The secret to success: an examination of New York state mediation related litigation.

• Author: Weisberg, Andrew N.

In October 2006, I conducted a voluntary mediation session in a small claims court in New York City. After more than an hour of mediating, including caucuses with each party, the two former business associates failed to settle their dispute. The case did not settle because the plaintiff sought unreasonable amounts of monetary and non-monetary compensation. Although I gain a sense of accomplishment when I help parties settle, I understand that not every case can reach a mediated settlement. I recognize that if I use a more forceful approach toward the parties I could likely settle more cases. Instead, I inform the parties that they are engaged in a voluntary mediation session and that I will facilitate a discussion between them, rather than render a decision in the case like an arbitrator or a judge. Ultimately, if the case is resolved through mediation, it will only occur if both parties agree to the terms of the settlement.

This is the correct approach for a mediator to adopt when acting as a court-appointed mediator in a voluntary court-annexed mediation program. If I were to offer my own opinion on the merits of each party's argument or use a more forceful approach and "bully" parties into settling their cases, I would run the risk of having parties sign an agreement with which they are not likely to comply. Adopting such an approach might result in two negative effects: (1) the approach defeats the purpose of mediation, namely party self-determination; and (2) the approach increases the likelihood of parties resorting to the courts to either request enforcement or to contest the validity of the mediated agreement. Thus, in a case such as the one involving former business associates, where it is evident that the parties would not likely comply with settlement terms, I am comfortable and frankly happy that the parties do not reach a mediated settlement and instead allow the court to decide their case. Forcing the parties to reach an agreement neither is likely to be satisfied with would leave the courts in the uncomfortable position of determining whether or not to enforce the mediated agreement. (1)

INTRODUCTION

The implementation of forms of alternative dispute resolution ("ADR") continues to increase as courts recognize the value of ADR as a means of lightening their caseload. (2) Unfortunately, not every attempt at alternative dispute resolution succeeds. While mediation often results in settlement, post-settlement issues occasionally arise over enforcement of the mediated agreement. When this occurs the court must determine whether it is proper to enforce the agreement. If, however, the central principle of mediation is self-determination by the parties, does court enforcement of mediated agreements defeat the purpose of mediation?

This Comment analyzes reported decisions of challenges to agreements reached through mediation. Specifically, the Comment addresses how often enforcement issues arise and the typical grounds on which parties rely when seeking to vacate or modify mediated agreements. Part I discusses the research conducted on New York state cases decided between January 1, 2004 and October 31, 2006. Part II describes research conducted by Hamline University School of Law Professors Coben and Thompson. (3) This research analyzes decisions in cases involving mediation throughout the United States from 1999 through 2003. Part III compares the decisions of New York state courts to decisions in the United States generally and attempts to reconcile the differences. While Professors Coben and Thompson found a large percentage of decisions involving enforcement issues, the research for this Comment found a significantly lower percentage of decisions that addressed those issues in New York State. Part IV addresses whether it is proper for courts to hear requests to set aside or modify agreements reached in mediation.

1. REPORTED DECISIONS INVOLVING MEDIATED SETTLEMENTS IN NEW YORK STATE COURTS

Between January 1, 2004 and October 31, 2006, there were 57,407 reported decisions from the New York state courts. (4) Of the nearly 60,000 decisions, only ninety-eight mentioned the word "mediate," or any conjugation of the word. (5) Further, only twelve of the ninety-eight decisions referenced a mediated settlement agreement. (6) The eighty-six decisions which concerned mediation but did not mention a mediated settlement agreement involved an array of issues, resulting from various uses of the word "mediate" and its conjugations. Twenty-three cases referenced an unsuccessful mediation, typically included as background to the litigation. (7) Fifteen cases contained a discussion of a contract or agreement between the parties requiring mediation, and often arbitration. (8) Six cases referred to a statute, set of rules, or procedures containing the word "mediation." (9) Six cases either cited a case whose name included the word "mediation" or "mediators," or used the word "mediation" in discussing a case cited by the court. (10) Four cases used the word but intended a meaning unrelated to alternative dispute resolution. (11) Four cases referred to a governmental agency containing the word "mediation" in its name. (12) Four cases discussed the rules of the New York State Fee Dispute Resolution Program. (13) In three cases, the court ordered the parties to engage in mediation. (14) The remaining twenty-one decisions used the word in various ways. (15)

