Hypothetical Mediation Scenario
The following hypothetical is intended to serve as an example of a conflict which is resolved through mediation. Much of the case is over-simplified, and issues which do not directly concern us in this course are glossed over entirely in an effort to provide an easily understood illustration of mediation at work.
EXAMPLE: Conrad is a first generation American whose parents, Anna and Lukas were born in Germany. After graduating from high school, Conrad decides to skip college and start his own antique restoration business (something he learned about by watching his parents build and furnish their new dream house). After two years of hard work, Conrad is starting to build a name for himself in his town.
Nancy owns a small antique store in town. Most of her inventory comes from tag sales and discoveries in musty attics. In order to maximize profit, a careful restoration is usually required before a piece can be sold. She started bringing items to Conrad a year ago and has been happy with his work thus far.
On March 16, Nancy brought a very special job to Conrad: a pair of French, 18th century, corner cabinets with marble tops which needed some loving attention. The cabinets seem to have been made by Monsieur Legume, a famous artisan of the time. Nancy was confident that, properly restored, the Legume cabinets could fetch over $40,000, and agreed to pay Conrad $5,000 for his work, which they agreed would be completed prior to her scheduled June 15 auction.
As June 15th approached, Conrad began to be increasingly worried. A few weeks after Nancy brought him the cabinets, they were smashed to pieces by one of his new assistants. The reasons are still unclear, but Conrad recalls the employee shouting something about his unfaithful wife and a carpenter… Needless to say, the assistant was summarily fired. Unfortunately, Conrad’s insurance would cover damage by a vandal, but will not cover damage by an employee. As of June 10th, when Nancy called to arrange for delivery of the completed cabinets, Conrad had still been unable to bring himself to tell her the bad news.
On June 14th, Conrad could no longer avoid the topic, and finally returned the latest of Nancy’s series of angry messages. Despite the cordial relationship the two had enjoyed in the past, Conrad had to endure a stream of epithets and insults, followed by a threat to sue unless he paid her the $40,000 she expected the cabinets would have sold for at auction. Conrad, of course, has nowhere close to $40,000 cash and told Nancy this.
By July 1st the conflict had become more heated. Nancy’s threats to sue led her to the firm of Joseph, Russo & Pasternack, where Joe Joseph took the case. Joe called Conrad and (after explaining that he was representing Nancy and suggesting that Conrad retain legal counsel) reiterated Nancy’s threat to sue if unpaid. The deadline for payment set by Nancy was July 15th.
Unwilling to call her bluff, Conrad assumed a lawsuit was forthcoming and hired his own attorney, Rock Robertson. At Conrad’s behest, Rock contacts Joe and suggests they try to come to an agreement which would allow Conrad to work off the debt to Nancy. By August 1st, however, negotiations were at a standstill and Nancy finally insisted that Joe file the claim in the local court. She was confident that she would see satisfaction now.
Nancy was in for a rude awakening, however. Joe informed her that because of the amount of money involved, the case had to be filed in “regular” civil court instead of small claims court (which has a $5,000 limit in her area), and that the case would not likely be heard for some months. Joe then suggests that while they wait for the case to come up, they enter into mediation. Exhausted, Nancy agrees.
Joe emails Rock on August 8th and broaches the topic of mediation, writing the following:
In the interest of fairness and to save your client the public embarrassment which would surely result if we go through with the trial, my client has agreed to enter into mediation to attempt to resolve this matter. We would agree to any mediator you choose from “Mediation Is Us” which can be found at www.MediateMediateMediate.com. Costs of mediation will be shared by both parties. I think their mediators charge from $1500 to $3000 per day.
The suit will be stayed pending the outcome of mediation but will not be dropped unless and until a settlement is reached in mediation.
This offer to mediate must be accepted within 2 days (August 10th), at which time it expires.
I sincerely hope we can settle this matter.
Rock forwards the email to Conrad and follows it up with a phone call the next morning. “Sure,” says Conrad, “but what does that mean?” Realizing that his client, like many laypeople, does not understand the workings of mediation, Rock gives Conrad a brief summary so that his client can make an informed decision.
“So it’s like when my Mom tries to get me and my brother to make up?” asks Conrad when Rock is done.
