Mediation and Negotiation

Background: Family Law Mediation - Dallas County Texas - The Early Years

In 1987, the Texas Legislature gave lawyers and judges a toolbox full of “alternative dispute resolution” procedures, including mediation, arbitration, summary jury trials, and mini-trials.

Some of these ideas gained traction; others, not so much.

Arbitration is still alive and well, but, clearly, mediation has become the LeBron of ADR.

The underlying rationale of mediation is: people are more satisfied with negotiated resolutions than with orders imposed upon them by judges or “adjudicators”; and people are more likely to comply with negotiated agreements than orders and rulings imposed upon them. That is clear. The best method to accomplish a successful mediation in a family law case, however, is still the subject of considerable controversy.

Mediation emerged in the civil courts first; court-annexed mediation meandered into the family courts several years later.

I said “court-annexed”. In fact, while lawyers were bringing the “lawyer model” to the civil courts in Dallas, non-lawyers were providing non-court-annexed mediation services for consumers of family law cases.

Many of these non-lawyers were mental-health professionals.

While mediation in the civil courts was based almost exclusively on the lawyer model, family law mediation evolved more as a New Orleans patois, blending styles/cultures/biases, sometimes as experimental as jazz, more willing to take risks, culminating in a matrix, consisting of the “lawyer” model, the “mental-health” model, the “empowerment” model, and the “evaluative” model.

The lawyer model is based upon day-long, sometimes into the wee hours, bop-til-you- drop negotiation with lawyers attending. The lawyer model typically starts with a joint session, moves into caucuses, and ends with an agreement prepared by the lawyers. In the lawyer model, the goal of the mediation is to resolve legal issues.

The mental-health model, in its early days, excluded lawyers as much as possible. Divorcing parties met with a mediator in sessions lasting approximately two hours each over a series of weeks. When they reached an agreement, the mediator prepared a non-binding memorandum confirming their understanding and, then, someone found a lawyer to prepare the necessary legal documents. In the mental-health model, the goal of the mediation is to improve the dynamics between the parties and make agreements that may or may not have legal significance.

In the evaluative model, the mediator is much more pro-active about offering his or her evaluation of the case. At its extreme, the evaluative model becomes a quasi-adjudication.3

In the empowerment model, the mediator is relatively passive. For believers in the empowerment model, mediation allows the parties to make their own agreements; lawyers provide advice to allow for informed consent; but, the deal belongs to the parties, not an adjudicator.

To complicate the matrix, while most mental-health-style mediators subscribed to the empowerment model, those practicing the lawyer model could favor empowerment or evaluative, or they could vary their style from case to case.

Family Law Mediation Evolves

That was the state of affairs in the early 1990s; systems competed, family law mediators tried out various styles and methods, searching for the most effective ways of resolving disputes with less court intervention. As you will see, the trend has been to an increasingly evaluative approach based almost exclusively upon the lawyer model

Co-mediation: an experiment that failed.

We tried the “co-mediation project” in the early 1990s, which paired lawyers and non-lawyers, males and females, with two mediators per case instead of one. With most lawyers taking a pay cut to mediate instead of litigate, the economics of this approach, as well as the obvious scheduling problems related to using two mediators instead of one, resulted in an early demise.

The lawyer model gains hegemony.

The lawyer model soon edged out the mental-health model because the results of the mental health model were often convoluted and legally unenforceable; and, as court-annexed mediation became more the norm, judges were more inclined to refer cases to lawyers.

Initial joint sessions? Too volatile.

Family law mediators varied, however, from the traditional lawyer model by eliminating, or, at least de-emphasizing, the initial joint session.

The lawyer model prescribes a joint session to begin every mediation, where the parties and their lawyers come together, the mediator explains the rules and exacts a promise of good faith negotiation, among other things.

Family law attorney-mediators quickly concluded that initial joint sessions in divorce cases or custody modifications were often a recipe for a really bad start, so they jettisoned that idea.

Today, most family law mediations in my universe do not begin with a joint session.

