From the Blog of Phyllis G. Pollack.
More times than not, in order for the parties to reach a resolution at mediation, they must attend the mediation. While this may seem axiomatic, in reality, not all of the necessary parties always show up at a mediation. In most instances where a party does not attend in person, it is difficult, if not impossible, to reach a resolution. Unsurprisingly, the matter does not settle.
This simple fact was the subject of a motion for sanctions before the Third Appellate District in the California Court of Appeal. In Campagnone v. Enjoyable Pools & Spas Service & Repairs, Inc. (C055050), the court denied the motion for sanctions solely because the applicable local rule was not explicit enough to put the defaulting party on notice of its obligation. However, the court admonished the parties about the value and importance of mediation.
In this case, plaintiff Robert Campagnone suffered severe injuries when the filter in his swimming pool exploded. After a jury awarded him $2.4 million in damages against both the manufacturer of the filter, Sta-Rite, and the seller and installer of the filter, Enjoyable Pools, the defendants appealed.
As part of its process, the appellate court offers mediation (‘court-ordered” mediation) in which the first four (4) hours of the mediation session are furnished to the parties at no cost. If the parties wish to continue with the session, financial arrangements must be made with the mediator.
The parties took advantage of the “court-ordered” mediation. However, Sta-rite did not notify its excess insurer (National Union) of the mediation session much less that its attendance was mandatory.
Well. . . the matter did not settle at mediation. So, plaintiff filed a motion for sanctions against Sta-Rite, its counsel and its excess insurer seeking attorney’s fees, mediation fees and the expenses of participating in the mediation process because of Sta-Rite’s failure to notify the excess insurer of the mediation and the latter’s failure to attend.
In its discussion on the virtues of mediation, the court noted that its court program had an over 50% settlement rate which occurred “. . .prior to the preparation of the appellate record, briefing and oral argument. By doing so, [the parties] saved substantial time and expense, achieved a result acceptable to each party, and moved on with their lives or business rather than having prolonged the litigation.” (Id. at 2).
The court then stated the obvious:
“For mediation to be effective, the parties must attend all mediation sessions in person, with full settlement authority. And when potential insurance coverage may apply, a representative of a party’s insurance carrier must attend all mediation sessions in person, with full settlement authority.” (Id.).
In sum, the court, in principle, agreed with plaintiff but declined to order the sanctions as the local rule in point did not put Sta-Rite on explicit notice of what was required. However, the court did admonish that henceforth it would award such sanctions. It stated that “. . . at a minimum, a reasonable sanction is the cost of their wasted time for a period of four hours . . . plus the court’s cost to process the sanction motion.” (Id. at 6-7).
In this way, the court is enforcing the obvious:
“. . .It is self evident that for a mediation to succeed, each of them must attend every mediation session in full, with full settlement authority.”
(Id. at 6).
I devote this blog to this point because although this simple fact may seem obvious, I have had too many mediations in which it is “inconvenient” for a party to appear in person such that the party either does not appear at all or simply appears by telephone – and then wonders why the matter did not settle. This court opinion explains the “why.”
. . . Just something to think about.