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Zeytoonian, Esq.

Wellesley Hills, Massachusetts

Attorney Zeytoonian is the founding member and Director of Dispute Resolution Counsel, LLC (DRC), in Wellesley Hills, Massachusetts, and is a lawyer, mediator and ombudsman. Founded in 2008 as the then Zeytoonian Center for Dispute Resolution, LLC, DRC focuses on resolving employment, business, family, education, consumer protection, probate and other disputes without litigation. Attorney Zeytoonian was also a partner at Hutchings, Barsamian, Mandelcorn & Zeytoonian, LLP, in Wellesley Hills, Massachusetts, from 2001 through 2013 and is presently Of Counsel. There, he practices employment, business, negligence, special education, contract, homeowner/contractor disputes and consumer protection law. He also provides preventive legal counsel and training for employers and small businesses on discrimination, sexual harassment, wage & hour, employment and business agreements, restrictive covenants and other employment contracts.

Previously, Attorney Zeytoonian was an Assistant Attorney General for the State of New York in White Plains, New York, from 1998-2001. There he served as a deputy and oversaw litigation in three counties. He also worked in the litigation department of the Westchester County Department of Law as an Assistant County Attorney from 1990-1998 and as a Legal Assistant at Simone, O’Rourke & Hickey, an insurance defense firm, from 1987-1990.

Mr. Zeytoonian has lectured frequently on ADR and Collaborative Law in local law schools including Suffolk University School of Law, New England Law Boston and Northeastern University School of Law. He has written several articles and blog posts on ADR, Mediation and Collaborative Law, has trained other lawyers and lectured on these topics around the United States, Canada and Europe.

Attorney Zeytoonian is co-author of the 2014 MCLE book “Collaborative Law: Practices and Procedures”.

Elizabeth (Beth) Roth, Esq.

Lowell, MA
Salem, NH

EDUCATION: Massachusetts School of Law (J.D. 1997) University of New Hampshire (M.A. in Counseling 1991, B.A. 1988)

LEGAL EXPERIENCE: Attorney Roth concentrates her practice of law on counseling companies at all phases of development. Her in-house business and employment law experience serving as In-House Corporate Counsel and Chief Compliance Officer for a national behavioral health care corporation is now utilized her in her private practice by representing high-tech telecommunication companies, manufacturing companies, metallurgic technology companies, and start-up companies that span all focus areas from technology to home health care to on-line businesses. Since 1997 Attorney Roth has represented both plaintiffs and defendants in civil litigation and found Mediation as an alternative dispute resolution brings an economy of cost and time to a successful resolution of business disputes.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Attorney Elizabeth (Beth) Roth began her professional life as a nurse. Later she earned her Master’s Degree in Counseling and became a leader in the psychotherapy profession and owner of a successful psychology practice. She served as the President of the New Hampshire Chapter of the American Counseling Association and was a member of the National ACA Board of Directors. Attorney Roth’s healthcare career focus expanded, as she pursued her Juris Doctorate from Massachusetts School of Law and began her legal career in the healthcare niche, representing doctors and nurses in medical malpractice cases. After serving as In-House Corporate Counsel and Chief Compliance Officer for a national behavioral health care corporation she established Roth & Associates, PLLC in the Merrimack Valley with focus on business and employment law and litigation. Today, Roth & Associates, PLLC has recently merged with the Lowell firm, Eno Martin Donahue, LLP where Attorney Roth serves as a partner. She is admitted to the Massachusetts Bar and the Federal District Court for the District of Massachusetts. Attorney Roth received her Mediation training in accordance with M.G.L. ch.233 sec.23C and has a mediation certificate from MWI in Boston, MA.

IN THE COMMUNITY: Attorney Roth served on the Salem, NH Board of Selectman for many years and served as the town’s first woman Chairman of the Board. She is also a Member of the Greater Salem, NH Chamber of Commerce and the Greater Salem, NH Rotary Club. She currently serves as the Vice-Chairman of the Board of Directors for the Center for Life Management, located in Derry, NH; a community behavioral mental health and psychiatric treatment center.

AREAS OF SPECIALITY:

ADA Disability (in the Workplace)
Biotech
Business Dissolution
Civil Rights
Commercial/Business
Community Associations
Condominiums
Construction
Contract Disputes
Dentists
Discrimination
Doctors
EEOC
Education
Elder Abuse
Employment
Engineering
Entertainment Sector
Family Businesses
Franchise
Health Care
Hospitals
Intellectual Property
International (UK Arbitration)
Internet
Labor/Unions
Land Use/Planning
Landlord/Tenant
Local Government/Municipalities
Media & Communications
Medical Devices
Medical Malpractice
Mergers & Acquisitions
Non-profit Organizations
Nursing Homes
Nurses
Partnerships
Personal Injury
Pharmaceuticals
Product Liability
Professional Liability (Medical)
Professional Malpractice (Medical)
Professional Negligence (Medical)
Property Damage
Sexual Harassment (in the Workplace)
Shareholder Disputes
Software
Technology
Telecommunications
Title Disputes
Trademark Litigation
Unfair Competition
Wage & Hour/FMLA

Avoiding Mediation Hazards, and getting to YES!

The expectations of the parties and their counsel or insurer coming into a mediation session play an important role in how successful the mediation process will be. Some cases come to mediation on the eve of or even after a trial, while others arrive before suit is filed or perhaps even before the parties have consulted with counsel about their dispute. In some cases, little-to-no negotiation has taken place. In others, extensive negotiations have taken place and have reached an impasse with specific parameters, or offers or demands being recognized and defined. When to go to mediation is important for both the parties and their counsel to consider.

How can the expectations of the participants impact the mediation process and the overall prospects of success, at both the essential initial stages as well as at its conclusion? And how can parties, counsel, and the mediator all take steps to avoid the pitfalls of misunderstood or unfounded pre-mediation expectations of the other side? In this article we’ll review some real-life examples of expectation pitfalls, consider what the impact to the mediation could be, and offer ideas on how to avoid the hazards which can negatively impact your chances of settling.

Over the years, I have experienced many situations which could have been avoided, if they had been identified early in the case, such as:

– a case comes to mediation with a high six-figure demand, where no offer has been made, when the defendant advises the mediator in an initial private caucus that they have authority only up to $10,000 for settlement;

– a case comes to mediation where at the beginning of the mediation session a prior settlement demand is increased significantly by the plaintiff, or a prior offer by the defendant is reduced, whether justified or not;

– a case comes to mediation where the parties have had prior negotiations, and where settlement offers and demands were made, but an impasse was reached. Now at the mediation session, one or both sides indicate they are starting at a zero offer, or at the initial demand made before negotiations began;

– a case comes to mediation where counsel or the parties have had a so-called “off-the-record” settlement discussion which set some informal expectations, but at the mediation session – either after a more formal discussion with their clients or not – a change is made from previous informal representations;

– a case comes to mediation where a party previously indicated off-the-record that a certain amount would likely settle their case, then at the mediation, makes a formal initial starting demand significantly higher than the off-the-record amount;

– a case where mediation has been suggested and deemed beneficial by the parties, where the plaintiff indicates they will not attend without a formal offer, perhaps of a minimum amount, or where the defendant will come only if the plaintiff lowers their demand to a certain number.

These scenarios can have very negative impact to the mediation session, the work of the mediator, and any future collaboration between the parties. Some general reactions I have heard from parties in these scenarios show the problematic effect:

“If I knew that was the other side’s position, I would never have come to mediation.”

“They should have told me that before coming today; they’ve wasted my time and my client’s time. I’m going to demand they pay my expenses and our share of the mediation costs.”

“They are not acting in good faith! I’ll never negotiate with them now on this case. I’ll see them in court!”

“I am going to assert a 93A and 176D claim over this bad practice and low offer.”

“We only came to the table when we were told a certain number or range would likely settle this case, and now they are starting with an unrealistic demand. We are finished here.”.

“If that is their position, I am raising my demand [or lowering my offer].”

“Mr/s. Mediator, you have to remind counsel, and tell their client as well, that we were told off-the-record that [a certain amount] would likely settle this case.”

“Until the other side puts their last pre-mediation demand [or offer] on the table, off-the-record or not, we are not going to begin negotiating.”

“I will never mediate with this attorney and/or insurer again.”;

“I will never go to mediation again without a significant pre-mediation offer [or more reasonable settlement demand].”

“I will never use you again Mr/s. Mediator, if you can’t get the other side to commit to a realistic starting number.”

Parties, counsel, insurers, and mediators need to know how to avoid the hazards in the examples above.

Here are some ways to remedy the common hurdles:

– The parties and/or their counsel should communicate clearly with the other side their reasonable expectations of one another before coming to a mediation session, or in many cases, before agreeing to the mediation process, to avoid surprises or unfounded expectations.

– Carefully consider the downsides of changing previously expressed settlement demands or offers on the day of the mediation. If such revisions are merited or sought, consider advising the other side well in advance of the mediation session, and provide rationale for such changes so the opposing side has the opportunity to digest and review the proposition and are not surprised at the mediation.

– As best possible, reach an understanding of what the starting demand and offer will be at the mediation session to avoid surprises. Agree on what effect “off-the-record” conversations will play, if at all, at the mediation session.

– Consider having a pre-mediation conference with the mediator should some of these issues arise so the mediator might assist you in sculpting an agreed-upon mediation process to best fit the needs and expectations of all participants.

– Many cases that settle have come to mediation without pre-mediation settlement demands or offers having been made. However, parties and their counsel or insurers may well consider whether and to what extent pre-mediation negotiations, offers, demands, or other parameters may be needed in a particular case to increase the likelihood that a mediation session will be most productive and successful.

– In certain cases, the parties may need to set parameters or expectations before coming to mediation. Recognize that pre-mediation conferences or telephone calls to negotiate parameters and/or expectations before the formal mediation session begins, can mean the difference between settlement or trial.

The good news is that experienced mediators have the skills to deal successfully with all of the issues, pitfalls, and avoidable frustrations noted above. Being informed of issues in advance, an experienced mediator can arrange for pre-mediation conferences so that false expectations won’t torpedo the session ahead. Even if these issues rear their heads only when the session begins, a seasoned mediator will use his skills to help the parties navigate these choppy waters, and steer everyone’s attention to the merits, strengths, and weaknesses of the case, the true needs and interests of the parties, and the benefits of a negotiated resolution. Avoid the prolonged time, expense, frustration, and uncertainty of further litigation and trial and come to the table with founded expectations….there’s a very high likelihood you will get to YES.

Avoiding Mediation Hazards, and getting to YES!

The expectations of the parties and their counsel or insurer coming into a mediation session play an important role in how successful the mediation process will be. Some cases come to mediation on the eve of or even after a trial, while others arrive before suit is filed or perhaps even before the parties have consulted with counsel about their dispute. In some cases, little-to-no negotiation has taken place. In others, extensive negotiations have taken place and have reached an impasse with specific parameters, or offers or demands being recognized and defined. When to go to mediation is important for both the parties and their counsel to consider.

How can the expectations of the participants impact the mediation process and the overall prospects of success, at both the essential initial stages as well as at its conclusion? And how can parties, counsel, and the mediator all take steps to avoid the pitfalls of misunderstood or unfounded pre-mediation expectations of the other side? In this article we’ll review some real-life examples of expectation pitfalls, consider what the impact to the mediation could be, and offer ideas on how to avoid the hazards which can negatively impact your chances of settling.

Over the years, I have experienced many situations which could have been avoided, if they had been identified early in the case, such as:

– a case comes to mediation with a high six-figure demand, where no offer has been made, when the defendant advises the mediator in an initial private caucus that they have authority only up to $10,000 for settlement;

– a case comes to mediation where at the beginning of the mediation session a prior settlement demand is increased significantly by the plaintiff, or a prior offer by the defendant is reduced, whether justified or not;

– a case comes to mediation where the parties have had prior negotiations, and where settlement offers and demands were made, but an impasse was reached. Now at the mediation session, one or both sides indicate they are starting at a zero offer, or at the initial demand made before negotiations began;

– a case comes to mediation where counsel or the parties have had a so-called “off-the-record” settlement discussion which set some informal expectations, but at the mediation session – either after a more formal discussion with their clients or not – a change is made from previous informal representations;

– a case comes to mediation where a party previously indicated off-the-record that a certain amount would likely settle their case, then at the mediation, makes a formal initial starting demand significantly higher than the off-the-record amount;

– a case where mediation has been suggested and deemed beneficial by the parties, where the plaintiff indicates they will not attend without a formal offer, perhaps of a minimum amount, or where the defendant will come only if the plaintiff lowers their demand to a certain number.

These scenarios can have very negative impact to the mediation session, the work of the mediator, and any future collaboration between the parties. Some general reactions I have heard from parties in these scenarios show the problematic effect:

“If I knew that was the other side’s position, I would never have come to mediation.”

“They should have told me that before coming today; they’ve wasted my time and my client’s time. I’m going to demand they pay my expenses and our share of the mediation costs.”

“They are not acting in good faith! I’ll never negotiate with them now on this case. I’ll see them in court!”

“I am going to assert a 93A and 176D claim over this bad practice and low offer.”

“We only came to the table when we were told a certain number or range would likely settle this case, and now they are starting with an unrealistic demand. We are finished here.”.

“If that is their position, I am raising my demand [or lowering my offer].”

“Mr/s. Mediator, you have to remind counsel, and tell their client as well, that we were told off-the-record that [a certain amount] would likely settle this case.”

“Until the other side puts their last pre-mediation demand [or offer] on the table, off-the-record or not, we are not going to begin negotiating.”

“I will never mediate with this attorney and/or insurer again.”;

“I will never go to mediation again without a significant pre-mediation offer [or more reasonable settlement demand].”

“I will never use you again Mr/s. Mediator, if you can’t get the other side to commit to a realistic starting number.”

Parties, counsel, insurers, and mediators need to know how to avoid the hazards in the examples above.

Here are some ways to remedy the common hurdles:

– The parties and/or their counsel should communicate clearly with the other side their reasonable expectations of one another before coming to a mediation session, or in many cases, before agreeing to the mediation process, to avoid surprises or unfounded expectations.

– Carefully consider the downsides of changing previously expressed settlement demands or offers on the day of the mediation. If such revisions are merited or sought, consider advising the other side well in advance of the mediation session, and provide rationale for such changes so the opposing side has the opportunity to digest and review the proposition and are not surprised at the mediation.

– As best possible, reach an understanding of what the starting demand and offer will be at the mediation session to avoid surprises. Agree on what effect “off-the-record” conversations will play, if at all, at the mediation session.

– Consider having a pre-mediation conference with the mediator should some of these issues arise so the mediator might assist you in sculpting an agreed-upon mediation process to best fit the needs and expectations of all participants.

– Many cases that settle have come to mediation without pre-mediation settlement demands or offers having been made. However, parties and their counsel or insurers may well consider whether and to what extent pre-mediation negotiations, offers, demands, or other parameters may be needed in a particular case to increase the likelihood that a mediation session will be most productive and successful.

– In certain cases, the parties may need to set parameters or expectations before coming to mediation. Recognize that pre-mediation conferences or telephone calls to negotiate parameters and/or expectations before the formal mediation session begins, can mean the difference between settlement or trial.

The good news is that experienced mediators have the skills to deal successfully with all of the issues, pitfalls, and avoidable frustrations noted above. Being informed of issues in advance, an experienced mediator can arrange for pre-mediation conferences so that false expectations won’t torpedo the session ahead. Even if these issues rear their heads only when the session begins, a seasoned mediator will use his skills to help the parties navigate these choppy waters, and steer everyone’s attention to the merits, strengths, and weaknesses of the case, the true needs and interests of the parties, and the benefits of a negotiated resolution. Avoid the prolonged time, expense, frustration, and uncertainty of further litigation and trial and come to the table with founded expectations….there’s a very high likelihood you will get to YES.

It’s an Arbitration for Ortiz

According to a recent Boston Herald article, David Ortiz has agreed to an arbitration hearing, unlike many of his teammates, as a means to resolve the dispute between his requested annual salary ($16.5 million) and the $12.5 million counter-offer by the Red Sox. Both parties will have an opportunity to present evidence in support of their case. Ortiz’s evidence: a triumphant 2011. Due to the nature of arbitration, however, complex scenarios can build throughout the process.

Alternative dispute resolution has successfully resolved disputes in the sports world for many years, allowing all parties to illustrate their strengths (and weakness). And as their followers know, both Ortiz and the Red Sox have a few.

We are saddened to announce the passing of Jon T. Skerry, a member of the MDRS panel.


We are saddened to announce the passing of Jon T. Skerry, a member of the MDRS panel.

Jon was tirelessly devoted to his family and clients up until the time of his death. He earned his law degree from Suffolk University, served in the US Army and was stationed overseas in Frankfurt Germany. In Salem, he was well respected and was known for his kindness, sense of humor and storytelling.

Read Jon’s Obituary below.

Jon T. Skerry, age 70, a lifelong Salem resident, passed away peacefully surrounded by family on September 22nd, 2020.
Jon was born on June 26, 1950 in Peabody, MA to Carol and Christopher Skerry. Jon was a devoted husband to Rebecca Skerry, proud and loving father of two daughters, Kathleen Skerry and her husband, Nick Tsolakis, of Boston and Annie Skerry of Brattleboro, Vermont. Jon leaves behind two treasured grandchildren, Holden Crosby and Vasia Tsolakis. He is survived by his sister, Patricia (Skerry) Julian of Salem, brother Scott Michaud, and his companion Leslie Richardson of Yarmouth, MA, niece, Jacquelyn Julian of Salem, nephew David Julian of Milford, MA, aunts and uncles Susan and Stephen Feit of Pocatello, Idaho and Mary and John Girasella of Reading, MA along with many cousins, in-laws, nieces and nephews, great-nieces and nephews and many other extended family members.
Jon attended Salem Public Schools. He graduated from Salem High School in the class of 1968 and was senior class president. He earned his undergraduate degree from the University of Massachusetts, Amherst and his law degree from Suffolk University. He served in the US Army and was stationed overseas in Frankfurt Germany.
Jon worked as an attorney for over forty years, tirelessly devoted to his clients up until the time of his death.
He was an avid sports fan, especially Boston teams, as well as college football and basketball. He loved attending games at Fenway Park with his family.
Jon was well-known for his sense of humor and storytelling. He loved entertaining, laughing, and being surrounded by family. He was well-respected and known in the community for his kindness.
Jon is predeceased by his father, Christopher Skerry, mother and stepfather Carol and Gil Michaud, uncle, William Doherty, and mother- and father-in-law Simone and George Strout.

B R E A K I N G N E W S . . . it’s as easy as 1-2-3!

1) WHAT’S NEW? Our website!


We’re very excited to have taken our website to new heights, providing visitors with…

We’re very excited to have taken our website to new heights, providing visitors with…

  • an improved neutral search;
  • easier case submission;
  • a streamlined experience;
  • and all of the reliable information you’ve come to expect from MDRS.

Check it out at www.MDRS.com
We hope you like it as much as we do!


2) We’re CELEBRATING, thanks to YOU…

You’ve again voted MDRS as your #1 Dispute Resolution Provider in Massachusetts Lawyers Weekly’s 2020 Reader Rankings Awards!

We are humbled, grateful, and even more dedicated to providing you with the excellence in service you’ve come to expect from industry leaders. OUR SINCERE THANKS goes to each of you for your support, your confidence, and your business. YOU make us what we are; MDRS will never let you down!

#1 Dispute Resolution Provider
2019 and 2020

 

3) Virtual v. In-Person Sessions: we’re here for you…either way.


Is your claims rep grounded from travel due to COVID-19? Are all attendees committed to a “virtual-or-not-happening” session? Perhaps the plaintiff is unable to navigate online technology…

No matter your situation, we’ve got you covered. Whether partially- or completely- online, or in-person when unavoidable, MDRS can provide you with the type of session your case requires.

MDRS provides free training (as much or as little as is needed) to all virtual attendees. This means that you don’t need to worry about technical preparation…our staff supports you AND your clients throughout the process.

Want to learn more about virtual sessions?

Click here for DR Videoconferencing: Fitting the Forum to Covid-19

Click here for Mediation and Arbitration Videoconferencing


Schedule your video conference or in-person session now!
Email us at caseadmin@mdrs.com or Call (800) 536-5520

DR Videoconferencing: Fitting the Forum to COVID-19

As published in Massachusetts Lawyers Weekly

The COVID-19 virus is affecting us all both personally and professionally. As of this writing, courts and many borders are closed, travel has been severely restricted, and even physical contact with one another is being discouraged (i.e., social distancing). All attorneys are now challenged with how to best represent their clients in this rapidly-evolving environment.

Dispute Resolution [DR] professionals must now coordinate all of our communication and technical options to continue to deliver the best possible support to the legal community and other clients. Though Online Dispute Resolution [ODR] has not typically been the most preferred method of solution delivery, the current state of crisis simply demands it.

Our own Massachusetts DR pioneer, Professor Frank E. A. Sander, prophetically published in 1994 a ground breaking article calling DR Fitting The Forum to the Fuss. Twenty-six years later this goal remains the same: we must continue to ask ourselves how the DR Industry can Fit The Forum to the Fuss in response to the global pandemic crisis.

In reality and for some time now, DR processes cannot be viewed as simply scheduled face-to- face physical encounters. Rather, from beginning to end, DR providers have been employing a variety of communications utilizing telephone, email, online tools, and in most cases still traditionally involving face-to-face sessions, where all parties with needed settlement authority and interest participate in person.

Most DR professionals will likely agree that face-to-face physical presence of all interested parties at a mediation session, for example, remains the preferred choice in resolving disputes. The complex dynamics and emotions of participants and the full range of neutrals’ interpersonal skills are perhaps best realized when the parties can reach out and touch each other.

However, DR’s historic reliance on physical meetings has been steadily eroding as ever improving online options, such as video conferencing, have become more efficient and user friendly. Many of us have become familiar with and enjoy using programs like Skype and FaceTime in our personal lives. Growing numbers of legal professionals are seeing the advantages of using advanced video conferencing services such as Zoom or GoToMeeting when a face-to-face meeting is either not possible or not preferred.

COVID-19 has not only nearly paralyzed the court system, but their ordinary backlog will continue to grow significantly with mandated closings. Many businesses, insurance claims handlers, lawyers, and individuals must currently and for the foreseeable future restrict their travel. Now more than ever it is the DR community that offers a forum to meet these challenges, employing the full array of technological advances, including [but not limited to] video conferencing to resolve disputes where all of the parties may not be able to meet face-to- face.

The cutting-edge technology of today’s video conferencing affords all parties the opportunity to fully participate with ease of use from offices, homes, or virtually anywhere – simply with phone in hand. Participants need not go to great costs to participate by video conference. All that is needed is a desktop, laptop, iPad, or cell phone that has a working camera and microphone. If devices don’t have a camera, inexpensive clip-ons that plug into the USB port can be purchased inexpensively online or at retailers. You might ask your DR provider for a trial run using videoconferencing before scheduling your next case.

Innovative DR providers have the facilities and technology to create sessions where some or even all of the participants cannot attend in person. Software applications such as Zoom, GoToMeeting, and others are tailored and administered by the DR provider to seamlessly fit the more traditional processes we all know, such as the joint meeting and private caucuses in mediation. Technology now allows the mediator to conduct advanced shuttle diplomacy, choosing who they speak to in private and when, even when participants are only doing so online.

While it is the COVID-19 virus bringing video conferencing to the fore for so many, incorporating video conferencing in the DR process has significant recognized advantages.

Cost savings has always been a key benefit of DR processes, and incorporating ODR technologies eliminates travel expenses, allows for quicker communications, and also provides more flexibility in scheduling. Documents can be easily shared during online sessions, and secure and encrypted document signing can be accomplished, critical, for example, to the all- important execution of a Mediation Settlement Agreement.

Quite frankly friends, these solutions will keep people in business.

So….please stay safe in these difficult times and look to DR as you Fit the Forum to Your Case.

Brian R. Jerome, Esq.

Founder and CEO

Massachusetts Dispute Resolution Services

Boston and Salem, Massachusetts

Mediation and Arbitration Video Conferencing

Dear Friends and Colleagues,

We’re committed to staying one step ahead of COVID-19 restrictions.

 

 

Though our ‘new normal’ is rapidly evolving, we’ve been working hard to remain your choice as The Dispute Resolution Resource.

You can mediate, arbitrate, and settle your cases using online video conferencing.

Together, we can keep reaching resolution. MDRS has state-of-the-art video conferencing facilities both within our offices as well as virtually (through your computer, tablet, or mobile device). We utilize Zoom, the awardwinning app that provides the resources businesses need to most effectively navigate Dispute Resolution through the coronavirus pandemic.

We can easily schedule your Mediation or Arbitration with some or even all of the needed
participants joining virtually and in a manner similar to how you would participate in a faceto-face session.

Zoom allows us to provide both joint sessions and private caucusing capabilities
seamlessly, and together with MDRS trained staff and neutrals, will help your business
maintain operations through this crisis and beyond.

BENEFITS of ONLINE DISPUTE RESOLUTION with ZOOM and MDRS:

  • Easy connection and ease of use
  • Stress-free 1:1 practice sessions as needed with our trained staff
  • Join in from any location and on any device, whether a desktop computer, a laptop
    or even your cell phone, all while maintaining employee safety. If needed, even an
    inexpensive clip-on camera attached by USB to your PC or laptop will get you up,
    running, and visually connected.
  • Built-in collaboration tools such as private chat, screen sharing, white-boarding,
    [shared or private] document viewing
  • Ultra HD video and audio
  • Scheduling available NOW!

Click here to Download the free Zoom client

Schedule your video conference now or let us answer any questions you may have by
emailing caseadmin@mdrs.com or calling (800) 536-5520.

We are committed to providing the resources needed to help your business stay strong.

Strumski, Jr

Joseph F. Strumski, Jr is a partner in the Law Firm of Strumski & Woods, LLC, where he specializes in Civil Litigation, Personal Injury, Malpractice, Insurance Defense Litigation and Construction Law.

Mr. Strumski is a former claims manager of the Commercial Union Insurance Company where he was employed from 1972 to 1987. He joined the law firm of Morrison, Mahoney and Miller in 1987 and was a partner and resident manager of the firm’s Cape Cod Office. He also served as a member of the firm’s management and executive committees.

Mr. Strumski has tried numerous cases in the Federal and State Courts as well as the Division of Industrial Accidents and has represented clients before private, governmental and quasi-governmental boards and panels. He is also a Court-Appointed Conciliator in the Superior and District Courts of Barnstable County, and has been qualified and testified as an expert in Chapter 93A/ 176D claims.

Additionally, he has served as a panelist in the Massachusetts Bar Association and Massachusetts Academy of Trial Attorneys seminars, is the author of several articles dealing with insurance issues, and is a member of the Massachusetts Defense Lawyers Association as well as the Massachusetts Bar Association and the Barnstable County Bar Association, and has been qualified as an expert in the Superior Court to give testimony regarding Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance (Massachusetts General Law Chapter 176D). Mr. Strumski is admitted to practice law in the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts. He holds a B.S. degree as an honor graduate of Northeastern University in 1978 and obtained his J.D. from the New England School of Law in 1987.

Rabkin, Esq.

Lynn, Massachusetts

Sandor Rabkin  is currently with Demakis Law Offices (1996 to Present).  Previously, he held the following positions: Niarcho & Toto (1995 to 1996), where he was involved in extensive range of tort and workers compensation matters; Mahoney, Kiley, Szulkin & Steward (1988 to 1995) as defense counsel; Long Anderson & McTaggart (1987 to 1988); Latham & Latham (1980 to 1986); Office of the District Attorney, Essex County, MA (1976 to 1980) as prosecutor. Attorney Rabkin for many years has also served as an arbitrator and mediator in hundreds of cases involving a wide range of matters, including the full range of  insurance claims, professional malpractice, commercial disputes, personal injury, product liability and general liability cases.

Mills (ret.)

Danvers, Massachusetts

After graduating from law school, Judge Mills clerked to Hugh H. Bownes, United States Judge in the District of New Hampshire. Judge Mills then served as an assistant district attorney for Middlesex County, then moved on to the Massachusetts Attorney General’s office as a division chief in the criminal bureau. Prior to his appointment to the Massachusetts Appeals Court, Judge Mills maintained offices in Boston, Danvers, and Provincetown. During his thirty-two years of private practice, his appearances were diverse in many courts, State and Federal, from district and municipal in Massachusetts and New Hampshire, to the United States Supreme Court in Washington, and, in between, the Massachusetts Land, Probate, Superior, Appeals and Supreme Judicial Courts, and the Federal District Courts in Massachusetts, New Hampshire, Pennsylvania, and the First Circuit. After concluding prosecutor work, his private practice initially concentrated in criminal defense and “people in trouble.” From 1985 to 2001 his practice was principally in the area of the use, reuse, and misuse of urban land, and during those years he presented approximately two thousand cases to local governmental agencies (e.g., zoning and planning boards, conservation commissions) and several State agencies, e.g., Department of Environmental Quality Engineering, Massachusetts Highway Department, Alcoholic Beverage Control Commission, Department of Telecommunication and Energy. He represented individuals before regulatory boards, for example, Registration in Medicine and the Board of Bar Overseers. He argued three cases in the United States Supreme Court in which his party prevailed. In land-use permitting he represented individual homeowners as well as developers of office parks, shopping centers, and condominium projects. As a land-use practitioner, he was involved in a variety of disputes between proponents, neighbors opposing, and various “small town fights.” His real estate clients included sellers, buyers, owners, and developers. In private practice he worked with many lawyers and appeared before several hundred judges in various State and Federal courts.

Over the course of 11 years as an appellate justice Judge Mills was the principal author of more than 100 published decisions. He has heard and considered matters involving substantive legal issues related to all legal disciplines within the jurisdiction of the Massachusetts Courts, including but not limited to:

He participated in the final review and disposition of approximately three thousand cases while a justice in the Massachusetts Appeals Court.

Harvard Negotiation Project, 1989, studying under Prof. Roger Fisher; Extensive Mediation training with MWI and MCLE in Boston; Member of Massachusetts Bar Association ADR Comittee; Mediator in the Haverhill, Salem, Gloucester, East Boston, and South Boston divisions of the Massachusetts Trial Court; Volunteer mediator in the Middlesex and Suffolk Probate and Family Courts, as well as the Massachusetts Land Court.

Commonwealth of Massachusetts; State of New Hampshire; United States District Court, Massachusetts, and New Hampshire; United States Court of Appeals, First Circuit; United States Supreme Court; Massachusetts Land Court

Associate Justice, Massachusetts Appeals Court (2001-2012); Assistant Massachusetts Attorney General – Chief of Criminal Appellate Section (1972 -1975); Assistant District Attorney, Middlesex County (1969-1972); Danvers Board of Selectman (current); Town Moderator, Town of Danvers (1998-2001); Town Meeting Member, Town of Danvers (first elected 1965); Commissioner, Massachusetts State Ethics Commission
(current).

Langella, Esq.

Framingham / Boston, Massachusetts

Attorney Langella began his exclusive DR practice in 2015 after a career that included twenty-six years as a trial attorney at two prominent Boston law firms, four years as General Counsel at a publicly traded medical device company and two years as Chief of the Business, Technology & Economic Development Division at the Massachusetts Attorney General’s Office. Over the years, Mr. Langella has litigated, mediated and/or arbitrated hundreds of disputes throughout the United States, as well as internationally.

From April of 2013 through June of 2015, Mr. Langella was Chief of the Business Technology & Economic Development Division at the Office of the Attorney General. There he advised the Massachusetts Attorney General from the perspective of the business community on a host of legal and policy matters that affect business activity and the economy and made recommendations relative to the impact of state laws and regulations on businesses in an effort to balance the intended policy objectives against the unintended business consequences.

From 1992 through March of 2013, Attorney Langella was a member/trial attorney at Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. While at Mintz, Mr. Langella focused on complex commercial cases, such a partnership/shareholder disputes, fraud and misrepresentation actions, breach of contract/breach of fiduciary duty claims, and failed business transactions.

From 1988 to 1992, Attorney Langella served as General Counsel at Healthco International, Inc., a Boston publicly traded medical device company with annual revenues of over $450M+ and 3,000+ employees. At Healthco, he was responsible for all domestic litigation, real estate leases and transactions, vendor contracts, employee claims and issues, insurance claims and policies, company trademarks, and acquisitions.

From 1983 to 1988, Attorney Langella was an Associate at Goodwin, Procter & Hoar where he gained substantial experience in the defense of product liability claims and commercial litigation matters on local and national levels. He managed hundreds of cases dealing with complex and evolving legal issues for clients such as Eli Lilly, B.F. Goodrich, Union Carbide, and W.R. Grace.

With a unique background that includes private, government and in-house counsel experience, Mr. Langella tries to quickly identify the key factual, legal, and emotional issues that form the basis of the parties’ conflict, and then utilizes a combination of facilitative and evaluative mediation techniques, depending on the needs of the parties.

Guschov

Middleton, Massachusetts

Having been selected to the ADR panels of numerous prestigious national and international organizations, Mr. Guschov has many years of arbitration, mediation and dispute review board training. This experience includes many years of arbitration and mediation training conducted in various cities throughout the country by the American Arbitration Association including Award Writing Training, Ethics Training, Construction Arbitration Training, Large Complex Case Training, Advanced Arbitrator Training, and Advanced Case Management Techniques. Additionally, Mr. Guschov has successfully completed both basic and advanced International Arbitration Training conducted by the Chartered Institute of Arbitrators of London, England. Finally, he has successfully completed Dispute Review Board Training and Dispute Review Board Chairing Training conducted by the Dispute Review Board Foundation, Inc.

With respect to his dispute resolution background, Mr. Guschov has more than 30 years experience as a panel member, single arbitrator/mediator and panel chairman. This experience has involved hundreds of disputes. Cases have included disputes on projects of virtually all types and sizes and have involved evaluation and quality of construction, contract terms and conditions, change orders, delays, design defects, and incomplete and/or defective work, with claims ranging to many millions of dollars. This experience includes large treatment plants and utilities claims and disputes as well as international airport arbitration. Mr. Guschov has extensive experience for the Commonwealth of Massachusetts as a arbitrator and ADR service provider.

von Rosenvinge, Esq.

Needham, Massachusetts

Bruce von Rosenvinge has been a practicing civil trial attorney for oever 25 years specializing in Environmental litigation under Massachusetts General Laws Chapter 21E.  He has handled over 800 hazardous material remediation cases over the past 25 years representing, Land Owners, Responsible Parties, Remediation Entities and Adjacent Land Owners.  He was lead counsel for a leading Massachusetts Oil Dealers Petroleum Insurance Program for over 18 years.  He has handled over 300 mediation and/or arbitrations and has experience in Will Contests, personal injury, lead paint poisoning litigation, and general liability cases.

Kirby and Associates, Boston, MA United States,Litigation Associate, Jun 1988 – Mar 1994; KIrby, O’Brien and von Rosenvinge, P.C., Boston, Massachusetts (MA) United States,Litigation Partner, Mar 1994 – Jun 1998; O’Brien and von Rosenvinge, P.C., Wellesley Hills, Massachusetts (MA) Managing Partner, Jul 1998 – Nov 2009; von Rosenvinge and Associates, Wellesley Hills,  Managing Partner, Nov 2009 – December 2012.

DR Resources

In addition to our FAQs, the following articles written by MDRS founder and CEO Brian R. Jerome, Esq., include extensive information about Dispute Resolution services.

ARTICLES AND INFORMATION BY ATTORNEY BRIAN JEROME

The Case for Private Caucus
by Brian R. Jerome, Esq.

The Case for the Joint Opening Session
by Brian R. Jerome, Esq.

DR Users Guide
by Brian R. Jerome, Esq.

DR and Automobile Claims
by Brian R. Jerome, Esq.

Arbitration – Voluntary or Mandatory? The Use of Pre-Dispute Arbitration Agreements
by Brian R. Jerome, Esq.

Avoiding Mediation Hazards and getting to YES!”
by Brian R. Jerome, Esq.

Avoiding Pitfalls During Mediation Settlement
by Brian R. Jerome, Esq.

The Attorney, the Client and the Mediator
by Brian R. Jerome, Esq.

Baseball (Pendulum) Arbitration
by Brian R. Jerome, Esq.

Bracketing Can Break Impasse in Negotiation
by Brian R. Jerome, Esq.

In Support of… Arbitration
by Brian R. Jerome, Esq. and Jeffrey S. Stern, Esq.

MED-ARB: Sculpting the ADR Process to the Case
by Brian R. Jerome, Esq.

Mediating Business Disputes
by Brian R. Jerome, Esq.

Winning Strategies and Practice Tips in Mediation
by Brian R. Jerome, Esq.

Mediating Complex Multi-Party Cases
by Brian R. Jerome, Esq.

Mediation and Arbitration of Premises Liability Cases
by Brian R. Jerome, Esq.

Mediation Confidentiality: Who, What, Where, When, How?
by Brian R. Jerome, Esq.

Mediation: It Pays To Be Civil
by Brian R. Jerome, Esq.

Musings of a Longtime Arbitrator
by Brian R. Jerome, Esq.

The Ten Commandments of Mediation Advocacy
by Brian R. Jerome, Esq.

Tips for Summer Productivity
by Brian R. Jerome, Esq., and Sheri Stevens Wilson

Recent ADR Developments
by MDRS

Recent Arbitration Developments April 2016
by MDRS

Recent Cases and Developments in ADR — April 2013
by MDRS

Recent Cases Involving ADR — February 2013
by MDRS

Recent Decisions Involving ADR — August 2012
by MDRS

Recent Decisions and Developments Involving ADR — June 2012
by MDRS

Recent Decisions and Developments involving ADR — October 2012
by MDRS

OTHER ARTICLES OF INTEREST BY MDRS NEUTRALS AND ASSOCIATES

Abraham Lincoln: An Early Champion of ADR
by Associate Justice Dennis J. Curran

If You and Your Lawyer Really Do Want to Negotiate
by Michael A. Zeytoonian, Esq.

Opening and Closing Statements at Arbitration
by Paul R. Kelley, Esq.

Parenting Coordinators: Who are they and what do they do?
by C. Michele Dorsey, Esq.

Secrets to Business Success
by Sheri Stevens Wilson

Let’s Cross Examine the Case Before We Decide to File that Lawsuit
by Michael A. Zeytoonian, Esq.

So What is this Different Kind of Legal Advocacy
by Michael A. Zeytoonian, Esq.

To Resolve a Dispute, the First Step is to Assess your Options
by Michael A. Zeytoonian, Esq.

Harris, Esq.

Boston, MA

Brian Harris has been practicing law since 1980. He is an experienced civil litigation attorney who has tried numerous cases in all the courts here in Massachusetts. He has also consulted and advised hundreds of clients in the areas of personal injury claims, insurance bad faith/93A allegations, insurance policy interpretation and mediation/arbitration dispute resolution. He was a partner in a larger law firm until 1994 at which time he formed his own law practice. Since that time, Mr. Harris has specialized in the defense and prosecution of personal injury claims and continues to represent a number of insurers and self-insured companies. Mr. Harris has received an A-V listing which is the highest rated category an attorney can achieve in the areas of both legal skills and ethical standards and is committed to providing the highest quality of legal representation for his clients.

Dorsey, Esq.

C. Michele Dorsey began practicing law in 1983, beginning her own firm in 1984. After a career as a Registered Nurse helping families with disabled children, Michele gravitated toward assisting families  who were struggling in the legal system. Michele has concentrated on complex issues in family law in the Probate and Family Court, the Appeals Court and Supreme Judicial Court.

In 1990, recognizing the need for a more constructive way to resolve family conflict, Michele opened one of the first mediation firms on the SouthShore. Michele is an Adjunct Professor of Law at New England Law/Boston where she has taught since 1986, first teaching Family Law and later teaching Mediation beginning in 1995.

Michele now includes services as Parenting Coordinator in her practice, helping parents who are engaged in high conflict to work together on issues regarding their children through an innovative mediation/arbitration role.  She has also served as Guardian ad Litem and as Counsel for children numerous times.

Read her article on Parenting Coordinators here.

Corbett, Esq.

Attorney Corbett is Of Counsel at Williams & Associates, concentrating in providing Alternate Dispute Resolution Services as a neutral mediator and arbitrator, as well as select civil litigation and appeals; and Of Counsel at Williams & Associates, concentrating in insurance defense civil litigation. For more than thirty years Attorney Corbett has been engaged in trial practice, representing insurers and their insureds as well as injured plaintiffs. His trial experience includes trials in virtually all types of tort matters, including automobile, general liability, products liability and medical malpractice cases.

His experience includes trying cases involving such diverse matters as wrongful death, spinal cord injuries, traumatic brain injuries, burns, amputations and numerous other types of personal injuries. He also has experience in employment and insurance coverage disputes. He is a certified trial advocacy instructor as well as a certified mediator.

NADNPreviously, Mr. Corbett was Counsel to  Guaranty Fund Management Services in Boston (2007-2009); an independent lead trial counsel to the Law Office of Peter L. Elley in Quincy (1997-2003); an independent defense counsel to Curtin, Murphy & O’Reilly in Boston (1998-2001); senior trial counsel to  the Law Office of Maria K. Mendros (previously Law Office of Philip J. McCarthy) (1982 – 1987; 1990 – 1997); senior associate at Griffin & Goulka (1988 – 1990); an independent contractor at Avery, Dooley, Post and Avery (1987-1988); and In house counsel to the Law Office of John P. Linehan (1977 – 1982).

Bernstein (ret.)

Judge Bernstein brings over 20 years of judicial experience on the Boston Municipal Court to her mediation and arbitration practice. She has presided over hundreds of civil and criminal cases, including commercial and business disputes, consumer lawsuits, commercial real estate summary process, civil restraining orders, personal injury, premises liability and insurance matters. She also presided over administrative appeals from the Department of Unemployment Assistance and from the Boston Police Department rulings on firearms licensing. As a member of three judge panels, she served on the Appellate Division of the Boston Municipal Court Department on numerous occasions and authored several published opinions.

Appointed as the Adjunct Administrative Justice of the Boston Municipal Court Department from 2005-2010, Judge Bernstein assisted the departmental Chief Justice with administrative and policy initiatives, including participation on the Massachusetts Trial Court ADR implementation committee. In 2007 she assisted in the development of the first specialized mental health court session in the Commonwealth and regularly presided over that session until 2015. Judge Bernstein has mentored fellow judges and trained law students in judicial internships from Boston College Law School and Harvard Law School.

Prior to serving on the bench, Judge Bernstein was an Assistant Attorney General, serving as Chief of the Public Integrity Division in 1991 and in 1993 as Chief Prosecutor of the Public Protection Bureau. She has also been an Assistant District Attorney in Middlesex County.

Brister

LEGAL EXPERIENCE:  John Brister spent three years at Boston Legal Aid Society before joining Parker, Coulter, Daley & White, a Boston litigation firm.  During his years there, from 1974 to 1995, Mr. Brister was the lead trial counsel in a multitude of cases in the Superior Courts of Massachusetts and the U.S. District Court.  He has represented insurers, private corporations, and individuals as plaintiffs and defendants in complex cases involving products liability (with particular emphasis on safety of industrial machinery), factory and construction site accidents, medical and legal malpractice, claims against insurance companies for bad faith and unreasonable failure to settle, as well as more routine personal injury claims arising from car accidents and premises liability.

Since the formation of Brister & Zandrow, LLP in 1996, his practice has focused primarily on representing individual plaintiffs and corporations, and has broadened to include non-personal injury related litigation, representing individuals and businesses in a variety of matters, including contract disputes, real estate issues, and legal malpractice.  During his 30 plus years as a trial lawyer, he has been directly involved in the settlements of hundreds of cases.  This experience gives him the ability to appreciate the perspective of both plaintiffs and insurers.

New to DR?

Welcome to an expansive world of problem-solving!  View or download our DR User’s Guide by clicking on the picture above to learn more about the methods used to most effectively resolve disputes.  Written in plain english, the Guide is of tremendous assistance in explaining multiple modalities of Dispute Resolution, and helps readers prepare for session.

What is DR?

DR is an alternative to the lengthy and costly pre-trial discovery required in the court system and to the uncertainty and frustration of trial.  Sometimes referred to as “appropriate dispute resolution”, the principal advantage of DR is its inherent flexibility, giving the parties, their attorneys and/or claims handlers the ability to tailor the DR process to the circumstances of the case as well as to the needs and preferences of the disputing parties.  The goals of DR are to increase efficiency of process with more productive, non-adversarial methods to achieve case resolution.

In Massachusetts, the impact of DR began to be felt in the legal and insurance communities in the late 1980’s.  DR services are now available to parties from a wide variety of sources, including private DR providers such as Massachusetts Dispute Resolution Services (MDRS) as well as some court-connected programs.  Whereas our firm is available immediately to parties when a dispute arises, court-connected programs are generally available only after suit is initiated and certain pretrial discovery has been completed.

The spectrum of DR processes range widely from planned early dispute resolution to more formal, binding arbitration which resembles a trial.  Unfortunately, much of the well known terminology of DR, such as mediation and arbitration, are often used interchangeably, even by attorneys and claims personnel, who may not be fully familiar with DR modalities. 

Click here for more information about the DR services we provide.

Katrina Luciano

Meet Katrina Luciano, our Client Coordinator.

In this position, Katrina serves as client liaison, assisting in coordinating and scheduling cases for dispute resolution with counsel and pro se clients, while providing high level support to MDRS Founder and CEO Attorney Brian Jerome and Director of Marketing and Operations Sheri Wilson.

Need help with scheduling?  Have a session submission question?  Want to set up Zoom training?  Need to speak with your mediator?  Have an invoice question?  Katrina is the woman to ask!

Katrina is a lifelong resident of Methuen, holds a Bachelor of Arts degree in Liberal Arts from University of Massachusetts Lowell.  Prior to joining MDRS Katrina was active in the insurance industry in sales and administration.

Katrina loves working with and assisting longtime clients (and getting to know new ones!), and will be happy to answer any questions regarding the process of mediation/arbitration, scheduling, and prepping for upcoming sessions.  Please feel free to contact her any time at Katrina@mdrs.com.

Alexander

Alexander, Femino & Lauranzano, (1968 to present), Partner of general practice of law specializing in real estate development, municipal law, zoning, landlord/tenant, U.S. and Massachusetts tax law, corporate, banking law. City Solicitor, City of Beverly (1988 to 1992). Assistant City Solicitor, City of Beverly (1985 to 1988). Ronan, Segal & Harrington, Salem, Massachusetts (1981 to 1986), attorney in general practice including real estate development, zoning matters and municipal law, estate planning, corporate law, and landlord and tenant. Massachusetts Executive Office of Communities and Development, Assistant Development Planner (1979 to 1981),

Negotiated purchase and sales with developers, advised housing authorities on appropriate action to the Secretary and Governor on bills dealing with zoning, development and housing. Legislative Assistant, Senate President’s Office, Massachusetts (1977 to 1978) researched and drafted legislation, advised the Senate President on the ramification of legislation; liaison to local communities on economic development programs.

Member of American Bar Association and Massachusetts Bar Association. Member of Beverly Rotary Club 1982 to Present, Board of Directors 1986, President 1996 to 1997. Board of Directors, Beverly Cooperative Bank, 1994 to present. Capital Campaign Chairman Beverly Regional YMCA, 1995 to 1996. Beverly Hospital Corporator, 1993 to present. United Way of the Central North Shore, Budget Committee, 1986 to 1992. Member of Board of Directors of Family counseling and Guidance Center of the North Shore, 1983 to 1988, Vice Chairman, 1984 to 1985. Member of Board of Directors of Camp Fire Council of the North Shore, 1981 to 1985, Treasurer 1983 to 1985.

Roth

Attorney Roth concentrates her practice of law on counseling companies at all phases of development. Her in-house business and employment law experience serving as In-House Corporate Counsel and Chief Compliance Officer for a national behavioral health care corporation is now utilized in her private practice by representing high-tech telecommunication companies, manufacturing companies, metallurgic technology companies and start-up companies that span all focus areas from technology to home health care to on-line businesses. Since 1997 Attorney Roth has represented both plaintiffs and defendants in civil litigation and has found that mediation as an alternative dispute resolution brings an economy of cost and time to a successful resolution of business disputes.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Attorney Elizabeth (Beth) Roth began her professional life as a nurse. Later she earned her Master’s Degree in Counseling and became a leader in the psychotherapy profession and owner of a successful psychology practice. She served as the President of the New Hampshire Chapter of the American Counseling Association and was a member of the National ACA Board of Directors. Attorney Roth’s healthcare career focus expanded as she pursued her Juris Doctorate from Massachusetts School of Law and began her legal career in the healthcare niche, representing doctors and nurses in medical malpractice cases. After serving as In-House Corporate Counsel and Chief Compliance Officer for a national behavioral health care corporation she established Roth & Associates, PLLC in the Merrimack Valley with focus on business and employment law and litigation. Today, Roth & Associates, PLLC has recently merged with the Lowell firm, Eno Martin Donahue, LLP where Attorney Roth serves as a partner. She is admitted to the Massachusetts Bar and the Federal District Court for the District of Massachusetts. Attorney Roth received her Mediation training in accordance with M.G.L. ch.233 sec.23C and has a mediation certificate from MWI in Boston, MA.

IN THE COMMUNITY: Attorney Roth served on the Salem, NH Board of Selectman for many years and served as the town’s first woman Chairman of the Board. She is also a Member of the Greater Salem, NH Chamber of Commerce and the Greater Salem, NH Rotary Club. She currently serves as the Vice-Chairman of the Board of Directors for the Center for Life Management, located in Derry, NH; a community behavioral mental health and psychiatric treatment center.

Purcell

Military: Graduated Infantry Officer Candidate School (12/68) and commissioned 2d lieutenant; completed Airborne training (2/69) and Pathfinder training (7/69); assigned to 101st Airborne Division Pathfinder team in Viet Nam (I Corps) (8/69-1/70); wounded and medevac’d stateside; after recovery, served as company commander for intelligence school unit until 2/71.

Law School: Attended Boston University Law School (1971-74), graduating magna cum laude in 1974; ranked second in class cumulatively; editor of Boston University Law Review; awarded John Ordroneaux Award for The Best All Around Professional Ability in the Class of 1974.

LEGAL EXPERIENCE: Associate at Pierce, Atwood Scribner, Allen, Smith & Lancaster, Portland, ME from 1974-1979

Associate and Partner at Tillinghast Collins & Graham, Providence, RI, from 1980-1988

Founding Partner, Chair of Litigation Department, and first Managing Partner of Partridge Snow & Hahn LLP, Providence, RI, from 1988-2000

Senior Counsel, Partridge Snow & Hahn LLP, January 1, 2012-December 1, 2012

Independent facilitator, mediator, and arbitrator: December 1, 2012 to date. During my career, I spent over 25 years of my professional career as a litigator. Virtually all of my work was in litigation—the resolution of complex business and other disputes. These ranged from financial and anti-trust cases to major construction and long term natural gas pricing contractual disputes to significant business tort and contract cases. My practice evolved over time such that, toward the end, at least 50% of my work was in arbitration and mediation.

NON-LEGAL EXPERIENCE: In 2000, I left my firm to be COO of Blue Cross & Blue Shield of RI, and in 2004, became its President and CEO until December 31, 2011, when I retired.

ADR EXPERIENCE: I am experienced in varied negotiation contexts as lawyer and as COO/CEO. In the mid-1990’s, I was part of the first certified ADR panel for the United States District Court for the District of Rhode Island. We received very thorough training, and thereafter, I conducted Early Neutral Evaluations and mediations under the auspices of the Federal District Court. In 1998, Chief Justice Torres (Federal Court) appointed me arbitrator to resolve the final dispute between the two developers of the Providence Place Mall. After two weeks of hearings, I issued an opinion resolving the complex construction and contractual issues. After retirement from Blue Cross, I have mediated and arbitrated a number of complex commercial cases, including healthcare, insurance, construction and contract disputes.

I have a combination of legal and business experience together with a personality that lends itself to alternative dispute resolution. I believe the same skills can be applied to “facilitation,” by which I mean, assisting parties who are negotiating complex contracts or renewals to reach resolution, particularly in healthcare negotiations.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: I am a member of the American Arbitration Association’s (AAA) Commercial and National Healthcare Rosters, its Commercial Mediation Roster, and a former member of its Healthcare Dispute Resolution Advisory Council. I also am a member of the American Health Lawyer’s Association (AHLA) ADR Panel and its ACO Task Force. I am a member of the Massachusetts Bar Association ADR Committee and the ABA Dispute Resolution Section. I have been a guest speaker for the national Blue Cross Association legal counsel summit, the World Health Care Congress, the AAA, and the AHLA regarding healthcare policy, reform, ACOs and the merits of alternative dispute resolution in payor-provider and other healthcare disputes. I have had many other speaking and writing engagements on healthcare and ADR.

I currently serve on the Boards of HopeHealth, Inc., Hyannis, MA, Southeast New England’s largest nonprofit hospice, palliative and home care organization, and Cape Abilities, Inc., also headquarted in Hyannis, which serves, educates and employs adults with disabilities.

Pierce

Alan Pierce is admitted to practice before the Courts of the Commonwealth of Massachusetts, the U.S. District Court for Massachusetts, U.S. Court of Appeals, First Circuit Court and the U.S. Supreme Court. He is a member of the Salem, Essex County and Massachusetts Bar Associations as well as the American Bar Association and the Massachusetts Academy of Trial Attorneys and its Board of Governors.

In 2004 and 2005 he served as President of MATA. Alan currently serves as chair elect of the American Bar Association workers compensation section and will be the national chairperson in 2010. Alan is the former chairperson of the Massachusetts Bar Association’s Section on Workers’ Compensation Law.

In 1995 Governor William Weld appointed him to the Workers’ Compensation Advisory Council and he was reappointed in 1998 by Governor A. Paul Cellucci. Alan has lectured extensively in Massachusetts and nationally on workers’ compensation issues for Massachusetts Continuing Legal Education, National Business Institute, Professional Education Systems, Inc., Risk Management Society, Harvard School of Public Health and the American Academy of Orthopedic Surgeons, among others. He has also served on a multitude of committees at the Department of Industrial Accidents, most recently on its rules committee.

He has written and edited several publications including Massachusetts Workers’ Compensation Law, Workers’ Compensation and the Law and Workers’ Compensation: Issues and Answers. He is the author of numerous papers relating to workers’ compensation and litigation strategy. He served on the editorial board of the Journal of Workers’ Compensation where his column From The Courts appeared quarterly. Alan now hosts Workers’ Comp Matters on the Legal Talk Network where has done over two dozen podcasts covering all issues of workers’ compensation law. In 2007 he was among the first attorneys in the country to be inducted as a Fellow in the College of Workers’ Compensation Lawyers of the American Bar Association.Alan has been selected as a Super Lawyer in Boston Magazine every year since 2004 and is listed in Best Lawyers in America.

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97% of cases don’t make it to trial.

We’re one of the reasons why.

MDRS. The Dispute Resolution Resource.


Statistics don’t lie: DR has evolved to become the primary means of case management and resolution. Planning for pre-trial settlement is an essential legal strategy.

Massachusetts Dispute Resolution Services (MDRS) provides a full range of out-of-court dispute resolution services, specializing in mediation, arbitration, as well as hybrid offerings and more. We assist parties in resolving their disputes bypassing the time, expense, and uncertainty of litigation and trial in the court system.

Our professional panel of skilled neutrals includes nearly forty experienced attorneys and retired judges in an easily searchable format so that you can designate the most fitting neutral to help resolve your case.

MDRS serves private individuals, attorneys, businesses, government agencies, and the insurance community.

Mediation


Have an impartial mediator assist all parties in negotiating their own settlement in a comfortable and professional atmosphere. Click to learn more about our mediation services.

 

Arbitration


Present your case to an unbiased arbitrator at an out-of-court hearing. Your experienced arbitrator will review the evidence and make a legally binding decision. Click to learn more about our arbitration services.

Helpful Links


You can trust MDRS with your next settlement event. 

When only the best will do

 

Choose an industry leader to resolve your cases.

For nearly 30 years, MDRS Founder and CEO, Attorney Brian R. Jerome has been exclusively focused on resolving thousands of cases for our clients.

Read more about his background and remarkable breadth of practice areas here.


Brian Jerome Bio (PDF)


Brochure (PDF)

Affiliations & Credentials


 

Mediating Business Disputes Effectively

By Guest Blogger Tim Langella

Business disputes come in all shapes and sizes, and often have both monetary and non-monetary elements. Here’s an interesting mediation case study:

A successful, public company is looking for a consultant to assist with a 5 year project that will be undertaken through several, ongoing work orders. The founder of a local consulting company pitches the work along with one of the consultant’s three key employees, and lands the job. The parties enter into a detailed, written agreement that specifies, among other things, how the scope of the work for a particular aspect of the project will be defined, payment terms, and what happens if the consultant breaches the contract.

The relationship is rewarding for both parties for the first two years — three separate projects are defined and completed, the consultant has hired numerous extra people to work on the various projects, and the public company is happy with both the personnel assigned to the projects, as well as the results.

During the third year, however, just a few months into the next 18-month project, the key person assigned to the account leaves the employment of the consultant. The public company, concerned about the loss of that key consultant, reluctantly decides that it no longer wishes to pursue the project without that key person assisting, and unilaterally terminates the relationship – with less than complete attention paid to the terms of the contract and the legal implications of doing so.

Instead, the public company offers to pay the consultant for all work performed up to the date of termination, plus two weeks salary for the consultant’s employees assigned to the existing project. The consultant is concerned about the loss of work/revenue, angry (and bit embarrassed) about how the termination was effected, and worried about having to lay-off several employees who have become part of the business family. The consultant counter-demands damages equal to the revenue it would have earned for the remaining 15 months of the project, thinking that will provide enough time to keep the employees on the payroll and find substitute work for them.

The parties stop talking, lawsuits are threatened and then filed, and both sides are faced with the prospect of years of expensive and consuming litigation.

Litigation may be able to resolve the financial aspects of this dispute – after months, if not years, of paying lawyers and experts to sort through the relevant information. But it will never resolve the personnel issues the consultant faces as the owner of a small business, or the reputational concerns the consultant has from being suddenly terminated from what it thought was a successful relationship. Nor will it allow the public company to address in a private and confidential setting a messy contractual dispute which resulted from its failure to follow agreed upon contractual terms.

Mediation is the best option to contend not only with the monetary dispute, but also with the other factors that have arisen. Mediating such a matter not only keeps decision-making in the hands of the parties, but also offers the best chance at salvaging at least some of the work on the disputed project, preserving the parties’ relationship for future work together, and negotiating important issues such as recommendations that the consultant can reasonably expect from the company for the work it successfully completed over the years.

An experienced mediator, skilled in business disputes, can help the parties air and resolve all aspects of their grievances in a controlled and confidential setting. Quickly, efficiently, and less costly than protracted litigation, mediation offers unparalleled creative problem-solving opportunities.

Joseph F. Strumski, Jr

Joseph F. Strumski, Jr is a partner in the Law Firm of Strumski & Woods, LLC, where he specializes in Civil Litigation, Personal Injury, Malpractice, Insurance Defense Litigation and Construction Law.

Mr. Strumski is a former claims manager of the Commercial Union Insurance Company where he was employed from 1972 to 1987. He joined the law firm of Morrison, Mahoney and Miller in 1987 and was a partner and resident manager of the firm’s Cape Cod Office. He also served as a member of the firm’s management and executive committees.

Mr. Strumski has tried numerous cases in the Federal and State Courts as well as the Division of Industrial Accidents and has represented clients before private, governmental and quasi-governmental boards and panels. He is also a Court-Appointed Conciliator in the Superior and District Courts of Barnstable County, and has been qualified and testified as an expert in Chapter 93A/ 176D claims.

Additionally, he has served as a panelist in the Massachusetts Bar Association and Massachusetts Academy of Trial Attorneys seminars, is the author of several articles dealing with insurance issues, and is a member of the Massachusetts Defense Lawyers Association as well as the Massachusetts Bar Association and the Barnstable County Bar Association, and has been qualified as an expert in the Superior Court to give testimony regarding Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance (Massachusetts General Law Chapter 176D). Mr. Strumski is admitted to practice law in the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts. He holds a B.S. degree as an honor graduate of Northeastern University in 1978 and obtained his J.D. from the New England School of Law in 1987.

Why Collaborative Divorce is Different & Better

By:  Anthony C. Adamopoulos
MDRS Neutral and Guest Blogger

THE DIFFERENCE:

The Collaborative Divorce Process is so much better because it is the only process where the attorneys are committed, by written agreement, to concentrate on settlement, AND, if they cannot get a settlement, they cannot represent you in litigation.

The difference is truly transformative in divorce law. In litigation, divorce attorneys cannot say that their first and only priority is to get a settlement. Collaborative Attorneys can and do.

THE PROCESS:

First, you must be committed to a quick and less expensive resolution of your divorce; rather than winning in court litigation.

Once you are committed to a quick and less expensive resolution, you each select your own Collaborative Attorney who is specially trained to practice Collaborative Divorce. Not all attorneys are certified to be Collaborative Attorneys.

You, your spouse, and the two attorneys then sign a contract committing all efforts to resolution.

The next real difference from litigation is that you and your spouse, with the guidance of your Collaborative Attorneys, will then use two key experts – a Financial Neutral and a Facilitator Neutral. Your Facilitator expedites the process by helping you and your spouse identify short and long term goals and overcome inter-personal roadblocks. Your Financial Neutral expedites the process by analyzing the unique needs of your family, identifying tax provisions related to those needs and creating realistic plans to preserve family income and property. And, the neutrals will bill at fees below the attorneys’ fees. This means that unlike other divorce situations, if, for example, you and your spouse disagree over a parenting plan, the Facilitator Neutral will help resolve the parenting problem at a lower rate than the attorneys’ fees. Or, if there is a disagreement over whether to sell the house, the Financial Neutral will work on a resolution rather than the two higher paid attorneys.

In resolving issues that are delaying settlement, neither the attorneys nor the neutrals will be concerned about “winning”; they will concentrate on meeting the real needs of you and your spouse rather than any psychological “want to win”.

The Elements of Disputes

by Timothy J. Langella
MDRS Neutral and Guest Blogger

Business disputes come in all shapes and sizes, and often have both monetary and emotional elements.  Take this case, for example:

Two brothers-in-law go into business together and form a partnership or closely held corporation, after marrying their respective wives (who are sisters).  After a rocky start, the business is soon notably successful.  The two couples are close:  they work, vacation, and even socialize together.  They each start a family and the cousins seem like siblings for many years. But as the cousins age, they grow apart, causing tension among the four parents.  Small issues become large ones, tensions escalate, and the previously-strong partnership is in peril.  The men begin to bicker and argue at work, one claims the other is not as dedicated to the business, and claims of unreasonably-inflated business expenses are made – and categorically challenged.  Eventually, the two sides don’t even speak to each other, the sisters are alienated, and a lawsuit claiming breach of contract, fraud, and breach of fiduciary duty is filed.

Litigation may be able to resolve the financial aspects of this dispute – after months, if not years, of paying lawyers and experts to sort through the relevant information – but it willnever resolve the family dynamic issue.  Mediation is the very best option to not only contend with the dispute, but to deal with the factors that have also arisen beyond the business issues.  Mediating such a matter not only keeps decision-making in the hands of the partners, but also offers perhaps the best chances at preserving (hopefully improving) these complicated relationships.

An experienced mediator, skilled in partnership disputes, can help the parties air and resolve all aspects of their grievances.  Quickly, efficiently, and less costly than protracted litigation, mediation offers unequalled ROI.

What is the Difference Between Divorce Mediation and Collaborative Divorce?

MEDIATION is an independent, voluntary, confidential process conducted by a mediator, who is neutral. Attorneys are not required. The mediator will:

  • Assist you and your spouse in identifying those issues preventing settlement.
  • Explore various avenues to resolution.
  • Develop a settlement resolution acceptable to you and your spouse.
  • Will prepare a Separation Agreement for presentation to the Court. (Only mediators who are attorneys may draft Separation Agreements.)
    The two of you will select the mediator. The mediator’s fees will usually be split between the two of you, however, the two of you may agree to a different responsibility for the fee.

The major benefits of Mediation are:

  • The mediation is private.
  • The mediator will provide all the time you and your spouse need to work on a resolution.
  • Experienced mediators have settlement rates of between 85% and 97%.
  • An attorney need not be present at mediation sessions.

In COLLABORATIVE DIVORCE, you, your spouse, your Collaborative lawyers and Coaches make up the Collaborative Team. The Team has one goal, the quick and efficient resolution of all issues without trial litigation.Coaches make your divorce process efficient and usually less expensive. The most common Coaches are the Facilitator and the Financial Neutral. The Facilitator expedites the process by helping you and your spouse identify term goals and overcome inter-personal roadblocks. The Financial Neutral expedites the process by analyzing the financial needs of your family, identifying tax provisions related to those needs and creating realistic plans to preserve family income and property. Coach hourly fees are often much lower than attorney hourly fees.

In Collaborative Divorce, attorneys are specially trained and certified.

Your Professional Collaborative Team will:

  • Identify issues regarding the children, support and property division that are preventing resolution.
  • Divide primary responsibility for resolving those issues. For example, issues dealing with the children will be addressed primarily by the Facilitator Coach; issues about the amount of support needed will be addressed by the Financial Coach.
  • Have the required Separation Agreement, Petition for Divorce and Affidavit prepared, executed and filed.
  • Have your attorneys accompany you to the Probate and Family Court for your divorce hearing before a Judge.


The major benefits of Collaborative Divorce are:

  • From beginning to end, you are with and “supported” by a team dedicated to getting you and your spouse divorced quickly and efficiently.
  • All issues are dealt with and resolved in confidential sessions.
  • Your attorneys handle all the administrative court matters to get your divorce papers filed, docketed and scheduled for a hearing.
  • At your divorce hearing your attorneys will respond to questions of the judge, thereby avoiding rescheduling of the hearing because you did not have an attorney to correctly answer questions.


by Anthony C. Adamopoulos

Richard T. Corbett, Esq.

Boston, Massachusetts

EDUCATION: Suffolk University Law School; University of Massachusetts at Boston.

LEGAL EXPERIENCE: Attorney Corbett is Of Counsel at Williams & Associates, concentrating in providing Alternate Dispute Resolution Services as a neutral mediator and arbitrator, as well as select civil litigation and appeals; and Of Counsel at Williams & Associates, concentrating in insurance defense civil litigation. For more than thirty years Attorney Corbett has been engaged in trial practice, representing insurers and their insureds as well as injured plaintiffs. His trial experience includes trials in virtually all types of tort matters, including automobile, general liability, products liability and medical malpractice cases.

His experience includes trying cases involving such diverse matters as wrongful death, spinal cord injuries, traumatic brain injuries, burns, amputations and numerous other types of personal injuries. He also has experience in employment and insurance coverage disputes. He is a certified trial advocacy instructor as well as a certified mediator.

Previously, Mr. Corbett was Counsel to  Guaranty Fund Management Services in Boston (2007-2009); an independent lead trial counsel to the Law Office of Peter L. Elley in Quincy (1997-2003); an independent defense counsel to Curtin, Murphy & O’Reilly in Boston (1998-2001); senior trial counsel to  the Law Office of Maria K. Mendros (previously Law Office of Philip J. McCarthy) (1982 – 1987; 1990 – 1997); senior associate at Griffin & Goulka (1988 – 1990); an independent contractor at Avery, Dooley, Post and Avery (1987-1988); and In house counsel to the Law Office of John P. Linehan (1977 – 1982).

NADNOTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Attorney Corbett has been a certified mediator since 2002, has received an AV Preeminent Rating by Martindale Hubbell since 1994, and has been a certified trial advocacy instructor through the NITA since 1992. Mr. Corbett has lectured frequently for several groups, including Massachusetts Continuing Legal Education, the Massachusetts Bar Association, the Boston Bar Association and the Massachusetts Academy of Trial Attorneys. He is also a member of the MA Chapter of the National Academy of Distinguished Neutrals.

AREAS OF SPECIALITY

  • Amputations
  • Burns
  • Employment
  • Insurance
  • Spinal Cord Injuries
  • Traumatic Brain Injuries
  • Wrongful Death

Paul R. Kelley Esq.

Lexington, Massachusetts

EDUCATION: Boston University School of Law (J.D. 1978); Tufts University (B.A. cum laude 1978).

LEGAL EXPERIENCE:  Mr. Kelley is a full time mediator and arbitrator hearing claims for personal injury, employment discrimination, professional malpractice, and product liability.

A 20-year trial attorney with over 150 jury trials conducted, he helps litigants mediate their claims on the basis of likely admissible evidence. He assists plaintiffs and defendants to form a realistic expectation of a potential jury award. His extensive knowledge of trial practice and mediation, combined with strength in handling emotionally difficult issues that arise during a session, leads to mutually satisfactory settlements. As an arbitrator he conducts full and fair hearings issuing just awards.

Before he became a full-time mediator and arbitrator, Mr. Kelley held the following positions: Neville & Kelley, Litigation Partner 1989 – 2001; Segal, Moran & Feinberg, Associate 1986 – 1989; Assistant District Attorney, Essex and Middlesex 1982 – 1986; National Association of Government Employees 1979 – 1982.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Lecturer and trainer in mediation and negotiation. Former clinical trial instructor at B.U. Law School. Professional mediation training with certification pursuant to G.L. c.233 Section 23C.

AREAS OF SPECIALTY:

  • Automotive
  • Bicycle Accidents
  • Medical Malpractice
  • Personal Injury
  • Police Disputes
  • Premises Liability
  • Slip and Fall
  • Subrogation Matters
  • Wrongful Death

Divorce Arbitration is the Way to Go! So……

by Anthony C. Adamopoulos

A decision of our Appeals Court, Gravlin v. Gravlin, is helpful for those facing divorce.

For collaborative divorce attorneys and divorce mediators, the decision confirms that arbitration is the viable alternative to court litigation for resolving a single issue or even taking the place of a full court trial.

In Gravlin, the Appeals Court acknowledged “… arbitration has long been recognized as a valid means of resolving disputes between divorcing parties.” This Blog has often praised the value of arbitration as an alternative to divorce litigation; with Gravlin, the Appeals Court stamped an imprimatur of sorts on divorce arbitration.

While arbitration is available to replace a public court trial, it is also available if collaboration or mediation reaches a deadlock (a stalemate on one or two remaining issues); then, it is time for divorce arbitration.

When parties follow a simple process, the Appeals Court promises a “… strict standard of review [that] is high[ly] deferential…” to an arbitration award.

What does the simple process involve? The simple process requires that:

Respective counsel advise each party.
Parties freely enter an Agreement to Arbitrate.
Parties knowingly waive a court trial and submit to arbitration.
If there is any trial court review of an arbitration award, the review will be limited to determining:

The arbitrator’s award was confined to what he/she was asked to decide;
The award did not give relief that is prohibited by law;
The award is not based on fraud, arbitrary conduct, or procedural irregularity in the hearing.
(In my experience, the selection of an experienced, knowledgeable arbitrator will result in a positive review and enforcement of the award.)

For collaborative attorneys and mediators, Gravlin is another reason to recommend arbitration for settlement stalemate.

For parties facing divorce or divorce stalemate, arbitration is an alternative to a costly, lengthy and publicly litigated trial.

Anthony is a divorce arbitrator, collaborative attorney and divorce mediator. His office is in Salem.

Brian Jerome selected as Super Lawyer for 2018

FOR IMMEDIATE RELEASE:

BRIAN R. JEROME, MDRS Founder and CEO, selected as 2018 Massachusetts Super Lawyer

DR Industry leader Brian R. Jerome brings valuable knowledge and experience of out-of-court Dispute Resolution to those seeking mediation and arbitration solutions as a means to achieve faster, less frustrating, and more effective resolution to business and personal disputes.  

October 30th, 2017 – BRIAN R. JEROME, MDRS founder and CEO, has been selected to the 2018 Massachusetts Super Lawyers list.  Each year, no more than 5% of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.  The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.  The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country.  For more information about Super Lawyers, visit SuperLawyers.com.

Attorney Jerome, Chair of the Massachusetts Bar Association’s DR Section, is available for questions and interviews.

About MDRS – With offices in Boston and Salem (MA), Massachusetts Dispute Resolution Services (MDRS) provides a full range of out-of-court mediation and arbitration services to private individuals, attorneys, business, labor, and the insurance community.  MDRS, one of the first DR providers in Massachusetts, offers a professional panel of over 35 select neutrals, including retired judges and experienced attorneys.  Including cases handled by the panel, they have resolved more than fifteen thousand cases for their clients.  Massachusetts Dispute Resolution Services provides mediation and arbitration services to parties seeking equitable settlement of their disputes without the time, expense, and frustration which often accompany the more formal trial court system.  MDRS neutrals provide a wide spectrum of experience paired with a wide range of dispute resolution processes designed to meet the parties’ interests in solving disputes equitably and skillfully.

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If you would like more information, please contact Marketing Director Sheri Wilson at (800) 536-5520 or swilson@mdrs.com.

Massachusetts Dispute Resolution Services (MDRS)

60 State Street, Suite 700
Boston, Massachusetts 02109
Phone: (800) 536-5520
Fax:     (978) 741-2368

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MBA’s Conflict Resolution Week

By  Michael A. Zeytoonian, Member of the MDRS Panel of Neutrals/Guest Blogger

An annual national tradition in the legal community is the celebration of “Conflict Resolution Week” (CRW) and “Conflict Resolution Day” (CRD) on the third week and the third Thursday of October respectively. This tradition reportedly started here in New England by the New England Association for Conflict Resolution (NE-ACR). It is a week and a day to shine a spotlight on one of the most important bodies of work that lawyers and mediators do – help people effectively resolve disputes. This year, CRW will be from October 16 through October 20, with October 19 as CRD, and the Massachusetts Bar Association (MBA), through its Dispute Resolution Section, will be celebrating these events in a big way, from Springfield to Andover to Marshfield to Cambridge to Boston!

Dispute Resolution (DR), historically referred to as “alternative dispute resolution” or ADR, was once an alternative to going to a trial to get a case resolved. But recent trends show that people are increasingly choosing to resolve their disputes using these other ways of resolving their disputes more so than going to trial, and often in place of the entire litigation process. In the early 1980’s mediation was rarely used, arbitration was just beginning to be used more regularly by businesses and Collaborative Law (CL) had not even been created yet. (CL was created through the efforts of one attorney in Minnesota in 1990). Today, mediation is the most frequently used means of resolving disputes, even more so than trials or arbitration. As a result, many practitioners and organizations, including the Massachusetts Bar Association’s (MBA) Dispute Resolution Section Council, have “dropped the A” in ADR and now refer to these other options as either DR or DRA (dispute resolution alternatives), reflecting the fact that people are intentionally turning to mediation, CL or arbitration to resolve their disputes. Trials today are rare – 97% of cases filed in courts settle and do not go to trial – and have become the default, to be used only when another DR process doesn’t result in a full resolution of the matter.

To celebrate the emergence of DR, and to help spread the word throughout the Commonwealth about what DR is, how it works and when and how it is being used to successfully resolve disputes, the MBA, through its DR Section Council’s efforts, is offering five different events, one on each day of CRW and each one in a different region of our state. All five the programs are free and open to the public. The MBA encourages anyone interested in DR as well as lawyers, practitioners of DR, judges, law school students and the general public to attend one or more of these programs.

Conflict Resolution Day on October 19 will feature a gala Reception at the John Adams Courthouse’s Second Floor Conference Room in Boston, starting at 5:30 pm, with a program opened by our two Chief Justices Ralph D. Gants and Paula M. Carey and featuring as its keynote Kenneth Weinberg, a man who has done important work in several conflict situations including 9/11, the Boston Marathon Bombing and other hotspots and events around the world.

The Peacemaker, a documentary film on the outstanding work around the world’s trouble spots of one man, Padraig O’Malley, will be the featured focal point of the Friday, October 20 event. The screening of this film will begin at 7 pm at Harvard Law School’s Ames Auditorium. After the film, both Mr. O’Malley and the film’s producer/director James Demo will be part of panel about the film and Mr. O’Malley’s ongoing work. This event is co-sponsored by the Harvard Program on Negotiation.

Other events around the state will recognize the work of those hundreds of volunteers working all through the state in court-connected community mediation programs (October 16 in the afternoon at the Hall of Justice in Springfield), peer mediation and other programs designed to address and resolve youth and community disputes (October 17 in the late afternoon at Massachusetts School of Law in Andover) and the use of mediation and CL to resolve disputes arising out of families in transition – divorce, inheritance and family business succession matters (October 18 in the early afternoon at the Ventress Memorial Library in Marshfield).

We encourage you to attend one or more of these events, learn more about DR and encourage others who may be interested in knowing about the many options available to them for resolving their legal issues to join in the celebration. For more information or to RSVP, please visit the MBA’s website at www.massbar.org.