Personally, I prefer a joint meeting with the lawyers, at which I ask them if a joint session with their crazy clients will be constructive.

Lawyers expect the mediator to prepare the MSA.

For reasons I do not understand, family lawyers decided that they wanted the mediator to prepare the mediated settlement agreement.

As an advocate, to this day, I will cage-fight a mediator over drafting rights, but the conventional wisdom has become that the mediator in family law cases should prepare the MSA.

Some lawyers think that this assures fairness.

More often than not, it just delays closing.

Short-cut enforcement procedure.

Around 1995, the Texas Legislature decided that enforcing MSAs in family law cases should be easier than in civil cases.

Why? I’m not sure, but, in a civil case, if a party signs an MSA, and then reneges, the other party can sue him for breach of contract, which makes sense.

The defending party can defend with typical contract defenses, like fraudulent inducement, failure of consideration, waiver, prior breach, etc.

In family law cases, no suit for breach of contract is necessary. Once the parties have signed an MSA, assuming that the agreement meets the requirements of the applicable statute, which are minimal, at best, either party can file a motion asking that the court enter a judgment based upon the MSA. The only defenses available, developed by case law, are fraud and illegality.

Collaborative law comes to town.

In the late 90s, a couple of local lawyers brought the collaborative law model to town.

In many ways, the collaborative model, when applied to family law cases, represents a re-emergence of the mental-health model: a mental health professional runs the meeting; the parties meet over a series of weeks for an hour or two, instead of for day-long sessions. Only now, the lawyers are invited to participate – on penalty of disqualification if litigation breaks out.

I am not sure what the impact of emergence of the collaborative model is on mediation. This is an interesting question worthy of further study.

2006 Election

Dallas County poured out most incumbent Republican family law judges in 2006.

What do judges do when they lose an election?

They become mediators.

What kind of mediators do they become? Facilitative or evaluative?

I’ll give you three guesses.

The problem of the binding MSA.

When the legislature decided that a party to a family law MSA could enforce it simply by filing a motion for entry of judgment, it caused certain likely unforeseen consequences: the damn thing was really, really binding.

What to do about all of those sloppy, midnight agreements?

For many of us the answers were: don’t negotiate until midnight; if you do, don’t sign anything then; if you do, make sure that the MSA says that, if disputes arose about the agreement when preparing final orders, the parties would return to mediation and deal with them, as they had done with the other issues in the case – through negotiation.

For others, however, the answer was to take the evaluative model to its extreme: turn the remaining portion of the mediation, the end game, into an adjudication.

How? By inserting BDPs in MSAs.

BDPS: Binding Decision Provisions

What’s a BDP, and why does it matter?

I know this sounds pedantic, but, please don’t go to sleep on me now!

This is important!

A BDP can slip into the cracks of a lengthy agreement reached late at night after a long day of negotiating, and the next thing you know, you are down the rabbit hole.

What am I talking about?

Two warring ex-spouses engage in negotiation/litigation/ex-spousewarfare, wind up in mediation, negotiate a solution to all of the important issues, and, then, sign an MSA, which just happens to contain, like a virus in your computer, and this only seems to be happening in family law cases, a seemingly innocuous provision that says something like: “if there are any disputes about the interpretation of this agreement, the mediator will make a binding decision”.

It sounds so innocent, doesn’t it?

BDPs often have references to soft-sounding concepts, like telephone conferences with the mediator (lawyers only; parties are not invited) to resolve the remaining issues.

Doesn’t it all sound, well, expedient?

What’s wrong with BDPs?

In some cases, I am sure that, if the BDP is implemented, the mediator makes a couple of calls, and the case is all buttoned up without the “unnecessary expense” of additional mediation.

But, what about cases in which the MSA is full of late-at-night ambiguities, cases where 40-50 issues come up?

Think it doesn’t happen?

I’m here to testify!

What then?

