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-- http://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2016/September/September%2009,%202016/2D15-1351.pdf

Sanctions for Shaq Skipping and Skyping into Mediation

In a Florida federal case, lawyers were sanctioned for advising their client, former NBA All-Star Shaquille O’Neal, that he didn’t need to personally attend court-ordered mediation. United States District Judge James Cohn of the Southern District of Florida ordered lawyers to pay $13,000 to cover mediation costs for a plaintiff who sued Shaq for allegedly ridiculing his appearance. Plaintiff has a rare genetic disorder that causes tooth loss and facial deformities and has since started an anti-bullying campaign on Facebook that attracted 20,000 members. Shaq posted a photo of himself on Instagram and Twitter stating "smile people" and imitating plaintiff's facial expressions. The lawsuit alleges defamation and invasion of privacy, though Shaq maintains there was no right to privacy because the photos were already on Instagram. He also said his conduct wasn’t so outrageous or extreme as to establish liability. Shaq reportedly attended via Skype and sent a representative to participate on his behalf, due to a television appearance conflict on the day of the mediation. The mediation order stated pursuant to Local Rule 16.2.E, the appearance of counsel and each party or a representative of each party with full authority to enter into a full and complete compromise and settlement is mandatory. The local rule says all parties shall be physically present at the mediation conference “unless excused in writing by the presiding judge.” Counsel argued unsuccessfully that the magistrate judge’s mediation order superseded the local rule, but local rule requires a federal district judge, not a magistrate judge, to excuse a party’s attendance in writing. See stories here-- http://bit.ly/1oLnNos and http://bit.ly/1oLnNos and local rule for court annexed mediation in the Southern District of Florida here-- http://1.usa.gov/1SYVSxx

Appellate Mediation Sanctions for Non-Attendance

Participants and counsel are reminded of the importance of appearance at mediation in a recent opinion of the Fifth District Court of Appeal. In an appeal from a final judgment, Florida's 5th DCA entered an order referring the matter to appellate mediation (a program in which I've participated since 2001). The order specifically stated that representatives of the parties with full settlement authority were required to attend the mediation in person, unless excused from attendance by the court. The order further stated that the failure to appear could result in the imposition of sanctions. At the commencement of the mediation, no representative appeared for appellant which also provided no certification of full authority to settle. Appellees objected to the absence of the representative and to the limited authority of the insurance company representative. The mediation proceeded without a waiver of objections, resulting in an impasse. Rule 9.720 of the Florida Rules of Appellate Procedure (which I helped amend as a corollary of civil procedure rule 1.720) governs appellate mediation procedures and provides that if a party fails to appear at a duly noticed mediation conference without good cause, the court, upon motion of a party or upon its own motion, may impose sanctions. The 5th DCA cited in their interim opinion awarding sanctions, previous holdings in Carden & Associates, Inc. v. C.O.D. Trees Partnership, 83 So. 3d 862 (Fla. 5th DCA 2012) and Carbino v. Ward, 801 So. 2d 1029 (Fla. 5th DCA 2001), finding them appropriate for a party's failure to appear at a court-ordered mediation, even though an insurance company representative was present. The court also referenced Mash v. Lugo, 49 So. 3d 828 (Fla. 5th DCA 2010) which held imposing sanctions were appropriate against a party for failing to appear, although counsel appeared who claimed to have full settlement authority. Sanctions in the present case included all fees charged by the mediator, all reasonable attorney's fees and costs incurred in preparing for and attending the mediation, as well as the costs incurred in filing a motion for sanctions. The court reserved the right to impose additional sanctions, including dismissal of the appeal or the assessment of additional attorney's fees and costs. See slip opinion here-- HDE v. Bee-Line, Case No. 5D15-2805 http://www.5dca.org/Opinions/Opin2015/122815/5D15-2805,non-disp.op.pdf

5th DCA sanctions for failure to appear at appellate mediation

Under Florida Rule of Appellate Procedure 9.720, an appellate court may impose sanctions for failure to appear without good cause. Neither the individual appellant nor a representative of the corporate appellant attended the mediation ordered in this matter. The insurance company representative and attorney were the only ones who appeared. The 5th DCA stated the law is clear: absent being excused by the court, a party must appear at mediation and a representative of the insurance company cannot take the party’s place (citing Carbino v. Ward, 801 So. 2d 1028 (Fla. 5th DCA 2001)). The court further explained the fact that Carbino involved a trial mediation, rather than an appellate mediation was of no relevance because the language in the applicable rule of civil procedure is identical; Fla. R. Civ. P. 1.720(b). Thus, the appellants were ordered to pay sanctions within 30 days, including all fees charged by the mediator in connection with the appellate mediation and appellee’s reasonable costs and attorneys’ fees incurred in preparing for and attending the appellate mediation, as well as for filing the motion for sanctions. See decision http://www.5dca.org/Opinions/Opin2012/010212/5D11-2960.op.pdf