Dispute Resolution Day in Massachusetts

Governor Baker has declared October the 19th  2017 Dispute Resolution Day in Massachusetts!  You can read Gov. Baker’s full announcement here: https://www.massbar.org/media/1807084/dr%20day%20proclamation.pdf  The day falls within Conflict Resolution Week and Baker urges all citizens of Massachusetts “to take cognizance of this event and participate fittingly in its observance.”  Citizens deserve education and access to ALL appropriate forms of dispute resolution. October 19th will be a day to empower the public and improve access to conflict resolution. The Massachusetts Bar Association’s Dispute Resolution Section invites you to attend a FREE event on 10/19/17 from5:30-7:30 pm at the John Adams Courthouse in Boston featuring Attorney Kenneth Feinberg, best known for his special master work on the September 11 Victim Compensation Fund and his administration of Boston’s One Fund.  Massachusetts Supreme Judicial Court Chief Justice Ralph D. Gants and Trial Court Chief Justice Paula M. Carey will also be speaking at the event. We hope you are able to join us!  https://www.massbar.org/publications/e-journal/2017/september/09-28/dr-conflict-resolution-week

MDRS Reader Ranking Announcement

MDRS is pleased to announce being named 2nd place in the category of Dispute Resolution in Lawyers Weekly’s 2017 Reader Ranking Awards! With a strong finish behind JAMS (the self-proclaimed “largest private ADR provider in the world”), MDRS is truly honored to be recognized as the DR industry leaders we continuously strive to be. Stay tuned for more, because we’re not sitting still (a comfort zone is a beautiful place, but nothing ever grows there)! Our heartfelt thanks to everyone who voted for MDRS. #We’reNotNeutralOnTheSubjectOfLeadership #When2ndPlaceIsAWinner #DRrocks

William F. Quinn, joins the MDRS Panel of Neutrals

We are also very excited to announce the addition of William F. Quinn, Esq. to our panel of neutrals. Bill brings considerable experience specializing for more than 30 years in all aspects of residential and commercial real estate.

As a founding shareholder of his firm, Tinti, Quinn, Grover & Frey, P.C., Bill is a highly experienced expert in all areas of real estate law as would affect any residential or commercial real estate situation or controversy.  He has been formally trained as a facilitative mediator, and has settled in quite easily to mediating actual cases, as helping people resolve disputes is how he always practiced law; the merger of field expertise, training, and experience has allowed a very natural expansion of the services he is able to provide clients.

We welcome you to view Bill’s biography here, and to call us at (800) 536-5520 to inquire as to his availability to assist with your dispute.

Timothy J. Langella, joins the MDRS Panel of Neutrals

It is with great pleasure that we announce the addition of Timothy J. Langella to the MDRS Panel of Neutrals.  Along with considerable experience in business and economic development, Tim brings over 30 years as a litigator, in-house general counsel, and government employee to his now exclusive work in Dispute Resolution.

Focusing on both stated interests as well as those revealed in session, Tim excels in pinpointing the issues and helping parties bridge their differences so that a mutually-beneficial resolution can be achieved.  His experience has developed in him a belief – which translate to a personal code of exemplary service – that the most valuable aspects of any DR process are efficiency, cost-effectiveness, and confidentiality.

We invite you to read more about Tim here, and to call us at (800) 536-5520 to inquire as to his availability to assist with your dispute.

The Case for the Joint Opening Session

By Brian Jerome

Particularly here in Massachusetts, long-held practice has been to start a mediation with a joint session among all parties and their counsel before breaking into individual private caucuses. A joint session is a meeting facilitated by the mediator where opposing parties and their attorneys face each other and speak directly to each other, rather than through the mediator. This gives disputing parties the opportunity to impart their perspectives, and address and listen to the other party directly.
Most Massachusetts neutrals would agree that over the past years there has been a decline or growing resistance to the joint opening session. Studies suggest that on the West Coast, use of the joint session has declined even more significantly.

Driving this change is the apparent belief that the joint session has lost value. Whether because that step of the process has become potentially too confrontational and counterproductive, or that particularly in more complex matters, the lawyers have prepared detailed mediation briefs, the case has been fully discovered, and all sides understand the other’s position, everyone just wants to get down to the business of negotiating without any distractions. Lawyers frequently assert that “everyone knows what the case is about,” or “we don’t want to have a meeting where people will just get upset,”
If the parties or their counsel approach the joint session as an opportunity to lash out at their opponents, the resulting alienation undoubtedly pushes the parties farther apart. And there are certain cases where it may not be appropriate or useful for the litigants to meet in person, including cases involving abuse claims or where personal animus is so extreme that bringing the parties together in the same room would be detrimental to the process. I have mediated cases where even counsel can’t spend much time together in the same room before fireworks erupt. Other options do exist: there are numerous forms of joint sessions such that the process design can include only the attorneys or only the participants most relevant to the matter.

Before deciding to forego a joint opening session, parties and their counsel may wish to consider some downsides of such a decision, and discern how that decision may result in losing some of the unique advantages of a carefully sculpted and mediator-moderated opening joint session.

As a commencement, the joint session allows the mediator to set the tone of the conference with all parties present, helping to ensure all participants concur and understand each other’s expectations and starting standpoints. For the mediator, the joint session is the best chance to establish the nature, purpose, and integrity of the mediation process, to get all parties committed to the process, and to work through difficult problems. The mediator is then able to provide a deeper understanding of their role, covering topics such as neutrality, confidentiality, risk assessment, party self-determination, time, cost savings, and closure.

Even when counsel or the parties do not wish to make formal opening presentations, they should be willing to remain together in a joint session to answer basic factual questions, identify key discussion topics, seek agreements regarding the law, streamline the issues, and/or consider other process adjustments. Formal discovery may not have been completed prior to mediation, or is inadequate to address key information useful for settlement; in such cases a joint session could provide information integral to resolution.

Foremost, however, a joint session provides almost unlimited opportunities for an effective mediation advocate to share and significantly advance the client’s interests and settlement goals, and to persuade the key decision-makers on the other side of the strengths of their case. In most instances, this group has never met face-to-face before the mediation session. There has likely been no forum or opportunity whereby the parties or their counsel have had the opportunity to fully set out their fundamental positions. Concern may also exist that critical messaging is not being heard or understood by decision-makers because it is being filtered through opposing counsel or administrators.

For example, plaintiff’s counsel in a mediation is often seeking to influence an insurance representative who has the ultimate settlement authority. The joint session may be the first chance to speak directly and in person to this critical decision-maker and express your view of the case, focusing on how you would like to approach settlement. To forego making an opening statement then enlists the mediator to be solely relied upon to transmit arguments of facts and law in private caucuses with the other side. No matter how talented and well prepared the mediator is, it is the parties and their lawyers who are best suited to directly present the strengths and basis of their own case.

Parties and counsel can also choose to provide pre-mediation briefs where appropriate directly to the opposing decision-makers and not keep them confidential to the mediator, so that the in-person presentation enhances the pertinent facts and law that constitute the burden of the case. Keeping mediation briefs confidential to the mediator may in certain circumstances be warranted, but in doing so, the mediator is again being relied upon to transmit your significant arguments to the opponent, particularly when the joint opening statement is also waived.

Most mediators have seen how an effective opening statement can be coupled with concise demonstrative evidence, a PowerPoint presentation that is neither too lengthy nor too wordy, photographs, key documents, or portions of key deposition testimony. This presentation has the effect of showing the other side that your case is well prepared and will be effectively tried if settlement is not reached.
With the already vanishing jury trial, joint opening sessions provide the parties with the closest thing to their “day in court”. While this may not be true for a large insurer or multinational corporation, the first-time consumer of mediation may come to the table expecting to be a direct participant in the process, and wants to feel that their positions and interests have been advocated, described, and heard by all – particularly the opponents – creating a feeling of direct participation and ownership of the process.

The joint session may be the only time an injured or aggrieved party feels heard; this allows them the opportunity to directly or through their counsel state their perspective and perhaps express anger or frustration. This venting is often like letting air out of a balloon: once feelings are expressed, the mediation can get to the real business of a negotiation no longer emotionally charged. Concerns over the possibility of such emotions getting out of hand are real, but an experienced mediator can minimize that possibility through pre-session instructions or pre-mediation conferences. A skilled mediator will also sculpt a process where parties and counsel are instructed to keep the tone positive, speak one at a time in uninterrupted fashion, and avoid unnecessary arguing or grandstanding.

Parties can certainly get their voices heard without a joint session with a mediator shuffling back and forth from room to room. A mediation that includes some joint process, rather than just private caucusing, however, tends to leave the parties with a greater sense that the process was fair and just. Studies have revealed increased party satisfaction and greater likelihood that the settlement agreement will be adhered to when the parties are involved directly in the process.
If the parties have any interest in a continuing relationship, relationship repair usually begins in the joint session, where disputants can communicate directly in a controlled environment. This is particularly critical where the parties desire to continue to work together, engage in a business venture, or maintain peace where they will continue to encounter one another after the mediation is over.

The greatest strength of a case may rest squarely with the plaintiff or the party directly. For instance, if a plaintiff makes a good witness and presents well, the plaintiff’s attorney may want the opposition to see and hear that in the joint session. Many insurance adjusters and key decision-makers come to mediation wanting to observe the plaintiff directly as their efforts to put a value on a case continue. Where a party’s demeanor or presentation may not be helpful to their case, counsel can choose to do all of the talking and reserve comments from their client to private caucuses with the mediator.

It may be important for an entrenched litigant to hear the other side’s point of view in a joint session as well. This is a useful reality check in many circumstances, allowing them to gain a better awareness and understanding of the other side’s positions and interests, and to more fully understand the risks and uncertainty of proceeding with litigation. Attorneys and parties want to watch, listen, and evaluate the opposition and their counsel in the joint session so they can learn more about the strengths and weaknesses of the opponent’s case.

The joint session also provides an opportunity for counsel and/or clients to express appreciation to the other side for coming to mediation or at least acknowledge something positive such as their willingness to negotiate and hopeful anticipation toward finding a mutually satisfactory resolution. Where appropriate, the joint session might also be used to provide an apology or showing of regret from one party to the other. The most effective apologies are those delivered directly face-to-face. The mediator can help integrate any such apologies in a joint session. Such comments serve as icebreakers that set a positive problem-solving tone and are confidential under the terms of the mediation agreement.

The most valuable trait of effective DR processes such as mediation is their flexibility to fit the format to the case. Experienced neutrals can be of valuable early assistance to parties and their counsel in preparing for the mediation session and in making decisions so as to create a process that will be most productive. In many cases a pre-mediation conference call may be useful, and many mediators will proactively arrange this. Parties and their counsel are encouraged to bring to the attention of the mediator in advance any particular issues that need to be factored into the process being designed.

Conclusion:

Participating in a mediator-crafted joint session can offer unique opportunities for parties and their counsel to more fully engage in the collaborative nature of the mediation process, better advance their positions, understand more fully the positions of their opponents, and increase the likelihood of reaching lasting settlements. Before foregoing the joint session, we encourage you to speak to an experienced neutral who can assist parties and their counsel in formulating an appropriate joint session event that will take into consideration the varied factors noted above to assure maximum effectiveness and productivity.

The Case for Private Caucus

By Brian R. Jerome, Esq.:

After a joint session, the mediator may ask to have private caucuses or meetings with each party and their counsel to further explore their position and flexibility for settlement. These private caucuses, like the full mediation process, are confidential; as such, the parties often find it easier and more appropriate to discuss certain issues or their willingness to show flexibility.

The mediation caucus has been the recent target of some harsh criticism. Detractors dismiss it as simple shuttling back and forth by the neutral which keeps parties in the dark about each other’s interests, and places full control over the flow of information in the hands of the mediator. It is argued that with the absence of the opposing party, it’s easier for one side to exaggerate or manipulate the mediator. Sometimes one party fears that the other party has somehow co-opted the neutral in the other party’s favor and that the mediator is no longer unbiased when they come back into the room.

The caucus can also shift the role of the mediator from neutral to primary advocate or agent for the parties, both hearing and making the essential arguments. There also exists a risk that the mediator may inaccurately convey information, or do so out of context. There is, as well, also the no argument that a mediator has too much power powerto influence the process and outcome when they are the only person who has seen how the parties and their lawyers are feeling and acting.

To some, the key problem with the private caucus is that it thwarts a fundamental mediation benefit: the opportunity for those most intimately familiar with the details and history of a dispute to be directly involved in its resolution. Indeed, from issue identification to problem-solving, direct communication between the parties is often the most productive and efficient way to advance toward resolution.

Perhaps the most significant apprehension associated with caucusing is the potential for mediator violation of confidentiality, either inadvertent or purposeful. A mediator needs to be unconditionally vigilant not to reveal confidential information. In fact, it’s strategically valuable that the mediator explain to the parties that they will not divulge what is said in caucus without that party’s consent.

Some also argue that caucusing generally results in but a series of shuttled offers rather than the processing and exchange of views, and subsequent change of perception and awareness, that are the essence of many successful mediations.

There are differences in the viability of private caucusing depending upon the type of case involved as well. For example, in divorce and custody disputes, where the parties will be dealing with each other – even if through only limited alliance – well after the mediation has concluded, face-to-face negotiations seem oftentimes best suited toward achieving resolution.

Notwithstanding these criticisms, private caucusing is an extremely useful tool in the mediator’s arsenal, allowing the neutral to learn about the elements of the dispute and also the parties themselves, while lessening tensions by providing parties the space to vent and to feel understood by the mediator. Caucusing provides an opportunity for a mediator to help clients process the messages sent by the other party, to give parties care and attention, and to promote resolution of issues individually with each of the parties. It is powerful for the parties to make their views known, and to feel the mediator understands their perspectives. Caucuses provide the opportunity to create an effective client-mediator bond. When the mediator is demonstrably neutral, credibility is established and concerns about an abuse of process are greatly reduced.

The viability of caucusing depends, quite often, on the type of case and the parties’ goals. In civil case mediations, caucusing is a more integral and helpful feature of the mediation process. The parties more often than not will have nothing or little to do with each other post-session, thus, the burden that caucusing could pose to any future relationship is less commonly an issue. Particularly in civil cases when money or settlement value is the key concern, the parties will come to the mediation with their lawyers, understanding that in their situation a strong caucusing element with features of shuttle diplomacy by the mediator is generally very effective.

Whatever the reason for caucusing, there are a few things good mediators establish if they are going to use this technique. Upon commencement, experienced mediators will explain what private caucuses are, their confidential nature, and that they may be held at some time during the mediation. The parties should be aware of how caucuses can help, and that either the parties or the mediator may request a caucus.

Confidentiality is a principal element that mediators must consider before they employ caucuses. Although a caucus may involve confidential information, it’s not about telling secrets or about excluding individuals, and it is assuredly not about leveraging position based on confidential information. Rather, these private discussions should be kept privileged by the mediator, and only those proposals that a party specifically authorizes a mediator to share with the opposing party should then be divulged. The mediator can be proactive and ask for permission to share information and proposals they believe will move the mediation forward.

Many mediators chose a process whereby everything said in the caucus may be shared except what the participant wants kept confidential. The other option is to explain that everything said in the caucus will be kept confidential except things specifically identified by the participant that may be shared. The former process permits the neutral to utilize their skills and experience to determine what, if anything, should be shared or held back when working with the opposing parties in order to best facilitate the process to the benefit of all involved.

Time is a major consideration in managing caucus sessions. Managing time so that the opposing party is not left alone for too long is typically advantageous. The party not in caucus may be left feeling worried or stranded, particularly after the momentum generated from the initial joint session. Before breaking into caucus sessions, it helps to reassure the parties that the length of time in these private meetings may be different with each party and is not entirely predictable.

The key value of the caucus session is that parties can talk frankly and freely about the dispute, compared with the more guarded expressions experienced when meeting jointly. The private and confidential nature of the caucus tends to decrease anxieties, allowing the parties to share case strengths and weaknesses, their view of the opposition’s case, and their underlying interests, as well as allow for suggestion of new ideas for solutions.

A mediator can ask questions in confidence that a party might not want to answer in a joint session. A skilled mediator, particularly in private sessions, is likely to discuss with each party the realities and alternatives facing them if, for example, they decide to go to trial. Most parties appreciate candid discussion regarding their chances of a verdict in their favor, information on a likely award, an estimate of time it could take to get to trial, and how much it might cost financially and emotionally to go through a trial. In private caucuses, the mediator can also offer negotiating advice and work to develop settlement proposals.

Some parties are resistant to hearing such realistic messages, even from their own attorneys; they may have overly optimistic assessments of what a trial may result in should they decide not to accept settlement. The mediator can be quite effective, as an impartial and experienced neutral, in dealing with unwarranted optimism.

Sometimes the relationship between the parties has become problematic. A caucus can be called to allow parties to vent intense, built-up emotions without aggravating the other party. Caucuses are frequently helpful in clarifying misperceptions. These private meetings are essential when used to address unproductive or negative behavior, and to limit destructive communications between the parties.

Conclusion:

Mediators orchestrate the use of caucuses to fit the nature of the case involved, and toward the needs and interests of the parties. A private, confidential caucus is a valuable tool which can produce impressive results. Utilizing this procedure the parties have an opportunity to openly discuss the dispute, providing needed grounds for progress of the matter, compared with less optimal information gleaned during meetings where guarded expressions of information are invoked because the other party is present. Private caucuses put the parties at ease, allowing uninhibited discussion of their position’s advantages and drawbacks, consideration and analysis of their opponent’s case, and exploration of latent interests. Private caucuses allow the parties to thoughtfully and intentionally work with their mediator to reach relevant and productive solutions for resolution.

Timothy J. Langella, Esq.

tjlFramingham / Boston, Massachusetts

EDUCATION: Boston University School of Law, 1983, J.D., magna cum laude; Williams College, B.A. in Political Science and English, 1980

LEGAL EXPERIENCE: Attorney Langella began his exclusive DR practice in 2015 after a career that included twenty-six years as a trial attorney at two prominent Boston law firms, four years as General Counsel at a publicly traded medical device company and two years as Chief of the Business, Technology & Economic Development Division at the Massachusetts Attorney General’s Office. Over the years, Mr. Langella has litigated, mediated and/or arbitrated hundreds of disputes throughout the United States, as well as internationally.

From April of 2013 through June of 2015, Mr. Langella was Chief of the Business Technology & Economic Development Division at the Office of the Attorney General. There he advised the Massachusetts Attorney General from the perspective of the business community on a host of legal and policy matters that affect business activity and the economy and made recommendations relative to the impact of state laws and regulations on businesses in an effort to balance the intended policy objectives against the unintended business consequences.

From 1992 through March of 2013, Attorney Langella was a member/trial attorney at Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. While at Mintz, Mr. Langella focused on complex commercial cases, such a partnership/shareholder disputes, fraud and misrepresentation actions, breach of contract/breach of fiduciary duty claims, and failed business transactions.

From 1988 to 1992, Attorney Langella served as General Counsel at Healthco International, Inc., a Boston publicly traded medical device company with annual revenues of over $450M+ and 3,000+ employees. At Healthco, he was responsible for all domestic litigation, real estate leases and transactions, vendor contracts, employee claims and issues, insurance claims and policies, company trademarks, and acquisitions.

From 1983 to 1988, Attorney Langella was an Associate at Goodwin, Procter & Hoar where he gained substantial experience in the defense of product liability claims and commercial litigation matters on local and national levels. He managed hundreds of cases dealing with complex and evolving legal issues for clients such as Eli Lilly, B.F. Goodrich, Union Carbide, and W.R. Grace.

With a unique background that includes private, government and in-house counsel experience, Mr. Langella tries to quickly identify the key factual, legal, and emotional issues that form the basis of the parties’ conflict, and then utilizes a combination of facilitative and evaluative mediation techniques, depending on the needs of the parties.

AREAS OF SPECIALTY:

  • Business Dissolution
  • Commercial/Business
  • Consumer Fraud
  • Contract Disputes
  • Family Businesses
  • Franchise
  • Mergers & Acquisitions
  • Partnerships
  • Real Estate
  • Shareholder Disputes
  • Unfair Competition
  • Venture Capital

Exceptions to Mediation Confidentiality

by Brian R. Jerome, Esq.

In an important decision, the Appeals Court has decided in ZVI Construction Company, LLC v. Levy, et al., (Docket No. 15-P- 359) (Oct. 6, 2016) that Massachusetts should not recognize a “fraud exception” to the confidentiality of mediation among business litigants who were represented by counsel. Judge Cynthia J. Cohen wrote on behalf of the Appeals Court that whether to recognize a fraud exception to the confidentiality of mediation communications has been “an undecided question in Massachusetts.” In rejecting a fraud exception, she noted that by passing G.L.c. 233, §23C (Massachusetts’ Mediation Confidentiality Stature), the legislature “has recognized the importance of preserving the confidentiality of communications made during mediation,” She also noted that even the drafters of the Uniform Mediation Act, adopted by 11 states and Washington, D.C. “specifically considered and rejected” a fraud exception to the protection given to mediation communications.

In ZVI a contractor alleged that it had reached an agreement with a business at a mediation whereby the business, about to receive a $250,000 payment from a former partner to settle a separate dispute, fraudulently represented that the money would be received and then passed through to the contractor. When it was not so paid, the contractor sued the business and theirattorney and firm, saying the attorney fraudulently induced it to settle with a statement he had allegedly made during mediation that the funds would be transferred when received. The full text of the opinion can be accessed at : https://www.mdrs.com/wp-content/uploads/2016/10/ZVICONSTRUCTIONCOMPANYLLCvs.FRANKLINLEVYanother.pdf

This decision is important because confidentiality is at the heart of every mediation. It is what allows for candid disclosures of private information and creates and preserves a sense of security for the parties during settlement discussions in order to generate the possibility of settlement. It is in essence an assurance that that no damage will be done to their legal case by what is done and said during the mediation.

The Massachusetts Mediation Confidentiality Statute, General Laws c. 233, s. 23C, is now over 30 years old and was created when mediation was in its infancy in Massachusetts. Yet there have been very few cases presented seeking exemptions from its blanket privilege against disclosure of information shared in the presence of a qualified mediator, despite the revolutionary expansion of the mediation field.

The recent decision in the ZVI case correctly states that s.23C does not include an exception for fraud, nor did the further written mediation agreement entered into by the parties with the assistance of counsel. As such, the Court correctly refrained from creating a fraud exception to s.23C nor the confidentiality agreement separately entered into by the parties.

Some eleven states, but not Massachusetts, have adopted the Uniform Mediation Act (UMA) which carves out certain exceptions to non-disclosure where the societal interest in obtaining information contained in mediation communications may be said to outweigh its interest in the confidentiality of the mediation process. Examples of this include, but are not limited to, communications concerning commission of or planned commission of a crime, child abuse and neglect, evidence that a person poses a danger of physical harm to himself or others, to prove or disprove a claim of professional misconduct or malpractice filed against a party or mediator, and allowance for a waiver of privilege by the parties. As noted by the ZVI Court, an exception for fraud was considered by the authors of the UMA but not included as an exception.

While some commentators suggest that some reforms to s. 23C may be worthy of consideration, where grave injustices to the otherwise unprotected or vulnerable may occur without disclosure, it more appropriately should be the legislature’s function and not the Courts to carve out such limited exceptions in Massachusetts.

Fraud however, by definition, involves misrepresentation of material facts to induce action with detrimental reliance, all factors subject to interpretation and vagaries. As in ZVI, parties, particularly those who are represented by counsel, most often have information about their opponent’s proclivities, can exercise due caution during the mediation process to avoid blind reliance on representations proffered to them and often have independent means of obtaining supporting evidence of fraud and avenues of recovery available to them.

As experienced mediators know, misrepresentations or mischaracterizations of facts is unfortunately not a rare or unique occurrence at mediations, and are more often than not appropriately dealt with within the confines of the confidential mediation session itself. That having been said, law makers should be concerned about the chilling effect on mediation confidentiality that would occur if the broad area of fraud is categorized as an exception to non-disclosure.

Question is raised for your consideration: Do you feel that any reforms need to be made to the Mediation Confidentiality statute in Massachusetts or, do you feel that it continues to properly serve the important interest in mediation confidentiality and, as such, if it is not broken, why fix it?

Have your say! Please click the link to our Facebook page to join the discussion.

Brian Jerome Selected as 2017 Super Lawyer

FOR IMMEDIATE RELEASE:

BRIAN R. JEROME, MDRS Founder and CEO, selected as 2017 Massachusetts Super Lawyer

DR Industry leader Brian R. Jerome brings valuable knowledge and experience of out-of-court Dispute Resolution to those seeking mediation and arbitration solutions as a means to achieve faster, less frustrating, and more effective resolution to business and personal disputes.  

October 18th, 2016 – BRIAN R. JEROME, MDRS founder and CEO, has been selected to the 2017 Massachusetts Super Lawyers list.  Each year, no more than 5% of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.  The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.  The result is a credible, comprehensive, and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country.  For more information about Super Lawyers, visit SuperLawyers.com.

Attorney Jerome, Chair of the Massachusetts Bar Association’s DR Section, is available for questions and interviews.

About MDRS – With offices in Boston and Salem (MA), Massachusetts Dispute Resolution Services (MDRS) provides a full range of out-of-court mediation and arbitration services to private individuals, attorneys, business, labor, and the insurance community.  MDRS, one of the first DR providers in Massachusetts, offers a professional panel of over 35 select neutrals, including retired judges and experienced attorneys.  Including cases handled by the panel, they have resolved more than fifteen thousand cases for their clients.  Massachusetts Dispute Resolution Services provides mediation and arbitration services to parties seeking equitable settlement of their disputes without the time, expense, and frustration which often accompany the more formal trial court system.  MDRS neutrals provide a wide spectrum of experience paired with a wide range of dispute resolution processes designed to meet the parties’ interests in solving disputes equitably and skillfully.

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If you would like more information, please contact Marketing Director Sheri Wilson at (800) 536-5520 or swilson@mdrs.com.

Massachusetts Dispute Resolution Services (MDRS)

60 State Street, Suite 700
Boston, Massachusetts 02109
Phone: (800) 536-5520
Fax:     (978) 741-2368

Homepage

Celebrate Conflict Resolution Week October 16-22

In 2005, the Association for Conflict Resolution [ACR] designated the third Thursday in October as Conflict Resolution Day, and later, the American Bar Association [ABA] designated the third week of October as Mediation Week.  Over the past decade, many states and other organizations have proclaimed days, weeks, and months in this honor, acknowledging the commendable and empowering services provided to all people via the many methods which comprise Dispute Resolution.

The DR Section celebrates this week with you to raise awareness about the availability of proven dispute resolution services to lessen the time, economic, and emotional costs of prolonged litigation, and the settlement of conflicts at every level.  We encourage users and practitioners to
focus this week on promoting fair, equitable, and creative solutions that are acceptable to the needs and interests of all parties involved.

Do you have a favorite Conflict Resolution activity, quote, story, or wisdom that you’d like to share? Visit our Facebook page at https://www.facebook.com/MassDispute/ or email us at caseadmin@mdrs.com

Mediate Disputes Between Owners and Trustees

By Jeanne Kempthorne

Life in a condominium can be challenging when neighbors do not see eye to eye—and they very often don’t. And when owners and trustees can’t resolve their disagreements, the condominium community suffers. An efficient and effective means of managing disputes is key to avoiding the “condo hell” that causes owners to sue or sell.

Mediation is an approach that is well-suited to disputes among people who have an ongoing relationship and need to work together to make decisions and solve problems. Facilitated discussion assists people with competing positions to hear each other out, prioritize issues, compromise and invent solutions, and ultimately to sign on to a deal they themselves make. Mediation offers more than a fix to an immediate problem. It can establish a mechanism for raising problems, communicating news and triaging projects. The process itself can reestablish long-broken lines of communication, breaking through stony silences and entrenched patterns of withdrawal or instant escalation.

To read the full article, please click here.

Recent Case Settlements

$1,450,000.00
Liquor liability death case against liquor store alleging they sold alcohol to a 20-year-old without asking for identification to confirm his legal age as 21, whereafter, upon leaving a house party, he drove off a roadway causing injuries and death to 18-year-old passenger.  Plaintiff also presented continuing claims against the 20-year-old operator’s automobile insurer and homeowner/hosts of house party.

$525,000.00
Food contamination claim of 30 year old man against high-end restaurant alleging contraction of salmonella bacterium and resultant development of Reactive Arthritis (RA), sometimes referred to Reiter’s Syndrome, a joint disease which reportedly occurs in about 2-10% of patients suffering from salmonellosis.

$1,250,000.00
Medical malpractice claim brought against ophthalmologist by 75-year-old woman who suffered permanent vision loss in left eye allegedly due to delay in the diagnosis and treatment of endophthalmitis, an infection inside of the eye, which developed after cataract surgery.

$300,000.00
Premises liability claim wherein plaintiff with significant pre-existing health issues suffered alleged permanent injuries when taking stairs due to elevators being temporarily out of service due to alleged defective maintenance by defendant building owner, where plaintiff claimed falling on non-defective stairs due to exhaustion while carrying groceries to fifth floor.

$4,800,000.00
Automobile bodily injury claim brought by 31-year-old married male alleging traumatic brain injury and subsequent seizure disorder.

$750,000.00
Wrongful death medical malpractice claim brought by parents of decedent 4-year-old alleging negligence on the part of nurse practitioner and pediatric practice resulting in death by septic shock due to Group A strep infection.

$2,000,000.00
Medical malpractice claim of 68-year-old male for failure of primary care physician to detect recurrence of prostate cancer allegedly shown on PSA testing, where defense argued any delay in diagnosis did not change the plaintiff’s subsequent treatment or prognosis.

$1,800,000.00
First party claim by a municipality against their insurer to recover for fire loss destroying school building under insurance policy with contested coverage provisions.

$1,200,000.00
Product liability claim against manufacturer of commercial coffee urn alleging defect in cover causing burn injury to minor claimant

$1,500,000.00
Automobile bodily injury claim involving pedestrian who suffered a fractured skull and brain bleed and alleged residual loss of smell and taste.

$3,000,000.00
Medical malpractice wrongful death claim brought by the estate of 44-year-old married decedent alleging failure to diagnose and treat invasive squamous cell carcinoma of the tongue.

$1,500,000.00
Wrongful death premises liability claim brought by estate of 74-year-old married decedent against nephew and niece arising out of slip and fall on hardwood floor while visiting their home.

$250,000.00
Action against insurer alleging violation of G.L.c.176D S3(9)(f) and G.L c.93A for failure to effectuate prompt, fair, and equitable settlement of an underlying tort claim once liability had become reasonably clear.

$500,000.00
48-year-old female plaintiff slipped and fell on black ice in commercial parking lot causing aggravation to pre-existing conditions in neck and back, leading to further spinal surgeries.

$850,000.00
94-year-old claimant, a passenger in vehicle operated by a friend who hit the gas instead of the brake with the vehicle subsequently striking a lamp post and tree.  Claimant suffered head laceration and type II odontoid fracture as well as alleged permanent residual injuries.

$725,000.00
Product liability and negligence case against a building owner and a manufacturer of roof-installed cooling tower on which injured worker stepped through and into operating fan causing serious leg injuries.

$725,000.00
Product liability claim wherein minor plaintiff alleged retinal damage caused by beam from laser pointer pen manufactured in China and sold through an online retailer.

$578,000.00
Subrogation claim brought by the insurer of a rock star whose home suffered property damage when a fire started in a wall where a gas-fueled fireplace had been installed by defendants, who contested responsibility as to cause and origin of fire.

$250,000.00
Construction site accident where plaintiff, an employee of an HVAC contractor, fell from ladder reportedly due to negligence of five contractors working in or about the area of the accident, all of whom contested liability and damages.  Plaintiff alleged rib fracture, small pneumothorax and possible non displaced fracture of T9 transverse process.

$600,000.00
Dental malpractice claim wherein 71-year-old patient with a past history of face and neck radiation treatment for tonsil cancer alleged negligence in subsequent dental care including tooth extraction leading to development of infection and osteoradionecrosis (ORN).

$450,000.00
Premises liability case wherein 20-year-old single student with no dependents fell from roof of apartment building to his death allegedly due to negligence maintenance of roof, access way thereto, and lack of proper guardrails at roof edge.

$1,200,000.00
Medical malpractice action for failure to timely evaluate embolic stroke and administer tissue plasminogen activator (tPA), requiring two unsuccessful hemicraniectomy procedures which were unable to adequately relieve cerebral edema, resulting in death.

$5,650,000.00
Medical malpractice claim alleging failure to recognize and appreciate a non-reassuring fetal heart rate pattern suggestive of hypoxia, and failure to expedite delivery of baby via caesarean section, thereby causing permanent neurologic injury to the minor child.

$737,500.00
Automobile bodily injury claim where learning-disabled claimant was struck crossing a secluded roadway at night in dark clothing.

$4,925,000.00
Medical malpractice claim where minor claimant suffers from cerebral palsy with spastic quadriplegia secondary to hypoxic ischemic encephalopathy (HIE) allegedly caused during birthing process.

$2,500,000.00
Automobile bodily injury claim in which the claimant allegedly suffered traumatic brain injury.

Top Massachusetts Mediation Firm Launches Foreclosure Mediation Program for City of Lynn

Massachusetts Dispute Resolution Services (MDRS) brings valuable knowledge and experience of out-of- court dispute resolution to City of Lynn Foreclosure Mediation program. Mediation gives Lynn homeowners and their lenders opportunity to explore alternatives to foreclosure.

July 9, 2014 – The City of Lynn Foreclosure Mediation Program has been created to give Lynn homeowners and their lenders an opportunity to find mutually beneficial alternatives to foreclosure. The goal of the program is to keep Lynn families in their homes and at the same time prevent vacant and abandoned homes that negatively impact property values and destabilize neighborhoods.

Foreclosure mediation is designed to enable homeowners and lenders to communicate and negotiate alternatives to foreclosure in a non-judgmental and
monitored setting. These alternatives include but are not limited to retention options such as loan modification, repayment plan, reinstatement, or forbearance agreement, and non-retention options such as a short sale, deed-in- lieu-of-foreclosure, or consent foreclosure. This foreclosure mediation program is limited to residential, owner-occupied properties that are currently the homeowner’s primary residence. Foreclosures of non-residential, investment, or commercial property are not eligible for this mediation program.

The City of Lynn is working exclusively with MDRS to use mediation as a means of exploring alternatives to foreclosure within this program. In foreclosure mediation, experienced and impartial MDRS neutrals, who have been specially trained in foreclosure mediation, work to facilitate communication and negotiations between the homeowner and lender. The solutions may vary for each situation, but the end goal is the same – to avoid foreclosure whenever possible, and to find an outcome that works for both the homeowner and the lender.

MDRS will be notified by the City of Lynn when a lender files a Notice to Cure with Lynn City Solicitors, per their city Ordinance. MDRS and Lynn United for Change, the mediation program’s loan counseling and advocacy group, will immediately attempt to notify the homeowner about the mediation program. Homeowners in Lynn will receive an easily recognizable gold envelope from MDRS in conjunction with the foreclosure mediation program. These envelopes will be easily distinguishable from other materials that may be received outside of the program; homeowners should be vigilant of foreclosure rescue scams promising immediate relief from foreclosure.

About MDRS – Massachusetts Dispute Resolution Services (MDRS) provides a full range of out-of- court mediation and arbitration services to private individuals, attorneys, business, labor and the insurance community. MDRS, one of the first ADR providers in Massachusetts, offers a professional panel of over 35 select neutrals, including retired judges and experienced attorneys. Including cases handled by the panel, they have resolved more than ten thousand cases for their clients. Massachusetts Dispute Resolution Services provides mediation and arbitration services to parties who seek equitable settlement of their disputes without the time, expense and frustration which often accompany the more formal trial court system.

MDRS neutrals provide a wide spectrum of experience paired with dispute resolution processes designed to meet the parties’ interests in solving disputes equitably and skillfully. If you would like more information, please call MDRS Business Manager and City of Lynn Foreclosure Mediation Program Manager Sheri Stevens at (800) 536-5520 or e-mail Sheri at sstevens@mdrs.com.

Massachusetts Dispute Resolution Services (MDRS)

60 State Street, Suite 700

Boston, Massachusetts 02109

Phone: (800) 536-5520

Fax: (978) 741-2368

Homepage

Preeminent ADR Firm Critical of New York Times Arbitration Series

Industry leader Massachusetts Dispute Resolution Services (MDRS) brings valuable knowledge and experience of out-of- court dispute resolution to those seeking mediation and arbitration solutions as a means to achieve faster, less frustrating, and more effective resolution to business and personal disputes.

December 15, 2015 – The New York Times recently published a three-part series entitled “Arbitration Everywhere, Stacking the Deck of Justice” (October 31, 2015) that reported on injustices and abuses within certain realms of arbitration. The series detailed some valid issues; however, through partisan perspective, vilified the ADR (Alternative Dispute Resolution) system in its entirety.

The focus of the Times series was the expanding utilization of arbitration clauses in consumer and commercial contracts among parties with unequal bargaining power; for example, a bank customer versus a large financial institution, or a low-wage employee versus their employer. These arbitration clauses are gaining popularity and are often buried in fine print. A tremendous number of consumers do not notice them when signing contracts such as credit card agreements, or if they do, most do not understand them or their relevance.

The series was critical of these clauses, which waive class-action lawsuits by consumers and present the impracticality of pursuing claims against large corporations unless the consumer is within a class action. The most troubling part of the series was the second installment, in which a small number of cases were highlighted where the outcomes appeared unjust and strongly indicated that the process of arbitration and arbitrators as a whole were somehow biased and the entire arbitral system was anti-consumers or plaintiffs.

Though the articles make a case for reform of mandatory arbitration clauses hidden in contracts – either by court decisions or legislative response – we must emphasize that the arbitration process has a long and honorable history, and should justifiably remain a viable and often preferred option
to litigation and trial for many disputes. Arbitration is more frequently and freely decided upon by parties and their attorneys in ongoing cases, without any mandatory arbitration clause. Its inherent features, which include time and expense savings, ability to mutually select the arbitrator(s), convenience and efficiency of scheduling and location, privacy benefits, and the finality of an award, are appropriate and favored by a great percentage of parties involved in disputes.

Attorney Brian Jerome, Founder and Director of MDRS, asserts that a few select anecdotes of inequitable arbitration – the outcomes of which seemed particularly unjust – should not characterize the work of the ADR community, especially of those dedicated arbitrators who hear cases, review presented testimony and evidence, and make logical and unbiased decisions. The Times series does not represent the breadth of arbitration or more than a miniscule portion of cases. As attorneys and ADR practitioners, at MDRS, we are bound by strict ethical rules and pledge authentic neutrality: both values are at the core of our mission and professional life.

Attorney Jerome, Chair of the Massachusetts Bar Association’s ADR Committee, is available for questions and interviews as indicated below.

About MDRS – Massachusetts Dispute Resolution Services (MDRS) provides a full range of out-of-court mediation and arbitration services to private individuals, attorneys, business, labor, and the insurance community. MDRS, one of the first ADR providers in Massachusetts, offers a professional
panel of over 35 select neutrals, including retired judges and experienced attorneys. Including cases handled by the panel, they have resolved more than twelve thousand cases for their clients.

Massachusetts Dispute Resolution Services provides mediation and arbitration services to parties who seek equitable settlement of their disputes without the time, expense, and frustration which often accompany the more formal trial court system. MDRS neutrals provide a wide spectrum of experience paired with dispute resolution processes designed to meet the parties’ interests in solving disputes equitably and skillfully.

If you would like more information, please call Business Manager Sheri Stevens at (800) 536-5520 or e-mail Sheri at caseadmin@mdrs.com.

Massachusetts Dispute Resolution Services (MDRS)

60 State Street, Suite 700

Boston, Massachusetts 02109

Phone: (800) 536-5520

Fax: (978) 741-2368

Homepage

MDRS Announces New MBA Dispute Resolution Section

We at MDRS are proud to announce a major leap forward in Massachusetts’s dispute resolution history; namely the MBA’s decision to move forward with plans to create a new Dispute Resolution (DR) Section. We are honored to have played a pivotal role in this decision through the leadership of our founder Brian R. Jerome who chaired the MBA’s Dispute Resolution Committee 2015/2016. MBA’s Dispute Resolution Committee was formed 20 years ago as a Standing Committee when ADR was in its early development in Massachusetts. Since then, ADR has arguably grown to become one of the most influential practice areas in law in the past 25 years. Over 97% of all cases presented reach settlement without trial, to the extent that dispute resolution (DR) is no longer the alternative, but is the primary mechanism of case management and resolution. Our founder, Brian R. Jerome served this year as chair of the MBA’s Alternative Dispute Resolution Committee and presided over a vote in January to pursue designation as a Section of the Massachusetts Bar Association. To reflect ADR’s increasing acceptance as a primary means of dispute resolution, the Committee also voted to rebrand the proposed MBA “ADR” Section to the Dispute Resolution Section.

In pursuing this designation, the existing MBA ADR Committee has crafted a mission statement that we believe reflects our hopes for DR’s continued positive influence in the Massachusetts Legal community. Our mission is as follows:

To promote the use of Alternative Dispute Resolution (ADR) by educating members of the Massachusetts Bar Association, the Judiciary, the Legislature, the bar, and the general public about the nature and benefits of ADR processes and how to utilize them for the best possible resolution of conflicts.

We believe that a new Dispute Resolution Section will bring long-anticipated benefits on many fronts, not least to fulfill the promise of Massachusetts as one of the first states, along with California and New York, to adopt Dispute Resolution. Currently neither the BBA nor any other state or local bar association or professional association has a strong or fully-inclusive Massachusetts-based ADR or DR group. The MBA Committee's size, agenda, and goals have also significantly expanded since its inception. A Dispute Resolution Section will solve multiple problems of access and inclusiveness, providing extended membership to Dispute Resolution professionals, which will increase MBA membership due to the continued growth in number of ADR practitioners.  With DR’s existing reach within the business community, in cases that tend to be settled without going to trial, the scope of outreach and the MBA’s relevance to an entire business sector would be increased by default. Then, with our increased membership, our ability to assist the judiciary in Court-connected ADR proposals, in presentations, networking events, open meetings, CLE's and/or other projects will be greatly increased. More members would allow us to provide more service and outreach to the audiences outlined in our Mission Statement, all to the benefit of the MBA and its mission of outreach and service.

Finally, we believe that DR Section Status is appropriate given our Mission statement, existing agenda and goals, and our organized effort. The MBA ADR Committee already actively participates in 8 to 10 monthly meetings yearly. We continue to plan and implement presentations, and other beneficial events within the MBA organization. We cannot wait to begin recruiting more members from an ever-expanding field of DR practitioners and users, giving us the opportunity to realize a more comprehensive vision of DR in Massachusetts and allowing us to step into the appropriate role as educators and facilitators within the ADR community and beyond. We hope to benefit all those professionals who could avail of the networking and
professional services that the MBA can offer, but also anyone who has been lacking easy access to education and assistance in the rapidly advancing and successful field of dispute resolution.

William F. Quinn, Esq.

William QuinnSalem, Massachusetts

EDUCATION: Boston University Law School (J. D. 1973): Dartmouth College (B.A. cum laude 1970).

LEGAL EXPERIENCE: Bill is a founding shareholder of his firm, Tinti, Quinn, Grover & Frey, P.C. in Salem, Massachusetts, one of the premier real estate and business law firms in the region. He is a highly experienced expert in all areas of real estate law as would affect any residential or commercial real estate situation or controversy. With over 30 years of experience, Bill routinely handles development and property management issues for residential and commercial properties and condominiums, the purchase and sale of homes, condominiums and commercial properties, real estate contracts, boundary disputes and local and state permitting for development projects, including waterfront properties.

OTHER LEGAL EXPERIENCE AND ASSOCIATIONS: Bill is a member of the Massachusetts Bar Association and the American Bar Association.

SPECIALTY AREAS FOR MEDIATION:

  • Condominium unit owners and associations
  • Real estate contracts
  • Title issues
  • Boundary disputes
  • Adverse possession claims
  • Land use controversies
  • Home sales and purchases
  • Beach rights
  • Landlord/tenant

Collaborative Law, PEN Focus of MBA ADR Panel

by Attorney Michael A. Zeytoonian

Most people who are in a dispute think about mediation or arbitration as alternatives to lawsuits and litigation. But there are several other process choices that people have for how to resolve their disputes. That critical choice of which process to use is often the most important choice people make in resolving their legal issue. Among these other choices are Collaborative Law, Case Evaluation and a general approach called Planned Early Negotiation or PEN.

Four talented and experienced practitioners teamed up for a lively and enlightening panel presentation and discussion on these other approaches to resolving disputes on May 17 at the MBA office in Boston. The program was the last in a 2016 series of “Best ADR Practices” presented by the Massachusetts Bar Association’s (MBA) Alternative Dispute Resolution (ADR)Committee. Brian Jerome, Esq. of Massachusetts Dispute Resolution Services in Boston and ADR Committee Chairman, along with MBA President Robert Harnais, Esq., welcomed a full and engaged audience to the program. Jerome also announced that the ADR Committee will be expanded and transformed into the new Dispute Resolution (DR) Section of the MBA starting in September, 2016 and welcomed people to join it.

Michael Zeytoonian, Esq. of Dispute Resolution Counsel, LLC in Wellesley, opened the panel discussion and served as its moderator. Zeytoonian set the tone for these “cutting edge” DR processes, suggesting a different approach to resolving disputes by designing the DR process to be responsive to the situation. He noted that processes like Collaborative Law offer parties the flexibility and agility to be shaped to the circumstances of each unique dispute, and intentionally designed for the goal of resolving the dispute efficiently and creatively.

Paul Faxon, Esq, a transactional attorney whose firm is in Waltham, explained the basic elements and components of Collaborative Law, specifically focusing on its application in small, closely-held or family business disputes. Faxon noted that this approach’s effectiveness when ongoing relationships are important to the parties, where the parties want to control their destinies and not turn the decision-making over to a third party, and where cost and time efficiency is valued. He highlighted some of the basic elements of Collaborative Law including the open and voluntary
sharing of all relevant information and the shared retaining of neutral experts that can freely and independently serve as a resource to the negotiation process.

David Consigli, a CPA and business valuation expert with the CPA firm of Alexander Aronson & Finning in Boston and Westborough, spoke about the advantages to using a neutral expert in a Collaborative case or a Mediation. He compared the role of an independent expert providing value to all parties as opposed to being hired by either the plaintiff or the defendant. He pointed out the value of having expert information available in business break-ups or partnership disputes, as well as the importance of valuation information in business succession planning.

John Fieldsteel, Esq., a lawyer, mediator, arbitrator and case evaluator whose specialty area of practice is complex construction cases, spoke about using case evaluation as a tool and an approach that can often be transitioned into mediation or used to assist a mediation. Case evaluation gives the parties a better sense of the strengths and weaknesses of their case as well as good indication of what the range of damages would be. Fieldsteel talked about the value to the parties of giving them good information, often confidentially, about the strength or viability of their positions and how useful this neutrally given information is in reaching a settlement.

Recent Arbitration Developments April 2016

Arbitration – Judicial review

In an important decision, the SJC has ruled that where a defendant has requested that an arbitration award be vacated, the request must be denied despite that the parties’ arbitration agreement contained language authorizing a different standard of judicial review than that mandated by the Massachusetts arbitration statute.

“The central question presented in this appeal is whether parties to a commercial arbitration agreement may alter by contract the scope or grounds of judicial review of an arbitration award that are set out in the Massachusetts Uniform Arbitration Act for Commercial Disputes (MAA), G.L.c. 251. The SJC decided that the grounds of judicial review are limited to those delineated in G.L.c. 251, §§12 and 13. …

The case involved a dispute between shareholders of an accounting firm and an accountant who was terminated from the company. The plaintiff shareholders sued in Superior Court to confirm an arbitration award they won against the former partner.

In upholding the trial court judge’s ruling confirming the award, the SJC made clear that lawyers cannot rely on contract language to alter the scope of judicial review under the Massachusetts Uniform Arbitration Act for Commercial Disputes, G.L.c. 251.

The language at issue (in §§11, 12 and 13) states that a court “shall confirm” an arbitration award absent a narrow menu of grounds that allows a judge to vacate, modify, or correct an award. Under the statute, an award can be vacated only if it was “procured by corruption, fraud or other undue means.”

The losing partner argued that to the extent his objection to the award is a claim that the arbitrator committed an error of law, he is entitled to have a court consider the merits of his claim because in the arbitration clause of the agreement, the parties specifically provided for judicial review of an award to determine whether there was a ‘material, gross and flagrant error’ by the arbitrator. The partner reasoned that arbitration is strictly a creature of contract, that the aim of the MAA is to enforce the parties’ contractual agreement to arbitrate, and that, therefore, the parties’ agreed-upon standard of judicial review should be enforced.

The SJC stated that …..“Although arbitration is a matter of contract, Commonwealth v. Philip Morris Inc., 448 Mass. 836, 843 (2007), we disagree that parties, through contract, may modify the scope of judicial review that is set out in §§12 and 13 of the MAA. As previously stated, the directive of G.L.c. 251, §11, is that a court ‘shall confirm’ an award unless grounds for vacating it pursuant to §§12 and 13 are shown; this statutory language ‘carries no hint of flexibility.’ See Hall St. Assocs., L.L.C. v. Matell, Inc., 552 U.S. 576, 587 (2008) (Hall St.). …

“In addition to the language of the MAA, there are strong policy considerations that support limiting the scope of judicial review to the statutorily defined ‘egregious departures from the parties’ agreed-upon arbitration,’ Hall St., 552 U.S. at 586, that are listed in G.L.c. 251, §§12 and 13. Allowing parties to expand the grounds for judicial review would ‘undermine the predictability, certainty, and effectiveness of the arbitral forum that has been voluntarily chosen by the parties’ (citation omitted). … If parties were able to redefine by contract language the scope of what a court was to review with respect to every arbitration award, it would spawn potentially complex and lengthy case-within-a-case litigation devoted to determining what the parties intended by the contractual language they chose. This is fundamentally contrary to the intent and purpose of our arbitration statute. The policy of limited judicial review preserves arbitration as an expeditious and reliable alternative to litigation for commercial disputes. …”

Given that arbitration is designed to be prompt, more streamlined, and less expensive than a full-fledged lawsuit, the SJC’s decision is well founded, because to have ruled otherwise would frustrate the fundamental purpose and advantages of arbitration.
The 23-page decision is Katz, Nannis & Solomon, P.C., et al. v. Levine, et al., SJC-11902 March 9, 2016

Arbitration – Annuity Award Upheld

The SJC has ruled that where an arbitration panel awarded a petitioner $1.24 million, the award should be confirmed despite the respondents’ contention that the panel awarded damages that were neither claimed by the petitioner nor supported by the evidence, awarded damages in a manner and amount that was contrary to clear law, and denied the respondents a fair opportunity to obtain material evidence through discovery.

“… Put simply, a party seeking to overturn an arbitration award faces a very steep uphill climb; that is true even if the award is against the great weight of the evidence or otherwise unreasonable or wrongly decided. Respondents here have not satisfied that demanding legal standard. …

“In early 2010, petitioner accepted an early retirement buyout package from her employer Verizon, purchased a Prudential variable annuity through Rogers and Ausdal, and retired but later became dissatisfied with the annuity’s performance. …

“Respondents’ argument has two parts: first, they contend that the arbitrators awarded damages on a claim or issue not before the panel; and second, they contend that the panel’s damages calculation was contrary to controlling law. … The SJC stated ….“Here, the panel’s brief award, made without explanation or elaboration at the request of the parties, makes it difficult (if not impossible) to determine the reasons for the specific amount the panel awarded to Rogers. However, as respondents themselves note, the panel ‘could have reached the damage award of $1,240,000 [by assuming] Ms. Rogers would not have retired at age 49 ½ and would have worked to age 65 (15 ½ more years) and would earn $80,000 per year in each of those years.’ … The question, then, is whether Rogers presented such a claim to the arbitration panel. The record demonstrates that she did so, or at least in a manner sufficient to satisfy the applicable standard. …

“Respondents’ second contention under §10(a)(4) is that the panel exceeded its powers by awarding a damages amount that was contrary to controlling law. Specifically, respondents contend that the panel failed to reduce the damages award to present value, and failed to adjust the damages to take into account Rogers’s duty to mitigate damages by working elsewhere.

“It is well-established that arbitrators are not generally required to give the reasoning behind an award. … Although the panel may have arrived at the number awarded simply by estimating Rogers’s lost future earnings, without more, it is also possible that the panel employed a different methodology. …

“Ultimately, the question before the Court is not whether the arbitrators made the correct decision, or even whether the arbitrators were rational or fair. Instead, it is whether the arbitrators had the authority to decide as they did. … Respondents’ own customer agreement specifically empowered the panel to hear ‘any controversy’ between Rogers and respondents. … Respondents have raised serious questions about the reasonableness and fairness of the award, but they have not demonstrated that the panel exceeded its legal powers. …

“Respondents’ primary contention that §10(a)(3) was violated centers on the panel’s denial of respondents’ request to issue subpoenas to non-parties, including Verizon. …

“Here, the panel may well have acted unfairly. It appears that the chair denied respondents the right to obtain the Verizon information, then concluded that the same information ‘seems to be important.’ Presumably, the panel could not and did not take that information into account, as it was not part of the record. However, the panel was acting within its legal authority when it reviewed and denied respondents’ requests for subpoenas and this Court is without the power to vacate the award on that basis. …

“Respondents further challenge the award under §10(a)(2) on the ground that the panel displayed evident partiality towards Rogers and against respondents. …

“In effect, respondents ask the Court to infer partiality not from the existence of undisclosed bias or facts indicating an improper motive on the part of the panel, but from the panel’s award of damages. Respondents have not submitted any facts demonstrating that the alleged ‘partiality’ was based on anything other than the facts and argument presented by the parties. Thus, a reasonable person certainly would not have to conclude that the panel was partial to Rogers.”

Rogers v. Ausdal Financial Partners, Inc., et al. (16 pages) (Saylor, J.) (USDC) (Civil Action No. 15-12899-FDS) (March 9, 2016).

Arbitration – Counsel fees/Contingent fee agreement

Where a plaintiff corporation contends that its application to vacate an arbitration award on the ground that the arbitrator erred in awarding counsel fees was improperly dismissed by a Superior Court judge, that contention must fail in light of the reimbursement provision in the parties’ cooperation agreement to “co-develop” solar energy projects.

“… [Plaintiff] ACE challenges the award of attorney’s fees to [defendant] The Real Thing, LLC, (TRT) for two reasons. First, ACE contends the arbitrator exceeded his authority in awarding attorney’s fees to TRT based on the lodestar methodology rather than on a contingent fee basis. Second, ACE contends that the arbitrator erred in failing to grant it a continuance to file its response to TRT’s attorney’s fee filing. …

“… ACE’s argument that the arbitrator exceeded his authority is based on the arbitrator’s interpretation of the underlying contract provision, specifically the use of the word ‘reimbursement’ in the phrase ‘shall award reimbursement of attorneys’ fees.’ Ace contends that the use of ‘reimbursement’ restricted the arbitrator to use of the contingent fee agreement as a ceiling to the amount of attorney’s fees that could be awarded, and that by using the lodestar method, the arbitrator exceeded his authority.

“However, even if we agreed with ACE’s interpretation of ‘reimbursement,’ we cannot overrule an arbitrator solely because ‘we give a contract a different interpretation.’ … It is clear that the arbitrator acted within the authority conferred on him, as ‘reimbursement’ is not a clear and plain limiting word with no room for interpretation.

“An arbitrator deciding an attorney’s fee award should be made aware of a contingent fee agreement. See Winthrop Corp. v. Lowenthal, 29 Mass. App. Ct. 180, 186 (1990). TRT provided its contingent fee agreement to the arbitrator when it submitted its affidavit for attorney’s fees. However, even if the arbitrator erred in not considering the contingent fee agreement, it is not an error that we can correct. See Softkey, Inc. v. Useful Software, Inc., 52 Mass. App. Ct. 837, 840-841 (2001). ‘Assuming, without deciding, that Winthrop Corp. v. Lowenthal, supra, is not distinguishable, the arbitrator’s deviation from the holding in that case was at most an error of law, and therefore not subject to review.’ …

“TRT seeks an award of attorney’s fees associated with defending ACE’s appeal to this court. We note that ACE substantially raises the same issues that were raised before and answered by the Superior Court judge, essentially enumerating the arbitrator’s alleged errors. The arguments raised on appeal ‘were wholly insubstantial, frivolous and not advanced in good faith,’ G.L.c. 231, §6F, inserted by St. 1976, c. 233, §1, and TRT is entitled to an award of attorney’s fees and cost associated with defending ACE’s appeal. …”

American Capital Energy, Inc. v. The Real Thing, LLC (7 pages) (Appeals Court – Unpublished) (No. 15-P-327) (Feb. 19, 2016).

Hon. Patricia E. Bernstein (ret.)

Judge BernsteinEDUCATION: Boston College Law School, J.D. 1976; Connecticut College, B.A. 1970

JUDICIAL EXPERIENCE: Judge Bernstein brings over 20 years of judicial experience on the Boston Municipal Court to her mediation and arbitration practice. She has presided over hundreds of civil and criminal cases, including commercial and business disputes, consumer lawsuits, commercial real estate summary process, civil restraining orders, personal injury, premises liability and insurance matters. She also presided over administrative appeals from the Department of Unemployment Assistance and from the Boston Police Department rulings on firearms licensing. As a member of three judge panels, she served on the Appellate Division of the Boston Municipal Court Department on numerous occasions and authored several published opinions.
Appointed as the Adjunct Administrative Justice of the Boston Municipal Court Department from 2005-2010, Judge Bernstein assisted the departmental Chief Justice with administrative and policy initiatives, including participation on the Massachusetts Trial Court ADR implementation committee. In 2007 she assisted in the development of the first specialized mental health court session in the Commonwealth and regularly presided over that session until 2015. Judge Bernstein has mentored fellow judges and trained law students in judicial internships from Boston College Law School and Harvard Law School.

LEGAL EXPERIENCE: Prior to serving on the bench, Judge Bernstein was an Assistant Attorney General, serving as Chief of the Public Integrity Division in 1991 and in 1993 as Chief Prosecutor of the Public Protection Bureau. She has also been an Assistant District Attorney in Middlesex County.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Completed thirty-three hour mediation training program at Community Dispute Settlement Center, Cambridge, MA; participant in practicum providing mediation at Cambridge and Waltham District Courts; Member of Massachusetts and District of Columbia Bar; Member, Massachusetts Bar Association, Women’s Bar Association (past President, 1991-1992, and member of Board of Directors) and American Bar Association, Section on Dispute Resolution; former District One Director of National Association of Women Judges; clinical supervisor at Office of Attorney General for students participating in Government Lawyer class at Harvard Law School (1992-1993); elected Town Meeting Member, Brookline, MA, (1980-1990).

AREAS OF SPECIALTY:

  • Civil Litigation
  • Commercial/Business
  • Consumer Disputes
  • Contract Disputes
  • Criminal
  • Debt Collection
  • Education
  • Employment
  • Foreclosure
  • Government
  • Insurance
  • Landlord/Tenant
  • LGBTQIA+
  • Personal Injury
  • Premises Liability
  • Real Estate
  • Wage Claims

Dispute Resolution Diffuses Explosive Situations

by Sheri Stevens Wilson

The Islamic Society of Greater Worcester is seeking town approval to develop a Muslim cemetery on 55 acres it plans to purchase in Dudley, Massachusetts. The group seeks a local option where their burial customs could be followed, which sometimes include ‘green’ burial options, direct contact with the dead, very specific positioning of the body according to their religious tradition and beliefs, and dignified behavior at the burial. At a recent public hearing, many residents voiced pointed opposition to the plan. Among the concerns were those of the possible effect on the local water table, traffic, noise, and vandalism. There were additional remarks made, however, which clearly showed emotional reactions and which transcended more straightforward issues.

Most present at the recent Zoning Board of Appeals public hearing might say there’s no hope of ever reaching resolution of this situation.

We hear this all the time.

We are mediators.

What are mediators? Mediators are skilled negotiators who assist those on opposing sides of an issue work toward agreement. Mediation has been a system of resolution for thousands of years and is practiced across the world in different cultures. As objective and unbiased neutrals, Mediators bring reasoning to situations where emotions and complex issues have often taken over productive discussion. Mediators have many different tools they employ, based on the conflicts and the parties involved. In general, they work to determine the genuine, underlying issues. They identify and dismantle false beliefs. They provide support for the parties to form new opinions based on facts. And they guide negotiations to determine the ways in which everyone’s needs can be met. Peacefully.

The beauty of mediation is that the parties retain all of the power, and are never made to accept methods of resolution that that decision-makers are not in agreement with. And the rate of settlement in approaching even the most complex problems in this manner is very, very high.

Attorney Brian R. Jerome, Founder and CEO of Massachusetts Dispute Resolution Services [MDRS] shares, “The controversy in Dudley involves competing interests of many factions and an interpretation of the law which creates uncertainty for all involved. That it is all in the context of an Islamic religious group raises the potential for passions and emotions to be inflamed, in part as a result of fear. In situations such as this, mediation provides a process where all of the competing groups can be heard, and their true needs and interests can be accommodated and satisfied by a carefully sculpted resolution. The parties would benefit from a better understanding of each other, and an attempt to collaborate rather than confront one another. Proceeding to a final arbitrary zoning decision may well be all or nothing, with a winner and a loser, rather than the give and take of mediation and what could be a win-win result. We encourage the parties to consider mediating their dispute, rather than continuing confrontation with the potential for further negative escalation.”

At MDRS, we’ve been helping people resolve disputes for 25 years. As leaders in the law, we find nothing as rewarding as helping our clients attain better end-results than they ever thought possible. If you are involved in a conflict and would like to speak with us further, please call (800) 536-5520 or visit us at www.mdrs.com.

Cross-Examine the Case Before Filing a Lawsuit

by Michael A. Zeytoonian, Esq.

I think it’s a good idea for people who find themselves in a dispute to do some cross-examining before they file a lawsuit.

Sounds odd, right? After all, based on what we know about litigation and how the legal process works from what we see on TV and in the movies, cross-examination is the high point of the lawsuit; it’s what everything builds up to, right?

There’s My Cousin Vinnie Gambini, (Joe Pesci), cross-examining the witness about how long it took him to cook his grits: “Were those magic grits, like the beans Jack bought to grow his beanstalk?”

Or passionate Lt. Calley (Tom Cruise) cross-examining high ranking Colonel Jessup (Jack Nicholson): “I want the truth!” “You can’t handle the truth!”

Matthew McConaughey in A Time to Kill: “Imagine the girl is white.” Atticus Finch in To Kill a Mockingbird. You can probably name ten more great TV scenes and riveting cross-examinations.

Real life court cases are not that way. First, less than 4% of the cases that get filed in court ever get to trial. Yes, you read that right. It happens rarely, and when it does, it is are not the stuff Hollywood is made of.

So back to my opening suggestion: Do some “cross-examining” of the case before deciding to file a lawsuit or hire a scorched earth litigator. Let’s move the spotlight around from just one place where your supposed “smoking gun” evidence is. Let’s examine behind the obvious and the positional statements, and peer into the corners of the other considerations about this case of ours. Test our assumptions, our biases and our maybe overconfidence about our “slam-dunk” case. Let’s ask a few more “why” questions before we start.

“I want to sue the other side,” you tell the lawyer you interview.

“Ok. Can I ask you why? What do you hope to achieve by litigating?”

“I want my day in court. I want the other side to suffer. I was wronged here; I want that wrong fixed and to get some justice.”

Suppose the lawyer stopped the inquiry of the client here and said “OK, let’s get started. We’re going to file a complaint, move things along and get you justice. Let me get some of the facts and then we’ll start wearing down the defendants into submission.”

You feel good hearing that. Pumped up. Yeah, baby; that’s what I’m talking about. You get your emotional high. Unfortunately, that high you’re feeling is very short-lived.

But you really haven’t had your dispute and your situation cross-examined to truly know what is ahead or what your options are. That was barely sufficient questioning to sign you up as a client. But not nearly enough to set you and your case up right. The lawyer didn’t even ask you what your desired goal was, or what you would consider to be a good outcome!

Now here’s what I’m talking about. A reality check. A cross-examination of the client about what she really wants, the interests underneath the position, her emotional bandwidth, pragmatic needs and level of risk aversion.

I’m reading another wonderful book by Dan and Chip Heath called Decisive. It cautions us against “the four villains of decision making”: Narrow framing, confirmation bias, short-term emotion and overconfidence. Essentially, the Heath brothers tell us with a great collection of story-telling and examples that we make poor decisions because one or more of these factors is at play in our decision-making process, and explain how to avoid them. Decisive, like their other books, Made to Stick and Switch, is a must read.

It is up to one’s lawyer, as a trusted advisor, especially if that lawyer is a person’s “Primary Care Lawyer (PCL)”, to cross-examine the client before deciding what course of action to take. Here are some recommended inquiries for you as a client to hear your lawyer ask you, before you sign on with the lawyer and absolutely before you choose a dispute resolution process. If your lawyer is not “cross examining” you with these before you start working together, think hard about getting a second opinion or interviewing more lawyers!

What is your goal here? What would a good outcome for you look like?

What does getting your day in court mean to you? What do you hope to get out of it?

Have you considered other ways of accomplishing your goals besides litigating?

What is your time frame for when you need to have this dispute resolved?

What is the skeleton in your closet that I need to know now so I’m not blind-sided later?

What is your level of risk aversion? Put it this way: A jury could decide this case the other way and you’d get nothing after spending several years and several tens of thousands of dollars on this litigation. How does that sit with you?

Do you want to control the outcome? Or would you prefer to leave the decision-making about your case to a jury of people you don’t know? Or an arbitrator who is probably very knowledgeable in the subject matter and applicable law in this case?

Can you negotiate or collaborate with the other side with some professional assistance from negotiation-style lawyers and/or a mediator?

Are there other parties and other considerations that we can include in our assessment of this dispute that will help us expand the pie of possible options for settlement?

How important is it to maintain a healthy (business, civic, organizational or family) relationship with the other party(ies)?

How important is confidentiality to the parties in this case?

This inquiry lays a solid foundation for going forward in a way that will achieve the best outcome. This cross-examination, done before you start, is likely far more valuable than the Hollywood one that will almost certainly never happen.

Michael Zeytoonian is a member of the MDRS Panel of Neutrals, and is the Founding Member of Dispute Settlement Counsel.

Celebrating 25 Years of Dispute Resolution at MDRS

MDRS 25As MDRS celebrates 25 years of providing Dispute Resolution, we reflect on no less than a quarter of a century in our field — a field which has thrived beyond all expectations: no longer a mere alternative to the courts, but widely recognized as a more direct route to positive outcomes for all kinds of disputes.

It can be argued that in the past 25 years, no area of legal practice has grown to have a wider impact on the practice of law than the cumulative forms of Dispute Resolution. Over 97% of all cases presented now reach settlement without trial, such that Dispute Resolution has moved into its rightful position — and away from being referred to as the ‘alternative’ resource. With fewer constraints than a courtroom, proven convenience and cost savings, and happier clients in the end, ‘DR’ continues to expand with new tools and techniques, and an ever-widening pool of practitioners.

One need only look back to our individual and collective experiences of bringing the practice into the mainstream, to see how much the reception of DR has changed, even as the basic principles have stayed relevant and enduring. We recently dug out a clipping of an article featuring our founder Brian R. Jerome, an early adopter of what was, in those early days, an oft-criticized method of resolving conflicts.

Reference to “the costly and painfully slow court process” seem familiar and timely, but it’s a quote from The Beverly Times article, dated August 8th 1995, when DR was still a revelation for many accustomed to seeing litigation as the only option.

Timeliness and civility? Also present in the enthusiastic testimony of a client who worked with Brian in the early days:

“One session with him and we were completely back on track…It was very civilized, which was a nice way of getting all the feelings and thoughts out. I felt it was very much like having a lawyer and a psychiatrist at the same time.”

And yet, in 1995, the State Supreme Judicial Court had only recently set up a committee to phase in dispute resolution.

As the old saying goes, “In matters of style, swim with the current; in matters of principle, stand firm as a rock.” The hundreds upon hundreds of DR practitioners in Massachusetts, and the continuing increase of DR use in so many areas of the law, demonstrate how comprehensively Dispute Resolution has been accepted as the right option for resolving disputes, after so many years of being the “alternative.”

Of course with this progressive expansion and growth come increased responsibility. Serving this year as the Chair of the Massachusetts Bar Association’s DR Committee has given our founder Brian Jerome an opportunity to bring even more to the field he has dedicated his career to. It’s a pleasure to be able to announce that the Dispute Resolution Committee is moving forward with a new voice and refreshed objectives. We anticipate sharing with you, our clients and friends, many new and exciting opportunities in connection with this dedicated group in the coming months, not to mention many more months and years of exciting developments in our field – not only for MDRS, but for great numbers of our esteemed colleagues who practice Dispute Resolution and continue to advocate for peaceful, efficient, and cost-effective resolutions of conflict.

We at MDRS want to acknowledge that this milestone would not have been possible were it not for you, our treasured clients and friends. We thank you, appreciate you, and look forward to continuing our work with you in the future.

Recent Developments in DR

Notice to Bar Inviting Comment on Proposed Superior Court Initiatives. Comments due on or before March 4, 2016

The Superior Court invites comments on a set of proposed initiatives, as described below, designed to make civil litigation more just, speedy, and inexpensive. These proposals would make significant changes in the conduct of civil litigation in the Superior Court. Comments should be sent by email to maria.pena@jud.state.ma.us or by regular mail to The Superior Court Working Group on Civil Litigation Options, c/o Maria I. Peña, Superior Court Administrative Office, 13th Floor, Three Pemberton Square, Boston, MA, 02108, on or before March 4, 2016.

The three proposed Superior Court initiatives are:

Proposal #1
Menu of Options- Right to Individual Case Management and Tracking.  A “menu” of options that would take the form of an individual case tracking order, at the option of the parties and with the approval of the Court.  The parties would have the opportunity to agree to vary standard procedures in one or more ways, including the procedures that otherwise govern discovery, trial, and post-trial events.  For example, the parties may agree to an early and firm trial date, with or without a jury, and with a variety of limits on the quantity and kind of evidence.  Parties would seek an individual tracking order by filing a Motion for Case-Specific Management, which would be authorized by changes to Superior Court Standing Order 1-88 and a proposed new Superior Court Rule 20.

 

Proposal #2
Pilot Program for Early Case Management Conferences for Qualifying Cases.  A pilot program for early case management conferences in four case categories: real estate, construction, products liability, and employment discrimination.  The proposed pilot program would provide an opportunity to assess the value of early case management conferences and the time required to conduct them.  In each case included in the program, the Court would convene a conference with the judge and counsel within 90 days after service of process.  Prior to the conference, the parties would be required to confer, to exchange written settlement proposals and responses, and to complete a standard form addressing case management.  An amendment to Superior Court Standing Order 1-88 would establish procedures for the conferences, and provide the form for the parties to prepare and submit. In addition, to facilitate conducting the conference early in the life of the case, as provided in the proposed amendment to the standing order, the Superior Court would recommend that the Supreme Judicial Court amend Rule 4(j) of the Massachusetts Rules of Civil Procedure to reduce the time limit for service of process from the present 90 days to 30 days, or to provide for a more expeditious alternative similar to the process now used in federal court, where service is required only when a defendant fails to respond to notice by mail.

 

Proposal #3
New Superior Court Rule on Expert Disclosure.  As is already required by the court’s “Notice to Appear for Final Pre-Trial Conference” in Superior Court Standing Order 1-88, the new rule would require that unless the parties agree, or the court orders otherwise, each party shall set forth certain information in the final pre-trial conference memorandum relating to any expert that a party intends to call at trial.

 

A link for further information concerning these proposals is attached below, please cut and paste:  http://www.mass.gov/courts/court-info/trial-court/sc/notice-to-bar-inviting-comment-on-proposed-superior-court-initiatives.html

 

Litigation conduct – Arbitration Waiver

Where a plaintiff has moved to compel arbitration, the motion should be allowed based on an arbitration clause in the parties’ subcontract. The claims all arise out of allegedly defective exterior sheeting the Defendants installed during the construction of a building, the New Hall, for Mount Ida College (‘Mount Ida’). …

 

Defendants argued that the Plaintiff’s motion should be denied because pre-conditions to arbitration have not been satisfied, which required on-site meetings and mediation before arbitration may be pursued, and that this dispute does not fall within the scope of the arbitration agreement, and Plaintiff has waived its right to arbitration through litigation conduct. …

 

“… [T]he decision as to the effect of Plaintiff’s alleged failure to comply with the preconditions of arbitration is one for the arbitrator. …“Under these circumstances, the Defendants will not be prejudiced by the compulsion of arbitration. Minimal litigation conduct has occurred, and the situation here is patently different from scenarios where delay in moving for compulsion of arbitration has resulted in parties engaging in months or years of unnecessary discovery or litigation conduct. … Additionally, any claims Defendants seek to pursue against other subcontractors, whether in this Court or before an arbitrator, may be subject to statutes of repose regardless of the ruling on this motion. Compulsion of arbitration does not contribute to any prejudice Defendants may experience in this regard. Accordingly, Plaintiff has not waived its arbitration right by litigation conduct. In light of the findings above, Plaintiff’s motion to stay and compel arbitration is granted.”

 

Cutler Associates, Inc. v. Palace Construction, LLC, et al. (13 pages) (Hillman, J.) (USDC) (Civil Action No. 15-40021-TSH) (Sept. 22, 2015).

 

Arbitration – Counsel fees
The issue presented in this case is whether an arbitration panel who applied the commercial arbitration rules of the American Arbitration Association  and who found that the arbitration agreement did not authorize an award of attorney’s fees, nonetheless may award attorney’s fees based on its finding that ‘substantially all of the defenses were wholly insubstantial, frivolous and not advanced in good faith.’  Where the arbitration panel ordered a condominium trust to pay counsel fees to the owner of two units, the SJC ruled that the fee award was correctly vacated in Superior Court because the parties did not authorize any such award. The Court noted that no provision of the parties’ agreement authorized the award of attorney’s fees.

 

Unlike an arbitrator’s authority in Superadio [Ltd. Partnership v. Winstar Radio Prods., LLC, 446 Mass. 330 (2006)] to award monetary sanctions for discovery violations and noncompliance with discovery orders, the key difference, however, lies in the AAA rules concerning the specific sanctions at issue: the version of rule 23 at issue in Superadio, governing discovery, broadly authorized the arbitrator ‘to resolve any disputes concerning the exchange of information,’ whereas rule 47(d)(ii) expressly limits the availability of attorney’s fees in arbitration awards, allowing fees only where they are requested by the parties or authorized by law or agreement. The SJC futher stated that thought G.L.c. 231, §6F, which allows a ‘court’ to award attorney’s fees where ‘substantially all of the defenses … were wholly insubstantial, frivolous and not advanced in good faith ….an arbitrator, however, is not a ‘court’ that may award attorney’s fees under §6F. …”

 

Beacon Towers Condominium Trust v. Alex, SJC-11880

 

Arbitration – Retroactivity
In a case where a plaintiff college alleged that the defendant accounting firm committed malpractice when it failed to detect serious financial irregularities that occurred in the college’s financial aid office during fiscal years 1998 through 2004, the plaintiff’s claims are not subject to an arbitration clause in the parties’ 2005 agreement.

 

None of the annual agreements from 1998 through 2004, referred to by the parties as ‘engagement letters,’ makes any mention of arbitration as an available (much less mandatory) means for the parties to resolve disputes that might arise between them.

 

KPMG is relying on the engagement letter that the parties executed for fiscal year 2005 which for the first time in any of their annual agreements, the 2005 engagement letter included a mandatory dispute resolution provision. …

 

… In our view……the only reasonable interpretation of that language in the context of this forward-looking agreement is in reference to services that KPMG would perform after the new contract was executed……where ‘it would have been a simple matter for’ the contract drafter to include a term it now claims is brought within the sweep of arguably ambiguous contractual language, ‘[w]e see no reason to add th[at] term[] now.’

 

Class Action Arbitration Clause Waiver

In DIRECTV v. Imburgia, decided on Dec. 14, 2015 the U.S. Supreme Court again dealt with a California court’s refusal to enforce a class arbitration waiver contained in a consumer form agreement falling under the Federal Arbitration Act.

 

Plaintiffs were customers of DIRECTV who in 2007 signed a customer service agreement with DIRECTV that included a mandatory arbitration clause and a class arbitration waiver. The plaintiffs subsequently sued DIRECTV alleging that their imposition of early termination fees violated California law. DIRECTV moved to compel arbitration, but the California Court of Appeal denied the motion, and the California Supreme Court denied discretionary review.

The lower court based its decision on its interpretation of language in the 2007 agreement stating that if “the law of your state” invalidated the class arbitration waiver, then the entire arbitration agreement would be unenforceable.

 

In 2011 however when the Supreme Court decided AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) holding that the FAA preempts state laws that invalidate a class arbitration waiver contained in an otherwise valid arbitration agreement.

 

After Concepcion, then, “the law of your state” has no effect on the enforcement of a class action waiver. Therefore, the disputed “law of your state” language in the 2007 agreement is now a meaningless artifact from the pre-Concepcion era.

