Bargaining with the Devil

by Robert Mnookin

  From Brenda’s standpoint, I don’t think she had anything to lose by negotiating. To negotiate didn’t mean she had to agree, or to compromise her vital interests if her alternative was better.

  The hardest question would be: What if Thomas’s last offer really was his final offer? Should Brenda negotiate or resist? Should she accept the offer (to spare the children from the stress of a trial) or go to court? I think it’s a close question. If I consider Brenda’s interests alone, I wouldn’t criticize her for fighting on, because she would probably get a better financial deal in court, as indeed she did. But how about the kids? For them, would the chance of shifting more money from Dad’s household to Mom’s be worth the anguish of another battle in court? I think the answer is no. My bet is that they would rather have the war end without the trial and have Brenda go back to work a little sooner.

  In the end, what troubles me about this case is how hard it is to discern the true basis of Brenda’s decision. I’m sure that in her own mind, she believed she was acting for the children’s benefit as well as her own. But if her decision was based on demonizing Thomas or some reflexive notion of her “integrity,” as I suspect it was, I could not call her decision wise.

  TEN

  Sibling Warfare

  Audrey spoke first. She was the oldest of the three Harding siblings and I sensed she was used to being in charge. The siblings had come to me for possible mediation of a family fight related to their father’s estate. All I knew was that it concerned the inheritance of a valuable Cape Cod family vacation home. Although this may sound like a nice problem to have, I knew it could tear a family apart.1

  Audrey was an attractive woman in her midfifties whose style I would describe as bohemian. She wore jeans, a shapeless sweater, and scuffed Frye boots that could have been originals from 1969. No makeup. Long dark hair, streaked with gray, pulled back in a ponytail, and a chunky necklace.

  “Daddy died eighteen months ago,” she began matter-of-factly. “He left us Swann’s Way, the family summer place on Cape Cod. We can’t seem to agree on how to deal with it. An old family friend said we should try mediation before spending more money on lawyers.”

  Audrey explained that Swann’s Way had nine acres, a private sand beach, a five-bedroom main house with water views, and a two bedroom guest cottage. A broker had told her it would sell for at least $6 million.

  “I live in Oakland, California, and I don’t make a lot of money,” she said. “The last thing in the world I need is a one-third interest in a waterfront estate three thousand miles away. I can’t afford to pay my share of the annual upkeep and taxes, and now that both of our parents are gone, I’d never use the place.”

  For readers not familiar with mediation, I will use the Harding story to give you an idea of how a family mediation might unfold. In an initial session, one of my goals is to develop a rapport with each party by demonstrating that I’m listening closely to them. I do this by reflecting back in my own words what I have just heard them say. My comments may sound obvious or repetitive to a neutral observer, but the parties find them very reassuring.

  I did that now. “As I understand you, Audrey, the three of you have inherited a very valuable vacation property. Because you live in California, you feel you will rarely use the property; you can’t afford to maintain it, and you need to sell your one-third interest, which you think is worth at least two million dollars.”

  “That’s right,” Audrey said. “You should also know that we’re tenants in common—equal one-third owners—so I can’t sell my share on the open market. No one would buy it. I’ve repeatedly explained to my sister Stephanie that she and my brother Matt have a very simple decision to make: either I sell my share to her and Matt for two million, or we sell the whole property and divide the proceeds.”

  “You left one thing out,” Stephanie interjected coldly. “When I turned down your ultimatum, you sued me.”

  That got my attention. If there was a lawsuit pending, this conflict was worse than I thought. Bringing a lawsuit against a family member is an extreme act, usually signaling a total breakdown in a relationship.

  Stephanie was the middle child, a few years younger than Audrey. Her hair was short, blond, and topped by a headband. She wore a pale yellow cashmere sweater and a pair of tailored khaki pants. Her arms were crossed and her lips set grimly. “This is a private matter,” she told me. “I find it humiliating to have it aired in public. I can’t believe Audrey is being so selfish and hurtful.”

  “I sued in desperation!” Audrey broke in. “You refused to respond to my calls or letters. I was at my wits’ end. You left me no choice.”

  By this point I realized that Audrey must have filed a partition suit in state court. When joint owners can’t agree about whether to sell a property, a court can be asked to resolve the matter by either dividing the property or having it sold and dividing the proceeds.

  Stephanie ignored her sister’s outburst and turned to me. “Audrey and Matt know I will never allow Swann’s Way to pass out of the family. I told her I was willing to discuss buying her out, but only on the basis of the estate tax appraisal, which was $4.5 million. Even at that number, I doubt Matt can afford to participate, and my husband and I can’t raise $1.5 million on our own. Audrey knows how I feel about Swann’s Way, and she’s trying to extort as much money as she can out of me. I haven’t spoken to her for months and I won’t haggle.”

  Was that a whiff of sulfur I smelled in the air? Was Stephanie demonizing her sister? I reflected back to Stephanie what she had said, adding, “It sounds like you are afraid that your attachment to Swann’s Way makes you vulnerable to exploitation by your sister.”

