Law Students

Impolite Language at Mandatory Settlement Conference May Mean Sanctions

By C. C.

Settlement can occur in a case at any time – from the time before the complaint is filed, during a deposition, in the middle of trial, after the judgment, even after the appeal. Most typically, settlements occur during a formal process known as the Mandatory Settlement Conference. For many reasons, judges like it when cases settle..

When a case settles, there’s no appeal and no jury. The judge doesn’t have to spend time handling the trial, which leaves room for other cases that won’t settle and moves the process along. One more case off the docket. Judges usually set MSCs before trial and after all the discovery in the case has been completed. That way, everybody’s got all the facts developed and understands the pros and cons of each side.

The parties arrive at court for the MSC and a temporary judge (usually not the judge who will hear the case) listens to both sides and tries to bring the respective offers closer together. Sometimes, however, cases don’t settle.

When they don’t, that failure means exactly the opposite of the benefits I described above. More time on cases, more cases on the docket and more juries to listen to cases. And sometimes a cranky judge.

So cranky, in fact, that one judge sanctioned one of the parties in this case. The judge relied on a Rule of Court and several other rules as the authority to sanction the party that he believed did not participate in good faith.

The case here involved a dispute over an auto accident, with $15,000 in possible damages. The parties negotiated, but Mercury Insurance refused to offer more than $1,000 in settlement. Here’s how the  described the judge’s reaction to the MSC: “the court was harshly critical of the conduct of Hernandez’s representatives at the settlement conference itself and, in particular, the refusal to offer more money than the section 998 offer of $1,000 for each plaintiff: ‘The point is that there was no negotiations. They just came in with the firm opinion we’re paying a thousand dollars . . . . [A]t least some movement under the circumstances, and some discussion was in order. That is the reason why [sanctions are being imposed].’”

Then, the appellate court pointed out: “The [trial] court also characterized the lack of “communication back” to the court as “uncivil” and “impolite.” So, the trial court held a hearing and afterward ordered Mercury Insurance to pay over $1,800 in sanctions.

The appellate court, however, wasn’t buying the sanctions the trial court imposed and overruled the trial court’s order. The appellate court said a court could impose monetary sanctions for failure to comply with ” any rule of court relating to general civil cases…” absent showing of good cause. Previously,however, Rule 2.30 included language that made the “failure to participate in good faith in any conference” sanctionable conduct. Noting that particular language was removed in 2001, the appellate court said no go on the sanctions.

Whether the parties negotiated in good faith is a difficult call to make in any case, especially since you may believe you can win at trial.

That’s a chance you have to weigh. At least you know that you can’t get sanctioned.

[thanks to spemss and j. craig williams via CC]

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Full post as published by Law Vibe on July 06, 2009 (boomark / email).