 

Nevertheless, the California Court of Appeal in DIRECTV interpreted “the law of your state” in the 2007 agreement to include the very California law hostile to class arbitration waivers that Concepcion subsequently declared to be invalid under the FAA.

 

Therefore, the lower court struck the class waiver under invalid, pre-Concepcion California law. The court also applied the contract’s jettison clause and refused to enforce the entire arbitration agreement.

 

In a majority opinion written by Justice Stephen G. Breyer, the court held that the FAA preempts the lower court’s interpretation of the agreement. That means that a reference to “the law of your state” in any pre-Concepcion agreement evolves with the times and reflects any subsequent changes made by a state legislature, a state supreme court, or, as in this case, a decision of the Supreme Court on the supremacy of federal law over state law.

 

In short, the FAA preempts the lower court’s departure from general California contract law when it presumed that “the law of your state” referred to California law that was declared invalid in Concepcion.

 

Under the court’s decision, then, parties would have to refer expressly to invalid or preempted state law in their arbitration agreements (an unlikely but nonetheless enforceable contract clause under the FAA), to override the presumptive meaning of “the law of your state.”

 

$48M Arbitration Award Upheld-Impartiality of Arbitrator Denied

An arbitrator did not exceed his authority when he applied out-of-state law to award treble damages to a husband and wife who claimed they lost millions due to the fraud and gross negligence of their investment advisor, a Superior Court judge has ruled in upholding the $48 million award. The plaintiff argued that the award of treble damages under Pennsylvania unfair trade practices and consumer protection statutes contravened choice of law and limitation of liability clauses in its client agreement.  Judge Edward P. Leibensperger found no reason to disturb the arbitrator’s award.

 

Leibensperger wrote that “the Agreement expressly contemplates the application of federal and state statutes that, in the case of the Pennsylvania Unfair Trade Practice and Consumer Protection Law, according to the arbitrator, allows for treble damages.” Commentaors have expressed that f the limitation language had specifically included a limitation on multiple damages, the case might have come out differently and if one wants to limit the law just to Massachusetts, there are ways to do that as well.”

 

In addition to the arbitration clause, the parties’ agreement provided that it would be governed and construed by the laws of Massachusetts. Yet in his choice of law analysis on the issue of damages, the arbitrator concluded that Pennsylvania law applied because FEP and Weiss were registered as investment advisors in that state.

 

Accordingly, the arbitrator applied the Pennsylvania Securities Act and the Pennsylvania Unfair Trade Practice and Consumer Protection Law to award the Sutows treble damages.

Judge Leibensperger concluded that the arbitrator did not exceed his powers by awarding treble damages under Pennsylvania law, finding that the parties’ arbitration clause was “much broader” than their choice of law provision.

 

As to the claim of arbitrator impartiality…..“The sum and substance of the claim by FEP and Weiss of evident partiality is that [Philip S.] Cottone knew counsel for the Sutows as a fellow professional in the field of securities arbitration. …

 

“I find that the claim of ‘evident partiality’ is completely unsubstantiated. First, the professional interactions between Mr. Cottone and counsel for the Sutows were adequately disclosed. FEP and Weiss had no objection. Moreover, mere professional interaction between two members of a specialized area of the bar, without more, does not begin to suggest evident partiality. …

“… It is hypocritical, at best, for a losing party in a trial to which he fully submitted his defenses and claims in the hope of victory, to claim bias when he loses. …

 

Family Endowment Partners, L.P., et al. v. Sutow, et al. (9 pages) (Leibensperger, J.) (Suffolk Superior Court) (Civil Action No. 2015 CV 1411-BLS1) (Nov. 16, 2015).

 

Arbitration – Employment dispute

Where a defendant employer has moved to compel arbitration of an employee’s claims of wrongful termination and retaliation, the motion must be allowed based on arbitration clauses in the employment application and offer letter signed by the plaintiff.

 

In the Employment Application, the parties agreed ‘to resolve any claims or disputes arising out of or relating to [Hagerty’s] application for employment or, if hired, [his] employment with or termination from Cyberonics exclusively by final and binding arbitration before a neutral arbitrator under the then current rules of the American Arbitration Association.’. In the Offer Letter, the parties agreed that in ‘the event of a dispute concerning this employment offer or [Hagerty’s] employment relationship with Cyberonics, [Hagerty] and Cyberonics agree to submit the matter to binding arbitration under the then current rules of the American Arbitration Association.’ (Magee Decl. Ex. 2) (emphasis added).

 

“The ‘arising out of or relating to’ and ‘concerning’ provisions indicate an intent to arbitrate a broad scope of claims. … The arbitration clauses state that they specifically apply to ‘employment,’ ‘termination,’ and ‘employment relationship. … Therefore, in light of the ‘presumption of arbitrability’ and the federal policy favoring arbitration, Hagerty’s wrongful-termination claims are subject to arbitration, no matter whether the relevant agreement is the Employment Application, the Offer Letter, or both.

 

“Hagerty contends that the anti-retaliation claims do not fall within the scope of the arbitration clause because the clause does not contain ‘clear and unmistakable terms’ evidencing an enforceable agreement to arbitrate the relevant statutory claims. He cites Warfield v. Beth Israel Deaconess Medical Center, Inc., 454 Mass. 390 (2009) in support of that contention. …

“However, the court in Warfield incorrectly ‘appl[ied] general principles of State contract law to determine whether a particular agreement requires arbitration of a claim.’ … As previously stated, the question of ‘whether a particular dispute is within the class of those disputes governed by the arbitration clause .. is a matter of federal law.’ … In determining whether the particular dispute falls within a valid arbitration agreement’s scope, ‘“there is a presumption of arbitrability[:] an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.”’ … Applying the Warfield ‘clear and unmistakable terms’ test would not ‘place [the arbitration agreement] upon the same footing as other contracts,’ … and would run afoul of the presumption of arbitrability whereby ‘any doubts concerning the scope of an arbitrable issue should be resolved in favor of arbitration.’ … Therefore, the Warfield ‘clear and unmistakable terms’ test does not apply here.

 

“However, and in any event, Warfield is readily distinguishable because the arbitration provision at issue in that case was much narrower than the ones in the present case. …”

 

United States ex rel. Hagerty v. Cyberonics, Inc. (20 pages) (Saylor, J.) (USDC) (Civil Action No. 13-10214-FDS) (Nov. 13, 2015).

Arbitration – Waiver – Litigation conduct
Where defendants have moved to compel arbitration pursuant to an operating agreement, the motion should be allowed despite the plaintiff’s claim that the defendants waived the right to enforce the arbitration provision in the agreement.

 

“Plaintiff opposes sending this matter to arbitration. His only argument is that CRIC Realty has waived its right to enforce the arbitration provision. …

 

“While it is a close call in this case, I find that CRIC Realty has not waived its right to demand arbitration of plaintiff’s claims. Rather than a plaintiff commencing an action in court and later changing his mind to seek arbitration (the scenario in many of the cases), here it is the defendants who are invoking arbitration in their responsive pleading. The length of time between CRIC Realty being served with this lawsuit (December 2014) and when it indicated that it wished to enforce arbitration (August 2015) is not unduly long, as compared to many of the cases addressing undue delay. While plaintiff claims prejudice because discovery, initiated by both sides, has started, such discovery would have occurred in the arbitration process if arbitration had been demanded earlier. There is no unfair prejudice to plaintiff as a result of discovery.

 

“The countervailing consideration is that CRIC Realty invoked the jurisdiction of the court by filing a motion to dismiss plaintiff’s complaint. In fact, defendants filed their initial motion to dismiss in February 2015, and CRIC Realty did not raise the arbitration provision. That motion was not acted upon as plaintiff requested leave to file an amended complaint. CRIC Realty then filed a renewed motion to dismiss in which it argued for dismissal of claims on the merits but also noted the arbitration provision and its position that the claims should be sent to arbitration. Plaintiff arguably suffered some prejudice by having to respond substantively to defendants’ arguments in the motions to dismiss the claims on the merits.

 

“On balance, I find that plaintiff’s slight prejudice (slight, because he will have to confront CRIC Realty’s legal arguments in arbitration just as he did here) is outweighed by the strong policy to enforce a party’s arbitration rights. Moreover, CRIC Realty’s litigation conduct can be explained, in part, by the fact that the other CRIC entities that do not have an arbitration agreement with plaintiff were required to file a responsive pleading along with CRIC Realty. Those defendants were required to raise substantive grounds in defense. In sum, there is insufficient conduct by CRIC Realty to find an implied waiver of CRIC Realty’s arbitration rights.”

 

Harelick v. CRIC, LLC, et al. (Leibensperger, J.) (Superior Court) (Civil Action No. 2014-3930 BLS1) (Sept. 28, 2015).

Arbitration – Trust – Non-signatory
In a case where defendants have moved to compel arbitration under a voting trust agreement (VTA) formed along with the creation of a realty trust, the motion must be allowed despite the fact that the plaintiff never signed the VTA.
“After a careful review of the complaint, its attachments, and the arguments set forth by the parties, this court concludes that Elizabeth’s claims in this action against the Brown Defendants and Adams must be submitted to binding arbitration before the American Arbitration Association under the arbitration provision contained in the VTA. Although Elizabeth is a nonsignatory to the VTA, she is (1) bound by the agreement of her trustee, Adams, to enter into the VTA, and (2) a third-party beneficiary of the VTA. … Adams’ signature, as trustee of [Elizabeth Brown Realty Trust (EBRT)], on the VTA bound Elizabeth as he was her agent or representative. Moreover, Elizabeth was a beneficiary of [Canal Realty Trust (CRT)] and, thus, derived the benefits of the VTA, which was created to ‘insure the continuity and stability of management’ of CRT and ‘to avoid a conflict … with regard to the management’ of CRT. Elizabeth continues to benefit from CRT today in the form of twenty percent of CRT’s income.

Ambeliotis v. Brown, et al. (7 pages) (Leibensperger, J.) (Superior Court) (Civil Action No. 14-00855-BLS1) (Sept. 30, 2015).

Arbitration – Minimum wage
Where a defendant has moved to compel arbitration of a plaintiff’s minimum wage complaint, the motion must be denied because the issue of whether the parties’ dispute involving truck drivers is exempt from the scope of the Federal Arbitration Act is for the court, not an arbitrator, to decide.

 

“This case involves a labor dispute between a trucking corporation and a former truck driver. In March 2015, the plaintiff Dominic Oliveira brought this proposed class action alleging that the defendant New Prime, Inc. violated the Fair Labor Standards Act (FLSA), 29 U.S.C. §§201 et seq., and Missouri and Maine labor laws, by failing to pay its truck drivers minimum wage. … New Prime moved to compel arbitration under §4 of the Federal Arbitration Act (FAA), 9 U.S.C. §4, and two operating agreements signed by Oliveira on behalf of Hallmark Trucking LLC, both of which contain an arbitration clause. … Oliveira argues that the Court must determine whether the operating agreements are exempt from arbitration under §1 of the FAA before it can consider New Prime’s motion to compel arbitration. … New Prime maintains that the exemption’s application is a threshold question of arbitrability that the parties delegated to the arbitrator in the operating agreements. …

 

“… Section 1 … exempts ‘contracts of employment of transportation workers’ from the FAA entirely. … Employment contracts involving truck drivers fall within the transportation worker exception. …

 

“The FAA does not define the term ‘contract of employment.’ See 9 U.S.C. §1. Although neither the Supreme Court nor the First Circuit has directly addressed the issue, courts generally agree that the §1 exemption does not extend to independent contractors. …

 

“Neither the First Circuit nor Supreme Court has answered the central question in this case: does a district court have to determine the applicability of the FAA §1 exemption itself, or is the exemption issue just another gateway question of arbitrability that contracting parties may validly delegate to an arbitrator? …

 

“The Ninth Circuit held that the applicability of the §1 transportation worker exemption is not a question of arbitrability that the parties may delegate to an arbitrator. [In re Van Dusen, 654 F.3d 838, 843-45 (9th Cir. 2011)]. The court explained that because a ‘district court’s authority to compel arbitration arises under Section 4 of the FAA,’ a district court ‘has no authority to compel arbitration under Section 4 where Section 1 exempts the underlying contract from the FAA’s provisions.’ … ‘Section 4 has simply no applicability where Section 1 exempts a contract from the FAA, and private parties cannot, through the insertion of a delegation clause, confer authority upon a district court that Congress chose to withhold.’ … The court emphasized that ‘whatever the contracting parties may or may not have agreed upon is a distinct inquiry from whether the FAA confers authority on the district court to compel arbitration.’ …

 

“As the Ninth Circuit highlighted, its holding is consistent with the Supreme Court’s decision in Bernhardt v. Polygraphic Co. of America, 350 U.S. 198 (1956). …

 

“… Thus, this Court must keep on trucking in the present case to determine whether the two operating agreements Oliveira signed on behalf of Hallmark Trucking LLC are contracts of employment within the §1 exemption.”

 

Oliveira v. New Prime, Inc. (21 pages) (Saris, C.J.) (USDC) (Civil Action No. 15-10603-PBS) (Oct. 26, 2015).

 

Arbitration – Fraud – Fiduciary duty

Where a Superior Court judge confirmed an arbitration award in favor of a defendant and against the plaintiff minority shareholders, the arbitration award was not contrary to the law or public policy of Delaware.

 

“The plaintiffs contend that the arbitrator exceeded his authority when he ‘refused’ to apply a section of Delaware law, namely 8 Del. C. §271, which requires that stockholders be notified and have consented before ‘all or substantially all’ of the assets of a corporation are sold, leased, or exchanged. Basing his decision on Delaware cases, Massachusetts cases, treatises, statutes, and practice guides, the arbitrator was ‘not persuaded that the statutory duties of the Board to notify the shareholders and to obtain their consent … in a sale of all the assets is applicable to a sale pursuant to an assignment for the benefit of creditors,’ as was the case here. This legal conclusion is shielded from our review. …

 

“The plaintiffs next contend that the arbitrator’s award offends public policy, namely, Delaware public policy of providing stockholders with a right to vote on the sale of assets which, they claim, is ‘[e]mbodied in the [s]tatute.’ …

 

“… However, the plaintiffs have not ‘identified “a well defined and dominant public policy, ascertained from laws and legal precedents,” that is offended by the award … in this case.’ … An error of law, even one amounting to a misapplication of a statute, is not, in and of itself, a violation of public policy. …”

 

Paasch, et al. v. Ranoux (5 pages) (Appeals Court – Unpublished) (No. 14-P-1076) (Oct. 20, 2015).

 

Insurance – Arbitration – Uninsured motorist – G.L.c. 93A
Where a plaintiff’s complaint seeking to compel arbitration of an uninsured motorist claim was dismissed, the dismissal order must be reversed despite the defendant insurance company’s claim of non-cooperation on the part of the plaintiff.

 

“… The insurer moved to dismiss the complaint, pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), arguing that the claim for uninsured motorist benefits was barred by the plaintiff’s non-cooperation (specifically his failure to complete an examination under oath and his failure to provide material documents and information in conjunction therewith), and that the claim asserting violations of chapters 176D and 93A is not subject to arbitration. A judge of the Superior Court allowed the motion to dismiss, stating in a marginal note that ‘the plaintiff’s complaint arises from a legal question of insurance coverage, an issue not properly committed to arbitration.’ …

 

“It is well-established that the plaintiff’s claim under chapters 176D and 93A is not within the scope of the policy’s arbitration clause. … The claim, however, may be litigated in court. Accordingly, while it was appropriate to dismiss so much of the complaint that sought to compel arbitration of the alleged violations of chapters 176D and 93A, dismissal should have been without prejudice to the filing of a new complaint, or the amendment of the present complaint, to assert the alleged violations in a civil action for damages.

 

“Insofar as the complaint sought to compel the insurer to arbitrate the plaintiff’s entitlement to uninsured motorist benefits, it should not have been dismissed. Although the representations in the insurer’s motion and accompanying memorandum, if substantiated, may well establish that it has a valid coverage defense to the payment of such benefits,a motion to dismiss must be decided based on the allegations of the complaint. On the face of the complaint, it cannot be determined, as matter of law, that the insurer is excused from liability under its policy.

 

Regis v. Progressive Insurance Company (4 pages) (Appeals Court – Unpublished) (No. 14-P-1848) (Oct. 16, 2015).

 

Arbitration – Counterclaim
Where a plaintiff who obtained a $1.24 million arbitration award against a defendant has moved to dismiss the defendant’s counterclaim seeking to vacate or modify the award, the dismissal request should be denied without prejudice despite the defendant’s error in failing to properly title the counterclaim as a motion.

 

“Section 6 of the Federal Arbitration Act directs that ‘any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions.’ 9 U.S.C. §6. That means that the Federal Rules of Civil Procedure generally do not apply to actions to confirm, modify, or vacate arbitration awards. … Thus, respondents’ request for the Court to vacate or modify the arbitration award should have been titled as a motion instead of as an answer or counterclaim. …

 

“The court, however, has the power to treat respondents’ ‘counterclaim’ as a motion if, despite its form, its substance is that of a motion. …

 

“In substance, respondents’ filing meets the requirements to constitute a motion. … The filing is 19 pages long and includes both the factual and legal bases for respondents’ request that the award be vacated or modified. Accordingly, the Court will treat the counterclaim as a motion to vacate or modify the arbitration award.

 

“A Rule 12(b)(6) motion to dismiss is not the proper mechanism for contesting a motion to vacate or modify an arbitration award. … Therefore, to the extent that [plaintiff Cindy-Marie] Rogers’s motion to dismiss respondents’ counterclaim attacks the merits of the ‘counterclaim,’ it is itself procedurally improper and will be denied without prejudice.

 

“Although the Court recognizes that the parties have supplied some briefing as to the merits of respondents’ contention that the panel’s award should be vacated, the Court is unable to issue a ruling either confirming or vacating the award without the benefit of a factual record. To that end, respondents should re-file an appropriately titled motion to vacate or modify the arbitration award, along with a memorandum of law and any supporting affidavits or other documents, in accordance with Local Rule 7.1(b).”

 

Rogers v. Ausdal Financial Partners, Inc., et al. (4 pages) (Saylor, J.) (USDC) (Civil Action No. 15-12899-FDS) (Oct. 14, 2015).

 

 

 

 

 

 

 

 

Bracketing Can Break Impasse in Negotiation

by Brian R. Jerome, Esq.

Whether parties are negotiating directly with each other or with the assistance of a mediator, a basic axiom is that a case will not settle until the parties are discussing terms within a reasonable settlement range.  When negotiations reach a critical impasse, the possibility of settlement steadily decreases as the time without demonstrable progress continues to pass.  This is particularly true in situations where the demand (or offer) made may be deemed unreasonable by the other side, resulting in an equally unreasonable counter proposal.  When parties reach impasse, they begin to abandon hope.  In such situations, breaking impasse is perhaps the most essential achievement a mediator can make; finding common ground keeps the interest and attitude of the parties focused on resolution and promises a better likelihood of settlement as an incentive to continue negotiating.  Bracketing, one of the many specialized tools in a skilled mediator’s arsenal, can be a helpful tool to jump-start the process and break an impasse in settlement discussions.  Bracketing can make bridging the divide seem possible again, and encourages the parties to continue negotiating.

For example, consider the case where the parties come to mediation and the plaintiff makes an initial settlement demand of $850,000.  The defendant, though having significant more settlement authority and/or willingness to move upward, may deem this demand unreasonably high and choose to make an in-kind, unreasonably low settlement offer of $50,000.  Hearing this, the plaintiff is immediately upset and frustrated:  “Why did we come to this table?  I have a lien three times that amount to satisfy!”  The plaintiff may then elect not to move, or move minimally, perhaps to $825,000.  Continuing this water torture approach to negotiation or mediation can result in significant frustration, and often emboldens further posturing – none of which lend to the collaboration and momentum parties need and a mediator seeks to resolve a case.

A skilled mediator by this point has likely gone well beyond an initial joint session with the parties and has been engaged in private caucuses with both sides.  S/he has begun to develop a sense of the needs and interests of both sides and by doing so, over time, likely begins to envision a range or window through which it is likely that both sides need to enter into for more fruitful discussions to begin.  In some cases, a party may elect to confidentially divulge to their mediator, hypothetical  lesser amounts or ranges that they may be willing to consider.  Being careful not to disclose these confidences, nor to prematurely provide their own evaluation which could prove counterproductive, an experienced mediator might suggest and begin to sculpt a process of bracketing that could revive the negotiation process, provide some optimism for the participants, and return some momentum to the session.

During private caucus, when the mediator makes a request to more significantly increase their offer, this defendant may indicate that if they were to raise their offer to $200,000 or $250,000 – which they might be willing to do at some point – they feel the plaintiff is likely to only reduce their demand by another $50,000 or so.  The defendant doesn’t want to be left in that negotiation position.  A mediator may ask where the plaintiff would need to be for the defendant to offer $250,000.  If they indicate $650,000, the mediator might ask for the defendant’s authority to propose these numbers as brackets, coming from the defense.

A mediator may inquire to a defendant who may be reluctant to disclose their own parameters, whether if the plaintiff was willing to reduce their demand to $650,000, would the defendant be willing to offer $250,000?  The mediator might stress to the defendant that should these brackets be found unacceptable by the plaintiffs, they often either result in a demand or a counter bracketing proposal that nevertheless will be more productive than making a single low offer.  Further, it could be suggested that if the plaintiff found this bracketing proposal unacceptable, the defendant could return to making a single offer at a level of his choice.

Though a bracketing proposal may often signal, or be perceived to signal, a willingness to reach the middle of these brackets, it does not necessary mean this.  Although such flexibility may be one of its advantages, as long as each party can settle this case at a number within these parameters, they may be inclined to assent to the bracket so as to take advantage of the momentum created by it.

After a bracketing proposal has been agreed to by both sides, the parties can return to negotiating by single offers or demands, or, can consider further bracketing to narrow their differences and reach a reasonable range of settlement.

Consider the use of bracketing to break an impasse in your direct negotiations with the other party – or better yet – have a capable mediator with knowledge and experience in this process help you sculpt your negotiations more effectively.  Remember that the numbers need to be a realistic reflection of the risks and realities of the case, and to give the other side time to gradually accept that their hoped-for, pre-mediation position may not be achieved.  Your mediator can assign rational reasons to the relative bargaining positions of the parties, and with his/her guidance, you can greatly enhance the prospects of resolving your more difficult cases.

The Ten Commandments of Mediation Advocacy

by Brian R. Jerome, Esq.

The process of mediation can be less formal than a courtroom, but its more relaxed setting does not lessen the importance of preparation and appropriate advocacy to achieve favorable results. Advocacy permeates this process well before the parties enter the mediator’s conference rooms. Attention to detail early on maximizes the prospects of having satisfied clients who feel their cases have been handled well. These ‘Commandments’ of Mediation Advocacy will help you achieveth the greatest success!

Determine Thy Timeline (How do you know When to Mediate?)

Generally, the best chance to get a case settled may be when it is mediated early. Time and money is saved, and early mediation brings people to the table while the parties may be more flexible and willing to hear strengths and weaknesses in their cases rather than after their positions have solidified and after considerable litigation expenses are incurred. However, investigation and case preparation has to reach a point where the case can be properly evaluated.  There can be reasons why an early mediation may meet the parties needs, including varied situations where parties cannot afford or withstand the time, expense, stress, or uncertainty of protracted litigation and/or trial, where extensive discovery may serve to undermine a parties’ position, or where the parties are either required or desire to continue an ongoing relationship.  A skilled attorney or advocate should consider and fully examine these considerations with their clients early on, since dispute resolution opportunities may be lost after months or years of contentious litigation.

Contemplate Thy Mediator

No two mediators are alike; careful consideration should be given to their selection. The mediator’s personality, experience, style, and skills should fit the particulars of the case so as to best enable the building of trust and respect among participants, maximizing the prospects of a satisfactory settlement.

While neutrality, patience, perseverance, specific training, and substantive experience are some of the most important traits to look for in a mediator, other subtle factors come into play.  Will the mediator’s personality fit with the parties well enough to earn their trust?  Does the client need a gentle hand, a forceful push, or perhaps both?  Can the particular mediator bring improvement to the discord created by litigation, and further, aid in the negotiation of a deal?  How many cases of the type involved in your matter has the mediator handled, and with what success?

Consultation with colleagues who have worked with a potential mediator should be considered.  Unlike the context of an arbitration, where ex parte communications are inappropriate, nothing prevents you from calling a potential mediator about your case. In fact, asking questions about the mediators experience and inquiring as to how the session would be conducted is time well spent by a strategic advocate who wants a satisfied client.

Be Cognizant Of Thy Opposition

Determine in advance who is coming from the other side. Be sure that the individuals(s) with full settlement authority are going to be physically present at the session. Whenever possible, determine the backgrounds, personality, and style of all participants by using sources available on public media or consultation with colleagues; this preparation will greatly assist your collaboration with them, and improve your ability to convince them of the merits of your case, much akin to jury research in a courtroom setting.

Equippith Thine Client

Preparing the client includes determining their interests, needs, motivations, concerns, and objectives; hopefully dispelling any unreasonable or unrealistic expectations they may have as well.  A range of possible outcomes at trial ought be discussed.  It’s also important to examine and understand the client’s tolerance for risk.

Be sure to explain to clients that they will be active participants in the mediation session and that most mediators will encourage them to speak at the session so as to hear directly from them what is most important.  A client who speaks well for their position may wish to participate actively in the joint opening session with a carefully planned presentation.  Having the client make a brief presentation in the right setting is very effective, but with the wrong client it could have disastrous consequences. Discuss with your client what information they should reveal, and be sure they understand which matters should not be shared. Clearly determine ahead of time how they will participate and what they intend to say.

Share with your client all available information about the mediator, their style, and how they conduct the mediation session. The differences between a trial and a mediation should be discussed so they know what to expect.  The joint opening session and opening statements should be reviewed.  The private nature of the individual caucuses the mediator will have with each party should be explained. Provide your client with specific guidance as to what they will or will not say during these private caucuses.

The confidentiality of the mediation process, both as outlined in the mediation agreement and under the provisions of the Massachusetts confidentiality statute, MGL c. 233 s.23C, should be explained to the client.

In cases involving parties such as businesses or corporations, consideration should be given as to who, among persons with authority, should attend the mediation.  Will the personality and demeanor of an individual detract from collaboration efforts?  Is there a personal animus that is likely to have a negative effect?  When issues of personality or emotion are apparent or anticipated, advise the mediator in advance.

Prepare For Thine Session

Plan to discuss all legal aspects of the case and be familiar with not only your client’s needs, but the other sides’ interest and goals as well.  Strategize possible solutions to meet their needs as well as your own.  Be prepared to highlight and explain the strengths and weaknesses of your case, and anticipate the arguments the opposing party is likely to make and the questions a mediator may ask.  A client or lawyer that can convince the mediator that he has considered all important facets of the case is more likely to convince a mediator that their position is serious and reasoned as opposed to mere posturing. Research jury verdicts and applicable case law, and be prepared to distinguish facts or legal issues in verdicts or legal decisions the other side may use to support its position, in addition to the ones that support yours.  Bring copies of any pertinent cases with you to the mediation session.

Composeth Thine Memorandum

Provide a mediation memorandum in advance to your mediator.  The mediation statement is the first opportunity to gain credibility and support with the mediator, so invest appropriate time crafting a compelling theme or story.  Be concise and set forth the background facts, legal theories, and defenses for the case.  Give the mediator the pertinent settlement history and the present demands and offers.

Make an informed decision whether to send the mediation memorandum to all of the parties or to send it confidentially only to the mediator.  Certain sensitive issues may not be best raised in an exchanged brief, since it may polarize the parties and intensify animosity or resentments.  You may choose to share it in a confidential memorandum only to the mediator.  Private and confidential “eyes only” communications work best when used to discuss a party’s underlying needs and interests rather than positions.  Your positions are best laid out in your public, shared submissions.  Providing this information in advance of the session allows your mediator appropriate preparation time, and ultimately brings benefit to your case.

The private submission is an opportunity to tell the mediator how s/he can best help you, raising sensitive problems that you or the other side may have, suggestions to overcome these obstacles, and discussion of other intangible issues beyond monetary components.  Providing such information to the mediator in advance of the mediation session, affords them opportunity to begin consideration of mediation processes which fit the particular needs and interests of the parties.  The prepared mediator is then able to more immediately focus in on the issues during the session, as well as to air the more difficult, associated questions.

Consider attaching concise demonstrative evidence that may assist you in explaining your perspective, such as photographs (a picture is worth 1000 words), portions of deposition transcripts, medical records, or expert testimony.  Highlight these exhibits and don’t make the mediator or opposing counsel pore over pages reading every word to figure out which sentence(s) in a lengthy document is the one you’re relying on.  Information you attach to a mediation memorandum should be tabbed or marked for easy reference, and should be readily accessible at the mediation session so that you can avoid fumbling while searching for documents or not have the information you need at hand.

Encourage the other side to provide a copy to their client.  If you have a concern that the party on the other side of the case might not be given a copy of your summary to read, prepare two copies.  Serve both on opposing counsel and explain that one copy is a courtesy for their client.  Bring extra copies to mediation to provide one to the other side.  If it was not shared before, you can be sure it will be read during caucus.

Persuadith Thine Audience

There are mixed opinions of late as to whether and to what extent an opening statement should be made at mediation.  Certainly the risk of alienating the other party by making offensive or inflammatory opening comments is often stated by many attorneys, parties, and by many mediators as reason to avoid or limit an opening statement.

Trial lawyers, who are accustomed to speaking with and negotiating only with opposing lawyers, have the opportunity at a mediation to make a pitch directly to the principles on the other side.  The tone of the opening presentation should then strike a balance between interest in settlement and readiness to litigate. It is not helpful to be offensive or unnecessarily aggressive, but best to utilize the opportunity to make your legal arguments and to persuade decision-makers of the merits of the case and the risk of litigation if settlement is not achieved.

You want the mediator, opposing counsel, any insurance carrier, and the decision-makers to know that you are organized, well prepared, knowledgeable, and can effectively tell a compelling story to a third-party decision-maker whether it be a judge, arbitrator, or jury.  Present your case in a way that is reasonable and palatable to the other side.  Do not assume that the other side has read what you’ve filed in the case or even the mediation brief.

Mark Twain once said, “I spent a week preparing for an impromptu speech”.  While a week is unneeded, an opening statement should not be off-the-cuff, but rather, strategically thought out and prepared.

Aireth Thy Grievances

It is in private caucus that the parties and the mediator roll up their sleeves and where the hardest work of the mediation session takes place.  It is also where the mediator will ask his toughest questions, focusing the parties on the key issues in dispute.  A skilled advocate should anticipate what these questions will be and be prepared to answer them and/or have the client prepared for them, as well as having a plan of who will say what.

Separating opposing parties allows more open communication between the party in caucus and their mediator, helping the mediator understand the party’s point of view better.  Without the presence of the opposing party, the client is hopefully less tense, angry, and defensive, and more flexible and creative.  Clients who know that their private discussions with the mediator are confidential tend to speak more openly about their case and personal interests, providing information about their underlying interests and assumptions as well as suggesting new ideas for solutions.  It is often during these private caucuses where a party has the opportunity to vent or tell their story so they feel they’ve had their “day in court”.  Prepare your client to share their thoughts and feelings in a reasonable manner.

In addition, if a client has unrealistic expectations, the mediator will be able to directly address this in private caucus, diplomatically reality testing their assumptions.  If the advocate believes that the proposed settlement meets all of the needs of the client and that at trial a better outcome is unlikely, the mediator may be a useful ally in convincing the client to settle.

Worketh Thine Settlement

Parties and their counsel should understand and appreciate the importance of embodying agreements reached at a mediation session being articulated in a detailed and signed document.  All material terms of the agreement should be included in this Mediation Settlement Agreement so as to make it an enforceable contract.

Parties and counsel should anticipate early on, any and all potential issues that may arise when formalizing and embodying the material terms of the agreement in a Mediation Settlement Agreement and/or, should it be followed by a further release, all anticipated and needed terms of the release.

Waiting until the end of a mediation session to raise and discuss material terms required in both the Mediation Settlement Agreement and the release can result in disintegration of the anticipated deal. Consider bringing a release with you that could be executed at the end of the mediation session, or at least shown to the other parties when discussing specific terms required in the final release.

A skilled and experienced mediator will likely anticipate the issues that must be agreed upon before final settlement can be reached, but don’t rely on the mediator for this; raise these issues during the mediation at an earlier time and in an appropriate manner, such as in private caucus first, to help you avoid common pitfalls at the end of the session that could jeopardize settlement.

Ye Shall Persevere

Taking the steps suggested in these ‘Commandments’ at the beginning, middle, and end of a well-crafted mediation process will significantly increase your chances of obtaining a favorable result and most importantly, a satisfied client.

DR Users Guide

Introduction

With only 1.5% of civil cases making their way to jury in Massachusetts, planning for pre-trial settlement is an essential legal strategy.  Dispute Resolution (DR) has evolved to provide specialized methods to assist parties in resolving their disputes without the time, expense, and uncertainty of trial in the court system.

This guide is intended to assist parties, whether represented by counsel or not, in the use of DR processes to best serve their interests in resolving disputes promptly, fairly,  economically, and without the anxiety and frustration of litigation and trial in the court system.

Who Uses DR, and Why?

Private individuals, attorneys, businesses, the insurance community, and the government all use Dispute Resolution.  Because it works.

When used effectively, DR generates predictable benefits.  Given commitment, the utilization of practical DR methods realize immense savings of time, money, and relationships.  Early resolution, collaborative law, mediation, and arbitration, among other DR processes, all enhance access to justice, bringing rapid, consent-based DR to the forefront as the preferred method of managing conflict.  Whereas, litigation tends to produce winners and losers – not solutions – to joint problems.

What is Dispute Resolution?

DR consists of alternative options to the lengthy and costly pretrial discovery required in the court system as well as to the uncertainty and frustration of trial procedures therein.  The principal advantage of DR is its inherent flexibility, giving the parties, their attorneys, and/or claims handlers the ability to tailor the dispute resolution process to the circumstances of the case, as well as to the needs and preferences of the disputing parties.

In Massachusetts, the impact of DR began to be felt in the legal and insurance community in the late 1980’s.  DR services are now available to parties from a wide variety of sources, including private DR providers such as Massachusetts Dispute Resolution Services (MDRS) as well as some court-connected programs.  Whereas MDRS is available immediately to parties when a dispute arises, court-connected programs are generally available only after suit is initiated and certain pre-trial discovery has been completed.

The spectrum of DR processes range considerably, and include our specialties of informal, non-binding mediation to more formal, binding arbitration.  Some of the recognized terminology of DR, such as ‘mediation’ and ‘arbitration’, are often mistakenly used interchangeably, even by attorneys and claims representatives who may not be fully familiar with DR procedures.  To assist with clarification, here is a glossary of terms used by DR practitioners.

ARBITRATION.  In arbitration, a binding decision is made on a disputed matter by a neutral arbitrator or panel of arbitrators after a hearing is conducted which involves the presentation of evidence and arguments by the disputants.  This process most closely resembles a trial in the courts.  In most arbitrations however, the rules of evidence are relaxed and there is limited pre-hearing discovery.  The award of the arbitrator, except in limited rare circumstances, is final and not subject to appeal.

MEDIATION.  Mediation is a voluntary process in which a neutral mediator assists the parties in resolving their own dispute.  The mediator has no authority to impose a settlement and the parties are under no obligation to reach agreement.  The mediator may, but need not, suggest settlement terms.  Mediation proceedings are private and confidential, and the substance of the discussions in mediation is generally considered privileged.  Well over 90% of cases mediated with MDRS reach settlement.

CASE EVALUATION.  Case evaluation is a process where the parties agree to present a summary of their case to a neutral evaluator for their opinion regarding the likely outcome if the case were adjudicated.  The opinion of the evaluator is not binding on the parties.  Its value is to encourage subsequent settlement, and the neutral is generally a well experienced attorney or retired judge whose opinion is respected by both sides of the controversy.  

CONCILIATION.  In several court counties, both district courts and superior courts schedule cases for conciliation conferences before retired judges or members of the bar usually acting on a volunteer basis, to assist the parties in settling their case or to ready the case for trial.  These sessions resemble mediations but are generally much shorter, typically between 30 to 45 minutes.  The conciliation is often scheduled after the discovery period for depositions etc., is complete and shortly before trial is scheduled.

MED/ARB.  Med/arb is a combination of mediation and arbitration, in which the parties agree in advance that they will mediate their case, but if the dispute is not resolved through mediation, they will proceed with a binding arbitration.  The parties agree in advance whether the mediator will subsequently serve as the arbitrator if the dispute is not resolved through mediation.  Although the use of the same neutral is more efficient, parties often may want a different impartial neutral to serve as arbitrator, a person who was not privy to offers or demands made or other confidential discussions taking place at the mediation.

MINI-TRIAL or SUMMARY JURY TRIAL.  Both of these processes can be either binding or non-binding, depending upon the agreement of the parties.  Both processes involve a summarized presentation of the evidence in a dispute to a panel composed of either experienced neutrals (mini-trial) or a lay jury (summary jury trial).  Generally the evidence is presented in summary form by counsel for each party as would be expected should the case go to trial, and arguments are made by both sides based on this evidence.  If the process chosen is non-binding, it resembles in effect a case evaluation, but with a panel of neutrals or jury being involved.  Mini-trials and summary jury trials are generally only used for cases in which a lengthy trial is anticipated, and where the liability and/or damages issues are in dispute.  More often than not, these processes are non-binding and only informational, to assist in valuation of the claim or in designing a trial strategy.

HIGH-LOW ARBITRATION.  This process is designed to minimize the risks of the parties in proceeding to binding arbitration, and is being used more and more by attorneys, individuals, businesses, and insurance claims handlers.  In advance of the hearing, the parties agree in writing to a minimum and maximum arbitration award.  The decision of the arbitrator is binding but can be no less than nor more than the minimum and maximum limits.  Generally the arbitrator is not made aware of the high and low limits determined by the parties, so as not to be influenced by these limits in making their award.  This process is often used when the parties have made some progress in their negotiations and wish not to abandon the progress made, but rather chose to have an impartial arbitrator resolve the differences remaining within set limits.

OTHER DR PROCESSES.  The flexibility of DR processes has led to the development of numerous hybrids, combining many of the processes described above including, for example, fact finding hearings, master’s hearings, settlement conferences, and “baseball” style arbitrations.  The details of any such hybrid agreement should be carefully considered by the parties before entering into a written agreement.

Advantages and Disadvantages of Dispute Resolution

Although DR is worth considering in most cases, there are certain cases where DR is better suited than others.  The issue confronting parties, attorneys, businesses, and insurance representatives is whether DR offers some advantage over the ordinary course of negotiation, litigation, and pre-trial discovery, as well as the costs, frustration, and uncertainty involved in trial to resolve a case.  Factors relevant to that decision are discussed herein.

Advantages of DR:

COST SAVINGS.  The primary reasons why litigation is so expensive in Massachusetts are well known:  pre-trial discovery and discovery-related motion practice.  According to a study of the federal courts by the Brookings Institute, 60% of the cost of litigation is attributable solely to pre-trial discovery.  Further, the cost for the personal appearance of expert witnesses at trial, generally required by the trial court’s evidentiary rules, is extremely high.  DR’s simplified procedures, which allow in many cases for the presentation of expert testimony and other documentary evidence by affidavits and written submissions, generally result in lower legal costs and accrued discovery expenses.  The fees for DR vary from provider to provider, but are a fraction of what discovery and trial in the Court system would cost parties.  Please refer to MDRS fees at www.mdrs.com/fees/.

TIME SAVINGS.  Litigation in the Courts is often delayed by the backlog of pending cases.  A trial in the court system could take two years or more after suit is filed.  Although most courts have improved their efficiency by reducing their case backlogs over the past years, continuing budgetary cuts have dramatically impacted the Courts and their ability to effectively handle the number of cases presently in litigation.

On the other hand, cases submitted to mediation or arbitration with a private DR provider such as MDRS can often be scheduled for hearing within days of submission, depending on the needs and availability of the parties.  Many DR providers render final and binding arbitration decisions between 10 to 20 days from the close of the hearing.

CONVENIENCE.  Unlike the scheduling of a trial by the court, with DR the parties select a mutually convenient time and place for a hearing.  Last minute postponements and delays, often resulting when a court is not ready for the case to commence as scheduled, are avoided by using DR.  Last minute calls by court clerks saying that the court needs you to commence trial tomorrow do not occur when using DR.  

FLEXIBILITY.  Using DR, the parties can tailor a dispute resolution process that will work best for them based on each individual case, whether, for example, non-binding mediation, binding arbitration, or perhaps binding high-low arbitration.  With DR, the parties retain greater control over the manner in which their dispute is resolved than they would if they opted for trial within the court system.

CHOICE OF NEUTRAL.  Parties utilizing DR mutually select the arbitrator(s) who will decide the case, or the mediator who will assist them in resolving their dispute, and are able to review detailed biographical materials.  In the courts, the parties do not know which judge their case will be assigned to, nor what experience that judge may have in the particular field of law that their case involves.  If a jury trial is requested, the decision makers on the jury ordinarily have no experience in the law or in the valuation of cases.  DR providers, such as MDRS, offer retired judges or experienced attorneys as neutrals who have training and experience in the particular area of law involved in each case.

PRIVACY AND FINALITY.  For many parties an important advantage of DR is the private resolution of their dispute.  This is often the case where reputational interests are involved or where the parties wish to limit public access to documents, exhibits, pleadings, and testimony.  An arbitration hearing or mediation session takes place in a private office setting and not in an open courtroom with spectators. A related concern of some parties may be avoiding a reported decision where an adverse precedent would encourage the filing of additional cases against the party.  Another important advantage of DR to many parties is that except in certain rare circumstances, the arbitrator’s decision is final and is not subject to appeal, which could take years, require significant further costs, and result in continued uncertainty.

PRESERVING ONGOING RELATIONSHIPS.  To many, no experience can be more adversarial than trial in the court system.  Prior relationships that may have existed between disputants, i.e., business associates, neighbors, employers and employees, married couples, etc., seldom survive the strain of protracted litigation.  In contrast, the informality of the mediation process, the mutual decision to elect mediation, the mutual selection of a mediator, and the focus of the mediator on the existing relationship can often help to not only resolve the immediate dispute, but also often increases the parties’ ability to resolve future disagreements in a non-adversarial manner.  Even the process of binding arbitration is less likely to further damage once beneficial relationships that may have existed among parties.

RISK MANAGEMENT.  DR proceedings can be structured in a manner that controls risk by setting limits on the range of outcomes, for example, by using a high-low arbitration format.  Such controls are particularly useful where there is a risk of a runaway jury or where the amount in controversy is such that a wholly adverse decision could be ruinous to one of the parties.  In mediation, of course, risk is always controlled because a party is free to refuse any offer or demand until a satisfactory one appears.

Some Disadvantages of DR:

SPLITTING THE APPLE.  Anecdotally, a criticism often made by some attorneys and insurers is a perceived tendency of arbitrators or mediators to split the differences between the parties, with arbitrators being reluctant to say “no” to a plaintiff by issuing a defendant’s verdict, or, on the other hand, being reluctant to issue a significant award in favor of plaintiff where warranted.  With the development of DR in the marketplace, both with private as well as public providers, however, these concerns have been addressed to a great extent.  Arbitrators who show a tendency not to make tough choices based upon the evidence presented, risking the alienation of one or another party, or who have any bias for or against plaintiffs or defendants are simply not being selected for service.

LIMITED DISCOVERY.  Use of DR can result in less protracted and expensive discovery, and often results in informal free exchange of information and documents, without excessive depositions, interrogatories, and document production requests often involved in the courts.  However, for a party in need of information, who needs to take depositions and obtain information through discovery to prove his case, neither mediation nor arbitration at an early stage may be advantageous to them.  Certain discovery may be needed for this party to properly prepare their case, before a mediation or arbitration is scheduled.

RELAXED RULES OF EVIDENCE.  Some parties want the protection of formal rules of evidence imposed by the courts, for example, the inadmissibility of hearsay statements, as a further safeguard that the decision rendered is based on “clean” evidence.  Most arbitration agreements relax rules of evidence, with many, for example, allowing hearsay statements and permitting the introduction of other evidence which may be prohibited in a court trial.  The specific arbitration rules of the DR provider should therefore be carefully reviewed in advance.  Many arbitration rules can be modified if requested by both parties in advance of the hearing, i.e., to rule out hearsay statements, etc., so long as the modifications do not violate any applicable law.

LACK OF APPEAL RIGHTS.  Parties who may be aggrieved by the decision of the arbitrator, but for rare exceptions, have no right to appeal the decision, as they may have in the court system.

LIMITED DEVELOPMENT OF THE LAW.  A frequently made argument against the expansion of DR throughout the legal system is the risk that DR will stunt the development of law.  Arbitration decisions are generally unreported and remain confidential.  The common law is developed by litigation and reported decisions of the courts.  Many feel that, particularly in high stakes or high profile cases, if such cases are resolved by DR, the law will not develop with its customary vigor, and that predictability and direction for the law will be undermined.

OTHER ADVANTAGES OF LITIGATION.  Some cases should go to trial, and the following are some characteristics of cases in which litigation may be needed or desirable:

  • Cases where a party has exercised bad faith and in settlement discussions may not be suitable for mediation or even arbitration.
  • Where the claim on the other side is totally without merit and there is a 100% likelihood of winning.
  • Where the delay inherent in litigation serves the business interest of the client.
  • Where the visibility of litigation may serve the goals of the client.
  • Where it is important for the client to establish a public record resulting from discovery and trial.
  • Where it is important for the client to discourage other claims and establish a tough stance on specific issues.
  • Where the client needs remedies that are available only through litigation (i.e., an injunction, attachment, or declaratory judgment).

MEDIATION:  What to Expect / Recommendations to Users

Before the Mediation:

WRITTEN SUMMARY.  Before a mediation convenes most mediators request a brief written summary of the case from each party.  In personal injury cases, the summary should discuss the issues of liability, focusing on the key evidence in support of the parties’ position, and on damages, discussing for example, such issues as the extent of disability, casual relationship, and the extent of special damages or economic loss.  If the issues of liability or damages can be best highlighted by attaching pertinent portions of medical records, statements, or other documents, you may wish to do so in advance of the mediation to assist the mediator.

PREPARATION.  Be prepared; carefully review your case before the mediation.  Although mediation is informal, be prepared to discuss the facts of your case in detail.  Identify and sort out all documents, or portions thereof, that may be helpful to show the mediator so as to avoid wasting time at the mediation by having to sort through a large file.  Spend time with your client preparing him for the mediation.  Determine who will speak and encourage the client to come with an open mind.  Discuss in general terms what settlement options they feel may be acceptable to them if they became available at the session.

KNOW THE MEDIATOR.  Spend some time finding out about your mediator and his or her background and experience.  Discuss with your co-workers or references provided by the mediator as to how the mediator generally conducts his mediations.  

THE PARTIES TO THE DISPUTE MUST ATTEND.  Research shows that where the plaintiff, the defendant, and/or any insurance representative or any individual with needed full settlement authority appear at the mediation, the chances of settlement increase dramatically.  Be sure the opposing party, and not just their attorney or other representative, are going to attend the mediation.  In the rare circumstance where the party is unable to attend, their representative should advise all parties of this before the mediation.  At times, due to geography or other circumstances, a party or person whose authority is needed to settle the case may be unavailable.  In such cases, with the assent of all parties, they may be able to participate by telephone or video conferencing during the course of the mediation session.

What Happens at the Mediation?

JOINT SESSION.  At the start of the mediation session, most mediators bring all the parties, their counsel, and/or representatives together in a large conference room for a joint session.  The mediator will typically describe the process they intend to follow, and should emphasize their impartiality and that all communications made at the mediation are confidential.  The parties, or their attorneys or authorized representatives, are given an opportunity in an uninterrupted manner, to explain the facts and key issues in the case from their standpoint and also may state where the parties are in terms of any settlement discussion that may have taken place before the mediation.  At times it may be advisable however, to reserve settlement discussions until in private caucus with the mediator;  a skillful mediator may in some cases encourage the parties to do so.

PRIVATE CAUCUSES.  Often after a joint session, the mediator will have private caucuses (meetings) with each party to explore their position and flexibility for settlement.  These private caucuses are also confidential, and as such, the parties may find it easier or more appropriate to discuss certain issues and/or their willingness to show flexibility in these private sessions.  These private discussions should be kept in confidence by the mediator, and only those proposals that a party specifically authorizes a mediator to share with the opposing party should be divulged by the mediator.  Parties to a mediation should insist that the mediator pledge that these discussions in private caucus will remain confidential.  This confidential information is critical to the mediator, since with this information in their mind they can begin to focus in on the true needs of the parties and possible terms or proposals for settlement.

TOOLS OF THE MEDIATOR.  Mediators are trained to deal with many issues likely to arise at a mediation, including intense emotions, lack of trust, and communication failures.  A skilled mediator, particularly in private sessions, is likely to discuss with each party the realities and alternatives facing them if, for example, they decide to go to trial, what the chances are of a verdict in their favor, what is a likely award, how long it would take to get to trial, and how much it would cost financially and emotionally to go through trial.  Mediators may wish to focus the party on what weaknesses they may have in their case.  Some parties are resistant to hearing such messages, even from their attorneys, and may have overly optimistic assessments of what a trial may result in should they decide not to accept settlement.  The mediator can be effective, as an impartial and experienced neutral, in dealing with such unwarranted optimism.

Many skilled mediators will avoid indicating their opinion about the merits or value of the case, particularly early on in the mediation session, which distinguishes a mediation from a case evaluation or arbitration.  Rather, mediators are experts in the process of settling the dispute.  However, a good mediator will often make suggestions to the parties and, as the session proceeds, may raise settlement suggestions, most often in private caucuses, i.e., “What would your response be if the defendant expressed willingness to pay $50,000.00 and dismiss their counterclaim?”

CONFIDENTIALITY.  The parties should be sure that the written mediation agreement contains a confidentiality clause, wherein the parties and the mediator agree that any communication made during the course of the mediation relating to the subject matter being mediated shall be a confidential communication and not be subject to disclosure in any subsequent judicial or administrative proceeding.  This is to assure that if the case does not settle, their statements, offers, demands, or other negotiations are not disclosed to a judge, jury, or arbitrator.

The Massachusetts Confidentiality Statute, M.G.L. ch. 233, s. 23C provides that documents exchanged in connection with a mediation and the substance of discussions in a mediation are not  “subject to disclosure”  in any judicial or administrative proceeding.  However the protection of the statute only applies if the mediator has satisfied certain requirements of training and experience.  Further, the statute has been little used or interpreted by the Courts, so that parties are well advised to embody their confidentiality agreement in a written mediation agreement.

SETTLEMENT OR OTHER DR ALTERNATIVES.  If settlement is reached at a mediation session, it is advisable to sign settlement agreements and/or written releases while all parties are present at the mediation.  Although mediation is often referred to as  “non-binding”, an agreement reached in a mediation is as binding and enforceable as any other agreement.  Statistics show that the vast majority of cases (approximately 85% to 90%) submitted to mediation reach settlement.  If settlement is not reached but progress has been made, it may be suggested that the parties return again for a second mediation.  In many cases where the differences of the parties have been significantly narrowed but settlement not reached, arbitration is then selected by the parties to reach a final resolution.  The parties may then wish to take advantage of the progress made in mediation by agreeing to submit the dispute to binding high-low arbitration, setting a minimum and maximum award, for example, perhaps at or near where their negotiations reached an impasse.

Arbitration:  What to Expect / Recommendations to Users

Before the Hearing:

DISCOVERY.  Perhaps the most significant difference between arbitration and court proceedings is the limited discovery available in arbitrations.  Indeed, one of the advantages of the arbitration process is avoidance of the costs and time delays involved in open-ended pretrial discovery, particularly in cases where overzealous counsel is of the  “leave no stone unturned” philosophy.  Insurers and businesses are seeking ways to reduce litigation costs, scrutinizing proposed discovery tools of their counsel to assure that each step yields corresponding gains for them in either fostering a more favorable settlement or resulting in a trial advantage.  What becomes important for DR therefore, is to provide a process that meets these legitimate concerns of the participants for discovery.  So the question arises as to how much discovery should be allowed in arbitration, and what steps participants should consider to assure they have enough opportunity for discovery.

As a starting point, it is best to understand that little-to-no discovery is generally permitted once the parties submit a case to arbitration.  Under the Massachusetts Uniform Arbitration Act (MUAA), an arbitrator has the authority to order document production and depositions of witnesses  “who are unavailable for the hearing or cannot be subpoenaed”.   The arbitrator has wide discretion in this regard and the Courts have repeatedly declined to become involved in disputes over whether or not an arbitrator exceeded his authority in permitting or prohibiting discovery.  Therefore, the issue of the extent of discovery permitted is left entirely to the determination of the arbitrator.

The diligent party therefore is well advised to either complete all necessary discovery before submitting a case to arbitration or to reach a written agreement with the opponent as to the discovery that will be permitted before submitting a case to arbitration.  Even the right of an insurer to a “statement under oath” of an insured, or one seeking recovery under the terms of an automobile insurance policy is not guaranteed to be allowed by certain arbitrators.

Many organizations providing DR services have arbitration rules which allow the arbitrator, in the event the parties are unable to agree on pre-hearing discovery, to decide such matters and make discovery orders if requested by the parties.  The written arbitration agreement should be carefully reviewed as to provisions relating to discovery.

INITIATION OF ARBITRATION.  When a case is deemed submitted to arbitration differs among DR providers.  The arbitration rules should be closely examined in this regard.  Some providers deem that an arbitration is initiated by receipt of written submission forms signed by the parties.  In cases where parties are bound by an arbitration clause in an ongoing contract, arbitration may be deemed initiated by serving a demand on the opposing party.  It is important for the user to determine and be sure that the opponent has bound himself to arbitration however, since occasions arise when parties wish to opt out of arbitration at the last minute, and if a binding arbitration agreement is not properly signed, or already in place, the opposing party may have little recourse.

SELECTION OF ARBITRATORS, DISCLOSURE OF CONFLICTS OF INTEREST.  The utmost care should be given to the selection of the arbitrator.  The arbitrator is the decisive element in any arbitration.  Their ability, experience, and fairness are at the foundation of the arbitration process.

The most common method of arbitrator selection is from a panel offered by the DR providing firm.  The user should request biographical materials concerning each arbitrator available for selection.  Inquire of co-workers, associates, or references provided by the arbitrator as to the arbitrator’s qualifications.  If the parties cannot agree on an arbitrator, the arbitration rules of the provider often provide an alternative selection process.  For example, the parties may be requested to number the proposed panelist(s) by order of preference and the DR organization may administratively appoint the arbitrator most highly sought by both parties.  If the parties cannot agree on an arbitrator, the Massachusetts Uniform Arbitration Act permits court appointment of an arbitrator upon request to the court.

Once selected, the arbitrator should disclose in writing to the parties any circumstances that would suggest a lack of impartiality, conflict of interest, or require disqualification.  If, after full disclosure, a party fails to object to an arbitrator, the objection is generally deemed waived, and subsequent challenge to an arbitration award on these grounds will likely fail.

WRITTEN BRIEFS.  Briefs may be submitted to the arbitrator both prior to and, at times, after the arbitration hearing.  If the user wishes to submit a brief after the hearing, the arbitrator and the opposing party should be informed, since the arbitrator may hold his decision pending receipt of briefs, or allow the opponent a certain amount of time to file their brief.  The arbitration rules should be carefully reviewed in this regard.

ADMISSIBILITY OF DOCUMENTARY EVIDENCE.  Many DR providers have arbitration rules that require a party who wishes to present documents at a hearing to produce them to the other side within a certain number of days in advance of the hearing, (i.e., 10 or 20 days).  These arbitration rules should be carefully reviewed and complied with.  Examples of documents that often are admissible in this fashion are medical reports, medical bills, experts reports, and affidavits of witnesses.  If these documents are not produced in advance according to these rules, the arbitrator may prohibit their introduction, particularly if failure to produce them has prejudiced the other side in their ability to prepare for the hearing.

What to Expect at the Arbitration Hearing:

CONDUCT OF THE HEARING.  Arbitrators do not conduct all arbitration hearings in a similar manner.  The arbitration rules should be carefully reviewed in this regard.  If these rules are vague as to how the hearing will be conducted, as many are, the user should request further information from the DR provider on the process to be used in advance of the hearing.

Arbitrations resemble trials.  They usually take place in a large private conference room.  Parties can be represented by counsel or can represent themselves.  Insurance claims representatives can appear on behalf of their insureds at the arbitration hearing, or they can have defense counsel appear, often depending on the value and legal complexity of the case.

STIPULATIONS.  The arbitrator often starts by making introductory remarks and explains the process they wish to follow during the course of the hearing.  Any stipulations that can be entered into by the parties should be made prior to the commencement of the hearing.  For example, the defendant may wish to stipulate as to liability with the only issue submitted to the arbitrator being the extent of damages.  Or, the parties may be able to stipulate as to offsets that are to be taken from a gross award, such as for Personal Injury Protection [PIP] benefits received by the claimant in an automobile bodily injury claim being arbitrated.

OPENING STATEMENTS.  Usually both parties or their counsel or representative are given an opportunity to make a brief opening statement outlining the evidence they expect to present at the hearing.

PRESENTING THE CASE.  The claimant presents his or her case first.  The arbitrator is empowered to administer oaths to all witnesses and the witnesses usually testify under the direct examination or questioning of their counsel or representative first.  The opposing party or his counsel or representative will have the opportunity to then cross examine each witness.  At times, the arbitrator may also question witnesses.

During the course of the claimant’s case, all relevant documentary evidence may be submitted, such as, in personal injury cases, medical bills, medical records, lost wage information, and in certain instances, expert’s reports or affidavits.  Expert witnesses, such as doctors or engineers, may testify in person at the arbitration.  As stated above, the arbitration rules must be reviewed carefully well in advance of the hearing concerning admissibility of testamentary and documentary evidence so as to comply with all notice requirements.

After the claimant presents their case, the respondent has the opportunity to present witnesses and submit documents in opposition.  The claimant, or his counsel or representative, shall also have the right to cross examine any witness presented by the respondent.

EVIDENTIARY OBJECTIONS.  The user should make any objections they deem warranted to evidence that their opponent seeks to admit.  The arbitrator shall rule on each objection.  Although the rules of evidence are generally more relaxed at an arbitration hearing, objections have value in that they may alert the arbitrator to possible deficiencies in the opponent’s evidence.

CLOSING STATEMENTS.  After all of the evidence has been submitted by both parties, each party is typically allowed to make closing statements outlining their positions as to liability and damages, with the respondent going first and the claimant last.

FORM OF AWARD.  Under the Massachusetts Uniform Arbitration Act, and under the terms of most written arbitration agreements, an arbitration award must be in writing and signed by the arbitrator(s).  Some arbitration awards may be sparse and not contain detailed findings of fact or rulings of law, but simply state the result, such as the amount of damages to be paid by one party to the other, i.e., “The defendant shall pay the claimant the amount of $50,000.00”.  Most  arbitration awards, however, do contain the arbitrator’s reasoning in reaching their decision.  The parties are nevertheless advised to clarify in advance with the arbitrator the type and form of award that they require and can be expected.  Some disputes require that the parties receive a reasoned award with specific findings.  The parties should clarify in advance issues such as offsets from any award, i.e., for Personal Injury Protection benefits paid, findings of comparative negligence, etc., so that the written award that is rendered makes clear the precise net amounts that may be awarded, without need for further clarification.

PUNITIVE DAMAGES.  Generally, punitive damages are not available under Massachusetts law unless authorized by a specific statute, however, an award of punitive damages by an arbitrator is not without precedent, though rare.  Parties should clearly determine and ideally stipulate in the written agreement whether punitive damages are an element to be submitted to the arbitrator.  Multiple damages under M.G.L. 93A and 176D can be awarded by arbitrators unless the parties agree to the contrary.

ATTORNEYS FEES.  In most cases, an arbitrator may not award attorney’s fees unless authorized to do so by statute or by the parties’ arbitration agreement.  Attorneys fees are expressly excluded from the relief available under the Massachusetts Uniform Arbitration Act, but, like punitive and multiple damages, these issues should ideally be discussed and agreed to by the parties in writing prior to submission to arbitration.

INTEREST.  Pre-award interest is generally, but not always, unavailable in arbitrations under Massachusetts law, unless the parties provide otherwise in their agreement.  Interest is available, however, from the date of the award.  Pre-judgment interest often plays a significant role in older cases submitted to litigation, since the Massachusetts statute presently calls for pre-judgment interest in tort cases of 12% from the date suit is initiated.  Should such an older case be submitted to arbitration, the parties should clearly indicate in the written arbitration agreement whether the arbitrator is authorized to award interest.

MOTION TO VACATE OR REVIEW ARBITRATION AWARD.  Challenges to arbitration awards are rare because the grounds for appeal are so narrow.  The grounds for vacating an award under the Massachusetts Uniform Arbitration Act (MUAA) are limited to:  1. Corruption, fraud, or undue means;  2.  Evident partiality of the arbitrator(s) or misconduct prejudicing the rights of any party;  3. Arbitrator(s) acted in excess of their power;  4.  Arbitrator(s) refused to postpone the hearing, upon good cause being shown, refused to hear evidence material to the controversy, or engaged in other misconduct at the hearing, which prejudiced the parties’ rights; and 5. The absence of a written arbitration agreement, as long as the party seeking to vacate the award did not participate in the arbitration hearing without raising an objection.

The most common but least successful ground for challenging an arbitration award is that the arbitrator erred with respect to the facts or the law.  The Massachusetts Supreme Judicial Court has stated however that, “if an arbitrator has committed an error or law or fact in arriving at his decision, a court will not upset the finding unless there is fraud involved.  Even a grossly erroneous decision is binding in the absence of fraud.”

ARBITRATOR IMMUNITY.  Arbitrators enjoy the same immunity from civil liability as judges.  This immunity extends to the organizations that administer the arbitrations.  Arbitral immunity includes immunity from testifying about the reasons for the award or any other aspect of the arbitration.

 

CONCLUSION:  We at MDRS hope that this guide assists you in understanding the processes of Dispute Resolution and we encourage you to consider employing a DR method rather than pursuing litigation in the court system to resolve your disputes promptly, economically, and fairly.

Please contact us should you have any questions that we can answer about our DR services.

 

 

Use an Honorable Engagement Provision

Use an Honorable Engagement provision to make the “steep uphill climb” toward arbitral vacatur improbable.

By Anthony C. Adamopoulos, Esq. ©2015

In May, the First Circuit of the United States Court of Appeals issued a decision of interest to arbitration practioners. Of exceptional interest is the court’s recognition that when arbitration agreements contain an Honorable Engagement provision “… the prospects for successful arbitration are measurably enhanced…”.

First State Insurance Co. and New England Reinsurance Corporation v. National Casualty Co., 781 F.3d 7 (1st Cir. 2015) 1 (First State)  described and confirmed, in a clear and plain manner, two concepts of arbitration: (1) the unlikelihood of having arbitration awards vacated and (2) the value of an “ honorable engagement” provision in arbitration agreements.

In First State, the arbitration Panel’s award arose out of a dispute involving eight reinsurance agreements.  The Panel’s interpretation of the agreements was the basis for its award.  The award included the establishment of a payment protocol and a reservation of rights procedure.

The appellant, National Casualty Company, contended that the interpretation that led to the payment protocol exceeded the Panel’s authority and that the reservations of rights procedure “…[did] not draw its essence from the underlying agreements.” Id. P. 10.

The unlikelihood of vacatur.

The Panel first describes the practical likelihood of having an arbitral award vacated:

“A party that implores a court to vacate an arbitration award normally faces a steep uphill climb: the scope of judicial review of arbitration awards is ‘among the narrowest known in the law’.”  Me. Cent. R.R. Co. v. Bhd. of Maint. of Way Emps., 873 F.2d 425, 428 (1st Cir. 1989).” First State Insurance Company, 781 F.3d at 9.

“… A federal court’s authority to defenestrate an arbitration award is extremely limited. … A legal error (even a serious one) in contract interpretation is, in and of itself, not a sufficient reason for a federal court to undo an arbitration award. … Only if the arbitrators acted so far outside the bounds of their authority that they can be said to have dispensed their own brand of industrial justice will a court vacate the award. … Put another way, as long as an arbitration award draw[s] ‘its essence’ from the underlying agreement, it will withstand judicial review — and it does not matter how ‘good, bad, or ugly’ the match between the contract and the terms of the award may be.” (Internal quotation marks and citations omitted.).  First State Insurance Company, 781 F.3d at 11.

Massachusetts case law provides a similar “steep uphill climb”:           “… on review of an arbitrator’s decision, we do not review the arbitrator’s findings of fact or conclusions of law for error… . Judicial review of an arbitration award is narrowly confined… . [A] court is bound by the arbitrator’s findings and rulings ‘even if they appear erroneous, inconsistent, or unsupported by the record at the arbitration hearing’. ” (Internal quotation marks and citations omitted.) American Fed’n of State, County, & Mun. Employees, Council 93, AFL-CIO v. School Dep’t of Burlington, 462 Mass. 1009,1010 (2012) Rescript affirming: American  Fed’n of State, County, & Mun. Employees, Council 93, AFL-CIO v. School Dep’t of Burlington, 78 Mass. App. Ct. 511, (2011).

The First State Panel does not set new law; rather, it boldly reiterates what seasoned arbitral attorneys know about overturning an award, from step one, it is a “steep uphill climb”.

For Massachusetts practitioners, arbitration law generally flows from two sources, U.S. Code, Title 9 – Arbitration, The Federal Arbitration Act  (FAA) and M.G.L. Ch. 251 – The Uniform Arbitration Act for Commercial Disputes, The Massachusetts Arbitration Act (MAA). “In all relevant respects, the language of the FAA and the MAA providing for enforcement of arbitration provisions are similar, and…[our Supreme Judicial Court] has interpreted the cognate provisions in the same manner.” Warfield v. Beth Israel Deaconess Medical Center, Inc., 454 Mass. 390,394 (2009).

The FAA, at Section 10, lists four reasons for vacating an arbitral award. The MAA’s Section 12, lists five.

The value of an Honorable Engagement provision.

What power does an honorable engagement provision give to arbitrators? “…[A]n honorable engagement provision empowers arbitrators to grant forms of relief, such as equitable remedies, not following the strict rules of law.’ ” First State Insurance Company, 781 F.3d at 12.

Until this case the First Circuit had “…not had occasion to address the operation and effect of an honorable engagement provision in an arbitration clause.” First State Insurance Company, 781 F.3d at 12.

The arbitration section in each of the subject reinsurance agreements contained an honorable engagement provision. That provision “… directs the arbitrators to consider each agreement as an honorable engagement rather than merely a legal obligation and [it] goes on to explain that the arbitrators are relieved of all judicial formalities and may abstain from following the strict rules of law.” (Internal quotation marks omitted.)  First State Insurance Company, 781 F.3d at 12.

The Panel spoke plainly on the value of such a provision.  “This is a huge advantage: the prospects for successful arbitration are measurably enhanced if the arbitrators have flexibility to custom-tailor remedies to fit particular circumstances. … An honorable engagement provision ensures that flexibility.” First State Insurance Company, 781 F.3d at 12.

As to the Appellant’s contention that the arbitrators’ payment protocol was not derived from the subject Agreements, the Panel, in effect, said that while Appellant’s contention may be sound in contract law it is not relevant, because, “… the honorable engagement provisions in the arbitration clauses of the underlying agreements authorized the arbitrators to grant equitable remedies”. First State Insurance Company, 781 F.3d at 12.

The take away.

If parties negotiating an arbitration agreement want to measurably reduce the chance of a future award being vacated they should craft into their arbitration agreement an honorable engagement provision and thereby make the “steep uphill climb” toward vacatur remotely improbable to reach.

———————-
1 The Panel that heard this case included Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States.

2 “The FAA was originally enacted in 1925… and then reenacted and codified in 1947 as Title 9… Its purpose was to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other contracts. Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 219-220, and n. 6 (1985); Scherk v. Alberto-Culver Co., 417 U. S.506, 510, n. 4 (1974).”  Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991)

In Support of … Arbitration

By Brian R. Jerome, Esq. and Jeffrey S. Stern, Esq.

A recent three-part series in the New York Times, (Arbitration Everywhere, Stacking the Deck of Justice October 31, 2015), which spotlighted certain abuses and injustices in particular types of arbitration, has gained wide attention in the ADR community, the broader legal community and with the public. While the series was unquestionably effective in pointing out problems where they exist, it also painted with such a broad brush as to tarnish (perhaps inadvertently) the arbitration system as a whole, and the many respected and ethical professionals who operate within it, and who provide just and effective resolutions to conflicts of many forms.

The primary emphasis of the series in the Times was the growing use of arbitration clauses being placed into commercial and consumer contracts among parties with unequal bargaining power, such as low-wage employees against their employers, credit card or bank customers against large financial organizations, and the like. Such arbitration clauses are being inserted in an ever-widening range of contracts, often buried in fine print and unbeknownst to the consumer or not understood by them, and in circumstances that bear no resemblance to freely negotiated agreements. The articles were particularly critical of corporations including arbitration clauses that have been interpreted to waive class actions by consumers, a practice which has been upheld by recent, highly controversial, Supreme Court decisions. While reasonable people’s opinions can differ about the merits of class actions, with some critics believing that they benefit attorneys more than the class members, the Times articles demonstrate that without the leverage of class actions, it is simply impractical to pursue many claims, by arbitration or otherwise, against large corporations.

The second installment of the series was particularly troubling to the ADR community. It highlighted a small number of cases, the outcomes of which seemed particularly unjust, and strongly suggested that the process of arbitration, and arbitrators as a whole, were somehow biased and that the system itself was anti-consumers or plaintiffs. Obviously, unjust outcomes are not unique to the arbitration process, as evidenced by the unpredictability of jury decisions. However, a few anecdotes of inequitable arbitration awards should not characterize the work of so many dedicated arbitrators who objectively follow the evidence and make unbiased and reasoned decisions.

The Times articles makes a case for reform, either by court decisions or legislative response, as to the use of mandatory arbitration clauses in contracts that are neither prominently displayed nor understood by the parties, and particularly in circumstances where parties have significantly unequal bargaining power.

It is the professional obligation of the ADR community, which we believe is undoubtedly shared by the populous of dedicated professionals providing arbitration services, to emphasize that the arbitration process has a long and honorable history, and should justifiably remain a viable and often preferred option to litigation and trial for many disputes. Unlike the situations described in the Times, arbitration is more frequently and freely decided upon by parties and their attorneys in ongoing cases, without any mandatory arbitration clause. It is selected as the preferred dispute resolution process because one or more of its inherent features is appropriate for the case, such as:

– the time, expense, and costs saved by choosing arbitration over extensive litigation, discovery, and trial in the court system;

– the ability to mutually select the arbitrator or panel of arbitrators to hear the case, customarily neutrals with legal expertise in the area of the law involved and with track records of integrity and fairness;

– the convenience and efficiency of selecting the time and place of the hearing;

– the privacy of a conference room over a court room, and the finality of an arbitration award, as may be deemed mutually beneficial to the parties.

The Times article focuses on abuses pertaining to a narrow segment of the arbitration field, the regrettable hallmark of which is the use of arbitration clauses in contracts involving parties with unequal bargaining power and where the agreement is neither fully understood nor freely bargained for. As such, its focus is not — and should not —be seen as representative of arbitration or arbitrators as a whole. As attorneys and ADR providers we are bound by strict ethical rules and believe that authentic neutrality is at the very center of our mission and professional life. Indeed, those are the reasons why ADR has become so progressively utilized and appropriate as a fair and effective resolution process, and that it is trials in the courtroom which are now viewed by many as “the alternative.”

Brian Jerome is the Founder of Massachusetts Dispute Resolution Services (MDRS) and Chair of the MBA’s ADR Committee. Jeffrey Stern is a neutral at The Mediation Group and a member of the MBA’s ADR Committee.

Secrets to Business Success

Sheri-Bio-Photo-2by Sheri Stevens Wilson, MDRS Business Manager

What’s the big secret? Tell me, how do YOU increase revenue, outrun your competitors, and put your firm in the Pole Position? Although I’ve never felt there was actually a secret, I have always recognized that the answer is different for every business. Here are my top three recommendations to aid in the success of YOUR business:

First and foremost, re-energize your perspective. Time speeds by for us all, and it’s easy to become so embedded in daily activities that the big picture loses focus. Our business goals must morph with the times as needed as well. Take the time – at least yearly for a small firm, and more often for larger firms – to consider and redefine your goals. Your operations must then be tailored toward their achievement. Fine-tuning fresh plans will revitalize your business and invigorate you!

Consider your case and administrative tracking systems. Outdated and inefficient systems take more time in the long run than does creating new, comprehensive systems. Hardware and software upgrades may be involved; know ahead of time that it’s always painful, but when you come out the other side, you can’t imagine having survived even a day without your new gear!

Are you backing up your business data? If the answer is no, make this section your top priority (bonus: you will be half-way to meeting a major business goal when you’re done).

Social Media. Media, Schmedia, right? WRONG. No matter how much you might want to ignore it, social media is here to stay. And if you don’t somehow technologically involve yourself, you are at a huge disadvantage, perhaps akin to starting a trial with no opening statement prepared. We’re all aging, but don’t let your clients think you are a dinosaur! Yes, there is a lot to it if you consider every possible option at once, thus, my advice to the uninitiated is to choose one hip thing to start with and Make. It. Happen. It could be the most significant move you make for your business this year.

Here at MDRS we’re always focused on improving infrastructure in ways that allow us the ability to provide you, our clients, with the best service possible. And our ears are open to your needs as well! Please let us know how we can help.

Avoiding Pitfalls During Mediation Settlement

It’s 6 PM after a long mediation and all the participants are cranky and tired…but an agreement on a monetary amount has been reached! The moment the parties heard “yes”, they began packing up their files, but the mediator insists that they stay long enough for him or her to prepare a mediation settlement agreement. The responses are varied but sound like this: “Jim and I can work out the release details later this week”, or, “A handshake has always been good enough for me”. A good mediator, however, wears suspenders and a belt for the parties and does not want their hard work (or his or hers) to be lost because fifteen more minutes of attention are needed. Don’t leave now, because all of your efforts could unravel unless a written mediation settlement agreement, containing all the necessary terms of the agreement, is signed by all needed parties. This agreement need not be long and most often, the settlement agreement contemplates that a further more detailed release will be signed by theparties. I can’t stress enough that it is the best practice – and in the best interests of you and your client – to contemplate and deal with all potential issues that may arise in agreeing on the terms and specific wording of this more formal release, since the devil, as they say, is in the details. Remember: a mediation settlement agreement in and of itself is a binding, enforceable contract as long as it contains all the material terms of the agreement, even without a later, more detailed release being executed.

Here are some examples, based upon my experiences, of what may come up (too) late in the mediation process that can jeopardize the finalizing of agreements reached at a mediation session:

Let’s take, for example, a personal injury case where Bill Smith, now 68 years old, was injured four years ago while working in the course of his employment, suffering serious and allegedly permanent injuries at on off-site location. There is an issue as to whether all of his injuries were causally related to this accident as opposed to pre-existing conditions he suffered from. His workers compensation case was lump-summed, and reflected contested issues of medical causation. Some of Bill’s initial medical bills were paid by workers’ compensation, while other contested medical bills were paid by his personal health insurer. He turned 65 after the injury and now qualifies for Medicare, who has paid some of his more recent bills. The case is in suit against multiple high profile defendants who don’t want furtherpublicity, and multiple insurers are involved. Though none of the insurers had been named as defendants, Bill’s lawyer had sent MGL c. 93A and 176D demand letters to some of the insurers. Bill will need future medical care or perhaps rehab or nursing home care that may well involve further Medicare and/or Medicaid payments.

Now it’s the end of a long day of negotiation, and a final joint settlement offer made on behalf of all of the defendants has been found acceptable by Bill and his lawyer. The mediator insists upon drafting a mediation settlement agreement to be signed by all involved parties. The mediator sharpens his pencil and consults with the parties as to the terms of this mediation settlement agreement, which is to be followed by a more detailed release to be prepared by the defendants within a scheduled period of days. Here we highlight a selection of issues which may or may not have been dealt with by the parties earlier during the session…which could potentially torpedo the hard fought agreements reached:

* The mediator may be told that the defendants need a strict confidentiality clause and a non disparagement clause in the release applying to Bill, his wife, and his attorney, and to the benefit of all defendants and their insurers, and a liquidated damages clause in the event of breach. Bill’s attorney may say, “I don’t agree to confidentiality clauses, period…”, “This issue was never raised or negotiated”, “If you need that clause, you’ll need to pay us $50,000 more”, ” I intended to put this case in Lawyer’s Weekly or the Boston Globe”, “What specific language are you looking for?”, or, “I can’t agree to that, haven’t you read the Dennis Rodman case?” (Amos v. Commissioner, T.C. Memo. Docket No. 13391-01, 2003-329, December 1, 2003 Tax Court rules that portion of personal injury settlement attributable to secure a confidentiality clause is taxable).

