Redemption and Arbitration


Just a reminder to take the arbitration process seriously.  Reprinted below is a portion of a decision by Judge Steele, Federal District Court for the Southern District of Alabama, who was a little perturbed (well, a lot perturbed) that parties got caught up in arguing about everything, and landed in court for him to make a decision.  Remember, everybody, if a Judge gets mad at you, you won’t be happy with his decision!

I think the decision is very amusing, but I was not on the receiving end of it!

From the Federal District court (SD Ala) decision of First Financial Bank v. CS Assets, 678 F. Supp.2d 1216 (2010), Judge Steele:  “Clearly, then, the statute requires courts in redemption actions to take into account the equities. In recognition of this fact, both parties appeal to the undersigned’s sense of fairness in briefing their respective positions. The Court will certainly consider the equities. In doing so, however, a pair of observations comes to mind. First, given the marked difference between the dueling redemption prices proposed by the parties and reasonable estimates of market value of the parcels in question, as well as the divergence between the foreclosure price and each of the aforementioned figures, it is apparent that both sides will come out ahead, whatever the ultimate resolution of this case may be. (See doc. 56, at 7-8; doc. 60, at 12.) The “equities” involved here are not the kind that leave one party penniless and bereft, and other luxuriating in opulence. Both parties stand to profit here, with the only question being by how much. This conclusion leads directly to the Court’s second observation, which is that we are here solely because of both sides’ inability to work together to divide the pie in a mutually satisfactory manner. There is a reason why the parties have been relegated to citing ancient Alabama precedents under predecessor statutory schemes,  and there is a reason why many aspects of their dispute have not been confronted or decided in modern Alabama jurisprudence. The reason is that parties in redemption disputes typically realize it is in their mutual best interest to reach a satisfactory compromise on redemption pricing issues. First Financial and CS Assets could have reached such an outcome here. In fact, record evidence confirms that “[p]rior to suit being filed we got very close to an agreement but did not ever get an agreed upon price.” (Mosher Dep., at 82.) Rather than making further compromises to advance the negotiations from “very close” to “yes,” the parties elected to go to war, consuming considerable litigant and judicial resources as they fight tooth and nail about every calculation and parameter of the redemption price, knowing full well that Alabama law is unsettled (and, indeed, opaque) in many of these respects. It is with that history in mind that the Court performs its statutory function of adjusting “all the rights and equities of the parties” pursuant to Alabama’s redemption statute.”