  She nodded and her expression softened a bit. “Swann’s Way has been in the family for more than forty years. We spent every summer there growing up. Daddy said he hoped it would stay in the family, not just for our generation but for our children and grandchildren. But as you see,” she said, flipping a hand in Audrey’s direction, “Audrey could care less what Daddy wanted.”

  “Steph, get real!” Audrey interrupted. “Daddy’s will doesn’t say anything about keeping Swann’s Way in the family.” She turned to me. “Don’t let her take you in with all this sanctimonious crap. Stephanie wants you to think that all she cares about is making Swann’s Way into some kind of shrine to the Harding family. But make no mistake: this fight is really about money. She knows damn well that the current market value is far more than $4.5 million. She just wants to buy it at a fire-sale price because that’s all she can afford.”

  Stephanie shot back, “You’re the one who’s making this all about money! You’re the one who is suing to force a sale. That’s not the way we were raised. It’s a disgusting way to behave.” She glared at her sister and then said to me, “Audrey thinks the world should revolve around her, and she always has. She bullied me when we were kids and she’s trying to bully me now. I won’t allow it.”

  “Stop!” Audrey exploded. “Why do you hate me so much? Why did you write me that letter saying I should stay away from your children because I was ‘immoral and evil’?”

  I was taken aback by these words. If Stephanie had really accused her sister of being immoral and evil, more than one negative trap might be at work. And Stephanie had just told us that in her eyes this conflict was about a great deal more than money. Stephanie felt that Audrey had always pushed her around and now she was determined—heroically, in her view—to resist and counterattack.

  My usual move at such moments is to reframe the dilemma in neutral terms that can encompass the stories on both sides. I said, “My guess is that this conflict is causing you both a great deal of pain.”

  Stephanie said nothing. Neither did Audrey.

  After a few moments of silence, I turned to Matt Harding, who looked frozen. He hadn’t said a word. “What are your thoughts about all this?” I asked.

  Matt, the youngest of the three, was the headmaster of a country day school outside Philadelphia, and
he dressed the part: blue blazer, seersucker pants, and a bow tie with whales on it. At the start of the session he had given me a friendly smile. Now he looked like someone with a migraine headache coming on.

  “I love Swann’s Way, and so do my wife and kids,” he said with a bit of sadness. “I get two months off during the summer, so we really use the place. But for me the problem really is the money. I can’t afford to buy half of Audrey’s share, no matter what the price. I know it would be a stretch for Stephie and Don to do it on their own, but I also understand why Audrey wants to cash out. This thing has gotten to be a nightmare. My sisters have been at each other’s throats for a year. They are never going to be able to work this out. And I’m stuck in the middle.”

  I looked at Matt and reflected back what he had said, adding, “I bet you feel that to take one sister’s side will damage your relationship with the other.”

  “Exactly,” Matt exclaimed. “You’ve got the picture. We’ve heard you are a smart guy. Tell us what to do to get out of this mess.”

  Almost every family has at least one story of a bitter fight over property that got out of hand. These stories often end with “Our relationship has never been the same since.” I have seen bitter disputes over family portraits, jewelry (especially engagement rings), pieces of antique furniture, and in one case a fishing camp that no family member had ever bothered to visit. I’ve heard of a case where two brothers spent years—and substantial amounts on lawyer’s fees—fighting over the family photo album.

  What triggers these disputes? For one thing, these are sometimes genuinely hard distributive problems.2 When it comes to dividing family property, the greatest challenges arise when the property has certain characteristics: (1) it can’t be neatly carved up into shares; (2) its market value is uncertain; (3) it is unique; and (4) it holds sentimental or symbolic value for at least one family member.3

  Suppose, for example, that you and your siblings inherit a grandfather clock that has been in the family for a hundred years. No problem if everyone is prepared to sell it. But suppose one or more of you want to keep it for its sentimental value. Who gets the clock, and how should the other siblings be compensated? How should the value be established? By appraisal? The price an antique store would charge? The amount an antique dealer would pay? Should there be an auction? A public auction or only among family members? There are many different ways to structure an auction, and the structure can affect how much the highest bidder will have to pay and how much will be in the pot for the other heirs to divide.4

  Many families muddle through such quandaries without too much strife. But others find that the challenge of dividing inherited property triggers such strong emotions that the relationships—often troubled for years—cannot withstand the strain. These relationships may have been limping along for years, even decades, without a blowup, but the intensity of this crisis finally does them in. Family members may find themselves reverting to old patterns and raising old resentments, and the emotional damage can be wildly disproportionate to what Spock would see as the practical stakes.

  What sets off these potentially destructive emotions? Sometimes it’s a deep emotional attachment to the property itself. Sometimes it is grief over the death of the loved one.5 Sometimes it is “unfinished business” relating to old conflicts that were never fully resolved. When a parent dies, the conflict is often related to parental favoritism.6 And sometimes family members may begin to feel that their very identities are at stake. For the Harding sisters, I would come to realize that all of these factors were at play.

