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Negotiation Drivers: Cash, Leverage, and Motives

Posted: August 19th, 2021

If COVID-19 has reinforced anything for lawyers and negotiators, it is that cash is still king! In a world where paying bills has been put on hold without consequence, the bill collectors, who are used to a steady stream of cash, are finding themselves sunbathing in a dry riverbed.

I lived this in a recent negotiation for a client, and we at CMM foresee it coming to a head with respect to residential and commercial mortgages. Debtors with cash may be able to cut a deal with creditors who have been legally unable to collect, potentially forgiving a significant amount of debt. Money now is better than a payment plan.

My recent story: our client was hit with a lawsuit from its credit card company seeking payment of over $200,000 in accrued debt. The client initially hoped that we could work out a payment plan to buy some time to repay the owed money. I dug in.

I quickly learned that not only was our client sued for this debt, but hundreds if not thousands of people were sued for the same debt types in and around the same time period. This was not a coincidence. Indeed, as soon various COVID-related restrictions that forced credit card companies to delay collection efforts were lifted, the credit card companies sought to collect millions of dollars owed to them. I understood their motive, and I had my leverage. This was not the time to work out a payment plan; this was the time to cut a deal.

Armed with this information, and after strategizing with our client, I was able to negotiate a lump-sum deal, settling for a mere 25% of the amount claimed. The credit card company indeed preferred to accept our client’s payment now – of a vastly smaller sum – than receive the full payment over the course of years. I was able to successfully negotiate a huge win for our client.

This is just one example of the importance of understanding the context and underlying motives of a negotiation. Similar to how credit card companies are filing lawsuits against their cardholders, banks and lenders will soon go after property owners in default, and when facing a prepared negotiator on the other side, may agree to various creative solutions to protect their investment. Approaching these matters in the same way we would have in February 2020 will simply not work.

Negotiations often go awry when one party assumes the motives and intentions of the other party. Whether you’re suspicious that the opposing party gives in too easily or you’re fooled that someone has good intentions when they really don’t, negotiations can sometimes turn into a guessing game.

Everyone’s first instinct is to assume they know what the other party wants – but it’s important to truly understand what’s really motivating them. Is someone trying to sell you their business because they are ready to retire and it’s time to move on? Or are things tough in their industry and they’re trying to ditch the company before it’s too late? Doing your research and digging into the past and present situation of the opposing party is an important step you shouldn’t enter a negotiation without having done first. This process helps you put things in context – and you can’t negotiate effectively without doing that. If you were negotiating a real estate deal during a recession, would you use the same approach as if you were negotiating when the market is booming? It’s no different coming out of a pandemic. Strategies that worked in 2019 must be tweaked now in 2021.

And likewise looking toward the future, what makes one negotiation strategy effective today may make it ineffective in the future. Today’s post-pandemic game plan will most definitely need to be modified when in a similar situation as my client in 2023 and beyond. Every negotiation is unique in terms of facts and timing. A skilled negotiator must take time to do their research and enter that negotiation equipped with all the background information that they can possibly find. This way, you’re fully prepared to tackle the issues at stake in the negotiation.

CMM is focused on helping clients by being effective dealmakers, and negotiation skill is a critical piece of the puzzle. If you need guidance in connection with a business dispute, debt relief, or something in between, let us help you. Contact us at 631-738-9100.

“I’ll Take That One!”: How “Shopping” for Cases Makes SCOTUS the Most Powerful Branch of Government

Posted: August 18th, 2021

By: Joe Campolo, Esq. email

Tags: Supreme Court

During its 2020-2021 term, the Supreme Court agreed to hear 62 cases – a seemingly large number until you consider the nearly 7,000 it rejected. So how do the less than .01 percent of cases make it to the Supreme Court docket? You may think it takes superior scholarship and a little luck…and you’d be right. But sometimes you might just need to give the Justices the exact type of case they ask for.