Here’s a short list of problems with implementation of a BDP in a complex case:

The mediator is violating ethical Rule 125 , and, typically, there is no express waiver.6 They do not define how binding decisions will be made. They do not state who will make the rules. They say nothing about the deadlines for whatever the procedure is, rendering them suspect for due process reasons, as far as I’m concerned. Naïve consumers do not understand their ramifications. Naïve lawyers do not understand their ramifications. The mediator may expose himself or herself to liability. Why are BDPs unethical?

In addition to suffering from procedural chaos, BDPs violate the Texas Ethical Guidelines for Mediators.

Rule 12 provides:

12. No Judicial Action Taken. A person serving as a mediator generally should not subsequently serve as a judge, master, guardian ad litem or in any other judicial or quasi-judicial capacity in matters that are the subject of the mediation.

Comment. It is generally inappropriate for a mediator to serve in a judicial or quasi-judicial capacity in a matter in which the mediator has had communications with one or more parties without all other parties present. For example, an attorney-mediator who has served as a mediator in a pending litigation should not subsequently serve in the same case as a special master, guardian ad litem or in any other judicial or quasi-judicial capacity with binding decision-making authority. Notwithstanding the foregoing, where an impasse has been declared at the conclusion of a mediation, the mediator, if requested and agreed to by all parties, may serve as the arbitrator in a binding arbitration of the dispute, or as a third-party neutral in any other alternative dispute proceeding, so long as the mediator believes nothing learned during private conferences with any party to the mediation will bias the mediator or will unfairly influence the mediator’s decisions while acting in the mediator’s subsequent capacity. (emphasis supplied)

To paraphrase: a mediator can only turn into an adjudicator when there has been an impasse, when requested by the parties, and when the mediator has not formed a bias (clearly a subjective test).

The rationale is easy to understand: in most mediations (probably “all” would be more accurate in the lawyer model), the mediator meets with each party in “private caucus”. What goes on there?

Systems based upon adjudication as a method of resolving disputes generally prohibit “ex parte communications” in order to assure the appearance of fairness. A typical mediation involves a continuous stream of ex parte communications.

A BDP that is part of an MSA are prima facie unethical because they are part of an agreement, and the rule only allows them when an impasse has been declared.

In many cases, the parties do not request a BDP; instead, it is in the boilerplate of the agreement that the mediator prepares and provides. Those cases include additional violations of the rule.

Can the ethical violation be waived?

Lawyers know that most legal rights can be waived.

Black-letter law teaches that an effective waiver must be “knowing and intelligent”. In other words, if you are going to waive your rights, you have to know what you are waiving.

What if the BDP included language that stated that the parties acknowledged that the mediator had met with each of them in private caucuses and they waived any rights to complain about that fact?

The problem that I have with this idea is: if you do not know what has been said and done in the other room, how do you know what you are waiving?

Case Study

Mediation – two days in mid-September.

MSA signed at 11:00 p.m. after the third day.

Trial date – two months later.

Pre-trial – two weeks before trial.

MSA is a mess of ambiguities.

Dad’s lawyer drafts an Order.

Mediator contacts lawyers and schedules a telephone conference for a status report.

On the morning of the telephone conference, Mom’s lawyer e-mails a 20 page letter, including multiple attachments, raising 75 drafting issues, and stating that Dad’s Order is “not even a basis for discussion”.

Three days before the pretrial conference, Mom’s lawyer files a motion to compel arbitration based upon the BDP.

Dad objects, raises the ethical issue, and proposes that the Court order the parties back to mediation.

The Court overrules the motion to compel arbitration, refuses to order the parties back to mediation, and tells everyone that s/he is going to enter a final order on the trial date.

Period.

Mom’s lawyer contacts the mediator and requests that she implement the BDP.

Dad’s lawyer continues to pitch mediation (to the mediator) but says that he will go along with the BDP process if he knows what the rules are.

The lawyers continue to banter daily with the mediator for approximately eight days, proposing different ways of proceeding and puzzling over the process.

The mediator sends an email on Friday (six days before trial), telling the lawyers to submit whatever they wanted by the following Sunday. She is going to prepare her own order, which is what she did.

In that process, she completely changes the deal, adds at least one provision to the Order about which the Court has no subject matter jurisdiction, and submits the so-called “Final Order” at 11:00 on a Sunday night.

