Chapter 6

Settling Your Dispute

Try to Negotiate First..................................................................... 83

Mediation....................................................................................... 86

Why Mediate?............................................................................ 86

How Does Mediation Work?...................................................... 88

Formal Demand Letters................................................................. 91

Composing Your Letter.............................................................. 93

A Real Small Claims Case........................................................ 94

Sample Demand Letters............................................................ 99

Get Your Settlement in Writing.................................................... 101

Last Minute Agreements.............................................................. 104

Lawsuits should be a last, not a first, resort. In addition to being time-consuming and emotionally draining, lawsuits—even the small claims variety—tend to polarize disagreements into win-all or lose-all propositions where compromise is difficult. It’s not hard to understand how this happens. Most of us, after all, are terrified of making fools of ourselves in front of strangers. When forced to defend our actions in a public forum, we tend to adopt a self-righteous view of our own conduct and to attribute the worst motives to our opponents. Many of us are willing to admit in private that we have been a bit of a fool—especially if the other person does, too—but in public, we tend to stonewall, even when it would be to our advantage to appear a little more fallible.

In most states, you are required to ask for the money owed you before filing a small claims lawsuit. For example, in California the form you fill out to start a small claims lawsuit states, “You must ask the Defendant (in person, in writing, or by phone) to pay you before you sue. Have you done this? If no, explain why not.”

Although I am a strong advocate of resolving disputes in small claims court, I have nevertheless witnessed many otherwise sensible people litigate cases that never should have been filed in the first place. In some instances, the amount of money was too small to bother with. In others, the problem should have been talked out over the back fence. And there were some situations in which the practical importance of maintaining civil personal or business relationships between the parties made it silly to go to court over a few hundred or even thousands of dollars.

Let me make this last point in a slightly different way: It is almost always wise to first look for a noncourt solution when the other party is someone you’ll have to deal with in the future. Typically, this would include a neighbor, a former friend, or a relative. Similarly, a business owner will almost always benefit by working out a compromise settlement with another established local business, a long-term customer, or a client. For example, an orthodontist who depends on referrals for most new customers should think twice before suing a patient who has refused to pay a bill in a situation where the patient is genuinely upset (whether rightly or wrongly) about the services received. Even if the orthodontist wins in court, the patient is likely to become a vocal enemy—one who may literally bad-mouth the orthodontist from one end of town to the other and in the end cost him or her a lot more than what was won in court.

Try to Negotiate First

It is rarely a waste of time to try to negotiate a compromise with the other party. Indeed, many states all but require you to make the attempt. For tips on writing demand letters, see “Formal Demand Letters,” below.

But, first things first. Before you reach for pen and paper, try to talk to the person with whom you are having the dispute. The wisdom of trying to talk out a dispute may seem obvious. But apparently it isn’t, since I am frequently consulted by someone with an “insurmountable dispute” who has never once tried to discuss it calmly with the other party. I suspect the reason for this is that many of us have a strong psychological barrier to contacting people we are mad at, especially if we have already exchanged heated words. If you fall into this category, perhaps it will be easier to pick up the phone if you remind yourself that a willingness to compromise is not a sign of weakness. After all, it was Winston Churchill, one of the 20th century’s greatest warriors, who said, “I would rather jaw, jaw, jaw than war, war, war.”

A compromise offer is not binding. It’s important to know that an offer of compromise—whether made orally or in writing—does not legally bind the person making it to sue for that amount if the compromise is not accepted. Thus, you can make an oral or written demand for $2,000, then offer to compromise for $1,500, and, if your compromise offer is turned down, still sue for $2,000. If the person you are suing tries to tell the judge you offered to settle for less, the judge will not consider this to be relevant.

In an effort to help you arrive at a good compromise, here are a few of my personal negotiation rules, which, of course, you should modify to fit the circumstances:

If you are the potential plaintiff, start by offering to settle for about 20% less than your original written demand. Why 20%? If you offer a smaller discount, chances are you won’t be taken seriously. Offer a bigger discount and you’re giving away too much too soon.

If you are the potential defendant, and you conclude that the plaintiff probably has a decent case, start by offering to pay about 50% of the amount demanded. This should be enough to start negotiations without conceding too much too soon. Many plaintiffs will ultimately agree to knock as much as one third off their original demand, in order to save the time and trouble of going to court.