“Close,” says Rock. “Except your Mom knows both you and your brother and comes in with some preconceived idea of what happened and who is right. Ideally, the mediator is impartial…or if not, hopefully she’ll be partial to us! Also, the lawsuit will be put on ‘pause’ until mediation ends. If we end with a settlement, the case is dropped. But if there’s no settlement, they hit ‘play’ again and we’re back on the path to trial.”
“Oh. But what’s this about splitting the cost?” Conrad asks his attorney.
“Well, we’ll probably get in and out in one day. After all, after a few hours around the table, we’ll either hammer out an agreement or establish that we’re deadlocked. For the mediation itself, your end will likely be about $1,000. Of course, to that you have to add my hourly fee.”
Calculating how quickly Rock’s fee would add up if the case actually goes to trial, Conrad agrees. Rock then replies to Joe’s email agreeing to mediation and attaches a brief, generic mediation agreement to be signed by both parties. The body of the agreement reads as follows:
|Conrad and Nancy hereby agree to enter into non-binding mediation in order to make a good faith effort to resolve the dispute arising from the Legume cabinets brought to Conrad by Nancy on or about March 16th of this year. The parties further agree that any facts revealed or discovered in connection with this mediation shall remain confidential and shall not be disclosed for any purpose, except insofar as may be required by law.|
The parties further agree that all costs for securing the mediator and a location suitable for mediation shall be shared equally by the parties, and that the mediator shall be chosen from “Mediation Is Us” by Conrad. Nancy shall have the right to reject the choice of mediator only for cause.
The parties shall make themselves available for mediation sessions upon reasonable notice on a day in September to be mutually agreed upon once a mediator has been chosen and agreed to.
The agreement is duly signed by both parties.
Rock then begins checking the resumes of mediators on the website. Among the other factors which are relevant (such as experience!) he is looking for one of the less expensive mediators (considering Conrad’s financial situation) who hopefully has something in her resume which makes it likely that his client will have the edge. Luckily, he finds an attorney who is in-house counsel for a manufacturer. He hopes that this mediator will understand just how difficult it is to keep employees from going off the deep end and therefore cut Conrad a bit of slack, unwitting though it may be. The mediator’s name is Lon L. Lesser. Rock has also heard about Lesser from some of his attorney buddies and knows that Lesser has an undergraduate degree in psychology. This believes Rock, will be useful in helping these two long-time business associates to reach an agreement in this highly emotional case (Nancy still pines for the splintered wood which is all that remains of her cabinets). Rock files a Mediation Request form similar to the sample below.
The mediation agreement is filed with Mediators Is Us. The mediator, Lesser, is requested for the date which Rock and Joe had already discussed with their clients: September 15th. In the weeks leading up to that date, the parties will prepare statements of their case and send them to Lesser. In addition to contacting the mediator, Rock and Joe will also be in contact with each other, and the three will decide on a location.
One sticking point is that Conrad’s mother, Anna, very much wants to be present at the mediation in order to protect her son. Joe and his client, however, feel it would be inappropriate and are insisting that only the real parties of interest and their attorneys should be able to attend the mediation session. After some debate, it is agreed that Anna may attend, but will not be able to speak during the actual session. She is, of course, free to talk to her son and his attorney during breaks. An agreement to this effect is signed by all (including Anna) and Lesser is given authority to eject Anna from the proceedings if she violates the agreement. It is commonly understood that co-counsel, legal assistants, and other members of the legal team are free to attend, within reason - if finding chairs for everyone becomes a problem, someone might be asked to leave!
Although Lesser has space which he usually uses for mediations, the parties agree to hold the joint mediation session at the offices of Joseph, Russo & Pasternack, where several large conference rooms are available. One room will be assigned for the joint session, one will be assigned to Nancy and her legal team, and one will be assigned to Conrad and his team.
On September 15th everyone shows up as planned, at 8 a.m. Conrad and Nancy assemble with their counsel in their respective rooms. Lesser first visits with Nancy and discusses her goals with her. Lesser tries to get some sense of Nancy’s main complaint, as well as what she might be willing to do to help resolve the conflict short of receiving the full $40,000 she seeks. He then speaks with Conrad and his team to try to determine how far Conrad is willing to go in order to make Nancy whole. In each private meeting he urges the parties to keep in mind that they have come together here in an effort to cooperate and find a mutually agreeable solution. He also confirms that each party fully understands his role in the process and knows that anything discussed privately with him will remain confidential. He makes a few more trips in and out of each room and then tells each side to meet in the main conference room at 9:30 a.m.