Can you file a motion to reconsider? Who knows?

Three days before the trial date: both lawyers continue to submit multiple requests for revisions. The mediator makes some and refuses some. This goes on until 5:00 p.m. the day before the trial date (set for 9:00 a.m.).

The Court signs, not an Agreed Order, as it should be, but an Order resulting in an adjudication with no rules. Due process? What’s that?

And, then: request for findings, post-trial motions, notice of appeal, etc.

The process is purely adversarial; whatever spirit of cooperation or compromise that brought the parties to some form of partial, albeit ambiguous, agreement is gone.

Advocates of BDPs argue that they are more expedient than reconvening mediation.

Really?

Recent Case Law

As noted above, these cases break down into BDPs (a) with express arbitration provisions, and without.

At least the word “arbitrate” gives the lawyers some hint as to procedure if the BDP is implemented; otherwise, it is just a vague contractual provision, which, more likely than not, no one seriously considered beforehand.

The Cartwright case is must reading for anyone interested in this issue. It is another example of dispute resolution run amok. It is unique in at least giving lip service to the ethical issue.

Provine, in my opinion, is unique in that the MSA was attached to the Decree. Conventional practice in Dallas County is to convert the MSA to an order or decree. Regardless, it is hard to read this case and imagine that the parties selected the most efficient method of resolving their disputes after they spent years litigating whether the BDP applied to disputes arising years after divorce.

As I read Moore, this is another case manifesting procedural madness. In the end, it appears that the husband got screwed. After mediation, Mrs. M raised an issue about how the MSA should be construed concerning the division of Mr. M’s ESOP plan. She argued that even though the MSA awarded Mr. M 100% of his ESOP plan, she should be entitled to 50% of “future benefits”. In the real world: unheard of. She pitched that argument to the mediator (now adjudicator). He rejected it twice. She continued to badger him, and on the third try, he reversed himself. It made no sense to the trial judge, so he refused to enforce the mediator/adjudicator’s third ruling. Reversed!

Milner is the best argument that I could muster for why lawyers err when they approve MSAs in complex cases at the end of a long day without proper vetting (assuming that this is what happened; if not, some lawyer may be discussing this case with his carrier right about now). Mrs. M probably got screwed in this one. What blows me away is that this is an opinion by the Texas Supreme Court, and they never mention the Texas Ethical Guidelines for Mediators, which they promulgated in 2005. Indeed, they reversed the Court of Appeals, which judiciously determined that the parties simply did not have a meeting of the minds, often the reality in these situations; and, they sent the case back to the mediator to arbitrate pursuant to the BDP.

What if I like BDPs?

Obviously, I am not a fan of BDPs. I have dealt with them as mediator and as advocate and found them to have dramatically untoward results. A recent discussion on LinkedIn regarding “binding mediations” in California reveals that my opinion is not unanimously shared. Okay. I can accept that.

If you are one of those unenlightened souls who disagrees with me, please consider the following suggestions for using BDPs in a manner that is safer and more effective:

1. Make sure that the BDP expressly states that the mediator has had ex parte communications with the parties and the parties waive any objections to an adjudication regardless.

2. Make sure that the BDP expressly provides that the mediator will become an arbitrator (not just a decision maker) only after the mediator declares an impasse and only if the mediator believes that he has seen or heard nothing that will cause him to have any bias.

3. Do not rely upon the typical short paragraph; instead, have the parties sign a short-form arbitration agreement, which describes the rules of arbitration, if needed.

Conclusion

When it comes to the various methods of mediating family law cases, my bias is to favor a balanced, flexible approach; mediators should be evaluative, when need be, but not to the extent that it undermines the rationale for mediation.

If parties have disputes about an MSA after mediation, they should negotiate these remaining issues; sloughing them off on the mediator should only be done when all attempts to reach a negotiated agreement have failed and the rules of arbitration are clear and agreed upon.

In the words of the great comic-strip sage, Charlie Brown, “If you can’t beat ‘em, cooperate ‘em to death.”