{"id":898546,"date":"2021-03-09T15:06:58","date_gmt":"2021-03-09T22:06:58","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898546"},"modified":"2021-03-09T15:07:03","modified_gmt":"2021-03-09T22:07:03","slug":"mediation-settlement-memorandum","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/mediation-settlement-memorandum\/","title":{"rendered":"When Mediating in Colorado, Sign a Settlement Memorandum During the Mediation"},"content":{"rendered":"\n

Daniel E. Evans and Colleen M. Kwiatkowski | Gordon Rees Scully Mansukhani<\/a><\/p>\n\n\n\n

In\u00a0Tuscany Custom Homes, LLC v. John B. Westover, et al<\/em>., No. 2020CA1724, the Colorado Court of Appeals held that post-mediation communications from a mediator memorializing the parties\u2019 agreement reached during mediation<\/a> (but not executed by the parties) and an unsigned settlement agreement formalizing those settlement terms were \u201cmediation communications\u201d under Colorado\u2019s dispute resolution statute (C.R.S. \u00a7 13-22-302(2.5) & -307) and thus inadmissible evidence of a settlement agreement. While the Court\u2019s holding does not necessarily set new law or change our understanding of Colorado\u2019s mediation statutes, it serves as a cautionary tale to those engaged in mediation that the extra effort to solidify the parties\u2019 agreements before ending the day is the safest bet. Clients can sometimes walk away from mediations and, having time to mull over their decision, change their minds even though it seemed to everyone that a deal was reached. Regardless of whether an oral agreement to settle was reached during mediation, without a signed agreement it will be an uphill battle to prove the existence of the settlement that occurred during mediation.<\/p>\n\n\n\n

In Tuscany Custom Homes,<\/em> the parties arrived at an oral agreement of settlement terms during the mediation. Because the mediator had computer issues, nothing was memorialized in writing or signed by the parties during the mediation session. The mediator followed up with an email to all parties summarizing the terms of the settlement reached during mediation and requested all counsel review the email and assent to the terms. Counsel agreed the mediator\u2019s email was correct and continued the email chain for several days making additions to the terms. Thereafter, Plaintiff\u2019s counsel drafted a settlement agreement and counsel for Defendant Westover responded \u201cWe don\u2019t have any changes. Provided there\u2019s no redlines, we\u2019ll get our clients to sign\u201d. Plaintiff and the other defendant then signed the draft agreement, but Defendant Westover refused to sign.<\/p>\n\n\n\n

Plaintiff filed a motion to enforce the settlement agreement, arguing that an oral settlement agreement was reached at mediation. It attached the mediator\u2019s email and the draft settlement agreement as proof of the agreement and its terms. Defendant Westover argued the evidence proffered was inadmissible under Colorado\u2019s dispute resolution act because it revealed confidential \u201cmediation communications\u201d. The District Court found in favor of Plaintiff, holding the evidence was admissible:<\/p>\n\n\n\n

[T]he objected to communications in [the mediator\u2019s email] and [the Draft Agreement] were not made in the presence of the mediator, were not connected to specific mediation services proceedings, and were typical settlement negotiations apart from the mediator and mediation. Rather, the communications in [the mediator\u2019s email] and [the Draft Agreement] were made to express and confirm already agreed upon terms, to seek written assent to those previously agreed upon terms, and were typical settlement negotiations apart from the mediation. The purpose of [the mediator\u2019s email] to counsel was to obtain written confirmation of what had previously been orally agreed to [by] the parties during the mediation. As such, the Court finds that [the mediator\u2019s email] and [the Draft Agreement] do not contain \u201cmediation communications\u201d under C.R.S. 13-22-302(2.5), which are confidential under C.R.S. 13-22-307.<\/p>\n\n\n\n

The Court of Appeals reversed, holding that the evidence was inadmissible to prove an agreement to settle. The Court held the mediator\u2019s email constituted a memorandum or note under the statutory definition of \u201cmediation communication\u201d because it outlined the terms of a transaction or contract. The Court further found that the email was prepared \u201cpursuant to\u201d a \u201cmediation services proceeding\u201d because the parties agreed during mediation that the mediator would draft the summary and send it to the parties. As to the draft settlement agreement, the Court held that it was also a \u201cmediation communication\u201d because it was made at the mediator\u2019s behest, and the mediator was kept on the email communications sending the draft agreement to all parties.<\/p>\n\n\n\n

The Court further reiterated that a party cannot use an unexecuted written draft of certain terms as proof that an oral settlement agreement was reached at mediation. Such would be inadmissible evidence of mediation communications. The Court concluded that Colorado\u2019s statutory provisions (\u00a7\u00a7 13-22-307, 13-22-302(2.5), 13-22-308(1)) \u201cwork in tandem to ensure that, in general, the only admissible evidence of an agreement reached during mediation is a signed written agreement.\u201d The Court reasoned that \u201c[o]therwise, a party \u2014 after going through a mediation proceeding \u2014 could write down oral communications made during the mediation, not seek any other party\u2019s written assent to the document, and then submit the document as evidence of an agreement reached at the mediation, claiming that it is not a protected mediation communication because it was not written in the mediator\u2019s presence or at the mediator\u2019s behest.\u201d<\/p>\n\n\n\n

The Court\u2019s holding counsels against a handshake deal or \u201csettlement in principle\u201d arrangement at mediation. Parties should be cognizant of the consequences associated with failing to memorialize and sign a formal written settlement agreement during mediation, and they should seriously consider whether keeping the mediator involved in post-mediation communications and discussions is necessary. And, while we have all become somewhat accustomed to the virtual world this past year, computers despite making our lives easier are prone to technical issues when you least expect it. Parties, and their counsel, should aim to come to mediation with a draft settlement agreement so that details and nuances can be worked through, resolved. documented, and signed during the mediation session. To the extent technical issues ensue, as was the case in Tuscany Custom Homes, <\/em>parties should endeavor to etch out key settlement terms on paper and sign. At a minimum, such a document should serve as the exception under C.R.S. \u00a713-22-302(2.5) and be admissible in court to enforce its terms.<\/p>\n","protected":false},"excerpt":{"rendered":"

Daniel E. Evans and Colleen M. Kwiatkowski | Gordon Rees Scully Mansukhani In\u00a0Tuscany Custom Homes, LLC v. John B. Westover, et al., No. 2020CA1724, the Colorado Court of Appeals held that post-mediation communications from a mediator memorializing the parties\u2019 agreement reached during mediation (but not executed by the parties) and an unsigned settlement agreement formalizing… Continue reading When Mediating in Colorado, Sign a Settlement Memorandum During the Mediation<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[13],"tags":[9895,79],"class_list":["post-898546","post","type-post","status-publish","format-standard","hentry","category-mediation","tag-advise-consult","tag-mediation-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nWhen Mediating in Colorado, Sign a Settlement Memorandum During the Mediation - 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