or her side has the upper hand. This is never a good thing for you.
Even worse, we have seen situations where the attorney in this situation structured the communications in a manner calculated to induce the unrepresented side to write a letter admitting liability. The attorney demanded that they write a “letter of apology” admitting wrongdoing and stated that this would allow the parties to avoid litigation. The recipients, who were understandably desperate to avoid an expensive lawsuit, complied. Once the attorney had this letter in hand, he instantly filed a lawsuit and tried to use this letter as evidence at trial. Do not let this happen to you. If you receive this kind of communication from an attorney, contact us. We will respond appropriately on your behalf. This kind of representation is almost always very economical. Not infrequently this show of resolve can stave off litigation.
8. Trust and Inheritance Disputes — The Trustee of the Trust of which I am a beneficiary refuses to communicate with me about my inheritance. What should I do?
Our Firm’s experienced will and trust dispute attorneys have handled many of these cases. It is a very common situation where, when the original maker of a Trust passes away, the Successor-Trustee acts arbitrarily, refuses to communicate meaningfully with the beneficiaries, and often treats the money and assets in the Trust as his or her own property. Sometimes the Trustee starts making distributions from the Trust which are not in accordance with the terms of the Trust, or improperly favors some beneficiaries over others. If any of this is happening to you, your first step should be to retain counsel. Even though Trusts are not ordinarily under the supervision of the courts, California law provides effective remedies to beneficiaries who find themselves in this kind of situation.
Our trust and estate dispute attorneys have repeatedly and successfully litigated these situations such that the Trustee was either removed (and sometimes surcharged by the Court) or otherwise made to conduct the office of Trustee properly and adhere to the terms of the Trust. These types of court actions are often inexpensive, and not infrequently the Courts will award attorneys fees to the beneficiaries if court action is necessary. If you believe that you are being treated unfairly in this type of situation, call us to arrange for a free, no-obligation consultation with a qualified Trust litigation attorney.
9. Undue Influence — My parent is very elderly and one of my siblings just caused him or her to sign over all or much of that parent’s estate. What can I do?
A common scenario occurs when the child of an elderly person pressures that parent into signing documents which have the effect of unfairly benefiting that child at the expense of the other siblings. Naturally, if the elderly parent is acting with full capacity, and this action truly represents the wishes of the parent, it is that parent’s perfect right to do this. Unfortunately, however, sometimes the parent is in fact the victim of Undue Influence. Sometimes the parent still has legal capacity, does not suffer from dementia, but nevertheless is simply not able to withstand the pressure that the child is exerting. When this occurs you should seek legal counsel. It is a common error to think that such transactions can be legally undone only when the parent in this circumstance suffers from outright dementia. Courts can make a finding of Undue Influence in many cases even when there is no dementia present. If you believe that something of this sort has happened in your family, you should call our Firm for a free consultation. Often there is an efficient legal solution that we can pursue on your (or your parent or relative’s) behalf.
10. Investment Fraud – What to do if you believe that you are the victim of investment fraud.
The short answer is: seek legal counsel immediately. Do not wait. Please read our article on this website: Investment Fraud — What it is and what to do if you are a victim. The link can be found here: Investment Fraud
11. Contingent Fee Cases — Are most civil cases done on contingency?
When a case is taken by a lawyer on a contingent-fee basis (often referred to as a “contingency” case) this means that the client does not pay the attorney by the hour, but instead the attorney is entitled to collect a percentage of the eventual outcome of the case. Usually this percentage is one-third (33.3%) and somewhat higher if the case actually goes to trial. Most civil litigation lawsuits are not taken on contingency. It is a common misperception by the public that a majority of civil cases are handled by attorneys on a contingent-fee basis. Certainly some are. Automobile collision, personal injury, and certain other types of cases are more commonly taken by attorneys on contingency. On the other hand, most business litigation, investment fraud, and inheritance dispute cases, to name a few categories, are rarely handled on a contingency basis.
Our Firm sometimes handles cases on contingency. Our analysis over the years is that contingency cases usually result in higher fees to the client than do cases in which the client pays hourly. This is logical since in a contingent-fee case the attorney runs the risk of not being paid at all. Nonetheless, sometimes it is best for everyone for a case to be handled on a contingent fee basis. In 2011 our Firm successfully completed three high-dollar business fraud cases on a contingent fee basis.
If you have a case that you would like us to consider taking on a contingent fee basis, you should call and arrange for a no-charge consultation with a qualified attorney at our Firm to discuss the matter.
12. Can I recover my legal fees if I win my lawsuit?
Usually not, in California and most states. Absent a statute or contract to the contrary, under California Code of Civil Procedure section 1021 in a civil lawsuit each side normally pays his or her own attorney fees. But there are exceptions. A few types of civil lawsuits provide attorney fees to the winner by statute. Certain actions between employee and employer are one example of where attorney fees are provided for by statute. By far the most common scenario in which the winner can obtain attorney fees is when the lawsuit concerns a contract between the parties which explicitly provides for the winner, in the event of a lawsuit on the contract, to recover attorney fees. California Civil Code section 1717 provides for this. Naturally there are many nuances to this. Your attorney can advise you.
Many people regret that California does not usually award attorney fees to the winner in many circumstances, but there are two sides to this argument. When litigation occurs over a contract that contains an attorney fee provision, this can vastly increase the danger of the litigation. It is not at all uncommon at the end of a lawsuit for the loser to owe the winner more money in attorney fees than the amount of money at stake in the original dispute. Our Firm always advises its clients to be very careful when agreeing to a contract with an attorney fee provision. While this can sometimes “keep a party honest” it can also tremendously increase the risk of litigating on the contract.
13. The Directors in our small corporation are deadlocked and do not get along. Do I have a legal remedy?
Yes. Buffington Law Firm’s corporate litigation attorneys have handled numerous cases dealing with situations in which a minority shareholder wished to force the dissolution of a small corporation. The law provides several remedies to minority shareholders who are being victimized by negligent or abusive management. This situation is not uncommon in small corporations.
Under California law, and the law of most or all other states, if the Directors of a small corporation simply cannot work together harmoniously, the corporation can usually be dissolved by means of a lawsuit. In California, shareholders who collectively own 33 1/3% or more of a corporation can bring a lawsuit asking the Court to dissolve a corporation on grounds the directors or officers running the corporation “… have been guilty of or have knowingly countenanced persistent and pervasive fraud, mismanagement, or abuse of authority or persistent unfairness or … [that corporate] … property is being misapplied or wasted by its directors or officers.” [Cal. Corp. Code §1800(b)(4)]. More generally, a shareholder can bring suit to dissolve a corporation on the grounds that “…liquidation is reasonably necessary for the protection of the rights or interests of the complaining shareholder or shareholders…” [Cal. Corp. Code§1800(b)(5)].
The stock owned by persons who are guilty of the fraud and mismanagement is not counted in calculating the 33 1/3% threshold – thus often shareholders in a small corporation who own much less than 33 1/3% of the stock can nonetheless successfully bring suit to dissolve a corporation and distribute its assets to the shareholders.
A lawsuit of this type can be an economical way to force the dissolution of a small corporation and the distribution of its assets to its owners.