The Process

Usually, the Supreme Court hears cases that have been decided in either an appropriate U.S. Court of Appeals or the highest Court in a state. Parties petition the Supreme Court to hear a case if they are not satisfied with a lower court’s decision. According to the Department of Justice, the primary means to petition the Court for review is to ask it to grant a writ of certiorari, which is an order issued by the U.S. Supreme Court directing the lower court to transmit records for a case it will hear on appeal. The Supreme Court will hear a case if at least four of the nine Justices agree to grant the petition for certiorari. This is called the “Rule of Four.” If three or fewer agree to grant the petition, then the Court must decline to hear the case.

How Do Justices Choose Which Cases to Grant Certiorari?

Sometimes, Justices might be interested in settling splits on an issue among lower Circuit Courts. This way, if a number of courts reach different conclusions about a law, the Supreme Court can step in and interpret the law and set a precedent for all the courts. Other times, the Court hears cases when they feel that lower courts have disregarded or misapplied Supreme Court precedent and the Justices want to correct it. Justices also choose cases to resolve conflict between federal and state laws. Through published opinions, it’s also not uncommon for Justices to encourage or even invite certain cases.

Wait, the Court Can Ask for Cases?

Yes, in opinions and dissents. Consider the Court’s rejection of Small v. Memphis Light, Gas & Water in April 2021.

In 1977, the Supreme Court decision in Trans World Airlines, Inc. v. Hardison established the precedent that an employer does not need to provide a religious accommodation to an employee that involves undue hardship on the employer. The Supreme Court rejected the opportunity to challenge this 44-year-old precedent when it declined to hear the Small case this spring.

Jason Small had worked as an electrician for over a decade at Memphis Light, but suffered an injury on the job in early 2013 that required him to change roles. Memphis Light offered him another position, which Small accepted, but with concerns that the new position would conflict with the practice of his religion. Small told the company that he attends services on Wednesday evenings and Sundays and asked for a different position or shift. Memphis Light denied the request. Small remained in the new position and used his vacation days when necessary to attend church. Eventually, Small asked to use vacation time on Good Friday, and the company refused. When Small missed work anyway, the company suspended him for two days without pay.

In 2017, Small sued Memphis Light, Gas & Water for violating Title VII of the Civil Rights Act of 1964, which requires employers to grant requested religious accommodations unless doing so would impose an “undue hardship” on them. On the eve of the trial, the District Court granted Memphis Light summary judgment, and the Sixth Circuit affirmed.

While the Supreme Court ultimately rejected Small, Justices Neil Gorsuch and Samuel Alito later wrote an opinion dissenting from the denial of the case in which they not-so-subtly voiced their desire for a case to be brought to the Court that could overturn Hardison. In their opinion about the Court’s rejection of Small, in which they referred to Hardison multiple times, Gorsuch and Alito wrote, “There is no barrier to our review and no one else to blame. The only mistake here is of the Court’s own making – and it is past time for the Court to correct it.” Using the medium of a public dissent, Justices Gorsuch and Alito voiced their opinion disagreeing with the other Justices that denied certiorari and advocated for the Court to correct what they deemed to be a past mistake.

In another published opinion, Justices Alito, Thomas, and Gorsuch concurred in the denial of certiorari of a 2020 case, Patterson v. Walgreen Co. However, despite their concurrence, and similar to the Small dissent, the Justices referenced Hardison. Justice Alito wrote, “I agree in the end that this case does not present a good vehicle for revisiting Hardison, but I reiterate that review of the Hardison issue should be undertaken when a petition in an appropriate case comes before us.” Essentially, while the three Justices agreed that Patterson v. Walgreen Co. was not the correct case through which to examine the precedent set by Hardison, they still invited cases that would challenge Hardison to come before the Court as a more appropriate “vehicle.”

History of Using Dissents to Invite Cases

The published dissent in the Small case and the concurrence in the Patterson case in which the Justices encouraged litigants in other cases to come forward that would challenge Hardison is not all that unusual. Justices have used published dissents as a way to show what cases they are looking for as well as solicit future attempts to win the “Rule of Four” needed to accept a case. The use of this practice has varied under different Chief Justices. Publishing dissents to garner support for cases was common under Chief Justice Warren Burger; however, Chief Justice William Rehnquist disliked the practice. Under Chief Justice John Roberts, publishing dissents to identify issues and express hopes for future cases has made a return.

