Dispute Resolution: Robert DeNiro Leaves Conflict Management to the Courts

Hollywood Star Turns to Litigation in to Resolve Conflict - How Negotiation Could Mitigate the Costs of Disputes

By — on / Conflict Resolution

To many of his neighbors in rural Gardiner, New York, actor Robert DeNiro’s decision to challenge the property assessment on his 98-acre property in 2010 seemed perfectly reasonable.

DeNiro bought the property through the Riverside Trust, a legal entity, for $1.5 million in 1997. At the time, the riverfront property in Ulster County was 78 acres and included a renovated 18th-century farmhouse, writes Matt A.V. Chaban in an article in the New York Times.

Since then, the trust has purchased an additional 20 acres and transformed the land into “a veritable Bobbywood,” writes Chaban. One barn was converted into a 14,000-square-foot recreation center that includes a basketball court, swimming pool, boxing ring, and film studio. Two other barns were converted into workspaces, and two guesthouses, a tennis court, and a small ski slope were added. More than $1 million in landscaping was added for privacy.

In May 2010, the town of Gardiner was notified that the trust was challenging its $6 million assessment of the property, a figure that results in an annual property tax bill of $170,000. In a trial, the trust argued that the property should be assessed based only on comparable properties in Ulster County, where property values are relatively low ($300,000 on average). On this basis, the trust’s appraiser valued the home at $4 million.

The town, by contrast, argued that the property had been transformed into a one-of-a-kind estate that would be attractive to wealthy buyers from New York City who might otherwise settle in nearby counties in New York and Connecticut. The appraiser the town hired for the trial estimated the property’s value at $8.985 million—well above the initial $6 million assessment.

The judge hearing the case sided with the town based on the property’s appealing “privacy and self-sufficiency” to wealthy New York City buyers. Though it could have asked for more, the town offered the trust a settlement of a little under its $6 million assessment.

To the dismay of town leaders, the trust rejected the offer and filed an appeal. If the trust wins the appeal, it could save $57,000 per year. If the town wins, it would gain much less, since it receives only 11% of the tax revenue, according to Chaban. The New Paltz school district has the most at stake, since it collects the bulk of the current tax bill.

The town racked up $150,000 in legal expenses in the initial trial. But the Town Board has decided to continue the fight rather than lower its offer, for fear the case would set a bad precedent for other wealthy landowners who move to the county. Some area residents have remained sympathetic to DeNiro; others believe it is time for him to back down in light of the costs the protracted battle is inflicting on the community.

How can you and your organization reduce legal costs and increase the odds of a timely and mutually satisfactory end to a dispute? Here are few suggestions.

Engage in joint fact-finding.

Legal disputes often arise due to a fundamental disagreement between parties about the “facts” of the matter. In some cases, you may be able to sidestep a legal battle by engaging in a joint fact-finding process when the dispute first arises or even after the courts are involved. In joint fact-finding, disputants mutually choose unbiased experts to prepare an analysis and tentative findings, writes Program on Negotiation faculty member and MIT professor Lawrence Susskind in his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation (PublicAffairs, 2014). In the DeNiro case, for example, the two sides might have negotiated terms for a single unbiased property assessment rather than each consulting experts who were likely to support their point of view.

Try to turn the dispute into a deal.

Disputants miss out on opportunities to look beyond price battles to make tradeoffs that expand the pie of resources, according to Program on Negotiation Chair Robert Mnookin and colleagues in Beyond Winning: Negotiating to Create Value in Deals and Disputes.

By identifying and expressing their myriad interests, negotiators can often find new sources of value. Rather than exclusively negotiating the assessed value of the trust’s property.

For example, representatives of the trust and the town of Gardiner might sit down together to discuss other ways for each to get what it wants.

There might be other sources of value that DeNiro could offer the town in exchange for a lower assessment.

For example, such as free acting classes or film memorabilia to be auctioned for the local schools.

Engage in decision analysis.

Before deciding to go to court, require your legal team to carefully quantify the likely short-term and long-term risks and opportunities of the litigation process, advise the authors of Beyond Winnning. Instruct your lawyers to generate predictions of the outcomes of a case by using decision-analysis tools such as decision trees and dependency diagrams. This type of rational analysis will help avoid the tendency toward overconfidence and reach a more clear-eyed decision about whether to move forward with a case.

Related Article: Top 10 Business Negotiation Articles of 2013

The New Conflict Management

Claim your FREE copy: The New Conflict Management

In our FREE special report from the Program on Negotiation at Harvard Law School - The New Conflict Management: Effective Conflict Resolution Strategies to Avoid Litigation – renowned negotiation experts uncover unconventional approaches to conflict management that can turn adversaries into partners.

Originally posted on November 2014.

Related Posts


Leave a Reply

Your email address will not be published. Required fields are marked *