* The mediator may be told that the defendants need a defense and hold harmless agreement as to any and all claims brought by anyone arising out of this litigation. The plaintiff may be unwilling to agree, defend, or indemnify the defendants against claims brought by others outside of their control.

* The mediator may be told that the defendants, in addition to agreeing to defending and holding harmless the defendants and insurers as to any and all liens, also need lien discharge letters from all lien holders in hand before making any payment. Plaintiff’s counsel may say, “Bill or I will hold you harmless personally, but it takes too long to get lien discharge letters and Bill needs the money now.”

* The mediator may be told that the workers compensation lien holder won’t agree to a reasonable compromise, and Bill’s lawyer needs to file a Curry motion with the Court to have a judge decide the lien amount.

* The mediator may be told that the defendants need extensive and detailed Medicare language included in the release. Because Bill will need long term medical care and perhaps nursing home care involving Medicare and/or Medicaid, the defendants may respond, “We also need to set up a Medicare Trust and set aside, to protect the defendants and their insurers from potential further Medicare/Medicaid claims.” Bill’s lawyer may demand the defendant’s counsel to “Show me the specific language you need in the release”, or ask, “Why is this being brought up now?”, or indicate that they
“don’t agree that a Medicare set aside is needed in these circumstances.”

* Some of the defendants may insist on adding Medicare or Medicaid or other large lien holders on the settlement check and not allow Bill’s attorney time to negotiate these liens and provide discharge letters after which separate checks can be issued. Bill’s attorney may say, “If you put the lien holders on the settlement check I lose all leverage and will never be able to negotiate a fair compromise of these liens”, or, “It will take forever to get endorsements from the lien holders and Bill needs his money now.”

* The defendants may say, “We want Bill and his wife, individually, to sign the release, and because Bill’s late-in-life son is a minor, we need a minor’s settlement approval by the Court.” Bill’s lawyer may respond that, “These requests were never raised during our mediation”, “They are not parties to this lawsuit”, “If you want these other releases you need to increase the settlement”, or, “I’m not going to court for approval of a $1.00 payment to Bill’s son”.

* The defendant may say, “Our release must include all potential claims from the beginning of time until the date the release is signed”. Bill lawyer may respond, “No way. Our claim is confined to a specific date of injury.”

* Defense counsel may say, “The release must discharge all claims against all insurers for claims of violation of MGL. 93A or 176D claims”. Bill’s attorney may respond, “No suit was brought on these claims”, “Defense counsel does not represent these insurers”, or, “We never negotiated settlement of these claims, so you need to increase the settlement amount to discharge these claims”.

Discussing the merits of the issues raised above, or methods by which these issues can be resolved, is beyond the scope of this article. The good news is that with time, all of these issues can usually be negotiated and resolved with the help of an experienced mediator. My purpose in this article is to highlight the problems that can occur if these issues are not raised earlier in the mediation session, but rather, are left to the end. To avoid this problem, may I suggest these thoughts for your consideration:

– Parties and their counsel should understand and appreciate the importance of embodying agreements reached at a mediation session into a detailed and signed Mediation Settlement Agreement;

– All material terms of the agreement should be included in the Mediation Settlement Agreement so as to make it an enforceable contract;

– Parties and their counsel should anticipate any and all potential issues that may arise when formalizing and embodying the material terms of the agreement in a Mediation Settlement Agreement and/or, should it be followed by a further release, all anticipated and needed terms of the release, including, but not limited to, such issues as discussed above;

– Parties and their counsel should not wait until the end of a mediation session to raise and discuss all material terms required in both a Mediation Settlement Agreement and the specific terms of any further release required;

– Anticipating that specific terms and language will be needed in a release, parties and/or their counsel may wish to bring a release with them that could be executed at the end of the mediation session and/or at least shown to the other parties when discussing specific terms required in the final release.

A skilled and experienced mediator will likely anticipate the issues that will need to be agreed upon before final settlement can be reached, and will raise these issues during the mediation at an earlier time and in an appropriate manner, such as in private caucuses first, to help you avoid pitfalls at the end of the session that could jeopardize the overall settlement.

Avoiding Pitfalls During Mediation Settlement

It’s 6 PM after a long mediation and all the participants are cranky and tired…but an agreement on a monetary amount has been reached! The moment the parties heard “yes”, they began packing up their files, but the mediator insists that they stay long enough for him or her to prepare a mediation settlement agreement. The responses are varied but sound like this: “Jim and I can work out the release details later this week”, or, “A handshake has always been good enough for me”. A good mediator, however, wears suspenders and a belt for the parties and does not want their hard work (or his or hers) to be lost because fifteen more minutes of attention are needed. Don’t leave now, because all of your efforts could unravel unless a written mediation settlement agreement, containing all the necessary terms of the agreement, is signed by all needed parties. This agreement need not be long and most often, the settlement agreement contemplates that a further more detailed release will be signed by theparties. I can’t stress enough that it is the best practice – and in the best interests of you and your client – to contemplate and deal with all potential issues that may arise in agreeing on the terms and specific wording of this more formal release, since the devil, as they say, is in the details. Remember: a mediation settlement agreement in and of itself is a binding, enforceable contract as long as it contains all the material terms of the agreement, even without a later, more detailed release being executed.

Here are some examples, based upon my experiences, of what may come up (too) late in the mediation process that can jeopardize the finalizing of agreements reached at a mediation session:

Let’s take, for example, a personal injury case where Bill Smith, now 68 years old, was injured four years ago while working in the course of his employment, suffering serious and allegedly permanent injuries at on off-site location. There is an issue as to whether all of his injuries were causally related to this accident as opposed to pre-existing conditions he suffered from. His workers compensation case was lump-summed, and reflected contested issues of medical causation. Some of Bill’s initial medical bills were paid by workers’ compensation, while other contested medical bills were paid by his personal health insurer. He turned 65 after the injury and now qualifies for Medicare, who has paid some of his more recent bills. The case is in suit against multiple high profile defendants who don’t want furtherpublicity, and multiple insurers are involved. Though none of the insurers had been named as defendants, Bill’s lawyer had sent MGL c. 93A and 176D demand letters to some of the insurers. Bill will need future medical care or perhaps rehab or nursing home care that may well involve further Medicare and/or Medicaid payments.

Now it’s the end of a long day of negotiation, and a final joint settlement offer made on behalf of all of the defendants has been found acceptable by Bill and his lawyer. The mediator insists upon drafting a mediation settlement agreement to be signed by all involved parties. The mediator sharpens his pencil and consults with the parties as to the terms of this mediation settlement agreement, which is to be followed by a more detailed release to be prepared by the defendants within a scheduled period of days. Here we highlight a selection of issues which may or may not have been dealt with by the parties earlier during the session…which could potentially torpedo the hard fought agreements reached:

* The mediator may be told that the defendants need a strict confidentiality clause and a non disparagement clause in the release applying to Bill, his wife, and his attorney, and to the benefit of all defendants and their insurers, and a liquidated damages clause in the event of breach. Bill’s attorney may say, “I don’t agree to confidentiality clauses, period…”, “This issue was never raised or negotiated”, “If you need that clause, you’ll need to pay us $50,000 more”, ” I intended to put this case in Lawyer’s Weekly or the Boston Globe”, “What specific language are you looking for?”, or, “I can’t agree to that, haven’t you read the Dennis Rodman case?” (Amos v. Commissioner, T.C. Memo. Docket No. 13391-01, 2003-329, December 1, 2003 Tax Court rules that portion of personal injury settlement attributable to secure a confidentiality clause is taxable).

* The mediator may be told that the defendants need a defense and hold harmless agreement as to any and all claims brought by anyone arising out of this litigation. The plaintiff may be unwilling to agree, defend, or indemnify the defendants against claims brought by others outside of their control.

* The mediator may be told that the defendants, in addition to agreeing to defending and holding harmless the defendants and insurers as to any and all liens, also need lien discharge letters from all lien holders in hand before making any payment. Plaintiff’s counsel may say, “Bill or I will hold you harmless personally, but it takes too long to get lien discharge letters and Bill needs the money now.”

* The mediator may be told that the workers compensation lien holder won’t agree to a reasonable compromise, and Bill’s lawyer needs to file a Curry motion with the Court to have a judge decide the lien amount.

* The mediator may be told that the defendants need extensive and detailed Medicare language included in the release. Because Bill will need long term medical care and perhaps nursing home care involving Medicare and/or Medicaid, the defendants may respond, “We also need to set up a Medicare Trust and set aside, to protect the defendants and their insurers from potential further Medicare/Medicaid claims.” Bill’s lawyer may demand the defendant’s counsel to “Show me the specific language you need in the release”, or ask, “Why is this being brought up now?”, or indicate that they
“don’t agree that a Medicare set aside is needed in these circumstances.”

* Some of the defendants may insist on adding Medicare or Medicaid or other large lien holders on the settlement check and not allow Bill’s attorney time to negotiate these liens and provide discharge letters after which separate checks can be issued. Bill’s attorney may say, “If you put the lien holders on the settlement check I lose all leverage and will never be able to negotiate a fair compromise of these liens”, or, “It will take forever to get endorsements from the lien holders and Bill needs his money now.”

* The defendants may say, “We want Bill and his wife, individually, to sign the release, and because Bill’s late-in-life son is a minor, we need a minor’s settlement approval by the Court.” Bill’s lawyer may respond that, “These requests were never raised during our mediation”, “They are not parties to this lawsuit”, “If you want these other releases you need to increase the settlement”, or, “I’m not going to court for approval of a $1.00 payment to Bill’s son”.

* The defendant may say, “Our release must include all potential claims from the beginning of time until the date the release is signed”. Bill lawyer may respond, “No way. Our claim is confined to a specific date of injury.”

* Defense counsel may say, “The release must discharge all claims against all insurers for claims of violation of MGL. 93A or 176D claims”. Bill’s attorney may respond, “No suit was brought on these claims”, “Defense counsel does not represent these insurers”, or, “We never negotiated settlement of these claims, so you need to increase the settlement amount to discharge these claims”.

Discussing the merits of the issues raised above, or methods by which these issues can be resolved, is beyond the scope of this article. The good news is that with time, all of these issues can usually be negotiated and resolved with the help of an experienced mediator. My purpose in this article is to highlight the problems that can occur if these issues are not raised earlier in the mediation session, but rather, are left to the end. To avoid this problem, may I suggest these thoughts for your consideration:

– Parties and their counsel should understand and appreciate the importance of embodying agreements reached at a mediation session into a detailed and signed Mediation Settlement Agreement;

– All material terms of the agreement should be included in the Mediation Settlement Agreement so as to make it an enforceable contract;

– Parties and their counsel should anticipate any and all potential issues that may arise when formalizing and embodying the material terms of the agreement in a Mediation Settlement Agreement and/or, should it be followed by a further release, all anticipated and needed terms of the release, including, but not limited to, such issues as discussed above;

– Parties and their counsel should not wait until the end of a mediation session to raise and discuss all material terms required in both a Mediation Settlement Agreement and the specific terms of any further release required;

– Anticipating that specific terms and language will be needed in a release, parties and/or their counsel may wish to bring a release with them that could be executed at the end of the mediation session and/or at least shown to the other parties when discussing specific terms required in the final release.

A skilled and experienced mediator will likely anticipate the issues that will need to be agreed upon before final settlement can be reached, and will raise these issues during the mediation at an earlier time and in an appropriate manner, such as in private caucuses first, to help you avoid pitfalls at the end of the session that could jeopardize the overall settlement.

Hon. David A. Mills (ret.)

Danvers, Massachusetts

EDUCATIONJudge David Mills

Boston College Law School, LLB, 1967; Boston College, BS, cum laude, 1964.

LEGAL EXPERIENCE AND PRACTICE FOCUS

After graduating from law school, Judge Mills clerked to Hugh H. Bownes, United States Judge in the District of New Hampshire. Judge Mills then served as an assistant district attorney for Middlesex County, then moved on to the Massachusetts Attorney General’s office as a division chief in the criminal bureau. Prior to his appointment to the Massachusetts Appeals Court, Judge Mills maintained offices in Boston, Danvers, and Provincetown. During his thirty-two years of private practice, his appearances were diverse in many courts, State and Federal, from district and municipal in Massachusetts and New Hampshire, to the United States Supreme Court in Washington, and, in between, the Massachusetts Land, Probate, Superior, Appeals and Supreme Judicial Courts, and the Federal District Courts in Massachusetts, New Hampshire, Pennsylvania, and the First Circuit. After concluding prosecutor work, his private practice initially concentrated in criminal defense and “people in trouble.” From 1985 to 2001 his practice was principally in the area of the use, reuse, and misuse of urban land, and during those years he presented approximately two thousand cases to local governmental agencies (e.g., zoning and planning boards, conservation commissions) and several State agencies, e.g., Department of Environmental Quality Engineering, Massachusetts Highway Department, Alcoholic Beverage Control Commission, Department of Telecommunication and Energy. He represented individuals before regulatory boards, for example, Registration in Medicine and the Board of Bar Overseers. He argued three cases in the United States Supreme Court in which his party prevailed. In land-use permitting he represented individual homeowners as well as developers of office parks, shopping centers, and condominium projects. As a land-use practitioner, he was involved in a variety of disputes between proponents, neighbors opposing, and various “small town fights.” His real estate clients included sellers, buyers, owners, and developers. In private practice he worked with many lawyers and appeared before several hundred judges in various State and Federal courts.

APPELLATE JUDGE EXPERIENCE

Over the course of 11 years as an appellate justice Judge Mills was the principal author of more than 100 published decisions. He has heard and considered matters involving substantive legal issues related to all legal disciplines within the jurisdiction of the Massachusetts Courts, including but not limited to:

– Administrative Law

– Banking and Finance

– Civil Rights and Constitutional Law

– Contracts

– Corporate/Securities Matters

– Employment Matters

– Criminal, Crimes and Procedures

– Evidence and Procedure Issues

– Fair Trade Practices and Chapter 93 A Cases

– Government Enforcement Actions

– Healthcare/Pharmaceutical Matters

– Property Law

– Probate and Family Court Cases

– Real Estate/Construction Matters

– Subpoena, Search and Seizure Matters

– Torts

– Zoning and Other Land-Use Matters

He participated in the final review and disposition of approximately three thousand cases while a justice in the Massachusetts Appeals Court.

MEDIATION/ADR EXPERIENCE

Harvard Negotiation Project, 1989, studying under Prof. Roger Fisher; Extensive Mediation training with MWI and MCLE in Boston; Member of Massachusetts Bar Association ADR Comittee; Mediator in the Haverhill, Salem, Gloucester, East Boston, and South Boston divisions of the Massachusetts Trial Court; Volunteer mediator in the Middlesex and Suffolk Probate and Family Courts, as well as the Massachusetts Land Court.

BAR AND COURT ADMISSIONS

Commonwealth of Massachusetts; State of New Hampshire; United States District Court, Massachusetts, and New Hampshire; United States Court of Appeals, First Circuit; United States Supreme Court; Massachusetts Land Court

PROFESSIONAL AND OTHER ASSOCIATIONS

Boston Bar Association; Essex County Bar Association; Massachusetts Bar Association; Massachusetts Bar Association ADR Committee; Massachusetts LGBTQ Bar Association; Former Hearing Examiner, Board of Bar Overseers; Massachusetts Judges Conference; International Association of Lesbian, Gay, Bi-Sexual and Transgender Judges; Massachusetts Land Court Partition Commissioner; Massachusetts Trial Court Standing Committee on Alternative Dispute Resolution; Presenter for MCLE, continuously for 25 years, on subjects including criminal, constitutional, and land-use law; Presenter, both individually and in panel, on appellate practice and diversity issues at the Boston Bar Association, the Massachusetts Bar Association, Boston College, Boston College Law School, Boston University, and the New England School of Law.

PUBLIC OFFICE

Associate Justice, Massachusetts Appeals Court (2001-2012); Assistant Massachusetts Attorney General – Chief of Criminal Appellate Section (1972 -1975); Assistant District Attorney, Middlesex County (1969-1972); Danvers Board of Selectman (current); Town Moderator, Town of Danvers (1998-2001); Town Meeting Member, Town of Danvers (first elected 1965); Commissioner, Massachusetts State Ethics Commission
(current).

MDRS Welcomes David A. Mills to the Neutral Panel

Judge David MillsIt is our great pleasure to announce the appointment of Judge David A. Mills to the MDRS Panel of Neutrals. Judge Mills’ remarkable background includes his service at the Massachusetts Appeals Court from 2001 to 2012. He has since then provided case evaluations in appellate matters, trial litigation matters, Single Justice practice, and pre-trial consultatons with a goal toward exploring alternative methods of dispute resolution. He is trained and experienced in ADR in its varied modes, receiving training with Professor Roger Fisher at the Harvard Negotiation Project in 1989. Judge Mills has also participated in extensive mediation training with MWI and MCLE in Boston, and has acted as a mediator in the Salem, Haverhill, Gloucester, East Boston and South Boston divisions of the Massachusetts Trial Court. He volunteers with SERV (State Employees Responding as Volunteers), primarily in the Middlesex and Suffolk Probate and Family Courts. Judge Mills is a member of the Trial Court Committee on ADR and was recently appointed to the Massachusetts Bar Association’s ADR Committee; he also serves as a Commissioner on the Massachusetts State Ethics Commission. Prior to his appointment to the Massachusetts Appeals Court, Judge Mills was a lawyer with a practice based in Boston and Danvers, maintaining private offices for thirty-two years. As a lawyer, his court appearances were diverse in many courts. His practice concentrated on zoning and land use and, for a time, criminal defense and “people in trouble.” He has been involved in a wide range of cases and represented many angles in disputes, from land disputes between opposing neighbors and “small-town fights”, to sellers, buyers, owners and developers in real estate matters. As a veteran of 47 years in the courts, Judge Mills is an advocate for mediation as an integral first response to disputes before time consuming, expensive litigation. Judge Mills has said that “in mediation, the parties seek a resolution that gives each something of value, often a resolution that saves time, money, and minimizes damage to relationships.” His work has given him substantive grounds as an advocate for ADR who will continue to enrich the practice with his many years of experience. We are very excited to have his services available to MDRS clients.

MDRS Welcomes Ralph Cecere to the Neutral Panel

3b9cf07We are so pleased to welcome Attorney Ralph N. Cecere to the MDRS Panel of Neutrals. Attorney Cecere is a seasoned practitioner with over 24 years of experience in the trial court and administrative agencies. He has handled over 200 cases taken to trial in the Superior and District Courts. During his years as a practicing attorney, most recently at Ralph N. Cecere, P.C., Ralph has represented insurance companies, small businesses and plaintiffs, acting as lead counsel in jury trials, binding arbitrations, and settlement conferences. Previously, Ralph handled litigation and trial work for a large insurance defense practice in a variety of contract and tort cases with substantial active caseload. Attorney Cecere’s career has encompassed a wide range of insurance coverage matters for auto, homeowners and causality. He also practices criminal defense as a Bar Advocate in Essex County. He has been admitted to the Massachusetts Bar and the New Hampshire Bar, and is a member of the Massachusetts Bar Association. Attorney Cecere brings thorough, hands-on knowledge and experience to his specialties in Insurance, Personal Injury and Workers’ Compensation-related areas. We are very happy to have Attorney Cecere join the MDRS Panel of Neutrals, and we look forward to having him assist MDRS clients achieve resolution of their disputes.

Client Testimonials

“I was a skeptic going into it, but Brian’s work reminded me why mediation is always worth a try.  He managed to reason with a party that I simply hadn’t been able to productively communicate with.  My client was comfortable speaking with him, and we both trusted in his neutrality.  I’m sure the insurer felt the same way, which was a big reason the mediation was successful.  My client and I are both very grateful.  I’m sure we’ll meet again for another mediation, and I look forward to it.”

-Drew W. Hoyt, Esq.

 

“As someone who has mediated hundreds of cases over the past 25 years, I can honestly state, without any hesitation, that Brian Jerome is among the best of the best.  Brian provides both sides of every dispute with a comfortable and unpressured environment within which to resolve their disputes.  He has a wonderful mediation style that has been successful in resolving a wide range of complex cases submitted by our firm over the past 20 years.”

-Eric J. Parker, Esq., Personal Injury Attorney

 

“I am a civil litigator in the Commonwealth of Massachusetts and have practiced law for over 18 years.  During that time I have utilized Attorney Brian Jerome’s services as both an arbitrator and mediator and, in my opinion, Brian is one of the very best attorneys engaged in [alternative] dispute resolution.  Brian is smart, professional, and dedicated.  I greatly endorse him as a legal professional.”

-Mark T. Rumson, Esq.

 

“Brian is very competent, pleasant and attentive to the claim and the parties that appear before him.  The cases always seem to settle with very favorable results.”

-Peter J. Carrozza, Esq.

 

“Brian Jerome is an excellent mediator and arbitrator who strives to settle difficult cases and treats all parties fairly and professionally.”

-Stephen M. Salon, Esq., Litigation Attorney

 

“I have known Brian for 30+ years, initially meeting him when we were young aspiring trial lawyers.  I have since, over the past 15 years, employed Brian’s skills as a mediator.  He is excellent in that capacity and has a well-deserved reputation for honesty, skill, and effectiveness.  Simply stated, he is at the top of the pyramid for mediators and should be rated as such.”

-Dennis J. Philips, Esq., Personal Injury Attorney

 

“Brian is an extremely effective arbitrator and mediator.  He gets right to the root of the issues to solve them in a timely matter.”

-Michael J. Smith, Esq., Personal Injury Attorney

 

“I have known Brian Jerome for more than a decade.  He has arbitrated and mediated dozens of my cases with great success and excellent results.  I highly recommend Brian Jerome to any lawyer requiring the skills and talents of a highly professional arbitrator/mediator.”

-Gregory J. Smith, Esq.

 

“My colleagues and I have engaged Brian’s mediation services on several occasions and his participation and hard work in those matters made all the difference in bringing about a resolution.”

-Scott A. Spencer, Esq.

 

“Wonderful to work with, very fair, definite expert in his field.  Attorney Jerome was the arbitrator for my recent case.  I was nervous about the hearing, but he put me at ease immediately – what a nice person!  During the arbitration, he was an attentive listener and very precise with his questioning and gave me the confidence to tell my story.  Both lawyers seemed to enjoy working with him, and the award he gave on my case was fair to everyone.  I would recommend Brian Jerome to anyone seeking a great arbitrator.”

-Anonymous Arbitration Client

 

“I must say, Brian made quite a positive impression on our clients.  I, on the other hand, was not at all surprised.  As usual, his professionalism and calming demeanor was of great assistance in guiding the parties toward resolution acceptable to all concerned.  I hope to have opportunities to work with Brian many times in the future!”

-Anonymous Counsel

 

“Best Mediator in the Commonwealth of Massachusetts.  Brian Jerome is the first attorney who comes to mind for me when choosing a mediator.  He has settled every case that he has mediated for me.  He has a excellent demeanor and [my] clients always feel comfortable with him.  He works hard to get the case settled.”

-Anonymous Mediation Client

Mediation ruled first step in cyber coverage case

A debate about cyber-coverage has played out in favor of policy-holders in a ruling that requires an Insurer to utilize Alternative Dispute Resolution (ADR) to resolve their dispute. As with any emerging trend, early Court rulings will encourage the introduction of legislature to define how such cases will commonly be handled in the future. It will be interesting to see how the role of ADR develops in this new frontier where it may prove to be most valuable. Read more….

Secrets to Business Success

What’s the big secret? Tell me, how do YOU increase revenue, outrun your competitors, and put your firm in the Pole Position? Although I’ve never felt there was actually a secret, I have always recognized that the answer is different for every business. Here are my top three recommendations to aid in the success of YOUR business:

First and foremost, re-energize your perspective. Time speeds by for us all, and it’s easy to become so embedded in daily activities that the big picture loses focus. Our business goals must morph with the times as needed as well. Take the time – at least yearly for a small firm, and more often for larger firms – to consider and redefine your goals. Your operations must then be tailored toward their achievement. Fine-tuning fresh plans will revitalize your business and invigorate you!

Consider your case and administrative tracking systems. Outdated and inefficient systems take more time in the long run than does creating new, comprehensive systems. Hardware and software upgrades may be involved; know ahead of time that it’s always painful, but when you come out the other side, you can’t imagine having survived even a day without your new gear!

Are you backing up your business data? If the answer is no, make this section your top priority (bonus: you will be half-way to meeting a major business goal when you’re done).

Social Media. Media, Schmedia, right? WRONG. No matter how much you might want to ignore it, social media is here to stay. And if you don’t somehow technologically involve yourself, you are at a huge disadvantage, perhaps akin to starting a trial with no opening statement prepared. We’re all aging, but don’t let your clients think you are a dinosaur! Yes, there is a lot to it if you consider every possible option at once, thus, my advice to the uninitiated is to choose one hip thing to start with and Make. It. Happen. It could be the most significant move you make for your business this year.

Here at MDRS we’re always focused on improving infrastructure in ways that allow us the ability to provide you, our clients, with the best service possible. And our ears are open to your needs as well! Please let us know how we can help.

Mediation: Achieving Success

How can participants maximize their chances for a successful outcome in mediation? While there are many worthwhile opinions and no shortage of advice, the simple virtue of civility can advance your negotiations in a powerful way.
Overlooked in so many cases is the personal factor. There are reports, claims, medical bills, evidence to be collected. There are usually emotions that further complicate each situation, and always in unique ways. Quite often there is never a direct or seemingly appropriate opportunity for one side to say to the other: “I’m sorry this happened,” an offer of sympathy, or even a kind word. Easy to forget in our world of work and facts and responsibilities is that bringing personal touches such as kindness, friendliness, and receptiveness to traditionally business-focused circumstances can have astounding impact. This is a hidden treasure of a key to help unlock your successful mediation.

While most attorneys and other professionals who participate in mediations display similar traits of civility and courtesy during the mediation process, too often, perhaps in the pursuit of zealous advocacy for the client or their case, an attorney, representative or party, usually in the initial opening joint session, makes comments that cross a line and offend, demean, or alienate their opponent. One should consider that these initial comments at the joint session often set a tone for the hours that follow. Such offending comments become counterproductive to the process and the mediator’s work. Because of these comments, excessive and valuable time becomes required thereafter for the mediator to stabilize the person(s) offended by these comments, often in private caucuses, and make them receptive to compromise and the willingness to show the flexibility needed for a successful outcome. Our experience is that less Rambo and more Dale Carnegie, will significantly improve your odds for a successful mediated resolution.

Don’t confuse civility with weakness. Attorneys, representatives and parties must be able to clearly state their positions as to all relevant issues that arise during a mediation. How and when they do so at a mediation, however, is the issue. We see more and more that experienced trial attorneys, with track records of success as fervent client advocates at trial, are choosing to leave their hatchets at home and making ever briefer and less contentious opening comments at the initial joint mediation session, knowing that the mediation process differs greatly from trial.

Most mediators recognize that for many parties a mediation can be viewed as their “day in court” and they may be used to, or expect, that their counsel in opening comments will passionately attempt to vanquish their opponent. However, experienced counsel will advise their clients of what mediation is and isn’t, and that their opening comments may not be what the client would hear at a trial. Many comments or arguments that could offend the opponent if made at the outset in the open joint session can be shared with the mediator later in private caucuses. Often a mediator may have a better sense of how and when such arguments could then be made most effectively and productively to the opponent.

As Mary Wortley Montagu said well: “Civility costs nothing and buys everything.”

Our expert mediators can help you and your clients resolve even the most contentious of conflicts. Visit us at www.mdrs.com or call us at (800) 536-5520 to learn more about how we can help you achieve the results you need.

What Happens in the (Mediation) Room Stays…

MDRS’ Brian Jerome was recently quoted in the Boston Herald in regards to the now-resolved Market Basket situation.  During a phone interview with the Herald, Brian expressed the importance of confidentiality while in the mediation room.  While his quote was referenced out of context in the published article, the interview brought up an important component of mediation, which is critical to highlight, and is always in the ADR spotlight – confidentiality.

Confidentiality in mediation is essential to the successful resolution of a case. It serves to preserve the sense that a mediation room is a sanctuary for those hoping to resolve a legal matter without trial.  This is especially important to emphasize given that if the case is not settled in mediation and finds its way in front of a judge that the information brought up in the mediation room will not impact the case.  It is the goal of the mediator to promote a comfortable environment where all parties feel safe to discuss a number of scenarios in order to reach a settlement.  Without the promise of confidentiality, some may not feel as secure in this process.  It’s also important to know that confidentiality doesn’t just start in the mediation session…it actually begins when the parties initially agree to mediation and submit their case.  This confidentiality is guaranteed until the mediation ends – and even then, if parties do not reach a settlement in mediation, the happenings of the mediation cannot be disclosed at any judicial proceeding or trial.

All parties involved in mediation have to trust in this confidentiality, and the mediator plays a significant role in maintaining this security.  A mediator’s role is to facilitate a settlement between multiple parties, and this can only be done if they are comfortable and willing to be open with their conversations and end-result considerations, which is a feat accomplished primarily through confidentiality and trust.  The mediator will also have private one on one caucuses with each party, and their counsel if represented, and these private caucuses are themselves confidential, which allows the parties to discuss their fundamental needs and interest in confidence with the mediator, based upon which a skillful mediator will work to sculpt a beneficial settlement to all parties.

Mediation is a timely, cost-effective alternative to trial and offers an opportunity to reach a settlement that is more agreeable to all parties.  If you agree to mediation, you should know that the information you share will be protected, and confidentiality will be upheld throughout the process.

 

 

Foreclosure Mediation Fee Schedule

The City of Lynn’s Ordinance designates that a mediation administration, or registration fee, is to be charged to the Mortgagee or its Mortgage Servicer for the services attendant to administering the established Mediation Program. The Ordinance also states that any fees assessed pursuant to this Ordinance shall not be charged to the Mortgagor, or Homeowner.

Massachusetts Dispute Resolution Services [MDRS] shall be directly paid by the Mortgagee or its Mortgage Service Provider a non-refundable registration/administrative fee of $650.00 per case, payable upon return of the Lender Authorization and Payment Form

Further, when in-person Mediation Conferences are required, Fees of $300.00 per hour will be charged in two-hour increments, payable prior to scheduled mediation sessions. Any mediation sessions scheduled beyond the second session must be agreed to by the homeowner, the lender, and the mediator.

In cases that have been actively mediated as part of Lynn’s Foreclosure Mediation Program, where the homeowner has again fallen behind with their mortgage payments, the homeowner will be allowed to re-mediate once after a 1-year period has passed, if the homeowner has evidence that their financial situation has changed in such a way as to have affected their ability to fulfill their mortgage obligations as previously agreed. In such cases, tiered pricing will be offered to the lender as follows: $500.00 administrative fee to be paid up front for such reoccurrences, with standard $300.00/hour in-person mediation fees as required; 75% [$375.00] of the administrative fee will be refunded to the lender if the homeowner reinstates and the lender notifies MDRS of such, with evidence and in writing, prior to the initial conference call. The tiered pricing applies to reoccurrences only.

For more information, please refer to Initiation of Foreclosure Mediation Cases.

Initiation of Foreclosure Mediation Cases

Per the City of Lynn, Massachusetts’ Ordinance to initiate participation in the Foreclosure Mediation Program, lenders must adhere to the following instructions:

The Mortgagee shall send a copy of all notices given to a Mortgagor pursuant to M.G.L. c. 244 § 35A(g), (h) which relate to Residential Property in the City, to the City of Lynn c/o The City Solicitor, Lynn City Hall, 3 City Hall Square, Lynn, MA 01901, within ten (10) days of giving such notices to a Mortgagor. The receipt by the City of said notice, or of a request for mediation from the Mortgagor made within fifteen (15) days of receipt of a Mortgagor’s notice pursuant to M.G.L. c. 244 § 35A(g), (h), shall constitute the beginning of the Mediation process as set forth in this Ordinance.

Administration of the program pursuant to recidivism:

The homeowner will be allowed to re-mediate once after any 1-year period, when lender indicates homeowner has again fallen behind in their mortgage payments and homeowner has evidence that their financial situation has changed in such a way as to have affected their ability to continue their mortgage payments as previously agreed.

In order to re-initiate a case, the lender must submit their standard 30 day notice/letter directly to MDRS along with a copy of the original 150 day notice, as well as their administrative fee [please reference tiered pricing section of Foreclosure Mediation Fee Schedule, if the property in question has previously been part of the program/re-occurrences only] and authorization form.

For more information, please refer to the Foreclosure Mediation Fee Schedule.

MDRS Launches Foreclosure Mediation Program

MDRS is excited to bring our valuable knowledge and experience of out-of-court dispute resolution to the City of Lynn Foreclosure Mediation Program. This groundbreaking program has been created to give Lynn homeowners and their lenders an opportunity to find mutually beneficial alternatives to foreclosure. The goals of the program are to prevent foreclosure, keep Lynn families in their homes, and prevent vacant and abandoned houses from negatively impacting property values and destabilizing Lynn neighborhoods.

The City of Lynn is working exclusively with MDRS to use mediation as a means of exploring alternatives to foreclosure. These alternatives include retention options such as loan modification, repayment plan, reinstatement, or forbearance agreement, and non-retention options such as a short sale, deed-in-lieu-of-foreclosure, or consent foreclosure.

In foreclosure mediation, experienced and impartial MDRS neutrals, who have been specially trained in foreclosure mediation, work to facilitate communication and negotiations between the homeowner and lender. The solutions may vary for each situation, but the end goal is the same – to avoid foreclosure and find an outcome that works for both the homeowner and the lender.

The City of Lynn Foreclosure Mediation Program is limited to residential, owner-occupied properties that are currently the homeowner’s primary residence. Foreclosures of non-residential, investment, or commercial property are not eligible for this program. MDRS will be notified by the City of Lynn when a lender files a Notice to Cure with Lynn City Solicitors, per their city Ordinance.  MDRS and Lynn United for Change, the mediation program’s loan counseling and advocacy group, will immediately notify the homeowner and lender about participating in the program.

Eligible homeowners in Lynn will receive an easily recognizable gold envelope from MDRS in conjunction with the foreclosure mediation program. These envelopes bear the MDRS and City of Lynn logos and are easily distinguishable from other materials that may be received outside of the program.  Homeowners should be vigilant of foreclosure rescue scams promising relief from foreclosure for fees.

If you would like more information, please call Sheri Stevens at (800) 536-5520 or e-mail Sheri at sstevens [at] mdrs.com.

Recent ADR Developments

Arbitration: Claim against former employee subject to arbitration clause in employment contract

Arbitration – Incomplete recording of FINRA Arbitration Hearing Does Not Vacate Award

Arbitration – Award vacated due to misapplied State Law

Arbitration – Right To Arbitration Not Waived by Delayed Filing

Arbitration – Health care proxy

Arbitration – Privilege

Arbitration – Legal malpractice – Maine law

Civil practice – Rule 11 – Sanctions

Tort – Wrongful death – Boating accident

Labor – Funding – Support – Arbitration award

Arbitration – Franchise agreement – Wage Act – Preemption

MBTA appealing $25 million arbitration award

Douglas G. Bailey vs. Astra Tech, Inc., & others

Arbitration – Time limit – Medical documents

Mediation: Employment – Settlement – Discrimination – Disability

Civil practice – Settlement – ‘Second thoughts’

Banks and banking – Settlement – Non-party – Safe deposit box

Chess match nets $12.25M in construction defect suit

Attorneys – Fees – Settlement

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Arbitration: Claim against former employee subject to arbitration clause in employment contract

A plaintiff corporation charged that their former CEO and a company he started improperly used their company’s confidential information to lure an important client away from their firm.  The Court ruled that plaintiff’s claims were subject to an arbitration clause in the defendant’s employment agreement.

The Court ruled that the defendant has met his burden … to show the existence of a valid and binding agreement to arbitrate at least some claims. … Thus, the question before the Court is which, if any, of [plaintiff] MOCA’s claims are encompassed by the Arbitration Clause in the Employment Agreement.

The defendant claimed that every claim alleged against him falls under the Employment Agreement’s Arbitration Clause encompassing ‘any and all claims or disputes arising out of this letter and any and all claims arising from or relating to your employment with the Company.’ The Court found that the claim for breach of the duty of loyalty falls within the reach of this Arbitration Clause. The clause provides that both the Company and the employee ‘agree to waive any rights to a trial before a judge or jury.’ … The illustrative list of claims within the scope of the clause includes claims such as breach of contract, defamation, invasion of privacy, fraud and others that do not depend, by definition, on an employment relationship.

The Court rejected the plaintiff’s argument that its claims arise out of Bernier’s conduct after MOCA terminated his employment (or in some instances conduct before and after) and, therefore, the claims do not arise from or relate to Bernier’s employment, finding it merely raises the question of whether, in light of the all the allegations, the claim ‘arises from or relates to’ Bernier’s employment with MOCA. .

The Court found plaintiff’s counts of  common law misappropriation of confidential and other information, intentional interference with prospective business relations, conversion, violation of the Computer Fraud and Abuse Act claim, and commercial disparagement ‘arise from or relate to’ his employment with the Company, unless any of its remaining arguments undermine this conclusion. The Court further found that the Arbitration Clause encompasses this breach of contract claim and the strong federal and state policy favoring arbitration thus requires that the Court remand this claim to arbitration. …

MOCA Systems, Inc. v. Bernier, et al. (11 pages) (Sorokin, U.S.M.J.) (Civil Action No. 13-10738-LTS) (Feb. 18, 2014).

Arbitration – Incomplete recording of FINRA Arbitration Hearing Does Not Vacate Award

The plaintiffs asserted that the following issues in the arbitration require vacating the award: (1) communication between the defendants and the case administrator concerning obtaining recordings, and notifying the case administrator that the recording was incomplete; (2) failure to inform the plaintiffs about the missing recording prior to August 4, 2011; and (3) the lack of a recording for a ‘significant portion of the December 2nd morning session.’ The plaintiffs argue these issues support vacating the award due to either evident partiality or significant procedural irregularity. The Court disagree.

“… The plaintiffs assert there is evidence of ex parte communication, and that the evidence, combined with the failure to timely disclose the missing recording, demonstrates evident partiality or bias on the part of the arbitrators. However, there is no evidence of ex parte communication. The communication with the case administrator concerning hearing recordings was not an ex parte communication because it was not directed to an arbitrator in the case, as noted in rule 12210 of the Financial Industry Regulatory Authority’s (FINRA) code of arbitration procedure for customer disputes (code). The failure to inform the plaintiffs about the missing recording until August 4, 2011, which was also the day one arbitrator signed the award, does not establish that any of the arbitrators was partial to one party over another. As the Superior Court judge explained, the plaintiffs have not demonstrated any prejudice from the failure to inform them of the missing recording until August 4, 2011.

“Furthermore, failure to record one session of a fourteen-session arbitration is not a significant procedural irregularity that would require vacating the award. … Additionally, the late notification to the plaintiffs that the recording was missing, although unfortunate, did not create a significant procedural irregularity. These issues did not affect the evidence presented to the arbitrators or the plaintiffs’ ability to prepare their case.”

Abdelnour, et al. v. Merrill Lynch & Company, Inc., et al.(Appeals Court – Unpublished) (No. 12-P-1375) (Feb. 13, 2014).

Arbitration – Award vacated due to misapplied State Law

An arbitration panel awarded a respondent $600,000 in back pay and $36,042.03 in counsel fees and costs. The Court vacated the award because the panel misapplied state law.

“Respondent worked as an independent broker-dealer for petitioner, a securities firm headquartered in St. Petersburg, Florida. In May 2009, petitioner discovered that respondent was abusing alcohol. Given its location, petitioner concluded that it could not adequately supervise respondent, who ran his own branch in Vermont. It terminated respondent on July 1, 2009. On February 15, 2012, respondent filed an arbitration proceeding alleging petitioner retaliated against him because of his sexual orientation and his disability as an alcoholic, in violation of the Vermont Fair Employment Practices Act, 21 V.S.A. §495. … Applying a choice of law clause in the contract the parties signed, … the panel determined that Florida law governed the proceeding. … In its final dispute resolution document, the panel stated that it considered the pleadings, evidence, and testimony in issuing the award, but it provided no legal analysis or explanation of its reasoning. …

“Respondent’s claim alleged a violation of a Vermont statute. In his post-hearing brief, he moved to add discrimination and retaliation claims under Florida law, … but the panel denied the motion. … Yet the arbitrators then concluded that Florida law governed the case. … Under Florida law, respondent’s claim, brought some two and one-half years after the termination of the contract, was barred by Florida’s one-year statute of limitations. Fla. Stat. Ann. §760.11. Nonetheless, the arbitrators ignored that statute and somehow construed Florida law to find a violation of a Vermont statute — a statute which, given the governing law, was wholly inapplicable to the case. Awarding damages to a plaintiff who has pled no claims under the applicable law plainly transgressed the limits of the arbitrators’ power. For this reason, the award must be vacated.”

Raymond James Financial Services, Inc. v. Fenyk (3 pages) (Zobel, J.) (USDC) (Civil No. 13-11326-RWZ) (Feb. 6, 2014).

Arbitration – Right To Arbitration Not Waived by Delayed Filing

The plaintiff alleges that the defendant wrongfully attempted to collect alleged credit card debts from him and other Massachusetts residents by suing them in Massachusetts state courts, and the Court found the matter must be referred to arbitration based on the plaintiff’s credit card agreement.

“Defendants CACH [LLC] and [J.A.] Cambece [Law Offices] have moved to compel arbitration and to stay or dismiss the litigation. … Plaintiff, in turn, asserts that defendants waived their right to arbitrate by filing the collection actions in state court and because he suffered prejudice by their delay in seeking arbitration. …“Here, plaintiff contends that defendants explicitly waived their right to arbitration by filing two certifications in the state court actions. … However, the certifications merely state that the attorneys discussed dispute-resolution services with their clients in accordance with the rules of the Supreme Judicial Court. They do not constitute a waiver of any rights.

“As for implied waiver, defendants’ delay in seeking arbitration was minimal. Plaintiff filed his complaint in state court on September 26, 2013. After removing the matter to federal court, CACH and Campece moved to compel arbitration on November 11 and December 12, 2013, respectively. A delay of less than one-and-a-half or two-and-a-half months is hardly excessive. … Furthermore, no discovery and little litigation had occurred within that period. Plaintiff, therefore, appears to have suffered little, if any, prejudice.

“CACH’s decision not to invoke arbitration in the earlier state-court collection actions is not relevant. The contract here provides that either party can elect arbitration as to ‘any claim.’ … It does not require that the parties either litigate all claims or arbitrate all claims. The collection actions, which CACH brought against plaintiff, are distinct from the claims brought by plaintiff here. CACH did not, therefore, waive its right to arbitrate the present dispute. …

“Because plaintiff suffered neither delay nor prejudice, the Court finds that defendants did not waive their right to invoke the arbitration clause. Accordingly, the motions to compel arbitration will be granted. …

Schwartz v. CACH, LLC, et al. (7 pages) (Saylor, J.) (USDC) (Civil Action No. 13-12644-FDS) (Jan. 27, 2014).

Arbitration – Health care proxy

By: Tom Egan, January 14, 2014

Where (1) a plaintiff commenced a wrongful death action as the administrator of the estate of his deceased mother and (2) the defendant nursing home operator moved to compel arbitration based on an arbitration agreement that the plaintiff signed purportedly on his mother’s behalf, the motion to compel was correctly denied because the plaintiff lacked authority to execute an arbitration agreement on his mother’s behalf and the arbitration agreement does not otherwise bind her estate.

“Our decision in Johnson v. Kindred Healthcare, Inc., ante, (2014), disposes of [defendant] GGNSC’s claim by holding that ‘a health care agent’s decision to enter into an arbitration agreement is not a health care decision as that term is defined and used in the health care proxy statute.’ Nonetheless, because the question has been raised and the parties have fully briefed the issue whether a transfer report or similar medical record can activate a health care proxy, we address that question. …

“… The transfer report makes no reference to Rita [Licata]‘s capacity or incapacity to make or communicate health care decisions. … Nor does the record reflect that the author of the transfer report, Rita’s attending physician at the medical center, notified Rita and [plaintiff] Salvatore [Licata Jr.] of the physician’s medical determination that Rita lacked the capacity specifically to make health care decisions.

“Furthermore, treating a transfer report or similar medical record both as a determination of incapacity to make health care decisions and as notice to a principal and agent that a health care proxy is effectuated, would create uncertainty about when the proxy has been triggered and deprive a principal of the opportunity to object to its activation. … Thus, Rita’s health care proxy did not take effect until her attending physician at the nursing facility executed the ‘Documentation of Resident Incapacity Pursuant to Massachusetts Health Care Proxy Act [G.L.c.] 201D,’ almost three weeks after her admission to the facility. …

“GGNSC argues in the alternative that Salvatore was authorized to sign the arbitration agreement as Rita’s son and ‘responsible party’ under G.L.c. 201D, §16. This argument is unavailing. …

“… GGNSC cites no binding authority for the position that a responsible party authorized to give informed consent on behalf of an incompetent patient also may bind the patient to an arbitration agreement. In light of our decision in Johnson v. Kindred Healthcare, Inc., … that a health care agent’s authority to make health care decisions does not include the power to sign an arbitration agreement on the principal’s behalf, we do not adopt such a position. It would be unreasonable to recognize a wider scope of authority for a responsible party, not appointed by the principal, than exists for a health care agent, designated by the principal. Thus, even assuming that Salvatore qualified as a responsible party for purposes of giving informed consent to medical treatment, this role did not empower him to sign an arbitration agreement on Rita’s behalf. …

“… As courts in other jurisdictions have recognized, a purported agent’s own representations, absent authority from the principal to make such representations, cannot establish apparent authority to sign an arbitration agreement on a nursing home resident’s behalf. …

“GGNSC points to no conduct by Rita to support its claim that Salvatore had apparent authority to sign the arbitration agreement. …”

Licata v. GGNSC Malden Dexter LLC (Lawyers Weekly No. 10-010-14) (18 pages) (Duffly, J.) (SJC) Motion to dismiss and to compel arbitration was heard by Troy, J., in Superior Court. Joseph M. Desmond and Thomas T. Worboys, both of Morrison Mahoney, for the defendant; Michael R. Rezendes and Patricia J. Rezendes, both of Rezendes & Trezise, for the plaintiff; Kelly Bagby, of the District of Columbia, & Rebecca J. Benson, of Margolis & Bloom, and Debra Silberstein submitted a brief for National Academy of Elder Law Attorneys (Massachusetts Chapter) and another, amici curiae (Docket No. SJC-11336) (Jan. 13, 2014).

Arbitration agreement not binding under proxy.

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A health care agent’s decision to enter into an arbitration agreement is not a “health care decision” under G.L.c. 201D, §5, and thus an agent’s agreement to arbitrate all claims arising out of a principal’s stay in a nursing facility does not bind the principal, the Supreme Judicial Court has ruled.

The suit involved Dalton Johnson, who executed a health care proxy authorizing his wife, Barbara Johnson, “as my Health Care Agent to make any and all health care decisions for me, except to the extent that I state otherwise.”

When a suit was brought on his behalf against a defendant a health care facility, the defendant moved to arbitrate.
The Supreme Judicial Court reversed a Superior Court’s decision to allow that motion.

“The language of G.L.c. 201D, §5, considered in the context of its purpose and the broader statutory framework, authorizes the agent only to make those decisions requiring a principal’s informed consent to a medical treatment, service, or procedure; it does not authorize a health care agent to make all decisions that the principal could have made if competent, even those that might bear some relationship to the receipt of medical services,” Justice Fernande R.V. Duffly wrote for a unanimous SJC.

“Were we to define ‘health care decisions’ broadly to encompass decisions that relate to a principal’s business affairs, property, finances, or the adjudication of legal claims, all of which fall within the authority of an attorney in fact or court-appointed guardian or conservator, many decisions made by the health care agent would override the more expansive powers allocated to these fiduciaries,” the court reasoned. “Such a reading would conflict with the language and intent of the health care proxy statute, which confers decision-making authority only over a narrowly-defined area (health care); it also would upset the statutory scheme that grants broader authority to attorneys in fact, guardians, and conservators.”

Johnson, et al. v. Kindred Healthcare, Inc., et al. (Lawyers Weekly No. 10-009-14)

Arbitration – Privilege

By: Tom Egan, January 10, 2014

Where the Boston School Committee refused to allow more than three of a union’s bargaining unit members to attend an arbitration, the school committee did not thereby violate G.L.c. 150E, §10(a)(5), or repudiate the past practices provision of the parties’ collective bargaining agreement.

However, statements by the school committee’s labor counsel — impliedly threatening unit members with adverse consequences if they did not leave an arbitration hearing — are not privileged.

“Here, the [Boston] Association [of School Administrators and Supervisors] has not established that there was a practice of permitting more than three school-based unit members to attend an arbitration simultaneously. … Six or more unit members leaving the schools to attend an arbitration is very different from unit members leaving the central administration office. As the parties stipulated, school-based unit members’ duties and responsibilities are very important to the running of the school. …. Accordingly, I dismiss this allegation. …

“… Because there was not a ‘fixed, established practice accepted and known’ by both the School Committee and Association, as explained above, the School Committee did not repudiate Article XI of the CBA by only permitting three unit members to attend the arbitration on December 9, 2008. This allegation is dismissed. …

“The Complaint alleges that [Virginia] Goscinak, as a School Committee agent, made statements before unit members which impliedly threatened those members with adverse consequences if they did not leave the hearing and return to their respective schools. The School Committee does not argue that Goscinak was not a School Committee agent, or that her statements would not chill a reasonable employee in the exercise of his or her rights. Rather, it contends that all of her statements were made on the record after the arbitration opened and, therefore, are absolutely privileged. …

“Even assuming without deciding that a party could invoke the absolute litigation privilege in connection with statements made at an arbitration in order to shield itself from a potential violation of the Law, the privilege does not apply to any statements made during the proceeding. Instead, ‘statements by a party, counsel, or witness in the institution of, or during the course of, a judicial proceeding are absolutely privileged provided such statements relate to that proceeding.’ (Emphasis Added.) …

“Goscinak’s statements that too many unit members were at the arbitration, and her subsequent actions in attempting to order the unit members back to their schools and contacting their principals to do so, did not relate to the proceeding at hand. Although Goscinak made these statements on the record of the arbitration, the actual issue to be heard was whether ‘personnel in schools designated as Superintendent’s Schools are working a lengthened workday without compensation’ in violation of the parties’ CBA, and had nothing to do with the number of unit members who could simultaneously attend an arbitration. Goscinak was not even attempting to limit the unit members who could testify in the case, but rather she was merely attempting to limit the number of unit members who could simultaneously wait to testify. … I therefore decline to extend the absolute litigation privilege to Goscinak’s statements that were unrelated to the subject matter of the arbitration. …

“… I have no doubt that Goscinak’s conduct in arguing that the unit members could not be at the arbitration, and subsequently contacting their principals to order them back to their schools, would chill a reasonable employee from engaging in their protected rights. It is highly likely that after such an incident, a reasonable employee would have concerns about attending an arbitration with multiple witnesses. Accordingly, I find that the School Committee violated Section 10(a)(1) of the Law by Goscinak’s statements at the arbitration on December 9, 2008.”

In the Matter of: Boston Association of School Administrators and Supervisors; and Boston School Committee (Lawyers Weekly No. 21-063-13) (23 pages) (Hatfield, Hearing Officer) (DLR) Peter J. Berry, of Deutsch Williams Brooks DeRensis & Holland, for the employer; Matthew E. Dwyer and Mark J. Esposito, both of Dwyer, Duddy & Esposito, for the union (Case No. MUP-08-5374) (Dec. 13, 2013).

Arbitration – Legal malpractice – Maine law

By: Tom Egan, December 20, 2013

Where a client sued his former counsel for malpractice and violations of Maine’s Unfair Trade Practices Act, a U.S. District Court judge did not err in enforcing an arbitration clause in the attorney-client engagement letter according to state law.

“ … We think it is clear that Maine law permits attorneys to enforce arbitration clauses like the one at issue here.

“[Plaintiff Douglas Bezio] argues his position is supported by the fact that under Maine law attorneys are fiduciaries. …

“The Maine Law Court has not addressed the precise claim Bezio makes. Nonetheless, we think the answer is clear based on Opinion 170 of the Law Court’s Professional Ethics Commission, the Law Court’s not having expressed disagreement with Opinion 170 over the almost fifteen years since it issued; the views of the ABA, on which the Law Court gives weight on ethics matters; and Maine’s strong policy of supporting arbitration agreements, embodied in the Maine Uniform Arbitration Act …

“… We do not think the Law Court would depart from a generally accepted practice such as this, particularly when this approach is also consistent with the purpose of the FAA. We have previously upheld arbitration of attorney malpractice claims under New York law. …

“That other jurisdictions may follow different interpretations of their professional liability rules is of no moment. …

“We also reject Bezio’s argument, whether or not preserved, that as a matter of generally applicable contract defenses, … Maine law would find this arbitration clause to be unconscionable and would not enforce it. Bezio is nowhere close to meeting the requirements of Maine law for unconscionability. … There is nothing inherently unconscionable about enforcing an arbitration clause encompassing malpractice claims between an attorney and a client. The clause is neither procedurally nor substantively unconscionable.”

Bezio v. Draeger, et al. (Lawyers Weekly No. 01-313-13) (14 pages) (Lynch, C.J.) (1st Circuit) Appealed from the U.S. District Court for the District of Maine (Docket No. 13-1910) (Dec. 16, 2013).

Civil practice – Rule 11 – Sanctions

By: Tom Egan, December 17, 2013

Where (1) plaintiffs brought suit alleging, among other claims, breach of contract, negligent misrepresentation and violation of Chapter 93A, (2) the defendant was granted judgment on the pleadings based on a prior U.S. District Court judgment confirming an arbitration award adverse to an entity affiliated with the plaintiffs and (3) the defendant now moves for Rule 11 sanctions, the plaintiffs’ counsel was not culpably careless in filing their complaint, so the motion for sanctions should be denied.

“Although Plaintiffs purported to bring their claim as parties separate and distinct from CCS Resources, this court held that ‘Plaintiffs’ allegations establish sufficient identicality between CCS Resources and Plaintiffs,’ and, therefore, allowed Defendant’s Motion for Judgment on the Pleadings [#12] pursuant to principles of claim preclusion. Because Federal Rule of Civil Procedure 11 required Plaintiffs’ counsel to make a reasonable inquiry into the existing law, which would have made plainly apparent that this claim was precluded, Defendant urges this court to sanction Plaintiffs’ counsel for failing to make such inquiry. After failing to convince this court that their claims did not warrant dismissal under well-established claim preclusion principles, Plaintiffs not only deny engaging in any conduct sanctionable under Rule 11, but additionally ask this court to reconsider its March 20, 2013 Order [#35]. …

“Defendant does not show that Plaintiffs were culpably careless in bringing this claim. Although Plaintiffs’ motions and memoranda are riddled with spelling and grammatical errors and Plaintiffs failed to employ proper legal citation, Plaintiffs did present legal arguments in support of their contention that their claims are not barred under judicial estoppel principles. The fact that Plaintiffs’ arguments ultimately proved unavailing, and were weak to begin with, does not warrant sanctions under Rule 11 without a showing of more serious misconduct. Additionally, considering that, at the time that they filed the Complaint [#1], Plaintiffs’ affiliate had already made full payment pursuant to the arbitration judgment rendered against it, it is not clear that Plaintiffs brought this claim for an improper purpose. Because Defendant fails to show that Plaintiffs’ claims rise to the ‘patently frivolous’ level, Defendant’s Motion for Sanctions is denied.”

Credit Control Services, Inc., et al. v. Noble Systems Corp. (Lawyers Weekly No. 02-710-13) (5 pages) (Tauro, J.) (USDC) (Civil Action No. 12-11321-JLT) (Dec. 12, 2013).

Tort – Wrongful death – Boating accident

By: Tom Egan, December 16, 2013

Where the parents of a recent high school graduate who died on a trip to Mexico have asserted a wrongful death claim against the defendant corporation that organized the trip, summary judgment is inappropriate given that discovery is not complete.

“Recent high school graduates Lisa Tam Chung and Loren Daily participated in a trip to Mexico organized by defendant StudentCity.com, Inc. (‘StudentCity’). A boating accident occurred during a snorkeling excursion. Lisa died; Loren barely escaped with her life. Lisa’s parents, Oahn Nguyen Chung and Liem Chung, Oahn Nguyen Chung as administratrix of Lisa’s estate, Loren Daily, and Loren’s parents, Patricia and Ollie Daily, filed several claims against defendant. The customer agreement Lisa and Loren signed contains a mandatory arbitration clause, Docket # 1-3 §XXIV, and in two prior orders (Docket ## 26, 42), I dismissed in favor of arbitration all claims save for the wrongful death claims brought by Lisa’s parents. See Mass. Gen. L. ch. 229 §2. Now before me is defendant’s motion to dismiss, Fed. R. Civ. P. 12(b)(6), or in the alternative, for summary judgment on, … these remaining claims. …

“Plaintiffs contend that defendant negligently selected Servicios Maritimos, a Mexican boat company, to lead the snorkeling excursion. … At this stage in the litigation, and giving plaintiffs the benefit of all reasonable inferences, I cannot conclude that plaintiffs’ claims for relief are so wholly implausible as to permit their resolution on a motion to dismiss. Defendant’s Rule 12(b)(6) motion is therefore denied. …

“Defendant moves in the alternative for summary judgment. Plaintiffs oppose on the merits and because they have not had adequate opportunity to conduct discovery. They identify numerous facts that require additional development, including oral and written representations defendant made to Lisa, Loren, and their parents, a recommendation regarding Servicios Maritimos that defendant sought and received from a tourism official in the Mexican government, and the presence of defendant’s staff members on the trip. …

“Discovery has not yet begun in this matter. Defendant has not answered the complaint and the parties have not had a discovery scheduling conference. … Much of the factual information plaintiffs desire is in defendant’s control and can be turned over expeditiously. That information may affect the determination of whether defendant voluntarily undertook a duty to ensure the safety of trip participants, and whether defendant knew or should have known about Servicios Maritimos’s dubious prior safety record, if indeed it exists. Because these facts pertain to the essential elements of a negligence claim, … they bear directly on the outcome of the summary judgment motion. Rule 56(d) relief is appropriate in these circumstances.”

Chung, et al. v. StudentCity.com, Inc. (Lawyers Weekly No. 02-706-13) (4 pages) (Zobel, J.) (USDC) (Civil Action No. 10-10943-RWZ) (Dec. 12, 2013).

Labor – Funding – Support – Arbitration award

By: Tom Egan, December 6, 2013

Where a union has charged the Chelsea City Manager with failing to voice support for funding for the cost times in an arbitration award, the union is entitled to summary judgment only as to a March 18 meeting of the City Council.

Partial victory

“Chapter 1078 of the Acts of 1973, as amended, requires the employer and the exclusive representative to support [Joint Labor Management Committee (JLMC)] arbitration awards in the same way and to the same extent that the employer and the exclusive representative are required to support any other decision or determination that they agree to pursuant to Chapter 150E. … For example, an employer violated the Law by failing to speak before the legislative body in opposition to a motion to decrease the amount of an appropriation that would be necessary to fund a collective bargaining agreement. Turner Falls Fire District, 4 MLC 1658 (1977).

“The Union argues that the City violated its obligation to unconditionally support the Award because the only supportive step that [Jay] Ash took was his February 25 statement that his support was required and consistent with State law. The Union contends that this statement falls short of expressing actual support for the Award and unlawfully pales in comparison to the enthusiasm that Ash displayed for the newly-negotiated Police Superior Officers’ contract. Ash’s statements to the City Councilors before and after the Award issued reminding them that they could vote against it signaled his true non-support, the Union maintains, and Ash had an affirmative obligation to verbalize his support for the Award once the City Council proposed a Resolution designed to subvert it. Ash violated the Law by remaining silent at the March 18 meeting. This case is not moot merely because the City Council voted to fund the Award, the Union contends, because the possibility exists that such conduct will recur in the future. …

“Although the funding dispute ceased with the City Council’s vote to fund the Award, the funding vote was separate from the City’s Manager’s conduct at issue in the Complaint, and the City Manager took no steps to remedy his own unlawful conduct. … Further, although the wrong that occurred in 2013 cannot recur during the pendency of the current contract, it could recur in future negotiations, as Ash never acknowledged any wrongdoing. …

“The Complaint alleges that Ash’s statement — ‘[p]er State law, once a decision is reached, I am required to provide you with the filing necessary to fund the award. This communication and my support of the Award are required and therefore consistent with State law’ — does not provide the requisite unconditional support for the funding request. The Union argues that this language expresses feigned rather than actual support, and that other communications from Ash to the City Council signaled a contrary position. I disagree and conclude that Ash’s February 25 expression of support satisfies the City’s bargaining obligation under the Law.

“The City can use different words to express support for different awards or negotiated agreements and need not mirror its enthusiasm for the police contract in its support for the firefighters’ Award. … Distilled to its essence, Ash’s statement communicated that his support was consistent with State law. Though tepid in tone, Ash’s position was clear enough for Hatleberg to understand that Ash supported the Award. Ash’s February 7 email to the City Councilors advising them of their ability to ‘approve, disapprove or request changes’ signaled no wrongful intent because it applied equally to both the police contract and the firefighters’ Award. …

“I reach a contrary conclusion regarding Ash’s silence at the March 18 meeting. … As the CERB explained in Worcester School Committee, 5 MLC 1080, 1083-1085 (1978), the obligation to seek funding is not static; it requires more than token efforts, and it compels employers to take affirmative steps — indeed, all steps necessary — to obtain funding to implement the cost items of an agreement.

“The City correctly notes that the City Manager took the affirmative step of submitting the Award to the City Council for funding. However, this action did not complete its obligation to bargain in good faith, because after Ash submitted the Award, the City Council took up a Resolution to renegotiate rather than fund the Award. Hatleberg’s prediction that the Resolution vote would be a proxy for a vote on the Award made clear that funding for the Award was at stake. The vote to renegotiate a contract on terms more favorable to the City left no doubt that a vote for the Resolution was a vote against the Award. Here as in Worcester School Committee, supra, the City’s support obligations changed when intervening events reduced the likelihood that the Award would be funded and required the City to modify its approach and step up its efforts. Therefore, the City’s bargaining obligation did not cease with Ash’s February 25 statement, but required him to vocalize his support for the Award at the March 18 meeting.

“Further, the fact that Hatleberg knew that Ash had supported the Award and acknowledged Ash’s support in his remarks was not enough to satisfy the City’s bargaining obligation. Ash sat silently by while Hatleberg tried to persuade his fellow Council members to reject the Award, and in these circumstances, his prior communication of support was no more than a token effort to obtain funding. The Law required Ash to take steps all steps necessary to obtain funding, which required speaking up to encourage the City Council to support the Award rather than the Resolution. …

“I need not assess whether Ash was obligated to imperil his employment in an effort to persuade the Council to fund the Award. Town of Rockland [16 MLC 1001 (1989)] requires vocalized support irrespective of the relational differences between the participants in the two cases. Here as in Rockland, the funding body could have misconstrued Ash’s silence as support for the Resolution, which as noted above, contravened the Award. The only way that Ash could clarify his support for the Award at a time when the Council was entertaining an alternative was to voice it. His silence at that critical time placed his support in doubt. …

“For the reasons stated above, I allow the Union’s Motion for Summary Judgment regarding Ash’s conduct at the March 18, 2013 meeting, and deny the remainder of its Motion. I also allow the City’s Motion for Summary Judgment regarding Ash’s February 25, 2013 statement and deny the remainder of its motion.”

In the Matter of: City of Chelsea and Chelsea Firefighters, Local 937, IAFF (Lawyers Weekly No. 21-061-13) (18 pages) (Atwater, Hearing Officer) (DLR) Jaime Kenny, of Clifford & Kenny, for the city; Alfred Gordon O’Connell for the union (Case No. MUP-13-2683) (Nov. 6, 2013).

Arbitration – Franchise agreement – Wage Act – Preemption

By: Tom Egan, December 6, 2013

Where plaintiffs have moved for reconsideration of an order regarding the arbitrability of Massachusetts Wage Act claims, the court concludes (1) that only express statements can submit Wage Act claims to arbitration but (2) that under 1st U.S. Circuit precedent, such a requirement would be preempted by the Federal Arbitration Act.

“Shortly before entering final judgment, this Court ruled that some franchisees who bought their franchises through consent-to-transfer agreements were not provided with proper notice of the arbitration clause in the franchise agreements. … Because of that lack of notice, this Court ruled that those franchisees were not bound by the arbitration clause, and were thus part of the certified class. …

“On December 27, 2012, the First Circuit reversed that decision. Awuah v. Coverall N. Am., Inc. (Awuah II), 703 F.3d 36 (1st Cir. 2012). It held that ‘Massachusetts law, which governs this dispute, does not impose any such special notice requirement upon these commercial contractual provisions. Such a requirement, in any event, would be preempted by the Federal Arbitration Act (‘FAA’), 9 U.S.C. §1, et seq. …’ …

“Complicating matters, ten days earlier the Massachusetts Supreme Judicial Court (the ‘Supreme Judicial Court’) had held in Crocker v. Townsend Oil Co., 464 Mass. 1 (2012), that waiver of claims under the Wage Act, Mass. Gen. Laws ch. 149, §§148, 150, must be done in ‘clear and unmistakable terms. … [The waiver] must specifically refer to the rights and claims under the Wage Act.’ …

“As a result of these two decisions, the Plaintiffs filed two motions for reconsideration. …

“In essence, the Plaintiffs argue for a special notice requirement before wage claims may be subjected to arbitration agreements. …

“… The issue for this Court to resolve is whether, under Massachusetts law, an agreement by an employee that includes a general provision to arbitrate all disputes or claims ‘will be enforceable as to the statutorily provided rights and remedies conferred by the Wage Act only if such an agreement is stated in clear and unmistakable terms.’ …

“… This Court concludes that, under Massachusetts law, to subject a Wage Act claim to arbitration, an agreement must do so explicitly. This conclusion is based on the Court’s reading of Crocker, 464 Mass. 1, and Crocker’s reliance on Warfield v. Beth Israel Deaconess Medical Ctr., Inc., 454 Mass. 390, 398-400 (2009), abrogated by Joulé, Inc. v. Simmons, 459 Mass. 88, 96 n.9 (2011) (concluding that even where an employee has agreed to arbitrate employment discrimination claims, the employee may still file a complaint with the Massachusetts Commission Against Discrimination). … Given the similar treatment of Wage Act claims and statutory employment discrimination claims and releases of claims and submissions of claims to arbitration by the Supreme Judicial Court, this Court must conclude that under Massachusetts law, only express statements can submit Wage Act claims to arbitration. …

“The FAA states that arbitration agreements ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 U.S.C. §2. If given a fresh slate free from binding precedent, this Court would conclude that this section of the FAA does not preempt Massachusetts law requiring express notice to submit Wage Act claims to arbitration.

“This Court, however, does not have such a blank slate on which to write. Instead, it must recognize binding precedent by the Supreme Court and, relevant to this case, the First Circuit. …

“… In this case, the First Circuit has spoken on this very issue. It has stated that a special notice requirement ‘would be preempted by the [FAA], which requires courts to place such arbitral agreements upon the same footing as other contracts.’ … This Court disagrees with that conclusion because a special notice requirement to arbitrate Wage Act claims would not be placing arbitral agreements on a different footing from other contracts; after all, waiving Wage Act claims also requires express notice. …. This Court, however, had to reject this motion for reconsideration because the First Circuit clearly stated that such a special notice requirement for arbitration would be preempted by the FAA. The plaintiffs must convince the First Circuit that the FAA does not preempt such a rule under Massachusetts law to prevail on their motion.”

Awuah, et al. v. Coverall North America, Inc. (Lawyers Weekly No. 02-684-13) (10 pages) (Young, J.) (USDC) (Civil Action No. 07-10287-WGY) (Dec. 5, 2013).

MBTA appealing $25 million arbitration award

By: Noah Schaffer, December 4, 2013

Despite fare hikes and a financial bailout last year and an influx of new taxes set into law this summer, the MBTA is on course for another multi-million-dollar deficit this fiscal year, which a top T official blamed on an arbitration award for an employees’ union.

“The projection does show us to have a deficit at the end of the year of approximately $25 million,” MBTA Chief Financial Officer Jonathan Davis told the Massachusetts Department of Transportation Finance and Audit Committee last week. “All of that relates to the arbitration award to Local 589. Now we are appealing that so it’s yet to be determined as to what that full impact would be.”

Under the award, the union that represents bus drivers, subway operators, maintenance workers and others would receive a 10.4 percent salary increase and retroactive raises dating back to 2010 of between $10,000 to almost $14,000 per worker, MBTA spokesman Joe Pesaturo told State House News Service.

The T’s appeal, which questions whether the arbitrator considered the authority’s ability to meet costs, is scheduled to be heard in Suffolk Superior Court on Dec. 16.

The 110-page award was issued in August by Sarah Kerr Garraty. The last contract expired in 2010. An official at Local 589 did not respond to phone messages seeking comment.

The arbitration noted Local 589 represents 3,481 employees “spread over 37 job classifications.”

“Secretary of Transportation Richard Davey and MBTA General Manager Beverly Scott stress that this lawsuit is not about the employees, and they acknowledge the good work they do every day,” Pesaturo said.

Douglas G. Bailey vs. Astra Tech, Inc., & others

DOUGLAS G. BAILEY[1] vs. ASTRA TECH, INC., & others[2]; ROBERT G. STOCKARD,[3] & others,[4] third-party defendants.

Suffolk. October 10, 2012. ‑ December 4, 2013.

Present: Kafker, Cohen, & Trainor, JJ.

Agency, Agent’s contract, Scope of authority or employment. Contract, Settlement agreement, Construction of contract, Contract clause, Merger. Escrow.

Civil action commenced in the Superior Court Department on January 13, 2009.

A motion for approval of a settlement agreement was heard by Judith Fabricant, J., and entry of a separate and final judgment was ordered by her.

Steven M. Cowley for the plaintiff.

Harvey E. Bines for CID Equity Capital VIII, LP, & others.

Richard D. Batchelder, Jr., for Astra Tech, Inc.

TRAINOR, J. Douglas G. Bailey, as shareholders’ agent (shareholders’ agent) of the shareholders of Atlantis Components, Inc. (Atlantis), appeals from a judgment of the Superior Court that (1) approved the settlement between Astra Tech, Inc. (Astra Tech), and a group of former shareholders of Atlantis (settling shareholders), and (2) ordered distribution of the settling shareholders’ proportional share of an escrow fund. The only issue before us is whether the settling shareholders had the power to negotiate this settlement with Astra Tech. Claiming that they do not have this authority, the shareholders’ agent makes three arguments: first, that there is no procedural mechanism that allows the settling shareholders to settle with Astra Tech; second, that under the merger agreement, he has the exclusive right to negotiate with Astra Tech; and third, that his agency is irrevocable because he has a power coupled with an interest. We reject these arguments and affirm the judgment of the Superior Court.

Background. In October of 2007, Astra Tech acquired Atlantis by a stock purchase merger for $71 million.[5] As is common, the parties placed a portion ($6.3 million) of the purchase price into an escrow fund, which would be disbursed to the former Atlantis shareholders on a pro rata basis on December 31, 2008, the release date. The escrow fund’s purpose was to indemnify Astra Tech if it paid any claims asserted against Atlantis after the closing date but before the release date. The merger agreement designated a shareholders’ agent to serve as the representative of the former Atlantis shareholders.[6] It was the shareholders’ agent’s duty either to approve Astra Tech’s indemnification claim on the escrow fund or to challenge it. The merger agreement also created a $100,000 representative’s fund, from which the shareholders’ agent would be reimbursed for fees, expenses, and costs incurred while performing his duties as shareholders’ agent.

In a letter to Atlantis dated August 23, 2007 (about one month before execution of the merger agreement), Atlantis’s competitor, Nobel Biocare USA, LLC (Nobel), alleged that Atlantis was infringing on Nobel’s patents.[7] In a letter dated six days later, Atlantis denied Nobel’s allegations, and on September 6, 2007, Astra Tech was informed of the Nobel claim. In a letter to Atlantis dated September 12, 2007, Nobel reiterated its patent infringement claim and attempted to refute Atlantis’s defenses. Robert G. Stockard, Atlantis’s chief executive officer, never disclosed this second letter, and Astra Tech did not learn of it until October 19, 2007. Alleging fraudulent and intentional misrepresentation against Atlantis for failing to disclose the September 12 letter, Astra Tech made an indemnification claim on the escrow fund for $417,992.33.[8],[9] After an initial rebuff by the shareholders’ agent, Astra Tech provided a formal demand for payment in a letter dated December 30, 2008, one day before the release date of the escrow fund. Because Astra Tech did not yet know the cost of defending the Nobel claim, Astra Tech demanded payment of the entire $6.3 million in the escrow fund. Stockard, the then-shareholders’ agent, submitted a notice of contention to Astra Tech’s claim, and subsequently filed suit against Astra Tech seeking a declaration that no indemnification was due Astra Tech from the escrow fund. Astra Tech counterclaimed — and brought in numerous third-party defendants, including the settling shareholders — seeking a declaratory judgment that it was entitled to the funds. Also, alleging fraud, breach of contract, and violation of G. L. c. 93A, Astra Tech sought damages, not limited to the former Atlantis shareholders’ proportional share of the escrow funds, directly from the third-party defendants.

As the lawsuit progressed and discovery ensued, Astra Tech’s legal expenses, which were compensable from the escrow fund, ballooned to nearly $2.5 million by October of 2010. Faced with potentially high out-of-pocket damages and a rapidly dwindling escrow fund, the settling shareholders opted to settle directly with Astra Tech, using their pro rata share of the escrow fund as payment. After reaching an agreement, the settling shareholders and Astra Tech moved in Superior Court for approval of their settlement. The shareholders’ agent opposed the settlement, on the basis that neither the merger agreement nor the escrow agreement permitted the settling shareholders to seek disbursement absent the consent of the shareholders’ agent. A judge approved the settlement agreement between Astra Tech and the settling shareholders.

The final settlement agreement, as approved by the judge, required that $2,453,850, i.e., 38.95 percent (the settling shareholders’ proportional interest in the escrow fund) be released from the escrow fund. Astra Tech would then release its claims against the settling shareholders for $973,305.18[10] of the released funds. In return, the settling shareholders would receive the remaining $1,480,544.82, to be distributed according to each settling shareholder’s pro rata share. The judge then ordered judgment pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), and dismissed the third-party claims against the settling shareholders. The shareholders’ agent appeals.

Discussion. The facts here are not in dispute, and the issues generally will be determined by our interpretation of the terms of several agreements. “Because the interpretation of the terms of a contract or agreement is a pure question of law, we exercise de novo review over this issue.” Buchanan v. Contributory Retirement Appeal Bd., 65 Mass. App. Ct. 244, 247 n.5 (2005).

Resolution of this case requires the interpretation and interplay of three contracts between the parties: (1) the escrow agreement between Astra Tech, Atlantis, the shareholders’ agent, and the escrow agent; (2) the merger agreement between Astra Tech, Atlantis, and the shareholders’ agent; and (3) the settlement agreement between Astra Tech and the settling shareholders. In interpreting these agreements, we are guided by the familiar tenets of contract interpretation. “The object of the court is to construe the contract as a whole, in a reasonable and practical way, consistent with its language, background, and purpose.” USM Corp. v. Arthur D. Little Sys. Inc., 28 Mass. App. Ct. 108, 116 (1989). “We must interpret the words in a contract according to their plain meaning.” Dickson v. Riverside Iron Works, Inc., 6 Mass. App. Ct. 53, 55 (1978). In addition, “[w]e must put ourselves in the place of the parties to the instrument and give its words their plain and ordinary meaning in the light of the circumstances and in view of the subject matter.” Polito v. School Comm. of Peabody, 69 Mass. App. Ct. 393, 396 (2007), quoting from deFreitas v. Cote, 342 Mass. 474, 477 (1961).

Escrow agreement. The shareholders’ agent first claims that no procedural mechanism exists to allow the settling shareholders to seek court approval of their settlement. We disagree because the escrow agreement itself provides such a mechanism.[11] The relevant portion of § 3(c)(iii) reads:

“Any Disputed Claim and any other dispute which may arise under this Escrow Agreement with respect to the rights of [Astra Tech] or any other Indemnified Party and the Shareholders’ Agent or the Company Securityholders to the Escrow Fund shall be settled by mutual agreement of [Astra Tech] and the Shareholders’ Agent (evidenced by joint written instructions signed by [Astra Tech] and the Shareholders’ Agent and delivered to the Escrow Agent); provided, however, that upon receipt of a copy of a final and nonappealable order of a court of competent jurisdiction with respect to payment of all or any portion of the Escrow Fund, . . . the Escrow Agent shall deliver the portion of the Escrow Fund specified in such award or order to [Astra Tech] or other Indemnified Party and/or the Shareholders’ Agent for the benefit of the Company Securityholders as directed in such award or order.”