While the Supreme Court doesn’t exactly have slim pickings when deciding which cases merit certiorari, they can encourage cases that challenge or address specific precedents to at least try and claim a spot on the Court’s docket. Therefore, it wouldn’t be surprising for more cases that challenge Hardison to petition the Court until one is finally granted review. Any middle schooler should know that the judicial branch of government can only interpret laws – not enforce them. Even Alexander Hamilton once said that the Judiciary branch would be the weakest of the three branches of government because it had no influence. But the practice of using dissents and majority opinions to ask for certain cases? That sounds like influence.

CMM Cares Wine & Dine Benefit Gala

Event Date: October 7th, 2021

Join CMM Cares for an unforgettable global taste experience!

Back by popular demand, our Wine & Dine Benefit Gala will celebrate some of the world’s best wines, expertly paired with delectable regional cuisines. Travel through New Zealand, Chile, and South Africa as we gather at the stunning Flowerfield in St. James to welcome and honor CMM Cares’ newest board members. Learn about wine pairings, enjoy a mouthwatering dinner, and reconnect in person as you support our mission to bring the business community together to make a difference for our Long Island neighbors, one family at a time.

Ticket sales and sponsorships will benefit CMM Cares, Inc., a registered 501(c)(3) nonprofit organization, which helps support and bring joy to Long Island families facing unexpected challenges. At the event, you’ll hear directly from some of the families we’ve positively impacted.

HONOREES:

Peter Klein, Chief Investment Officer & Founder of ALINE Wealth
Alan Sasserath, Managing Partner at Sasserath & Co.
Scott Maskin, CEO of SUNation Solar Systems

Thursday, October 7, 2021 | 5:30 P.M. – 8:00 P.M.

Single Ticket – $250 | Couples Ticket – $400

BUY TICKETS

DOWNLOAD SPONSOR SHEET

To pay by check, please make out to CMM Cares, Inc. and mail to 4175 Veterans Memorial Highway Ronkonkoma, New York 11779.

SPONSOR VIP HOUR:

All sponsors are invited to join us for our VIP Hour hosted exclusively for sponsors at the below levels. This SPONSOR-ONLY reception will begin one hour prior to the main event, featuring a certified sommelier sharing his custom chosen fine wines the secrets of wine pairings.

Premier Sponsor: $5,000

Reserved table and 10 tickets to the main event and exclusive VIP Hour
Company logo on CMM Cares marketing collateral, emails & social media blasts
Company logo on event signage
Company logo on CMM Cares website with link

Corporate Sponsor: $2,500

5 tickets to the main event and exclusive VIP Hour
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Friend Sponsor: $1,000

2 tickets to the main event and exclusive VIP Hour
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Campolo Spearheads “Fly Islip Now” Initiative

Posted: August 6th, 2021

HIA-LI has partnered with the Town of Islip on its critical “Fly Islip Now” initiative, spearheaded by Joe Campolo. For many years, the business community has lamented the lack of direct flight destination options from MacArthur Airport (ISP). Today, there are several airlines considering making a new home at ISP. The addition of even one would open up dozens of new travel options.

To help attract those airlines, we need to demonstrate the support of the Long Island business community for MacArthur Airport. To show support, we ask that you fill out this brief survey, the results of which will be presented to airlines to assist with making their business decisions. Town of Islip Supervisor Angie Carpenter and the airport executives report that this step is critical to bringing new airlines to the airport.

Now is the time for us to once again demonstrate the power and cohesiveness of the Long Island business community. Together, we can effectuate this monumental step forward for the Long Island region and economy. We appreciate your support and we welcome you to please share this survey with your contacts in the business community.

We would appreciate all responses to be submitted before September 6th. Thank you.

