In Pickell v. Guaranty National Life Ins. Co.,917 S.W.2d 439 (Tex. App.–Houston1996, no writ) the Court of Appeals addressed the necessity of taking affirmative action with the trial court consistent with settlement agreements reached at mediation.
Facts
Appellant Pickell and Appellee Guaranty National Life Insurance Company (“Guaranty”) reached agreement at a court ordered mediation. Under the agreement, Pickell was to receive $10,000 and his lawyer $3,800, and Guaranty agreed to dismiss its counterclaims. The settlement, however, was contingent upon having an unrelated lawsuit between Guaranty and another party dismissed. Pickell’s lawyer was to work to resolve this unrelated lawsuit. The mediator notified the court that the matter had settled, but the court did not remove the matter from the trial docket, and neither party filed a motion for continuance on grounds that the case had been settled. Guaranty sent settlement documents to Pickell’s lawyer for both Pickell’s lawsuit and for the unrelated lawsuit. Pickell executed and returned his settlement documents to Guaranty, but the settlement documents for the unrelated lawsuit were not returned to Guaranty.
A scheduled pretrial conference was held in the Pickell/Guaranty lawsuit on May 6, 1994. Pickell did not appear and did not notify the court that he was not appearing because the case had settled. On May 9, 1994, the scheduled trial date, Guaranty appeared and announced ready for trial. Pickell failed to appear and failed to inform the court that he was not appearing because the case had settled. Guaranty presented evidence of damages on its counterclaims, and the trial court entered a default judgment in its favor. Pickell filed a Motion to Set Aside Judgment on grounds that the judgment was obtained by fraud and deception because the case had settled at mediation. At the end of the hearing on the motion, the court denied the motion on grounds that the court’s pretrial order required both parties to appear at the pretrial conference and at trial, and the pretrial order did not allow the parties to change these dates by agreement.
Holding and Reasoning
On appeal, Pickell argued that the trial court erred in granting default judgment for Guaranty since the parties had signed a settlement agreement at mediation. The Court of Appeals affirmed the lower court’s judgment. The Court of Appeals noted that there were three problems with Pickell’s position. “First, Pickell did not file (1) amended pleadings with the court raising a defense or asking for affirmative relief based on the mediated settlement agreement or (2) a motion for summary judgment based on the agreement.” Id. at 441 (citations omitted) “The court cannot take action on the mediated settlement agreement without an affirmative request to do so.” Id. at 442. Second, the settlement agreement contained a contingency that was not met. Id. Third, both parties were subject to the court’s docket control order which required both parties to appear at the pretrial conference and at trial. The pretrial order specifically provided, that such appearance may not be changed by agreement of the parties. Id. Accordingly, while noting that the results of this case were harsh, the Court of Appeals affirmed the judgment of the trial court.
Comments
After settling a case at mediation, make sure to take action in the trial court consistent with the settlement agreement( i.e., file an agreed motion to dismiss, an agreed judgment, contact the court to find out how to handle any upcoming deadlines, file amended pleading seeking affirmative relief based on the settlement agreement or file a motion for summary judgment based on the agreement).
In Nueces County v. The Honorable Hector De Pena, 953 S.W.2d 835 (Tex. App. – Corpus Christi 1997, no writ), Nueces County challenged the authority of a district judge to order the county judge to attend a mediation in a case against the county. The Court of Appeals conditionally granted mandamus relief.
Facts
Plaintiffs filed an employment related lawsuit against the Texas Workforce Commission and Nueces County. The trial court referred the case to mediation, ordering that “[e]ach party, and a representative having settlement authority shall attend the mediation. . . .” Id. at 836. Nueces County, through its Commissioners’ Court, gave authority to its county attorney to attend the mediation and settle the lawsuit within a specific range. The plaintiffs moved to compel the county judge to attend. The trial court granted the motion and ordered the county judge to attend the mediation.
Holding and Reasoning
The Court of Appeals noted that while the trial court may require disputants to attend a mediation, the county judge was not himself a disputant or a party to the litigation. Nor had the county judge been given authority by the county to settle the lawsuit. Id at 837. The Court of Appeals found that because the county acts through its Commissioners’ Court and that individual members do not have authority to bind the county by their separate actions, the county judge had no authority on his own to settle the underlying dispute. Id.
