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Mediation Message No. 33

MICHAEL D. MARCUS’ MEDIATION MESSAGE NO. 33

BREAKING AN IMPASSE AT MEDIATION

Occasionally, during a mediation, the discussions cease being fruitful because of unrealistic expectations, a disagreement over material facts, bad timing (incomplete discovery; an impending motion for summary judgment), the failure of one side to have sufficient settlement authority or the absence of an essential party. This message discusses ways of breaking an impasse when the expectations of the parties (usually over the monetary value of the case) are far apart.

During the distributive bargaining process of repeated demands and offers, one side may dig in its heels and refuse to move any further. In such circumstances, assuming that the relevant facts and applicable law have already been fully discussed, the following approaches may be helpful:

Bracketing – In a case with a potentially high settlement value where the demands and offers of the respective parties have left them still far apart, it may be helpful to obtain an agreement from each that they change their positions to agreed upon sums. For example, if the plaintiff and defendant are “stuck,” respectively, on $500,000 and $75,000, both may consent to continue the negotiations at $375,000 and $150,000. The bracketed numbers should reflect the strengths and weaknesses of each side’s case. The downside to bracketing is that it may involve as much time as would be needed to get the parties to move to the same, acceptable numbers. Its benefit is that it provides a different dynamic to the discussions and may cause one or both parties to provide additional insight into their thought processes.

“Split the baby” – This simply involves dividing equally the amount between the last demand and offer. It works best when the difference is relatively small.

Baseball – Like baseball arbitration, the parties submit their respective numbers to the mediator. The number closest to the mediator’s valuation is accepted. This method is rarely used because it is unpredictable.

Wouldya-Couldya – After lengthy negotiations have taken place and with some sense of what the case is “worth” to the respective parties, the mediator asks one of the parties if it would settle the case for a specific amount. If the party is agreeable, the mediator “floats” the possibility of settling at that amount to the opposing side without representing that that amount is an offer.

Mediator’s proposal – This tactic requires the mediator to propose a settlement on terms (e.g., amount, number of payments) that will most probably be acceptable to all of the parties. The proposal does not reflect what the mediator believes is the value of the case. Depending on the wishes of the parties, it can be kept “open” for a short period of time or for several days.

Arbitration – The prospect of arbitrating the matter rather than trying it to a jury may be acceptable to the parties if the case does not have strong emotional appeal and holding down costs is an important consideration for both sides. Because the mediator has heard so much about the case, it is preferable that he or she not be the arbitrator. However, if the parties want to use the mediator, the mediator must, pursuant to Rule of Court 1620.7(g), inform the parties, inter alia, of the consequences of their having previously revealed confidential information.

Hi-Lo – Whether the case be tried to a jury or arbitrator, the parties agree beforehand that the judgment shall be no greater or less than two specified amounts.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright, Michael D. Marcus, April 2006

Copies of Michael Marcus’s previous Mediation Messages and Arbitration Insights are available by e-mail request.

Mediation Message No. 11

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 11

THE FAILURE TO APPEAR OR COOPERATE AT MEDIATION

It is very unusual for an attorney or party at either a consensual or court-ordered mediation not to appear at a subsequent mediation. (Message no. 7 reviewed the law and court rules which mandate that counsel, parties and individuals with settlement authority must attend mediations, unless excused.) The failure of a party or attorney to not cooperate, once present, is even more uncommon but can occur. This message discusses what the mediator or counsel may legally advise the trial court about such conduct.

The subject is governed by Evidence Code sections 1119 and 1121 and Foxgate Homeowner’ Association, Inc. v. Bramalea California, Inc. (2001) 26 Cal.4th 1. Evidence Code section 1119 states, in substance, that all oral and written communications made in a mediation are not discoverable and shall be confidential. Section 1121 provides that a court or other adjudicative body may not consider a report or any finding by a mediator, other than those authorized by law, concerning a mediation conducted by that mediator. Foxgate holds that there are no exceptions to section 1119 but, while a mediator may not report to the court about a participant’s conduct, that a party may do so.

The failure to appear at mediation by counsel, a party or a person with full authority to settle the case: Since this conduct occurred outside of the mediation, both the mediator and a party may report the non-appearance to the court. Consequently, a mediator can advise the court, in Judicial Council form ADR-100 (Statement of Agreement or Non-Agreement) about the failure of a party or counsel to appear at court-connected mediation programs authorized by Code Civ. Proc. Sections 1775 et seq. and 1730 et seq.

The failure by counsel or a party to cooperate during mediation: Foxgate applies to this situation, and only an opposing party may report such conduct. The reportable facts are limited to those that are non-communicative or, if communicative, were not for “the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation…” (Evid. Code sec. 1119(a).)

Judge Michael D. Marcus (Ret.)
ADR Services
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
310-201-0010
Copyright, Michael D. Marcus, February 2004

Mediation Message No. 53

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 53

WHY ARE WE HERE?

The sine qua non for an effective mediation, as I’ve mentioned many times, is preparation. But good faith and flexibility by the parties, although not as important, are also integral to resolving cases.

One aspect of good faith by parties in mediations is that they shall be willing to consider all reasonable options and arguments presented by the mediator. Flexibility goes hand-in-hand with good faith. In the mediation context, it means that the parties will be open to changing their minds; it is the polar opposite of rigidity.

Before the mediation, lawyers should assess their respective client’s willingness to listen to competing facts and theories and to adjust their positions accordingly. It is their obligation, if the clients are rigid, to educate them about the nature of the mediation process and to advise that resolution is not likely to happen if they are not willing to modify their positions or be willing to compromise some of their firmly held opinions.