COMPLETE THE SURVEY

Judicial Dissolution: An Uphill Battle

Posted: August 5th, 2021

By: Patrick McCormick, Esq. email

Published In: The Suffolk Lawyer

Tags: commercial litigation, corporate, startups

When drafting limited liability company operating agreements, some variation of the words “The LLC is formed to conduct any lawful business activity” is used to describe the purpose of the entity. The wisdom of this approach was called into question in a recent judicial dissolution proceeding that came before the New York County Commercial Division (Masley, J.). Across the East River, on the very same date, the Commercial Division in Queens also issued a decision in a judicial dissolution proceeding (Livote, J.), involving shareholder oppression in a corporation. These recent decisions serve as a reminder to corporate shareholders and LLC members – and their attorneys – that dissolving a business entity is far more difficult than creating it.

Broad Purpose Clause: Lazar v. Attena LLC[1]

Petitioners Lazar and Sheinbaum commenced a special proceeding pursuant to LLC Law § 702 to dissolve three LLCs: Attena LLC, Hemera LLC, and Nessa LLC, all of which had been formed during the early 2010s. They also sought the appointment of a receiver to wind up the LLCs’ affairs as well as to restrain respondents Mor and Zichron from filing tax returns on the LLCs’ behalf without prior express written consent of the petitioners or the receiver.

In their petition, Lazar and Sheinbaum contended that the sole purpose of the LLCs was to acquire, own, and operate five multi-family properties in Manhattan. All the associated properties were sold by December 2015, rendering the intended purpose of the LLCs moot. Asserting that the LLCs had therefore “run their course,” the petitioners sought judicial dissolution.

LLC Law § 702 provides that “‘[o]n application by or for a member, the supreme court in the judicial district in which the office of the limited liability company is located may decree dissolution of a limited liability company whenever it is [n]ot reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.’ Thus, the court must determine whether it is ‘reasonably practicable to carry on the business’” of the LLC (citing Matter of 1545 Ocean Ave., LLC, 72 A.D.3d 121 (2d Dep’t 2010). To succeed, the petitioner must establish that “‘(1) the management of the entity is unable or unwilling to reasonably permit or promote the stated purpose of the entity to be realized or achieved, or (2) continuing the entity is financially unfeasible.’” Id. at 131.

Upon the Court’s examination, contrary to the petitioners’ assertions, the operating agreements of the LLCs all defined each entity’s purpose as “any lawful business purpose” – not to acquire, own, and operate the properties. The Court noted that the petitioners offered no evidence to support the claim that this general purpose of the LLCs to engage in “any lawful activity” was no longer occurring. The court found that the respective operating agreements did not limit the business purpose of the LLCs and that the petitioners provided no evidence that the LLCs were in “financial turmoil, insolvent, or otherwise cannot meet their debts and obligations” (a second potential basis for dissolution). The Court therefore dismissed the petition, pointing out that “Oppressive conduct is not sufficient.”

Lazar is a sharp reminder that when petitioning for judicial dissolution under LLC Law § 702, a broad purpose clause in an operating agreement will be a potential hurdle that must be overcome. When forming a new company, the last thing business partners want to think about it is dissolving it based on a future disagreement. But the LLC members and attorney should discuss this clause upon the LLC formation, and not treat it as an afterthought.

Shareholder Oppression: Hammad v. Jamal Kamal Corp.[2]

Petitioner Nedal Hammad was the 25% owner (as well as the president) of respondent corporations Maysa Realty Corp. and Jamal Realty Corp. (“Jamal Kamal”), both real estate holding companies. Nedal’s brothers (Jamal, Kamal, Omar, and Samir) owned the remaining 75% of the corporations.

In February 2017, the brothers made fourteen demands to Nedal regarding company operations. One demand was to stop making payments to Highcrest, another company owned by the brothers, because they thought Nedal was using Highcrest to drain money from the companies to enrich himself. Nedal continued to make payments to Highcrest, making payments for $29,850 from Maysa and $29,975 from Jamal Kamal in March 2017. Later that year, Nedal made distributions of $150,000 from Maysa and $160,000 from Jamal Kamal to himself and the brothers, including Jamal, without their approval. The brothers did not cash the distribution checks. Thereafter, the brothers elected Jamal president. Jamal, as president, retroactively changed the 2017 distributions made to Nedal. Following his removal as president, Nedal filed a petition for judicial dissolution of the companies under BCL § 1104-a.

