NJ Court Says Mediation Agreements Must Be in Writing
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Mediation agreements will not be enforced unless the terms are put in writing and signed by the parties before the mediation comes to a close, the state Supreme Court says.
Where the terms are too complex to be drafted that same day, the mediation should be continued for “a brief but reasonable period of time to allow for the signing of the settlement.”
The bright-line rule is meant to prevent litigation over what occurred at mediation because mediation should help resolve disputes expeditiously, “not spawn more litigation,” the court held on Thursday in Willingboro Mall LTD v. 240/242 Franklin Ave LLC.
Though there was no signed agreement in the case, the court enforced the oral settlement based on testimony from the parties and the mediator, finding waiver of the mediation privilege. But “going forward, parties that intend to enforce a settlement reached at mediation must execute a signed written agreement,” the court said. “Had that simple step been taken, the collateral litigation in this case might have been avoided.”
The underlying dispute arose from the sale of the Willingboro Mall in February 2005. Part of the deal was that the buyer, 240/242 Franklin, would pay $2.5 million in fines and penalties imposed on the property by the township of Willingboro, with the obligation secured by a mortgage. A few months later, the seller, Willingboro Mall, brought a foreclosure action, claiming Franklin had defaulted.
Read original articleTags: Mediation Agreements, Mediation Privilege, Supreme Court
