Litigation 101 - What to expect in a lawsuit? Part 1

Most real estate agents, and most people for that matter, have never been involved in a lawsuit.  The first thing I'd say is a lawsuit is a marathon not a sprint.  I recently attended a GRI contract class and the instructor, who's been involved in real estate for over 30 years in every capacity, said, "I've been a broker who's been responsible for over a billion dollars worth of transactions, you're going to get sued and you will sue others with that amount of money and contracts being executed."  Expect that during your real estate career that you're going to either sue someone or be sued. 

A lawsuit is a complicated legal process and can be full of unpleasant surprises and frustrating delays. Some lawsuits can take several months on the short end to years on the long end.  I was involved in a lawsuit that took almost 5 years where I was the defendant (the first time ever) and the individual finally dropped the lawsuit after reaching a settlement and coming up on their statute of limitations, frankly they had no claim and couldn't afford to keep funding their lawsuit and in the end the only people that won were the attorney's.  Some things happen in the same order and in most states it's the same, but it's best to confer with an attorney.  Remember, interview several attorneys to ascertain which one is best for you in terms of your interaction, costs involved (more on this later) and the way they think to proceed with your claim or defense.  An excellent flow chart will help you visual the process

1. A civil action begins with the complaint (this lays out the plaintiff's claim against the defendant, or person being sued)
2. The defendant has to answer within a required time frame or the court may enter a default judgment if they don't (I've been granted default judgments in the past and on some you can collect and others it's almost impossible)
3. The parties exchange documents relevant to the litigation in a process called discovery. Discovery can take 3 forms:  written questions (interrogatories), which must be answered under oath, document production and finally depositions.  Depositions can be long (usually several hours) and typically you'll be video taped, I've been deposed numerous times and testified in court dozens if not hundreds of times.  It's a chance for the opposing side to ask pretty much any question.  Remember, remain calm, answer truthfully, keep it simple, make eye contact and pause before answering.  DO NOT elaborate or give the other side anything more than a yes, no or I don't recall or understand the question.  Keep your answers short and to the point.  DO NOT act the following way in a deposition    
4. Sometimes at this point the parties can mediate, arbitrate or settle.  I'd recommend, after being involved in many lawsuits, and almost any attorney or smart business person would agree, if you can mediate, mediate.  If you can settle, settle.  If you can arbitrate, arbitrate, also known as Alternative Dispute Resolution.  Look at the statistics, almost 98% of civil cases settle before ever going to trial, and if they did go to trial plantiffs won 54% of the cases. (So it's best to be the plantiff)
5. If you do not mediate, arbitrate or reach a settlement, and the matter is not disposed of by motion, the case will go to trial.  In most cases either party can request to have a jury or judge decide the case.  This is an extremely important decision and seeking the advice of an attorney is highly recommended.
6. At trial, the attorneys present evidence and arguments for both sides and the judge or jury decides on the unresolved issues, once a decision has been reached the judge will order a judgment be entered for the party that wins.
7. Either or both parties can appeal the decision to a higher court

It's hard to say how long all these factors will take in your case.  Generally speaking, the less money at stake and the more issues that can be resolved before trial, the smoother and faster the lawsuit will go.