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Is It True That You Get More Flies with Honey than with Vinegar?

Plain Speaking
By: James Hochman

A bit of research reveals that Benjamin Franklin said in Poor Richard’s Almanack (in 1744) that: “Tart Words make no Friends; spoonful of honey will catch more flies than Gallon of Vinegar.” As a lawyer in his fifth decade of practice, one with one foot in court and the other in transactional work, I think I have acquired experience and perspective to reflect on this issue and how it applies in our world of commercial real estate (both transactions and litigation).

I recently concluded a rather complicated transaction involving a surviving partner’s buyout of his long time best friend and partner, who died quite suddenly. Let’s call them George and Steve. George and Steve grew up building go-carts in each other’s parents’ garages, and their mechanical skills led to the two founding a very successful truck repair business. They (along with their wives in living trusts) came to co-own the industrial building that housed the business, another investment property (which was leased to a bar and restaurant), a shared/co-owned vacation home in Florida, and of course, they each owned 50% of the stock in their successful business.

George’s sudden death shocked them all, and even worse, the key man insurance owned by the business was woefully low for the buyout of the decedent’s share of co-owned assets. George’s son worked in the business, but during COVID-19, he opted for unemployment and left the business; and when he wanted to come back, that son was not welcome. Meanwhile, George’s widow had one idea of the value of the shared assets subject to buyout, while Steve had another. The battle of the experts, the battle of the appraisals began. This took the parties to mediation, at least avoiding litigation, which would have prolonged the agony, further inflamed the parties, and increased the costs of any resolution. Steve was my client, and I asked my partner to handle the “partner dispute,” the type of matter that my partner handles regularly. Let’s call my partner Marvin. I had litigated against Marvin for more than 30 years in multiple matters when we finally discussed actually joining forces. At Marvin’s invitation, I met with Marvin’s firm and joined their ranks, just about five plus years ago. Knowing Marvin as an advocate, I had found him to be intelligent, fair, and even tempered. In our many suits, the interests of our clients were well served, often settlements were reached, and occasionally one of us triumphed over the other.

George’s widow hired a litigator, one who apparently thrives on being the meanest guy in the room; and in the mediation, resolution was impossible with the lawyers present. Let’s call him Jackson. The mediator, a retired judge, asked the lawyers to step outside the room, and then actually settled the matter, resulting in the type of settlement that made both sides a bit unhappy. In other words, probably a fair deal. But the story doesn’t end there, in fact, it really begins at this point.

Steve went out and obtained a mortgage commitment to borrow funds to buy out George’s widow. The title company chosen by George’s lender actually goofed, named the wrong parties in title, and then delayed in correcting the title commitment, thereby delaying both the closing and the funding of the buyout. The errors had arisen when stray deeds were recorded by George’s and Steve’s well-meaning estate planners, who apparently overlooked the fact that the title to the subject property had long been held in a land trust, in fact for decades. That really confused the title company; and unfortunately delayed the closing. Steve missed the deadline in the parties’ settlement agreement. Jackson pounced, insisted on additional compensation, and the settlement agreement was amended. By now, Jackson was taking everything personally, and anyone involved (me included) received the wrath of his stinging personal comments, running the range between nasty, sarcastic, even abusive.

Obstacles to this multi-property and stock purchase closing arose—yes, even more obstacles than either party had anticipated. Sorry folks, but George and Steve weren’t as careful stewards of their properties as we would have liked. Meanwhile, I trudged ahead, addressing and solving as many of the obstacles as came our way. Jackson had no part in the solution, continuing to send heat seeking missiles my way on a daily basis. I don’t recall ever hearing anything constructive from Jackson. The good news, though, is that Jackson yielded to a transactional attorney who then represented George’s widow through closing. I don’t know if Jackson had vacation plans, ran out of steam, or tired of my calm and measured responses to his insults. Thank you, Muhammad Ali, for teaching us to rope-a-dope. And I bet every one of our readers knows what it is like to try and close a deal when the parties’ attorneys are at war, as opposed to rowing in the same direction. The change was truly like night and day. The deal closed successfully just a few days early before Jackson’s next ultimatum, and I may add, Jackson was nowhere to be found when it was time to say “Nice working with you.”

So, back to our friend Ben Franklin, a true polymath. What do his words about flies and honey and vinegar mean today, when applied to attorneys’ and even brokers’ styles in closing real estate and other transactions? Is there something to be learned about style, something about negotiation approaches, something about problem solving, about living in this world?

"Civility matters; and professionalism always wins out in the end."

And another thing, I have heard it said that the world is a round place, and what goes around comes around. Jackson, “As ye sow, so shall ye reap.” Someday perhaps, though I have better things to do than look for Jackson. Some day he may see the light; but I have better things to do, deals to close, fights to fight, albeit professionally and not in a personal or insulting manner.

Civility matters; and professionalism always wins out in the end. Yes, this column is a bit off the usual real estate transactional theme, but I thought there may be one or two more “Jacksons” out there; and if I can suggest a different style, maybe that will do us all some good for closing our next transaction.

 

Media Contact
Alexis Fermanis SIOR Director of Communications
James Hochman
James Hochman
Schain Banks Kenny & Schwartz
jhochman@schainbanks.com

Jim Hochman is a partner at Schain Banks Kenny & Schwartz law firm and freelance writer. Contact him at jhochman@scheinbanks.com.