Arbitration/Mediation/Escrow messed up


My father sold house#1 but the escrow co paid off his house #2. Now, Title insurance company is paying off house#1 and asking my father to re-imburse them $200,000+.  Could he be liable?

Thank you for your question!

If you have looked at some of my previous answers you may know that I always advise questioners that mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.

I am not an attorney and cannot give you legal advice but can respond from my mediation, management and consulting experience.  Issues such as yours may certainly have legal ramifications and you may wish to consult an attorney.

My opinion is that your father is exposed, meaning the company could TRY to seek reimbursement from him, but I can't imagine they would prevail if they made an error.  I think you need legal advice here.

In any case I always recommend:

1.  Document a chronological timeline noting the creation of the dispute, and your performance of it (payments, communication, etc). Also document the rise of the conditions leading to the matter and record how this plays out.

2.  Review carefully your existing documents and contracts.  

3.  Look at your legal options.  You don't say how much money is involved here but any litigants will incur a large cost to file suit, and you have to count the possible cost to yourself to pay for or defend this.  Remember that nearly 90% of lawsuits settle before trial so the question is usually not IF you will settle, but when and at what cost.  Disputing parties would be better off to wisely choose a cheaper, faster mediated settlement.

4.  Go see a lawyer.  The local Bar Association usually has a referral service that will give you access to an attorney for free.  You may wish to understand the legal landscape.

Once you understand where you are and how you got there you are then in a position to work out a settlement.  

These are some ideas.  Feel free to follow up with additional questions.

For your general information, the pros and cons of the types of dispute resolution methods follows.


Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:

 Confidential, no public record
 Limited exchange of documentation, information
 Quick, don't have to wait for a court date
 Arbitrators have expertise in the subject matter and are trained in conflict resolution
 Cheaper than litigation
 Preserves business relationships

Negatives of Arbitration

 It's often a compromise, no 100% winner
 Complex arbitration can be costly
 If not satisfied, may litigate the arbitration procedure
 Poor results with an unskilled arbitrator
 Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

 Neutral mediator can objectively suggest alternatives not considered before
 Parties are directly engaged in negotiating the settlement
 Can be quicker than litigation
 Less costly than litigation
 Preserves business relationships
 85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

 may not reach a binding decision
 unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

 a clear winner and loser
 uses a prescribed set of procedures
 more predictable outcomes
 is final

Negatives of Litigation:

 waiting for court dates can do more harm
 usually more expensive than mediation and arbitration
 part of the public record


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Timmy Chou


I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".

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