Additionally, in late 2018, Maysa and Jamal Kamal made distributions of $509,400 and $499,900, respectively. Nedal’s share of these distributions were applied to his outstanding loans that were created by the re-classifications. These distributions were calculated to reduce the balance of Nedal’s loans to zero. Nedal was not notified of the distributions.

Pursuant to Business Corporation Law (BCL) 1104-a, a holder of 20% or more of the shares of a business corporation (which Nedal held) may seek dissolution if “the directors or those in control of the corporation have been guilty of illegal, fraudulent or oppressive actions toward the complaining shareholders.” Dissolution also is warranted if “the property or assets of the corporation are being looted, wasted or diverted.”

In determining whether to proceed with involuntary dissolution, the court must take into account (1) “Whether liquidation of the corporation is the only feasible means whereby the petitioners may reasonably expect to obtain a fair return on their investment; and (2) Whether liquidation of the corporation is reasonably necessary for the protection of the rights and interests of any substantial number of shareholders or of the petitioners.”

Here, the Court held that judicial dissolution was not warranted. The removal of Nedal as president did not constitute oppressive conduct. However, no acceptable justification was offered for the reclassification of the payments to Highcrest; although the brothers alleged that Nedal was self-dealing through Highcrest, they did not prove the allegations.

The Court also noted that Nedal’s reasonable expectations as a shareholder were to receive a dividend in proportion to his ownership. The oppressive conduct against Nedal was to remedy what the brothers viewed as his unauthorized and oppressive conduct. After the 2018 distributions were made to “equalize” the distributions among all the shareholders, the Court did not find that any “future oppressive conduct” was intended by the brothers, and Nedal will share in future distributions. Therefore, dissolution would not be an appropriate remedy. Instead, the appropriate remedy was to pay to Nedal the amounts paid to Highcrest that the brothers improperly reclassified as loans.

Hammad is a reminder that courts have a great deal of discretion when determining petitions for judicial dissolution in shareholder oppression suits. Specifically, when majority shareholders are able to continue company operations, judicial dissolution may not be the appropriate remedy; monetary damages for past wrongdoings may be more appropriate. Like Lazar, Hammad reminds us that breaking up can be hard to do.

[1] 2020 WL 5439528 (NY County Sup. Ct., Sept. 9, 2020)

[2]2020 WL 5755548 (Queens County Sup. Ct., Sept. 9, 2020)

High Bar for Tenants: Court Sides with Landlord in Harassment Case

Posted: July 29th, 2021

By: Patrick McCormick, Esq. email

Tags: landlord-tenant

Sitting in a rare en banc hearing in Francis v. Kings Park Manor, Inc. 992 F.3d 67 (2d Cir. 2021), the United States Court of Appeals for the Federal Circuit vacated the panel determination holding and affirmed the District Court’s dismissal of the plaintiff’s claims of intentional discrimination under the Fair Housing Act of 1968; Housing Discrimination claims under 45 USCA §§1981 and 1982; Housing Discrimination under NYSHRL; and negligent Infliction of emotional distress. The Court held that a claim by a tenant “alleging that his landlord failed to respond to reports of race-based harassment by a fellow tenant fails to state a claim for intentional discrimination.” The Court reasoned that “landlords typically do not, and therefore cannot be presumed to exercise the degree of control over tenants.”