At 9:45 a.m. Lesser, Conrad and Rock are still waiting for Nancy and Joe to show up. Conrad is starting to lose patience. Joe finally arrives and apologizes for the delay, indicating that Nancy has been “unavoidably detained.” A few minutes after 10 a.m. Nancy arrives and Lesser launches into his introductory speech.
Having served as a mediator for several years, Lesser has a few different versions of his opening comments from which he selects based on the situation at hand. This time, he decides that he should get right down to business.
“Alright folks, I know everyone has met so let’s get down to business. As everyone knows, I’ve had private conferences with each party and I want to take this opportunity to make sure everyone is on the same page. The parties have agreed to stipulate that Conrad bears full liability for the damage to Nancy’s cabinets. There remains significant dispute as to the value of the cabinets. Is that correct?” everyone nods and says “Yes.”
“Alright, then in order to arrive at a mutually agreeable settlement the parties will need to agree on the amount of damages. Joe, how has your client arrived at her estimated….”
The parties here might introduce evidence or even call experts to testify as to the value of the cabinets rendered worthless by the employee’s destruction. Unless the parties eventually agree on an actual number – not just a range – there can be no settlement agreement.
“Well, it appears that we are at a standstill,” says Lesser, “insofar as Nancy cannot imagine that the pieces were worth less than $30,000 and Conrad cannot see anyone paying more than $20,000 for the cabinets. Add to this the fact that, based on everyone’s evidence and statements, I believe that the unique nature of the cabinets makes it difficult to know to any degree of certainty what these cabinets might have garnered on the open market. Perhaps, then, this is a good opportunity to take a lunch break. I’d like everyone to be back at 1:30 p.m., at which time I’ll speak with each party individually again in the hopes of coming to some solution here.”
Nancy and Joe eat at a fancy restaurant while Conrad and his attorney get slices of pizza. The mediator has lunch delivered to the main conference room, paid for by the parties,
After lunch, Lesser first meets with Conrad and Joe. At that session, Conrad makes clear that even if he were to agree on the $30,000 value sought by Nancy, he could never pay it off. If they go to court and a $30,000 judgment is entered, according to Conrad, he will have to declare bankruptcy and Nancy might end up with $10,000.
Lesser then meets with Nancy who insists on the value and adds that she is not only upset about the cabinets but also about the way her relationship with Conrad has soured. Where else, she laments, will she be able to find such a skilled furniture restorer? This gives Lesser an idea, and he call the parties back together.
“Conrad, Nancy, I think you may be able to resolve your differences without having a judge rule on your case. The solution I’m about to present is something a court would never do, as courts are loath to force parties in conflict into a continued relationship. In this situation, however, I get the sense that both of you would actually like to continue to do business together if only you could put this behind you.” Conrad immediately agrees out loud, while Nancy and her attorney whisper back and forth for a moment, after which Joe indicates that his client, too, would like that.
“I suggest, therefore, that you focus your negotiations on the possibility of having Conrad work off some part of the damages through future restoration on Nancy’s behalf. I believe that this is the best avenue for you to explore at this time. Unless anyone objects, I’m going to send you back to your rooms to discuss this privately and I will come speak with each of you again in about 15 minutes.”
This interesting turn of events might or might not lead to resolution We do not see the final result of the mediation here, but if the parties are willing to take the mediator's suggestion they would then draw up a mediation agreement. Most likely, the parties are irrevocably deadlocked, and the case will go to trial. After all, unless both Nancy and Conrad want to maintain a business relationship they will find themselves at an impasse. This “last-ditch” effort by the mediator will probably be in vain.
Note that while the opinions expressed by Lesser here are not expected of a mediator, neither are they prohibited. Some mediators will take on a more active role while others will simply facilitate. (See Dauer 8-50 for more discussion on mediators and their opinions.) Lesser’s suggestion here should be contrasted with the mediators in the Clergy Cases discussed in the next section. There is nothing improper about a mediator suggesting a solution to the parties which neither party thought of - after all, that is one of the benefits of mediation! The hope is always that the mediator will see something, as an objective party, which the parties of interest miss.
The solution is, indeed, one which would never be mandated by a court. It is also one which is relatively unlikely to be agreed upon by parties in conflict, as mentioned above. It serves as an example, however, of one way in which a mediator can help parties negotiate in a way which they were disinclined to do on their own without running into the trouble seen in the Clergy Cases.