The shareholders’ agent contends that this section authorizes only him and Astra Tech to settle disputed claims, and that the court order referenced after the semicolon simply provides the manner of dispute resolution should they fail to settle. That interpretation ignores the plain meaning of the agreement. “The word ‘provided’ in common speech naturally expresses a qualification, limitation, condition, or an exception respecting the scope and operation of words previously used.” Sears v. Childs, 309 Mass. 337, 345-346 (1941). In conjunction with the word “however,” it is clear that the proviso following the semicolon created an exception to the claim resolution procedure outlined prior to the semicolon. This exception to the settlement provisions permits a court of competent jurisdiction to issue an order to disburse funds, and the court’s power is not limited to resolving a claim dispute where the shareholders’ agent and Astra Tech have failed to settle. Therefore, the escrow agreement provides a mechanism for disbursing the escrow funds in addition to providing a settlement between Astra Tech and the shareholders’ agent.[12]

Merger agreement. Next, the shareholders’ agent contends that under § 8.6(a) and (e) of the merger agreement, he has the exclusive right to negotiate with Astra Tech. Section 8.6(a) provides, in pertinent part:

“[T]he Shareholders’ Agent shall be, and hereby is, appointed and constituted in respect of each Company Securityholder, as his, her or its agent, to act in his, her or its name, place and stead, as such Company Securityholder’s attorney-in-fact, as more fully set forth in this Section 8.6. Without limiting the generality of the foregoing, the Shareholders’ Agent shall be constituted and appointed as agent for and on behalf of the Company shareholders to give and receive notices and communications, to authorize delivery to [Astra Tech] of the monies from the Escrow Fund in satisfaction of claims by [Astra Tech] Indemnified Persons against the Escrow Fund, to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, and to take all actions necessary or appropriate in the judgment of the Shareholders’ Agent for the accomplishment of the foregoing.”[13]

Section 8.6(e) further delineates the actions that may be taken by the shareholders’ agent:

“A decision, act, consent or instruction of the Shareholders’ Agent shall constitute a decision of all Company shareholders . . . and shall be final, binding and conclusive upon each such Company shareholder, and the Escrow Agent and [Astra Tech] may rely upon any decision, act, consent or instruction of the Shareholders’ Agent as being the decision, act, consent or instruction of each and every such Company shareholder.”

Read together, these sections clearly entrust the shareholders’ agent with broad powers to negotiate and to make decisions for the settling shareholders. The question before us, however, is whether the merger agreement grants the shareholders’ agent not just broad powers, but also the exclusive right to negotiate, which would bar the settling shareholders from negotiating for themselves.[14] This distinction is significant because, “[u]nless the agent was given an exclusive agency, the principal is free to compete with the agent.” Gregory, The Law of Agency and Partnership § 83 (3d ed. 2001).[15]

The shareholders’ agent argues that his rights are exclusive because his decisions and acts “constitute a decision of all Company shareholders” and are “final, binding and conclusive upon each such Company Shareholder.” Any other construction, according to the shareholders’ agent, would render meaningless the words “final” and “conclusive.”[16] We disagree with this interpretation. While the use of those words makes actions taken by the shareholders’ agent binding on the settling shareholders, the words do not grant him the exclusive right to negotiate. “Conclusive” is defined as “decisive; settling the question.” Webster’s New Universal Unabridged Dictionary 377 (2d ed. 1983). Likewise, “final” is defined as “decisive; determinative.” Id. at 687. “Exclusive,” on the other hand, is defined as “having the tendency or power to exclude all others.” Id. at 638. There is no basis in the definitions of “conclusive” or “final” that would lead us to define them as a substitute for “exclusive.”

To create an exclusive agency, “the parties must expressly and unambiguously indicate such an intent in the contract.” Bump v. Robbins, 24 Mass. App. Ct. 296, 304 (1987). If the parties had wished to give the shareholders’ agent the sole or exclusive authority to negotiate on behalf of the settling shareholders, they could have done so. See, e.g., Hayes v. Gessner, 315 Mass. 366, 369 (1944) (“By the terms of the policy the defendant had conferred ‘the sole right of settlement and defense’ upon his insurance company”). See also Aveta Inc. v. Cavallieri, 23 A.3d 157, 165 (Del. Ch. 2010) (“the Principal Shareholders and each of the other Shareholders signing this Agreement hereby irrevocably designate Roberto L. Bengoa . . . as their representative,” quoting from purchase agreement). We will not contort the plain language of the merger agreement to interpret “final, binding and conclusive” as synonymous with “irrevocable” or “exclusive.” We conclude that the merger agreement gives the shareholders’ agent an express right to negotiate with Astra Tech and to bind the settling shareholders, but not a contractually exclusive right to do so.[17]

Power coupled with interest. The shareholders’ agent contends that his agency is irrevocable because he has a power coupled with an interest. As we have discussed, under general principles of agency law, the principal may revoke the agent’s authority at any time, even if the agreement expressly states that the principal may not revoke. See Restatement (Third) of Agency § 3.10 comment b (2006). But “[i]t is perfectly possible to create by contract an agency power so coupled with an interest that the creator can neither revoke nor control the exercise of the power.” Hayes, supra at 370. When this occurs, the agent is said to have a power coupled with an interest.

A power coupled with an interest is not technically an agency relationship because “it is neither given for, nor exercised for, the benefit of the person who creates it.” Restatement (Third) of Agency, supra at § 3.12 comment b. In an agency relationship, granting authority to the agent is solely for the benefit of the principal. Ibid. When a power is coupled with an interest, the donee holds that power for his own benefit (or for the benefit of a third party), but not for the benefit of the donor. Gregory, supra at § 10. Additionally, when a power is coupled with an interest, the agent (donee of the power) must have a present interest in the property upon which the power is to operate. Id. at § 47. It is generally accepted that the “interest” must be ownership of the property itself and it is “this ownership which makes the power irrevocable.” Ibid. With this relationship in mind, we must determine whether the shareholders’ agent here has a power coupled with an interest.

We first consider whether the shareholders’ agent has a power in the escrow fund. As discussed supra, the shareholders’ agent has broad powers under the merger agreement, but he does not have an exclusive or irrevocable power. Under the escrow agreement, his powers are more limited. The escrow agreement makes clear that the escrow agent only may release funds upon agreement by the shareholders’ agent and Astra Tech. Thus, this case is unlike other cases where courts have found a power coupled with an interest, as those cases described a donee with unilateral power to affect the property. See, e.g., Hayes, supra at 369 (policy providing sole right to agent irrevocable); MacDonald v. Gough, 326 Mass. 93, 97-98 (1950) (agent appointed by brothers had power coupled with interest). Here, the shareholders’ agent does not have unilateral power to control disposition of the escrow fund. Rather, he must reach an agreement with Astra Tech before the escrow agent could be compelled to release the funds. Accordingly, the shareholders’ agent does not have sufficient power in the escrow fund to be deemed the donee of a power coupled with an interest.

Nor does the shareholders’ agent have an interest in the escrow fund sufficient to create a power coupled with an interest. The common thread running through our cases, going back to Chief Justice Marshall’s opinion in Hunt v. Rousmanier, 21 U.S. (8 Wheat.) 174, 203 (1823), which equated interest with title, is that the agent must have an interest “in the property itself” and “not merely an interest in the proceeds of the property.” Varnum v. Meserve, 8 Allen 158, 159 (1864), citing Hunt, supra. “[T]here has been general acceptance of the distinguishing feature of the ‘interest’ which operates to make the power irrevocable, i.e. ownership. . . . [T]he basic question is whether the holder of the power has such an interest in the subject matter as to enable him to exercise the rights of an owner or part owner.” Gregory, supra at § 10.[18] Likewise, our cases have required incidents of ownership before concluding that there was a power coupled with an interest. See Varnum, supra (“a mortgage vests the whole legal estate in the mortgagee. . . . The power is to be executed out of the estate conveyed, and is not merely collateral to it”); Dickinson v. Central Natl. Bank, 129 Mass. 279, 282-283 (1880) (stock certificate issued to owner of shares, with execution of power of attorney, “conferred a power coupled with an interest”); Mulloney v. Black, 244 Mass. 391, 394 (1923) (“The defendant had a property interest in the money in his hands with a power to dispose of it under the contract”); MacDonald, supra (“The purpose of the contract was to protect the interests of the three brothers as heirs at law and next of kin in the estate of their deceased brother”).

Here, the shareholders’ agent serves two roles. The shareholders elected him to serve as their agent.[19] In addition to representing the interests of all shareholders in the escrow fund, he also, in an individual capacity, is the principal (majority) shareholder in the escrow fund. He certainly has a property interest in the escrow fund in his individual capacity to the extent of his majority interest, but he does not have a property interest in the entire fund in his capacity as shareholders’ agent. The critical distinction between an agent and the donee of a power coupled with an interest lies in who receives the benefit of the relationship. In a principal-agent relationship, the principal receives the benefit; for a power coupled with an interest, the benefit inures to the donee himself (or to a third party), but not to the donor. See Gregory, supra at § 10. Ultimately, in his capacity as shareholders’ agent, he serves for the benefit of the shareholders, and not for his own benefit. That he is also, in his individual capacity, a shareholder does not transform his role under the escrow agreement from an agent to a donee of a power coupled with an interest in the entire escrow fund.

Even if we were to assume that the shareholders’ agent had a power coupled with an interest in his own shares, the settlement between the settling shareholders and Astra Tech does not affect the rights of any nonsettling shareholders, including the shareholders’ agent in his individual capacity. The settlement consists of the 38.95 percent of the escrow fund that would have been distributed to the settling shareholders on the release date. It does not affect the remaining 61.05 percent, which includes the shareholders’ agent’s individual proportional share. Moreover, in the event of damages in excess of the escrow amount, § 8.2(d) of the merger agreement[20] and paragraph 5 of the settlement agreement[21] expressly prevent Astra Tech from seeking damages from the remaining shareholders (the 61.05 percent) to cover the percentage loss of the settling shareholders. The maximum liability of each shareholder is limited to his pro rata share in any award of damages. Because the shareholders’ agent suffers no economic prejudice due to the settlement, he does not have an interest in the 38.95-percent portion of the escrow fund representing the settling shareholders’ proportional share. Contrast MacDonald, 326 Mass. at 97-98 (contract made by brothers who were heirs of decedent provided sufficient interest to create “power coupled with an interest”). With no interest in the settling shareholders’ divisible portion, the shareholders’ agent cannot have a power coupled with an interest in the whole escrow fund, and his agency is neither irrevocable nor exclusive.

Settling shareholders’ rights. Having concluded that the shareholders’ agent has neither the exclusive right to negotiate under the merger agreement nor a power coupled with an interest in the entire escrow fund, we must determine whether the settling shareholders had the right to settle with Astra Tech. In the absence of an agreement, the settling shareholders retain their common-law rights as principals. “Notwithstanding any agreement between principal and agent, an agent’s actual authority terminates . . . if the principal revokes the agent’s actual authority by a manifestation to the agent.” Restatement (Third) of Agency, supra at § 3.10. The principal may manifest a revocation of all or part of the agent’s authority through implicit conduct. Id. at comments b, c. See Gagnon v. Coombs, 39 Mass. App. Ct. 144, 151 (1995). Because a principal may revoke part of the agent’s authority, it follows that a principal may, in the absence of an agreement to the contrary, negotiate on his own behalf without infringing on the agent’s ability to perform his duties. “Unless otherwise agreed, a principal is not subject to a general duty to refrain from competition with the agent that does not interfere with the agent’s ability to achieve standards set by contract.” Restatement (Third) of Agency, supra at § 8.13 comment b. As discussed supra, nothing in the agreements between the parties abrogated these common-law rights because nothing vested an exclusive or irrevocable right in the shareholders’ agent. Therefore, the settling shareholders had the power to negotiate a settlement agreement with Astra Tech.

Judgment entered August 19, 2011, affirmed.


[1] As shareholders’ agent of the shareholders of Atlantis Components, Inc.

[2] Foley & Lardner LLP and Charles R. Dougherty.

[3] Individually & as securityholder of Atlantis Components, Inc.

[4] ABV Holding Company 3 LLC; ABV Holding Company 4 LLC; ABV Holding Company 5 LLC; ABV Holding Company 8 LLC; ABV Holding Company 11 LLC; Douglas Bailey; Gerald Bloom; Brookwood Partners; John D. Chambliss; CID Equity Capital VIII LP; Keith Cooper; Heron Capital Venture Fund 1 LP; Ironwood Equity Fund LP; Peter Laimins; Life Sciences Opportunities (Institutional) Fund II, LP; Life Sciences Opportunities Fund II, LP; Richard E. Mastromatteo; H. Robert Moorehead; Richard H. Oedel; William O’Neill; Orlene Shimberg; Steven Shimberg; Tolkoff Family LP II; VIMAC AC LP; VIMAC AC2 LP; VIMAC AC3 LP; VIMAC Early Stage Fund LP; VIMAC ESF Annex Fund LP; and Arnold Watkin.

[5] The merger agreement was executed on September 26, 2007, and the deal was consummated on October 9, 2007.

[6] Douglas G. Bailey became the shareholders’ agent in March, 2009. He replaced Robert G. Stockard, the original shareholders’ agent and former chief executive officer of Atlantis.

[7] Around the same time, Atlantis also became involved in a trademark dispute with Dabi Atlante.

[8] Of that total, Astra Tech submitted an invoice for $373,261.04 in legal expenses from litigating the Nobel claim. Astra Tech also demanded $10,000, its estimated legal fees in a second dispute, the Dabi Atlante trademark issue, see note 6, supra. And finally, Astra Tech demanded $34,731.29 for fees and expenses arising out of the merger itself.

[9] The merger agreement provided that only claims in excess of $500,000 could be made; but the $500,000 requirement did not apply to so-called “material claims.” Because Astra Tech alleged that Atlantis fraudulently and intentionally misrepresented its position, Astra Tech alleged it was a “material claim” not subject to the $500,000 threshold.

[10] This figure represents 38.95 percent of Astra Tech’s accrued legal fees.

[11] Section 3 establishes a system for disbursement from the escrow fund: Astra Tech first is to submit a written demand for payment. The shareholders’ agent then has fifteen business days to dispute the claim. In addition to providing a procedural mechanism for disbursement, the escrow agreement also governs claims disputed by the shareholders’ agent.

[12] This alternative procedure for distribution of escrow funds also anticipates the power of a principal to act on his own behalf even while in a relationship with an agent.

[13] Section 8.6(a) also provides the method for electing a new shareholders’ agent.

[14] The concept of agency, as defined by the common law, acknowledges a consensual relationship between parties, in which one party acts as a representative or on behalf of the other party with power to effect the legal rights and duties of that other party. See generally Restatement (Third) of Agency § 1.01 comment c (2006). Every agency expects the agent to exercise power, the extent of which is usually determined by the circumstances of the agency. Ibid. Even an agent holding broad powers, however, holds and exercises those powers as a result of a voluntary conferral by the principal. Ibid. We have used the Restatement (Third) of Agency’s description of agency principals to develop our agency case law. See, e.g., MacDonald v. Gough, 326 Mass. 93, 97-98 (1950) (using Restatement to support explanation of power coupled with interest); Kirkpatrick v. Boston Mut. Life Ins. Co., 393 Mass. 640, 645 (1985) (using Restatement definition of agency relationship); Haufler v. Zotos, 446 Mass. 489, 498 (2006) (using Restatement explanation of agent’s power).

[15] However, even when an agency relationship is stated to be “irrevocable” or “exclusive,” the statement does not make it so. “The principal may still revoke, . . . while incurring liability for the breach. It must be remembered that, authority as commonly conceived in an agency setting may always be revoked. . . . It is believed that it should always be within the power of the principal . . . to reassume the control over his own business which he has but delegated to his agent.” Gregory, supra at § 47.

[16] The shareholders’ agent also points to Ballenger vs. Applied Digital Solutions, Inc., Del. Chancery Ct., No. 19399, slip op. at 10 (April 24, 2002), where the court held that the stockholders’ representatives had “the authority to determine how far to press a dispute over an Earnout issue.” But there, the stockholders’ representatives and the stockholders were on the same side of the dispute against the acquiring company. Id. at 1. Here, the settling shareholders are opposed to the shareholders’ agent’s position and have directly settled a dispute with the acquiring company.

[17] As previously stated, even if an agreement creates an agency that is irrevocable or exclusive, the principal still maintains the power to revoke the agreement at any time. Restatement (Third) of Agency § 3.10 & comment b (2006). But such revocation could render the principal liable for breach of contract. Gregory, supra at § 47.

[18] The ordinary incidents of agency — such as payment of a commission or a fee — do not constitute a sufficient interest to create a power coupled with an interest. Restatement (Third) of Agency, supra at § 3.12 comment b.

[19] Although he is entitled to fees from the representative fund, that is an interest arising from his role as agent. Restatement (Third) of Agency, supra at § 3.12 comment b (ordinary incidents of agency — such as payment of a commission or a fee — do not constitute a sufficient interest to create a power coupled with an interest).

[20] “In no event shall a Company Securityholder be liable for any amounts in excess of Merger Consideration actually paid to him, her or it.”

[21] “Astra Tech . . . will not seek to recover the Settling Shareholders’ pro rata share of the Astra Tech Excess Damages from any other person or entity.”

Lawyers Weekly No. 11-142-13

Arbitration – Time limit – Medical documents

By: Tom Egan, November 26, 2013

Where a plaintiff abuse victim, having received an arbitration award, filed the underlying suit asserting that the arbitration award should be increased because the arbitrator improperly ‘stated that [certain medical documents submitted postarbitration] were not necessary,’ the complaint was correctly dismissed as untimely.

“The plaintiff alleges that his lawyer received medical documents immediately after the arbitration hearing that meaningfully bolstered his claim. The lawyer contacted the arbitrator in order to submit the documents, but the arbitrator stated they were ‘not necessary.’

“Massachusetts General Laws c. 251, §12(a)(4), empowers a court to vacate an arbitration award if the arbitrator ‘refused to hear evidence material to the controversy.’ However, any application under that ‘section shall be made within thirty days after delivery of a copy of the award to the applicant.’ … The underlying complaint was not filed until three years after the arbitration award, long after the thirty-day period had expired. Moreover, the complaint gives no basis to toll the limitations period, G.L.c. 251, §12(b), because the plaintiff acknowledges (and affirmatively pleads) that he was informed of the arbitrator’s position regarding the supplemental medical documents at the time his counsel attempted to submit them to the arbitrator back in 2006.”

Young v. Archdiocese of Boston, et al. (Lawyers Weekly No. 82-125-13) (2 pages) (Appeals Court – Unpublished) (No. 12-P-1436) (Nov. 22, 2013).

Mediation: Employment – Settlement – Discrimination – Disability

By: Tom Egan, February 7, 2014

Where a plaintiff in a disability discrimination case refused to sign a formal agreement to settle, the terms of the preliminary settlement should be enforced.

“… On June 19, 2012, the parties engaged in an extended mediation session conducted with the private mediation firm JAMS. At the end of the lengthy mediation, the parties reached the essential terms of a settlement and executed a three page ‘JAMS Settlement Agreement Term Sheet.’ The plaintiff had been present throughout the mediation, and before executing the term sheet, she had a lengthy private consultation with her lawyer.

“The term sheet provided that the parties would later execute a more formal settlement agreement and release, and a form of that contemplated agreement was sent by the defendant’s lawyer to the plaintiff’s lawyer in early July. It had been delayed slightly by the plaintiff’s request to give her time to discuss with a financial adviser precisely how the settlement proceeds should be allocated, apparently for tax planning purposes. The settlement agreement recited the same essential terms as the term sheet, including particularly the amount of the settlement to be paid to the plaintiff and the plaintiff’s agreement to give the defendant a release of claims and to dismiss this action with prejudice.

“The plaintiff did not execute the settlement agreement and release. Instead, on August 20, 2012, her lawyer wrote to the defendant’s lawyer advising that she would not execute the agreement. After further negotiations were unsuccessful, the defendant moved to enforce the settlement of the case in accordance with the term sheet signed by the parties on June 19, 2012.

“The plaintiff’s principal contention is that she did not genuinely assent to the term sheet because, as a result of her emotional state at the time it was signed, she lacked the capacity to effectively agree. Her evidence in support of this proposition is essentially limited to her own assertion. She proffers statements from two doctors in support, but their opinions are apparently based principally on her own statements to them, rather than any independent assessment of events by them, coupled with her manifest unhappiness after the fact. Even so, her statements to them could plausibly be understood as expressing a concern that she had agreed to something she thought afterward she shouldn’t have agreed to.

“In contrast, it appears undisputed that the mediation was presided over by a presumably experienced mediator, that the plaintiff was represented by counsel throughout, and that before signing (along with counsel) the term sheet, she had the opportunity for a lengthy private consultation with him. There is no evidence in what has been presented of any overreach or coercion. Her signature on the term sheet was an objective manifestation of assent to its terms, with the result that she should be held bound to those terms. …

“The term sheet was complete and specific enough to qualify as an enforceable agreement. The parties’ commitment to sign a more formal settlement agreement and release does not vitiate the enforceability of the term sheet. The draft settlement agreement tracks the promises of the term sheet, only in more ‘lawyerly’ language. It is a settled principle of the Massachusetts law of contracts that where the parties have demonstrated agreement to the material terms of a bargain, binding them to it is not affected by their contemplation that they will later execute a more ‘polished’ version. …

“The plaintiff’s reference to the Older Workers’ Benefit Protection Act, 29 U.S.C. §626(f), is beside the point. Those provisions by their terms relate only to claims made under the Age Discrimination in Employment Act. The plaintiff has not advanced a claim under that act. … Ironically, she refused to sign the more formal settlement agreement, which would have given her as a matter of contract some OWBPA rights not in the term sheet that she did not have as a matter of statutory mandate. Having declined to sign the more formal agreement, she cannot claim that she contracted for those additional terms.

“The defendant’s motion to enforce the settlement reached between the parties as contained in the settlement term sheet dated June 19, 2012, is granted, and the parties are directed to perform their respective obligations as set forth therein within thirty days of the entry of this order.”

Politis v. GlaxoSmithKline LLC (Lawyers Weekly No. 02-071-14) (3 pages) (O’Toole, J.) (USDC) (Civil Action No. 10-11773-GAO) (Feb. 6, 2014).

Civil practice – Settlement – ‘Second thoughts

By: Tom Egan, January 23, 2014

Where the plaintiff has objected to an agreed-upon settlement (over the loss of items from a safe deposit box) because she had “second thoughts,” this is not a legally sufficient ground to invalidate the settlement agreement.

“[Plaintiff Fariba D.] Amary objects to the agreed-upon settlement because she had second thoughts. Defendant responds that while Amary’s claim may or may not be valid, she agreed in open court to a settlement that would dismiss her claim. Defendant is correct. Once agreed to voluntarily and submitted to the Court, a settlement agreement is binding. … The lack of a written agreement does not bar enforcement. … Moreover, the lack of final approval of the settlement amount at the time the agreement was announced is immaterial because persons may enter into agreements that are binding unless voided by a future contingency and the parties clearly did so here. …

“Settlement agreements can be revisited when a party’s attorney oversteps her delegated authority, a settlement agreement is unfair or subsequent events warrant re-opening the case. … None of those circumstances, however, are present here. The record shows that both Amary and [Tannaz] Khorsandian attended the mediation and did not object to the agreement. Amary’s second thoughts are not legally sufficient grounds to invalidate the settlement agreement. … Accordingly, the Court will overrule plaintiff’s objection and enter final judgment enforcing the settlement.

“The Court notes that after Amary filed her objection to Magistrate Judge Collings’ recommendation, which was properly served on defendant, she filed with the Court an ex parte ‘clarification and objection’ on January 6, 2014. That was an improper filing, even for a pro se litigant, and ordinarily would not be docketed. Courts give pro se litigants latitude but Amary’s effort to revisit substantive issues (especially without notifying her opponent) ignores the importance of procedure in the real world. Her case has been heard, she has been afforded due process and her actions led to the subject settlement. There must be an end to litigation and in this case we have arrived at that point.”

Amary v. J.C. Morgan Chase, N.A. (Lawyers Weekly No. 02-021-14) (5 pages) (Gorton, J.) (USDC) (Civil Action No. 12-10777-NMG) (Jan. 13, 2014).

Banks and banking – Settlement – Non-party – Safe deposit box

By: Tom Egan, January 22, 2014

Where a defendant bank has moved to dismiss a complaint over a lost safe deposit box, the dismissal motion must be allowed based on a settlement agreement between the plaintiff’s mother and the bank.

“The Court concludes that [plaintiff Tannaz M.] Khorsandian’s complaint is precluded. Although she was not a named party in Amary [v. JP Morgan Chase Bank, N.A., 12-cv-10777-NMG ], Khorsandian attended the mediation hearing and offered her assent to the settlement in the same manner as [Fariba] Amary. If, as the ex parte pleading filed by Amary in her parallel case asserts, Khorsandian is somehow disabled and unable to express her assent, plaintiff should have brought that to the court’s attention. The Court also finds no support for the proposition that a non-party is foreclosed by virtue of her status from entering into a settlement. Khorsandian’s status as a ‘co-signer’ on the lease has not been fully described but the Court concludes that the individuals involved in the mediation, including Magistrate Judge Niedermeier, defendant’s representatives, Attorney Marino, Amary and Khorsandian, would not have countenanced (and did not, in fact, countenance) a partial settlement.

“The Court declines Khorsandian’s invitation to view her complaint as alleging a different set of facts from the Amary case. Magistrate Judge Niedermeier stated that the settlement would release ‘both sides from any future claims arising out of this particular incident,’ leaving no doubt that any related claim is barred.”

Khorsandian v. JP Morgan Chase Bank, N.A. (Lawyers Weekly No. 02-022-14) (7 pages) (Gorton, J.) (USDC) (Civil Action No. 13-11692-NMG) (Jan. 13, 2014).

 

Chess match nets $12.25M in construction defect suit

By: Brandon Gee, January 16, 2014

Thomas O. Moriarty had a problem. The construction defect case he was handling, filed against developers on behalf of a condominium association, was nearing trial after six years of litigation.

The Braintree lawyer believed he could prove damages of $40 million if the case were tried. But there was an acceptable, if not preferable, fix to the problems at the condominium building in question that would cost just $11 million. Settlement, it seemed, was a no-brainer.

“Ninety-five percent, if not more, either get settled before litigation or as soon as we file suit,” Henry A. Goodman said of construction defect lawsuits filed by condo boards. Goodman’s Dedham firm — Goodman, Shapiro & Lombardi — represents more than 800 condominium associations in Massachusetts and Rhode Island.

“Usually, you either do or do not have evidence of something wrong. It’s glaring, like water through the roof. It’s there; you see it,” he says.

But Moriarty’s case was not like most. For one, his client was the association board of directors for One Charles, a 550,000-square-foot, 231-unit luxury high-rise near Boston Common created by one of the city’s most prominent developers, Millennium Partners.

Further, the building’s alleged issues were not as glaring as “water through the roof.” The condo association claimed that the building’s HVAC system was defective and resulted in less visible problems such as high humidity, the migration of smoke and cooking odors throughout the building, and “negative pressurization,” a condition in which the amount of air exhausted from a building exceeds the supply of treated replacement air, causing untreated outside air to rush into the building whenever doors and windows are opened.

The defendants in the case were Millennium affiliate MDA Park LLC and a host of contractors and subcontractors, including architectural and engineering firms. As the project’s “declarant,” MDAPark faced the most risk and liability in the suit.

Moriarty believed the reason he was having trouble getting the parties to settle was because the HVAC design engineer, Cosentini Associates, was relying heavily on the well-heeled developer not only to coordinate and lead the defense, but also to cover any potential damages that would result from the case.

Moriarty put himself in the shoes of MDAPark and came to the conclusion that Cosentini’s assumption was wrong; the developer would assert claims against its contractors and subcontractors to satisfy any potential judgment against it. But with both parties believing, correctly or incorrectly, that their exposure was limited, they had little motivation to settle.

“It was a very interesting process because we had a number of attempts at settlement,” said MDAPark’s lawyer, Richard J. Shea of Hamel, Marcin, Dunn, Reardon & Shea in Boston. “It was the classic case where the defendants couldn’t fairly allocate fault and responsibility among themselves. When it came down to a design-based claim, we were relying on the people MDA retained to step up and take responsibility. We didn’t consider ourselves to be the legally responsible defendant in the case.”

The move

To clear the logjam, Moriarty decided to take a chance.

“If we went to trial, even if we got a significant judgment, MDA would be expected to pass that through to the engineers,” the Marcus, Errico, Emmer & Brooks lawyer said.

“MDA wasn’t going to give us a lot of money. [We decided] we’ve got to shake it up somehow, and the best way to shake it up would be to get MDA out of the case so that the design engineers wouldn’t even have the expectation that they were going to cover it,” he said.

So Moriarty took what he considered “a discount” from MDA to flush the defendant from the suit. With MDA out of the picture, the HVAC designer would have to accept the fact that, in order to get out as well, it had to return to the settlement table and think more seriously about its liability, he said.

The move also allowed Moriarty to kill two birds with one stone.

“MDAPark were the champions, and their lead defense counsel was highly skilled and doing an excellent job of defending the case,” Moriarty said. “We felt if we could take their principal lawyers out of the game shortly before trial, that was going to be strategically advantageous to us.”

The decision paid off, and Cosentini also eventually settled. The total value of the settlements with all defendants was $12.25 million, but confidentiality provisions prevent Moriarty from revealing who paid what. (Cosentini’s lawyers from Donovan Hatem in Boston did not respond to an interview request.)

The tack Moriarty took in the case is not lost on opponent Shea.

“Ordinarily, these cases are all or nothing. Everybody globally resolves or they don’t. From that perspective, [Moriarty] strategically made a good decision to let MDA out along with the mechanical contractors,” Shea said.

With sizeable settlements in the condo construction arena generally running in the $1 million to $2 million range, the amount of Moriarty’s award is noteworthy, Goodman said, adding that dismissing a defendant from such a case can be a risky move, prompting remaining defendants to assert an empty-chair defense.

But Donna M. Turley, a Boston litigator who represents condo trustees and unit owners, said it must have been pretty clear that the HVAC engineer was responsible for the problems at issue.

“Absolutely, it’s usually the declarant who has the most risk and liability,” Turley said. “This is a very curious case that the declarant would be removed from this. [Liability] must have been heavily weighted toward the subcontractor.”

Moriarty is the first to admit that it was “an intimidating step to take,” but he does not believe he would have achieved a favorable settlement otherwise.

“It’s somewhat daunting to say, ‘I’m going to let them out for what I would consider significantly less than what you would expect the developer to pay if there had been a global settlement,’” Moriarty said. “You never know in these cases. You have to make the best decision based on the information you have. But in hindsight, I think it was one of the two pivotal moves that brought the case to resolution.”

If the case holds a practical lesson for other lawyers, Shea said it is if you choose not to engage in a global settlement, you run the risk of increasing your exposure when you go it alone.

“The initial settling defendants got out for a very reasonable sum,” he said. “We settled not on the eve of trial, and the remaining defendant was faced with the threat of trial and ended up resolving the case in a fashion markedly different.”

Experts stricken

Moriarty said the second pivotal development in the case was the evisceration of Cosentini’s experts. After the plaintiff settled with MDAPark, the HVAC engineer defendant scrambled to shore up its defense.

“Virtually all of the experts that we were relying upon with the exception of the two we had designated were now taken away from us,” Cosentini’s lawyer, Eric A. Howard, said at a hearing before Judge Thomas P. Billings in the Business Litigation Session. “We can’t even contact them by virtue of the terms of the settlement between the plaintiff and settling defendants.”

The hearing concluded with Billings granting the plaintiff’s motion to strike supplemental expert disclosures that Cosentini submitted after MDAPark settled and exited the case. Perhaps more damning, though, was what Billings had to say not only about the supplements, but Cosentini’s expert disclosures in general.

“It’s not a disclosure of the opinions and the bases therefore,” Billings said at the Aug. 20 hearing. “You’ve identified a subject matter but there’s nothing about what his opinion would be or what the bases therefore would be.”

That commentary loomed large when, a month later and 12 days before the trial was scheduled to begin, Moriarty filed a motion in limine to preclude Cosentini from calling any expert witnesses at trial on the basis that the disclosures were “so incomplete and vague that the Plaintiff could not be expected to prepare a response to the proposed testimony of any of Cosentini’s expert witnesses.”

At a subsequent mediation, Moriarty said, the opposition didn’t make much of an argument to the contrary, and the case settled just before Christmas.

The $12 million-plus settlement figure was not the only reason a suit involving the One Charles Condominium Association was gratifying to plaintiff’s lawyer Thomas O. Moriarty.

At the summary judgment stage last July, the case became one of the first to apply the Appeals Court’s December 2012 ruling in Wyman, et al. v. Ayer Properties LLC.

In Wyman, which was won by the Braintree attorney on behalf of another condominium association, the Appeals Court ruled that the economic loss doctrine does not bar a condominium association’s negligent construction claim against a developer for defects in common areas. The decision was appealed and is now pending before the Supreme Judicial Court.

In an attempt to force litigants to recover under the provisions of their contracts with one another, the economic loss doctrine bars tort damages stemming from defective products absent a showing of personal injury or damage to other property. The doctrine was problematic for condominium associations trying to sue over construction defects, since associations don’t come into being until after a project is finished.

“Condominium associations really own nothing. They never bought anything,” said Dedham lawyer Henry A. Goodman, who authored an amicus brief for the pending SJC case on behalf of the Community Associations Institute. “They are given authority over something purchased by others. If something breaks or is wrong, they are left without remedy, in theory. In my opinion, it is a contrived rule that seems to be sort of ridiculous.”

In the One Charles case, Business Litigation Session Judge Mitchell H. Kaplan cited the Appeals Court’s decision in Wyman to deny a defendant’s motion for summary judgment.

“I’m glad that the court has recognized what the Appeals Court asserted in the Wyman case, which is that you can make a claim of negligence against a developer,” Boston litigator Donna M. Turley said. “It’s important because how else are condo associations able to assert their losses if there has been some sort of negligence on behalf of the developer? Trustees don’t take shape until developer has left the scene.”

Attorneys – Fees – Settlement

By: Tom Egan, December 30, 2013

Where (1) a settlement was mediated on a plaintiff’s allegations that the defendant retailer used ZIP codes, gathered in connection with credit card purchases, for marketing purposes in violation of state law and (2) the plaintiff has since requested $450,000 in counsel fees, the fees awarded should instead total $75,959.

“Having determined the reasonable number of billable hours (174.65), the court turns to the reasonable rate to apply to those hours. As previously noted, Meiselman Packman [Nealon, Scialabba, & Baker] has billed all hours, with the exception of a few tasks performed by a paralegal, at $600 an hour, a figure which although generous for the relevant market (Boston/Providence), the court will accept as commensurate with the firm’s customary rate and counsels’ experience. The court has also determined a fair rate for associate-level work to be $275 per hour and a fair rate for clerical and paralegal tasks to be $90 per hour by whomever performed.

“The result is a lodestar fee award of $75,959.00. This is the sum of: 65.80 research hours and associate-level drafting hours billed at a $275 rate ($18,095.00), 14.60 hours of clerical work billed at $90 per hour ($1,314.00), and 94.25 hours billed at a partner-level rate of $600 per hour ($56,550.00).

“… Meiselman Packman urges this court to apply a multiplier to the lodestar calculation in this case because of the ‘extraordinary,’ ‘exceptional,’ and ‘unparalleled’ result it secured for the Class. … This the court declines to do as, in its judgement, the case required no extensive litigation effort, given J.C. Penney’s willingness to settle the case almost at its inception. Nor is the court concerned that the refusal to award a multiplier will discourage firms like Meiselman Packman from prosecuting similar litigation on a contingent basis. As was made clear when the court questioned [plaintiff Jacqueline] Brenner, this is not a case where the firm chose to take on what might have appeared a quixotic quest on behalf of a plaintiff unable to afford counsel. To the contrary, it was Meiselman Packman that sought out Ms. Brenner as a plaintiff in this and several other nearly identical cases in which the result, given the decision of the SJC in the Tyler v. Michael Stores, [464 Mass. 492 (2013),] was virtually preordained.

“The motion for attorney’s fees and costs is granted in part and denied in part. Counsel is to be awarded $75,959.00 of the requested $450,000.00 in attorney’s fees, to be paid by J.C. Penney pursuant to the Settlement Agreement.”

Brenner v. J.C. Penney Company, Inc. (Lawyers Weekly No. 02-725-13) (18 pages) (Stearns, J.) (USDC) (Civil Action No. 13-11212-RGS) (Dec. 26, 2013).

Where six banks have challenged ordinances enacted by the city of Springfield that (1) require foreclosing entities to maintain real property during the foreclosure process and provide a $10,000 cash bond per foreclosure to the city and (2) require mortgagees to attempt a negotiated settlement before foreclosing, the matter should be referred to the Massachusetts Supreme Judicial Court through certified questions.

“This case presents facial challenges under both state and federal law to two local Ordinances enacted by the City of Springfield. In broad terms, the Ordinances impose new legal duties on (1) property ‘owner[s]’ to maintain property during the foreclosure process and provide a $10,000 cash bond per foreclosure to the City and (2) on mortgagees to attempt a settlement through a new particular system of negotiations before foreclosing. As to the first Ordinance, the central point of contention is that its definition of ‘owner’ includes mortgagees who are not in possession and have begun the foreclosure process, and it appears to impose these duties on foreclosing mortgagees regardless of whether the mortgagors are still in possession.

“Objecting to the imposition of these new duties, six banks brought this suit in state court, seeking to have the Ordinances invalidated as inconsistent with and preempted, under both field and conflict preemption principles, by the comprehensive state laws governing foreclosure and property maintenance, and as inconsistent with federal and state constitutional guarantees. …

“First, the outcome of this case has the potential to impact thousands of outstanding and future mortgages in Springfield. We are told other municipalities have followed or are considering following Springfield’s example by enacting their own foreclosure-related ordinances. The resolution of these issues will have ramifications for thousands more mortgages throughout the Commonwealth. …

“We therefore certify the following questions to the SJC:

“1. Are Springfield’s municipal ordinances Chapter 285, Article II, ‘Vacant or Foreclosing Residential Property’ (the Foreclosure Ordinance) or Chapter 182, Article I, ‘Mediation of Foreclosures of Owner-Occupied Residential Properties’ (the Mediation Ordinance) preempted, in part or in whole, by those state laws and regulations identified by the plaintiffs?

“2. Does the Foreclosure Ordinance impose an unlawful tax in violation of the Constitution of the Commonwealth of Massachusetts?”

Easthampton Savings Bank, et al. v. City of Springfield (Lawyers Weekly No. 01-293-13) (16 pages) (Lynch, C.J.) (1st Circuit) Appealed from a decision by Ponsor, J., in the U.S. District Court for the District of Massachusetts. Tani E. Sapirstein, with whom Sapirstein & Sapirstein, P.C. was on brief, for the plaintiffs-appellants; Brenda R. Sharton, Thomas M. Hefferon, William F. Sheehan and Goodwin Procter LLP on brief for Massachusetts Bankers Association, Inc., amicus curiae.; Thomas D. Moore, with whom Edward Pikula and Anthony Wilson were on brief, for the defendant-appellee; Lee D. Goldstein on brief for Harvard Legal Aid Bureau, National Consumer Law Center, National Community Reinvestment Coalition, Massachusetts Law Reform Institute and Massachusetts Alliance Against Predatory Lending, amici curiae (Docket No. 12-1917) (Nov. 22, 2013).

Johnson, et al. v. Kindred Healthcare, Inc., et al.

BARBARA JOHNSON & another,[1] as co-administratrices,[2] vs.

KINDRED HEALTHCARE, INC., & others.[3]

Plymouth. September 4, 2013. ‑ January 13, 2014.

Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

Civil action commenced in the Superior Court Department on October 3, 2011.

A motion to stay the proceedings and to compel arbitration was heard by Charles J. Hely, J.

A proceeding for interlocutory review was heard in the Appeals Court by Gabrielle R. Wolohojian, J. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

John Vail, of the District of Columbia (David J. Hoey with him) for the plaintiffs.

Christopher R. Lavoie for the defendants.

Kelly Bagby, of the District of Columbia & Rebecca J. Benson & Debra Silberstein, for National Academy of Elder Law Attorneys (Massachusetts Chapter) and another, amici curiae, submitted a brief.

DUFFLY, J. This case presents the question whether a health care agent’s agreement with a health care facility to arbitrate disputes arising from the principal’s stay at that facility constitutes a “health care decision” binding on the principal pursuant to G. L. c. 201D, § 5.[4]

The plaintiffs, administrators of the estate of Dalton Johnson, filed a complaint in the Superior Court against a national operator of nursing and rehabilitation centers, one of its subsidiary nursing homes and the operator of that nursing home, and two health care professionals, alleging, inter alia, negligence and seeking damages under the wrongful death statute, G. L. c. 229, § 2, as a result of the defendants’ care of Dalton[5] while he was a resident at the nursing home.[6]

On May 24, 2007, Dalton executed a health care proxy pursuant to the Massachusetts health care proxy statute, G. L. c. 201D, §§ 1-17 (health care proxy statute). In it, he authorized his wife, Barbara Johnson, “as my Health Care Agent to make any and all health care decisions for me, except to the extent that I state otherwise.” Dalton was admitted to the nursing facility operated by Braintree Nursing, LLC, doing business as Braintree Manor Rehabilitation and NursingCenter (Braintree Nursing), in September, 2007. On August 6, 2008, Barbara, in her capacity as health care agent, signed an agreement with Braintree Nursing “to submit any disputes that may arise between [Dalton and the nursing home defendants] for resolution by mediation, and if mediation is unsuccessful, then by arbitration” (arbitration agreement).[7] In March, 2009, while a resident of the nursing facility, Dalton suffered burns and was transported to a hospital where, on July 27, 2009, he died.

After the plaintiffs filed their complaint, the nursing home defendants sought to enforce the arbitration agreement. Contending that the agreement to arbitrate disputes arising out of Dalton’s stay at the nursing facility was not a “health care decision” under the terms of Dalton’s health care proxy and the health care proxy statute, the plaintiffs argued that Barbara, as Dalton’s health care agent, did not have the authority to execute the arbitration agreement on his behalf. A judge of the Superior Court concluded that the arbitration agreement was “an agreement affecting the responsibilities of the health care facility toward the patient,” and therefore that Barbara’s decision to enter into such an agreement was a health care decision that bound Dalton. The judge ordered that the proceedings be stayed pending the conclusion of mediation and arbitration, and denied the plaintiffs’ request for reconsideration. The plaintiffs thereafter filed a petition under G. L. c. 231, § 118, seeking leave to pursue an interlocutory appeal. A single justice of the Appeals Court allowed the petition, and we transferred the case to this court on our own motion.

We conclude that a health care agent’s decision to enter into an arbitration agreement is not a health care decision as that term is defined and used in the health care proxy statute and, therefore, that an agreement to arbitrate all claims arising out of a principal’s stay in a nursing facility does not bind the principal where the agreement was entered into solely by a health care agent under the authority of a health care proxy.

Discussion. Adjudication of a motion to compel arbitration, including a challenge to the validity of the arbitration agreement, is governed by G. L. c. 251, § 2 (a). If there is a dispute as to a material fact, “the judge conducts an expedited evidentiary hearing”; where, as here, “there is not such a dispute, the judge resolves the issue as a matter of law.” McInnes v. LPL Fin., LLC, 466 Mass. 256, 261 (2013). We review matters of law de novo. See Deutsche Bank Nat’l Ass’n v. First Am. Title Ins. Co., 465 Mass. 741, 744 (2013).

The plaintiffs argue that the health care proxy statute solely concerns decisions about a patient’s treatment by health care professionals and, because the statute does not authorize a health care agent to make decisions about dispute resolution on the principal’s behalf, the order compelling arbitration must be vacated. The nursing home defendants contend that health care decisions should be defined broadly to include decisions that “pertain[] to or [are] associated with the health care which is to be provided to the individual resident” or “arise out of and . . . are connected to” such health care. They claim that, therefore, a health care agent may decide not only whether to admit the principal to a health care facility, but also whether to enter into an agreement to arbitrate claims arising from the principal’s treatment while a resident of the facility.[8]

a. Statutory framework. As set forth in G. L. c. 201D, § 2, “[e]very competent adult shall have the right to appoint a health care agent by executing a health care proxy.” This statutory right reflects the doctrine of informed consent, which promotes an individual’s “strong interest in being free from nonconsensual invasion of his bodily integrity” and protects his “human dignity and self‑determination.” Superintendent of BelchertownState Sch. v. Saikewicz, 373 Mass. 728, 739 (1977). See Cohen v. Bolduc, 435 Mass. 608, 617 (2002) (purpose of health care proxy statute is “to support and enhance patient autonomy”). In the case of an incompetent person, who has “the same panoply of rights and choices” as a competent person, those rights may be asserted by an authorized representative. See Superintendent of BelchertownState Sch. v. Saikewicz, supra at 746. The health care proxy statute enables an individual to designate in advance a person he or she trusts to provide such informed consent when the individual is no longer able to do so. An agent granted the authority to make health care decisions on behalf of an individual lacking capacity must do so “from the principal’s perspective,” in accordance with the principal’s wishes, if known, or best interests, if not. Cohen v. Bolduc, supra at 618.

The manner in which the health care proxy is to be executed and the scope of authority of the health care agent are governed by G. L. c. 201D, §§ 1-17. The health care proxy statute authorizes a health care agent “to make any and all health care decisions on the principal’s behalf that the principal could make, including decisions about life-sustaining treatment, subject, however, to any express limitations in the health care proxy.” G. L. c. 201D, § 5. In making these decisions, the agent must assess the principal’s wishes, including “the principal’s religious and moral beliefs.” Id. An agent will be removed if “not reasonably available, willing and competent to fulfill his or her obligations.” G. L. c. 201D, § 17.

Echoing the language of the health care proxy statute, Dalton’s health care proxy authorized his agent “to make any and all health care decisions for me, except to the extent that I state otherwise.” Whether Barbara had authority to execute the arbitration agreement as Dalton’s health care agent thus turns on the meaning of the phrase “health care decisions.”

b. Meaning of “health care decision”. “The object of all statutory construction is to ascertain the true intent of the Legislature from the words used.” Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, 448 Mass. 15, 24 (2006), quoting Champigny v. Commonwealth, 422 Mass. 249, 251 (1996). We interpret a statute according to “all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated.” Board of Educ. v. Assessor of Worcester, 368 Mass. 511, 513 (1975), quoting Industrial Fin. Corp. v. State Tax Comm’n, 367 Mass. 360, 364 (1975). “Significantly, a statute must be interpreted ‘as a whole’; it is improper to confine interpretation to the single section to be construed.” Commonwealth v. Keefner, 461 Mass. 507, 511 (2012), quoting Wolfe v. Gormally, 440 Mass. 699, 704 (2004).

We begin with the plain language of the statute. The health care proxy statute defines “[h]ealth care” as “any treatment, service or procedure to diagnose or treat the physical or mental condition of a patient,” and “[h]ealth care decision” as “a decision which is made in accordance with the requirements of this chapter, is consistent with any limitations in the health care proxy, and is consistent with responsible medical practice.” G. L. c. 201D, § 1. Taken together, these definitions appear on their face to limit “health care decisions” to those that directly involve the provision of responsible medical services, procedures, or treatment of the principal’s physical or mental condition.[9]

This reading of “health care decisions” gains support from language elsewhere in the statute. In particular, G. L. c. 201D, § 5, which delineates the scope of a health care agent’s authority, provides that the agent has a right to all “medical information” necessary for an informed health care decision and, further, that the agent may make such a decision only “[a]fter consultation with health care providers, and after full consideration of acceptable medical alternatives regarding diagnosis, prognosis, treatments and their side effects.” No language in the statute suggests that the Legislature intended a health care agent to have authority over any decision other than medical treatment decisions that the principal would have made had the principal been capable.

c. Statutory context and history. Moreover, the statute’s language, context, and progression through the legislative process show that the Legislature intended to distinguish between a health care proxy, which limits an agent’s decision-making authority on behalf of an incapacitated person to health care decisions, and a durable power of attorney, guardianship, or conservatorship, all of which authorize broad decision-making power on behalf of an incompetent person, including over the person’s financial interests and estate.[10] See Sullivan v. Chief Justice for Admin. and Mgt. of the Trial Court, 448 Mass. at 24, quoting Murphy v. Bohn, 377 Mass. 544, 548 (1979) (“Statutes are to be interpreted, not alone according to their simple, literal or strict verbal meaning, but in connection with their development, their progression through the legislative body, the history of the times, [and] prior legislation”).

Unlike a health care proxy, a durable power of attorney can authorize an agent to make decisions affecting the principal’s business, estate, finances, and legal relationships in a variety of contexts unrelated to health care. See G. L. c. 190B, § 5-502 (“All acts done by an attorney in fact pursuant to a durable power of attorney during any period of disability or incapacity of the principal have the same effect and inure to the benefit of and bind the principal and his successors in interest as if the principal were competent and not disabled”). In 1990, when it was contemplating enactment of House Bill No. 3006, which eventually became the health care proxy statute, the Legislature considered an alternative bill that would have combined the roles of health care agent and attorney in fact by “empowering the attorney-in-fact to enter into agreements concerning the care of the principal or concerning medical or surgical procedures.” See 1990 House Doc. No. 3367. The statutory scheme enacted by the Legislature, however, maintains a distinction between these two roles, thereby recognizing that an individual may choose to appoint one person to make health care decisions based on that person’s relationship with the principal and knowledge of “the principal’s wishes, including the principal’s religious and moral beliefs,” G. L. c. 201D, §§ 5, 17, but may choose someone else to make decisions that require business, estate planning, financial, or legal knowledge and experience.[11]

Consistent with this distinction, the guardianship and conservatorship statutes also grant broader decision-making authority than that recognized under the health care proxy statute. A guardian who has been appointed for a person found incompetent “shall make decisions regarding the incapacitated person’s support, care, education, health and welfare . . . .” G. L. c. 190B, § 5-309 (a). Among other powers, such a guardian shall take reasonable care of the ward’s personal effects, and shall apply available money of the ward to meet his or her current needs; the guardian also may apply for statutory benefits, and may consent to professional services on the ward’s behalf. G. L. c. 190B, § 5-309 (a). Similarly, a conservator’s extensive, enumerated powers include the power to “expend or distribute income or principal of the estate without court authorization or confirmation for the support, education, care, or benefit of the protected person and dependents,” G. L. c. 190B, § 5-424 (a), and the power to “pay or contest any claim; settle a claim by or against the estate or the protected person by compromise, arbitration, or otherwise.” G. L. c. 190B, § 5-423 (c) (21).[12]

Significantly, the health care proxy statute gives the health care agent priority over other fiduciaries in making health care decisions. See G. L. c. 201D, § 5.[13] Were we to define “health care decisions” broadly to encompass decisions that relate to a principal’s business affairs, property, finances, or the adjudication of legal claims, all of which fall within the authority of an attorney in fact or court-appointed guardian or conservator, many decisions made by the health care agent would override the more expansive powers allocated to these fiduciaries. Such a reading would conflict with the language and intent of the health care proxy statute, which confers decision-making authority only over a narrowly-defined area (health care); it also would upset the statutory scheme that grants broader authority to attorneys in fact, guardians, and conservators.

Interpreting health care decision-making as the narrow, though important, domain of the health care agent also comports with the purpose of the health care proxy statute. It permits invasions of a person’s bodily integrity only with the principal’s informed consent, which will be given or denied by the agent whom the principal has appointed to make such decisions consistent with the principal’s wishes and belief system. See Superintendent of BelchertownState Sch. v. Saikewicz, 373 Mass. at 739-740. In light of the language, context, history, and purpose of the health care proxy statute, we conclude that a health care agent’s decision-making authority, confined, as it is, to health care decisions, does not include the authority to bind the principal to arbitration.[14]

d. Other authorizations and directives. In support of their claim that the definition of a “health care decision” must include an agreement to enter binding arbitration, the nursing home defendants argue that such an agreement is no different from other decisions that a health care agent may make on a nursing home resident’s behalf. As described in the nursing home defendants’ brief, such other decisions include “decisions regarding whether and how to sign billing documents, decisions delineating access to the resident’s mail and personal property, decisions regarding what the resident will eat and decisions pertaining to the reviewing of statements discussing the grievance procedures with state agencies.”

Although it is not entirely clear what the nursing home defendants mean by “billing documents,” to the extent such documents seek to hold a principal responsible for the payment of medical treatment, the health care proxy statute already directs that “[l]iability for the cost of health care provided pursuant to an agent’s decision shall be the same as if the health care were provided pursuant to the principal’s decision.” G. L. c. 201D, § 9. Thus, a health care agent’s consent to medical treatment automatically imposes liability on the principal for the costs of such treatment. A health care agent’s signature on such a “billing document” merely confirms the principal’s obligations to the health care facility arising from the health care proxy statute; that a health care agent can sign this document does not support the nursing home defendants’ argument that a health care agent also may sign an arbitration agreement.

Moreover, many of the other decisions enumerated by the nursing home defendants could be made by any trustworthy individual with sufficient knowledge of the principal. For example, an individual does not financially or contractually bind the principal by directing where to put the principal’s mail or personal effects; indicating the principal’s food preferences; or authorizing third-party payments from previously selected health insurance or health care entitlements such as Medicare or Medicaid. See, e.g., 42 C.F.R. § 406.5(a) (2012) (“[Medicare h]ospital insurance is available to most individuals without payment of a premium if they . . . [a]re age 65 or over” or satisfy other requirements); G. L. c. 118E, § 9 (“Medicaid benefits shall be available to all persons eligible for financial assistance” under particular statutory provisions). Therefore, unless further restricted by law, an individual may make such decisions even without authorization under a durable power of attorney, guardianship, or conservatorship.

This is acknowledged, for instance, in the broad definition of those who may act as a patient’s “Eligibility Representative” for Medicaid purposes. See 130 CodeMass. Regs. § 515.001 (2011). Although the regulation includes health care agents, attorneys in fact, guardians, and conservators, among others who may “mak[e] decisions related to health care or payment for health care,” it also includes any person who “is sufficiently aware of the applicant’s or member’s circumstances to assume responsibility for the accuracy of the statements made during the eligibility process, and who . . . is acting responsibly on behalf of an applicant or member for whom written authorization cannot be obtained.” Id. A person’s designation in a health care proxy may establish the individual’s trustworthiness and familiarity with the principal and, therefore, enable the individual to sign many of the documents included in a nursing home’s admissions package. But it does not follow that such a person also can sign an arbitration agreement, which requires the power of an authorized fiduciary.[15]

e. Other jurisdictions. Our conclusion that a health care agent does not have the authority to bind the principal to an arbitration agreement comports with the view of a majority of courts in other jurisdictions that have considered similar issues. See, e.g., Estate of Irons ex rel. Springer v. Arcadia Healthcare, L.C., 66 So.3d 396, 400 (Fla. Dist. Ct. App. 2011); Life Care Ctrs. of Am. v. Smith, 298 Ga. App. 739, 744 (2009); Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 593-594 (Ky. 2012), cert. denied, 133 S. Ct. 1996 (2013); Dickerson v. Longoria, 414 Md. 419, 445 (2010); Texas Cityview Care Ctr., L.P. v. Fryer, 227 S.W.3d 345, 352-353 (Tex. Ct. App. 2007). See also Curto v. Illini Manors, Inc., 405 Ill. App. 3d 888, 894 (2010); Mississippi Care Ctr. of Greenville, LLC v. Hinyub, 975 So.2d 211, 218 (Miss. 2008); Koricic v. Beverly Enters.-Nebraska, Inc., 278 Neb. 713, 719 (2009); State ex rel. AMFM, LLC v. King, 740 S.E.2d 66, 75 (W. Va. 2013).

The defendants rely on Owens v. National Health Corp., 263 S.W.3d 876, 884 (Tenn. 2007), cert. denied, 555 U.S. 815 (2008) (Owens), one of only a handful of cases where a court in another jurisdiction has determined that an agency created under a health care proxy statute must include the power to enter into arbitration agreements.[16] In that case, an attorney in fact, acting under a durable power of attorney for health care, signed an arbitration agreement as a precondition[17] for the principal’s admission to a nursing home.[18] The Tennessee Supreme Court held that “an attorney-in-fact acting pursuant to a durable power of attorney for health care may sign a nursing-home contract that contains an arbitration provision because this action is necessary to ‘consent . . . to health care.’” Id. at 884, quoting Tenn. Code Ann. § 34–6–201(3) (2001).[19] Relying on the Tennessee statute’s language authorizing an attorney in fact to “make health care decisions . . . to the same extent as the principal,” see Tenn. Code Ann. § 34–6–204(b), the court reasoned that “[b]ecause [the principal] herself could have decided to sign the nursing-home contract containing the arbitration provision had she been capable, . . . [the attorney in fact] was authorized to sign the arbitration provision on [the principal’s] behalf.” Owens, supra at 884. The court stated that signing a contract for health care services always constitutes a legal decision and that “[h]olding that an attorney-in-fact can make some ‘legal decisions’ but not others would introduce an element of uncertainty into health care contracts signed by attorneys-in-fact that likely would have negative effects on their principals.” Id. at 884-885.

We frame the matter differently. That a competent principal could have decided to enter into an arbitration agreement does not answer the core question we confront: whether our Legislature intended the term “health care decision” to include the decision to waive a principal’s right of access to the courts and to trial by jury by agreeing to binding arbitration. Our health care proxy statute reflects no such intent. The language of G. L. c. 201D, § 5, considered in the context of its purpose and the broader statutory framework, authorizes the agent only to make those decisions requiring a principal’s informed consent to a medical treatment, service, or procedure; it does not authorize a health care agent to make all decisions that the principal could have made if competent, even those that might bear some relationship to the receipt of medical services.

Nor does the result we reach promote uncertainty concerning the scope of a health care agent’s authority under G. L. c. 201D, § 5. To the contrary, the nursing home defendants’ expansive reading of “health care decision” as including any decision that arises from or relates to medical treatment would render uncertain the outer limits of a health care agent’s decision-making authority. Moreover, to the extent such decisions fell within the explicit, statutory authority of other fiduciaries, this broad definition could create conflicts between a health care agent and such other fiduciaries. We are not persuaded that the concerns expressed in Owens require us to broaden the definition of “health care decision” beyond that contemplated by our Legislature.

Conclusion. The order compelling mediation or arbitration, and staying the proceedings in the Superior Court pending the outcome of the mediation or arbitration proceedings, is vacated and set aside. The case is remanded to the Superior Court for further proceedings consistent with this opinion.

So ordered.


[1] Stephanie Johnson Leslie.

[2] Of the estate of Dalton Johnson.

[3]KindredNursingCenters East, LLC; Kindred Healthcare Operating, Inc.; Braintree Nursing, LLC d/b/a Braintree Manor Rehabilitation and NursingCenter (Braintree Nursing); Barbara Webster; and Robert E. Young.

[4] We acknowledge the amicus brief of the National Academy of Elder Law Attorneys (Massachusetts Chapter) and the American Association of Retired Persons in support of the plaintiffs.

[5] Because they share a last name, we refer to Dalton Johnson and Barbara Johnson by their first names.

[6] The complaint also asserted violations of G. L. c. 93A by Braintree Nursing; sought to hold Kindred Healthcare, Inc., Kindred Healthcare Operating, Inc., and Kindred Nursing Centers East, LLC, vicariously liable for the actions of Braintree Nursing and its employees; and asserted claims for negligence and for damages under the wrongful death statute, G. L. c. 229, § 2, against Barbara Webster, a licensed practical nurse employed by Braintree Nursing. We refer to the Kindred Healthcare entities, Braintree Nursing, and Webster, collectively, as the nursing home defendants.

Dr. Robert Young was also named as a defendant. Because he is not asserted to be an employee of Braintree Nursing, the

arbitration agreement at issue does not implicate the plaintiffs’ claims against him, which are not before us.

[7] The arbitration agreement described itself as “voluntary” and “not a precondition to admission.”

[8] The narrow question presented by this case was not addressed by our decision in Miller v. Cotter, 448 Mass. 671, 676 (2007), in which we reversed a Superior Court judge’s order denying a motion to dismiss the complaint and to compel arbitration between a nursing facility and a resident. In that case, it was undisputed that the resident’s “son had authority to make binding agreements on [the resident’s] behalf pursuant to a validly executed durable power of attorney.” Id. at 672. Here, however, there is no assertion that Dalton executed a durable power of attorney and that the agreement to arbitrate was signed pursuant to such authority.

[9] Consistent with this definition, we have said that the authority to make health care decisions encompasses the power to admit a principal to a mental health facility for treatment. See Cohen v. Bolduc, 435 Mass. 608, 616 (2002). The decision whether to execute an arbitration agreement, however, is different in kind from the decision to admit a principal to a health care facility.

[10] “A person may be adjudicated legally incompetent to make some decisions but competent to make others.” Cohen v. Bolduc, 435 Mass. at 618 n.25, citing Matter of Moe, 385 Mass. 555, 567-568 (1982). The capacity “to make treatment decisions” is distinct from the capacity “to make informed decisions as to [one’s] property or financial interests.” See Cohen v. Bolduc, supra, quoting Rogers v. Commissioner of the Dep’t of Mental Health, 390 Mass. 489, 497 (1983), and Fazio v. Fazio, 375 Mass. 394, 403 (1978).

[11] See, e.g., P.M. Annino, Estate Planning § 3.15, par. 13 (3d ed. 2007) (“Provisions that pertain to finances should be drafted in the durable power of attorney. Provisions that pertain to health care decisions should be drafted in the health care proxy”); id. at § 4.1 n.3 (“The author strongly recommends that the [durable power of attorney and health care proxy] documents be separate as they accomplish quite different objectives”).

The importance of a fiduciary’s knowledge and experience was emphasized in Miller v. Cotter, 448 Mass. at 682, where we described Miller, an attorney in fact, as “a sophisticated and experienced party authorized to sign agreements [including an arbitration agreement] on his father’s behalf.”

“Miller showed an understanding of contracts and the language used in them during his deposition. He holds a degree in English from TuftsUniversity and served as an intelligence officer in the United States Air Force. After leaving the military, Miller spent twenty‑seven years in the insurance industry, working as a claims examiner and as a regional claims manager in a variety of divisions of his company (including medical and disability). Because of his work, he had a knowledge of arbitration . . . .”

Id. at 674.

[12] In 2008, the Legislature repealed, among other statutes, G. L. c. 201 and 201B, which theretofore had governed the powers and authority of attorneys in fact, guardians, and conservators; it then codified the various provisions governing such powers and authority as part of the Uniform Probate Code. See St. 2008, c. 521, §§ 9, 21-22. This codification did not change the relationship between the powers conferred by a health care proxy and those granted under a durable power of attorney, guardianship, or conservatorship. When the health care proxy statute was enacted in December, 1990, see St. 1990, c. 332, § 1, the language in G. L. c. 201B, § 2, describing the scope of authority of an attorney in fact, was materially identical to that now set forth in G. L. c. 190B, § 5-502. See St. 1981, c. 276, § 2. Likewise, the broad powers and authorities of guardians and conservators contained within various provisions of G. L. c. 201 were substantially similar in scope and kind to those now provided by G. L. c. 190B. Compare St. 1974, c. 845, § 11; R. L. 1902, c. 145, § 25, as amended by St. 1915, c. 23; St. 1930, c. 138, § 1, as amended by St. 1976, c. 515, § 26.

[13] General Laws c. 201D, § 5, provides:

“Health care decisions by an agent pursuant to a health care proxy on a principal’s behalf shall have the same priority over decisions by any other person, including a person acting pursuant to a durable power of attorney as would decisions by the principal . . . .”

See G. L. c. 190B, § 5-309 (e) (“If a health care proxy is in effect . . . a health-care decision of the agent takes precedence over that of a guardian”).

[14] Because we conclude that Barbara was without authority to sign the arbitration agreement on Dalton’s behalf, we do not address the plaintiffs’ argument that a decedent’s agreement to arbitrate future disputes does not bind the statutory beneficiaries of a wrongful death claim.

[15] To the extent that the Federal Arbitration Act (FAA) applies to arbitration agreements between a patient and a nursing home, see Miller v. Cotter, 448 Mass. at 678, our reading of the health care proxy statute comports with the FAA’s directive to place arbitration agreements “on an equal footing with other contracts.” See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011). Under the outcome we reach today, parties remain free to submit to arbitration claims of the sort at issue here: a competent patient can agree to arbitrate disputes with a health care provider, as can an appropriately authorized agent, such as an attorney in fact. Arbitration agreements are treated no differently from any other non-medical agreements that a health care proxy does not authorize a health care agent to make on a principal’s behalf.

[16] See Garrison v. Superior Court, 132 Cal. App. 4th 253, 266 (2005); Moffett v. Life Care Ctrs. of Am., 187 P.3d 1140, 1147 (Colo. Ct. App. 2008), aff’d, 219 P.3d 1068 (Colo. 2009). Cf. Barron v. Evangelical Lutheran Good Samaritan Soc’y, 265 P.3d 720, 726 (N.M. Ct. App. 2011).

[17] By contrast, the arbitration agreement signed by Barbara was “not a precondition to admission.”

[18] The principal’s durable power of attorney authorized her agents “to make health care decision[s] for me if I am incapacitated or otherwise unable to make such decisions for myself.” Owens v. National Health Corp., 263 S.W.3d 876, 883 (Tenn. 2007). It also contained a grant of authority broader than the one at issue here or provided in G. L. c. 201D, § 5: “the power and authority to execute on my behalf any waiver, release or other document which may be necessary in order to implement the[se] health care decisions.” Owens v. National Health Corp., supra at 883.

[19]Tennessee’s authorizing statute states: “the attorney in fact designated in such durable power of attorney may make health care decisions for the principal . . . to the same extent as the principal could . . . if the principal had the capacity to do so.” Tenn. Code Ann. § 34–6–204(b) (2001).

Lawyers Weekly No. 10-009-14

Opening and Closing Statements at Arbitrations

By Attorney Paul R. Kelley

An “old school” lawyer asked me at the start of a personal injury arbitration if he could stand up while making his opening. After years of jury trials, he just wasn’t comfortable sitting down while presenting his case. You don’t have to stand up, but if you are plaintiff’s counsel and the arbitrator asks, “Do you wish to make an opening?” you must answer, “yes.” Why?

The first reason is that it is good business. Your client is present — show them some lawyering. It doesn’t have to be Cirque du Soleil, but a solid, “this is my client and she was hurt,” lets your client know right from the start that you are fighting for her. While the court room may be familiar to you, your client is most likely nervous. An opening gives your client a chance to ease into the hearing without being put on the spot right away.

An opening by plaintiff’s counsel, even if the arbitrator has read the brief, orients the arbitrator to this case and this claim. An opening says professionally, “Look at me, and pay attention to my client.”

Defense counsels often waive their openings believing that there is no need to tip off plaintiff to what you might ask them, and that any arguments are better saved for closing. The content of the closing need not be flamboyant. The “it is what it is” argument sends the message that, for whatever reason, the case simply needs a value put on it.

But when you really want to persuade, because the claim or defense ignites your passion, and there is justice to be determined, I have one piece of advice: Talk slowly. You can talk faster than I can listen. And you can certainly talk faster than I can write down a note on a crucial piece of evidence that you’re stating. It’s worth saying again, talk…more…slowly!

Now, you’ve gotten this advice before and you’re wondering how to do it. Talking slowly may not come naturally. You speak fast naturally, you’ve got nervous energy from the hearing, and how do you slow down? You need to practice. Practice your closing in front of a mirror, practice it in front of your spouse (or your kids or your dog), and even videotape yourself doing a closing. By watching yourself on videotape, you’ll realize just how fast you are talking, and you can practice slowing down.

A good closing argument in an arbitration hearing is conversational in tone. We are sitting together, not more than two or three feet apart. A courtroom allows for some dramatic flair. But over the years I’ve found that in an arbitration arguments that are conversational in tone are more effective than those that resemble speeches. The content may still be passionate, but persuade me like we’re chatting over a cup of coffee, not like I’m in the audience.

For more information about Attorney Paul R. Kelley, please click here.

Abraham Lincoln: An Early Champion of ADR

Abraham LincolnBy Associate Justice Dennis J. Curran, Massachusetts Superior Court and Emma Kingdon

Our nation continues to be fascinated by Abraham Lincoln’s “Gettysburg Address,” delivered 150 years ago. Lincoln’s most famous speech became known as the “words that remade America.”

The address of only 272 words overshadowed Edward Everett’s two-hour oration and stunned the crowd of nearly 20,000 by transforming the ugliness of the war into a call for America to become a single people dedicated to one proposition: equality.

We revere Lincoln and are captivated by his legacy because he confronted a greater crisis than any other president. Lincoln became the leader of a divided nation, and his strong sense of moral duty equipped him to abolish the greatest injustice of our past: slavery.

We continue to be fascinated with the man who is arguably this nation’s greatest president, made plain from at least two facts.

First, more than 16,000 books have been written about Lincoln, more books than about any other figure in world history, with the exception of Jesus Christ.

Second, Steven Spielberg’s iconic movie “Lincoln” garnered a dozen Academy Award nominations and won two Oscars, including for Best Actor. We appreciate and admire Lincoln for his grit, moral authority, and ability to transcend petty politics through pure character and strength of will.

While it is Lincoln’s career as a great leader that continues to fascinate, much less is known about his quite extensive legal career, a period that dwarfed his time as president. From that earlier career, he developed his skills at compromise and an ability to forge alliances between folks of vastly competing interests, talents, agendas and egos.

Witness, for example, the eventual brilliance of those attributes that later radiated through Doris Kearns Goodwin’s “A Team of Rivals” (a book that incidentally consumed a decade to research and write).

Lincoln’s legal career

Four significant points emerge from looking at Lincoln’s legal career. The first is that Lincoln, 150 years before his time, used and supported alternative dispute resolution.

Second, as a lawyer, Lincoln encouraged the peaceful resolution of disputes by not charging his clients for cases that settled on the courthouse steps.

Third, Lincoln so fundamentally believed in non-adversarial settlement that he wrote a speech for a bar association that actually discouraged litigation.

Finally, Lincoln’s sense of moral duty, evidenced by not only his significant acts as president, but also in his commitment to resolve disputes through non-adversarial means as a lawyer, transcends time.

Obviously, Lincoln never heard of the acronym “ADR,” as the term came into wide usage by American lawyers well over a century after his death. Yet, the practice of civil litigators to resort to alternative dispute resolution by mediation or arbitration was well established among the American bar before the Civil War.

In fact, Lincoln’s law practice appears to have embraced a non-adversarial strategy with his long, open arms.

Guy C. Fraker’s fine, detailed study of Lincoln’s legal career in “Lincoln’s Ladder to the Presidency: The Eighth Judicial Circuit” reveals that Lincoln, a highly respected trial lawyer, actively assumed the role of peacemaker, mediator and settlor of lawsuits as the vagaries of his caseload demanded.

Between 1836 (when Lincoln began to practice law) and 1860 (when Lincoln ceased his practice to assume the presidency), he was involved in more than 5,000 legal matters in the state and federal courts of Illinois. Nearly half of those cases involved suits for debt, while the remainder largely dealt with slander, title to land, minor tort claims and, most lucratively, railroad litigation.

About 33 percent of Lincoln’s cases were dismissed, most of them because they settled. Thus, Lincoln settled more than 1,600 cases in the course of his career and plainly championed compromise as an alternative to trial.

Lincoln as peacemaker

The Illinois of Lincoln’s day was a rough frontier; Springfield was a small community. In such a setting, Lincoln understood both the social and economic costs of a lawsuit as well as the turmoil and unrest it caused.

Remember, too, Lincoln’s own hardscrabble existence as a farmer, Mississippi River flat-boatman and manager of a general store. Those diverse experiences gave him insight into human nature.

Lincoln’s skill at reaching and preference for settlement was perhaps best displayed in slander lawsuits. In his brilliant study of Lincoln’s law practice, Mark Steiner observes that Lincoln often acted as a mediator in those emotionally charged cases.

In a frontier society, men sued for slander when accused of theft because such a charge could fatally damage a man’s reputation; women sued because of errant allegations involving their sexual reputation. In a long-past era, such allegations dramatically affected a woman’s standing in the community; indeed, it likely affected whom she could marry and her future economic well-being.

Thus, trials for slander were not so much to obtain a liability verdict against the defendant and a jury award, but rather to force the slanderer to publicly retract the allegation.

In 92 cases, representing both plaintiffs and defendants, it was not unusual for Lincoln and his partners to resolve the case by a compromise: The court would find the defendant guilty and issue a large award, but would remit the verdict once the defendant provided a public retraction.

Similarly, in commercial disputes, Lincoln has been praised for his frequent discouragement of doubtful litigation and his instinct for peacemaking.

In an 1850 case in which Lincoln represented Abram Bale in a dispute for $1,000 worth of wheat, Lincoln wrote the following to his client: “I sincerely hope you will settle it. I think you can if you will, for I have always found [the plaintiff] a fair man in his dealings.”

As to his legal fees, Lincoln said, “I will charge nothing for what I have done, and thank you to boot.” He advised his client that “by settling, [he] will most likely get [his] money sooner and with much less trouble and expense.”

Bale’s case settled.

The letter confirms Lincoln’s awareness of the enduring advantages of ADR — speed, economy and stress avoidance — that remain unchanged to this day. Although commercial disputes offered less latitude to be a peacemaker, Lincoln clearly had taken to heart the maxim in Noah Webster’s American Spelling Book: “Somebody is always the worse for lawsuits, and of course society is less happy.”

The largest part of Lincoln’s law practice was debt litigation. Money was scarce in a rough-hew frontier. About 700 of the 2,100 cases Lincoln handled in debt collection settled. Lincoln’s typical compromise was to accept partial payment with a year’s forbearance to pay the remainder.

That was an exceedingly difficult resolution as the prevailing system greatly disfavored persons who did not fully pay their debts. Lincoln’s personality and reputation likely contributed to most of those settlements.

Conclusion

Abraham Lincoln may not have known the term “ADR,” but he certainly embodied its practice. He recognized the advantages of a negotiated settlement and would even encourage his clients to avoid litigation by surrendering his own legal fee.

That sense of moral duty, not only as a president but also as a lawyer, to do what is best for his clients and for society, is what we enduringly admire. By promoting compromise, avoiding the uncertainty and expense of full-blown litigation, as well as inspiring and influencing his community’s social expectations, Lincoln’s alternative methods for peaceful settlement anticipated today’s use of ADR.

…………………………………………………………………………………………………………………………………………………..

Associate Justice Dennis J. Curran, Massachusetts Superior Court is a member of the Board of Advisors of The Lincoln Forum. He has chaired the Superior Court’s Committee on Alternative Dispute Resolution and has also served on the Massachusetts Trial Court’s Standing Committee on Uniform Dispute Resolution, chaired by District Court Judge Mark D. Mason. Emma Kingdon is enrolled in a joint-degree program at Boston College Law School and its Lynch Graduate School of Education.

The authors wish to thank Katherine McCann, Jared N. Ballin, James L. Polianites, Vincent N. DePalo and Louisa E. Gibbs for their contributions to this article. They also wish to acknowledge retired Superior Court Judge John C. Cratsley, a leading light in the use of ADR for more than two generations in Massachusetts’ trial courts.

If You and Your Lawyer Really Do Want to Negotiate…

Michael A. ZeytoonianBy Attorney Michael A. Zeytoonian

In every dispute a client calls me in to work to resolve, my first inquiry with the other side is to discuss the possibility of early resolution. If we can explore this option even before any litigation has been initiated, it’s even better.

The other side often responds that they too want to negotiate to resolve the matter without either initiating or continuing litigation. Even thought they don’t always advise their clients to resolve the dispute without starting or prolonging the litigation, most lawyers recognize that early resolution is almost always in their clients’ best interests.

There are several compelling reasons why this is true. First, an early resolution will save the parties time and money and will prevent the draining of resources and energies. Second, if relationships between the parties are important, early resolution offers the best chance for preserving important business or family relationships. Third, the parties hold onto control of the process and the outcome, rather than giving these up to a third party like a judge, jury or arbitrator to decide. Fourth, the process and outcome can be kept private and confidential.

Once I hear some buy-in from the other side to work at a negotiated resolution approach, I’ll suggest some basic rules of engagement, based on the model suggested in the groundbreaking book “Getting to Yes”. That model is built on the concept of interest-based or “principled” negotiation. This is where the first test of the lawyer and party on the other side comes, to see whether they really do want to pursue a negotiated settlement or are just reciting the words or posturing.

