Valpo Law Blog

Analysis of current legal issues and cases in the Seventh Circuit Court of Appeals

Category: Alternative Dispute Resolution

Justice Is Never Free… In Regard to Attorney’s Fees

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By: Jeremy M. Schmidt
J.D. Candidate, 2017
Valparaiso University School of Law

Goesel v. Boley International (H.K.) Ltd., et al., is a very unfortunate case involving a minor child that suffered a life changing injury resulting from a negligently designed and produced toy robot. This case never made it to trial because the two parties settled the day before the trial was set to start.

Goesel, who was five years old at the time of the incident, was playing with a toy robot that was designed and produced by Boley International (Boley). The toy robot shattered which lead to pieces of the robot piercing Goesel’s right eye lens. This injury resulted in irreversible damage, and caused him great pain and suffering. Goesel’s parents hired the law firm of William, Bax & Saltzman to sue Boley for the damage they caused to their son.

This case came before the Seventh Circuit on appeal because of a disagreement between Goesel’s counsel and the presiding judge on how much the attorney’s fees would be. The parties settled on the amount of $687,500 to be paid to Goesel by Boley for the injury he sustained. Personal injury cases are, traditionally, taken on by attorneys on a contingency fee basis. This means that the attorney will only get paid if the plaintiff were to win the case. If the plaintiff were to lose the case, then the attorney will not get paid for the services provided. This is exactly the type of arrangement that was agreed upon in this case. The retainer agreement stipulated that if Goesel won the case then the firm would receive one-third (1/3) of the settlement, and all litigation expenses were to be paid by Goesel from the settlement. This type of retainer is common practice for firms that take on personal injury cases.

The seventh circuit decided that Goesel’s counsel was entitled to all of the attorney’s fees under the retainer agreement, which was reasonable, and that the trial judge was wrong in the ruling. The seventh circuit awarded the attorney’s fees saying that they were reasonable. The fees ended up being about 58% of the settlement leaving Goesel with only about 42% of the settlement. Opinions will be different on whether or not this amount was fair; however, the key principle to remember is that there is an expectation (and an obligation) for an attorney to work endless hours to get the best result for their clients. Therefore, they not be compensated reasonably and fairly.

 

The Shortcomings of Mediation

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By: Alex Steciuch
Valparaiso University Law School
J.D. Candidate, 2015

Mediation is a fragile process with noble goals.  It seeks to allow parties to come together and draft a settlement agreement to their liking with minimal court interference to free up limited resources.  To that end, states usually provide special protection for mediation communications, making those communications confidential and inadmissible in future proceedings.  But when this privilege and protection of communications is invoked to protect a morally reprehensible party in a case of sexual abuse, the usefulness and utility of such a practice opens itself to criticism and examination, and that is exactly what should happen in Doe v. Archdiocese of Milwaukee.

The nutshell of the case is this: John Doe settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program.  Later he filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse claims.  The Archdiocese filed a motion for summary judgment.  In his response to the motion, Doe contended that his settlement was fraudulently induced, citing to statements made during the mediation.  However, Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation.

Doe believed that an exception applied to his new action, specifically that it was “distinct from the dispute whose settlement is attempted through mediation.”  Wis. Stat. § 904.085(4)(e). The Seventh Circuit concluded otherwise, holding that Doe’s bankruptcy action was not distinct from the dispute settled in mediation and that the exception in Wisconsin Statute § 904.085(4)(e) did not apply.  Therefore, he could not proceed with his new claims.

To Doe, the heart of the problem was the mediation process itself in which he had participated in.  Central to Doe’s arguments was that the mediation was ‘manifestly unjust.’  Doe is deaf and was not represented by counsel.  According to Doe, the Archdiocese had made several false statements regarding key elements of the sexual abuse he had experienced, including the ability of the Archdiocese to pay, the number of children the priest had abused and activities the Archdiocese had engaged in to cover up those practices.  Doe argued that had he known these facts, he never would have settled.

These concerns are balanced with the Wisconsin legislature’s own reasons for protecting mediation communications: “to encourage the candor and cooperation of disputing parties, to the end that disputes may be quickly, fairly and voluntarily settled.”  To put it succinctly, if mediation communications were not protected, nobody would mediate.  Why would a party give up information during mediation or admit to anything if they knew it could be used later against them at a trial?  For the Archdiocese, the protection of the mediation communications worked exactly as it should.  It rewarded them for participating in mediation and coming to a voluntary agreement while protecting them from potentially exposing themselves.

Besides, Doe did not have to come to an agreement in the mediation.  The mediation program was voluntary.  Neither party was required to come to an agreement in mediation.  Mediation agreements are always voluntary.  If Doe was not happy with the proceeding or believed he could not achieve his goals through it, he could have just as easily retained counsel and proceeded to trial and make these findings during discovery.  Doe and the Archdiocese both wanted to settle at the mediation.  The two parties came together, made an agreement and left with what they wanted.  Doe received money for his past abuse and the Archdiocese was released from any future liability from Doe’s abuse.  When two parties decide to settle through mediation, this is generally the ideal outcome.

None of this changes the fact that even if Doe was 100% correct in his assertions that the Archdiocese had fraudulently misrepresented their case about the abuse, he has no remedy now.  Sexual abuse is a serious matter, and in a case involving an alleged institutional cover up, mediation may not have been the best place to discuss it in the first place due to the confidentiality of the proceedings.  Although mediation may remain an ideal process for many other conflicts, for some it seems inadequate to bring to light the necessary information that may come out in an adversarial setting like a courtroom.

John Doe stated that he never would have settled had he known the true depth of the misdoings of the Archdiocese of Milwaukee, and because of the mediation process he participated in, he will never be able to take action over it.  No one should go into the mediation process and come out worse for participating in it.  For John Doe at least, the mediation process failed him.

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