Background

As alleged in the Complaint, Donahue Francis, a Black man, rented and lived in an apartment at Kings Park Manor, an apartment complex owned and operated by defendant Kings Park Manor, Inc. (“KPM”). Throughout 2012, Francis’s neighbor verbally attacked and attempted to intimidate him by making racist insults and at least one death threat. In March 2012, Francis reported his neighbor to the Suffolk County police, who informed KPM of the reported events. Francis renewed his lease “without comment” on May 1, 2012; thereafter, Francis wrote three letters to KPM, in which he recounted his neighbor’s behavior, the police involvement, and his neighbor’s arrest for aggravated harassment in August 2012. However, he did not allege in the complaint that he ever requested any action by KPM. His neighbor pleaded guilty to a charge of harassment in April 2013.

The Complaint

Francis’s Complaint asserted claims of racial discrimination against KPM under the Fair Housing Act (“FHA”), Section 1 of the Civil Rights Act of 1866, as amended and codified at 42 U.S.C. §§1981 and 1982, and the New York State Human Rights Law (“NYSHRL”), as well as a common law claim of negligent infliction of emotional distress. The Complaint also included a breach of contract claim against KPM. KPM moved to dismiss all claims pursuant to Federal Rule of Civil Procedure 12(b)(6). The District Court for the Eastern District of New York denied the motion as to Francis’s breach of contract claim, but otherwise granted it by dismissing Francis’s other claims against KPM.

A divided panel in the Second Circuit issued an opinion affirming the dismissal of Francis’s claims for negligent infliction of emotional distress but reversed the dismissal of his discrimination claims. Rehearing en banc was later ordered.

The Court’s Analysis

The Second Circuit, in a 7-5 en banc ruling, vacated the panel decision and affirmed the judgment of the District Court, holding that “(1) a landlord cannot be presumed to have the degree of control over tenants necessary to impose liability under the FHA for tenant-on-tenant harassment, (2) Francis fail[ed] to state a claim that the KPM defendant intentionally discriminated against him on the basis of race in violation of the FHA, Civil Rights Act, or the NYSHRL; and, (3) Francis fail[ed] to state a claim of negligent infliction of emotional distress against KPM under New York law.”

Because the plaintiff’s claims were not premised on direct evidence of landlord discrimination, the Court analyzed the claims under the McDonnell Douglas burden-shifting framework.[1] The Court found the complaint “lacks even ‘minimal support for the proposition’ that the KPM defendants were motivated by discrimination intent” and that “only untethered speculation supports an inference of racial animus of the part of the KPM defendants.” The Court recognized that Francis claimed these allegations establish that defendants intentionally discriminated against him under the “deliberate indifference” theory of liability. The Court held that, even if this theory applied, “Francis has failed to state a claim because his complaint provides no factual basis to infer that the KPM defendants had “substantial control over [the harassing and the context in which the known harassment occur[red].” Nor can such control be reasonably presumed to exist in the typical arms-length relationship between landlord and tenant, unlike the custodial environments of schools and persons.”

The Court further explained that the typical powers of a landlord over a tenant – such as the power to evict – does not establish the “substantial control” necessary to state a “deliberate indifference” claim under the FHA.

Significantly, the Second Circuit went to lengths to distinguish the Seventh Circuit’s determination in Wetzel v. Glen St. Andrew Living Community, LLC 901 F.3d 856 (7^th Cir. 2018), which “recognized a deliberate indifference theory of liability for a claim of discrimination under the FHH.” The Second Circuit distinguished Wetzel because there the allegations “gave rise to the plausible inference that the defendant landlord had unusual supervisory control over both the premises and the harassing tenants.” In addition, the Second Circuit found it significant that the landlord in Wetzel “was alleged to have affirmatively acted against the plaintiff.”

The Court also concluded that even if KPM had “substantial control,” Francis would have still failed to state an FHA claim for discrimination under a “deliberate indifference” theory because KPM’s inaction was not “clearly unreasonable” in light of the circumstances described in the Complaint.

Conclusion

While the Court’s decision emphasizes the particular facts in this case, it seems that the Court’s analysis and application of the law to those facts, coupled with its analysis of the Second Circuit’s determination in Wetzel, result in a very high bar for tenants to overcome. The decision also gives significant protections to landlords faced with intentional discrimination claims based on allegations that the landlord failed to respond to allegations of fellow tenant’s race-based harassment.