Money isn’t always at the root of the problem. If you pay close attention to the other party’s concerns, you may find that the key to arriving at an agreement can be found elsewhere. For example, a print shop owner who refuses to repay you $2,000 for a screwed-up job might agree to do the disputed job over and give you a discount on the next one, in exchange for an agreement to continue to work together and speak well of each other in the future.

The patient negotiator has the edge. Many Americans are in such a big hurry to arrive at a solution that they agree to a bad one. Take your time. If you make a lowball offer and the other person gets mad and hangs up, you can always wait a few days and call back with a slightly sweetened one.

Good negotiators rarely change their position quickly, even if the other side does. Instead, they raise or lower their offer in very small increments. For example, if your opponent counters your original offer of a 20% reduction in exchange for a settlement by offering to pay 50% of what you originally asked for, you’ll do best by not jumping to accept or even agreeing to split the difference. Instead, counter by reducing your original demand by an additional 5%–10%. Often this will result in your opponent further improving his or her offer. And even if that doesn’t happen, you haven’t lost anything, because once someone has made a 50% offer, it is unlikely to be withdrawn.

Why it’s rarely wise to split the difference. Often, an inexperienced negotiator will quickly agree to the other party’s offer to split the difference or settle a claim for 50¢ on the dollar. It’s rarely wise to do this. After all, by proposing to split the difference, your opponent has all but conceded he or she will pay that amount. Better to counter by reducing your first offer by a smaller amount and leave the next move up to your opponent.

Estimate how much money a compromise settlement is worth to you, given the fact that a settlement eliminates the time and aggravation of going to court. I do this by putting a dollar value on my time and then multiplying by the number of hours I estimate a court fight will take. Also, based on the facts of your case, take into consideration the chances that you might lose or get less than you ask for. In a study of 996 small claims cases that actually went to trial, only 32% resulted in the plaintiff receiving 100% of the amount claimed; 22% resulted in the plaintiff getting between 50% and 100% of the amount claimed; 20% resulted in the plaintiff getting less than half; and in 26% of the cases, the plaintiff got nothing at all. (See Small Claims and Traffic Courts, by John Goerdt (National Center for State Courts).)

Example: In a dispute my business, Nolo, had with a phone company, Nolo originally asked for $5,000. The phone company admitted some liability and offered to compromise. After considering the value of the time Nolo would invest bringing the dispute to court, we decided that it would make sense to compromise for $3,500. And although we were sure we had a strong case, we had to admit that there was some possibility the judge would not agree, so we decided to subtract another $500 and accept a settlement for $3,000. Unfortunately, after several conversations and letters, the phone company wouldn’t offer a dime more than $2,000. Since this was too low, we decided to go to court. As it happened, the small claims judge awarded us the entire $5,000. But then the phone company appealed and received a new trial. After the case was presented over again, the second judge reduced our final award to $3,500. Considering that it was easier to prepare the case the second time, we still probably came out ahead of the game, as compared to accepting the $2,000. In truth, however, given the time needed to prepare for two court presentations, we probably netted only about $500 more.

If you settle, sign a written agreement, pronto. If you talk things out with your opponent, write down your agreement as soon as possible. Oral settlement agreements, especially between people who have little confidence in one another, are often not worth the breath used to express them. And writing down an agreement gives each party a chance to see whether they really have arrived at a complete under­standing. Often one or more details must still be hashed out. (See “Get Your Settlement in Writing,” below, for more on how to reduce a compromise agreement to writing.)

Learn more about negotiating. On several occasions when I have been involved in important negotiations, I’ve gotten help by rereading Getting to Yes: Negotiating Agreement Without Giving In, by Bruce Patton, Roger Fisher, and William Ury (Penguin). I also like Getting Past No, by William Ury (Bantam). Neighbor Law: Fences, Trees, Boundaries & Noise, by Cora Jordan and Emily Doskow (Nolo), has excellent advice on negotiating neighborhood quarrels.

Mediation

If you and the opposing party can’t seem to resolve matters one on one, mediation is the next best settlement technique. Mediation is a procedure in which the disputants voluntarily meet with a neutral third party who helps them discuss the issues and arrive at their own solution. For small claims disputes, mediation is available right in the courthouse in many counties. In others, it’s provided by community-based mediation programs.

Why Mediate?

