Litigation

Sanctions for Failure to Attend Court-Ordered Mediation

By Bruce Nye

The original mission of this blawg was to provide guidance to out-of-state businesses and others whose involvement in California litigation was infrequent, but potentially painful.  So a decision last Friday from the Court of Appeal in Sacramento is useful for understanding the appellate courts' view on the obligations of parties at court-ordered settlement conferences and mediations.  And given the Court of Appeals' prospective announcement about how it is going to approach this issue in the future, this is probably valuable for just about anybody.

The case is Campagnone v. Enjoyable Pools & Spas Service & Repairs (May 30, 2008) ___ Cal.App.4th___ (Third District, No. C055050).  More after the jump.

So the deal is this:  The Third District Court of Appeal, like many courts, has a mediation program.  Once a case goes up on appeal, the Court furnishes a confidential mediation program, giving the parties four hours of mediation without cost, using volunteer mediators.

The Court, like every court with a settlement conference or mediation program, wants the decision-makers there:

?All parties and their counsel of record must attend all mediation sessions in person with full settlement authority.  If a party is not an individual, then a party representative with full authority to settle all appeals and cross-appeals must attend all mediation sessions in person, in addition to counsel.  If a party has potential insurance coverage applicable to any of the issues in dispute, a representative of each insurance carrier whose policy may apply also must attend all mediation sessions in person, with full settlement authority.  Any exception to this requirement must be approved in writing by the mediator.?

So in Campagnone, there was an excess insurer who didn't come to the mediation, who didn't know about it, and who the attorney hadn't told about it.  The Court of Appeal said, ok, we haven't enforced this, but next time we're going to sanction somebody.  It could be the insurer who doesn't show up, or it could be the party who doesn't tell the insurer about the mediation.

And the Court used this opportunity to remind everybody that parties, and their insurers, can be required to show up for settlement conferences and mediations, and if they don't show, the courts --trial or appellate -- can order sanctions.

Two notes:  in a court of appeal or a trial court, counsel whose client wants to stay back in Iowa, New Jersey, or wherever wants to get permission in advance!  Moreover, the sanctions aren't insignificant.  In this case, the court was talking about $14,200 in attorney fees for the other side and $4,845 in mediation fees.  So this is a situation where it's better to ask for permission than for forgiveness.

Full post as published by CalBizLit on June 03, 2008 (boomark / email).