[1] McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Plaintiffs have specific, “reduced” pleading burdens in cases subject to the McDonnell Douglas analysis. For a plaintiff’s claim to survive a motion to dismiss under the McDonnell Douglas analysis, he must plausibly allege that he “(1) is a member of a protected class, . . . (2) suffered an adverse . . . action, and (3) has at least minimal support for the proposition that the [housing provider] was motivated by discriminatory intent.” While plaintiff did allege, “in a conclusory fashion” that the KPM defendants intervened against other tenants regarding non-race related violations of their leases or of the law, the Court held that “there is no factual basis to plausibly involve infer that the KPM defendants’ conduct with regard to Francis was motivated by racial animus.”

CMM Prevails in Arbitration for Long Island Custom Home Builder

Posted: July 23rd, 2021

Tags: construction, litigation

Ask someone to picture lawyers resolving a dispute, and they likely envision a wood-paneled courtroom with a judge banging a gavel, a shocked jury, and a lot of drama. Or perhaps they imagine a bright, sleek conference room with a shiny long table and people in Armani suits arguing passionately for their respective clients. But no one really thinks of arbitration… and many don’t know what it is.

Arbitration is a form of alternative dispute resolution (ADR) and a way to resolve disputes outside the courtroom. During arbitration, an impartial third party known as an arbitrator hears evidence and arguments in a dispute between parties, then makes a decision. The decision results in a binding “arbitration award” to the winner. (Other forms of ADR, such as mediation, are non-binding, but nevertheless effective at resolving disputes without resorting to litigation.) Sometimes, ADR is the best choice for a client when there is an opportunity to move beyond an impasse and resolve matters more quickly than in the courtroom or board room. Other times, it may be mandated by an agreement between the parties.

CMM recently prevailed in an arbitration proceeding on behalf of our client, a Long Island custom home construction management company. Our client had an agreement to provide construction management services for a significant $2 million renovation at a residence in Suffolk County. The corporate homeowner failed to pay our client the full construction management fee, claiming that they were entitled to offsets due to alleged damages and defective work/supervision.

While conflict resolution is never easy, CMM’s Jeffrey Basso prevailed after a four-day arbitration hearing and multiple witnesses spanning several months of investigation and discovery along with submission of post-hearing briefs. With careful preparation in advance of the hearing, Basso refuted the allegations made by the corporate homeowners by strategically presenting credible and convincing witnesses during the hearing that substantiated the work performed by our client. The arbitrator granted our client a significant arbitration award, as well as attorneys’ fees and the dismissal of all counterclaims. CMM has a proven track record of success with ADR, including arbitration, and views ADR as a critical tool to resolve matters reasonably. Please contact us to discuss the best avenues available to resolve your business dispute.

Webinar: Yermash To Talk Cannabis Law on HIA-LI Manufacturing Committee Panel

Posted: July 23rd, 2021

Event Date: July 28th, 2021

Join CMM Partner Arthur Yermash, Chair of our Cannabis Law practice, for the HIA-LI Manufacturing & International Trade Committee webinar as he discusses the legal considerations of starting a cannabis business in New York. Panelists include Martin Chalif, Owner of Paperless Solutions Company of Long Island and Joel Halvorson, Vice President of Quintel Management Consulting in Denver, Colorado. Attendees will have the opportunity for a Q&A session at the end.

At this online event you will learn the following:

General information about cannabis; growers, processer, sellers,
What other states have been experiencing that New York can learn from,
Technology considerations in cannabis industry,
Compliance considerations in cannabis industry,
Legal considerations in cannabis industry,
Regulations and more.

