North Carolina Business Litigation Report

How To Get Properly Excused From Mediation, And Other Ways To Avoid Sanctions

The North Carolina Court of Appeals ruled yesterday that a mediator doesn't have the authority to excuse a party from attendance at a mediated settlement conference, in the absence of approval of either all the parties or of the Senior Resident Superior Court Judge.

The issue arose in Perry v. GRP Financial Services Corp., where the trial court had sanctioned some of the plaintiffs for failing to appear at the mediation session and awarded the defendant its attorneys' fees.  The Court of Appeals reversed the award of sanctions, but the opinion highlights some things you might want to be aware of if you have a client that has to skip a mediation session, or if you are pursuing sanctions against a party who failed to show up.

Proper Procedure For Excusing A Party's Attendance At Mediation

The Court said that  a mediator does not have authority to grant permission to a party to be absent.  The operative Rule is Rule 4A(2) of the Rules for Statewide Mediated Settlement Conferences, which states that a party can be excused from physical attendance either "(a) by agreement of all parties and persons required to attend and the mediator," or (b) by order of the Senior Resident Superior Court Judge, upon motion of a party and notice to all parties and persons required to attend and the mediator." 

The Court rejected plaintiffs' argument that Mediation Rule 6A(1), which says that the mediator is "at all times . . . in control of the conference and the procedures to be followed," gave the mediator unilateral power to excuse a party's attendance.

A Court Must Assess Whether There Is "Good Cause" For A Party's Absence

Mediation Rule 5 specifies that if the party "fails to attend without good cause," then a superior court judge "may impose upon the party or person any appropriate monetary sanction including, but not limited to, the payment of fines, attorneys fees, mediator fees, expenses and loss of earnings incurred by persons attending the conference." 

So, before sanctioning a party for failing to attend a mediation session, the Court has to determine whether there was "good cause" for the absence. 

The sanctions order in the Perry case was reversed because the trial judge hadn't made adequate findings of fact on the good cause issue.  The Court of Appeals ruled that one party's excuse that her employer unexpectedly wouldn't give her the day off to attend the mediation, and that she would have lost her job if she had, was arguably "good cause" for her absence.  It held that another party's statement that she didn't have the financial means to attend might also meet the "good cause" standard.  Travel problems experienced by another party might also suffice. 

Watch Out For Waiver

The Court suggested (but didn't explicitly rule) that a party who participated in the mediation notwithstanding the absence of some of the opposing parties might waive its objection to their lack of attendance.  In Perry, the defendants presented an affidavit that they had objected at the outset of the mediation to the absence of some of the plaintiffs.

Reasonableness Of Attorneys' Fees

Finally, the Court said that if attorneys' fees are awarded for a violation of the Mediation Rules, the Court must make specific findings as to the reasonableness of the fees awarded.

The mediation cartoon at the top is from LawComix, by Charles Fincher. 

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Mack Sperling
Brooks Pierce, LLP
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