The discussion above offers an in-depth survey of the range of issues raised in New York state cases involving mediation over the specified thirty-four month span. As previously mentioned, this Comment focuses on enforcement of mediated settlements. Therefore, it is necessary to examine the twelve cases involving mediated settlements. In six of those decisions, enforcement was not an issue because the parties did not contest the validity of the mediated settlement. (16) The other cases required the court to determine whether or not to enforce a mediated agreement.

In the first of the six enforcement cases, Frazier v. Penraat, (17) the Family Court considered whether respondent should be liable to petitioner for child support. Petitioner raised numerous objections to the Magistrate Judge's finding that respondent was not liable for child support. (18) Specifically, the petitioner argued that "more weight should have been given to the parties' mediated agreement ... in which respondent agreed to provide child support." (19) The court concluded that the respondent was not responsible for paying support to petitioner because the mediated agreement was subject to change. (20) The Appellate Division subsequently reversed the decision, (21) insofar as the lower court had determined not to order compliance with the agreement. After reviewing the details of the mediated agreement, (22) the court ordered the parties to comply with its terms. (23) The court noted that its decision was influenced by the impossibility of determining the respondent's income, and thus child support calculations could not be accurately computed under the Child Support Standards Act. (24) Therefore, it appears that if the respondent's income could have been accurately computed, the court may have ruled against enforcement of the agreement and instead calculated the support under the Child Support Standards Act. The court's decision to enforce a mediated agreement with an acknowledgment that the court might rule against enforcement in an appropriate scenario is a theme that emerges from the examined cases.

In Agostini-Knops v. Knops, (25) the Appellate Division considered a mediated separation agreement in a divorce action. The case centered on one component of a stipulation agreement, reached via mediation conducted by respondent. (26) The agreement stated that the husband would pay a $21,000 legal fee the wife owed to respondent. (27) On appeal, the wife argued that the settlement should not be enforced and that the respondent should not be allowed to retain the fee. (28) The wife contended that that the fee was excessive and that respondent violated the Procedure for Attorneys in Domestic Relations Matters ("the Regulation") (29) by failing to provide her with a Statement of Client's Rights and Responsibilities or a written retainer agreement. (30) The court enforced the mediated agreement because the fee was not paid by the wife but by the husband, and he was not seeking its return. (31) Although the court chose to enforce the mediated agreement, the court noted that the respondent did not substantially comply with the Regulation. (32) The holding suggests that if the husband had contested the respondent's retention of the fee, the court might not have enforced the agreement because of the mediator's violation of the Regulation. The court's decision to enforce a mediated agreement while mentioning a hypothetical wherein the court might rule otherwise is similar to the approach taken in Frazier.

In Rachel C.H. v. Timothy S., (33) the New York state courts continued the trend of enforcing mediated agreements. The court ruled on five petitions filed in the matter. (34) The unmarried parties entered mediation, resulting in a mediated custody/visitation agreement. (35) The mediated agreement granted joint legal custody of the parties' child to both parents, but the mother retained primary physical custody. (36) The court approved the agreement. (37) The judge enforced the mediated agreement and held that the father of the child violated the express terms of the mediated agreement. (38) The court based its decision on evidence that the father smashed a tape recorder in the presence of the child and, on another occasion, made vulgar statements about the child's mother in the child's presence. (39) The court denied the father's petition seeking custody of the child and refused to modify the mediated agreement (40) because it found that the father did not meet his burden to establish his...