Many people ask why they should waste any time at all mediating with an opponent who they believe is unreasonable. My best answer is that when the parties to a small claims court case voluntarily agree to mediate, the majority of disputes are settled. Settlement is especially likely when, deep down, one or both parties realize they have an interest in arriving at a solution that’s at least minimally acceptable to the other party. This is particularly common in disputes between neighbors or businesspeople who live or work in the same geographical area and who really don’t want the dispute to fester.

Studies have shown that people who agreed to have their cases mediated were more likely to be satisfied with the outcome of the case than litigants who went to trial. One reason for this is that people who arrive at a mediated settlement are more likely to pay up than are people who have a judgment imposed on them after losing a contested trial.

Is entering into mediation always a good idea? No. If you are determined to get the total amount you are asking for, and you will have no ongoing relationship with the other party (for example, your dispute is with a large corporation or government agency), bypassing mediation and going directly to court makes more sense.

Example: John rented an apartment from Frontier Arms, Inc. When he moved out and left the unit undamaged and spotless, the Frontier Arms manager made up a bogus reason to avoid refunding his $1,500 deposit. John decided that proposing mediation was a waste of time, because he was pretty sure a judge would enter a judgment for his entire $1,500, plus $3,000 punitive damages as provided by his state’s law when a land­lord keeps a tenant’s deposit without a good reason. (See Chapter 20.)

How Does Mediation Work?

A small claims mediation session typically lasts between 30 minutes and three hours. Although many mediators are ex-attorneys or even ex-judges, they have no power to impose a decision on you. The result is that mediation sessions tend to be much more relaxed than court proceedings, and they often result in compromises that both parties are better able to live with.

You can’t force the other party into mediating—both of you must agree to engage in the process. However, many states now “strongly encourage” small claims litigants to mediate before they head into the courtroom, including telling them that the judge may look more favorably upon parties who willingly try to mediate. Your small claims court appointment may even be scheduled to include an extra block of time before the hearing so that you and the other party can meet with the mediator. Your discussions during the mediation session are confidential—if the mediation fails, the judge won’t be told what went on.

Although it makes sense to approach mediation with an open mind and be ready to agree to a reasonable compromise, nothing requires you to agree on anything at this stage. It’s your right to have your case presented to a judge if you wish. You can even call off the mediation in the middle, which is particularly appropriate if, despite your spirit of compromise, the other party refuses to realize that he or she is in the wrong or will only settle for an amount you can’t possibly accept. Also watch out for result-oriented mediators who make you feel like you have to give up a large chunk of your claim just to reach a settlement. Being reasonable doesn’t mean giving away the farm.

Assuming you do want to mediate, how can you get a reluctant opponent to the table? Often you can get help from your local court-sponsored or community mediation program. Typically, as soon as you notify a mediation program that you have a dispute and would like to try mediation, an employee or volunteer with the mediation program will contact the other party or parties and try to arrange a mediation session.

If you and the other party agree on a mediated settlement, it will normally be recorded by the mediator on a form called a “Mediated Agreement,” or something similar. The agreement, signed by both parties, will spell out the terms of the settlement and the deadlines for payments or other actions. If the mediation occurs after the plaintiff has already filed a small claims case, some counties will add the agreement into the court record in a sealed envelope.

Learn to be a good mediator. People who are well prepared to engage in mediation are likely to achieve far better results than those who take a more casual approach. The best source of information on how to mediate successfully is Mediate, Don’t Litigate: Strategies for Successful Mediation, by Peter Lovenheim and Lisa Guerin, available as a downloadable eBook at www.nolo.com. If you read it before you mediate, you will almost certainly achieve better results than would have been possible otherwise.

Assuming both parties honor the agreement you reached in mediation, that’s the end of the case—no court judgment is ever entered by the judge or reported to a credit agency. Some states will automatically set a second court date in case the agreement isn’t honored. If your agreement is honored, however, then you can either advise the court to cancel the second date or simply not show up.

If your opponent doesn’t honor his or her obligations under the mediated agreement by the deadline, you must go back to court and obtain a judgment. That’s easy in the states where a second court date was scheduled automatically. In other states, you will need to request a new court date or simply request a judgment, either of which can often be done by mail. Ask the court whether they have forms for such follow-up—if not, write a letter similar to the sample letter requesting judgment, shown below.

In case the mediated settlement agreement is broken, protect your right to ask for the full amount. Most disputes that are successfully mediated result in a compromise, as would occur where A sues B for $2,000 and agrees to accept $1,200. But if B fails to pay within the time allowed by the written mediation agreement, A may want a judgment for the full $2,000. After all, A no longer has an incentive to compromise if B isn’t willing to end the dispute without a day in court. Add a sentence or two to your mediated agreement stating that if the other party doesn’t meet the settlement obligations, you reserve the right to make your full, original claim in court. Even if you forget to add this, ask the judge for the full amount when you write your letter requesting judgment or when you get to court.