WHEN: Wednesday, July 28, 2021

TIME: 8:30 AM – 10:00 AM

COST: Free

Communication in Negotiation: Cialdini’s Six Principles of Persuasion

Posted: July 15th, 2021

By: Joe Campolo, Esq. email

“Communication is key in negotiation” and “negotiation is an exercise in communication” – phrases you’ve probably heard so many times that they’ve become meaningless. What if instead, we said that negotiation is about communication and persuasion. That’s what the research of Dr. Robert Cialdini, an expert in the field of influence and persuasion through evidence-based research, has revealed. According to Cialdini, negotiation is about persuasion and how one can present their ideas to others through effective communication in a way that moves them. By using Cialdini’s six principles of persuasion, you can use scientific and psychological-based claims to improve success in your own negotiations – and improve your communication skills while doing so. Here, a closer look:

Reciprocity

This principle states that people tend to give back to others what has been given to them – encouraging giving when you receive and making clear that you should be the first to “give.” Cialdini points out that what you’re giving should be personalized and unexpected.

For example, if you’re negotiating with a client around the holiday season, you could send them a holiday gift as a way to show that they can trust you. This can keep the relationship going in a meaningful way, especially if you send a personalized card. Research shows that client and customers are more likely to be touched by personal gestures such as a handwritten note or an envelope with a handwritten address rather than pre-typed label. Since you sent the gift first, the client now has the option to send one back (or not), but regardless, they will not forget the gesture you made.

Scarcity

People want what they can’t have – they crave exclusivity. In negotiations, it’s important to tell people about the benefits of your proposal. However, a more effective way of communicating is to highlight what makes your offer unique and what your counterpart stands to lose if they fail to consider it.

Say you’re negotiating the sale of a property or building. As the seller, you could consider mentioning to the potential buyer that there are others interested in buying as well so there isn’t that much time available to think about the offer. (Of course, if you use the scarcity principle to create a sense of urgency, you have to consider the ethics and be careful not to make fake claims that could risk your reputation.)

Authority

People follow the lead of those they perceive to be credible and knowledgeable – so it’s critical to communicate your expertise before you even start a negotiation.

An “expert introduction” is one way to establish credibility before a negotiation even begins. For example, if you are a client who calls an insurance company seeking to speak with an agent, the receptionist may transfer you to “Auto Agent David,” or to “Auto Agent David, who has 20+ years of experience in the auto industry and was recently recognized by an industry publication for his work.” Through this small extra detail, Auto Agent David’s authority just increased in your eyes.

Commitment & Consistency

People do not like to make large commitments. Therefore, it’s important to look for and ask for small initial commitments that can be made easily as a gateway to something bigger. For example, in a negotiation, if you are able to get your counterpart to agree to something smaller once, they are more likely to agree to something bigger later. Say you’re negotiating with a potential sponsor of your company event and want them to contribute a certain amount of time or money, you might want to start by asking for something minimal. Then, after they agree, you can ask them for more, or if you’re satisfied, the next time you host the event, you can ask the company to donate more than they did the first time.

Liking

People generally say yes to those that they like or feel more connected to. Furthermore, people like those who are similar to them, pay them compliments, and cooperate with them. When you are in a negotiation, sometimes a simple action like giving your counterpart a compliment and exchanging some personal information can create a more positive and successful interaction. Before starting a negotiation, try identifying a similarity that you and your counterpart share. This will set the stage for an agreeable outcome for both parties.

Consensus

The final principle is consensus – people look to the actions of others and try to mimic them. People like to be in the majority and feel safe there. That’s why a sign asking people to recycle might help; however, a sign adding that a certain percentage of the population recycles could be even more effective. By encouraging action (or inaction) from people by pointing out what others are doing, people will generally follow the behaviors of others to determine their own. This is often referred to as “FOMO” or “fear of missing out” where people want to feel included and be a part of a pack.

And there you have it: Cialdini’s six principles of persuasion can help sway a negotiation in your favor when properly executed (ethically, of course). You’re probably already employing some of these principles in your daily life. For instance, giving compliments might seem effortless and a part of your personality, but that means you’ve already mastered the principle of “liking.” Likewise, you might already gear up to ask people for bigger commitments by asking for little ones first – that means you’ve been putting the principle of “commitment & consistency” into effect. The next time you find yourself facing an unswayable friend or foe, try one, two, three (or all) of Cialdini’s principles out.