The language, the approach, and indeed the mindset of those who truly practice interest-based negotiation are different from those of lawyers who operate in litigation or “adversarial” mode. That is not their fault. The adversarial process is what litigation and civil procedure is built upon; it’s what we were all taught in law school. But it is usually detrimental to interest-based negotiations. They are not compatible, and are far more different than a lot of lawyers realize. Positional, adversarial is a strategy designed for one side to win and the other side to lose. It is built to convince and persuade the other side to come around to “my side”, “my view” and “my position”. It is not intended for use in an approach designed for win-win, in which parties and lawyers must work together, understand and acknowledge the other sides’ needs, interests and goals and collaborate on developing a mutually desirable outcome.

Here’s how this language/approach barrier typically arises between lawyers: I’ll suggest that we identify the interests of our respective parties and discuss what it would take to satisfy those interests. We may even agree on what the opposing party’s interests are and ways to meet those needs. We then agree to go back and discuss this approach with our clients, maybe even have a joint face to face discussion with parties and lawyer all together around a conference table. I end the call or meeting and think: Good first discussion; we are off to a good start.

Then a day or two later, I’ll get an email from the other side that reads something like this: “As a follow up to our discussion, please be advised that my client’s settlement offer is $60,000. This offer will be on the table until the close of business Friday. If you do not accept this offer, we will proceed to arbitration.”

Huh? What happened there? I’m reading this response, wondering if we were both in the same prior conversation. When did we talk about offers? We weren’t nearly there yet. The language of “offer and counter offer” is not the language of interest-based negotiation or collaborative dispute resolution. In a successful interest-based negotiation or process, it’s not even likely that there would ever be an “offer vs. counteroffer” scenario and there would never be any “deadline/ultimatum” language between the lawyers. What there would be is some more work to be done – usually some information exchanges – before we even start to consider working together to develop good options for resolution.

It’s not easy to transform the approach, the language, indeed the lawyers, to a truly interest-based discussion and negotiation. And it’s probably not this first exchange between the lawyers, but then next one and all those that follow, that will reveal the other side’s desire and ability to work within these different rules and conversation. But it is where the transformation to efficient, sensible dispute resolution begins

My experience, having been a litigator as well as working as settlement or collaborative counsel, and having sometimes tried to serve clients in both roles, is that clients are better served if they have different lawyers who are trained for this special kind of legal representation, limited to Settlement Counsel or Collaborative Counsel. The rules of Collaborative Law mandate lawyers that are at the very least trained in Collaborative Law. But even in mediation or other dispute resolution processes that are based on satisfying interests (interest-based), this focused representation by a lawyer who specializes in this niche is the better course of action for clients.

For more information about Attorney Michael A. Zeytoonian, please click here.

To Resolve a Dispute, the First Step is to Assess Your Options

Michael A. ZeytoonianBy Attorney Michael A. Zeytoonian

I’ve heard people who are in a business or employment dispute often lament: “I’m stuck in this dispute, and now we’ll have to litigate; I have no options.” If you take nothing else from this post, know this: They are usually wrong about this.

This is like when a retail sales person gives you the company line: “If you want to buy it, that’s the price.” You feel like you have no choice.

My father taught me that everything is negotiable, especially if you are willing to walk away from the deal. His lesson was the core message of what those in the dispute resolution field today refer to as having good “BATNA” (best alternative to a negotiated agreement). When you don’t need to buy what they are selling to you, when you can and will walk away, you have great BATNA.

My dad also gave my wife one piece of advice when she married me: “Make sure you give Michael options; he needs to have options.” This was great advice for her. I am a true Libran in the sense of weighing options before deciding. That’s part of what drives me to provide clients with options for how they should resolve their disputes.

Most people in disputes don’t know they have options and if they do, don’t consider them. They may have heard of mediation and arbitration but really don’t know exactly how they work, what the differences are and when to utilize them. They have probably not heard of collaborative law, conciliation or case evaluation. They usually just start the litigation process, which is like opting for legal surgery.

We don’t approach legal disputes the way we would probably approach medical issues. When it comes to our health, we get advice from doctors we know and trust, and we often also get at least one second opinion. We don’t just call the surgeon and start the prep for surgery first. Yet that is what most people do when they are in a legal dispute.

Legal disputes affect your health and well-being in more ways than one. So why wouldn’t we check what options are available for resolving this dispute and get some good counsel on the pros and cons of each alternative to going to court before we choose a course of action?

Your best “First Step” is finding a legal counselor that will assess your situation, teach you about the dispute resolution options available to you, recommend which one is the right process for you and tell you why. It should be a lot more like the medical process than you think.

For more information about Attorney Michael A. Zeytoonian, please click here.

So What is this Different Kind of Legal Advocacy?

Michael A. ZeytoonianBy Attorney Michael A. Zeytoonian

One reason we changed the name of my own firm recently to Dispute Resolution Counsel was to highlight the role that lawyers play in representing their clients in an alternative dispute resolution (ADR) processes. The role, approach and technique of a lawyer in these situations are different from that of a litigator. The focus and the goal of the process are different and the process itself is different from litigation and trial. In a world of specialization and niches, this different process and different role calls for a different kind of lawyer. Not only is the training for this role different but the whole feel and intuitive skills are different. Some of this can be learned and obtained through training and practice. But part of this is just inherent intuition and it cannot be taught. That part is the realm of insights, innate ability and presence.

The word “different” appeared in the last paragraph seven times, naturally, but also to stress a point. This ADR area of law calls for a different skill set. To just plug any litigator or other kind of lawyer into this role would be doing the client a great disservice. You wouldn’t use a transactional lawyer to try a case just as you wouldn’t use a clinical research doctor to do surgery. And surgeons do not usually serve as primary care physicians because (a) they probably have no interest in doing so and (b) they do not have that skill set.

ADR processes, unlike litigation and arbitration, are not adversarial processes. They are not zero sum game, win-lose situations. The degree of victory is not determined by the other side’s degree of loss. Any kind of “hide the ball” strategy when it comes to information exchanges, or the practice of continually hammering away at the other side’s flaws and weaknesses are counter-productive. The focus of ADR is on the present and the future outcome, not the past and the laying of blame. These are processes that work to find shared interests and work toward connection, instead of harping on differences and driving people apart.

On the contrary, knowing what the other side’s needs and interests are is productive. Information is viewed as a shared asset, not a strategic weapon. Active listening to the other side is productive. The quality of the end resolution depends on both sides winning, not one winner and one loser. Collaboration of clients and lawyers working together not only replaces the adversarial approach; it also replaces compromise in the sense that compromise calls on us to give up something important (win- some lose). These processes have a goal of win-win and their challenge is how can we solve the problem so both sides get what they want. That’s what makes these approaches so valuable to clients.

There is a special niche in the legal profession for this role of focused representation, serving clients as settlement counsel or collaborative counsel. As clients demand better value in legal services and as lawyers are driven to develop better ways to serve their clients, this new niche will continue to grow. Some lawyers try to represent clients as both their litigators and their settlement counsel; some clients try to cut costs and corners by hiring one type instead of two. Every once in a while, you might a person who is gifted both as a litigator and also as settlement counsel. But given how different the mind-sets and strategies of these two are, it is not likely that one lawyer will be able to (or want to) serve both roles.

My experience, having been a litigator as well as working as settlement or collaborative counsel, and having sometimes tried to serve clients in both roles, is that clients are better served if they have different lawyers who are trained for this special kind of legal representation, limited to Settlement Counsel or Collaborative Counsel. The rules of Collaborative Law mandate lawyers that are at the very least trained in Collaborative Law. But even in mediation or other dispute resolution processes that are based on satisfying interests (interest-based), this focused representation by a lawyer who specializes in this niche is the better course of action for clients.

 

To Resolve a Dispute, the First Step is to Assess Your Options

By Michael A. Zeytoonian

I’ve heard people who are in a business or employment dispute often lament: “I’m stuck in this dispute, and now we’ll have to litigate; I have no options.” If you take nothing else from this post, know this: They are usually wrong about this.

This is like when a retail sales person gives you the company line: “If you want to buy it, that’s the price.” You feel like you have no choice.

My father taught me that everything is negotiable, especially if you are willing to walk away from the deal. His lesson was the core message of what those in the dispute resolution field today refer to as having good “BATNA” (best alternative to a negotiated agreement). When you don’t need to buy what they are selling to you, when you can and will walk away, you have great BATNA.

My dad also gave my wife one piece of advice when she married me: “Make sure you give Michael options; he needs to have options.” This was great advice for her. I am a true Libran in the sense of weighing options before deciding. That’s part of what drives me to provide clients with options for how they should resolve their disputes.

Most people in disputes don’t know they have options and if they do, don’t consider them. They may have heard of mediation and arbitration but really don’t know exactly how they work, what the differences are and when to utilize them. They have probably not heard of collaborative law, conciliation or case evaluation. They usually just start the litigation process, which is like opting for legal surgery.

We don’t approach legal disputes the way we would probably approach medical issues. When it comes to our health, we get advice from doctors we know and trust, and we often also get at least one second opinion. We don’t just call the surgeon and start the prep for surgery first. Yet that is what most people do when they are in a legal dispute.

Legal disputes affect your health and well-being in more ways than one. So why wouldn’t we check what options are available for resolving this dispute and get some good counsel on the pros and cons of each alternative to going to court before we choose a course of action?

Your best “First Step” is finding a legal counselor that will assess your situation, teach you about the dispute resolution options available to you, recommend which one is the right process for you and tell you why. It should be a lot more like the medical process than you think.

For more information about Attorney Michael A. Zeytoonian, please click here.

Client List

Attorneys, Businesses, and Private Individuals:

For nearly 30 years, MDRS has provided services to thousands of attorneys, private individuals, businesses, and government agencies.  In consideration of their privacy, we do not disclose any individual, attorney, or corporate entity names here.  We are always pleased to provide references upon request.

Insurance Companies:

  • AIG / Chartis Insurance Companies
  • Abington Mutual Insurance Company
  • Acadia Insurance
  • Ace USA
  • Allendale Mutual Insurance Company
  • Allstate Insurance Company
  • American Hardware Insurance Company
  • American Policyholders Insurance Company
  • American Transportation Insurance Company
  • AMICA Insurance Company
  • Andover Companies
  • Arbella Mutual Insurance Company
  • Arrow Mutual Liability Insurance Company
  • American Mutual / Centennial Insurance Company
  • Berkshire Mutual Insurance Company
  • Central Insurance Company
  • Chartis Insurance Companies
  • Chubb Group
  • CIGNA Property and Casualty Insurance Group
  • Citizens insurance Company of America
  • CNA Insurance Company
  • Commerce Insurance Company / MAPFRE USA
  • Concord Group
  • Continental Insurance Company
  • Coregis Insurance Company
  • Coverys
  • Crawford and Company
  • Crum and Foster Insurance Company
  • Eastern Casualty Insurance Company
  • Eastern Dentists Insurance Company
  • Electric Insurance Company
  • Empire Insurance Company
  • Encompass Insurance Company
  • Energi Insurance
  • Farm Family Casualty Insurance Company
  • Farmers Insurance Exchange
  • Fidelity and Deposit Company of Maryland
  • Fireman’s Fund Insurance
  • Fitchburg Mutual Insurance Company
  • Geico Insurance Company
  • General Accident Insurance Company
  • Global Indemnity Group
  • Great American Insurance Company
  • Greater New York Mutual Insurance Company
  • Hanover Insurance Company
  • Harleysville Insurance Company
  • HCM Claim Management Corporation
  • Hingham Mutual Fire Insurance Company
  • Holyoke Mutual Insurance Company
  • Home Insurance Company
  • Horace Mann Insurance Company
  • Hospitality Mutual Insurance Company
  • Intercare Insurance Services, Inc.
  • International Insurance Group, Inc.
  • ITT First State Management Corporation
  • James River Insurance Company
  • Jefferson Insurance Group
  • John Hancock Property and Casualty Insurance Company
  • Lexington Insurance Company
  • Liberty Mutual Insurance Company
  • Lumbermens Mutual Insurance Company
  • Magna Carta Companies
  • Mass West Insurance Company
  • Massachusetts Casualty Insurance Company
  • Massachusetts Interlocal Insurance Association
  • Massachusetts Property Insurance Underwriting Association
  • Massachusetts Title Insurance Company
  • Massamont Insurance
  • McLarens Young international
  • Merchants Mutual Insurance Company
  • Merrimac Mutual Fire Insurance Company
  • MetLife / Metropolitan Life Insurance Company
  • Metropolitan Property & Casualty Insurance Company
  • Middle Oak Insurance Company
  • Monarch Life Insurance Company
  • Mount Vernon Fire Insurance Company
  • Mount Washington Assurance Company
  • Narragansett Bay Insurance Company
  • National Grange Mutual Insurance Company
  • National Interstate Insurance Company
  • Nationwide Insurance Company
  • Nautilus Insurance Company
  • Netherlands Insurance Company
  • New England Fidelity Insurance Company
  • New Jersey Manufacturers Insurance Company
  • NLC Insurance Companies
  • Norfolk and Dedham Group
  • North American Risk Services
  • Northland insurance
  • Old Dominion Insurance Company
  • OneBeacon Insurance Group
  • Pawtucket Mutual Casualty Insurance Company
  • Peerless Insurance Company
  • Peoples Service Insurance Company
  • Philadelphia Insurance Companies
  • Pilgrim Insurance Company
  • Plymouth Rock Assurance Company
  • Preferred Mutual Insurance Company
  • Premier Insurance Company
  • Progressive Insurance Company
  • Providence Mutual Fire Insurance Company
  • Providence Washington Insurance Company
  • Prudential Property and Casualty
  • Quincy Mutual Fire Insurance Company
  • Risk Management Foundation
  • RLI Insurance Company
  • Royal and Sun Alliance Insurance Company
  • Safeco Insurance Company
  • Safety Insurance Company
  • Selective Insurance Company of America
  • Travelers Insurance Company
  • Travelers of Massachusetts
  • The Andover Companies
  • The Concord Group Insurance Companies
  • The Hartford Insurance Company
  • The Main Street America Group
  • Tower Insurance Company
  • Trident Insurance Company
  • Trust insurance Company
  • Union Mutual Fire Insurance Company
  • UNUM Provident Insurance Company
  • US Liabilities Insurance Group
  • US Fidelity and Guarantee Company
  • USAA
  • US F&G Insurance Company
  • Utica National Insurance Company
  • Vermont Mutual Insurance Company
  • Worcester Berkshire Insurance Company
  • Zürich North America

Beware of Foreclosure Rescue Scams

Scam artists are stealing millions of dollars from distressed homeowners by promising immediate relief from foreclosure, or demanding cash for counseling services when HUD-approved counseling agencies proved the same services for FREE. If you receive an offer, information or advice that sounds too good to be true, it probably is. Don’t let them take advantage of you, your situation, your house or your money.

MDRS, in conjunction with the official City of Lynn foreclosure mediation program, will be mailing out information to Lynn homeowners in an easily recognizable gold envelope.

Official MDRS COLF Mailing
Official MDRS City of Lynn Mailing

These bright gold envelopes will be easily distinguishable from other materials that may be received outside of the program. Homeowners should be vigilant of foreclosure rescue scams promising immediate relief from foreclosure.

How to Spot a Scam

Beware of a company or person who:

  • Asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
  • Guarantees they can stop a foreclosure or get your loan modified.
  • Advises you to stop paying your mortgage company and pay them instead.
  • Pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read and don’t fully understand.
  • Claims to offer “government-approved” or “official government” loan modifications.
  • Asks you to release personal financial information online or over the phone and you have not been working with this person and/or you do not know them.

Important Points to Remember

  • Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent mortgage.
  • Beware of any person who says he or she can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
  • Never make your mortgage payments to anyone other than your mortgage company without its approval.

How to Report a Scam

  • Visit preventloanscams.org and fill out the Loan Modification Scam Prevention Network’s (LMSPN) complaint form online and get more information on how to fight back.
  • Call 1-888-995-HOPE (1-888-995-4673) and tell a counselor about your situation and that you believe you have been scammed or know of a scam.

Lynn United for Change

Lynn United for Change is a community organization dedicated to helping people in foreclosure stay in their homes. There is no charge for the information, support, and legal assistance that the group provides.

Many Lynn United for Change volunteers have faced foreclosure themselves, and have been able to hold on to their homes with the group’s help.

All City of Lynn residents dealing with foreclosure are welcome to attend a meeting, talk with others who have been through foreclosure, and get connected with legal help. Meetings are every Thursday at 6:30 pm at 112 Exchange Street, Lynn. Homeowners can also contact the group for assistance at 781-346-9199 or info@LynnUnited.org.

(Lynn Unido por El Cambio es un grupo comunitario que ayuda a personas con problemas de ejecuciones hipotecarias. El grupo no cobra nada por la información, apoyo, y consejo legal que ofrece. Reuniones cada Jueves a 6:30 pm en la 112 Exchange Street, Lynn. Para más información llame al 781-346-9199. Se habla español.)

Beware of Foreclosure Rescue Scams — More information available here.

 

Glossary of Terms

Definitions are provided in connection with Massachusetts State Laws and for the understanding of those potentially involved with Foreclosure Mediation Programs.

A

Affordable Monthly Payment
Appraisal

B

Bankruptcy
Borrower
Borrower’s Representative

C

Certain Mortgage Loan
Creditor
Creditor’s Representative

D

Deed in Lieu of Foreclosure
Dodd-Frank Wall Street Reform and Consumer Protection Act
DU Refi Plus

E

Eviction
Extension Agreement

F

Fair Market Rent
Fair Market Value
Fee-Shifting
FHA – Federal Housing Administration
Forbearance Agreement
Forbearance Plans
Foreclosed Property
Foreclosing Property
Foreclosure
Foreclosur Sale
Foreclosure Sale Purchaser
Foreclosing Owner

G

Good Faith Effort

H

Home Affordable Modification Program
Home Affordable Foreclosure Alternatives
Homeowner or Mortgagor
Hope for Homeowners
HUD – Housing and Urban Development

J

Judicial Foreclosure

L

Loan Guarantee Partial Claim
Loan Modification
Loan Work-Out Plan

M

MassHousing Refinance Loans
MediationConference
Mediator
M.G.L. Chapter 93A
MERS – Mortgage Electronic Registration System
Modified Mortgage Loan
Mortgage Documents
Mortgagee
Mortgage Loan
Mortgage Loan Assumption
Mortgagor or Homeowner
Mortgage Servicer

N

Net Present Value
Net Recovery Following Foreclosure
Non-judicial Foreclosure

O

Occupant

P

Parties
Pooling and Servicing Agreement
Principal Forbearance
Principal Reduction
Promissory Note
Property

R

Refinancing
Reinstatement
Repayment Plan
Residential Property
Residential Unit or Unit
Responsible Party
Reverse Mortgage
Right to Cure
Robo-signing

S

Shared Appreciation Mortgage (SAM)
Security Instrument
Shadow Inventory
Short Sale
Subprime Lending

T

Time to Refinance

U

Unit or Residential Unit

V

Vacant Property
Voluntary Surrender/ Cash for Keys

Affordable Monthly Payment: Monthly payments on a mortgage loan, which, taking into account the borrower’s current circumstances, including verifiable income, debts, assets, and obligations enable a borrower to make the payments.

Appraisal: A valuation of property by the estimate of an authorized person, designated by a regulatory body within the jurisdiction.

Bankruptcy: A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor’s assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.

Borrower: A mortgagor of a mortgage loan.

Borrower’s Representative:  An employee or contractor of a non-profit organization certified by Housing and Urban Development, an employee or contractor of a foreclosure education center pursuant to section 16 of chapter 206 of the acts of 2007 or an employee or contractor of a counseling agency receiving a Collaborative Seal of Approval from the Massachusetts Homeownership Collaborative administered by the Citizens’ Housing and Planning Association.

Certain Mortgage Loan: A loan to a natural person made primarily for personal, family, or household purposes secured wholly or partially by a mortgage on an owner-occupied residential property with one or more of the following loan features:  (i) an introductory interest rate granted for a period of three years or less and such introductory rate is at least 2% lower than the fully indexed rate; (ii) interest-only payments for any period of time, except in the case where the mortgage loan is an open-end home equity line of credit or is a construction loan; (iii) a payment option feature, where any one of the payment options is less than principal and interest fully amortized over the life of the loan; (iv) the loan did not require full documentation of income or assets; (v) prepayment penalties that exceed section 56 of chapter 183 or applicable federal law; (vi) the loan was underwritten with a loan-to-value ratio at or above 90% and the ratio of the borrower’s debt, including all housing-related and recurring monthly debt, to the borrower’s income exceeded 38%; or (vii) the loan was underwritten as a component of a loan transaction, in which the combined loan-to-value ratio exceeded 95%; provided, however, that  a loan shall be a certain mortgage loan if, after the performance of reasonable due diligence, a creditor is unable to determine whether the loan has one or more of the loan features in clauses (i) to (vii), inclusive, and provided, further, that loans financed by the Massachusetts Housing Finance Agency, established in chapter 708 of the acts of 1966 and loans originated through programs administered by the Massachusetts Housing Partnership Fund board established in section 35 of chapter 405 of the acts of 1985 shall not be certain mortgage loans.

Creditor: A person or entity that holds or controls, partially, wholly, indirectly, directly, or in a nominee capacity, a mortgage loan securing a residential property, including, without limitation, an originator, holder, invesetor, assignee, successor, trust, trustee, nominee holder, Mortgage Electronic Registration System or mortgage servicer, including the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.  “Creditor” shall also include any servant, employee or agent of a creditor.

Creditor’s Representative: A person who has the authority to negotiate the terms of and modify a mortgage loan.

Deed in Lieu of Foreclosure:  With a deed in lieu of foreclosure, you voluntarily execute a deed conveying your property to the lender in exchange for the lender canceling, in full or partial satisfaction, the debt owed on the loan. The lender often will agree to forgive any deficiency (the amount of the loan that isn’t covered by the sale proceeds) that remains after the house is sold. The lender will also agree not to initiate foreclosure proceedings or to terminate any initiated foreclosure action.

Dodd-Frank Wall Street Reform and Consumer Protection Act: Requires that every servicer participating in HAMP that denies a homeowner’s loan modification request on the basis of net present value (NPV) analysis provide that homeowner with the data used to make its calculation.

DU Refi Plus: For existing MassHousing Borrowers: DU Refi Plus is a Fannie Mae, no-cash-out refinance program offering reduced verification and documentation. MassHousing is making DU Refi Plus available to existing MassHousing borrowers who have a conventional first mortgage sold to and owned by Fannie Mae on or before June 1, 2009.Borrowers must meet income limits, which vary by community.

Eviction: Any action, without limitation, by a Foreclosure Sale Purchaser of Residential Property which is intended to compel an occupant to vacate or to be constructively evicted from such Residential Property.

Extension Agreement: This is an agreement in which you pay a portion of the amount of your delinquency, and the remaining portion of the delinquent amount is added on the end of your loan.

Fair Market Rent: An amount equal to that established by the most recent United States Census Bureau American Community Survey which shall be fair market value only, for a unit of comparable size in the area in which the Residential Property is located.

Fair Market Value: Estimate of market value of property based on what a knowledgeable and unpressured buyer would pay to a knowledgeable seller for the property.

Fee-Shifting: Adjusts who is paying for the mediation session

FHA – Federal Housing Administration: Established in 1934 to advance homeownership opportunities to all Americans.  Lenders who make FHA loans are covered by mortgage insurance, which protects them from most losses when a borrower defaults.  Lenders are more likely to make FHA loans to borrowers who might not qualify for conventional mortgages since the liability for default has been dramatically reduced.  Became a part of HUD when HUD was created in 1965.

Forbearance Agreement: Forbearance agreements are plans that allow borrowers to repay a loan delinquency over time. Regular monthly payments are made according to your loan agreement, and an additional monthly payment is made each month that is applied to the delinquent amount. Once the delinquent amount is paid in full, the normal payment amount resumes. It fully reinstates the loan. A forbearance plan may include one or more of the following features: (a) suspension or reduction of payments for a period sufficient to allow the borrower to recover from the cause of default; (b) a period during which the borrower is only required to make his/her regular monthly mortgage payment before beginning to repay the arrearage; (c) a repayment period of at least six months and (d) allow reasonable foreclosure costs and late fees accrued prior to the execution of the forbearance agreement to be included as part of the repayment schedule. However, they frequently may only be collected after the loan has been reinstated through payment of all principal, interest and escrow advances.

Forbearance Plans: A Loss Mitigation option in which the Lender arranges a revised repayment plan for the Borrower that may include a temporary reduction or suspension of monthly loan payments.

Foreclosed Property:  A property on which a Foreclosure Deed has been recorded until such property has been purchased from a Mortgagee or its Mortgage Servicer.

Foreclosing Property:  A property on which the Mortgagee or its agent has filed a Complaint with the Land Court or Superior Court pursuant to the Massachusetts Soldiers’ and Sailors’ Civil Relief Act (St. 1943, c. 57 (1943), as amended through St. 1988, c. 142) until such time as a Foreclosure Deed has been recorded in the Southern Essex Registry of Deeds.

Foreclosure: The foreclosure of a Mortgagor’s equity of redemption in property, by action, bill in equity, entry, and/or power or sale.

Foreclosure Sale: The foreclosure of a Mortgage of a Residential Property pursuant to a power of sale in a mortgage and as described in M.G.L. c. 244.

Foreclosure Sale Purchaser: A Foreclosing Owner as defined below, or a person or entity who purchases Residential Property from a Foreclosing Owner and not intending to reside or have a family member reside in such Residential Property as the primary residence.

Foreclosing Owner: An entity that both:

  1.  Held or owned a Mortgage Loan in the Property at any point prior to the foreclosure of the Property or is the subsidiary, parent, or agent of, or otherwise is related to any entity which held or owned the Mortgage in the Property at any time prior to the foreclosure of the Property; and
  2. Holds title to this Property that it acquired at a foreclosure sale or by any other method of foreclosure and holds a security interest in three or more Mortgage Loans.

For purpose of this definition, the phrase ‘holds title’ shall include an entity which holds title in any capacity, directly or indirectly, without limitation, whether in its own name, as trustee, or as beneficiary.

Good Faith Effort: Each party to the mediation is present, has decision making authority to negotiate and agree upon a commercially reasonable alternative to foreclosure, provides required documentation, and actively participates in the mediation process.

Home Affordable Modification Program: Can lower borrower monthly payments.

Eligibility Requirements (Learn More at MakingHomeAffordable.gov) – You may be eligible for HAMP if you meet all of the following criteria:

  • You obtained your mortgage on or before January 1, 2009.
  • You owe up to $729,750 on your primary residence or single unit rental property
  • You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
  • The property has not been condemned
  • You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify).
  • You have sufficient, documented income to support a modified payment.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.

Home Affordable Foreclosure Alternatives: Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls “short” of the amount you still owe. The deficiency is guaranteed to be waived by the servicer. In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price. HAFA has a less negative effect on your credit score than foreclosure or conventional short sales. When you close, HAFA may provide $3,000 in relocation assistance.

Eligibility Requirements (Learn more at MakingHomeAffordable.gov) –

  • You have a documented financial hardship.
  • You have not purchased a new house within the last 12 months.
  • Your first mortgage is less than $729,750.
  • You obtained your mortgage on or before January 1, 2009.
  • You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

Homeowner or Mortgagor: A natural person or residential trust who received a Mortgage Loan secured by a Residential Property located in the City, and for whom such Residential Property is his/her principal residence.

Hope for Homeowners: The benefits include: homeowner keeping home, getting a 30 –year fixed rate mortgage (extendable to 40 years in some cases), lower monthly mortgage payments which do not change.

Eligibility Requirements (Learn more at FHA.com) –

  • Mortgage must be dated on or before 1/1/2008
  • Homeowner did not default on the original loan intentionally
  • Homeowner not invested in multiple home loans
  • All information on the original mortgage is true
  • Homeowner has not been convicted of fraud and requires equity sharing with government.

HUD – Housing and Urban Development: the Federal Department that has the responsibility for all major housing programs in the United States.

Judicial Foreclosure: Massachusetts is not a judicial foreclosure jurisdiction.  A judicial foreclosure is a court proceeding that is initiated when a lender files a complaint and records a notice announcing a claim on the property.  Judicial foreclosure involves the sale of the mortgaged property under the supervision of a court with the proceeds going first to satisfy the mortgage, then to other lien holders and, finally, to the borrower if any proceeds remain.  All parties involved must be notified of the foreclosure proceedings by mail, direct service or publication of the notice.  The borrower is permitted to dispute the claims made by the lender (though most do not because they are currently in default) and must respond within 30 days.  After judgment, the sheriff conducts a “Sheriff’s Sale,” which is a public auction sale of the property to satisfy the judgment after notice to the public.

If a Sheriff’s Sale is conducted, the foreclosed homeowner does have the “Right of Redemption,” which is the right of the homeowner to buy back the home from the person who bought it at foreclosure.  If the homeowner is able to buy back the property, he or she must pay off the loan plus any accrued interests and associated costs.  Though the borrower loses possession of the home during the redemption period, they retain the title to the home.

Loan Guarantee Partial Claim: If your mortgage is insured, your lender might help you with a one-time interest-free loan from your mortgage guarantor to bring your account current. You may be allowed to wait several years before repaying this loan.

Loan Modification: An agreement that permanently changes one or more terms of your mortgage. For example, (1) extend amortization (i.e., extending the number of years you have to repay the loan, such as, converting a 30-year loan to a 40-year loan), (2) converting a sub-prime 2-, 3- 5-, 7-year ARM loan into a fixed rate loan, (3) reducing the mortgage interest rate, (4) adding missed payments to the existing loan balance.

Loan Work-Out Plan: Also known as loan modification or mortgage modification.  It is a way to restructure debt to avoid foreclosure.

MassHousing Refinance Loans: Benefits are 30 year terms, fixed interest rates (meaning your payment will always remain the same), mortgage insurance with MI Plus mortgage payment protection, loans serviced by MassHousing.

Mediation Conference: The formal discussion and negotiation undertaken by the parties in a Good Faith Effort to negotiate and agree upon a commercially reasonable alternative to foreclosure.

Mediator: An individual:

  1.  Whose training complies with the qualification standards for neutrals specified in the guidelines for training mediators adopted by the Supreme Judicial Court of Massachusetts pursuant to Rule 8 of the Uniform Rules for Dispute Resolution; and
  2. Who has completed training on foreclosure mediation; and
  3. Who has a working knowledge of all federal, state, and city programs available to help homeowners retain their homes.

MERS – Mortgage Electronic Registration System: Does not typically qualify as the “real party in interest”.  MERS is not an assignee.  If MERS is not named in your note and the loan has not been properly assigned to them, they are not legally able to bring foreclosure action.  MERS operates as a nominal party; a lender may register (transfer) a defaulted loan to this entity.  Currently many consumers who are in default may find MERS shown as the party bringing the foreclosure action.

M.G.L. Chapter 93A: (Consumer Protection) This law prohibits businesses in Massachusetts from employing “unfair and deceptive practices” in their interactions with consumers. Some common examples include: fraud, deception and unfair methods of competition, harassment, defamation, and invasion of privacy. A business such as a bank may violate this law by charging consumers higher rates than the marked, published or advertised price.

Modified Mortgage Loan:  A mortgage modified from its original terms including, but not limited to, a loan modified pursuant to one of the following:  (i) the Home Affordable Modification Program; (ii) the Federal Deposit Insurance Corporation’s Loan Modification Program; (iii) any modification program that a lender uses which is based on accepted principles and the safety and soundness of the institution and recognized by the National Credit Union Administration, the Division of Banks or any other instrumentality of the commonwealth; (iv) the Federal Housing Agency; or (v) a similar federal refinance plan.

Mortgage Documents: The Promissory Note, including any allonges, additional pages, and other evidence of all endoresements; mortgage; loan agreement; assignments (recorded and unrecorded); powers of attorney granted by the Mortgagee or Homeowner to entities acting on its behalf; and any other documents evidencing or securing a Mortgage loan.

Mortgagee: An entity that is the present holder of the Mortgage Loan.

Mortgage Loan: A loan, in the form of a promissory note, to one or more natural persons, or to a nominee trust or residential trust on behalf of one or more natural persons, made for non-commercial purposes and secured wholly or partially by a mortgage on residential property which is the principal residence of one or more borrowers of the loan or their family members, or in the case of a nominee trust, one or more of the beneficiaries of the trust.

Mortgage Loan Assumption: Most mortgage loans include a “due on transfer” provision. If this provision is waived by the lender, it allows a qualified individual or entity to assume the loan’s payment obligations. This is often used to facilitate the sale of the property to a third party. The original lender may or may not release you from personal liability on the note if the individual or entity assuming the loan’s payment obligation defaults.

Mortgagor or Homeowner:  A natural person or residential trust who received a Mortgage Loan secured by a Residential Property located in the City, and for whom such Residential Property is his/her principal residence.

Mortgage Servicer: An entity which administers or services or at any point administered or serviced the Mortgage Loan; provided, however, that such administrator or servicing shall include, but not be limited to, calculating principal and interest due on the mortgage loan, assessing fees and costs onto a mortgagor’s loan account, collecting regular payments from the mortgagor, acting as escrow agent for the owner of the Mortgage Loan or foreclosing on a Mortgage Loan in the event of a default.

Net Present Value: The present net value of a residential property based on a calculation using one of the following:  (i) the federal Home Affordable Modification Program Base Net Present Value Model, (ii) the Federal Deposit Insurance Corporation’s Loan Modification Program; or (iii) for the Massachusetts Housing Finance Agency’s loan program used solely by the agency to compare the expected economic outcome of a loan with or without a loan modification.

Net Recovery Following Foreclosure:  A monetary value that includes, but is not limited to, projected costs from:

  1. Delinquency, interest, and/or fees incurred by the date of foreclosure sale based on average length of Massachusetts foreclosure process;
  2. Costs of all legally required actions to foreclose and percentage loss from foreclosure sale;
  3. Meeting all sanitary code requirements;
  4. Property maintenance;
  5. Eviction; and
  6. Other ownership costs until projected sale or re-sale to third party purchaser.

Non-judicial Foreclosure: Massachusetts is a non-judicial foreclosure jurisdiction.  Also known as a title theory jurisdiction where the property remains “in trust” until payment in full occurs for the underlying loan.  Non-judicial foreclosure involves no court intervention.  The trustee of the trust deed forecloses on the lien, not the beneficiary of the trust deed.  Such a foreclosure is also referred to as a “trustee’s sale.”  The trustee initiating the non-judicial foreclosure must strictly follow all of the states’ foreclosure laws.

Similar to the “Right of Redemption” for a judicial foreclosure, the homeowner has the “Right of Cure” for non-judicial foreclosure.  The grantor must pay the amount due on the loan plus any associated costs.

Occupant:  Any person or group of persons, including the Mortgagor, who occupied Residential Property prior to a Foreclosure Sale.

Parties: The Mortgagor and the Mortgagee or its Mortgage Servicer.

Pooling and Servicing Agreement: Legal document usually filed with the Securities and Exchange Commission, which defines the rights and obligations of the parties involved.  It defines the proper procedure and what should have occurred to the promissory note.  Many advocates for Homeowners argue at foreclosures that this agreement is not properly followed.

Principal Forbearance: Forbearance of the repayment of part of the principal interest-free. The actual principal amount due and payable at maturity of the loan (or sale of the property) is the original unmodified principal amount, less any and all periodic principal payments that you make until maturity or sale. The loan payments only partially, not fully, amortize the loan. Contrast with Principal Reduction.

Principal Reduction: Loan principal is reduced. This may be possible if you have a negative amortization loan (you are paying less than is necessary to fully amortize (payoff) the loan during the loan’s term) and the lender is willing to reduce principal to the original loan amount. A principal reduction program may be agreed upon in exchange for a shared appreciation mortgage (SAM). A SAM is a fixed rate, fixed term loan. In exchange for a lower interest rate, you agree to give up a portion of the home’s future value — the difference between what it is worth now and what it will be worth in the future.

Promissory Note: A legal instrument in which one party promises in writing to pay a predetermined sum of money to the other.  The promissory note includes the terms of repayment, such as the interest rate, maturity date, and the monthly payment.

Property: Any real property that is either a single-family dwelling or a structure containing not more than four residential units, and shall also include a residential condominium unit or a residential co-op unit.

Refinancing: Revising a payment plan for repaying debt

Reinstatement: Your lender agrees that all amounts required to bring your loan current can be paid (including late fees, attorney fees, taxes, insurance, et cetera) and once these amounts are paid, the foreclosure will be dismissed and you will be back on your regular payment plan.

Repayment Plan: An agreement to resume making your regular monthly payments, plus a portion of the past due payments each month until you are caught up (i.e., the lender raises the monthly payment for a set period of time until the arrears amount is caught up).

Residential Property:  Real property located in the commonwealth having thereon a dwelling house with accommodations for 4 or less separate households and occupied, or to be occupied, in whole or in part by the obligor on the mortgage debt; provided, however, that residential property shall be limited to the principal residence of a person; provided further, that residential property shall not include an investment property or residence other than a primary residence; and provided further, that residential property shall not include residential property taken in whole or in part as a collateral for a commercial loan.

Residential Unit or Unit: The room or group of rooms within a Property which is used or intended for use as a residence by one household.

Responsible Party:  Every person, entity, servicer, property manager, or real estate broker, who or which, alone or severally with others:

  1. Has care, charge or control of Property, including but not limited to any dwelling, dwelling unit, mobile dwelling unit or parcel of land, vacant or otherwise, including a mobile home park, or any administrator, executor, trustee or guardian of the estate of the holder of legal title; or
  2. Is a Mortgagee of any such Property who has filed a complaint with the Land Court or Superior Court pursuant to the Massachusetts Soldiers’ and Sailors’ Civil Relief Act (St. 1943, c. 57 (1943), as amended through St. 1988, c. 142), including its successors or assigns; or
  3. Is an agent, trustee or other Person appointed by the courts and vested with possession or control of any such Property;
  4. Is a Mortgagee who has made entry on any such Property, pursuant to the terms of the Mortgage, in order to make repairs upon Mortgagors failure to do so.

Reverse Mortgage: Reverse mortgages, or home equity conversion mortgage (HECM) loans, are commonly used to help senior citizens tap into their home equity for retirement. As a foreclosure prevention device, you generally need to be age 62 or older and have adequate accumulated home equity.

Right to Cure: The Right to Cure Regulations are designed to assist commencement of foreclosure provisions found in Chapter 244, Section 35A of the Massachusetts General Laws, which requires the sending of a right to cure notice prior to the commencement of foreclosure proceedings for certain principal residence properties. Section 35A provides for a 150-day right to cure, or in the alternative, a 90-day Right To Cure Notice may be sent provided the mortgagee can demonstrate that it has negotiated in good faith with the borrower; the mortgagee certifies that it has negotiated to reach an alternative to foreclosure in good faith with the borrower; at least one meeting has taken place between the mortgagee and the borrower; the mortgagee provided loss mitigation information to the borrower before the meeting; and that after the meeting, the creditor is able to demonstrate that the mortgagee and the borrower were not able to reach a resolution (other than foreclosure). A 90-day right to cure notice would also be acceptable if the mortgagee can demonstrate that the borrower failed to respond within 30 days to the mortgagee’s offer to negotiate.

Robo-signing: Automatically signing documents before reviewing them. The robo-signer assumes the documents to be correct and does not review each detail of the document.

Shared Appreciation Mortgage (SAM): A SAM is a fixed rate, fixed term loan. In exchange for a lower interest rate, you agree to give up a portion of the home’s future value — the difference between what it is worth now and what it will be worth in the future.

Security Instrument: Gives the lender a lien on the property.  The borrower retains full ownership of the property.  The security instrument secures repayment of the promissory note and is more specifically described as a mortgage or a trust deed.

Shadow Inventory: Generally, in a healthy economy, the foreclosure rate is around 1% of total loans, during past few years the foreclosure rate has been around 7-8% of total loans.  This term means in the past few years, banks may have not foreclosed on all properties that they typically would have.   This is because of the fear that more foreclosures or an increase in the rate would alarm consumers and negatively impact the economy.  Therefore, there are likely many foreclosures in the pipeline that are being processed slowly.

Short sale: A sale for less than what you owe on the mortgage loan. Lenders may allow a home to be sold at a loss (consequently, the term short sale), because a short sale is nonetheless preferable to foreclosure. Foreclosure exposes lenders to potential substantial loss for litigation costs, carrying costs, including real estate taxes and insurance, and low forced sale bids or low resale prices. A short sale may be beneficial when a lender agrees to relieve you of liability for any deficiency (waive suing for a deficiency).

Subprime Lending: (also known as near-prime, non-prime, and second chance lending) means making loans to people who may have difficulty maintaining the repayment schedule.  These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk.

Time to Refinance: Provided you have a reasonable prospect of arranging to refinance the loan, the lender may agree to some period during which it will not schedule a sheriff’s sale.

Unit or Residential Unit: The room or group of rooms within a Property which is used or intended for use as a residence by one household.

Vacant Property: Structure or building not legally occupied.

Voluntary Surrender/ Cash for Keys: Lenders may offer homeowners money to leave the home voluntarily without a post-foreclosure judgment eviction, if the house is in relatively good condition and undamaged.

MEDIATING COMPLEX MULTI-PARTY CASES

The complexity of facts, legal issues, and respective needs and interests involved increase significantly when multiple parties are engaged in a dispute.  Mediation, with its inherent flexibility and unique components, is ideally suited to handle the complexities of multi-party cases.  To understand why this is so, it is important to consider some basic differences between multi-party and one-on-one mediations and how the process of mediation can be sculpted to meet the needs of the many parties involved and the issues that often arise when there are many disputants.  Beginning from the start:

The Mediator Selected:

Managing mediation with a large number of parties, akin to issues of crowd control, is certainly a challenge to any mediator in a multi-party mediation.  The more people there are, the more likely it also is that a mediator must manage diverse personal dynamics, high emotions as well as cultural issues.  It is important that a mediator experienced in handling multi-party cases be selected.  He or she will not be overwhelmed by the multiplicity of parties, counsel, issues, or negotiating strategies.  The mediator must be able to get and keep control of the process.  As an analogy, a large orchestra may need a stronger conductor than a duet would.  Co-Mediators or a team of mediators may be needed in certain multi-party settings to better facilitate the separate groups.

The Facilities:

In many more complex cases, there can several plaintiffs and several defendants with different counsel representing each of them.  There must be sufficient rooms for all parties collectively and individually as necessary. There must be a room sufficient to handle opening statements and other joint caucuses of all parties and counsel. There must be a room sufficient to house all defendants together so as to obtain unified or collective offers. There also must be a room large enough for all plaintiffs to gather to the extent that such collective caucusing is appropriate among them.  It may be necessary to have each plaintiff separated in rooms from the others because their injuries were different and/or their settlements not uniform and the offers may need to be separately communicated to each of them.  It may also be important to have an attorney breakout room so the mediator can meet with attorneys or they can meet among themselves during different stages of the process.

Pre Mediation Conferences:

Even more so than in one-on-one mediations, to sculpt an efficient and effective mediation process in multi-party cases it is critical that pre-mediation conferences with the mediator occur to determine, among other things, the issues involved, who is coming, the makeup of each parties’ team, who has the ultimate settlement authority and who will be the primary spokesperson.

These pre-mediation conferences can be done by telephone or it may be advisable to have a meeting with counsel and/or some of the key disputants.   By way of these conferences, an experienced mediator will be determining what form of process is best suited to this particular dispute.  The mediator also uses this time to determine the relationships between the various parties, verify the issues involved, and also clarify the issues on which certain parties may be aligned.

The mediator seeks to avoid a situation where the parties enter the mediation with different ideas as to how the mediation will be conducted, the issues to be resolved, or how the process of negotiation will proceed.  Having everyone on the same page, and incorporating the input of the disputants and their counsel into sculpting the upcoming mediation session enhances their buy in to this process and furthers the prospects of their co-operation and collaboration at the sessions to follow.

Pre Mediation Position Statements / Briefs:          

An experienced mediator will usually request short summaries of the dispute from each party, and also submission of the key documents.  Position statements from each party are often sought in multi-party mediations, to educate the mediator and allow each side to see those issues and positions of the other side that are critical to their individual evaluation and to their collective resolution. The more each side knows about the other’s position, the more effectively they will be able to achieve resolution. In certain situations confidential position statements can submitted and remain confidential between a party and the mediator.

The Mediation Session – The Joint Session:

Traditionally, the mediation itself begins with the opening (joint) session. The tone for conciliation must be set by the mediator in their opening remarks.  It is then that the mediator again describes his role, the process to follow, and emphasizes the confidentiality of the entire session and also of the private caucuses that will follow.  The overarching goal of the mediator’s opening is to create a positive environment of optimism, safety, conciliation and mutual respect. The parties are encouraged to remove the litigation boxing gloves for a day and work jointly toward a resolution of the case.

In complex multi-party cases, a mediator must also consider the factor of excessive time being expended by multiple parties making opening statements. In certain situations, time limits on these statements can be agreed to, keeping the mediation session fresh and moving forward toward private caucuses and the hard work of collaboration and negotiation.

The dual purpose of an initial joint session is to allow each party the opportunity to highlight the merits of their case or defense while also listening to another perspective on the dispute. Executed well, the joint session combines subtle advocacy and reflective listening. The content of a joint session can range from a short statement to an elaborate Power Point presentation.

The joint session is often the only opportunity for a party to speak about their case directly to the opposing party. On the other side of the joint session coin, is the opportunity to engage in some reflective listening, and to understand there are at least two sides to every story.  The “listening” party gets a preview of what they are likely to encounter at trial.

The chief peril of a joint session is that it can alienate parties, with a wrong word or gesture at the wrong time causing an otherwise well-intended joint session to spiral out of control.  The first inquiry should be whether to hold a joint session, which often can be determined by advanced preparation, determining the dynamics involved and the level of emotions involved. Counsel have likely been involved for a long period of time and can be helpful to a mediator in determining the wisdom of a joint session.

Private Caucuses – Dealing with Idle Time While in Private Caucuses:

A mediator often will have private discussions or caucuses with individual parties during the course of a mediation session. Often in one-on-one mediations, these private caucuses can be somewhat short and roughly equal time can be devoted to both sides for these caucuses. In multi-party cases, a private caucus with a large group of plaintiffs or defendants can take much longer, while the other side sits bored, or worse feels unattended or ignored.  A client may not see the mediator for several hours.

Often the lawyers for the parties and the mediator can discuss how to keep the teams engaged while private caucuses are taking place with the other parties.  A mediator can task the waiting group with updating risk analysis, brainstorming possible solutions, visioning the issues through the other’s eyes or suggesting/setting up working groups, to keep the team working as a team during the idle time.

At times an entire session can be scheduled only with the defendants to assist them in working out their differences without leaving the plaintiff(s) unattended for hours during this process.

The Mediator’s Toolbox:

The many tools employed by skillful mediators to break impasses and bring parties to agreement will not be fully explored in this article.  Many of these tools of persuasion are used most effectively in these private, confidential caucuses with the parties. Briefly stated, a skillful mediator will listen, understand, and flush out areas of agreement that can be the foundation for most successful mediations.  They will explore the positions of all sides, probing for underlying needs and interests and settlement possibilities. Reality testing will be undertaken by the mediator in private caucuses. Often parties have taken hard positions which have become matters of principle to them. The impartial mediator will probe these positions. Private caucuses are the time for the prepared mediator to be pointing out the factual and legal problems of the case.  An experienced mediator lets no risk go unnoticed.  When the mediator is trusted and acts with integrity, this information exchange validates the mediator’s role as expert.  The mediator must also emphasize the costs of litigation, as well as other, more difficult measurements, such as the emotional toll on the parties.

Different Types of Settlements:

It is often the case that multi-party mediations, particularly multi-issue/multi-party mediations, can lead to several deals being made. This may be in settlement of the overall dispute or in settlement of some issues with others left unresolved.

Levels Of Insurance Coverage:

In multi-party and catastrophic injury cases, differing levels of available coverage add further complexity to the mix.  A carrier with high limits insuring a defendant with only marginal liability, for example, may find itself pressured into paying more than it thinks it ought to. The availability and extent of insurance coverage needs to be determined by the mediator.

Agreement on Percentages Of Contribution:

Mediators are all too familiar with the challenges that multi-party cases present. Among the most frustrating situations are those in which warring defendants or multiple plaintiffs place conflicting conditions on the negotiation that cannot be satisfied. Most commonly, parties will insist that their financial participations bear consistent or inconsistent relationships to other parties’ participations. For example, Defendant A in a multi-party case may insist that it will not contribute 25% percent to a settlement fund unless all three other defendants do the same.  This conditioning is oftentimes conceived prior to the session, and poses the additional challenge of unraveling that perception of logic in order to introduce new proposals.

Best Offers From Each Defendant:

Sometimes, the defendants never reach agreement on the percentage each will be willing to make.  If that happens, another technique is for the mediator to meet separately with each defendant and obtain the best offer each is willing to make. At the end of this exercise, the mediator then, by agreement, will disclose the total package available from all defendants, but does not disclose the individual contributions each has authorized. Having obtained total authority from the defendants, the mediator will then meet with the plaintiff — or plaintiffs, if more than one — and determine if settlement is possible within the authority given. Of course, if the cumulative best offer is not enough, this step may have to be repeated.

Separate Settlements with Defendants:

If, after all is said and done, the mediator cannot get substantial commitment from all of the defendants, he or she can explore whether the plaintiff(s) may or may not be willing to settle separately with some of the defendants, while continuing to pursue the others.

Settlement with Plaintiff / Further adjudication between Defendants:

As a last effort to achieve at least a partial settlement, the mediator may seek preliminary contributions from the defendants sufficient to settle with the plaintiff(s), with the defendants agreeing to resolve their final contributions through separate arbitration (or litigation) among themselves. This course of action has the advantage of capping the total amount to be paid to the plaintiff(s), thus protecting the defendants from the consequences of a runaway verdict, while allowing them to fully litigate their final contribution percentage.

 The Mediation Agreement:

Just as in the two-party mediation, when settlement is reached, the mediation agreement in a multi-party negotiation is vital. The delineation of each party’s commitment and participation in the resolution must be memorialized.  At times, the parties (or their counsel) will insist on not disclosing who is getting what among the plaintiffs, or who is paying what among the defendants. While the opposing sides do not need to see this distribution, it is suggested that a written, supplemental mediation agreement be entered into among defendants or among plaintiffs to identify the distribution. The terms of the release to follow should be set forth as generally or as specifically as is required. Standard provisions in releases are well-known in the local communities of attorneys. However, terms such as confidentiality, indemnification, and waiver of subrogation claims should be set forth in the settlement agreement. While one side may draft the release agreement, the other side should be given the opportunity to review and approve it. Thereafter, all parties participating in the release should be required to sign it, with said signature requirement being set forth in the mediation agreement. Dismissal of the case with prejudice or such other judicial disposition should be set forth.

Conclusion:

The very essence of multi-party negotiations is the totality of benefits to the parties, the attorneys and the courts. In one mediation, multiple parties, allegations, defenses, and interests are being resolved in place of expensive and time consuming litigation, as well as the uncertainty of so many in going to trial.  A large group of parties, with the wise assistance of a skilled mediator, can sculpt a flexible resolution that meets their individual needs and avoids the win–lose/winner take all result associated with trial in the court system.

Mediating Business Disputes

2015 statistics show there are over 123,000 small businesses (19 employees or less) in Massachusetts, representing some 86% of all firms in the Commonwealth.  Small business owners are as likely as large corporations to become entangled in disputes with their customers, vendors, employees, other businesses or even their own business partners. Unlike many larger corporations, small businesses often do not have the budget, human resources and legal departments to deal with these conflicts.  For many business owners, one protracted legal case can put them out of business.  They need to avoid the expense, delay, uncertainty, aggravation and lack of control that is associated with having to go to court.

Mediation offers business owners, both small and large, an effective alternative to litigation in the courts and more and more business are turning to alternative dispute resolution (ADR) to resolve their disputes efficiently, economically and effectively.  An experienced neutral mediator can carefully sculpt and manage a settlement process whereby the business dispute, whether large or small, is viewed against the backdrop of the true business interests and practical considerations of all involved , and put the focus on options for mutual gain and agreement.  At MDRS, approximately 90% of all business disputes that come to mediation reach a mutually agreed upon settlement.

Time and Cost savings

Time is money says the proverb, but turn it around and you get a precious truth. Money is time.”  George Gissing

Who can relate to this truism more than a small business owner in today’s economy?  To divert precious time and diminished resources to a contentious business dispute is not what a seasoned owner wants or needs.  Mediation will likely result in the resolution of a business dispute and save considerable time and money through the avoidance of protracted litigation.  Settling a business dispute by mediation can occur in a matter of hours or days, and not years, as would be involved in court proceedings.  Mediation fees and costs are a small fraction of the costs associated with litigation, which involve high costs for attorney fees, discovery costs during litigation, expert witnesses and potential appeal costs.   A successful mediation will allow business owners and their staff to again focus on running their operations and earning their livings.

Risk management and control over the process and the outcome

Trial in the court system is unfortunately focused on winners and losers.   The major difference between mediation and litigation is that settling through mediation is a voluntary agreement between the parties, in contrast to litigation that results in a binding decision outside of the parties’ control.  Too often, when a business transaction fails or a relationship sours, a business owner thinks, “we need to go to court.”  In going that route they are accepting loss of control over outcomes.

Mediation provides a framework that strengthens the ability of business people to adjust relations and resolve problems efficiently and effectively—without losing control of the outcome to a judge or jury. The parties themselves will jointly select the mediator and determine the issues the mediator will assist the parties in resolving. The parties will also select mutually agreeable times to meet with the mediator.

Importantly, the mediator has no power to impose a solution upon the parties, although in some cases a mediator may propose solutions.  The resolution of the dispute can only result from a voluntary agreement between the parties.  Mediation has been called the thinking business person’s process of choice where control of the outcome sits with them, and not a judge or jury.

Whether occurring before or after the filing of a civil complaint, mediation permits parties to engage in a carefully managed settlement event in which the dispute is viewed against the backdrop of broad business interests, practical considerations, and options for mutual gain, a win-win approach and not winner take all.

In many business disputes, the risks involved are not limited only to winning or losing a monetary judgment,  but also could involve loss of reputation, pride, position, having to divert precious human resources, employee time and attention from other more important matters, strained customer relations, bad publicity, aggravation and the like.

Studies consistently show that parties report high levels of satisfaction with private mediation and only moderate to poor satisfaction with resolution by way of litigation and trial.

A neutral third party experienced in fostering communication and resolving even the most difficult business disputes

Many business owners may ask “Why do I need a mediator, when I’ve made my living negotiating my own deals?“

Mediation with an experienced neutral provides distinct advantages over unaided face-to-face negotiation without a mediator.  Due to the mediator’s unique and neutral role, they can challenge parties’ assumptions and help the parties craft a solution that they might not otherwise have found.  The mediator does not decide who is right or wrong or issue a judgment in favor of one party. The mediator’s function is to create an effective process, gather information and assist in problem solving. Mediators routinely help parties confront the hard realities of their established positions, highlighting weaknesses and drawing attention to the compounding of risks and costs that accompany litigation or arbitration. The mediator can help parties transition from justifying their positions on the issues to defining their interests and objectives and harmonizing them.

In the course of a dispute, business managers, their employees and at times even their counsel, become emotionally invested in their position. When a dispute arises, owners and their employees directly involved can feel resentment, anger, betrayal, and a desire to retaliate.  Negative emotions sometimes can have a significant influence on the parties’ attitudes towards resolution.  Part of the role of a mediator is to bring the parties together in an environment that permits them to vent and blow off steam while establishing new and more constructive ways of interacting. Effective mediators reduce or eliminate the extent to which emotional factors hinder acceptance of otherwise reasonable settlement terms.

A confidential process and outcome

The mediation process is confidential and governed by statutes that protect this confidentiality as well as a mediation agreement which calls for confidentiality.  The mediation takes place in a private conference room and not a courthouse.  Mediation discussions are not admissible in any court proceeding, except for a finalized and signed mediated agreement.  This requirement of confidentiality allows parties to explore settlement options with candid interaction between them and with the mediator, to frankly discuss the facts, their position, the issues and settlement options.  It also facilitates the exchange of information and it encourages the parties to actively participate and “own” the mediation process.

An additional layer of privacy is provided by private caucuses or meetings the mediator may have with individual parties where they can speak in confidence to the neutral and disclose information about their true present needs and interests, perhaps acknowledging some weaknesses in their position, revealing business goals, brainstorming settlement options, and often sharing other sensitive information that may be important for the mediator to know in order to facilitate a resolution.

Also, unlike a jury verdict in a public courtroom, a mediated settlement is accomplished in a private conference room, outside the glare of publicity that most business owners wish to avoid. The resolution of the case and its terms can be kept confidential if the parties so desire.

Flexibility in the resolution process and in sculpting reasonable, creative and durable solutions

Another important difference between mediating and litigating a dispute is the flexibility available in reaching a negotiated settlement.  In a lawsuit, the party who wins is usually limited to an award of money damages.  In mediation, the parties will find solutions to their dispute that might not have been available in court. The range of options for business parties seeking third party assistance to facilitate negotiations is limited only by the willingness of the participants and the creativity of the parties and the mediator.  A mediator may help the parties realign their focus to their actual business goals.  In a dispute with customer, vendor or other business over an existing contract, a business owner may wish to negotiate a change in the terms of the contract and maintain the business relationship. That kind of non-monetary outcome is best achieved through mediation and not trial.

There are many ways in which the mediation process itself can be sculpted to the needs of the parties and the issues at hand.  It begins with the basic format for the interactions among the parties and the mediator.  Many neutrals will have discussions with the parties before the mediation session to help them create the most effective process for resolution.  Many times the mediation session will start with a joint session with the parties. Or it can start with separate meetings with business persons and counsel.  This intermingling of joint discussions and separate private caucuses will continue during the mediation session.   At some points, the mediator, after conferring with counsel, may arrange for the principals to meet by themselves.

Skillful mediators regularly use further telephone communications, e-mails and other means to funnel important information into the mediation process to provide an objective foundation for negotiations.  Mediators may seek submission of joint or separate materials from the parties on legal or factual issues, or reports on key technical issues.

This inherent flexibility extends to mediated settlement terms reached, embodied in a written settlement agreement that could include monetary terms, payment terms, terms to continue the business relationship, and other terms.  Mediation offers an opportunity to sculpt solutions that are well beyond the limited remedies of court proceedings and judge or jury verdicts.  Parties involved in the mediation process are also more likely to comply with self-formulated agreement terms rather than those imposed by a court.

Preserving and enhancing continuing business relationships

Mediating business disputes is not just about dollars and cents. It is about the relationships that exist between the people in business.  A conflict does not necessarily mean the business relationship must end.  Engaging in a consensus decision can allow the parties to continue their business relationship and eliminate the uncertainty or ambiguities that may be complicating an otherwise successful venture. Litigation can end otherwise profitable relationships prematurely.  Many business leaders understand the importance of using mediation to build and keep good customer and employee relationships.

Mediation can restore trust where business relationships have turned sour.  Parties used to be partners, used to act together to fulfill their common interests, but have now lost faith in each other.  Using mediation is a method that can help restore dialogue and confidence.

Types of Business Disputes MDRS has Resolved:

While virtually any business dispute, large or small, can be effectively resolved by mediation, MDRS over the past 22 years has resolved business cases including, but not limited to:

Breach of contract – Claims of fraud – Lender liability – Embezzlement  –  Tortuous interference with contract –  Shareholder disputes –  Antitrust – Professional liability -Anti-competition – Copyright and trademark infringement – False, deceptive, unfair trade practices – General contractor/subcontractor disputes – Receiverships – Failed mergers and acquisitions –Sale of businesses and their assets  -Construction contracts – Insurance disputes – Shareholder actions -Disputes between partners, family businesses or members of limited liability corporations – Uniform Commercial Code (“U.C.C.”) claims – Contracts involving the sale of goods, security interests –  Loan transactions and banking procedures  – Foreclosures – Negligent misrepresentation –  Breach of fiduciary duty – Class action lawsuits – Defamation, including libel and slander – Small Business dissolution – Intellectual property claims – Interference with prospective business advantage -Employment disputes – Real estate litigation -Securities and Antitrust violations –Trade secret disputes -Lease and other commercial property disputes –  Corporate, partnership and LLC dissolution lawsuits – franchise conflicts – small and large family-owned companies in disputes over the control and/or operation of the business – Condominium disputes – Collection Actions – Consumer Protection claims – Land Use – Disputes over sales and purchase agreements – Disputes related to claims that services or products were defective.

MDRS Can Help You

If you are a business owner (or their counsel), and are involved in a dispute, small or large, call MDRS at (800) 536-5520  to discuss what we can do for you.  There is an alternative to the time, expense, aggravation and uncertainty of going to court.  Now, More Than Ever, ADR is the Answer.

Bruce von Rosenvinge, Esq.

20130918_083038Needham, Massachusetts

EDUCATION: New England School of Law (Doctorate of Law, Academic Honors, 1988); Babson College (B.S., Business and Entrepreneurial Studies, 1984)

LEGAL EXPERIENCE: Bruce von Rosenvinge has been a practicing civil trial attorney for oever 25 years specializing in Environmental litigation under Massachusetts General Laws Chapter 21E.  He has handled over 800 hazardous material remediation cases over the past 25 years representing, Land Owners, Responsible Parties, Remediation Entities and Adjacent Land Owners.  He was lead counsel for a leading Massachusetts Oil Dealers Petroleum Insurance Program for over 18 years.  He has handled over 300 mediation and/or arbitrations and has experience in Will Contests, personal injury, lead paint poisoning litigation, and general liability cases.

Kirby and Associates, Boston, MA United States,Litigation Associate, Jun 1988 – Mar 1994; KIrby, O’Brien and von Rosenvinge, P.C., Boston, Massachusetts (MA) United States,Litigation Partner, Mar 1994 – Jun 1998; O’Brien and von Rosenvinge, P.C., Wellesley Hills, Massachusetts (MA) Managing Partner, Jul 1998 – Nov 2009; von Rosenvinge and Associates, Wellesley Hills,  Managing Partner, Nov 2009 – December 2012.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: Admitted to Massachusetts Bar, 1988; United States District Court, Boston, 1988; First Circuit Court of Appeals, Member, Massachusetts Bar Association, Massachusetts Real Estate License.

AREAS OF SPECIALTY:

  • Construction
  • Contract Disputes
  • Environmental
  • Nursing Homes
  • Personal Injury
  • Police
  • Probate
  • Trust/Estate
  • Lead Paint
  • Performing Arts
  • Public Transit

Parenting Coordinators: Who are they and what do they do?

By C. Michele Dorsey, Esq.

No one who watches the news on television or reads a newspaper would be surprised to learn that the incidence and intensity of family conflict is on the rise. Whether it is because of the economy, the introduction of social media or environmental influences, what we do know is that many families are in trouble now and desperately need help.

Unfortunately, children are often caught in the cross-fire of their parents’ conflict, held hostage by the people who love them most, but can’t get out of each other’s way long enough to make sound decisions on their behalf. In these high conflict situations, parents go to war over which extra-curricular activities or sports the children can participate in, where they will attend school and which pediatrician to use.

Sometimes the conflict escalates while the parents are engaged in divorce proceedings but abates once the divorce is finalized and tension dissipates. But for other families, filing a complaint  for divorce is just the execution of a declaration of war which can be waged for decades in a series of battles, leaving parents and children scarred, exhausted and depleted.

These parents are the frequent flyers at the courthouse, returning repeatedly until they run out of money or are more frustrated by “the system” than they are by each other. Some will try mediation to see if they can resolve their disputes out of court, but since mediation is voluntary, often one party opts out in a huff.

Parenting Coordination is a relatively new hybrid form of Alternative Dispute Resolution.  It allows a neutral third-party professional, often a psychologist, social worker or attorney, to work with families who are steeped in deep conflict by first attempting to help them reach a mutual resolution through mediation. Consensus building is the optimal process because it gives the parents control over their own lives and children and also helps them acquire skills to draw upon in future disputes.

For the same reasons that mediation is frequently unsuccessful with high conflict couples, the Parenting Coordinator’s efforts at consensus building can be equally so. But a Parenting Coordinator, either through a court order or an agreement entered by the parties, depending on the jurisdiction, has the authority to issue a binding decision on issues related to the children if the parents are unable to reach an agreement. Either parent can appeal the Parenting Coordinator’s decision to the court, but unless and until a court modifies the decision, it is binding on the parents. Children no longer languish while their parents engage in endless conflict and escape the consequences of the maxim from Harvey Cox : “Not to Decide is to Decide.”

As a lawyer, mediator and former nurse whose professional focus has been on children, I am gratified that a process which places children’s needs above all has been developed. While I am acutely aware of and respect the rights of parents, children must always come first.

C. Michele Dorsey, Esq.

Michele Dorsey

Scituate, Massachusetts

EDUCATION: Quinnipiac School of Law (J.D. 1983); Southern Connecticut State University (B.S. Magna Cum Laude Political Science); Faulkner Hospital School of Nursing (Diploma)

LEGAL AND PROFESSIONAL EXPERIENCE: C. Michele Dorsey began practicing law in 1983, beginning her own firm in 1984. After a career as a Registered Nurse helping families with disabled children, Michele gravitated toward assisting families  who were struggling in the legal system. Michele has concentrated on complex issues in family law in the Probate and Family Court, the Appeals Court and Supreme Judicial Court.

In 1990, recognizing the need for a more constructive way to resolve family conflict, Michele opened one of the first mediation firms on the SouthShore. Michele is an Adjunct Professor of Law at New England Law/Boston where she has taught since 1986, first teaching Family Law and later teaching Mediation beginning in 1995.

Michele now includes services as Parenting Coordinator in her practice, helping parents who are engaged in high conflict to work together on issues regarding their children through an innovative mediation/arbitration role.  She has also served as Guardian ad Litem and as Counsel for children numerous times.

Read her article on Parenting Coordinators here.

OTHER PROFESSIONAL AND PROFESSIONAL EXPERIENCES:  Michele is a member of Association of Family Conciliation Courts(National), Association of Family Conciliation Courts (Massachusetts Chapter). She was the first woman elected to the Scituate Planning Board and currently serves on the Scituate Library Foundation.

AREAS OF SPECIALTY:

  • Divorce
  • Parenting Coordination
  • Multi-generational Family Conflict
  • Health Care
  • Family Businesses
  • Postal

Practice Areas

MDRS is proud of the extensive and proven expertise of our neutrals.  Following are practice areas in which we have successfully assisted our clients through settlement events via usage of differing DR modalities.

  • ADA Disability
  • Admiralty
  • Agricultural
  • Anti-Trust
  • Appellate
  • Arts (Fine, Performing)
  • Automotive
  • Aviation
  • Banking & Finance
  • Bankruptcy/Creditors
  • Biotech
  • Business Dissolution
  • Civil Litigation
  • Civil Rights
  • Class Actions
  • Commercial
  • Community Associations
  • Condominiums
  • Construction
  • Consumer Fraud
  • Contract Disputes
  • Cross Cultural
  • Debt Collections
  • Discrimination
  • Divorce
  • EEOC
  • Education
  • Elder Abuse
  • Eminent Domain
  • Employment
  • Energy Sector (Oil, Gas)
  • Engineering
  • Entertainment Sector
  • Environmental
  • Family Businesses
  • Franchise
  • Health Care
  • Industrial
  • Insurance
  • Intellectual Property
  • International
  • Internet
  • Labor/Unions
  • Land Use/Planning
  • Landlord/Tenant
  • Legal Malpractice
  • Lemon Law
  • Libel & Slander
  • Local Government/Municipalities
  • Media & Communications
  • Medical Devices
  • Medical Malpractice
  • Mergers & Acquisitions
  • Military
  • Mining
  • Mortgage Foreclosure
  • Native American
  • Natural Disasters
  • Non-profit Organizations
  • Nursing Homes
  • Partnerships
  • Pensions/ERISA
  • Personal Injury
  • Pharmaceuticals
  • Police
  • Postal
  • Premises Liability
  • Probate
  • Product Liability
  • Professional Fees
  • Professional Liability
  • Professional Malpractice
  • Professional Negligence
  • Property Damage
  • Public Policy
  • Railroad & Trucking
  • Real Estate
  • Religious Institutions
  • Securities
  • Sexual Harassment
  • Shareholder Disputes
  • Slip and Fall
  • Snow and Ice
  • Software
  • Sports
  • Taxation
  • Technology
  • Telecommunications
  • Title Disputes
  • Torts
  • Trademarks/Patents
  • Transportation
  • Trusts/Estates
  • Unfair Competition
  • Utilities
  • Venture Capital
  • Wage & Hour/FMLA
  • Workers’ Compensation
  • Wrongful Death

Premises Liability

premisesliabilityimage

The Reality of Premises Liability Cases

According to a recent statistic, the National Safety Council reported that slip and fall accidents account for 1 million visits to the ER per year.

Slip and fall cases are common occurrences, but that doesn’t diminish the impact that they have on individual lives. Issues of Premises Liability can often arise in these circumstances and it can be difficult to prove whether the fault is on the injured party or the owner of the property where the injury has occurred. Those involved in these unfortunate accidents deserve fair resolution.

Using Alternative Dispute Resolution to settle these types of cases can often be the best choice for both parties.

Rather than waiting years to resolve their case, victims of a slip and fall accident will see results faster, and both parties will be able to come to an agreeable settlement without leaving the decision in the hands of the court system.

What makes ADR the best choice for resolving these cases?

  • Control – The parties control their case resolution on even ground; choices are not left up to a judge or jury.
  • Communication – Skilled neutrals improve communication among the parties in a guided and controlled setting.
  • Effectiveness – Utilization of ADR enhances the  prospects of settlement and satisfaction.
  • Expedience – ADR allows the participants to fashion their own sets of rules and limitations, and is well attuned to a more streamlined, less time-intensive procedure than going to trial.
  • Economy and Efficiency – ADR allows better management of the parties’ time and money.
  • Fairness – The choice of mediator or arbitrator remains in the hands of the parties; your chosen neutral should have the case experience you need, the legal knowledge you require, and the skillset and demeanor you prefer.
  • Flexibility and Adaptability – In choosing the ADR mechanism most appropriate to the case, parties are able to sculpt the resolution process to meet their needs.

MDRS Premises Liability Expertise:

  • Premises Liability cases
  • Trips and falls due to defective conditions or surfaces
  • Slip and fall accidents involving foreign substances
  • Inadequate or negligent security cases
  • Elevator and escalator accidents
  • Swimming pool injuries or drownings
  • Building, floor or deck collapses
  • Dog bite or animal attacks
  • Accidents caused by snow and ice
  • Fire and smoke damages
  • Inadequate lighting
  • Building code or housing code violations
  • Defective or hazardous conditions
  • Rape or sexual assaults on premises
  • Subrogation claims for property damage or injuries caused to or on premises

Workplace Accidents:

  • Construction site accidents
  • Scaffolding and crane accidents
  • Safety code or OSHA violations
  • Defective tools or equipment
  • Slip, trip and fall on dangerous work premises
  • Toxic chemical exposure
  • Workers’ compensation claims

Now, more than ever, ADR is the answer.

At MDRS we have successfully resolved thousands of slip and fall cases. Please contact us today to learn more about using ADR to resolve your case.

For more information about our ability to assist with your premises liability case, or to book your case to be heard, please call us at (800) 536-5520 or visit us at www.mdrs.com.

 

 

Brian R. Jerome on Trial Court Steering Committee

Brian R. Jerome Invited to Trial Court Standing Committee on Dispute Resolution and the Process Steering Committee for Strategic Planning

As a Court Approved ADR Provider, MDRS, specifically our Director, Brian Jerome, was invited by the Trial Court Standing Committee on Dispute Resolution and the Process Steering Committee for Strategic Planning to attend on May 9, 2013 in Worcester, Massachusetts a meeting on the broad Strategic Planning process underway for changes in the Trial Court.  This meeting was to seek feedback from stakeholders and approved ADR providers about the Trial Court’s strategic plan for the future. An outside consulting firm has been retained to provide a comprehensive plan to the Trial Court on needed changes to improve their delivery of services effectively and efficiently to Court consumers.The provision of ADR services, the use of approved providers, pro bono providers and other groups, funding, and the prior success of, and need for improvements in, the Courts use of conciliation, mediation, arbitration and other ADR processes was discussed and input was provided by the ADR stakeholders present. Recommendations from the ADR providers present included the need for more early conciliation sessions, mandatory or presumptive conciliation and the need for the Judiciary, from the top down, to more effectively promote and direct cases to conciliation and other ADR processes.  When the draft report is produced, MDRS will provide it to our clients and users.

Mediation and Arbitration of Premises Liability Cases

Mediation and Arbitration of Premises Liability Cases
MDRS has handled a wide array of premises liability cases, that is, accidents that occur on the property of another.  The property involved could be a personal residence, a commercial property or public property.  These accidents account for a significant number of personal injury claims and are particularly well suited to resolution by way of mediation or arbitration.  Generally speaking, liability is based upon the requirement that business owners and homeowners have the responsibility under Massachusetts law to maintain their premises in a safe condition for all persons who might reasonably be expected to enter onto the premises.

Types of Premises Liability Cases MDRS Has Resolved:
The range of premises liability cases has significantly expanded with the promulgation of updated Building, Housing and Sanitary Codes, other statutory regulations, developments in the area of warranty and strict liability, increased potential for violation of MGL c.93A, and recent and ongoing changes in case law, such as in snow and ice cases.  A case that illustrates such changing dynamics in premises liability matters is Papadopoulos v. Target Corp., 457 Mass. 368 (2010) in which the SJC overturned the old rule which distinguished liability based upon natural and unnatural accumulations of snow and ice and decided that the same obligation that a property owner owes to lawful visitors as to all other hazards will apply to hazards arising from snow and ice. That is a duty to “act as a reasonable person under all of the circumstances including the likelihood of injury to others, the probable seriousness of such injuries, and the burden of reducing or avoiding the risk.”  Another example of a changes in Massachusetts in premises case law is Sheehan v. Roche Brothers Supermarkets, Inc., 448 Mass.780 (2007) which somewhat lightened plaintiff’s burden of proof in regard to self-service retailers in slip and fall cases.

Our panel of MDRS neutrals have extensive, up to date experience in all matters involving premises liability.  Though in the past “premises liability” was associated by many primarily only with trip and fall or slip and fall cases, MDRS has resolved a broad array of premises cases, including, but not limited to, the following:

Trip and falls due to defective surfaces
Falls on defective stairways, steps or pavement, stair collapse, lack of/or defective handrails
Unmarked or uneven stairs or steps
Slip and falls on debris or foreign substances
Balcony, roof, porch and deck defects
Building or floor collapse
Unprotected holes and uneven surfaces
Inadequate Construction Warnings
Accidents caused by snow and ice
Swimming pool accidents, lack of fences, warning signs, or lifeguard negligence
Dog bites and animal attacks
Elevator and escalator accidents
Smoke and fire injuries
Lead paint poisoning
Defects at supermarkets, retail stores and commercial properties causing slips, trips or falls
Defective or dangerous store displays or falling products, shelving in stores
Slips and falls from spilled food, drinks or products
Accidents involving flooding, water leaks, oil leaks or spills
Inadequate lighting on property, parking lots, staircases
Injuries caused by chemicals or toxic fumes, explosions or electrocutions
Injuries involving Building code, Housing code or Sanitary code violations
Failure to maintain residential or commercial premises
Assaults and wrongful death from negligent security
Inadequate security involving nightclubs, bars, or entertainment venues
Sexual assault, battery or rape due to inadequate or negligent security
Construction site accidents
Subrogation claims involving premises accidents

Liability may extend beyond the property owner:
Ordinarily it is the property owner who is the defendant in premises liability cases.  However both commercial and residential property owners often lease all or parts of their property to tenants, who may have responsibility, by the terms of a lease or otherwise,  for property maintenance.  Contractors working on, or who have worked on, the property involved may have responsibility for premises accidents.  Architects, engineers, training organizations, property maintenance or management companies and plowing or landscaping contractors are often seen as defendants in premises cases.  Some larger businesses are self-insured or have a self-insured retention policy with an insurer.   As in many cases, the availability of insurance is an important component in premises liability cases, whether it be homeowners or renter’s insurance covering personal residences or apartments, or commercial insurance policies covering businesses.  Often, an insurance policy covering premises contains a medical payments provision which could provide payment for a limited amount for medical bills incurred by an individual injured on the covered premises, without the need to prove fault.

Why Mediate or Arbitrate Your Premises Liability Case With MDRS?

Save Time and Expense:
Ordinarily, to prove a premises liability case the plaintiff must prove that the owner knew or that reasonably should have known about the condition which caused the injury.  Experience suggests that the issue of liability in premises liability cases is most often contested by premises owners and comparative negligence on the part of the plaintiff is often alleged.  As a result, lengthy and costly litigation and discovery is usually involved.  Often liability experts are retained by both parties to provide their opinions on matters such as whether the conditions involved are defective or hazardous, the cause of these conditions and whether any building or housing codes or other applicable regulations or industry standards have been breached.  Expert site visits and narrative reports can be very expensive, as can be the attendance of experts as witnesses to testify at trial.