Example: Elena rents a filthy apartment from MNO Realty. She does her best to clean it up, but after two months decides the place is hopeless. She provides a proper 30-day notice and moves out. MNO refuses to refund her $1,000 security deposit, claiming the unit is dirty. Elena sues in small claims, asking for $3,000, the extra $2,000 being for punitive damages (see Chapter 20). The day of the court hearing, she and MNO’s owner agree to mediate. Worried that she may have trouble proving that she left the apartment cleaner than when she moved in, Elena agrees to accept her $1,000 deposit back with no damages. In the Mediation Agreement, the parties forget to specify what happens if MNO fails to pay. When MNO does, in fact, fail to pay Elena under the terms of the mediation agreement, she sends a short letter to the court, as follows:

Sample Letter Requesting Judgment

Formal Demand Letters

If your efforts to talk out your problems fail and you decide not to propose or agree to mediation, your next step is to send your adversary a letter. Many courts require you to make a formal demand for payment. But even where writing a formal demand letter isn’t legally required, there are two reasons why doing so makes great sense. First, in as many as one-third of all disputes, your demand letter will serve as a catalyst to settlement. Second, even if no settlement results, setting out your case in a formal letter affords you an excellent opportunity to lay your case before the judge in a carefully organized way. Or, put another way, it allows you to “manufacture” evidence that you will likely be permitted to use in court if your case isn’t settled.

Example: Sunita purchases a designer dress on eBay from Maya. When it arrives, she realizes that the dress was meant to come with a jacket and is too skimpy to be worn without it. Maya refuses to take the dress back. She hangs up the phone whenever she hears Sunita’s voice on the line. Sunita writes a demand letter outlining all of this and sends it via certified mail. Maya doesn’t respond. In court, Maya feigns complete surprise, claiming, “I had no idea you had a problem with the dress—why didn’t you say something before?” Sunita’s demand letter, with its complete account of events, can now be used as evidence to back up Sunita’s account of the dispute—and it will make Maya look less believable on the whole.

You can be sued without first being sent a formal letter stating that a lawsuit is imminent. Some people believe they can’t be sued until they receive a formal letter asking for payment and saying that a lawsuit will be filed if it isn’t forthcoming. This is not necessarily true. A simple past-due notice form from a creditor, stating that if the account isn’t paid promptly court action will be pursued, is usually sufficient. In addition, a judge has the power to conclude that an oral demand for payment is adequate.

In the years since I wrote the first edition of Everybody’s Guide to Small Claims Court, readers have sent in hundreds of small claims success stories. One thing has consistently delighted me: Many self-proclaimed winners never had to file their small claims case in the first place. These readers took my advice and wrote the other party a clear, concise letter demanding payment. As a result of either the letter itself or conversations it engendered, they received all, or at least a significant part, of what they asked for.

That a simple letter can be so effective may at first seem paradoxical, especially if you have already unsuccessfully argued with your adversary in person or over the phone. To understand why the written word can be so much more effective, think about the times you have found yourself embroiled in a heated consumer dispute. After angry words were exchanged—maybe even including your threat of a lawsuit—what happened next? The answer is often “nothing.” For any number of reasons, you didn’t follow up on your “I’ll sue you” threat. And, of course, you aren’t the only one who hasn’t made good on a declaration of intent to file a lawsuit. In fact, so many people who verbally threaten to sue don’t actually do it that many potential defendants don’t take such threats seriously.

But things often change if you write a letter, laying out the reasons why the other party owes you money and stating that if you fail to get satisfaction, you plan to go to small claims court. Now, instead of being just another cranky face on the other side of the counter or a voice on the phone, you and your dispute assume a sobering realness.

Really for the first time, the other party must confront the likelihood that you won’t simply go away, but plan to have your day in court. And that person will think about the time and energy it will take to defend a case and that you may win. In short, assuming your position has at least some merit, the chances that the other party will be willing to pay at least a portion of what you ask go way up when you make your case in writing.

Composing Your Letter

When writing your demand letter, here are some pointers to keep in mind:

Type your letter. If you don’t have a computer or typewriter, try to get access to one. Many public libraries have computers that you can use for free or a minimal charge.

