If the Other Party Reneges
Although parties tend to comply with mediated agreements—even more so than with court orders—this will be cold comfort if your case is one of those in which the other party reneges.
If the other party fails to send you a check when due, fails to fix your water heater, continues to call you at home late at night after agreeing not to do so, or otherwise doesn’t keep a promise, what action can you take? Step one is to call the person and try to work it out directly. If that fails or is impractical under the circumstances, consider these other possible remedies.
1. Involve the Mediation Service
The mediator or mediation service will probably be willing to lend a hand if the other side fails to carry out the agreement. For example, assume that you used a private dispute resolution company to mediate a dispute over ownership of a small business. Under the agreement, your former partner was to pay you monthly installments to purchase your shares in the company. But your former partner has stopped making payments, claiming that the deal is too favorable to you and refusing to fork over another dime. What can you do?
Because it appears that further negotiations with your ex-partner would be useless, your next step is to tell the case manager at the mediation company about the problem. Although case managers have no obligation to get involved, most will be willing to step in and try to solve the problem.
Case Manager to Reneging Party: “Stan, Joe told me that there’s some problem with the agreement you both reached in mediation last summer. Can you tell me about it?” (The case manager begins simply by offering to listen. He wants to remain neutral until information from both sides convinces him there really is a compliance problem.)
(Later in conversation): “From what you’re telling me, it sounds as if you’ve just decided not to honor the agreement.
If you and Joe both want, I can see about reopening the mediation. But I have to remind you that you both agreed to have the settlement written as a legal contract. By making the agreement a contract, you both intended that if one of you broke it, the other could sue for breach of contract. IfJoe did that and won, you might be looking at liability not only for what you still owe him, but also interest, damages, court costs, and Joe’s legal fees, as well as your own. You’d risk having a judgment issued against you that would be a matter of public record and available to banks. Unless you paid it promptly, that could make it difficult for you to get a line of credit for the business. Are you sure it wouldn’t be in your best interest just to finish up the payments as you agreed?”Community mediation centers also have some persuasive authority. In cities and towns where mediation centers are well established and strongly supported by local government and business, centers are often perceived as representing the “the community.” After all, they receive public funds, and prominent judges and community leaders sit on their boards of directors. The staff will try to convey to a reneging party that the community at large—as represented by the center—expects both parties to live up to the agreement.
In cases originally referred from the police or a judge, the center will use a more direct approach to encourage compliance, often threatening to send the case back for further legal action. For example, assume that criminal harassment charges were brought against a man for harassing his former girlfriend. The city court judge referred the exes to mediation, where they worked out an agreement. A few months after the mediation, however, the man starts calling and following his ex again. As a first step, the woman calls the mediation center to alert them to the problem. Someone from the staff then contacts the man to discuss the situation, and to remind him of his obligations under the agreement:
EXAMPLE: “Hello, Mr.
Winters, this is Nancy Hoyerfrom the Centerfor Dispute Resolution. I’m calling in regard to your case with Amy Present. Ms. Present tells me there’s a problem with the way your agreement is being followed. Is there a problem?” (Discussion follows confirming that there is a compliance problem.)“I notice from the file in your case that this case was referred to us by Judge Venditto in City Court. He was willing to adjourn the case for six months if it could be settled through mediation. I need to tell you that if you don’t comply with the agreement, the Center will send the case back to Judge Venditto with a recommendation that the original charges be reinstated.”
2. Ask the Mediator to Intervene
You can also ask the mediator who handled your original case—as opposed to a mediation center’s case manager—to call the other party directly. If you used a mediation center, contact the mediator through them. If you used an independent mediator, call the mediator yourself.
If the other party still trusts and respects the mediator, the mediator may be able to put the agreement back together. Many mediators will be willing to help out in this way, although some may decline to do so on the ground that involving themselves in matters of compliance is inconsistent with a mediator’s neutral role. Mediators who work with private dispute resolution companies tend to be more inclined to help out as a matter of customer service; mediators at public centers are more likely to decline on ethical grounds.
IF YOU WANT TO RENEGE
If you are the party who does not want to honor the mediation agreement, what can you do? If your agreement was written in the form of a binding contract, you don’t have the legal right to change it by yourself. Unless you want to just ignore the agreement and hope the other side will give up, you have to convince the other side to change the original agreement. Here are a few arguments that might work:
• It’s in his best interest to do so.
Try to persuade the other side that the agreement made in mediation is not maximally beneficial to either of you, and that changing it will benefit you both.• It’s the only way to avoid more problems. Tell the other side that the agreement failed to address important issues (or that new ones have arisen since the agreement was made). Explain that you will not comply with the agreement unless the mediation is reopened to deal with these matters.
• It’s better than going to court. If you can convince the other party that you are not going to abide by the agreement, you might persuade him to return to mediation and work out a new arrangement, simply to avoid the hassle of a lawsuit.
3. Sue to Enforce the Agreement
Going to court to enforce a mediation agreement is a last resort. Unless you can make use of small claims court, you will endure at least some of the costs and delays that you tried to avoid by going to mediation in the first place. Nevertheless, if the other party reneges on the agreement and ignores all the persuasive efforts of the mediation service or mediator, then court might be where you have to go.
Fortunately, with a well-drafted, binding mediation agreement in hand, your job (or your lawyer’s job) in court will be much easier than it would have been otherwise. When you come into court with a mediation agreement, the only question for the judge is: “Is this a valid and enforceable contract?” If it is, the judge can enforce it by entering a judgment in your favor. Had you gone to court without mediating, the judge would have had to figure out the underlying dispute, including what the facts are, who is right and who is wrong, and what should be done about it. And of course, there is no assurance that you would have come out of court with anything resembling what you wanted.
Having a contract should also help speed you through the court process. You may even be eligible for what is called a “summary judgment”—an accelerated process available when the facts supporting one party’s case are so clear that the judge decides in that party’s favor without a trial.
In some states, mediation agreements reached under state-sponsored mediation programs are assumed by law to be enforceable in court. Otherwise, you will need to convince a judge that your agreement satisfies the requirements of a legally binding contract. (For information on these requirements, see Chapter 7.)
If your agreement requires the other party to pay you an amount of money that falls within the small claims court limit in your state, you will probably want to represent yourself in small claims court. If so, be prepared to show the judge that a contract exists and to explain the process that led to its creation. Be sure to present a copy of the contract to the judge. Also bring a copy of the mediation service’s rules, or even a descriptive brochure explaining how mediation is conducted. The judge may be looking for assurance that your session was conducted fairly, that the other party was not coerced into making the agreement, and that both of you intended the agreement to be binding. If you take your case to a regular trial court, you or your lawyer will need to offer the same types of proof.
4. Enforce the Mediation Award
If a judge finds that your agreement was a contract and that the other party breached it, the judge can issue a judgment in your favor for the full amount due, plus court costs and interest from the date the money was supposed to have been paid. If you have suffered damages because of the other side’s failure to live up to the agreement, the judge might award you some money for that, too.
Unfortunately, winning in court does not necessarily resolve your dispute. The same party who reneged on the mediation agreement may balk at paying a court judgment. You may be facing years of collection proceedings before a wage garnishment or seizure of assets yields the money due you. The unfortunate truth is that a party who doesn’t honor a mediated agreement is equally unlikely to honor a court judgment.
HCollecting judgments in California. How to Collect When You Win a
Lawsuit in California, by Robin Leonard (Nolo), gives California readers the practical tips, step-by-step instructions, and forms they need to locate difficult debtors, find debtors’ assets, and get the money they’re owed. ■