These costs and high legal fees associated with lengthy litigation can be overly burdensome to the parties as well as to the insurers who are usually involved.  ADR provides a more economical and efficient mechanism to resolve these cases than reliance on the unwieldy and impractical process offered by the Court.  Cases submitted to mediation or arbitration with MDRS can often be scheduled for hearing within days of submission, depending on the needs and availability of the parties.  Final and binding arbitration decisions are generally rendered from 10 to 20 days from the close of the hearing.

Avoid The Uncertainty of Lay Jury Verdicts / Minimize risk:
Perhaps no other type of case involves more jury verdict uncertainty, for plaintiffs, defendants and Insurers alike, than premises liability matters.  Contested issues such as the applicability of Building and Sanitary Codes or other statutory regulations, increasing claims for breach of warranty and strict liability, and potential violations of MGL c.93A, add to the risk to all parties in relying on a lay jury for a binding resolution.

Mediating these premises liability cases with an experienced neutral has a success rate of over 90%.  The parties can control the outcome of a mediation and generally reach a negotiated resolution that meets their specific needs.   In the alternative, a binding arbitration before an experienced neutral can serve to minimize the risks involved in placing premises liability cases in the hands of a lay jury.  If a jury trial is requested, ordinarily the decision makers on the jury have no experience in the law or in the valuation of cases.  An experienced neutral will have familiarity with, and the ability and attention to comprehend applicable building codes, other regulations, and the case law in the area involved, and is more likely to reach a more predictable and appropriate decision than a lay jury.  Another alternative, a high-low arbitration, where the applicable award of the arbitrator is capped by a minimum and maximum amount (generally not disclosed to the arbitrator) can also minimize the high risks faced by plaintiffs and defendants in proceeding to a jury trial.  The parties can tailor a dispute resolution process that will work best for them based on each individual case, and can retain greater control over the manner in which their dispute is resolved than they would if they opted for trial in the court.

Convenience:
With MDRS, the parties select a mutually convenient time and place for a hearing. Last minute postponements and delays, often resulting when a court is not ready for the case to commence as  scheduled, are avoided by using ADR.   Last minute calls by court clerks saying that the court needs you  to commence trial tomorrow do not occur when using ADR.

Privacy/Finality:
For many parties, an important advantage of ADR is the private resolution of their dispute. This is often the case where reputational interests are involved, such as a business involved in a premises liability case, or where the parties wish to limit public access to documents, exhibits, pleadings and testimony. An ADR arbitration hearing or mediation session takes place in a private office setting and not in an open court room with spectators. A related concern of some parties may be avoiding a reported decision where an adverse precedent would encourage the filing of additional cases against the party. Another important advantage of ADR to many parties is that except in certain rare circumstances, the arbitrator’s decision is final and is not subject to appeal, which could take years, require significant further costs and result in continued uncertainty.

Conclusion:
We hope that you will consider submitting your premises liability case to MDRS for a prompt,  economical and fair resolution for you and/or your client.  We are happy to answer any questions you may have.  Kindly contact us by telephoneat  (800) 536-5520, or email us at caseadmin@mdrs.com.   Please visit our website for more information www.mdrs.com.

Karen Thome Guthrie, Esq

karentguthrieKaren Thome Guthrie, Esq.
Andover, Massachusetts

EDUCATION: New England School of Law (J.D. 1995); Cornell University (B.A. 1988)

LEGAL EXPERIENCE:  Karen Thome Guthrie has been a civil litigator in Massachusetts since 1995 and has extensive experience in ADR.  Karen employs a very wide range of experience and is an excellent choice for a great majority of mediation and arbitration cases; her primary practice areas include all types of personal injury cases, tort, business and commercial litigation, contract disputes, and real estate cases including condominium disputes, landlord/tenant, boundary disputes and property damage.  Karen’s significant experience with domestic relations, divorce, and custodial cases make her a positive choice for all types of family disputes.   As a trial attorney for over twenty years, representing plaintiffs, defendants, and insurers, Karen has represented clients in the Superior, District, and Probate courts. She has had extensive mediation and arbitration training, and has had excellent results using ADR throughout her law career.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS:  Attorney Guthrie has been a member of the Massachusetts Bar since 1995, and is a current member of the Massachusetts Bar Association.  She completed mediation training in accordance with M.G.L. ch.233 sec.23C and has a mediation certificate from MWI in Boston, MA.   She volunteers as mediator and conciliator for Lowell and Ayer District Courts, and is also on the neutral panel of New England Dispute Resolution.

Attorney Guthrie currently has her own civil litigation practice and is of counsel to Cossingham Law Office, P.C. in Andover, Massachusetts.

AREAS OF SPECIALTY:

  • Banking & Finance
  • Commercial/Business
  • Condominiums
  • Construction
  • Consumer Fraud
  • Contract Disputes
  • Debt Collections
  • Divorce/Custody/Family Law
  • Insurance
  • Land Use
  • Landlord/Tenant
  • Nursing Homes
  • Personal Injury
  • Premises Liability
  • Property Damage
  • Real Estate
  • Title Disputes
  • Wrongful Death

Using ADR to Resolve Slip and Fall Accidents

Premise liability occurs when injury is suffered on property belonging to another person or business.  Whether it is the conditions of the land, or activities performed, issues often arise in determining fault. When personal injury occurs it is often the first response to assign causality for the accident, but it can be difficult to prove whether the fault is on the injured party or the owner of the property where the injury occurred – often times there is no clear answer.  Using Alternative Dispute Resolution to reach an agreeable settlement in these types of cases is often the best choice for both parties.

Slip and fall accidents, in particular, are common occurrences.  According to the National Safety Council, slip and fall accidents account for 1 million visits to the ER per year. While the repercussions of slip and fall accidents can vary from minor scrapes and bruises to serious injuries, the accidents often leave the victim in physical and/or emotional pain.  If you are the victim of a slip and fall, or if you are the owner or resident of the location where the accident occurred, consider this:  litigation is often not the best way to handle the incident. When brought to trial, slip and fall cases are highly uncertain and can result in a long, drawn-out process with an extremely unpredictable outcome. Often times, fault is shared and an accident is just that – an unfortunate accident.  With litigation, both parties are subjected to a long, grueling and costly trial that can be avoided by instead utilizing ADR.

As the victim, you are experiencing pain and suffering, and yet during a trial you must prove that the property owner’s negligence caused the accident — not a simple or comfortable task, especially if you wish to preserve the relationship.  As the property owner, you likely feel badly that someone was injured, and are just as anxious to resolve the issue.  With Alternative Dispute Resolution, your case can be heard, and it can be resolved quickly and fairly, with an outcome agreeable to all parties.   MDRS has skilled and knowledgeable neutrals, with a wide breadth of experience in premise liability and slip and fall cases. Contact us at (800) 536-5520.  We’ll help you come to a settlement quickly, easily, and inexpensively.

DR and Automobile Claims

Founded in 1991, MDRS has perhaps mediated and arbitrated more automobile claims of all types than any other DR provider in Massachusetts.  Automobile related claims are particularly suited to the processes of dispute resolution, which are designed to meet the parties’ interests in resolving these cases equitably, economically and skillfully, and avoiding the time, expense, and uncertainty of trial in the Court system.  Over the past years, the inability of the Court system to appropriately adjudicate the array of automobile claims has become even more pronounced to legal consumers.

MDRS has attempted to maintain our reasonable fee structure for automobile related claims and the present fees for a standard mediation session or arbitration hearing are but $575.00 per party, much less than parties would expend in bringing their case through litigation to a distant trial in the traditional Court system.  MDRS also offers what we see as the best available panel of experienced neutrals with extensive substantive experience in mediating and arbitrating automobile claims.  We have resolved thousands of automobile cases, including, but not limited to:

-Automobile bodily injury cases, ranging from soft tissue injuries to wrongful death cases

-Pedestrian accidents

-Motorcycle, moped and bicycle accidents

-Trucking, Commercial Carrier and Disabled Transport Claims

-Lemon Law Claims

-Automobile coverage disputes

-Personal Injury Protection Claims

-Uninsured Motorist Claims

-Underinsured Motorist Claims

-MGL c. 93A and 176D claims

-Automobile Insurance Fraud or SIU Claims

-Automobile Subrogation and Third party claims

The DR processes most commonly sought at MDRS for resolving automobile claims are mediation, arbitration, and high-low arbitration.

In mediation an experienced neutral selected jointly by the parties assists them in negotiating and resolving their own dispute.  The mediator has no authority to impose a settlement and the parties are under no obligation to reach agreement.  The mediator may, but need not, suggest his or her own settlement evaluation.  Mediation proceedings are private and confidential and the substance of the discussions in mediation is generally considered privileged.  More than 95% of cases mediated with MDRS reach settlement.

In arbitration a binding decision is made by a neutral arbitrator, or panel of arbitrators, selected jointly by the parties after a hearing is conducted which involves the presentation of evidence and arguments by the disputants.  This process most closely resembles a trial in the courts.  In most arbitrations, however, the rules of evidence are somewhat relaxed and there can be more limited pre-hearing discovery.  The award of the arbitrator, except in limited rare circumstances, is final and not subject to appeal.

High-low arbitration is a process designed to minimize the risks of both parties in proceeding to binding arbitration and is being used more and more by parties, attorneys, and insurers in automobile claims.  In advance of the hearing the parties agree in writing to a minimum and maximum arbitration award.  The decision of the arbitrator is binding but can be no less nor more than the minimum and maximum limits that the parties previously agreed to.  Generally the arbitrator is not made aware of the high and low limits chosen by the parties, so as not to be influenced by these limits in making their award.  This process can be used effectively when parties have made some progress in their negotiations and wish not to abandon the progress made, but rather choose to have an impartial arbitrator resolve the differences remaining within set limits.  It may also be used to cap any award by the amount of automobile insurance available.

Automobile Bodily Injury Claims:

Over the past 25 years, perhaps no other type of claim has been the subject of more DR processes than cases brought by plaintiffs suffering injury in automobile accidents.  This is because DR is a more efficient, economical, fair and flexible process than is presently offered by the Courts to effectively resolve these claims.  Plaintiffs, defendants, counsel, and insurers all can appreciate the inherent benefits of DR in such cases.  Unlike the Courts, DR affords participants the opportunity to sculpt the resolution process to the particular case.  Participation in DR in automobile bodily injury cases is voluntary and not mandated by the automobile insurance contract, unlike uninsured and underinsured motorist claims.

If the parties cannot negotiate a settlement on their own, mediation affords them the opportunity to work with an experienced, professional neutral to reach their own resolution.  MDRS mediators are experts at bringing parties from dispute to settlement.

Unlike trial in the Courts, binding arbitration allows the parties to schedule a hearing at their convenience, both in time and place, before an arbitrator of their own choosing.  MDRS is ready for the hearing on the date scheduled, unlike the case often with the Courts.  A hearing will be conducted in a private conference room, not in a public courtroom and the decision is issued is accompanied by a reasoned opinion, unlike the results of a jury trial.

An MDRS Arbitration Agreement  is signed by all parties.  MDRS Arbitration Rules are provided to the parties and by agreement they are applicable to the arbitration process.  Evidence to be submitted at the arbitration hearing is to be produced to the opposing side no later the 10 days before the arbitration hearing (MDRS Rule 16).

Before the arbitration hearing begins, the parties can enter into stipulations that could streamline the hearing, such as whether liability is contested or acknowledged, whether and to what extent elements of damages are contested, such as medical bills, lost wages and/or offsets to be taken from any total award, such as for Personal Injury Protection [PIP] Benefits paid.  The process of introducing evidence can also be made more efficient and understandable than the rules of procedure dictated by the Courts.  The rules of evidence can be somewhat more relaxed, but not at the expense of fundamental fairness and reliability.  Witness testimony is taken under oath.  Counsel, or parties if not represented, can make opening and closing statements.  Signed affidavits, narrative medical reports and other business records can often be admitted.

After the close of the hearing a written reasoned award is issued, usually within 14-30 days.  The award has the same effect as a jury award and is enforceable in any Court of competent jurisdiction.

As indicated above, the parties may also choose to enter into a High-Low Arbitration Agreement, usually kept confidential from the arbitrator, that limits any award to the high and low amounts agreed upon.

By using DR with MDRS, parties to automobile bodily injury cases can achieve resolution of their case expeditiously, economically, fairly and finally, which is, after all, what all parties involved in these matters are seeking.

Uninsured and Underinsured Motorist Claims:

Section 113L. states in pertinent part…(1) No policy shall be issued or delivered in the commonwealth with respect to a motor vehicle, trailer or semitrailer registered in this state unless such policy provides coverage in amounts or limits prescribed for bodily injury or death for a liability policy under this chapter, under provisions approved by the insurance commissioner, for the protection of persons insured there under who are legally entitled to recover damages from owners or operators of uninsured motor vehicles, trailers or semitrailers and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death resulting there from; and, subject to the terms and conditions of such coverage, such coverage shall include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency.

Briefly stated, benefits payable under underinsured motorist coverage are limited to a maximum of the difference between the applicable limits of underinsured motorist coverage and the amount collected from the tortfeasor’s liability coverage.  Under the terms of the statute, the tortfeasor vehicle qualifies as “underinsured” only if the applicable limits of liability coverage are less than the claimant’s limits of underinsured motorist coverage.

If the insurer and the claimant are unable to agree on issues of liability (the purported tortfeasor’s negligence) or damages, those issues must be resolved through arbitration.  No defense to coverage or arbitration lies solely on the basis that the claimant may have settled with the tortfeasor’s insurer for less than the tortfeasor’s limit of liability coverage.  However, in such cases, the underinsured motorist carrier is entitled to an offset reflecting the full amount of the tortfeasor’s available liability coverage limit.  All fact finding functions involved in determining liability and damages are subject to the automobile policy’s arbitration clause.

An insured who intends to pursue an underinsured motorist claim should obtain the consent of the insurer prior to settlement with the tortfeasor.  Insurers consenting to settlement are nevertheless not precluded from contesting liability in connection with the underinsured motorist claim.  There is a six-year statute of limitations applicable to uninsured/underinsured motorist claims.

Ordinarily, the amount of UM coverage available is not disclosed to the arbitrator at the arbitration hearing.  Often, the amount of the underlying recovery from the tortfeasor and the amount of Personal Injury Protection Benefits paid, both of which will offset any total award of damages, are disclosed, by agreement of the parties, to the arbitrator.

Personal Injury Protection Benefits (PIP) Claims:

Briefly stated, Personal Injury Protection or “no-fault” benefits require an automobile insurer to pay reasonable and necessary medical and funeral expenses incurred within two years of the accident, lost wages of up to 75 percent of the injured person’s average weekly gross wage or equivalent for the year immediately preceding the accident (if employed at the time of the accident) or of up to 75 percent of the injured person’s actual loss of earning power (if not employed at the time of the accident); and replacement services paid to someone outside of the injured person’s household to perform necessary services that the injured party would have otherwise performed if not for his or her disability resulting from the accident.

Persons entitled to PIP benefits include anyone occupying the insured vehicle with the insured’s consent; the named insured or anyone else living in his or her household if injured either while occupying or struck by an auto that does not have Massachusetts compulsory insurance; and any pedestrian struck by the insured’s automobile in Massachusetts, or any Massachusetts resident struck by the insured’s automobile outside of Massachusetts who was a pedestrian at the time.

MGL c. 90 Section 34M, includes, in pertinent part, this language:  In any case where benefits due and payable remain unpaid for more than thirty days, any unpaid party shall be deemed a party to a contract with the insurer responsible for payment and shall therefore have a right to commence an action in contract for payment of amounts therein determined to be due in accordance with the provisions of this chapter.  In any such action commenced in the district court in the judicial district in which the unpaid party resides, the court shall, upon the filing of an answer by the insurer and upon the motion of the unpaid party, advance the action for a speedy trial.  If the unpaid party recovers a judgment for any amount due and payable by the insurer, the court shall assess against the insurer in addition thereto costs and reasonable attorney’s fees.

The statutory language above concerning actions in contract for payment of PIP, as well as the allowance of reasonable attorney’s fees and costs, has resulted in a volume of PIP claims begin presented on behalf of insured parties as well as medical care providers.  Particularly with the exposure of costs and attorneys fees being awarded in the event of a judgment in any amount, insurers may be particularly interested in the expedience and economy offered by DR to resolve these claims.  Over the past years MDRS has mediated and arbitrated many of these PIP cases.  On a number of occasions several claims by a particular insurer or a medical care provider have been submitted together to streamline the resolution process in these matters, made possible with the flexibility afforded by the DR process.

Summary:

MDRS is particularly suited to handle automobile claims of all varieties in a manner that affords expedience, economy, fairness, and finality to parties, attorneys, and insurers.  Should you wish to schedule your case or have any questions please call us at (800) 536-5520.

MED-ARB: Sculpting the ADR Process To The Case

Both mediation and arbitration are now familiar and popular ADR processes used to resolve an ever broadening array of disputes. Over the past years, these two processes have literally transformed the legal landscape such that parties and their counsel are viewing ADR as a more appropriate manner of resolving disputes than is offered by Courts.

Less familiar, and to some observers more controversial, is the hybrid ADR process called MED-ARB, where the parties agree in advance to present their case to a mediator and, should that process not result in a final settlement, the case will be submitted to binding arbitration. In its “pure” state, the same neutral is selected to serve as both mediator and arbitrator.  As an alternative, a separate neutral can be selected to serve as arbitrator should the matter not fully resolve at mediation.

 

The Advantages of MED-ARB:

It is our experience at MDRS that MED-ARB offers legal consumers perhaps the most flexible ADR mechanism available, allowing parties to sculpt the resolution process to meet the needs of the specific case.  The “best way” to resolve the dispute takes on utmost importance and substance prevails over form.  Other advantages of this process include efficiency in time and money, enhanced prospects of settlement at the mediation stage and, most importantly, a process that assures finality.  MED-ARB gives the parties the opportunity to engage in the cooperative aspects of mediation, while providing the parties the certainty of a final decision.

If the mediation fails, or should all of the issues not be resolved, the parties do not have to hire another neutral to render an award.  Instead they can simply continue with the same neutral who likely already knows most of the information necessary to make a decision. This also means that the arbitration phase has the potential, by agreement, to be streamlined or presented in a summary fashion not possible in a formal arbitration conducted by a different neutral.

A complete mediation can be held and a separate arbitration hearing can be scheduled for a later time. Often however, a MED-ARB is scheduled to run consecutively, with the arbitration stage commencing immediately should the mediation not result in full resolution.  The arbitration hearing may be a standard arbitration, with the full presentation of evidence including witness testimony, or it can be a more abbreviated format, subject to agreement by the parties, such as a summary presentation of the case or simply closing arguments.  It is very important however to reach agreement on the methodology to be employed and to memorialize that agreement prior to the commencement of the MED-ARB.

Often the parties will narrow the dispute in the mediation phase so that the arbitration phase of MED-ARB will only have to deal with unresolved issues. They can choose to proceed immediately into the arbitration phase.  Depending on the nature of the dispute involved, the parties have many options available as to the binding arbitration phase. They can, for example, choose to proceed to a “high low” arbitration based upon progress and/or parameters made at or after the mediation session. They can choose to proceed to a “baseball” type arbitration, where the arbitrator decides only whether the last offer or the last demand made at the mediation stage amount will be the binding arbitration award.  This “baseball” process, by definition, limits the discretion of the arbitrator to decide what he or she believes to be the most appropriate solution, one of the most distinctive features of arbitration, since the award must be limited to one of the two offers.  In any event the parties achieve significant savings of time and money over separate mediation and arbitration proceedings, and they are also certain to obtain a resolution of their dispute within a reasonable time.

It is our experience at MDRS that the med-arbiter’s authority to arbitrate those issues unresolved in mediation actually decreases the likelihood that any issues will actually have to be decided in arbitration. The presence of the med-arbiter and the imminence of an arbitrated decision create tremendous incentive for the parties to successfully mediate their dispute.  While some may view this incentive as undue coercion, in proper practice by a skilled neutral this is better characterized as appropriate subtle pressure.  Certainly, it is critical that a neutral be selected who has the skill and experience necessary to exercise this power appropriately and not abuse it.  Most skilled med-arbiters are likely to avoid disclosure of their ultimate opinions on the merits of the case while in the mediation phase, thus reserving their judgment(s) until likely more complete evidence is presented at the arbitration phase agreed upon.  Nevertheless, there appears to be agreement that parties in MED-ARB are more likely to reach a negotiated settlement than in a stand-alone mediation process.

The experience of most ADR providers is that the MED-ARB process also increases the likelihood that parties will participate in the mediation phase in sincerity and good faith knowing that should they fail to reach an agreement they will immediately lose control over the outcome.  Therefore parties are more likely to present more reasonable demands, posture less, and display a more conciliatory attitude than in mediation alone, increasing the opportunity for a more satisfying result for all involved.

Most importantly, the savings of time and money, and the manner in which the parties approach the process are due in large part to the finality that permeates the MED-ARB process.

 

Dealing with Potential Disadvantages of MED-ARB:

Our experience at MDRS is that the advantages of the MED-ARB process outweigh its perceived disadvantages.  These perceived disadvantages can be dealt with appropriately if parties, counsel, and neutrals alike understand the pros and cons of merging the two processes and the nuances inherently involved in the resultant combination.  A detailed MED-ARB agreement, prepared after full disclosure and discussion between the parties and the neutral(s), can appropriately anticipate and deal with the issues raised when the processes of mediation and arbitration are joined within one resolution process.

Issues that arise when combining the processes of mediation and arbitration primarily arise in the “pure” form of MED-ARB, where the same neutral is chosen to serve as both mediator and, if needed, arbitrator.  An understanding of these issues and full disclosure and discussion between parties and the med-arbiter is essential.

 

Use of confidential Information by Med-arbiter at Arbitration: 

Mediators often separate the parties into private “caucuses,” where the mediator receives information that may not be related to the dispute, can be irrelevant, inadmissible or embellished, since it is not provide under oath, and of which the opponent may never learn or have a chance to rebut or cross-examine. The fear is that those things could “improperly influence” a deciding arbitrator and should not be considered by them. Arbitrators, by contrast, customarily apply more strict rules of evidence at a hearing with sworn witnesses and there are no ex parte communications.  The premise of this criticism is that the med-arbiter cannot be completely neutral in the decision-making phase, having gained some information in confidence in the mediation phase.  While this concern is real, judges and lay juries are regularly required to ignore information that has been deemed improper.  A judge presiding over a bench trial is often required to disregard evidence he or she has heard but has subsequently determined to be inadmissible.  Moreover, this issue ultimately rests with the competence of the neutral and the trust the parties place in him or her.

Parties should be aware of the confidentiality issues when considering MED-ARB, but they should be perfectly free to enter into the process so long as the information sufficient to obtain their informed consent has been disclosed. In the case of MED-ARB, the protection is in full disclosure to the parties, informed consent and/or knowing waiver by the parties, proper crafting of the process and a competent, trustworthy neutral.

The parties and neutral should, in advance, agree on what evidence the med-arbiter is allowed to consider should he or she be required to decide the matter in arbitration. For example, all could agree that the arbitrator shall not base his decision on any information obtained at the mediation session.  An example of such a clause in the MED-ARB agreement follows:

The parties agree that no information shared or submitted at the mediation session, whether in joint session or in private caucuses with the mediator are to be considered as evidence in the event that an arbitration hearing is required.  Rather, the arbitrator shall hear and determine the controversy upon the evidence submitted at the arbitration hearing only and shall have the ultimate responsibility to determine the relevancy and admissibility of all evidence.

 

These concerns about confidentiality and due process can also be addressed by the parties in other manners:

-“opt out” variation:  The parties can initially agree to MED-ARB by the same neutral, but either party may opt out of its initial decision to use the same neutral for arbitration after the mediation has concluded.  And, it can solve a problem for a party who doesn’t “hit if off” with the mediator or who is concerned for other reasons about being treated fairly in the arbitration phase. In that event, of course, the ADR process is delayed until the parties select an arbitrator, who will have to climb the learning curve.

-no private caucuses:  Another variation is for the parties to agree there will be no private caucuses  in the MED-ARB mediation phase, thus limiting the ex parte aspects of mediation and the fear that potentially unreliable information gleaned from private caucuses could improperly influence a deciding arbitrator and should not be considered by them.

 -Different Mediator and Arbitrator:  The parties always have the option to select different neutrals for the roles of mediator and arbitrator.  What distinguishes the process from a traditional mediation followed by a traditional arbitration is that both neutrals would be selected before the process begins and the arbitration phase would follow right behind the mediation phase.  This process however is generally more costly and time consuming.

 

Conclusion: 

Although not suitable for every situation, MED-ARB can be a highly effective and flexible dispute resolution mechanism for wide array of disputes.  However, it should only be undertaken after a thorough understanding of the nuances of the process by both parties and the neutral.

A sample full MED-ARB agreement of this type is available here.

If you have any questions about this highly effective and adaptable ADR process, please contact us at MDRS (800) 536-5520.

Recent Cases and Developments in ADR – April 2013

Arbitration – Arbitration Clause in Employee Handbook Not Enforceable

The plaintiff brought suit alleging that her employer, its owner and her former supervisor interfered with her request for maternity leave under the Family and Medical Leave Act and retaliated against her by passing her over for promotion and demoting her to a part-time position. The defendants moved to compel arbitration pursuant to a provision in an employee handbook signed by the plaintiff. The Court denied the defendant’s motion on grounds that the arbitration agreement in the handbook is unenforceable.

In so ruling, the Court noted that the defendants conceded that the handbook is not a contractual agreement between the parties, that the defendants retained the unilateral right to alter the terms of the Handbook without plaintiff’s consent, that the handbook makes clear that its purpose is to provide guidelines to company employees, and that the defendants did not give plaintiff the opportunity to negotiate the terms of the Handbook and likewise did not direct any special attention to the Handbook’s import. Although plaintiff signed the Receipt & Acknowledgment page, that fact, standing alone, is not dispositive of contract formation.

The Dispute Resolution Policy appeared within the handbook and the defendants contend that the executed Receipt & Acknowledgment page operated as a separate and distinct agreement between the parties that gave effect to the terms of the Dispute Resolution Policy. However, the Court adjudged that a fair reading of the Receipt & Acknowledgment page and the Dispute Resolution Policy itself dictates a different result. The specific reference to the Dispute Resolution Policy which states ‘I have read and understand the [Dispute Resolution Policy] and agree to the resolution of any covered dispute in accordance with that Policy,’ appears alongside six other bulleted sentences. One of the later-bulleted sentences reemphasizes the unilateral right to modify the terms, stating ‘… should the content of this Handbook in any way change, Premier Education Group may require an additional signature from me to indicate that I am aware of and understand any new policies.’

“Furthermore, the Dispute Resolution Policy appears before the Receipt & Acknowledgment page, within the body of the Handbook itself. It does not appear in an additional format or on an additional page. In contrast, the Conflict of Interest and Alcohol Abuse Policies appear in a different format after the Receipt & Acknowledgment page; each requires an additional signature, arguably making them distinct from the Handbook itself.

The court concluded that ….”At best, therefore, it is ambiguous whether defendants intended that the reservation of the right to modify the contract applied to the entire Handbook, or the entire Handbook with the exception of the Dispute Resolution Policy. But ambiguities in arbitration agreements must be construed against its drafters. … Accordingly, the Court will interpret the Handbook to grant defendants the unilateral discretion to alter the terms of the Dispute Resolution Policy without having to notify plaintiff. Such discretion makes any agreement, if one even existed, illusory and unenforceable. …

“In sum, defendants retained the ability to modify the terms of the Handbook at their discretion, without notice to plaintiff. Because the Dispute Resolution Policy was a subsection of the Handbook, the power to modify terms also applied to the Dispute Resolution Policy. Defendants thus had the power to require plaintiff to arbitrate the covered dispute, while simultaneously reserving the right to modify the agreement. Such an agreement is not enforceable. Accordingly, defendants are not entitled to arbitration and the motion to compel arbitration will be denied.”

Domenichetti v. The Salter School, LLC, et al. (12 pages) (Saylor, J.) (USDC) (Civil Action No. 12-11311-FDS) (April 19, 2013).

 

Arbitration – Dispute over Condominium Stairs Requires Arbitration Under Trust Documents

In a case where the owners of the units in a two-unit condominium have been engaged in a dispute over the stairs leading to the front doors of the units, the Court ruled that the defendant’s motion to compel arbitration should be allowed based on the terms of the condominium trust and the commonwealth’s public policy favoring arbitration of disputes.

The parties’ dispute stemmed from the reconstruction of the front stairway leading up to the condominium. For purposes of this motion, the Court found that that this is a ‘common area’ and thus, subject to the By-Laws governing common areas, which states ‘All maintenance, and replacements of and repairs to the common areas and facilities as defined in the Master Deed … shall be made by the Trustees and shall be charged to each of the Unit Owners as a Common Expense.’ …

The Trust also contained a section entitled ‘Disputes’ which reads that ‘[a]ny Unit Owner aggrieved by any decision of the Trust in the administration of the Condominium may, within (30) days of the decision or action of the Trust, appoint an arbitrator. The Court found that whether through oversight, the use of boilerplate language, or otherwise, this provision creates impossibility: the only manner for resolving a dispute requires the unit owners to act unanimously in creating the dispute.

Interpreting this provision so as to give it meaning, this Court found that Nancy Marks, as a Unit Owner, was aggrieved by a decision of the Trust, namely Shawn McNamara’s decision, in his role of Trustee, to refuse to permit construction to go forward on the common area. … Alternatively, this Court could find that Ms. Marks acted in her role as Trustee when she decided to begin work on the common area, making Mr. McNamara the aggrieved unit owner.

In reaching the determination that arbitration is the appropriate course, the Court also noted that an April 29, 2010 letter from the McNamara’s predecessor counsel to Ms. Marks requesting that the parties arbitrate this dispute. In 2010, the plaintiffs recognized the availability of arbitration, it would therefore be inconsistent to claim that this same arbitration clause is now inapplicable.

The Court found that “Ms. Marks has not expressly or impliedly waived her right to arbitrate. … Here, the demand for arbitration was made immediately after the filing of this lawsuit. While the delay in filing the lawsuit may have been attributable to the defendant, this Court cannot affirmatively say she waived her contractual rights. …”

McNamara, et al. v. Marks, et al. (3 pages) (Curran, J.) (Middlesex Superior Court) (Docket No. 12-CV-0750-F) (April 10, 2013).

 

Arbitration – Counsel Fees Allowed in FINRA Case

In a case where the parties agreed to abide by any arbitration award rendered, the Court ruled that the arbitrators were acting within the Financial Industry Regulatory Authority (FINRA) guidelines by awarding counsel fees.

The plaintiffs argued that in the absence of a contractual agreement, statutory authority, or a joint agreement, counsel fees are generally not recoverable. … The defendants countered, and the arbitrators agreed, that pursuant to the ‘Registered Representative Agreement’ (RR agreement) and the rules of the Financial Industry Regulatory Authority (FINRA) to which the plaintiffs agreed to be bound, the circumstances of this case permit attorney’s fees. The judge agreed with the defendants, holding that according to the FINRA Dispute Resolution Arbitrators’ Guide, attorney’s fees are allowed when the contract includes a clause that provides for the fees and the all of the parties request or agree to such fees, as was the case in this matter. As the arbitration award did not violate the law, the judge confirmed the award.

The record revealed that the plaintiffs filed a FINRA ‘Arbitration Submission Agreement’ stating that they would agree to abide by any award rendered. The parties filed several claims and asked for attorney’s fees to be decided as part of the arbitration award. The Court noted that under the FINRA Dispute Resolution Arbitrators’ Guide, attorney’s fees may be included in an award under certain circumstances, such as when all of the parties request or agree to such fees and found accordingly, as identified in the arbitration award, the arbitrators were acting under FINRA’s guidelines by awarding such fees.

Kaplan, et al. v. Shanahan, et al. (4 pages) (Appeals Court – Unpublished) (No. 12-P-356) (April 10, 2013).

 

Arbitration – Award in Employment Dispute Upheld

In 2010, the plaintiff employer was awarded damages due to the defendant employee’s breach of a non-competition clause. In 2012, the defendant was awarded damages pursuant to an unlawful retaliation lawsuit. The defendant then sought to vacate the 2010 arbitration award given the findings in the 2012 lawsuit, the defendant is unable to show that the 2010 award should be vacated under either 9 U.S.C. §10(a) or F.R.C.P. 60(b)(2).

The Court found that “… Once an arbitration award is confirmed it is given the ‘same force and effect’ as a ‘judgment in an action’. … The plain language of 9 U.S.C. §10(a), the section of the Federal Arbitration Act under which defendant raises most of his arguments, does not pertain to a confirmed award which has become a final judgment of the court. …

The Court found that although defendant raised several arguments under 9 U.S.C. §10(a), the Court reviewed his motion and the arguments contained therein under the standard set forth in case law interpreting F.R.C.P. 60(b), which itself provides relief that is ‘extraordinary in nature’ and which ‘should be granted sparingly’, and that “It is clear that defendant’s complaints do not merit the extraordinary remedy that he seeks. …

The Court found that the Defendant’s argument is deficient even when construed as an attack on the 2010 Arbitration Award rather than on this Court’s final judgment, and that a review of the 2010 Award demonstrates that the arbitrator analyzed the non-compete provision under the applicable legal principles and upheld the provision. Defendant cites no binding authority that the arbitrator neglected to consider and, as a result, the Court must still defer to her conclusion.

The Defendant entered into an employment agreement for consideration. That contract included both a two-year non-compete clause and an arbitration provision. He has contested the 2010 Arbitration Award on three occasions and has lost each time. The Court stated that…”Should defendant defy a valid attempt by plaintiff to execute upon the judgment of this Court, he will be held in contempt and sanctions will be imposed.”

Lumber Liquidators, Inc. v. Sullivan, (9 pages) (Gorton J.) (USDC) (Civil Action No. 10-11890-NMG) (March 28, 2013).

 

Arbitration – Arbitration Clause Found Not Enforceable in Home Improvement Case

An Essex County Superior Court judge awarded summary judgment to the plaintiff homeowners in a dispute with the defendant home improvement contractor.  The Court affirmed this judgment despite the defendant’s assertion that the dispute should be arbitrated in Worcester County.

The contract signed by the homeowner and the contractor had this arbitration clause embedded into the middle of a paragraph indicating…‘Should disputes arise after commencement of work and parties cannot come to an agreement customer agrees that all and any disputes shall be settled through arbitration in county where the business Keller Waterproofing & Foundation LLC resides.’  The defendant argued that G.L.c. 251, the Massachusetts version of the Uniform Arbitration Act, and the strong public policy in favor of arbitration, required the Court to reverse the order from the Essex County Superior Court and compel arbitration in Worcester County. The plaintiff countered that the arbitration provisions of G.L.c. 142A, which govern home improvement contractors, supersede those of G.L.c. 251 in this case, and the Court agreed.

The Court found that while the defendant is correct that G.L.c. 251, §1, controls arbitration provisions generally, that is not the case here. The defendant is a home improvement contractor; the plaintiff, a homeowner. The legislature has adopted a series of laws that govern the relationship, including arbitration procedures, between home improvement contractors and homeowners. Based on the familiar tenets of statutory construction, the Court found that G.L.c. 251 must yield to G.L.c. 142A, when these parties are involved.

The Court agreed with the Essex County judge who found that the arbitration provision agreed to by the parties contained deficiencies prohibited by G.L.c. 142A, and that in the absence of an approved provision for arbitration in a contract, G.L.c. 142A gives homeowners the right to seek arbitration should a dispute arise, but contractors are not afforded the same right. See G.L.c. 142A, §3. The Court found that if contractors include an arbitration provision in a contract, they may do so only with a provision that is ‘clearly and conspicuously disclosed in the contract, in language designated by the director, and that each party separately signs and dates the provision, thereby assenting to the procedure.’ G.L.c. 142A, §2. See also 201 Code Mass. Regs. 14.03(4) (2003). The Court found that the arbitration clause here meets none of these requirements. It is contained in the middle of a long paragraph and is not distinguishable, whether by size, font, or color, from the rest of the text. Nor does the language match, or even closely approximate, that of the director’s as outlined in 201 Code Mass. Regs. 18.05(e). Finally, the parties did not separately sign and date the provisions. Accordingly, the provisions of G.L.c. 142A generally, and G.L.c. 142A’s arbitration provisions specifically, supersede the provisions of G.L.c. 251 under the facts of this case, and the Court ruled that the judge properly awarded summary judgment to the plaintiff in the declaratory relief action.”

Mamaril, et al. v. Keller, et al. (7 pages) (Appeals Court – Unpublished) (No. 12-P-827) (March 15, 2013).

 

Arbitration – Police Officer Reinstatement Does not Contravene Public Policy

Where a Superior Court judge confirmed an arbitrator’s decision to order the reinstatement of a police officer who had been terminated, the arbitration award did not contravene public policy, so the Superior Court judgment must be upheld.

The plaintiff, the city manager of the city of Worcester, contended that the arbitrator’s decision infringes on the city’s managerial prerogative and otherwise violates public policy by requiring the city to retain an officer who (i) violated three teenagers’ constitutional rights and (ii) engaged in felonious conduct by assaulting the teenagers without cause. The plaintiff also argues that the arbitrator exceeded his authority under the applicable collective bargaining agreement (CBA) by improperly interpreting and applying various statutory, regulatory, and other administrative rules incorporated therein. The judge was not persuaded that the arbitrator’s decision to reinstate the officer amounted to a violation of public policy and confirmed the arbitration award.

Affirming this award, the Court stated… “It seems clear that the city’s claim meets the first two of three criteria for application of the public policy exception. The critical issue here is the third: whether ‘the arbitrator’s award reinstating the employee violates public policy to such an extent that the employee’s conduct would have required dismissal.’ … This factor cannot be met ‘by the expedient of ignoring the arbitrator’s finding’ that [David] Rawlston had acted reasonably under the circumstances and had not violated the rights of the teenagers, nor used excessive or improper force, nor had improperly used his firearm. …

“In Boston v. Boston Police Patrolmen’s Assn., 443 Mass. [813, 819 (2005)], unlike the case at bar, the arbitration award was vacated as a violation of public policy because the arbitrator ordered reinstatement in spite of having made findings showing egregious conduct, including ‘that [the officer] had falsely arrested two individuals on misdemeanor and felony charges, lied in sworn testimony and over a period of two years about his official conduct, and knowingly and intentionally squandered the resources of the criminal justice system on false pretexts.’ …

“Here, the factual and legal underpinnings necessary to the application of the public policy exception is lacking. The arbitrator did not issue an award of reinstatement that flies in the face of factual findings of misconduct; there is no inconsistency between the findings of the arbitrator and his award of reinstatement.”

O’Brien v. New England Police Benevolent Association, Local 911 (9 pages) (Fecteau, J.) (Appeals Court) Case heard by Budd, J., in Superior Court. (Docket No. 12-P-155) (March 1, 2013).

 

 Conciliation training guidelines modified 4:29 pm Thu, March 7, 2013 

Trial Court Chief Justice Robert A. Mulligan has approved a change in the qualification training requirements for court-connected conciliators, as recommended by the Standing Committee on Dispute Resolution.

The amended guidelines, which took effect March 1, permit those who have completed an approved mediation training program to serve as conciliators in a court-approved program, subject to the approval of the conciliation program and the completion of the necessary court orientation.

Accordingly, Article III of the Alternative Methods for Conciliators in the Guidelines, implementing Rule 8 of the Uniform Rules on Qualification Standards for Neutrals, has been amended to include: “Completed the training requirements for a Mediator, as set forth in Rule 8(c) in addition to a court orientation as an approved Conciliation Program requires.”

MDRS About Town

IMG_3243-smallThis Spring, Brian Jerome has helped lead a variety of ADR-related events in the Boston area.  Here are a few of the places where he has been.

In March, Brian participated in, and helped present, a Mediator Training Program at Salem Bar Advocates with Attorney Michael Merriam.

In February, Brian helped present an Insurance Training Seminar for Claims Handlers at The Hartford in Connecticut with Ryan Hamilton of Resolute Systems.

Earlier this month, Brian participated on an ADR Panel at Northeastern University Law School with Judge Judith Dein and Attorney Michael Zeytoonian.

On April 18, Brian participated in a Mock Mediation Training at New England School of Law with Professor C. Michele Dorsey

Looking for Signs of Nursing Home Abuse

 

Taking care of aging parents is a difficult job.  Turning to adult day care and nursing homes for assistance are sometimes unavoidable arrangements.  This decision is often times inescapable – whether it is because of hectic work schedules, caring for young children, or medical handicaps that make home care impossible.  At MDRS, we understand how hard the decision to give up day to day control over your loved ones can be.  Therefore, it is fundamentally important that you feel comfortable with the caregivers who take on the daily responsibilities of caring for your elderly loved ones.

Unfortunately elder abuse and nursing home mistreatment does exist and at MDRS we are often called upon by disputing parties to help mediate and arbitrate these types of cases.  If you believe your loved one may be a victim of nursing home abuse then here are some key factors to look for.

An article on USNews.com recently offered “9 Warning Signs of Bad Care.”  Contributor, Kurtis Hiatt, consults Dan Sewall, the director of the senior behavioral health unit at the UC San Diego Medical Center, to sum up some of the major, often overlooked, signs of nursing home negligence.  First and foremost, keep an eye out for “emotional or physical changes.”  Hiatt warns that behavioral discordances as simple as becoming withdrawn from activities once previously enjoyed may be a clue to mistreatment.  More physical ailments, such as unexplained bruises or weight loss are also huge red flags.  While these symptoms are not enough to be certain, they undoubtedly should prompt further exploration into the care of your loved ones.

Be weary of a consistently unresponsive staff.  If you are not having your questions sufficiently answered or feel as though responses are vague and inconsistent, there may be cause for concern.  Hiatt cites Jatin Dave, a physician at Brigham and Women’s Hospital’s Center for Older Adult Health in Boston, who claims that “I get more concerned when someone says, ‘This is how we do things here,’ and has no desire to help.”

If the vibe of the residence is constantly frenzied and the directors are missing in action then there may be a cause for concern.  Likewise, frequent staff turnovers, unanswered telephones, and more explicitly, a loved one’s direct wish to avoid interaction with particular personnel are warning signs that should not be ignored.

Ultimately, Hiatt acknowledges that you should go with your gut.  If you believe there is reason to be concerned do not hesitate to explore the possibility.

If negligence or abuse has occurred, MDRS may be able to help you mediate your issue or case with a nursing home.  Our out-of-court Alternative Dispute Resolution and mediation services can facilitate the process so that you can avoid a lengthy, expensive and emotionally taxing court trial.  MDRS has a panel of experienced neutrals, who can help you achieve fair and impartial results.

Focus on Elderly and Nursing Home Abuse Cases

One of the most common types of cases or disputes that we help to resolve are cases involving elderly nursing home abuse or neglect. One of the challenges involved in these cases is that often times if there is an abuse or mistreatment, the injured parties often suffer from a loss of trust.  It is difficult to then move beyond the mistrust into an environment of healing and settlement, which is why these cases lead to litigation.

At MDRS, we understand the difficulties in these cases and how to resolve them fairly and cost-effectively.  Along with our panel members, MDRS takes a careful and impartial approach and examines the facts of the case, helping you achieve better alternatives to resolving the cases at trial.

In a series of upcoming posts we will look at some of the common issues of neglect and abuse that occur in nursing homes, how they can be avoided, and provide some resources to help families struggling with these challenges, as well as discuss our approach to resolving these types of cases utilizing alternative dispute resolution methods with MDRS.

MDRS Welcomes New Neutral, James Purcell

 

James E. Purcell

Jim has a long involvement with ADR both as a practicing attorney and as the CEO of Blue Cross & Blue Shield of RI.  As a trial lawyer, Jim represented clients in mediations and arbitrations.  He was a charter member of the ADR Panel of the US District Court for the District of RI and conducted court assisted mediations and early neutral evaluations, until he left his practice in 2000 to become first the COO and later in 2004, the President & CEO of Blue Cross RI. He remained CEO until he retired effective December 31, 2011.  He practices independently and focuses solely on ADR as facilitator, mediator, and arbitrator.  As an attorney, he focused on the resolution of complex business disputes, particularly in healthcare.  Jim has sat in mediations both as counsel and as client.  He understands both perspectives.  He takes an active role in moving the parties toward resolution.  He believes pre-meeting preparation is very important.  Jim makes it clear how he will conduct the proceeding to minimize surprises to counsel.  At the onset of the mediation or facilitation, he will set the tone with the clients, making them understand this is not about mad dog litigation or “winning,” but rather settling.  Counsel will tone down their arguments in hopes of a civil, courteous and respectful dialogue.  ADR, particularly in the healthcare arena, is the best way to resolve disputes.  Confidentiality is key to the participants; subject matter expertise is a must; and the attorneys get to choose who will conduct the proceeding, unlike in the court system. Read more about Jim in his neutral profile.

Recent Cases Involving ADR — February 2013

Arbitration – Loss of use damages

Where the plaintiffs appeal from a decision reducing an arbitrator’s award for loss of use damages from $120,000 to $4,500, the reduction of damages must be reversed, as (1) the award for loss of use was within the arbitrators’ authority and (2) it is too late for the defendant insurer to claim it is not bound by the arbitration.

“The issue of loss of use damages was before the arbitrators by consent of the parties, as stated in the 1998 District Court judgment and reinforced by this court in 2004 in a memorandum and order pursuant to our rule 1:28. … Contrary to the defendants’ suggestion that the arbitrators based their award on matters not before them, the award by its own terms is limited to loss of use. The defendants argue that the arbitrators exceeded their authority under G.L.c. 251, §12(a)(3), because loss of use damages generally extend only for the time reasonably necessary to repair a damaged automobile. … The plaintiffs sought and were awarded damages for an increased period of time based on the situation ‘where an injured party is unable to finance repairs and a defendant refuses to pay.’ … It suffices to say that this relief was not ‘prohibited by statute,’ … nor otherwise ‘prohibited by law.’ … The defendants’ argument therefore amounts to no more than an assertion of error of law or fact, which is insufficient. …

“The Appellate Division held that [defendant] Liberty had not been party to the arbitration and therefore should not have been subject to the judgment. We disagree. The stipulation of dismissal did not remove Liberty from the case, but instead dismissed ‘any claims in this action not disposed of by the binding arbitration,’ meaning that the arbitration proceeding was fully preserved. At a hearing in 1998, an attorney representing both defendants agreed that the loss of use issue had been sent back to the arbitrators, and gave no indication that Liberty no longer considered itself a party despite Timothy J. Sheehan, Jr.’s description of his ‘adversary’ as ‘the insurance company.’ The resulting judgment entered against both Liberty and [defendant Helen] Miller and noted the parties’ acknowledgment that ‘the arbitration panel has been requested to consider an additional claim for damage for loss of use,’ and Liberty neither moved to amend the judgment nor appealed from it. Instead, Liberty brought an action in Superior Court in 2000 in its own name, seeking to enjoin the arbitration, without mentioning its present contention that it had no part in the arbitration. We held nearly a decade ago that this suit was an impermissible collateral attack, that Liberty ‘expressly acknowledged the pendency of the [plaintiffs’] loss of use claim before the arbitration panel,’ and that therefore the arbitration could proceed. … The time for Liberty to raise its claim that it was not bound by the arbitration is long past. …”

Sheehan, et al. v. Miller, et al. (5 pages) (Appeals Court – Unpublished) (No. 12-P-340) (Feb. 6, 2013).

 

Arbitration – Untimely motion to vacate

Where an arbitrator awarded a defendant $126,442.58 in connection with loans to the plaintiff, a former employee, a motion by the plaintiff to vacate the arbitration award must be denied, as the motion was untimely and the defendant did not engage in “corruption, fraud or undue means” by communicating with the plaintiff rather than her legal counsel.

Limitations

“… On September 18, 2011, Plaintiff’s attorney, as attested to by her, sent Defendant a letter … stat[ing] that all future communications regarding the matter, including arbitration, were to be directed to the her and not to Plaintiff. …

“Plaintiff never filed an answer and did not appear at the arbitration proceeding. …

“Plaintiff asserts that the court should vacate the arbitration award because, despite the September 18, 2012 letter to Defendant from Plaintiff’s attorney directing that all future communications be sent to her, Defendant failed to provide Plaintiff’s attorney with notice of its statement of claim and failed to advise [the Financial Industry Regulatory Authority (FINRA)] that Plaintiff was represented by counsel. …

“Even assuming that Plaintiff’s actual receipt of the arbitration decision, i.e., April 28, 2012, began the running of the limitations period, it is undisputed that Plaintiff’s filing of the present motion on July 31, 2012, was untimely by three days. ... Unfortunately for her cause, Plaintiff has not cited nor can she cite any case law which excuses such late filing, no matter how short it may appear. …

“At best, without citing any case law, Plaintiff asserts that ‘the timing of the filing to vacate the arbitration should not have begun to [run] until her attorney received notice of the decision [on May 1, 2012].’ However, this is not a situation in which there were ‘extraordinary circumstances’ beyond Plaintiff’s control or in which she was ‘materially misled into missing the deadline.’ … Plaintiff was hardly unaware of an obligation to proceed expeditiously; in fact, as Plaintiff asserts in her memoranda, her attorney had multiple conversations with Defendant’s attorney ‘between the months of May and June’ concerning the arbitration award. In short, Plaintiff is not entitled to equitable tolling and her motion remains untimely.”

Lack of deceit

“… Plaintiff claims that Defendant’s failure to provide the statement of claim to Plaintiff’s attorney or advise FINRA that she was represented by counsel constituted ‘corruption, fraud, or under means’ under 9 U.S.C. §10(a)(1), which justifies vacatur. …

“[T]he court concludes that Plaintiff has not demonstrated and cannot demonstrate that ‘corruption, fraud, or undue means’ on Defendant’s part justifies vacating the arbitration award. First, Defendant complied with the FINRA Code — which, as mentioned, was incorporated into the arbitration contract — by sending the statement of claim directly to FINRA, not to Plaintiff or her attorney. … As Defendant asserts, ‘there was nothing immoral or deceitful in the routine manner in which the arbitration was commended and proceeded.’

“Second, FINRA sent multiple reminders to Plaintiff to file her answer and warnings as to the consequences of failing to do so. Thus, due diligence on Plaintiff’s part, namely, forwarding the documents to her attorney, would have ensured notice to her attorney and prompted discovery of any problem. … That simply did not occur.

“To be sure, Plaintiff alleges that ‘[a]ll of [her] time and effort during this period were focused on taking care of her mother,’ who was battling terminal cancer, and that she assumed her attorney was taking care of the arbitration issue. These unfortunate circumstances, however, do not transform this case into one of ‘corruption, fraud, or undue means’ on Defendant’s part. Even if Defendant were somehow obligated to inform FINRA that Plaintiff was represented by counsel and that she wanted all correspondence directed to her attorney, and assuming that FINRA would have disregarded its procedure requiring that the statement of claim be sent directly to Plaintiff, both of which are doubtful, the court would still conclude that this case does not rise to the level of ‘corruption, fraud, or undue means.’ …”

Domnarski v. UBS Financial Services, Inc., (11 pages) (Neiman, U.S.M.J.) (Civil Action No. 12-30139-KPN) (Jan. 30, 2013).

 

Arbitration – Central Artery/Tunnel Project

Where arbitration awards concerning the work of a contractor on the Central Artery/Tunnel Project were vacated in Superior Court, that was proper based on the language of the contracts between the parties.

“The defendants, Perini Corporation, Kiewit Construction Co., Inc., and Jay Cashman, Inc. (collectively, PKC), doing business as Perini-Kiewit-Cashman Joint Venture, appeal from a Superior Court order vacating arbitral awards in PKC’s favor and from orders on PKC’s subsequent motions for clarification and reconsideration. See G.L.c. 251, §18. The awards were made pursuant to a 1999 agreement between PKC and the plaintiffs, the public agencies overseeing the Central Artery/Tunnel Project (collectively, CA/T). The 1999 agreement provided that the parties submit a specific group of PKC’s claims against CA/T, arising from PKC’s work as a general contractor on the project, to binding arbitration before a disputes review board (DRB). Those claims were listed in exhibit 1 to the 1999 agreement and were related to events occurring prior to January 1, 1999.

“In addition to the claims specifically listed in exhibit 1, PKC submitted other claims to the DRB, some of which PKC alleged were related to the exhibit 1 claims and subject to binding arbitration. The DRB issued binding determinations as to which of the submitted claims were subject to binding arbitration, assessed the merits of the claims, and issued awards.

“CA/T brought suit in the Superior Court to vacate or modify the awards. On cross motions for summary judgment, a judge allowed CA/T’s motion, concluding that the court was required to vacate the awards because the DRB had exceeded its authority under the 1999 agreement when it decided which of the claims before it were arbitrable. In response, PKC filed motions for clarification and reconsideration. A second judge, acting on those motions, concluded that the awards were to be vacated in their entirety, that disputes concerning arbitrability were to be decided under the dispute resolution provisions of a 1995 contract between the parties, and that C/AT neither waived nor was judicially estopped from contesting the DRB’s authority to make binding determinations as to arbitrability. …

“We conclude that the 1999 agreement did not give the DRB the authority to issue binding awards as to the arbitrability of the disputes between the parties. We further conclude that the issue of arbitrability is to be resolved in accordance with the 1995 contract’s dispute resolution process, set out in subsection 7.16, and that there was no error in vacating the awards in their entirety.

“The order (dated December 23, 2010, and docketed December 27, 2010) on the cross motions for summary judgment is affirmed. The order (dated March 7, 2011, and docketed March 8, 2011) on the motion for clarification is affirmed. The order (dated June 2, 2011, and docketed June 3, 2011) on the motion for reconsideration is affirmed. The matter is remanded to the Superior Court for further proceedings in accordance with this opinion.”

Massachusetts Highway Department, et al. v. Perini Corporation, et al. (20 pages) (Graham, J.) (Appeals Court) Cases heard by Hinkle, J., on motions for summary judgment, and motions for clarification and reconsideration heard by Lauriat, J., in Superior Court. (Docket No. 11-P-1666) (Jan. 17, 2013).

 

Arbitration  –  Clause Binding on Assignees

An arbitration clause contained in a cleaning company’s franchise agreements is binding on a group of assignees, the 1st U.S. Circuit Court of Appeals has ruled.

The plaintiff assignees signed “Consent to Transfer Agreements” or “Guaranties to Coverall Janitorial Franchise Agreements,” which did not themselves contain arbitration clauses, but which by reference incorporated obligations under the original franchise agreements that did contain such clauses.

U.S. District Court Judge William G. Young found that the plaintiffs did not have adequate notice of the clause contained in the franchise agreements and thus were not obligated to arbitrate.

But the 1st Circuit reversed.

“Massachusetts law is explicit that it does not impose a special notice requirement upon agreements containing arbitration clauses,” Chief Judge Sandra L. Lynch wrote for the unanimous panel. “Such a requirement, in any event, would be preempted by the Federal Arbitration Act (‘FAA’), 9 U.S.C. §1, et seq., which requires courts to place such arbitral agreements upon the same footing as other contracts.”

The 20-page decision is Awuah, et al. v. Coverall North America, Inc., No. 12-1301, December 27, 2013.

 

Insurance – Fees – Settlement – Class action

Where (1) a class action was brought challenging a defendant insurance company’s failure to pay interest on arbitration awards obtained by insureds and by third parties, (2) a settlement agreement has been reached and (3) the plaintiff seeks $136,800 in counsel fees, the fee award should be in the amount of $50,000.

Reduced award

“This case raises claims identical to those raised and decided in an earlier class action filed in this Court, Meaney v. OneBeacon Ins. Group, LLC, SUCV 2007-1294-BLS. Seven automobile insurers were named as defendants in Meaney. After several years of litigation, that suit has been largely resolved by settlements in favor of class plaintiffs. …

“… Certainly, the result obtained on behalf of the class was a good one and the legal work was of a high quality. The fact remains, however, that this matter was essentially concluded within a very short period of time, the legal issues were not unduly complicated (since they had largely been resolved in the Meaney litigation), and the amount of the settlement was relatively small. Most significant, the number of hours for which plaintiff’s attorneys seek compensation is extremely high. In particular, this Court notes the following:

“1. The requested attorneys fees are more than ten times the $13,888.95 settlement agreed upon by the parties. When a fee request is on its face dramatically disproportionate to the results obtained, the judge should focus with precision on the relationship between the time invested and the results achieved and satisfy itself that counsel has not substantially exceeded the bounds of reasonable effort. … Plaintiff’s counsel’s work in this case does not hold up under such scrutiny.

“2. The amount of hours for certain work is clearly excessive, given the fact that [John] Yasi and his associates had already addressed the same issues in Meaney, and [defendant] NGM indicated early on in the litigation that it did not intend to dispute liability. Indeed, the number of hours billed for particular tasks seems to have been inflated. For example, a close reading of the Complaint in this case shows that it is virtually identical to the complaint filed in Meaney. Thus, counsel’s bill for over $17,000 related to the drafting or reviewing of the Complaint, where the work was for the most part a ‘cut and paste’ job, is clearly not warranted. The same is true with regard to the settlement documents. On September 26, 2011, [Matthew] LaMothe sent the settlement documentation used with respect to an insurer in the Meaney case as a the basis for a proposed settlement of [plaintiff Julie] Diminico’s class claims. With only minor changes, these documents became the basis for the settlement that this Court approved.

“3. Some of the work for which plaintiff’s counsel seeks compensation was plainly unnecessary. For example, after receiving the check sent from NGM to cover the unpaid interest on the named plaintiffs underlying arbitration award, attorney Yasi and NGM, via email, agreed that the check did not limit or waive any claim the plaintiff had against NGM. Notwithstanding this express agreement between the parties, Yasi had [Kevin] McCullough analyze and research case law as to the legal implications of cashing the check received from NGM. Attorney McCullough spent 9.75 hours researching this issue at a rate of $550 per hour. As another example, this Court notes that counsel seeks fees for time spent monitoring a deposition of a witness in Meaney. This was after the parties had entered into a memorandum of understanding to resolve the case and is therefore hard to justify on its face.

“4. Some billing appears to be duplicative of the work of others. For example, no less than four attorneys billed large blocks of time on the same dates in June 2011 for work described simply as ‘review of existing class actions,’ ‘rereading of all case law, ‘review of prior decisions, and ‘reexamination of legal issues pertaining to arbitration interest.’

“5. Seventy eight hours were billed by a first year associate, Matthew T. LaMothe, whose hourly rate was $300. This Court finds that both the number of hours and the hourly rate are unreasonably high in light of LaMothe’s limited experience and the fact that the bulk of the work had already been done in Meaney. Moreover, Yasi, lead counsel on this case, billed 84.5 hours at a rate of $550. From the descriptions in the bills, some portion of this time was spent in supervising LaMothe and reviewing his work. While this kind of supervision is important in the development of young associates, it is not time that NGM should have to pay for.

“Finally, there is the matter of the stipend for the named plaintiff. This was not part of the settlement agreement approved by the Court. Consequently, there is no basis to allow such a stipend as part of a fee request. If the named plaintiff is to be rewarded for her agreement to bring this suit, it should come out of the money paid to plaintiff’s counsel, who clearly benefitted most from this action.”

Diminico v. National Grange Mutual Insurance (6 pages) (Sanders, J.) (Suffolk Superior Court) (Docket No. 11-03037) (Dec. 4, 2012).

Contract – Arbitration – Lease

Where a judge found that a dispute over a lease for a boat slip was governed by an arbitration clause in the lease, that conclusion was warranted and thus an order allowing the lessor’s motion to compel arbitration must be affirmed.

“… The judge rejected [Robert] Cremone’s argument that the marina had waived the right to arbitration by terminating the lease and taking other action provided for in the lease. …

“… Under the plain and unambiguous terms of their contract, Cremone and the marina agreed that ‘any controversy or claim’ regarding the lease of the boat slip, or breach of that lease ‘shall be settled’ by arbitration. Contrary to Cremone’s contention, their agreement to arbitrate controls without regard to whether the dispute is ‘commercial.’

“We discern no error in the judge’s determination that the marina did not waive its right to arbitration by taking action as provided for in the lease, see e.g., lease §§5 and 9. The propriety of the marina’s action remained a ‘controversy or claim arising out of … [the] Lease’ subject to mandatory arbitration under the contract. Moreover, to the extent that Cremone argues that the marina violated the contract by not initiating arbitration at earlier points in time, that argument itself can be raised in the context of arbitration.

“Nothing in the record suggests that the marina acted in a manner inconsistent with its right to arbitration. … It responded promptly to service of Cremone’s complaint with a motion to dismiss or, in the alternative, to compel arbitration. …

“We also reject Cremone’s contention, raised for the first time in his reply brief, that the dismissal of his claims under G.L.c. 93A were improper in light of Hannon v. Original Gunite Aquatech Pools, Inc., 385 Mass. 813, 826 (1982). Nothing in the record demonstrates that this issue was even argued below. … Even were this issue not waived, we conclude that Cremone’s claim under G.L.c. 93A is itself a subject of mandatory arbitration under the agreement. …”

Cremone v. Development and Marketing Group Chelsea II, LLC  (3 pages) (Appeals Court – Unpublished) (No. 11-P-1458) (Dec. 3, 2012).

Insurance – Sexual harassment – Issue preclusion

Where a judge ruled in favor of an insurance company on the issue of whether a duty of defense or indemnification was owed to a company president accused of sexual harassment, the judgment was correct under the doctrine of issue preclusion in light of a prior arbitration between the company president and the purchaser of his business.

1st Circuit’s reasoning

“The crux of this appeal is whether the district court properly applied the doctrine of issue preclusion to bar [Luciano] Manganella from litigating whether the Policy’s Disregard Exclusion applies to the conduct alleged in [Donna] Burgess’s MCAD charge. As described above, the district court held that the arbitration between Lerner [New York, Inc.] and Manganella had decided, in the affirmative, the crucial question of whether Manganella’s acts, as alleged by Burgess, were committed with wanton, willful, reckless, or intentional disregard for the Massachusetts sexual harassment law that formed the basis for her claims against him. …

“Manganella argues that the arbitrators were simply never called upon to decide whether he acted in disregard of state law. He claims that Lerner’s Code of Conduct is broader and stricter than state sexual harassment law; the Code, he says, reaches not only sexual harassment serious enough to violate the law, but also less serious harassment, as well as behavior that would embarrass the company or constitute a failure of leadership. Thus, Manganella argues, the arbitrators did not, in the process of deciding whether he violated the Code, decide anything about the relationship between his conduct and state law.

“We think that Manganella overstates the differences between the Code of Conduct and the state law referenced in the Disregard Exclusion. … Thus, both the state law and the Code reach ‘sexual advances,’ ‘requests for sexual favors,’ and other ‘verbal’ or ‘physical’ ‘conduct of a sexual nature.’

“To be sure, the law does impose a severity requirement absent from the Code; the behavior described above is unlawful only if it involves a quid pro quo or ‘creat[es] an intimidating, hostile, humiliating or sexually offensive work environment.’ But this requirement does not, as Manganella suggests, mean that a single incident cannot constitute unlawful sexual harassment. In fact, the Supreme Judicial Court has declined to require sexual harassment claims to be based on any particular number of incidents. … Thus, the fact that the arbitrators did not expressly find that Manganella had propositioned any particular employee more than once does not mean that his conduct could not have run afoul of the law.

“None of this is to say that we see no distinction between the standard imposed by the Code and that created by the law. Rather, the point is that the two standards are similar enough that we are unable to discern a meaningful difference, on the facts of this case, between acting in willful violation of the former (which the arbitrators found Manganella to have done) and acting with wanton disregard of the latter (which triggers the Disregard Exclusion). Because of this similarity, sexually harassing conduct committed in willful violation of the Code, by a person familiar with the law, would, on these facts, show a wanton or reckless disregard for whether that conduct was lawful. …

“One final point bolsters our conclusion that the arbitrators effectively decided the issue presented here: proof of a willful violation of the Code and proof of conduct committed in disregard of the law would be extremely similar. …

“Consequently, we turn to the other element of issue preclusion that Manganella contends is missing here: necessity to the judgment. Manganella asserts that the arbitrators’ finding that he engaged in sexual harassment in willful violation of Lerner’s Code of Conduct was not essential to their ruling. … Based on what was actually decided by the arbitrators, we disagree. …

“In sum, the arbitration presented Manganella with the ‘full and fair opportunity’ for adjudication of the issue at hand that is the centerpiece of modern issue preclusion doctrine. … The extent of his harassing conduct and his knowledge that it was prohibited were vigorously litigated and were essential to the panel’s judgment. Allowing Manganella to contest these questions now would contravene the twin goals of issue preclusion: protecting litigants from the burden of relitigating settled issues and promoting judicial economy by preventing needless litigation. … Accordingly, the district court was correct to bar Manganella from disputing the applicability of the Disregard Exclusion.

Manganella v. Evanston Insurance Company v. Jasmine Company, Inc. (Lawyers Weekly No. 01-312-12) (19 pages) (Stahl, J.) (1st Circuit) Appealed from a decision by Stearns, J., in the U.S. District Court for the District of Massachusetts. (Docket No. 12-1137) (Nov. 27, 2012).

 

Arbitration – Statute of limitations – CBA

Where the plaintiff electric company filed an action against the defendant union seeking to vacate an arbitration award, the plaintiff’s action must be dismissed as untimely.

The defendant’s motion to affirm is granted in light of evidence supporting the arbitrator’s decision.

“[Defendant] Local 455 argues that [plaintiff] WME failed to file its application to vacate the arbitrator’s award within the statute of limitations, which it contends is thirty days, and therefore that the application to vacate should be dismissed. …

“Here, the arbitrator’s decision was handed down on January 28, 2011, and WME stipulated that it received a copy on January 31, 2011. WME then filed its application to vacate the arbitrator’s award some eighty-nine days later on April 27, 2011, well more than thirty days after it received a copy of the arbitrator’s decision. As a consequence, WME’s action is untimely, and is barred by the statute of limitations.

“Although WME’s application to vacate the award is untimely, Local 455′s motion to confirm the award is not. Accordingly, I turn to the merits of the award, which it bears emphasizing is a declaration without a particular remedy. …

“Here, I find that the arbitrator applied the [collective bargaining agreement (‘CBA’)] in a plausible manner. The arbitrator’s opinion noted that Local 455′s argument was that ‘that [WME] cannot unilaterally, without negotiating with the Union, require that employees work at entities outside of the [WME] service area.’ The opinion then described the evidence adduced by Local 455 representatives, including examples of past projects that were negotiated, such as the Interplant Maintenance Workforce accord and the Kent Distribution Project. In each example, WME and Local 455 met and negotiated wages, hours, and working conditions for employees who were being assigned work outside of WME’s territory. The arbitrator thus found that there was a past practice of negotiation and agreement in instances where WME employees were going to be assigned to work outside of WME’s districts. The evidence supported the arbitrator’s decision, which was within the scope of the CBA. I therefore must confirm his decision.”

Western Massachusetts Electric Company v. International Brotherhood of Electrical Workers, Local 455 (23 pages) (Woodlock, J.) (USDC) (Civil Action No. 11-30106-DPW) (Sept. 27, 2012).

 

Resolving Nursing Home Liability Cases with ADR

The number of Americans age 65 and older is expected to double in the next thirty years. With advances in medicine and an increased life expectancy rate, that estimate may be low. Some forty-five percent of the U.S. population now sixty-five or older will reside in nursing homes before they die.  Of the baby boom generation, it is expected that 5% or 3.9 Million people will eventually be cared for by these facilities on either a short or long-term basis. The number of nursing home litigation cases has increased significantly over the past ten years. Federal and state regulations have been promulgated that now govern virtually every aspect of a nursing home’s care of its residents.  Nursing home litigation is now widely recognized as one of the fastest-growing areas of health care litigation.

Alternative dispute resolution (ADR), whether in the form of non-binding mediation or binding arbitration, provides litigants in nursing home liability cases a valuable and effective alternative to the time, expense, anxiety and uncertainty of protracted litigation and trial in the court system.

Types Of Cases MDRS Handles:

Our MDRS panel of neutrals have experience handing a wide array of nursing home abuse and neglect cases including, but not limited to, matters involving inadequate nutrition or hydration, mistakes in prescription medication, slip and falls or unattended falls, bedsores, sepsis, unreasonable or unnecessary restraints, unsanitary conditions, emotional neglect, failure to protect patients from violent or sexual assault, misconduct and rape, wrongful death and medical malpractice cases.

To better understand why ADR, specifically non-binding mediation and binding arbitration, is the preferable process for resolving these cases effectively, efficiently and fairly, a brief look at this area of the law may be helpful to those who might be considering ADR or selecting MDRS.

Federal and State Regulation of Nursing Homes:

The promulgation of federal and state regulations concerning how nursing homes must care for their residents has substantially fueled the large increase in litigation over the past decade. These regulations now cover nearly every aspect of nursing home care.

Briefly stated, federal law mandates the framework for what the states must do, and states may impose additional regulations. Nursing homes are federally regulated by the Omnibus Budget Reconciliation Act of 1987 (OBRA), 42 U.S.C. §§ 1395-1396 (1999), and are individually licensed in the state where they operate. OBRA lays out standards for nursing homes, along with a patients’ bill of rights. Notably, OBRA requires nursing homes to conduct an annual assessment of each individual resident, create individualized care plans, reduce the use of chemical and physical restraints, and ensure adequate staff training in special needs situations. Among the rights guaranteed to residents under OBRA, is the right to be free from neglect and abuse. Facilities receiving federal funds through Medicare and Medicaid must comply with OBRA.

In Massachusetts, nursing home regulations are issued by the Department of Public Health (“DPH”).  Regulations issued by the Massachusetts Attorney General fall under the state Consumer Protection law, Ch. 93A, and these regulations are designed to supplement existing statutes and regulations. The Attorney General works and cooperates with other state and federal agencies in enforcing 940 CMR 4.00 and other regulations. 940 CMR 4.00 Long Term Care Facilities defines certain unfair or deceptive acts or practices. These regulations are designed to promote the protection, comfort, health and well-being of consumers of services provided by long-term care facilities, to be consistent with existing legal standards, and to be as responsive as possible to the constraints and administrative realities under which long-term care facilities operate.

Massachusetts Governor Deval Patrick recently signed legislation which establishes minimum care standards at dementia special care units and nursing homes. The legislation will provide dementia-specific training for direct-care workers, activity directors and supervisors in traditional nursing homes and special care units.

Claims for Violation of MGL c. 93A Consumer Protection Statute:

The attorney general has promulgated regulations pursuant to M.G.L. c. 93A, § 2(c) to promote the protection, comfort, health and well being of nursing home residents. The regulations define acts and practices that constitute unfair and deceptive acts and practices prohibited by the Consumer Protection Statute. The regulations also provide that it “shall be” an unfair and deceptive act and a per se violation of the Consumer Protection Statute for a nursing home or the administrator of a nursing home to fail to comply with any existing state or federal statute, rule or regulation which provides protection to residents of long-term nursing care facilities.

The Massachusetts Patients’ Bill of Rights (M.G.L. c. 111, § 70E), the Department of Public Health regulations (105 C.M.R. 150 et. seq.), the attorney general’s regulations (940 C.M.R. 4.00, et. seq.), the Nursing Home Reform Act (42 U.S.C. 1395i-3, 1396r) and the Federal Health Care Financing Administration Regulations (42 C.F.R. 483, et. seq.) all have regulations which if violated can risk exposure by long term care facilities to punitive damages and attorneys’ fees under the Consumer Protection Statute.

As a result, nearly every nursing home negligence case has been accompanied by a 93A count citing one or more of the many applicable regulations as the foundation of the 93A claim, raising the potential for significant damage awards in these cases.

Causes Of Action Brought In Nursing Home Liability Cases:

Causes of action brought in these matters often include, but are not limited to:

  • Negligence claims…where negligence per se is a very important cause of action, based upon reasoning that a statute or regulation sets the standard of care and the unexcused violation of a legislative enactment or administrative regulation is therefore negligence in itself.
  • Wrongful death claims.
  • Intentional tort claims…where a deliberate act causes harm, such as where a patient is the victim of a sexual assault or assault and battery.
  • Negligent hiring and supervision claims…including claims that a nursing homes is understaffed or where there is too little training… these issues will include staff training, adequacy of medical care and nursing care and profit motive of the operator.
  • Loss of consortium….a claim by a loved one of the resident, typically a spouse or child, for their suffering as a result of the resident’s injury or abuse.
  • Third party responsibility…a nursing home can be found liable because of acts of a third party when the nursing home fails to protect residents from other residents or others in the home and is thereby injured or assaulted by another resident.
  • Breach of statutory or regulatory rights, duties or responsibilities.
  • Chapter 93A Consumer Protection Claims where punitive damages and attorney’s fees may be sought.

Why ADR Is The Answer In Nursing Home Liability Cases:

Mediation:

Experience suggests that perhaps no area of alternative dispute resolution contains more emotional issues than nursing home liability cases and elderly abuse. It is often the adult children who must decide to place their parent in the care of a nursing facility, a decision that is difficult for the entire family and often associated with emotions of guilt, anxiety and perhaps disagreement as to the choices made when the parent’s health may be rapidly deteriorating.  If and when the parent suffers injury, illness or death while at the facility, anger and the desire for retribution can be accordingly great. It may be difficult for the family members to consider defenses or arguments made by the facility or their attorneys, whether rightly or wrongly, that the injury, illness or death may have been a byproduct of the parent’s deteriorating medical condition and not the fault of the facility.

Mediation is an ideal forum for parties in these emotional cases. An experienced mediator, with substantive knowledge of the law as well as the facts of the specific case, will sculpt a process where all parties can be heard with respect and even-handedness.  After a joint session with all parties, the mediator will likely have individual private and confidential meetings with the plaintiff and key family members first and then the defendant and their representatives, focusing on the key issues of the case and will typically point out the risks associated with each side’s position in an effort to ensure maximum flexibility and compromise. Experience suggests that nearly 90% of mediated nursing home liability cases reach settlement at the mediation session. When settlement is reached the mediator will obtain a signed and binding settlement agreement.

Arbitration:

Generally, most cases submitted to Massachusetts Dispute Resolution Services for binding arbitration are by parties who, with equal bargaining power, mutually agree at some point after a dispute has arisen to avoid the many disadvantages of litigation and trial in the Court system and resolve their case through the use of a mutually acceptable arbitrator, who will render a binding decision.

However, particularly over the course of the last ten years, there has been a significant increase in the use of pre-dispute mandatory arbitration clauses being contained in various contracts existing between parties, including nursing home contracts. Where parties, with equal bargaining power, mutually agree in advance to bring disputes that may arise between them to binding arbitration, the Courts, including Massachusetts, have given great deference and support to the validity of such pre-dispute mandatory arbitration clauses.

However, there have been several cases recently litigated where a nursing home resident or their family allegedly did not know or fully understand that they had given up their right to bring to Court their liability claim when they signed a nursing home contract upon admission. The Courts, both federal and state, have been called upon to decide the validity and enforceability of such arbitration clauses, with varying results.

For a more expansive look at these cases please refer to our recent MDRS article Arbitration – Voluntary or Mandatory? The Use of Pre-Dispute Arbitration Agreements.

Factors considered by the Courts in deciding whether to uphold, or to void as unconscionable, a mandatory arbitration clause in a nursing home contract include:  the  intelligence and education of the signatory, his familiarity with the process of admission, whether they were required to sign the agreement as a condition of admission, any undue influence or pressure put on the signatory, whether the arbitration clause was obvious and/or presented as a separate document or was buried within a large document, whether it was discussed or explained at the time of admission, whether it was bilateral in that either party can invoke its provisions, whether all rights and remedies available in the courts were preserved for the arbitrator, whether there was a unilateral right of rescission for a given period after execution of the agreement, whether the patient’s acute condition had created overwhelming pressure on a relative to sign, and whether the arbitration agreement limited the residents’ right to file a grievance or complaint with the facility or any appropriate government agency, from requesting an inspection from such an agency, or from seeking review under applicable federal regulations of a decision to transfer or discharge the patient.

For an instructive Massachusetts case on this topic please see Miller v. Eric Cotter & others, 448 Mass. 671 (2007).

Pending legislation concerning pre-dispute arbitration agreements:
H.R. 6351 (112th): Fairness in Nursing Home Arbitration Act of 2012 was filed in August of 2012 and would make any pre-dispute arbitration agreement between a long-term care facility and a resident of such facility (or person acting on behalf of such resident, including a person with financial responsibility for such resident) invalid and specifically unenforceable. Prior versions of this act have been filed yearly since 2009 and have not garnered sufficient support for passage.

Conclusion:

Litigation and trial within the Courts of a nursing home liability case will be complex, expensive, time consuming and emotional for all parties involved, with a result that will be uncertain. Non binding mediation and/or binding arbitration of these difficult cases offers parties an alternative approach that can achieve a result that is efficient, effective, fair and economical, and ADR is a more appropriate forum for resolution.

An experienced mediator or arbitrator, with knowledge of the complex law in this area and with the ability to understand the complex facts usually involved, is better suited than a lay jury, after years of litigation, to achieve an appropriate result.