Concisely review the main facts of the dispute. At first it may seem a bit odd to outline these details; after all, your opponent knows the story. But remember—if you end up in court, the letter will be read by a judge, and you want the judge to understand what happened. Now is a good chance to make a record not only of the initial dispute, but of any subsequent phone conversations, unanswered calls, or inappropriate conduct by the defendant.

Be polite. Absolutely avoid personally attacking your adversary (even one who deserves it). The more you attack, the more you invite the other side to respond in a similarly angry vein.

Write with your goal in mind. The letter should encourage your opponent to make a businesslike analysis of the dispute and raise such questions as:

What are my risks of losing?

How much time will a defense take?

Do I want the dispute to be decided in public?

Ask for exactly what you want. For example, if you want $2,000, don’t beat around the bush—ask for it (or possibly a little more to allow some negotiating room). Explain how you arrived at this figure. And be sure to set a deadline. One week (two weeks at the outside) is usually best; anything longer and your opponent has less motivation to deal with you right away. Supply the actual date, to remove any doubt.

Conclude by stating you will promptly pursue your legal remedies if your demand is not met. Remind the defendant that a court judgment could adversely affect his or her credit rating.

Make and keep copies. Make a copy of each letter before you send it, and keep a copy of the post office receipts (use certified mail, return receipt requested). Keep all correspondence from your adversary, also.

Use certified mail. Send the demand letter via certified mail with a return receipt requested. If you do end up in small claims court, you can use the return receipt to counter any claim that your opponent didn’t receive the demand letter.

A Real Small Claims Case

Now let’s consider a real small claims case. The facts (with a little editorial license) are simple: Jennifer moved into Peter’s house in August, agreeing to pay $550 per month in rent. The house had four bedrooms, each occupied by one person. The kitchen and other common areas were shared. Things went well enough until one chilly evening in October, when Jennifer turned on the heat. Peter was right behind her to turn it off, explaining that heat inflamed his allergies.

As the days passed and fall deepened, heat became more and more of an issue, until one cold, late November night Jennifer returned home from her waitress job to find her room “about the same temperature as the inside of an icicle.” After a short cry, she started packing and moved out the next morning. She refused to pay Peter any additional rent, claiming that she was within her rights to terminate her month-to-month tenancy without giving notice because the house was uninhabitable. It took Peter one month to find a suitable tenant and to have that person move in. Therefore, he lost rent in the amount of $550.

After calling Jennifer several times and asking her to pay the $550, only to have her slam down the phone in disgust, Peter wrote her the following letter:

To which Jennifer replied:

Both Peter and Jennifer made the same mistake. Instead of being businesslike, each deliberately set out to annoy the other, reducing any chance of compromise. In addition, they each assumed that they were writing only to the other, forgetting that the judge would be privy to their sentiments. Thus, both lost a valuable chance to present the judge with a coherent summary of the facts as they saw them. As evidence in a subsequent court proceeding, both letters were worthless.

Now let’s interrupt these proceedings and give Peter and Jennifer another chance to write sensible letters. You might want to interrupt your own proceedings and have a trusted friend read your letter before you send it.

To which our now enlightened Jennifer promptly replied:

As you can see, while the second two letters are less fun to read, they are far more informative. In this instance, the goal of reaching an acceptable compromise or agreeing to mediation was not met, but both parties have prepared a good outline of their positions for the judge. Of course, in court, both Peter and Jennifer will testify and present witnesses and possibly other evidence that will tell much the same story as is set out in the letters. However, court proceedings are often rushed and confused, and it’s nice to have a written statement for the judge to fall back on. Be sure the judge is given a copy of your demand letter when your case is presented. The judge won’t be able to guess that you have it; you will have to state that you have it and hand it to the clerk. (For more about how to conduct yourself in court, see Chapters 13–15.)

Sample Demand Letters

Below are letters a consumer might write to an auto repair shop after being victimized by a shoddy repair job and to a contractor who botched a remodeling contract.

Sample Letter: Car Repair

Sample Letter: Home Contractor

Sample Letter: Home Contractor

Get Your Settlement in Writing

If you and the other party agree to a settlement, either on your own or with the help of a mediator, it’s important to promptly write it down. When a mediator is involved, preparing a written agreement is usually the last step in the mediation process. If you and your opponent negotiate your own settlement, you’ll need to cooperate to reduce it to writing. Lawyers call an agreement to settle a dispute a “release,” because in exchange for some act (often the payment of money), one person gives up (or releases) his or her claim against another. For instance, if the paint on John’s building is damaged when Sandra, a neighboring property owner, spray-paints her building on a windy day, John might agree to release Sandra from liability (that is, not sue Sandra) if she agrees to pay $2,000 to have the damaged area of John’s building repainted.

