As the day draws to a close you shake hands with the mediator, the opposing side’s attorney, and your adversary. You just signed an agreement painstakingly negotiated over the last several hours, and you breathe a sigh of relief – your journey through the legal system is over. Or is it? You might have resolved your case. Or, you might be at the beginning of a new fight: enforcing the settlement agreement.
A mediator cannot be compelled to testify in a dispute about the enforceability of a mediated settlement. [Utah Code § 78B-10-106(3).] However, in certain limited circumstances, the parties and their attorneys can be called to testify when a party challenges the enforceability of a mediated settlement. [Utah Code § 78B-10-106(2).] This may happen even where the parties have put their agreement in writing and signed it, and the testimony concerns what was said at the time. Our Utah Supreme Court has admonished and cautioned Judges to tread carefully into settlement discussions, but Utah Code leaves a small crack in the otherwise closed door on a mediation. [Reese v. Tingey Construction, 2008 UT 7, 177 P.3d 605; Utah Code § 78B-10-106.] While in many cases, the Court should not, and will not, explore this avenue, a determined litigant and willing Judge can wedge that crack open.
In a recent case, eleven hours of mediation resulted in a written agreement, signed by all parties and counsel, and the parties began the usually routine process of negotiating a more detailed version of the agreement. However, before the ink was fully dry, the other side sought to “sweeten” the deal by trying to add a new term inconsistent with the signed agreement.
The other party claimed that the new term was a promised made orally at the mediation. Since all communications were relayed through the mediator, the challenge facing the Court was to sort out testimony of “the mediator told me that opposing counsel told him that…” from testimony of “we didn’t tell the mediator to say that.”
Ultimately, the Court determined that the written agreement was an enforceable agreement. It was executed by the parties, with aid of competent counsel, and contained proper consideration (a promise of certain performance by the Defendant, and a promise to dismiss by the Plaintiff.) The Court rejected the opponent’s claims of fraud or mutual mistake, based on its claims about statements made at mediation, finding the opponent’s allegations that the mediator delivered promises not to be credible.
We always celebrate victories for our clients. This case also underscores that mediation confidentiality is not sacrosanct. Before trying to resolve a case, it is important to have experienced counsel to make sure that any agreement reached at mediation is legally binding and protects your interests. Otherwise, you can be at the mercy of an opponent who wakes up the next morning with a renewed appetite for fighting and hopes of a better deal.