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In the past few years, I have come across situations more frequently where the parties to a lawsuit reach an agreed settlement at mediation but, for a myriad of potential reasons, the parties or counsel do not later agree upon all of the terms you reached just days or even hours before. Someone changed their mind or, more likely, misunderstood the details of the agreement. This situation usually arises when a party submits a proposed Settlement Agreement and Release a day or days after mediation. The document contains a detailed memorialization of the complete terms of the parties’ resolution. This is opposed to the “short form” the parties and counsel often sign at the conclusion of mediation – which usually only lists the terms of the agreement in bullet-point fashion. When such a dispute arises after mediation but before execution of a final Settlement Agreement and Release, a considerable problem is created. This is especially so in a jurisdiction, like Florida, where a party can only enforce a settlement when it can show that there was a mutual agreement as to every essential term. See Don L. Tullis & Assocs., Inc. v. Benge, 473 So. 2d 1384, 1386 (Fla. 1st DCA 1985). By the very existence of the dispute about language and/or terms of the Settlement Agreement and Release, the court will likely rule against a Motion to Enforce, finding that there was no meeting of the minds on the essential terms. This is despite the prevailing policy favoring settlements and enforcing such resolutions whenever possible. See State Farm Mut. Auto. Inc. Co. v. InterAmerican Car Rental, Inc., 781 So. 2d 500, 502 (Fla. 3d DCa 2001). The question becomes, then, what is the best method to help ensure one can enforce the settlement if a dispute later arises.
The solution is as obvious as one might expect. Given the available technology of today, and technology that has existed for some time now, drafting and signing the final Settlement Agreement and Release before the parties leave mediation is not remotely difficult. Parties and counsel must break with habit and take the additional time required to complete a full and final Settlement Agreement and Release at mediation. One should not simply say, “This is the way we have always done it, so this is the way we will continue.”
To save time, a draft of the final document should be completed, to the extent possible, prior to the mediation conference. This should be part of one’s preparation before mediation. If this is done, the document may be finalized with the addition of only a few terms to reflect fully and in detail what was agreed upon at mediation. Even after a long and drawn out mediation, the extra time spent is well worth the security.
Admittedly, in the vast majority of cases, no problems will arise if the final document is completed in the days following mediation. However, in those few cases where a dispute does arise, it will be difficult, if not impossible, to enforce the settlement without a final Settlement Agreement and Release. The result will likely be protracted additional negotiation on the terms and, in a worst case scenario, the settlement is not consummated. Either way, the client will incur additional fees that may have been avoided. Therefore, it should be one’s usual practice to attend mediation prepared to complete a final Settlement Agreement and Release before adjourning rather than agreeing to complete the document post-mediation.
For any questions, please contact Jeremy Rogers.