A written release is valid if it is signed by both parties; is fair, in the sense that neither party was tricked into signing on the basis of a misrepresentation; and provides each party with some benefit (if you pay me $500, I won’t sue you and I’ll keep my dog out of your yard). If either party later violates the terms of the settlement, the other can file a lawsuit and receive a court judgment for appropriate damages.

It’s important to understand that settlement agreements are powerful legal documents. If you completely release someone who damaged your car for $500, only to later find out that the damage was more extensive, you’ll be stuck with the $500 unless you can convincingly claim that the other party was guilty of misrepresentation or fraud in getting you to sign the settlement agreement. Of course, in most situations, where the details of a dispute are all well known, a settlement can be comfortably signed with the knowledge that the dispute will finally be laid to rest.

Below we provide a sample release (“Sample General Release”) adopted from Nolo’s book, 101 Law Forms for Personal Use, by Robin Leonard and Ralph Warner. That book contains a number of specialized releases adapted to auto accidents, property damage, and personal injuries. It also contains mutual release forms for use when both parties are giving up claims. In addition, release forms are often available from office supply stores that carry legal documents and from lawyers’ form books, available at law libraries.

No matter where you get your release, it should contain the following information:

The names and addresses of the party being released (the potential defendant) and the party granting the release (the potential plaintiff).

A brief description of the “what,” “when,” and “where” of the dispute or issue to which the release pertains. (The release below provides several blank lines for you to briefly describe the events giving rise to the need for the release.)

A statement of what the person giving up a claim is getting in return. As mentioned, for a release to be a valid and enforceable contract, the person signing the release (releasor) must receive something of benefit (called “consideration” by lawyers) in exchange for agreeing to give up the right to sue. The release below provides a space for this “consideration” to be described. Typically, it is money. If so, simply enter the amount. If it is an agreement by the releasee to perform or not perform some act (for example, stop his dog from barking at night), describe the act.

A statement that the release applies to all claims arising from the dispute or issue, both those known at the time the release is signed and those that may come along later. This provision is very common in releases; without it they wouldn’t be worth much.

A statement that the release binds all persons who might otherwise have a legal right to file a claim on behalf of the releasor (for example, the releasor’s spouse or heirs). Although I have included this provision in my releases for caution’s sake, it is rare that it will ever prove relevant. In fact, such persons are usually bound by the release anyway.

The date the release is signed.

The signatures of the parties. Legally, only the person granting a release needs to sign it, but we think it is a better practice for both parties to do so—after all, this important document contains statements that affect both of their rights. In the case of mutual releases, which occur when both parties give up a claim against the other, both must sign.

Use witnesses. There is no legal requirement for a release to be witnessed, but if you don’t completely trust the other person and think he or she may later claim “it’s not my signature,” a witness can be a good idea. If a release involves a lot of money or a potentially large claim, you may want to bolster the chances of its being upheld (should it ever be challenged later) by signing it in front of a witness or two who can later testify, if the issue arises, that the other party was under no duress and appeared to know what he or she was doing. If your release involves a small claim, it is not necessary to do this.

Last Minute Agreements

Occasionally, disputes are settled while you are waiting for your case to be heard. Even on the day you go to court, it is proper to ask the other person to step into the hall for a moment to talk the matter over. If you can agree on a last-minute compromise, wait until the courtroom clerk calls your case by name and then tell the judge the amount you have agreed upon and whether the amount is to be paid all at once, or over time. Typically, the judge will order that the case be dismissed if one person pays the other the agreed-upon amount on the spot, or, if payment is to be made later, the judge will enter a judgment for the amount that you have agreed on.

Another possibility is that you and your opponent will agree to a last-minute attempt to mediate. If so, you will want to explain this to the judge, who in turn will normally delay (“continue,” in legalese) your case until the mediation session takes place. If mediation works and your case settles, you and the other party should jointly notify the court clerk. Again, unless the agreed-upon amount is immediately paid, the debtor will normally want to return to court and have the settlement amount made part of an official court order (judgment).

Sample General Release