The Court of Appeals further noted that while the county judge’s presence may have indirectly encouraged settlement:
a person’s indirect influence over settlement proceedings does not render that person subject to mandatory attendance at mediation. Otherwise, the trial court could arguably require a party’s relatives, close friends, or business associates to attend mediation for advice and support. Such authority is not provided in the mediation statute.
S.W.2d953 at 837.
Comments
In compliance with a court’s mediation order, you must make sure that the parties, and representatives with decision making authority, are present. You need not bring individuals who are tangential to the process.
In, M.D. et al. v. The Fifth Court of Appeals, 925 S.W.2d 656 (Tex. 1996) the Texas Supreme Court addressed the issue of enforcement of mediation agreements.
Facts
Plaintiff obtained a judgment for $209,423 in a commercial dispute. Defendant appealed the judgment. The court of appeals ordered the parties to mediation, and the case settled at mediation. Pursuant to the parties’ settlement agreement, defendant issued a check to plaintiff and his attorneys for $160,000. Plaintiff signed a release of judgment, a joint motion to dismiss the appeal, and an agreed order dismissing the appeal.
The same day, before these document were filed with the court of appeals, plaintiff withdrew his consent to the settlement, revoking defendant’s authority to file the documents with the court of appeals.
Defendant moved the court of appeals to enforce the settlement agreement. The court of appeals denied defendant’s motion to enforce. As a result, defendant filed a separate suit to enforce the settlement agreement, and asked the court of appeals to abate the appeal pending the outcome of the suit to enforce the settlement agreement. The court of appeals denied the request to abate. Defendant sought mandamus relief, from the Supreme Court, compelling the court of appeals to enforce the settlement agreement, or in the alternative, to abate the appeal pending the outcome of the suit in the district court.
Holding and Reasoning
The Supreme Court held that the court of appeals correctly decided that because plaintiff “revoked his consent to the settlement before the court of appeals dismissed the appeal in accordance with the agreement, the court correctly determined that [defendant] was required to seek enforcement in a separate suit.” Mantas, 925 S.W.2d at 659.
The Supreme Court did, however, conclude that the court of appeals abused its discretion by failing to abate the appeal pending the outcome of the case in the district court to enforce the settlement agreement.
In holding that the court of appeals correctly denied defendant’s request to enforce the settlement agreement, the Supreme Court stated that:
a written settlement agreement may be enforced though one party withdraws consent before judgment is rendered on the agreement. See Padilla v.LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). Where consent is lacking, however, a court may not render an agreed judgment on the settlement agreement, but rather may enforce it only as a written contract. Id. at 462. Thus, the party seeking enforcement must pursue a separate breach-of-contract claim, which is subject to the normal rules of pleading and proof. Id. Where the settlement dispute arises while the trial court has jurisdiction over the underlying action, a claim to enforce the settlement agreement should, if possible, be asserted in that court under the original cause number. However, where the dispute arises while the underlying action is on appeal, as in this case, the party seeking enforcement must file a separate breach of contract action.
Mantas, at 658.
Comments
This case confirms that a settlement agreement reached at mediation may be enforced like any contract. If a dispute over the settlement agreement arises while the trial court still has jurisdiction over the original action, the party seeking to enforce the settlement agreement should try to do so in the trial court. If the trial court no longer has jurisdiction, the party seeking to enforce the settlement agreement should file a new action for breach of the settlement agreement.
I recently dealt with the issue of the confidentiality of communications made to the mediator, both verbal and written. In the course of my research, I found the case of In Re Empire Pipeline Corporation, 323 S.W. 3d 308 (Tex. App.---Dallas [5th Dist] ) 2010. In this case, the trial court granted a partys motion to compel production of documents related to communications made to the mediator, and notes or drafts of documents given to the mediator in connection with the mediation of the underlying case. The Court of Appeals granted Realtors mandamus, reversing the trial courts order on the grounds that such discovery is barred by the Texas Civil Practices and Remedies Code Sections 154.073(a) and (b). While the courts examine the particular facts of each situation, this case clearly upholds the general sanctity of confidentiality in the mediation process.