  In my first session, one of my goals was to connect with each sibling through active listening. A second goal related to process: I wanted each sibling to understand my approach to mediation so that each could make an informed decision about whether to participate in mediation with me. Matt gave me the perfect opening when he said, “Tell us what to do.”

  I asked Matt, “What role do you see me playing as a mediator?” His answer revealed that he thought my role would be akin to that of a judge or arbitrator: a neutral who would listen to everyone’s arguments and then provide a solution. He understood, of course, that I would have no power to enforce my recommendation. But he thought of the mediation process as something like nonbinding arbitration, where I would announce the right result and recommend that the parties adopt my solution. In a sense, he was innocently asking me to assume responsibility for solving the problem.

  I explained to Matt and his sisters that I wasn’t going to tell them what to do. If that’s what they wanted, they could go to court or hire an arbitrator. When I mediate family disputes, I am committed to a process in which the disputants accept full responsibility for deciding whether the conflict will be resolved. This model requires that the parties’ participation be entirely voluntary and the neutral’s role entirely noncoercive.7

  A common occupational hazard for mediators is getting hooked into taking responsibility for finding a solution. It’s all too easy for the mediator to believe that his value as a mediator depends on whether a deal is made. And many parties are all too eager to dump this burden in the mediator’s lap. “Aren’t we paying you to come up with a solution?” they often say—or at least imply.

  I have to constantly remind myself that this is the parties’ dispute, not mine. My responsibility is to help the parties better understand each other and their predicament, and then fashion their own solution. Parties seeking mediation are often in situations that put them under a lot of pressure, and the mediator shouldn’t add to that pressure by pushing them toward settlement. You will note that the role I’m describing here is much narrower than the one that Jack Jones and I played in the IBM-Fujitsu arbitration. In that case, we played many different neutral roles—some facilitative and some coercive—and we assumed full responsibility for implementing the Secured Facility Regime. But in family conflicts I am reluctant to do that, because I think it’s so important for the parties to learn to do business together. If a neutral makes the decision, they have no opportunity to learn.

  “Does this type of mediation have any appeal?” I asked the siblings. “Do you have any concerns?”

  Audrey asked, “What if Stephanie won’t cooperate? Can you assure me she will participate in good faith?”

  “That will be entirely up to Stephanie,” I said. If the Hardings chose to mediate with me, I explained, the exit door would always be unlocked. If any of them concluded that the mediation was no longer serving his or her interests, that person was perfectly free to walk out and pursue the litigation alternative. I think Audrey was rather shocked to hear this. She probably thought I would try to sell all three of them on the virtues of mediation and settlement. Instead I suggested that mediation would give them an opportunity to better understand the opportunities and risks of litigation and to explore whether we could come up with some options that better served each of their interests.

  The Hardings had other concerns about the process. Stephanie indicated that she felt uncomfortable even being in the same room with Audrey. She was willing to work with me and didn’t mind Matt being present, but she had things she wanted to say without Audrey there. Matt expressed the concern that his two sisters wouldn’t be able to manage a civil conversation at all. “Wouldn’t it be better if you met separately with each of us and then did some shuttle diplomacy?” he asked.

  Many mediators operate this way, even in family disputes. But as you may recall from the IBM-Fujitsu case, I believe that the best way for parties to better understand each other’s perspectives is to meet face-to-face. This isn’t easy for the participants, especially in an intense family conflict. It can be very difficult for parties to hear what the others have to say. Their usual patterns of direct communication are often very ineffective. They push each other’s buttons and don’t listen. But a skilled mediator can help them learn how to listen to each other—even if they strongly disagree—and to express themselves in a way that makes it more likely that they will be heard. A
mediator may also be able to accomplish some of this even when meeting with parties in separate sessions, but it’s far less likely. There is simply no substitute for seeing that your adversary understands your point of view, rather than having the mediator tell you it’s so. Because of the increased possibilities for promoting mutual understanding, I’ve found that working together offers the greatest hope for finding lasting solutions and even for repairing damaged relationships.

  Another reason I don’t like shuttle diplomacy is that it gives the mediator too much power. Parties often want to meet privately with the mediator so they can tell him secrets that he is then obligated not to share. The result is that the mediator alone knows the whole story. That makes it all too easy for the parties to expect the mediator to tell them what to do—and for the mediator to fall into the trap of manipulating both sides to get a deal.

  In addition to helping parties better understand what mediation is all about, my third goal for the initial session is to try to assess whether each party is motivated to engage in the sort of process I prefer. I explained that it would be hard work and would require their active participation. Audrey and Matt both quickly confirmed that they were ready for this. Audrey said she wanted to mediate because she hoped to find a solution without destroying family relationships she valued. Matt wanted to find a solution that would satisfy both of his sisters and allow Swann’s Way to remain in the family. Stephanie remained silent.

  “Stephanie, I get the feeling you’re more skeptical about this process. What about it has some appeal to you?” I continued.

  “Look, I’m here because Audrey sued me,” she said. “Obviously I want to solve the problem. I hate the thought of airing dirty family laundry in court, so I guess mediation is the lesser of two evils.”