CALIFORNIA’S LEGAL SYSTEM NEEDS REFORM - Article #1

Its unfortunate that I’m writing this article, but I’ve always been one that fights for reform and fights for doing what’s right.  Our legal system in California is designed for attorneys to maximize their income while stealing the income of hard working average Americans, like myself.

I’ll be writing on this topic, from time to time, with my only intention to educate and inform the public how the trial lawyer unions and state employeee unions (court system in this case) have designed such a system to strip consumers and corporations of all the money they can, by designing a legal process to maximizes billable lawyer hours, while adding NO value to the legal settlement process.  In fact, they produce a system to inflame conflict!

Here is my story...Back in 2008, right when the banking system was failing and when there were virtually no buyers, we listed a Chinese restaurant called Little Panda in Sacramento for $85,000.  We marketed the business, but it was clearly over priced. The seller refused to reduce the price yet two months after listing the business he sells it to one of our buyers for $25,000.

Fortunately, and unfortunately as well, this is California and it’s easy to catch seller’s trying to save a commission.  The red lights went-off and we immediately contacted the seller.  He refused to pay the commission. So we were left with filing a lawsuit, something that we’ve never done on such a small deal.

Here is what I’ve learned. First, the state doesn’t want brokers filing lawsuits.  This is clear when filing the suit because the broker must deposit $10,000 with the court before filing.  On the other hand, a non-broker can file a lawsuit with no penalty, regardless of whether the lawsuit is based in law or conjecture, encouraging lawyers to file frivolous law suits, clogging up the courts – employing more state union employees in the court systems, by the way.  There is no real remedy to these frivolous lawsuits other than suing the attorney, yeah right!

Second, the process is long and drawn-out, totally designed to maximize the hours a lawyer spends on the case and the paperwork that must be filed with union court employees. First there is the filing of the complaint - $5,000-$8,000…Kaching! Then there is the interrogatories - $2,000+…Kaching! Then there is the depositions - $5,000-$8,000…Kaching! Then there is the wait, and the wait, and some more court filings due to the court delays…another $1,000-$2,000…Kaching! Then the court forces a arbitrator on the case, which is non-binding, meaning the judgment of the arbitrator is worthless…$2,500 - $4,000….Kaching! And before you even get to court, the legal system has raped me for $15,000+!!!

Finally, four year after filing the lawsuit, we’re still waiting for our day in court.  We go to the forced non-binding arbitration. We win. Seller says screw you!  Then shortly after getting the arbitrator's favorable judgment,  the seller files bankruptcy. That’s a game changer! 

In the end, I forked-out $16,000+ on this case, never got to court, the seller files bankruptcy, but had the courts efficiently and timely handled my case, we’d been out of court, my commission paid along with my legal fees.  This was a NO BRAINER case, open and closed.  But for the trial lawyer’s control over the legal process, I would have had my day in court and I would have received restitution.  Instead I get the short-end of the stick in a legal system where the only winners are the trial lawyers and the union court employees.  Is this justice? Is this what the people in California want?  Certainly not the honest people!  But the lawyers love it!

I'm reminded of the EAGLE'S song with the lyrics "Let's kill all the lawyers, kill 'em tonight!"  I certainlky felt that way after being screwed by them on this transaction!

Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry.  Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer.  Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world.  There he participated in more than $11.5 billion of merger and acquisition transactions.  Give Mel a call at 480.274.7000 if you have any questions.