Mediation Attendance in Florida: Failure To Comply Results in Harsh Sanctions

Florida – Civil Practice/Mediation

Key Points:

  • For insurers, the most important thing about mediation is that it requires a representative of the insurance carrier for any insured party who is not such carrier's outside counsel and who has full authority to settle up to the amount of the plaintiff's last demand or policy limits, whichever is less, without further consultation.
  • Failure to comply with that requirement, and others, will lead to costly sanctions.
  • It is possible that the mediation rules may change in the future, requiring more planning and coordination between defense counsel and the claims handler.

 

There is some confusion regarding the mediation attendance requirements imposed by the Florida Supreme Court and whether alternatives, such as "phoning in" or sending counsel as a "representative" of the carrier, suffices to meet those requirements.

The purpose of this article is to clarify whose attendance is required and to discuss the sanctions (imposed against the parties, their insurers and the attorneys) for failure to comply with the attendance requirements.

Finally, this article will discuss a proposed change to the mediation attendance requirement that is currently under consideration by the Florida Supreme Court. If enacted as currently drafted, it will pose increased scheduling pressure on claims handlers and defense counsel alike.

The Current Rule: Fla. R. Civ. P. 1.720

Fla. R. Civ. P. 1.720(b) specifies who must attend mediation, stating that unless stipulated by the parties or changed by order of the court, a party is deemed to appear at a mediation conference only if the following persons are physically present:

(1) The party or its representative having full authority to settle without further consultation;
(2) The party's counsel of record, if any; and
(3) Where insurance is involved, a representative of the insurance carrier for any insured party who is not such carrier's outside counsel and who has full authority to settle up to the amount of the plaintiff's last demand or policy limits, whichever is less, without further consultation.

It further states that "[i]f a party fails to appear at a duly noticed mediation conference without good cause, the court upon motion shall impose sanctions, including an award of mediator and attorneys' fees and other costs, against the party failing to appear."

It is not enough that counsel for an insured and the insurer appears at the mediation: failure of an insurer to send a representative of the insurer who has full authority to settle will result in expensive sanctions. In Mash v. Lugo, 49 So. 3rd 829, 829-830 (Fla. 5th DCA 2010), the Fifth District Court of Appeal granted a motion for sanctions against Fernando Lugo and Manuel A. Irizarry and their counsel after Mr. Lugo and Mr. Irizarry failed to appear for a court-ordered mediation conference. Mr. Mash and his counsel appeared for the mediation session, but only Mr. Lugo's and Mr. Irizarry's counsel, Mr. Muniz, appeared for Mr. Lugo. In response to the motion for sanctions filed by Mr. Mash, the attorneys for Mr. Lugo and Mr. Irizarry filed affidavits stating that Lugo's and Irizarry's insurer, Aequicap Insurance Company, held the exclusive right to decide to defend or settle any claim or suit within policy limits, that Lugo and Irizarry did not have the authority to bind the insurer to any settlement, and that attorney Muniz had full settlement authority on behalf of the insurer. The appellate court stated that Mssrs. Lugo and Irizarry's counsel's claim that he had full authority to settle the case on behalf of the insurer did not excuse the appellees' and the insurer's representative's failure to attend.

Parties who fail to appear at mediation will be sanctioned (as will their attorneys who fail to advise their clients about the mandatory mediation requirement). Doorstep Bevs. Of Longwood, Inc. v. Collier, 928 So. 2nd 482, 483 (Fla. 5th DCA 2006.) The facts of Doorstep were that Mr. Collier did not appear for the scheduled mediation and no motion was filed with the court to excuse his appearance. Mr. Collier was ordered to pay the following amounts as sanctions: 1) to the mediator, all fees charged by the mediator in connection with the appellate mediation; 2) to opposing counsel, reasonable attorney's fees and costs incurred in preparing for and attending the appellate mediation and filing the motion for sanctions; and 3) to the clerk of the court, $500 as a sanction for willful failure to comply with the court's mediation order.

In a related proceeding, Mr. Collier's attorney admitted that he had failed to advise Mr. Collier of the attendance requirement. The attorney then was ordered to pay the sanctions earlier imposed upon Mr. Collier.

Failure of a party to attend will result in expensive sanctions, even where he sends his attorney and the party is available by phone. That a party has the ability to "appear" by phone does not satisfy the requirement of Rule 1.720 (unless stipulated by the parties or permitted by order of the court). In Segui v. Margrill, 844 So. 2nd 820 (Fla. 5th DCA 2003), a party who had been ordered to participate in appellate mediation argued that he should not be sanctioned because his attorney attended the mediation with "full settlement authority." He further contended that sanctions were not warranted since during the mediation he could have been contacted at all times by telephone. The Fifth District Court of Appeal rejected the arguments as meritless. "We required [Mr.] Margrill to attend mediation because a party's actual presence at mediation is often critical to its success. Counsel is clearly not a 'party,' regardless of whether he or she is given authority to settle by the client." The Fifth District Court of Appeal then stated that appropriate sanctions for a party's failure to comply with the court's order included the award of reasonable attorney's fees and mediator fees, citing Carbino v. Ward, 801 So. 2nd 1028 (Fla. 5th DCA 2001) (awarding appellate attorney's fees as a sanction for failure to appear at a mediation, although such fees were not specifically referenced in the sanction rule).

The Proposed Change to Rule 1.720

The Florida Supreme Court is considering re-writing Rule 1.720(b) and other parts of Rule 1.720.

This new rule - as presently proposed and drafted - will require each party to file with the court, ten days prior to the mediation, a written notice identifying the person or persons who will be attending the mediation conference as a party representative or as an insurance carrier representative, and confirming that those persons have sufficient settlement authority as is set forth in section (b) of the new rule. Comment: this rule, if implemented, will require special coordination between defense counsel and claims hander.

The proposed rule (proposed text in italics) reads as follows:

(b) Appearance at Mediation. Unless otherwise permitted by court order or stipulated by the parties in writing, a party is deemed to appear at a mediation conference if the following persons are physically present:

(1) The party or a party representative having full authority to settle without further consultation.

(2) The party's counsel of record, if any.

(3) A representative of the insurance carrier for any insured party who is not such carrier's outside counsel and who has full authority to settle in an amount up to the amount of the plaintiff's last demand or policy limits, whichever is less, without further consultation.

That proposed rule states that a "party representative having full authority to settle" shall mean "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."

Additionally, that proposed rule further provides that "[u]nless otherwise stipulated by the parties, each party, 10 days prior to appearing at a mediation conference, shall file with the court and serve opposing counsel written notice identifying the person or persons who will be attending the mediation conference as a party representative or as an insurance carrier representative, and confirming that those persons have the authority required by subdivision (b)."

Finally, the proposed rule states that "[i]f a party fails to appear at a duly noticed mediation conference without good cause, the court, upon motion, shall impose sanctions, including award of mediation fees, attorneys' fees, and costs, against the party failing to appear. The failure to file a confirmation of authority... or failure of the persons actually identified in the confirmation to appear at the mediation conference shall create a rebuttable presumption of a failure to appear."

*Pamela is an associate in our Jacksonville, Florida, office. She can be reached at 904.358.4206 or pslynd@mdwcg.com.

Defense Digest, Vol. 17, No. 4, December 2011