Friday, September 30, 2016

Beware Mediation Certificates of Authority

This month, the Second District Court of Appeal reversed a circuit court judge who agreed with exceptions taken to a magistrate's report and recommendation and entered a final order following a failure to show cause, thereby dismissing a residential foreclosure case with prejudice due to a bank's alleged failure to attend mediation. The court also entered a final judgment against the bank for attorney’s fees and costs pursuant to Section 57.105, Florida Statutes. This sanction was given because the bank had technically failed to attend court-ordered mediation because in not timely filing a certification of settlement authority required by Florida Civil Procedure Rule 1.720. Rule 1.720 authorizes a court to award sanctions that include attorney’s fees and costs and mediator expenses resulting from a party’s failure to appear. Violations of Rule 1.720 have typically been addressed only with monetary sanctions. As a mediator, we are not often copied on Certificates of Authority and are not involved in policing this filing, which is the court's domain. A party representative having full authority to settle under the rule means the final decision-maker with respect to all issues presented by the case who has the legal capacity to execute a binding settlement agreement on behalf of the party. Nothing about the rule requires any party or party representative who appears at a mediation conference in compliance with the rule to enter into a settlement agreement. The rule also requires that 10 days prior to the mediation, participants must file a certification of who will be attending the mediation on behalf of the party and who has the authority to settle the case. In the H&R Block Bank v. Perry matter, the complaint was filed on behalf of H&R Block by Nationstar Mortgage, LLC, a mortgage servicer, acting as H&R Block’s attorney-in-fact. At the outset of the case, H&R Block had filed a required form which stated that a representative of Nationstar would attend any mediation on behalf of H&R Block with authority to settle the case. The trial court subsequently entered an order referring the case to mediation. Three days before mediation, H&R Block filed a certification of settlement authority under rule 1.720. H&R Block’s certification was filed seven days later than Rule 1.720 requires. Because the trial court failed to make findings supported by the record that the conduct involved was willful, persistent, or otherwise aggravated and that no lesser sanction would be just under the circumstances, the decision was reversed. See opinion here--,%202016/2D15-1351.pdf