When The Lawsuit Backfires

Frivolous lawsuits: A proud tradition of complete assholes everywhere.

But most frivolous lawsuits rely on the cost of defending the suit outweighing any possible gain, so you settle out of court. That is, unless the lawyer you’re up against already hates you, and is more than willing to take you on at a reduced rate…

This story is from a few years ago when I worked in the legal department of a 1,000+ store national retailer. As part of my job, I handled customer complaints that elevated when the customer threatened legal action. The cast is very simple:

Me = Me.

EM = Karen, who was also an attorney

AE = Our awesome attorney

Our customer service call center forwarded EM’s call to me after she threatened legal action. EM left a message claiming that she was not provided $10 in customer reward coupons (spend $200, receive a $10 coupon in the mail sort of thing…this was before apps) based on her purchase of clothing for her son and daughter for back to school. I looked into it and called EM back.

It turned out, we had an old address associated with her rewards account. No big deal, right? I spoke with EM and offered to send her the original $10 coupon and an additional $25 for her trouble to the correct address.

That did not satisfy EM.

She claimed we should have known her address and threatened to sue us if we didn’t pay her $1,000 in cash. Her rationale was that it would cost us at least $1,000 to defend the suit (she was in a state in which our company did not have any offices), so we should just pay it to her.

I declined, but still forwarded her the $10 coupon she was entitled to pursuant to our rewards program. Sure enough, she sued us for breach of contract, fraud, and any other conceivable charge. I went to my boss, the COO, and told him the story. He asked what I wanted to do? I said I’d rather pay legal fees to a defense attorney than pay EM and he agreed.

I contacted AE, explained the situation to him and I $hit you not he said (in a Southern drawl): “I get to sue EM? I should be paying you guys. There are a lot of lawyers in this legal community who would love to sue her as she is reckless, unpleasant and a total pain in the ass to deal with. I’ll gladly take your case.” He agreed to defend us at a reduced rate.

Part of our defense strategy was to counter-sue her under the state’s frivolous lawsuit statute, which would move the suit from small claims court to the larger civil court. AE filed our answer and counter-claim.

Although EM was an attorney, she was not a defense attorney, so she had to engage her own attorney to defend against the counter-claim. After a couple of hearings, she offered to settle for no more money exchanged (she didn’t even get the extra $25 coupon I offered her), and the dismissal of both suits.

I talked with AE about continuing our claim, but he advised it would probably be worth settling and being done with it rather than being vindictive. Although vindictive would have been fun, courts tend not to like that so I agreed.

My company ended up paying AE $900 in attorneys’ fees. AE later called and told us that the attorney EM engaged charged her $1,700 to defend the suit. Although I would have liked to continue with our suit, I think her having to pay $1,700 over a $10 coupon sent to the wrong address is sufficient justice.

TheBreakUp2013