One of the hardest parts of my job is telling clients that it’s not worth pursuing a legal claim or that settlement may be better than proceeding to trial.  When people go to attorneys, they (rightfully so) expect to get advice about their legal rights.  What people often don’t think of is that the attorney is uniquely situated not only to advise them of their legal rights, but also about the practical implications of their decisions.  Litigation is not easy and often when you get a judgment against someone, it’s not worth the paper on which it’s printed.  A good, responsible attorney should be able to tell his or her clients not only about the legal side of their cases, but about the practical realities.  For many clients this is hard advice to hear, but they would be wise to listen.

I recently had a case where the landlord had treated a tenant’s unit for bed bugs countless times but it wasn’t working because the tenant was not preparing the unit for treatment.  Finally, upon our advice, the landlord served the tenant with a 5-day Health and Safety Notice stating that the tenant would be evicted unless he properly prepared the unit.  The next time the exterminator went to the unit, again it was not prepared and could not be treated.  We then filed an eviction.  The tenant appeared in court with an attorney arguing that he had taken the reasonable steps necessary for treatment and that the bed bugs were the landlord’s fault.

As I do in every case, I spoke to my client about potential settlement.  At first the landlord refused to even discuss settlement—he was angry that he had been dealing with the tenant for months and wanted to make the tenant pay.  However, after realizing the extra time he would have to spend in a trial, the potential risk of losing, and the potential extra attorneys’ fees involved, the landlord agreed to dismiss the case if the tenant would simply leave within two weeks.  The landlord realized that even if he won, he likely wouldn’t collect any money because the tenant was insolvent.  The landlord even agreed to let the tenant out of the remainder of his lease if he vacated.  This was a more than reasonable offer to settle the matter and get the tenant out.  Realistically, it would have been a win-win for the landlord and tenant.

I spoke to the tenant’s attorney, explained the issues, and made the settlement offer.  After talking to his client, the attorney said that the tenant wanted 90 days to move and wanted to be put in another unit at the landlord’s complex.  Of course, my client refused this offer as he couldn’t wait 90 days to fix the problem and because he didn’t want this tenant in another unit.  I tried to reason with the attorney and explain that even if his client won the eviction, the tenant was stuck in a unit with bed bugs and there was nothing further the landlord could do.  The attorney refused any settlement proposal and simply stated that he would win the case and seek his attorneys’ fees in court.

We conducted a trial wherein the manager and the exterminator testified that the tenant failed to properly prepare the unit, which was causing the bed bugs to return.  The tenant had several witnesses testify that the tenant did prepare the unit to the best of his ability.  After the trial, we got a judgment against the tenant for monetary damages and attorneys’ fees, and requiring the tenant to vacate in 5 days.

Because of the tenant’s refusal to settle, he now has an eviction judgment against him, he had to leave in 5 days, and he is still liable on the remainder of the lease until the unit is re-rented.  Not only is this a significant financial burden, but it may prevent the tenant from renting another apartment.  Had the tenant simply accepted the settlement offer, he would have had time to move and wouldn’t have an eviction judgment on his record.  However, the tenant was overly confident that he would win and wanted to make his landlord suffer.

Since my clients are only landlords and investors, they don’t face the possibility of being evicted, but they do face other problems of litigation: the stress, the cost, and the uncertainty of the outcome.  Many times I have advised landlords that it’s not worth pursuing a claim against a tenant for damages to a unit because the tenant is insolvent and the landlord will spend more money in the litigation and won’t even be able to collect against the tenant.  And, often, tenants either represent themselves against the landlord or obtain free legal counsel.  In these situations, tenants really have nothing to lose and may even relish the opportunity to force the landlord to expend attorneys’ fees and attend court hearings.

In effect, often by fighting the tenant the landlord would be throwing good money after bad just trying to get an uncollectable judgment.  Just because you get a judgment against a tenant doesn’t mean you will be able to collect.  All of these factors should be considered before undertaking litigation or reviewing a possible settlement in a case.  A party should never litigate on principle—he or she should only litigate when it’s appropriate from both a legal and a practical perspective.