Despite these best efforts, if a client is adamant that it is his or her way or trial and the lawyer honestly believes that this position is both deeply held and unalterable and cannot be changed by the most persuasive and evaluative mediator, it is better to not go forward with the mediation. Rather than proceed with a futile settlement effort, the attorney should strongly consider calling opposing counsel and the mediator to advise about the probable hopelessness of the mediation. (This discussion, incidentally, is privileged. See Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137.) By alerting the other participants, the lawyer has preserved the integrity of the mediation process, saved opposing counsel from expending precious time and money and negated the other attorney from having to expound at the subsequently failed mediation, Why are we here?

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.

1900 Avenue of the Stars, Suite 250

Los Angeles, California 90067

(310) 201-0010

Copyright Michael D. Marcus, August 2009

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.

Mediation Message No. 76

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 76

JUDGE KOZINSKI IS NOT A FAN OF MEDIATION

Ninth Circuit Chief Judge Alex Kozinski once again has established his credentials as a legal iconoclast. In Nordyke v. King (9th Cir. 2012) 676 F.3d 828 (Nordyke II), he issued a short but sharp rebuke of the en banc panel’s order that the parties mediate a long-running dispute concerning the right to bear arms.

Nordyke I involved an Alameda County ordinance prohibiting firearm’s sellers from possessing firearms on County property and at County fairgrounds. The Ninth Circuit affirmed the trial court’s dismissal of the gun sellers’ action challenging the ordinance as a violation of the Second Amendment because an ordinance exception allowed gun sales as long as the firearms were secured to prevent unauthorized use when not in the actual possession of the authorized participant. Thus, the Court reasoned, the ordinance did not violate the Second Amendment since it only minimally regulated the sale of firearms at gun shows.

On en banc review of Nordyke I, the majority in Nordyke II held that “the parties should attempt to settle this dispute by agreeing on the conditions for holding gun shows at the Alameda County fairgrounds, with the assistance of mediation. The case is referred to the Circuit Mediation Office for mediation, and its submission is deferred for 45 days or pending further order of the court.”
Kozinski dissenting, with Judge Gould concurring, stated “The parties have not asked for mediation; they have said nothing that suggests mediation would be fruitful; when asked about it in court, they displayed obvious distaste for the idea. We overstep our authority by forcing the parties to spend time and money engaging in a mediation charade. Our job is to decide the case, and do so promptly. This delay serves no useful purpose; it only makes us look foolish. I want no part of it.”

The majority’s order is an appropriate recognition of mediation’s value and, perhaps, as well, a subtle effort to sidestep a possible appeal of the Second Amendment issue to the U.S. Supreme Court, where its affirmation might be reversed. Kozinski’s dissent is notable because it reflects the distaste of a well known jurist for imposing mediation on unwilling parties.

Judge Michael D. Marcus (Ret.)

ADR Services, Inc.

1900 Avenue of the Stars, Suite 250

Los Angeles, California 90067

(310) 201-0010

Copyright Michael D. Marcus, June 2012

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.

Mediation Message No. 75

MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 75

MEDIATORS’ PET PEEVES

Last month I wrote about attorneys’ pet peeves concerning mediators. This month, as promised, I’m commenting on gripes that mediators have regarding what lawyers do or don’t do at mediation.

Not filing a timely mediation brief – It is not uncommon for mediation briefs to be submitted the afternoon before or the day of the mediation. The law is a demanding companion, but the sooner mediators receive the briefs, the sooner they are read and considered and critical legal issues can be researched. Further, late briefs may be disorganized and sometimes omit essential facts, law or argument.
Not sharing mediation briefs – A majority of attorneys do not send their briefs to opposing counsel, which means that mediators must spend valuable time educating the parties about facts and laws in contention. Submitting a confidential brief when a complaint has not yet been filed makes sense but does not when discovery has been completed and trial is not far away. If you don’t want the opponent to know about facts, legal theories or argument that are best held in reserve, then put them in a separate, confidential brief for the mediator and provide the known facts and contentions in a non-confidential memorandum. At the end of the day, experience has proven there are few issues a party chooses to keep secret throughout mediation.
Not being prepared at the mediation – Before mediation begins, attorneys should know the facts and law; have interviewed their clients; form opinions about the value of their cases and submit timely and informative briefs. The failure to do so causes a fitful mediation process.
Making unreasonable demands and offers – Unreasonable demands cause unreasonable offers and vice versa; they also cause delay and stalemate. Unreasonable positions often result from a concern that a more sensible demand or offer will compromise the attorney’s bargaining position. To this, I respond poppycock. (I might use stronger language, but I’ve been told that children read these messages.). An example should suffice: Assume the first demand is $750,000 or the first offer is $5,000 when both sides know the case is worth between $75,000 and $125,000. Isn’t the plaintiff better off initially demanding $300,000 and making the next move a small one, if the responding offer is also small, instead of dropping to $710,000, $675,000 and $635,000 and so on until, in exasperation, both sides agree to brackets, which hopefully move the parties to where they should have been long before? To ask this question is to answer it.
Not having a person with authority at the mediation – The practical purpose behind California Rule of Court 3.874, subdivisions (a)(1) and (2), which requires the personal attendance of the parties, their counsel and insurance representatives at all mediation sessions, unless excused, is that resolution of the dispute is more realistic when the decision makers are present to hear about the benefits of settling and/or the downsides of going to trial.
Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, May 2012

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.