Enforceability of Mediated Settlements
Many people wonder (including attorneys and mediators), are mediated settlement agreements enforceable? Well, that depends on the situation. In a recent case, Tornstrom v. Tornstrom, 887 N.W.2d 680 (Minn. Ct. App. 2016) the court determined that a mediated settlement agreement was enforceable. Again, in an unpublished case, Burke v. Burke, No. A15-2064, 2017 Minn. App. Unpub. LEXIS 188 (Minn. Ct. App. Mar. 6, 2017) affirmed their decision that a mediated settlement agreement is enforceable.
In Tornstrom, the court addressed two issues: (1) if the district court erred in enforcing a mediated settlement agreement that was repudiated by wife prior to its signature and presentation to the district court; and (2) if the district court erred in concluding that the mediated settlement is an enforceable contract. On both these issues the Court of Appeals found that the district court did not err in their decisions that the mediated settlement agreement was enforceable contract even if repudiated by the wife prior to signature and presentation to the court.
The first issue is whether or not the district court erred in enforcing a mediated settlement agreement that before being presented and signed by the court was repudiated by wife. To come to the conclusion that the district court did not err, the court of appeals looked at first, Minn. §Stat. 518.619, subd. 7. The Court of Appeals found that under Minn. Stat. §518.619 Wife had consented to the settlement being submitted to the district court when the parties agreed to orally record the terms of their settlement agreement, and acknowledged their intent to form a binding agreement.
Following the mediation, Husband’s attorney used the recording to draft the agreement and sent this over to Wife’s attorney for her signature. Wife would not sign the agreement because she said she felt pressured into coming to an agreement and that the agreement was not in the best interest of the children. The court stated that because wife didn’t claim that the draft was inconsistent with the parties’ mediated agreement, the agreement was enforceable.
The next question answered in this opinion was whether or not the court’s admission of the mediated settlement violated Minn. R. Gen. Pract. 114.08(e). the court determined that the recording fell into the exception of the rule because it is “a memorandum of issues that are resolved.”
The second issue is whether or not the district court erred in finding that mediated settlement is an enforceable contract. The court cited other decisions stating that the court favors settlement of disputes without litigation and that courts favor the use of stipulations in dissolution proceedings. Shirk v. Shirk, 561 N.W.2d 519, 521 (1997). Wife claimed that there was no meeting of the minds.
The court in Theis v. Theis, determined that a mediated settlement agreement is of the nature of a contract. 135 N.W.2d 740, 744 (1965). The court requires a meeting of the minds. In the Tornstrom case, the court said that “the parties’ recorded statements that they agreed to the terms of the settlement and intended to be bound demonstrated a meeting of the minds.” 887 N.W.2d 680, 686 (Minn. Ct. App. 2016).
In the unpublished case, Burke v. Burke, Husband claimed that the stipulated dissolution judgment was inconsistent with the mediated settlement agreement. The court found that the terms in the stipulated judgment were consistent with the terms agreed to in the mediated settlement agreement. The court reaffirmed their earlier decision in Tornstrom that a mediated settlement agreement is like a contract and is binding on the parties.
If you have Divorce and Family Law questions, please contact the Family Law experts at Minneapolis based Lake Harriet Law Office at 612-750-4843.