Should you wish to submit a nursing home liability case to MDRS or have any questions we can answer please contact us at (800) 536-5520. We can help you resolve your case.

James E. Purcell, Esq.

JPurcellHyannis, Massachusetts

EDUCATION: Undergraduate Education: Cornell University (1967) AB History; Cornell Baseball all four years, Captain of Freshman team (1964) and of Varsity team (1967); MVP (1966); Tapped member of Junior and Senior Men’s Athletic Honoraries (Red Key and Sphinx Head).

Military: Graduated Infantry Officer Candidate School (12/68) and commissioned 2d lieutenant; completed Airborne training (2/69) and Pathfinder training (7/69); assigned to 101st Airborne Division Pathfinder team in Viet Nam (I Corps) (8/69-1/70); wounded and medevac’d stateside; after recovery, served as company commander for intelligence school unit until 2/71.

Law School: Attended Boston University Law School (1971-74), graduating magna cum laude in 1974; ranked second in class cumulatively; editor of Boston University Law Review; awarded John Ordroneaux Award for The Best All Around Professional Ability in the Class of 1974.

LEGAL EXPERIENCE: Associate at Pierce, Atwood Scribner, Allen, Smith & Lancaster, Portland, ME from 1974-1979

Associate and Partner at Tillinghast Collins & Graham, Providence, RI, from 1980-1988

Founding Partner, Chair of Litigation Department, and first Managing Partner of Partridge Snow & Hahn LLP, Providence, RI, from 1988-2000

Senior Counsel, Partridge Snow & Hahn LLP, January 1, 2012-December 1, 2012

Independent facilitator, mediator, and arbitrator: December 1, 2012 to date. During my career, I spent over 25 years of my professional career as a litigator. Virtually all of my work was in litigation—the resolution of complex business and other disputes. These ranged from financial and anti-trust cases to major construction and long term natural gas pricing contractual disputes to significant business tort and contract cases. My practice evolved over time such that, toward the end, at least 50% of my work was in arbitration and mediation.

NON-LEGAL EXPERIENCE: In 2000, I left my firm to be COO of Blue Cross & Blue Shield of RI, and in 2004, became its President and CEO until December 31, 2011, when I retired.

ADR EXPERIENCE: I am experienced in varied negotiation contexts as lawyer and as COO/CEO. In the mid-1990’s, I was part of the first certified ADR panel for the United States District Court for the District of Rhode Island. We received very thorough training, and thereafter, I conducted Early Neutral Evaluations and mediations under the auspices of the Federal District Court. In 1998, Chief Justice Torres (Federal Court) appointed me arbitrator to resolve the final dispute between the two developers of the Providence Place Mall. After two weeks of hearings, I issued an opinion resolving the complex construction and contractual issues. After retirement from Blue Cross, I have mediated and arbitrated a number of complex commercial cases, including healthcare, insurance, construction and contract disputes.

I have a combination of legal and business experience together with a personality that lends itself to alternative dispute resolution. I believe the same skills can be applied to “facilitation,” by which I mean, assisting parties who are negotiating complex contracts or renewals to reach resolution, particularly in healthcare negotiations.

OTHER PROFESSIONAL EXPERIENCE AND ASSOCIATIONS: I am a member of the American Arbitration Association’s (AAA) Commercial and National Healthcare Rosters, its Commercial Mediation Roster, and a former member of its Healthcare Dispute Resolution Advisory Council. I also am a member of the American Health Lawyer’s Association (AHLA) ADR Panel and its ACO Task Force. I am a member of the Massachusetts Bar Association ADR Committee and the ABA Dispute Resolution Section. I have been a guest speaker for the national Blue Cross Association legal counsel summit, the World Health Care Congress, the AAA, and the AHLA regarding healthcare policy, reform, ACOs, and the merits of alternative dispute resolution in payor-provider and other healthcare disputes. I have had many other speaking and writing engagements on healthcare and ADR.

I currently serve on the Boards of HopeHealth, Inc., Hyannis, MA, Southeast New England’s larges nonprofit hospice, palliative and home care organization, and Cape Abilities, Inc., also headquarted in Hyannis, which serves, educates and employs adults with disabilities.

AREAS OF SPECIALTY

  • Banking & Finance
  • Civil Litigation
  • Class Actions
  • Commercial
  • Contract Disputes
  • Eminent Domain
  • Energy Sector
  • Health Care
  • Insurance
  • Real Estate
  • Sports
  • Unfair Competition

2012 International Arbitration Survey

The 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process is an empirical study regarding the field of international arbitration. The survey is the fourth in a series of surveys conducted by the School of International Arbitration at Queen Mary, University of London (QMUL). The survey focuses on the views of in-house counsel, arbitration practitioners, and arbitrators on preferred international arbitration practices.

The survey looked for responses from in-house counsel as well as from private practitioners and arbitrators in order to create “a much larger pool of respondents to give empirical weight to our findings.”

The goal of the survey was to examine whether a “harmonised international arbitration procedure is emerging, by canvassing the views of experienced arbitration practitioners from all over the world,” explains Professor Loukas Mistelis, Director of the School of International Arbitration at QMUL.

The sections of the survey’s findings include:

  • Selection of arbitrators
  • Organizing arbitral proceedings
  • Interim measures and court assistance
  • Document production
  • Fact and expert witnesses
  • Pleadings and hearings
  • The arbitral award and costs.

To view the full survey findings and the executive summary, visit  2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process at White & Case.

ADR in the Trial Court – December 2012

Court-Connected ADR is governed by the Uniform Rules on Dispute Resolution, Supreme Judicial Court Rule 1:18, which took effect in 1999, and are designed to offer litigants more options in resolving disputes. There are seven ADR processes defined in the Uniform Rules: arbitration,  conciliation, case evaluation, dispute intervention, mediation, mini trial and summary jury trial. The  best known and most used ADR process is mediation.

The Trial Court Standing Committee on Dispute Resolution advises the Chief Justice for Administration and Management (CJAM) of the Trial Court with respect to the implementation and oversight of court-connected dispute resolution services in the Trial Court.

Each Trial Court Department has designated a person or a committee to be responsible for the administration of ADR services within that department. ln addition, each division in every Trial Court Department has designated someone to be the local dispute resolution coordinator to maintain information about ADR and assist the public in using those services.

There are 54 individual court-approved programs providing alternative dispute resolution services in the seven Trial Court Departments,. Pursuant to Rule 4(a) of the Uniform Rules, programs are approved by the Chief Justice of each of the Trial Court Departments, and most are approved in more  than one department. Overall these 54 programs account for 99 program approvals across the seven departments.

Of the 54 programs, 38 operate as primarily free or non-fee~based programs in the Boston Municipal, District and Juvenile Court Departments. Many of these programs are also approved in the Land Court, Superior Court and Probate and Family Court Departments and charge fees for services in those Departments. The remaining 16 programs operate as fee-based programs in the Land Court, Superior Court and Probate and Family Court Departments. Services provided by in-house providers and Bar Associations-sponsored programs are free to litigants.

The Boston Municipal Court Department has 7 approved mediation programs serving various Divisions. There is an in-house mediation program for criminal and civil cases, a Boston Bar Association (B.B.A.) sponsored program for civil cases in the Central Division, and three non profit mediation programs handling mostly small claims and summary process cases. Of the seven mediation programs, two are university based. Mediation services are available in all the Divisions free of cost to the parties. In addition, a Pretrial Conference Program operates in the Central Division for civil cases and is administered by the B.B.A. and Court staff.

Cases. 573 cases were referred to mediation from all divisions in FY10. (342 were small claims; 110 criminal; 79 summary process; 25 civil; and 17 other). In FY 10, the on staff mediator expanded mediation services to all court divisions.

Administrative Structure. The Boston Municipal Court Department has an Administrator of Mediation Services who supports ADR providers and mediates cases. The Boston Municipal Court Department also has am Administrative Justice position that is responsible for implementation and oversight of dispute resolution services. In addition, a court committee comprising of staff and judges have recently begun meeting to discuss ADR issues and initiatives.

Early Intervention. The Boston Municipal Court Department has a Pre T rial Case Conferencing Program in the Central Division that screens cases for referral to mediation. The Boston Municipal Court is satisfied that its Standing Order 1.04 adequately addresses the availability of early intervention.

The District Court Department has approved 24 programs providing free mediation services in small claims, summary process and minor criminal cases in 56 of the 62 Court divisions. Cases referred to these programs are mediated by volunteer mediators. Of the 24 programs, two are university-based mediation programs and two are conciliation programs.

Cases. 5,836 cases  – 3,105 small claims (or small claim appeals), 1,432 summary process and assorted civil and criminal. A copy of the District Court’s FY 10 Approved Program statistics is attached. A pilot mediation project was implemented in the Spring of 2011 in Quincy to provide mediation services to harassment prevention cases. No programs have stopped providing services but some have reduced the amount of time in court since legislative funding was cut.

Administrative Structure. The Deputy Court Administrator is the Department ADR Coordinator.

Early Intervention. No early intervention events. In this regard, the Standing Committee has requested the District Court consider revisions to its Standing Order 1.08III(b)(3).

The Housing Court Department has approved 2 programs, an in house ADR program (office of the Housing Specialists) and an outside program that provides specific services. The Housing Specialists are approved in all five count divisions to provide free mediation and dispute intervention services; they resolve hundreds of summary process and landlord/ tenants disputes weekly. The other program has been approved as an outside provider for cases requiring subject matter expertise in the areas of lead paint, mold and asbestos, zoning litigation and environmental litigation.

Cases. In fiscal year 2010, the Housing Court referred 19,697 civil and summary process cases to the Housing Specialist Department.

Administrative Structure. Each division of the Housing Court has an ADR coordinator on staff.

Early Intervention. Litigants are referred to the Housing Specialist at the time all parties must present themselves in court at the earliest stage of the litigation.

The Juvenile Court Department has 19 approved programs offering mediation of Permanency, CHINS and Parent-Child cases. Permanency Mediation is an alternative to a contested proceeding seeking to terminate parental nights and is offered statewide in both the Juvenile and Probate and Family Court Departments. There is one bar-based mediation program for care and protection cases.

Cases. In FY10, 35 cases were referred to approved alternative dispute- mediation programs statewide in the Juvenile Court Department. Of the 35 referrals, 29 were in care and protection cases, 4 were in delinquency eases and 2 were in guardianship cases. Massachusetts Families for Kids (MFFK), which provided permanency mediation services in care and protection cases to the Juvenile Court under a contract funded by the Trial Court reported having 196 referrals. The funding for MFFK expired at the end of FY10. Other than that program, the Juvenile Court did not lose any ADR services in FY10.

Administrative Structure. The Administrative Attorney in the Administrative  Office of the Juvenile Court is the department ADR coordinator for the Juvenile Court.

Early Intervention. No early intervention events. However, the Administrative  of the Juvenile Court has identified CHINS and G.L. c. 25813 matters as case types that may benefit from early intervention.

The Land Court Department has 5 approved programs providing ADR Services. Additionally, the Land Court has an active case conferencing program which promotes ADR to litigants.

Cases: In at majority of cases, the parties go directly from a court event straight to mediation without a referral from the court. In FY 10, 29 cases did get written ADR  referral from the court to programs for initial screening. Each of the five court-connected ADR providers contracts with the court to do a free initial screening upon referral.

Administrative Structure. The ADR Coordinator for the Land Court Department is Sessions Clerk Jennifer Masello. Regular discussion of ADR – The programs that are in place work well for the Land Court. ADR needs are discussed among the judges and with the Bar to reaffirm that needs are being met. During the most recent period when programs were vetted, the court was particularly interested in and did include a program that offered a sliding scale payment system that would be suitable for the growing number of pro se litigants.

Early Intervention. The Land Court has a Case Management Conference (CMC) held within 90 days of the case filing. In advance of the CMC event, the Land Court requires a joint CMC Memo be filed with the inclusion of each party’s willingness to participate in ADR. In FY10, 148 cases included docket entries indicating that ADR was formally discussed during the CMC event. The Land Court Standing Order 1-04F(i)II) and 1.04F(ii) addresses early .intervention and requires no revisions.

The Probate and Family Court Department has 24 approved programs offering ADR services. This includes  dispute intervention services administered by the Office of the Commissioner of Probation and conducted by probation officers in each of the 14 court divisions. This department also approves programs to provide permanency mediation. There are six bar-­based Conciliation programs.

Cases. In FY10, 37,109 cases were referred to dispute intervention, 741 cases to conciliation and 93 cases to mediation. The contract for permanency mediation services in the Juvenile and Probate and Family Court Departments expired at the end of FY 2010, and no new RFP and/or contract was undertaken due to the fiscal crisis.

Administrative Structure. Supervision of the department’s ADR activities conducted pursuant to S.J.C. Rule 1:18 is included among the responsibilities of the Manager of Administrative Services in the Probate  Family Court Administrative Office. Meetings of Probate and Family Local Dispute Resolution Coordinators (one individual appointed by the First Justice in each division) are    held quarterly. Best practices and concerns are considered and discussed; updates concerning trial court ADR (such as the approval application process and Standing Committee discussions) and news about any other developments (e. g., ADR training announcements) is shared. Recent presentations, by representatives of approved programs and other guest speakers have included topics such as elder mediation, mediation  divorces and collaborative law.

Early Intervention. On-site screening and mediation services are available in Hampshire and Essex (limited) and are provided by approved (pursuant to S.J.C. Rule 1:18) ADR programs. Our Time Standards (Standing Order 1-06 “Case Management and Time Standards for Case Files in the Probate and Family Court”) continue to highlight that Case Management Conferences may “explore  the possibility of settlement including, but not limited to exploring to use of Alternative Dispute Resolution (ADR) processes.” Further, provision 5 ofthe Standing Order states: “When appropriate, cases may be referred to: Probation Officers for dispute intervention services in contested matters at any court event; or other approved providers of court connected dispute resolution services, as defined in S.J.C. Rule 1:18, Uniform Rules on Dispute Resolution.”

Standing Order  Special Procedures for Cases involving children (Hampshire) requires attorneys, parents and care givers in divorce, separate support, paternity, support/custody/visitation, modification, contempt, guardianship and termination of parental rights eases in the Hampshire Division to participate in a child-focused resolution process. The child-focused procedural model enhances parents’ understanding of the effects of hostile litigation on children, provides early opportunities for non-adversarial planning of all unresolved issues and establishes a problem-solving environment in which each parent, care giver and attorney is expected to be a problem solver.  Attendees at mandatory, introductory meetings are required to subsequently present at the  Pre-Trial Conference a summary of cooperative efforts taken in working toward a cooperative resolution of the unresolved issues.

In addition, early intervention events at court could include initial meeting with probation officers who could explain all ADR. processes and options as defined pursuant to S.J.C. Rule 1:18 and make referrals to (additional) approved ADR programs for further ADR services. Litigants are referred to probation at the time all parties first present themselves in court at the earliest stage of litigation.

The Superior Court has approved 14 programs offering ADR services and has an in­-house program which screens cases for use of ADR and mediates cases involving pro se litigants and in other cases at the request of counsel or by order of a judge. The Superior Court’s ADR staff consists of two attorneys who conduct mediations and are available to explain court-conducted mediation services to attorneys and parties. In addition, retired Superior Court Judge Thayer Fremont-Smith has volunteered his services to serve as mediator and discovery master, primarily in Suffolk County.  A Superior Court judge  interested in referring a case to retired judge Freemon-Smith must enter an order referring the case to him. All in-house mediations are provided at no cost to the parties.

Administrative Structure. While the Superior Court does not have an official ADR coordinator, Maria Pena, Associate Court Administrator/General Counsel works with the ADR Staff to continue the court’s efforts in providing ADR services. The Superior Court has an ADR committee that meets as issues arise, In addition, Maria Pena, and Chief Justice Barbara J. Rouse meet with in-house ADR staff and judges to discuss ADR services.

Early Intervention. As set forth in Superior Court Standing Order 1-88, judges discuss ADR at pretrial conferences. In addition, judges sitting in time standards sessions are encouraged to discuss alternative dispute resolution options with parties and have the discretion to recommend and/or order  free in-house mediation services.  conduct Rule 16 conferences early in each case in which case-specific deadlines for discovery and events are set, and also conduct status conferences more frequently, at least at the end of discovery, and in some ceses, at the end of earlier phases of discovery.

Don’t Fear the Unknown

By Joseph S. Berman, Esq.

When lawyers agree to mediate a case, one of the first issues they face is choosing a mediator.   They exchange names of potential neutrals, looking to secure an “advantage” in the right person.  One criteria is often whether a mediator is supposedly a “defense” or “plaintiff” attorney.  I believe that this approach is misguided for several reasons. Taking a broader view of mediation can assist lawyers in settling a case.

In my experience, good mediators leave their advocacy at the conference room door.  We recognize the difference between advocating for a particular position and neutrally trying to settle a case.  Our incentives are different.  As lawyers, we try to obtain the best result for our clients.  As mediators, we want to bring both parties to a resolution that they control, and which is not left to a judge or jury.

More specifically, as mediators we bring a unique perspective to a case.  And, this is why I believe that a bias for or against mediators with a perceived viewpoint fails to recognize what we bring to settlement negotiations.  For example, I have spent most of my legal career on the “defense” side of civil and criminal litigation.  Often, I am hired by insurance companies or self-insured defendants to represent them in civil litigation, coverage disputes, and cases of professional liability.  Plaintiff’s lawyers may not select mediators with this type of background out of a perception that I will “side” with the defendant.

I think that the opposite is true.  In a mediation, I can speak candidly and sympathetically with the defendants, including insurance company representatives, about the strengths and weaknesses of their case.  As a “defense lawyer,” I can speak persuasively from my own experiences.  Indeed, I can be an effective advocate for the plaintiff’s position.  Since I have defended, tried and appealed hundreds of cases, I can bring that perspective to the case and its settlement value.

Lawyers who believe that a mediator will “agree” with one side, or advocate for a particular position, are missing out on the most important part of mediation.  This view ignores the unique and critical role that mediators play.  A mediator is not an advocate.  Mediators don’t care who wins.  Our objective is to settle the case.  Our means is our ability to show each side the benefits of compromise.  Often, this includes being relentlessly honest about the pitfalls of not settling.

For example, think of a case where an insurance adjuster believes that the plaintiff is malingering and exaggerating his injuries.  An effective mediator will acknowledge these arguments but point out that they don’t always prevail at trial.  By speaking from personal experience, the mediator may be able to cause the adjuster to see a different viewpoint.  And, because the mediator is a “defense lawyer,” he will have more credibility with the defendants.  He can provide a valuable service to the plaintiff.  Similarly, a lawyer who represents the defendant at a mediation may want to consider using as a mediator a lawyer who typically represents plaintiffs.  The “plaintiffs’ lawyer” can speak convincingly to the plaintiff about the risks of going to trial, the value of a settlement, and the advantages that defendants often have in terms of resources.  In other words, an effective mediator can be an articulate proponent of your position, particularly if he or she has credibility with the other side.

This outlook points to a larger issue in mediation.  It’s an issue that lawyers often forget or ignore.  As I mentioned above, the objective of mediation is very different from courtroom advocacy.  Obviously, when lawyers negotiate a settlement, they want to achieve the best result for their clients, whether it’s monetary or other terms.  They same applies to mediation.  However, when litigants agree to mediate, they agree to compromise their positions.  They must be open to listening to different views.  The goal, ultimately, is to resolve a dispute on terms that they control.  Mediation is not a zero-sum game.  Just because one side achieves a good result (whether on a specific point or in the entire case) does not mean that the other side loses.

It’s a very different dynamic than trying a case.  I think that the lawyers who succeed at mediation are those who are best at listening.  This is different than courtroom advocacy, where the lawyer’s skill at speaking or writing is most important.  It’s also important to appreciate the motivations on the other side of the case.  A good mediator can do this, regardless of his or her experience as an advocate.  The best mediator for your case is not the person who you think will agree with your position and argue for it.  As a lawyer, you should be able to handle that yourself.  Instead, the best mediator is the one who will encourage both sides to listen.  The side that may need this the most may be your own.

 

 

Baseball Arbitration Isn’t Just for Baseball

By Jeffrey S Stern

In 1966, Marvin Miller, a labor economist with various unions, became the executive director of the Major League Baseball Players Association, serving in the position until 1982.

No less an authority than Red Barber has said that Miller, along with Babe Ruth and Jackie Robinson, are among the “two or three most important men in baseball history.” That Miller is not yet a member of the Baseball Hall of Fame is a travesty, but that’s another story.

Miller’s tenure included the first Collective Bargaining Agreement in 1968, which raised the annual minimum salary for players from $6,000 to an unheard-of $10,000.

After various challenges to long-standing rules that tied players in perpetuity to their teams, Miller eventually negotiated a CBA that provided for free agency, but only to players with six years of service.

To solve the problem of salary disputes for players not yet eligible for free agency, Miller developed a streamlined procedure. The formal term, used in the ADR world, is “final offer arbitration,” or FOA. It had been used in other kinds of disputes previously, but it was Miller’s twist on it that led to its further use and development — and the name by which it is now widely known, “baseball arbitration.”

This is how the procedure works in Major League Baseball. First, it applies to disputes over salary and nothing else. The player and the team each submit a proposed salary for the coming year to a three-person arbitration panel. They do so blindly, that is, without benefit of knowing the other side’s figure. The figures are then disclosed.

The hearing before the panel is tightly constricted, both in terms of time (90 minutes per side) and by delineated criteria.

The unique and defining feature of the procedure is that the panel must opt for one figure or the other, with no ability to go in between or outside the two submitted proposals.

The charge to the arbitration panel is to select the most reasonable of the two salary proposals, with no written opinion. Thus, the procedure compels each side to put forward what it deems a reasonable figure.

Since salary information of free agents is well publicized (thereby creating appropriate benchmarks), the two proposals are frequently not far apart, and settlement is promoted. Indeed, approximately 80 percent settles before or after the figures are published but prior to the hearing.

For a number of years, I have encouraged the adoption of baseball arbitration procedures to resolve some disputes that come before me. Perhaps due to unfamiliarity with the procedure, my entreaties were never successful — until a few months ago. With the kind permission of counsel, I have been authorized to describe (albeit vaguely) this recent case.

I was asked to mediate a claim arising from a dispute about the meaning of a termination clause in a contract for personal services. The amount at issue was relatively modest, and the parties had already invested significant time before appearing at my office for mediation.

Even though both sides (and counsel) wanted the case to end, the mediation was unsuccessful, in part because of a dispute about potential testimony of a key witness.

After careful consideration of a number of ways forward, such as the familiar “mediator’s proposal,” the parties opted for baseball arbitration, primarily because they knew it would end the case.

Before proceeding further, the parties requested that I subpoena the key witness to testify, which I did. Shortly thereafter, and consistent with a negotiated scheduled, each party submitted its recommended award, accompanied by a brief supporting document.

As with Major League Baseball, the submissions were blind to each other, then published by me. I waited about a week (as previously agreed) to give the parties an opportunity to discuss settlement if they so chose.

No settlement ensued. After oral argument (by phone), I waited an additional week and then issued my award. As is typical in my arbitration practice, I wrote a “Reasoned Opinion” so that the parties would understand my rationale, although that is certainly not a requirement of the process and would not happen under Major League Baseball rules.

Based on subsequent feedback with counsel, I believe all parties felt reasonably satisfied, although obviously one was happier than the other (a factor that causes many mediators to not offer arbitration services).

In this case, however, I think the process was well suited to the needs of the parties and particularly the compelling need, mutually felt, to put the dispute behind them.

Tort litigation, business disputes, even probate litigation

As a result of the experience, I have tried to educate myself about the process and to consider, in a more organized way, how and when principles of baseball arbitration might be applied.

Some of the literature in the field suggests that it is best applied to one-issue disputes, as is true in Major League Baseball. In the context of a tort or contract case, the most typical situation would be one in which there is little or no dispute about liability, but the parties disagree about damages.

I am not convinced, however, that its use needs to be so confined. As trial lawyers, we are thoroughly accustomed to combining our analyses of liability and damages, frequently entailing both factual and legal disputes, and making settlement recommendations based on the process.

In a hypothetical baseball arbitration of such a case, the two sides, and the arbitrator, may well balance liability and damage figures in a different way, but there is no reason why an arbitrator should not be able to comfortably arrive at a conclusion that one side’s proposal was more reasonable than the other.

Assuming the proposals are in the form of dollars, the procedure should be able to work for a wide range of disputes, spanning simple or complex tort litigation, business disputes of all kinds and even probate litigation.

As with most forms of ADR, flexibility is the hallmark. The parties can proceed with limited discovery, or no discovery. They can present the case on an agreed statement of facts, or on some agreed quantum of evidence.

They can even agree on a version (humorously referred to as “night baseball”) in which the written proposals are sealed but not revealed to the arbitrator. The arbitrator then issues a decision, the proposals are unsealed, and whichever is closest to the arbitrator’s award carries the day.

A frequently voiced complaint about commercial arbitration is that it has morphed into something too closely resembling the overblown and overpriced litigation that it was intended to replace.

Any form of arbitration, at least theoretically, allows the participants to fashion their own set of rules and limitations (unless bound by some previous arbitration clause). However, baseball arbitration is particularly well attuned to a more streamlined, less time-intensive procedure. As was true in my case described above, the parties know their case will end and under circumstances in which they can effectively control the costs.

To my mind, the most significant advantage of baseball arbitration derives from its unique feature. Since the arbitrator is directed to choose the more reasonable of two figures, it forces each side to be reasonable, at least by their own reckoning.

Unlike conventional arbitration, where arbitrators may be tempted to “split the baby,” thus driving the parties to extreme positions, baseball arbitration does just the opposite.

The experience of baseball salary arbitration demonstrates, quite convincingly, that the rules of the game do, in fact, drive settlement-inducing behavior. While there are other settlement drivers in MLB salary disputes, such as effect on clubhouse “chemistry,” the procedure itself is the most important.

In going through the process myself, I confronted an issue that seems to not have been addressed in the literature, perhaps because it is not a problem in baseball salary arbitration itself. The issue can best be understood by a hypothetical.

Assume a contract case in which the arbitrator would evaluate liability as 60/40 in favor of the plaintiff, with full damages of $500,000. Traditionally, one would say that the mathematical settlement value is $300,000.

If the defendant’s proposed figure was $250,000 and the plaintiff’s was $400,000, which does the arbitrator choose? If based on “settlement value,” he would select the defendant’s proposal.

However, if he were acting as a “pure arbitrator,” he could conclude that the plaintiff satisfied his burden of proof on liability and the award on that basis would be $500,000, so he selects the plaintiff’s figure.

While there is probably no “right answer” to this conundrum — and most arbitrators would probably think in terms of settlement value — the question should perhaps be addressed with the parties at the outset.

On the basis of my (limited) experience, I have long believed that baseball arbitration has much to recommend it as a cost-efficient way to effect final resolution. It is a suggestion I will continue to raise in appropriate cases.

Jeffrey S. Stern practices at Sugarman, Rogers, Barshak & Cohen in Boston.

Allocating Damages After Curry

As you may know, Curry v. The American Insurance Company, 80 Mass. App. 592 (2011) is a decision that has altered and helped facilitate settlements of third-party claims by workers injured in the course of their employment.  In Curry, the Appeals Court ruled that though workers’ compensation insurers’ rights to reimbursement extend to medical expenses and lost earnings or earning capacity, both being compensable under the worker’s compensations act, they do not extend to damages allocated for pain and suffering and loss of consortium in third party claims, which are not compensable under the Act. On December 1, 2011, the SJC denied review of the Court of Appeals’ decision so its findings stand in Massachusetts.

Curry involved a medical malpractice wrongful death case arising from injuries sustained initially in a work-related automobile accident. The parties agreed to arbitrate the third party claim pursuant to a high/low arbitration agreement.  The plaintiff received an unallocated $300,000 award.  Great American filed a statutory lien to recover full amounts it had paid in workers’ compensation benefits under G.L. c. 152 §15.  The estate filed a declaratory relief action seeking to have the lien declared invalid. A Superior Court judge allocated damages as follows:  $100,000 representing net expected loss of income, $100,000 representing conscious pain and suffering of the deceased, and loss of consortium damages of the decedent’s spouse ($60,000) and emancipated son ($40,000).  Of note, the insurer did not contest the fairness of the allocation between the components of the third party damages and there was not an argument that the allocation was wrongfully structured to insulate a significant portion of the proceeds from the insurer’s statutory rights nor a possible offset against any excess recovery for future compensation benefits it may have to pay, the so-called Hunter offset.

However, the insurer argued that their right of lien reimbursement extended to claims for consortium like damages brought under the Wrongful Death Act as well as to claims for the deceased workers conscious pain and suffering.  A Superior Court justice ruled that their lien attached to neither.  While it had long been well settled that a workers’ compensation lien does not attach to loss of consortium claims, See Eisner v. Hertz Corp., 381 Mass. 127, 132–133 (1980), the insurer argued that a wrongful death claim is distinguishable since brought by the estate’s personal representative and not a separate action by a consortium survivor.  However, the appellate court agreed with the Superior Court’s view that such a result would “put form over substance”, and that “the reasoning behind the court’s holdings in [loss of consortium cases] does not derive from the fact that a spouse or other family member brought a separate loss of consortium claim, but from the independent nature of the loss suffered by the person”.  The Appeals court also agreed with the lower Court judge that the primary goal of the compensation statute is wage replacement, as distinguished from more expansive tort damages, and that the workers’ compensation payment is not for pain and suffering, which is not a compensable injury under the Act.

Accordingly, plaintiff’s attorneys representing injured employees and their families in third party cases are being dutiful in negotiating respective allocations when resolving these cases, particularly at mediation sessions.  They are also including such allocations in mediation settlement agreements, releases and other needed closing documents.  Though most defendants and their insurers seek and insist upon finality when agreement is reached to settle a third party case, in cases where final agreement cannot be reached with the workers’ compensation lien holder involved, plaintiffs have at times been able to have the agreed settlement be contingent upon either subsequent acceptance of specific terms of allocation and net recovery by the lien holder and/or approval of such specific allocations and terms by the Court or Department of Industrial Accidents under G. L. c. 152, § 15.

Ideally, the workers compensation lien holder will be invited and agree to participate in person, or at least by telephone conference, at the mediation session to provide agreement with any such allocations made as well as to negotiate and reach agreement as to the net lien amounts to be paid out of the third party settlement.  This would allow for a Petition for Settlement Approval under G.L. c. 152, §15 to be jointly submitted and approved by either the Court or the Department of Industrial Accidents.

While agreement with the lien holder is reached in most cases settled at mediation, at times the insurer may disagree with either the allocation of damages being proposed and/or the net amount of the lien to be payable.

In cases where agreement cannot be reached, the Court in Curry found that if the allocation proposed by the plaintiff is fair and reasonable and has a “sound basis in law” it must be approved even over the objections raised by the insurer, and that a judge cannot impose their own allocations. The workers’ compensation insurer is placed in the position to establish they are not fair or reasonable and seek to have a new proposal submitted.

In light of the Curry decision, the Industrial Accident Board in April of 2012 revised its § 15 interactive calculator and petition by circular as follows:

 

……..Henceforth, § 15 petitions submitted to the industrial accident board for

approval should specify the amount allocated to compensate the employee for

her/his conscious pain and suffering, as well as any amount(s) recoverable in

damages for the loss of consortium claims of family members. Amounts so allocated

are beyond the reach of the workers’ compensation insurer’s lien, and therefore are

not subject to offset against the employee’s future entitlement to c. 152 benefits. See

Hunter v. Midwest Coast Transport, 400 Mass. 779 (1987).Where the employee and the

workers’ compensation insurer are unable to agree on the amount of an allocation,

either party may submit a petition delineating the amounts of all proposed allocations

and request a hearing before the board. After notice to all parties, the matter will be

assigned to an administrative law judge to consider “the merits of the settlement” as proposed.

G. L. c. 152, § 15. The judge will approve or reject proposed settlement petitions. The judge

will not substitute his judgment of that of the parties and impose upon them his own formula.

See Walsh v. Telesector Resources Group, Inc., supra at 233.” Hultin, supra, at 698 n.8.

 

The Curry findings support the understanding that the function of the board or the court in a Section 15 approval is to approve or reject the settlement, and not to make its own findings as to allocations based on reasonableness.

Accordingly, plaintiffs and their counsel must be careful to evaluate and be prepared to support that any allocation of damages made in a third party settlement where there is a workers’ compensation lien be “fair and reasonable” and have a “sound basis in law”.

The Curry decision is troubling for the workers’ compensation subrogation industry, as it relates to subrogation against damages awarded for conscious pain and suffering since it has the potential to lower subrogation recoveries in Massachusetts.  Accordingly, worker’s compensation insurers are becoming more proactive in third party subrogation cases prior to the presentation of the Section 15 petition to engage in the process of establishing fair and reasonable allocations and net monies to be recovered by the workers’ compensation insurer under Section 15 and are filling appeals to dispute the allocations by plaintiffs.

There are very few reported cases in Massachusetts that address the issue of fairness in the allocation of damages.  What can we at MDRS do to assist parties in this context?  As in many such circumstances, ADR IS THE ANSWER. 

Mediation:  An impartial experienced mediator can assist plaintiffs and workers compensation insurers in negotiating not only appropriate allocations of damages in third party cases but also the net amount to be payable to satisfy workers compensation liens.  That is why it is so important that particularly large lien holders, such as workers’ compensation lien holders, be invited to attend a mediation session, or at least be available during the session by telephone, so that they can hear directly from the impartial mediator and participate in reaching a binding resolution for all involved.

    Arbitration:  While arbitrators may well respond to such requests differently, parties, ideally jointly, might consider requesting that the arbitrator selected to decide a third party case which involves a workers’ compensation lien, specifically make allocations of damages in their award, such as medical expenses, lost wages, loss of consortium and pain and suffering.  Plaintiff’s attorneys are more often making such requests in the Courts for modifications to special verdict slips to itemizing the allocation of damages among the damage components that are reimbursable and those that are not.

It is the adaptability afforded by ADR processes such as mediation and arbitration that affords plaintiffs, defendants, and workers compensation lien holders in these cases the opportunity to talk, reason, negotiate and resolve third party cases so that the Curry findings can be navigated and its uncertainties avoided.

Mediation Settlement Day

Mediation Settlement Day was held in New York State on Thursday, October 18, 2012.

Mediation Settlement Day is an annual event organized by a coalition of over 100 organizations with the purpose of creating awareness about the benefits of mediation as well as the resources available to those who need it.

On Mediation Settlement Day, organizations conducted a variety of special programs which were made to promote mediation. These programs also helped educate attorneys and potential parties about what the mediation process entails. The goal of Mediation Settlement Day was to encourage disputing parties to try mediation.

The message that Mediation Settlement Day hoped to impart was that mediation is an efficient way to resolve differences. Parties were able to learn about how valuable and effective mediation can be.

Attendees included anyone interested in becoming a mediator or learning more about mediation as a way to resolve disputes. This included individuals, attorneys, mediators, and corporate and law firm representatives. Participants were mostly from the Greater New York City area, but there were participants from across the country. The event offered panel discussions, presentations, an open house, and more.

Massachusetts Dispute Resolution Services (MDRS) also holds Mediation Settlement Days for insurers and large companies who are able to schedule up-to-hourly mediation sessions throughout a full day in their offices.  These days are very cost effective for both the insurer as well as for the plaintiff.  Please contact MDRS at (800) 536-5520 to learn more about how our Settlement Days could work for you.

ADR Pioneer Roger Fisher Dies

Roger Fisher, a pioneer in the field of international law and negotiation and the co-founder of the Harvard Negotiation Project, died on August 25, 2012. He was 90 years old. A professor at Harvard Law School for more than four decades, Fisher established negotiation and conflict resolution as a field deserving academic study and devoted his career to challenging students and colleagues alike to explore alternative methods of dispute resolution.

Over his career, Professor Fisher eagerly brought his optimistic can-do brand of problem solving to a broad array of conflicts across the globe, from the hostage crisis in Iran to the civil war in El Salvador. His emphasis was always on addressing the mutual interests of the disputing parties instead of what separated them. As he would tell his students, “Peace is not a piece of paper, but a way of dealing with conflict when it arises.”

Fisher’s work laid the foundation on which much of the field of negotiation and conflict resolution has been based. His best-selling book, “Getting to Yes: Negotiating Without Giving In” (co-authored with William Ury in 1981), has been translated into 23 languages and has sold more than 3 million copies worldwide. Prior to the publication of “Getting to Yes,” there were almost no regular courses in negotiation taught at academic institutions. Now there are hundreds, if not thousands, of courses devoted to negotiation.

Recent Decisions and Developments Involving ADR – October 2012

Arbitration clause in Bill of Lading not enforceable

The plaintiffs alleged that a shipment of fruit from Morocco to New Bedford arrived in moldy condition. A defendant who chartered the vessel sought a stay or dismissal to allow for arbitration. However, the Court found that the plaintiffs were not bound by the arbitration clause and thus the defendant’s motion was denied.

The arbitration clause at issue read… ‘Any dispute arising under this Charter Party to be referred to the arbitration in London, according to English Law, one arbitrator to be nominated by the Owners and the other by the Charterers, and in case the arbitrators shall not agree then to the decision of an Umpire to be appointed by them the award of the arbitrators or the umpire to be final and binding upon both parties.’

The issue became whether the arbitration clause contained in the charter party agreement, incorporated as it is into the bill of lading, is enforceable against the plaintiffs.  The Court found that the validity of agreements to arbitrate entered into between parties from different countries is governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Convention is implemented by Chapter Two of the Federal Arbitration Act. The Convention as set forth in Chapter Two of the Federal Arbitration Act requires, as a preliminary matter, that an arbitration clause be part of an ‘agreement in writing’ in order to be enforceable.

The Court found that the Plaintiff was not bound by the arbitration clause contained in the charter party agreement because the bill of lading does not meet the requirements for an ‘agreement in writing’ under Chapter Two.  Maroc Fruit Board S.A., et al. v. M/V Vinson, et al, (7 pages) (Tauro, J.) (USDC) (Civil Action No. 1:10-10306-JLT) (July 11, 2012).

Arbitration – Denial of Motion to modify arbitration award upheld

A Superior Court judge denied a motion by a defendant to modify an arbitrator’s award.  Upon appeal pursuant to G.L.c. 251, §13, the Court upheld the denial despite finding some questionable conclusions by the arbitrator.

The defendant had sought modification of the arbitrator’s award arguing that (a) the c. 93A award in favor of  the plaintiff Broderick rested upon the invalid grounds (i) that he had been serving as Broderick’s attorney furnishing services in the open market, and (ii) that the true relationship of the parties as joint venturers precluded application of c. 93A liability; and (b) that the arbitrator had wrongly failed to award him prejudgment interest of approximately $84,500 upon the $301,591 capital deficiency of Broderick.  The Superior Court judge concluded that these contentions did not fall within the narrow grounds for modification of an arbitral award.  On appeal the Court stated that their review confines itself to determinations of (1) whether the arbitrator has committed any error itemized in G.L.c. 251, §13(a)(1)-(3), such as miscalculation of figures, misidentification of persons or property, or action upon a matter not submitted to him, or defects of form; (2) whether the arbitrator has delivered an award totally devoid of factual and legal support in the record, … and (3) whether the arbitrator has rendered a result in violation of public policy, citing Superadio, Ltd. Partnership v. Winstar Radio Prods., LLC, 446 Mass. 330, 334 (2006).

The Court found that none of these exceptional grounds to be present stating that …”Lombardi does not claim that the arbitrator travelled beyond the bounds of the arbitration agreement. He does not argue that the result violates a public policy as distinguished from his private interests. Finally, he does insist that the challenged elements of the arbitrator’s decision lack support in evidence and law. The role of Lombardi in the treatment of the disputed property deeds was arguable. We cannot modify even though we may have concluded differently from the arbitrator. The refusal of the arbitrator to award interest upon the joint venture capital account deficit accumulated by Broderick is arguable also. While the arbitrator could have rendered a more explicit explanation of that decision, the record does permit us to infer that the volume and complexity of dealings between the two parties over the course of the years left the calculability of interest indefinite and unreliable.”

Broderick v. Lombardi, et al.  (5 pages) (Appeals Court – Unpublished) (No. 11-P-854) (Aug. 29, 2012).

Arbitration – Employment  Constructive discharge

In a case where two employees with heart conditions filed suit claiming that the defendant employer constructively discharged them, the USDC judge found that the dispute must be referred to an arbitrator pursuant to language of a Problem Resolution Policy instituted by the employer.

The plaintiffs contended that enforcing such an arbitration clause in the circumstances involved would not be ‘appropriate’ under the ADA. …, and argued that that defendant failed to provide appropriate notification that they were required to arbitrate their claims before seeking a judicial remedy, in so far as the language of the Policy was ambiguous such that a reasonable person could read it and conclude that the Policy presented an optional alternative to litigation, and that defendant did not otherwise explain that the Policy required them to arbitrate claims before proceeding to court.

However, the Court found the plaintiffs’ argument is contradicted by the plain language of the Policy and that for the arbitration agreement to be binding, defendant is not required to show that plaintiffs actually understood their obligations under the Policy, only that they gave plaintiffs ‘the information sufficient to put a reasonably prudent employee on adequate notice of the agreement to arbitrate.’ … Here, defendants clearly met that standard. Plaintiffs received a copy of the Policy and signed a form certifying that they reviewed the Policy, had an opportunity to ask questions about it, and understood how they were required to resolve disputes. … The fact that plaintiffs cannot remember signing the certification or reading the Policy does not ‘rebut defendant[’s] overwhelming evidence that [they] did, in fact, have actual knowledge of the Policy and its terms.’ …”

Salvi, et al. v. TRW Automotive U.S. LLC,  (10 pages) (Saylor, J.) (USDC) (Civil Action No. 11-40085-FDS) (Jan. 30, 2012).

Arbitration clause doesn’t cover applicant seeking job

A mandatory arbitration clause in an employment application was unenforceable against a pregnant woman who brought suit after being denied a job, the 1st U.S. Circuit Court of Appeals has ruled in a 2-1 decision. The employer argued that the arbitration clause unambiguously covered all disputes with job applicants. But the 1st Circuit disagreed, holding that because the clause was ambiguous, and because the party that drafted it had all the bargaining power, it should be construed against the employer.

“[N]othing in the arbitration clause refers to ‘applicants,’” Judge Kermit V. Lipez wrote for the court. “Instead every reference is to ‘your employment, ‘the employment process,’ or ‘pre-employment disputes.’ Accordingly, there is a reasonable basis for [the applicant’s] belief that she would only be bound by the arbitration clause if ultimately hired.”

The plaintiff Gove completed an online application for a position with the defendant that included a mandatory arbitration clause stating that “any dispute between you and CSD with respect to any issue prior to your employment, which arises out of the employment process” would be resolved through arbitration. Gove placed a checkmark in a box that indicated her assent to the agreement and submitted the application.

Gove later interviewed for the position with CSD, when visibly pregnant.  She was asked when she was due to deliver and if she had other children. She was not hired and Gove filed a complaint with the Maine Human Rights Commission, which found reasonable grounds to conclude that she had been denied the position because of her pregnancy.   Gove sued CSD in U.S. District Court, alleging discrimination on account of her gender and her pregnancy.

CSD moved to compel arbitration, citing the arbitration clause in the application. But Judge George Z. Singal denied the motion, finding the clause invalid due to ambiguity as to whether it covered an applicant who was not hired and concluding under Maine contract law that such an ambiguity must be construed against the party that drafted the agreement.

CSD appealed and the 1st Circuit determined, in contrast to the trial court, that the provision itself was not invalid and that if had Gove been hired, it was conceded that she would have been required to arbitrate disputes stemming from events occurring prior to employment. “Thus, she is arguing that her employment by CSD is a condition precedent to her obligation to arbitrate,” Lipez said. “However, the nonoccurrence of a condition precedent does not render an agreement invalid. It simply means that the duty to perform does not arise.”  Turning to the issue of scope, Lipez noted that in normal circumstances the 1st Circuit would give significant weight to the federal policy of presuming arbitrability. But since CDS did not argue that policy on appeal, arguing exclusively that the agreement itself unambiguously applied to job applicants who were not ultimately hired, the federal policy would not be considered. Instead, the 1st Circuit applied Maine contract law construing a contractual provision against the party that drafted it. “Gove argues that the clause’s references to the ‘employment process’ and ‘pre-employment disputes’ should be read literally,” Lipez said. “Under her reading, if one is never employed by CSD, then a dispute cannot be ‘pre-employment’ or related to the ‘employment process’ and the arbitration clause is inapplicable.”

The court found that it was reasonable for Gove to believe that she would only be bound by the arbitration clause if she was hired. Accordingly, Lipez said, the provision was indeed ambiguous.

Additionally, the court found, Gove was in no position to bargain over the terms of the application. Instead, she was required to accept the arbitration clause as part of the online application with no meaningful way to clarify its meaning. While the court conceded that Maine law — like federal law — has a broad presumption in favor of arbitration, it emphasized that where there is a significant disparity of bargaining power, as there was here, the equitable rule construing the contract against the drafter trumps that presumption. “Because of [this] obligation under Maine law, we conclude that Gove is not required to arbitrate her claims,” Lipez wrote.

Judge Juan R. Torruella dissented, disagreeing with the majority’s determination that CSD had waived arguments based on the federal policy favoring arbitration.

The case underlines the principle that employers must draft their agreements carefully and precisely.

Arbitration – Fee dispute

Where a Superior Court judge confirmed an arbitration award that resolved a fee dispute between the plaintiff and the defendant law firm, the arbitrator did not refuse to hear material evidence, so the confirmation order should be affirmed.

“… [Defendant] Goodwin [Procter] moved to exclude evidence that [plaintiff] Northland sought to introduce to show that one of Goodwin’s senior partners had disclosed confidential information about Northland to an investor, in violation of the law firm’s duty of loyalty and in breach of its obligation of confidentiality. … After reviewing the case law and considering the arguments made by the parties, the arbitrator determined that the evidence was immaterial and should be excluded. On October 19, 2010, the arbitrator issued a decision, awarding Goodwin approximately forty-five percent of the legal fees it was seeking from Northland.

“… Northland argues that the arbitration award should have been vacated rather than confirmed because the arbitrator ‘refused to hear evidence material to the controversy,’ which is one of the bases for vacatur enumerated in G.L.c. 251,§12(a)(4), inserted by St. 1960, c. 374, §1.

“To begin with, we disagree with Northland’s contention that this court is empowered to engage in more searching inquiry in its review of an arbitration award simply because what has been arbitrated is an attorney’s fee dispute. We read Marino v. Tagaris, 395 Mass. 397 (1985), as an exercise of the Supreme Judicial Court’s supervisory power — a power committed by statute only to that court, see G.L.c. 211, §3 — rather than as calling for more searching inquiry in the ordinary course of arbitration awards in attorney’s fee disputes.

“In any event, even if more searching inquiry were called for, Northland has failed to demonstrate that the arbitrator ‘refused to hear evidence material to the controversy.’ G.L.c. 251, §12(a)(4). The arbitrator’s decision not to admit the evidence was made after a full offer of proof and oral argument. Even if the evidence were material, the arbitrator’s decision does not amount to a ‘refus[al]’ to hear it. … The statute speaks of ‘refus[ing] to hear evidence material to the controversy,’ not of erroneous determinations not to admit material evidence or ‘failures’ to hear material evidence. We therefore do not read the statute to create a special rule by which, contrary to the ordinary principles of review of arbitration awards, we may vacate an arbitrator’s award simply because we decide that evidence we determine to be ‘material’ was erroneously excluded from the arbitration.

“For aught that appears in the record, the arbitrator in this case may simply have concluded that the alleged breach of fiduciary duty, which caused no injury to Northland, provided no defense to Goodwin’s fee claim, and that the proffered evidence, which the arbitrator evaluated, was therefore not material to the issue before him. Even if the decision by the arbitrator to exclude the evidence were based upon an error of law, a point on which we express no opinion, an error of law does not provide a basis for a court to vacate an arbitration award. …”

Northland Investment Corporation v. Goodwin Procter LLP (4 pages) (Rubin, J.) (Appeals Court) Case heard by Haggerty, J., and a motion for partial relief from judgment or to alter or amend the judgment considered by her. (Docket No. 11-P-1555) (July 25, 2012).

UM Arbitration plaintiff entitled to pre-award interest

10:43 am Thu, July 19, 2012
The estate of a woman who was seriously hurt in an automobile accident was entitled to pre-award interest on an arbitration award in the woman’s underinsured motorist (UM) claim, the Appeals Court has ruled. An arbitrator awarded no interest all, reserving the issue for the Superior Court. A Superior Court judge, in confirming the arbitration award, awarded post-award interest but declined to award pre-award interest.

But the Appeals Court ordered that the arbitration award be amended to included pre-award interest.

“A claim for underinsurance benefits properly is considered to be a contract action,” Judge Joseph A. Trainor wrote for the court. “In her motion to confirm the award, the plaintiff properly requested that preaward interest be added from the filing date of her application to compel arbitration. We see no reason why preaward interest should not be added to the arbitrator’s award in these circumstances as part of the damages the plaintiff is ‘legally entitled to recover’ under [Ch. 175, Sec. 111D, which mandates arbitration when UM disputes can’t settle].”

The court also ruled, in an issue of first impression, that the issue of pre-award and post-award interest in arbitrated UM claims can indeed be reserved for consideration by a Superior Court judge. Additionally, the court found that pre-award interest should be calculated based on net, as opposed to gross, damages.

The original plaintiff was severely injured in a motor vehicle accident on Jan. 4, 2002. Before she died on June 9, 2003, she settled her personal injury claim for the $100,000 policy limit.   After her death the executor of her estate brought a claim for underinsured motorist benefits against the defendant Plymouth Rock Assurance Corporation. The parties could not agree on the amount of damages. On December 31, 2007 the executor Bolman filed an application in Superior Court to compel arbitration. The case was arbitrated in March 2010 and in May of 2010 the arbitrator issued a decision awarding $150,000 in gross damages. The parties agreed that they would resolve any offsets among themselves. The arbitrator also wrote in the final paragraph of his decision that the parties agreed to have any question of interest determined “by the court.”  $42,000 was sent by the insurer to the estate, deducting $108,000 for the $100,000 tort payment recovered and $8,000 paid in personal injury protection benefits.

The plaintiff filed a motion in Superior Court to confirm the arbitrator’s award, seeking both pre-award and post-award interest.  She also sought to have the interest payments calculated based on the $150,000 gross award rather than the $42,000 net award.  The insurer opposed the motion, arguing that the plaintiff was not entitled to pre-award interest and that any interest award should be calculated based on the net award.

Superior Court Judge Richard E. Welch III awarded post-award interest based on the net award but declined to award pre-award interest.

The Appeals Court first found that pre-award interest is indeed permissible under state law and – by extension – the Plymouth Rock policy, noting that the SJC held in its 2002 decision in Connecticut Valley Sanitary Waste Disposal, Inc. v. Zielinski that “’the entitlement of a party to preaward interest is a decision that is within the purview of arbitrators.’”  Pre-award interest compensates prevailing parties for the loss of use of money that they should have had to begin with and shouldn’t have had to chase, and thus are truly part of compensatory damages, the judge continued. As a result, he said, such interest awards can be part of the damages a plaintiff is “’legally entitled to recover’” under Sec. 111D.

The Court then found that the interest issue in a UM arbitration can be reserved by an arbitrator for consideration by a judge. “Generally, in a proceeding to confirm an arbitration award, a judge may not alter an arbitrator’s decision that allows, denies or fails to mention preaward interest,” Trainor acknowledged. He also conceded that the Appeals Court had on other occasions vacated trial judges’ additions of pre-award interest to arbitration awards.  But in those cases, Trainor wrote, the arbitration awards were completely silent on the issue of pre-award interest, while in this case the arbitrator clearly referenced the parties’ agreement that a judge would resolve the interest issue.

The court found that pre-award interest should have been awarded in this particular case, characterizing the claim as a “contract action.” In contract actions, interest is automatically added to damages at the

The Court however noted that  “[i]t is worth reiterating that any determination that preaward interest shall be added … is … applicable only in circumstances where the interest issue has been reserved, as here.” Had the issue not been reserved, he said, “the determination made by the arbitrator, including silence on the issue, would not be reviewable, either here or below.”

Finally, the court concluded, the pre-award interest should be calculated based on the amount of the net award, not the gross award as the plaintiff had requested.

Class-wide arbitration claim allowed without an express agreement

The 1st U.S. Circuit Court of Appeals has held that an arbitrator, and not a judge, must decide if an arbitration agreement allows for a dispute to move forward individually or on a class-wide basis.

The plaintiff franchisor argued that the U.S. Supreme Court’s 2010 ruling in Stolt-Nielsen S.A. v. AnimalFeeds International Corp,. 130 S. Ct. 1758 (2010), required the express consent of the parties before arbitration could proceed as a class action. But the 1st Circuit disagreed, holding not only that an agreement silent on the class-action question did not control, but also that the arbitrator was properly in a position to decide the intent of the parties.

“We … reject the … precept, on which [the franchisor’s] argument depends, that there must be express contractual language evincing the parties’ intent to permit class or collective arbitration,” Chief Judge Sandra L. Lynch wrote for the court. “Stolt-Nielsen imposes no such constraint on arbitration agreements.”

The defendant owners association represented a group of franchisees that had entered into agreements with plaintiff Fantastic Sams Franchise Corp, a franchisor of a chain of hair salons known as Fantastic Sams.  In 2011, the owners’ association filed a demand for arbitration against the franchise corporation, seeking declaratory and injunctive relief on behalf of its members for breach of contract and violations of Chapter 93A. In response, the franchise corporation filed suit in U.S. District Court in Boston, seeking to stay the arbitration demand and compel the owners’ association to bring its claims on an individual basis.  The district court allowed FSFC’s petition as to some of the license agreements at issue, based on the terms of those agreements which contained provisions stating that any arbitration between the franchise corporation and owners’ association must be done individually.  That decision was not at issue in the appeal.

However, it denied relief as to ten other agreements, which contained different language. FSFC appealed this denial contending that the Stolt-Nielsen decision holds as a matter of law that no class or collective arbitration may proceed unless the arbitration agreement expressly authorizes those forms of proceedings.

However, the Court found…..“FSFC reads Stolt-Nielsen too broadly” and that “The parties in Stolt-Nielsen stipulated that their agreement was unambiguously ‘silent’ on class arbitration, not merely in the sense that the agreement made no express reference to class arbitration, but because ‘they had not reached any agreement on the issue.’

“We thus reject the very different precept, on which FSFC’s argument depends, that there must be express contractual language evincing the parties’ intent to permit class or collective arbitration. Stolt-Nielsen imposes no such constraint on arbitration agreements.

The Court further reject FSFC’s argument the arbitration agreements at issue here are ‘silent’ on class arbitration, within the meaning of the ‘silence’ recognized in Stolt-Nielsen, and thus preclude FSRO’s action. FSFC’s argument fails because the agreements at issue here are not ‘silent’ in the same sense that the agreement was silent in Stolt-Nielsen. Furthermore, the Supreme Court has not extended Stolt-Nielsen to the type of associational action brought by FSRO, which is different in many respects from the class-action arbitration at issue in Stolt-Nielsen.  We cannot conclude, under the auspices of Stolt-Nielsen, that as a matter of law the broad arbitration clause at issue here precludes arbitration of this issue. …

The Court also felt their conclusion is reinforced by the sweeping language of the arbitration clauses at issue here, and that the question of whether the parties to this arbitration agreement ‘agreed to authorize’ an action like FSRO’s, Stolt-Nielsen, 130 S. Ct. at 1776 n.10, is one for the arbitrators to decide.”

Fantastic Sams Franchise Corporation v. FSRO Association Ltd., et al. (18 pages) (Lynch, C.J.) (1st Circuit) Appealed from a decision by Gorton, J., in the U.S. District Court for the District of Massachusetts (Docket No. 11-2300) (June 27, 2012).

Mediation: It Pays To Be Civil

By Brian R. Jerome

Over the past 25 years I have had the distinct pleasure to serve as mediator in a large number of cases involving a wide variety of subject matters and I have had the opportunity to observe the differing demeanors, styles and presentations of parties, their attorneys, insurance and business representatives and other interested participants.  Why I love my job so much is that every day is different, every case is different and the interactions between the many participants at mediations vary so greatly.

I’m often asked to give advice on what works and what doesn’t at mediations, and how participants can maximize their chances for a successful outcome at these sessions.  ADR literature on this has felled many forests of trees.  Yet often overlooked in my judgment is the simple virtue of showing civility at all times during a mediation process.

I recently concluded a mediation involving a man severely handicapped at birth who allegedly suffered injury while in the care of a special needs provider.  The plaintiff’s family was angry and emotionally charged at the mediation session and reportedly had never heard an apologetic or sympathetic word from the defendant since the incidents involved had occurred.  Negotiations were not going particularly well.  At one point mid day the handicapped man was first brought to the office.  The attorney for the defendant was distinctively gracious, receptive and kind to the man while he was present.  The family expressed to me their sincere gratitude for this attorney’s showing of kindness and humanity to the plaintiff. Thereafter something changed in their demeanor. The case successfully reached settlement. I believe that this attorney’s simple showing of courtesy and civility played a significant contributing role in this settlement.

While most attorneys and other professionals who participate in mediations display similar traits of civility and courtesy during the mediation process, too often, perhaps in the pursuit of zealous advocacy for the client or their case, an attorney, representative or party, usually in the initial opening joint session, makes comments that cross a line and offend, demean or alienate their opponent.  One should consider that these initial comments at the joint session often set a tone for the hours that follow.  Such offending comments become counterproductive to the process and the mediator’s work.  Because of these comments, excessive and valuable time becomes required thereafter for the mediator to stabilize the person(s) offended by these comments, often in private caucuses, and make them receptive to compromise and the willingness to show the flexibility needed for a successful outcome.  My experience is that less Rambo and more Dale Carnegie, will significantly improve your odds for a successful mediated resolution.

Don’t confuse civility with weakness.  Attorneys, representatives and parties must be able to clearly state their positions as to all relevant issues that arise during a mediation.  How and when they do so at a mediation however is the issue. I see more and more that experienced trial attorneys, with track records of a success as zealous client advocates at trial, are choosing to leave their hatchets at home and making ever briefer and less contentious opening comments at the initial joint mediation session, knowing that the mediation process differs greatly from trial.

Most mediators recognize that for many parties a mediation can be viewed as their “day in court” and they may be used to, or expect, that their counsel in opening comments will zealously attempt to vanquish their opponent.  However, experienced counsel will advise their clients of what mediation is and isn’t and that their opening comments may not be what the client would hear at a trial.  Many comments or arguments that could offend the opponent if made at the outset in the open joint session can be shared with the mediator later in private caucuses.  Often a mediator may have a better sense of how and when such arguments could then be made most effectively and productively to the opponent.

Hopefully this mediator’s perspective can assist you in reaching more favorable results at your next mediation.

“Civility costs nothing and buys everything”    Mary Wortley Montagu

“The greater the man, the greater courtesy”   Ralph Waldo Emerson

NADN Membership for Brian Jerome

The National Academy of Distinguished Neutrals (NADN), an invitation-only association of exceptional Alternative Dispute Resolution professionals, has announced the induction of Brian R. Jerome, Esq. to its esteemed group.

The NADN recognizes mediators and arbitrators who have met stringent practice criteria, and whom stand out among firm- and peer-reviews.

The Academy has made its directory of neutrals like Brian available online, to encourage easier searching for the best ADR providers in any area.  Please visit www.nadn.org or www.mdrs.com for more information, and to view our NEW easy-to-navigate calendar tool for your scheduling ease.

 

MDRS Calendar

 


 

 


Click for Printable Summary of Available Dates

Please note the Calendar above is only for Brian Jerome and not for all of the panel members.
Please call Sheri Stevens at (800) 536-5520 to determine alternate neutrals’ availability.

 

Tips for Summer Productivity

It’s so easy to fall into the summer doldrums with the excessive heat and humidity, a sometimes quieter and less stressful work week, and less of a rigid schedule driving you at work and at home.  That’s why we’re dedicating this newsletter to you, our faithful clients and readers, and offering some ideas and inspiration to help you wrap up your summer.  Don’t let another summer pass you by!  Chose something from these ideas, incorporate it into your August, and put your best food forward into fall knowing you accomplished something special.

  • Empty your Inbox

Seems like an easy thing to do.  Well, maybe it is easy for some of us.  But for others, developing a new approach to processing your Inbox can help gain control, improve response time, and keep up with critical actions and due dates – and that’s worth a little effort!  But how?

  1. Set up a simple and effective email reference system.  Have a Reference Information folder(s) in which to store information that you keep in case you need it later.  As much as one-third of your e-mail is reference information, so be sure to consider how to break up and store your reference information so that you can easily find what you need when you need it.
  2. Schedule uninterrupted time to process and organize email daily.  Disciplining yourself toward having the habit of working through your daily e-mails during a set time frame will help you not only empty your Inbox, but you will also become more organized and efficient in no time at all.  Process one item at a time, and stick with that message until you’ve done everything you are able to do to file it away.  Resist the temption to jump around your Inbox in no particular order; it’s inefficient and won’t help you achieve your goals.
  3. Use the 4 D’s model of message options:

Delete it.  Does the message relate to a meaningful objective you’re currently working on? Will you refer to it within the next six months? Does the message contain information you are required to keep?  If not, delete that message.

Do it.  Ask yourself, what specific action do I need to take?  If you can do it in a relatively short amount of time, just do it.

Delegate it.  Can you forward the e-mail to a team member who can care for the task?  If so, delegate it and move on.

Defer it.  If you can’t Delete, Do, or Defer, you must turn the message into an actionable task, or turn it into an appointment.  Create a Task List that you can prioritize and schedule to complete on your calendar.  Defer such messages to your task list.

Use the 4 D’s every day.  Studies show that on average, people can process about 100 email messages an hour if they do so in an organized and efficient manner such as the 4 D’s.  If you receive 40 to 100 messages per day, all you need is one hour of uninterrupted email processing time to get through your Inbox!  Statistics show that of the email you receive:

– 50% can be deleted or filed;

– 30% can be delegated or completed in less than 2 minutes;

– 20% can be deferred to your Task List or Calendar to complete later.

  • Rock your downtime

Many people report their most creative moments come to them when they least expect it.  New ideas squeeze into our consciousness when our mind takes a break.  Our memories work better when we’re not in overdrive, and the process of consolidating new memories takes time, peace, and quiet.  So rock your downtime by embracing the fact that downtime rocks!  Take time off when you can.  Rest when you can – and don’t feel guilty.

  • Enhance your skills

Harvard Business Review tells us that when times are tough, professional development is NOT a luxury.  In fact, often that is precisely when there is enough breathing room in the daily work flow to utilize the chance to better yourself.  Get some new training that you need, take a class, volunteer at court (or elsewhere that will improve your skill set), and see the pay off when things pick up and “normalcy” returns.  Training can increase productivity, increase collaboration, and fine-tune skills.  Motivate yourself by turning your downtime into opportunity.

  • Network

We all know that networking is one of the finer communications forms of this day and age, and expanding your own personal network can only be a positive endeavor.  Don’t have a Facebook page?  Never Tweeted in your life?  Think Linked-In has something to do with rusty chain-link fences?  It’s time, friend.  You don’t have to learn everything all at once.  Get yourself a basic understanding of which social networking tool you might be most interested in, open an account, and  give it a shot. Spend just a few short minutes on it every day for three weeks, and consider the ways in which this type of networking could help you and your business.  Say it, seize it, read it, sync it, tweet it, link it, post it, make the most of it!

  • Think and create

Think?  Really?  Yes, really.  Think about things you don’t have time to think about when you are busy.  What challenges face your clients and keep them up at night?  Take the next step and translate your knowledge into business activities that will help make you invaluable to your clients.  Start a blog if you don’t have one – keeping in mind that blogs are the most effective, lowest-cost form of online marketing for many businesses.  Subscribe to newsletters and see how others are doing it.  Post often.  Nobody’s reading it at first?  We all need to start somewhere.  Be sure to include a call to action, in order to generate a response and new business.  After you’ve discussed your point, invite readers to subscribe to your blog or newsletter.  Find ways to draw people in, and reap the benefits of being viewed as the uber-intelligent expert!

  • Update your iPhone Apps

Technology can be daunting, but making it really work for you brings the benefit of time and organization.  Did you know there are actually seminars about iPhone Apps?  No matter what your career choice, specialty, or interest, there are iPhone Apps that can help you make every day easier and more productive.  Use Madame Internet and search for ideas, and go to tech websites to see what people have to say about the App(s) you’re interested in.  Read reviews.  Switch from manual typing to voice recognition for typing e-mails, sending text messages, and making notes…you’ll save myriads of time and will be safer on the road as well.

And as you enjoy this last hot month, recall what Steinbeck once said:

“What good is the warmth of summer, without the cold of winter to give it sweetness.”

Remember, that chill will be here before you know it.

 

Our best to you all,

Brian Jerome and the MDRS team

Recent Decisions Involving ADR – August 2012

By Brian R. Jerome, Esq.

Arbitration – Fee dispute

Where a Superior Court judge confirmed an arbitration award that resolved a fee dispute between the plaintiff and the defendant law firm, the arbitrator did not refuse to hear material evidence, so the confirmation order should be affirmed.

“… [Defendant] Goodwin [Procter] moved to exclude evidence that [plaintiff] Northland sought to introduce to show that one of Goodwin’s senior partners had disclosed confidential information about Northland to an investor, in violation of the law firm’s duty of loyalty and in breach of its obligation of confidentiality. … After reviewing the case law and considering the arguments made by the parties, the arbitrator determined that the evidence was immaterial and should be excluded. On October 19, 2010, the arbitrator issued a decision, awarding Goodwin approximately forty-five percent of the legal fees it was seeking from Northland.

“… Northland argues that the arbitration award should have been vacated rather than confirmed because the arbitrator ‘refused to hear evidence material to the controversy,’ which is one of the bases for vacatur enumerated in G.L.c. 251,

§12(a)(4), inserted by St. 1960, c. 374, §1.

“To begin with, we disagree with Northland’s contention that this court is empowered to engage in more searching inquiry in its review of an arbitration award simply because what has been arbitrated is an attorney’s fee dispute. We read Marino v. Tagaris, 395 Mass. 397 (1985), as an exercise of the Supreme Judicial Court’s supervisory power — a power committed by statute only to that court, see G.L.c. 211, §3 — rather than as calling for more searching inquiry in the ordinary course of arbitration awards in attorney’s fee disputes.

“In any event, even if more searching inquiry were called for, Northland has failed to demonstrate that the arbitrator ‘refused to hear evidence material to the controversy.’ G.L.c. 251, §12(a)(4). The arbitrator’s decision not to admit the evidence was made after a full offer of proof and oral argument. Even if the evidence were material, the arbitrator’s decision does not amount to a ‘refus[al]’ to hear it. … The statute speaks of ‘refus[ing] to hear evidence material to the controversy,’ not of erroneous determinations not to admit material evidence or ‘failures’ to hear material evidence. We therefore do not read the statute to create a special rule by which, contrary to the ordinary principles of review of arbitration awards, we may vacate an arbitrator’s award simply because we decide that evidence we determine to be ‘material’ was erroneously excluded from the arbitration.

“For aught that appears in the record, the arbitrator in this case may simply have concluded that the alleged breach of fiduciary duty, which caused no injury to Northland, provided no defense to Goodwin’s fee claim, and that the proffered evidence, which the arbitrator evaluated, was therefore not material to the issue before him. Even if the decision by the arbitrator to exclude the evidence were based upon an error of law, a point on which we express no opinion, an error of law does not provide a basis for a court to vacate an arbitration award. …”

Northland Investment Corporation v. Goodwin Procter LLP (Lawyers Weekly No. 11-114-12) (4 pages) (Rubin, J.) (Appeals Court) Case heard by Haggerty, J., and a motion for partial relief from judgment or to alter or amend the judgment considered by her. (Docket No. 11-P-1555) (July 25, 2012).

 

Arbitration plaintiff entitled to pre-award interest

The estate of a woman who was seriously hurt in an automobile accident was entitled to pre-award interest on an arbitration award in the woman’s underinsured motorist (UM) claim, the Appeals Court has ruled.

An arbitrator awarded no interest all, reserving the issue for the Superior Court.

A Superior Court judge, in confirming the arbitration award, awarded post-award interest but declined to award pre-award interest.

But the Appeals Court ordered that the arbitration award be amended to included pre-award interest.

“A claim for underinsurance benefits properly is considered to be a contract action,” Judge Joseph A. Trainor wrote for the court. “In her motion to confirm the award, the plaintiff properly requested that preaward interest be added from the filing date of her application to compel arbitration. We see no reason why preaward interest should not be added to the arbitrator’s award in these circumstances as part of the damages the plaintiff is ‘legally entitled to recover’ under [Ch. 175, Sec. 111D, which mandates arbitration when UM disputes can’t settle].”

The court also ruled, in an issue of first impression, that the issue of pre-award and post-award interest in arbitrated UM claims can indeed be reserved for consideration by a Superior Court judge. Additionally, the court found that pre-award interest should be calculated based on net, as opposed to gross, damages.

The 14-page decision is Bolman v.Plymouth Rock Assurance Corporation, Lawyers Weekly No. 11-102-12.

The original plaintiff in this case, Natalie Parker, was severely injured in a motor vehicle accident on Jan. 4, 2002.

At some point before she died on June 9, 2003, Parker settled her personal injury claim with Liberty Mutual Insurance Company, the insurer for the person who caused the accident, for the $100,000 policy limit.

After Parker died, plaintiff Diane P. Bolman, the executor of her estate, brought a claim for underinsured motorist benefits against Bolman’s own insurer, defendant Plymouth Rock Assurance Corporation, to recover the excess damages Bolman had sustained in the accident.

The parties could not agree on the amount of damages and, as a result, on Dec. 31, 2007, Bolman filed an application in Superior Court to compel arbitration.

The dispute went to arbitration in March 2010 to determine the total damages, exclusive of interest or offsets.

On May 7, 2010, the arbitrator issued a decision awarding $150,000 in gross damages. The parties agreed that they would resolve any offsets among themselves. The arbitrator also wrote in the final paragraph of his decision that the parties agreed to have any question of interest determined “by the court.”

Plymouth Rock subsequently tendered a $42,000 check to Parker’s estate, deducting $108,000 for the $100,000 payment from Liberty Mutual and for an $8,000 payment under the personal injury protection provision in Parker’s own policy with Plymouth Rock.

Bolman filed a motion in Superior Court to confirm the arbitrator’s award, seeking both pre-award and post-award interest. She also sought to have the interest payments calculated based on the $150,000 gross award rather than the $42,000 net award.

Plymouth Rock opposed the motion, arguing that the plaintiff was not entitled to pre-award interest and that any interest award should be calculated based on the net award.

Superior Court Judge Richard E. Welch III awarded post-award interest based on the net award but declined to award pre-award interest.

The plaintiff appealed.

The Appeals Court first found that pre-award interest is indeed permissible under state law and – by extension – the Plymouth Rock policy.

As Trainor noted, the SJC held in its 2002 decision in Connecticut Valley Sanitary Waste Disposal, Inc. v. Zielinski that “’the entitlement of a party to preaward interest is a decision that is within the purview of arbitrators.’”

Pre-award interest compensates prevailing parties for the loss of use of money that they should have had to begin with and shouldn’t have had to chase, and thus are truly part of compensatory damages, the judge continued.

As a result, he said, such interest awards can be part of the damages a plaintiff is “’legally entitled to recover’” under Sec. 111D.

Next, the court found that the interest issue in a UM arbitration can be reserved by an arbitrator for consideration by a judge.

“Generally, in a proceeding to confirm an arbitration award, a judge may not alter an arbitrator’s decision that allows, denies or fails to mention preaward interest,” Trainor acknowledged.

He also conceded that the Appeals Court had on other occasions vacated trial judges’ additions of pre-award interest to arbitration awards.

But in those cases, Trainor wrote, the arbitration awards were completely silent on the issue of pre-award interest, while in this case the arbitrator clearly referenced the parties’ agreement that a judge would resolve the interest issue.

Further, he added, a number of other jurisdictions allow a court to award pre-award interest if the issue has been reserved in the text of an arbitration decision.

The court found that pre-award interest should have been awarded in this particular case.

Specifically, Trainor characterized the claim as a “contract action.” In contract actions, interest is automatically added to damages at the “contract rate” or at the rate of 12 percent annually from the date of the breach or demand, he said.

Because the plaintiff property requested that pre-award interest be added from the filing date of her motion to compel arbitration, the court saw “no reason” why it shouldn’t be done.

However, said Trainor, “[i]t is worth reiterating that any determination that preaward interest shall be added … is … applicable only in circumstances where the interest issue has been reserved, as here.”

Had the issue not been reserved, he said, “the determination made by the arbitrator, including silence on the issue, would not be reviewable, either here or below.”

Finally, the court concluded, the pre-award interest should be calculated based on the amount of the net award, not the gross award as the plaintiff had requested.

 

Class-wide arbitration claim OK

3:20 pm Thu, July 5, 2012
Massachusetts Lawyers WeeklyThe 1st U.S. Circuit Court of Appeals has held in an issue of first impression that an arbitrator, and not a judge, must decide if an arbitration agreement allows for a dispute to move forward individually or on a class-wide basis.

The plaintiff franchisor argued that the U.S. Supreme Court’s 2010 ruling in Stolt-Nielsen S.A. v. AnimalFeeds International Corp. required the express consent of the parties before arbitration could proceed as a class action.

But the 1st Circuit disagreed, holding not only that an agreement silent on the class-action question did not control, but also that the arbitrator was properly in a position to decide the intent of the parties.

“We … reject the … precept, on which [the franchisor’s] argument depends, that there must be express contractual language evincing the parties’ intent to permit class or collective arbitration,” Chief Judge Sandra L. Lynch wrote for the court. “Stolt-Nielsen imposes no such constraint on arbitration agreements.”

The 18-page decision is Fantastic Sams Franchise Corporation v. FSRO Association Ltd., et al., Lawyers Weekly No. 01-156-12.

Defendant Fantastic Sams Regional Owners Association represents a group of franchisees that had entered into agreements with plaintiff Fantastic Sams Franchise Corp.

The franchise corporation is the franchisor of a chain of hair salons known as Fantastic Sams.

In 2011, the owners’ association filed a demand for arbitration against the franchise corporation, seeking declaratory and injunctive relief on behalf of its members for breach of contract and violations of Chapter 93A.

In response, the franchise corporation filed suit in U.S. District Court in Boston, seeking to stay the arbitration demand and compel the owners’ association to bring its claims on an individual basis.

U.S. District Court Judge Nathaniel M. Gorton barred collective arbitration on 25 of the 35 agreements at issue because they contained provisions stating that any arbitration between the franchise corporation and owners’ association must be done individually.

The agreements were all written and entered into after 1988.

The remaining 10 agreements, executed prior to 1988, contained no express prohibitions on class or collective arbitration. As a result, Gorton denied relief.

He concluded that whether the agreements precluded the owners’ association’s action “is a matter of contract interpretation which the parties have agreed to submit to arbitration.”

In affirming Gorton’s denial, Lynch wrote that the question of what the parties agreed to authorize was for the arbitrator to decide. She said she disagreed with the franchisor’s claim that the lack of an express agreement prohibited a class-wide claim.

“[Fantastic Sams Franchise Corporation] reads Stolt-Nielsen too broadly,” she said. “The Court granted certiorari in that case to decide ‘whether imposing class arbitration on parties whose arbitration clauses are ‘silent’ on that issue is consistent with the [FAA].’”

Unlike Fantastic Sams, the Stolt-Nielsen parties stipulated their agreement was unambiguously silent on class arbitration.

“Although the arbitration panel had considered the language, context, and usage of the agreement in that case, the Court held that these considerations were ‘beside the point’ in a case in which the ‘parties were in complete agreement regarding their [lack of] intent,’” she wrote. “Once the parties stipulated that they had reached ‘no agreement’ on class arbitration, … ‘the only task … left for the panel … was to identify the governing rule applicable’ in the case.”

The franchisor’s argument failed, Lynch said, because the agreements in Fantastic Sams were not ‘silent’ in the same way they were in Stolt-Nielsen.

“Furthermore, the Supreme Court has not extended Stolt-Nielsen to the type of associational action brought by [Fantastic Sams Regional Owners Association], which is different in many respects from the class-action arbitration at issue in Stolt-Nielsen,” she wrote. “We cannot conclude, under the auspices of Stolt-Nielsen, that as a matter of law the broad arbitration clause at issue here precludes arbitration of this issue.”

 

Arbitration – Res judicata – Dismissal of teacher

Where the plaintiff, formerly a high school teacher with tenure, has challenged an arbitrator’s decision affirming his dismissal by the defendant school district for inappropriate sexual conduct toward a pupil, the plaintiff is barred by res judicata from proceeding with his federal claims in this court.

“The only issue currently before the court is whether [plaintiff Thomas] Atwater is barred by res judicata from proceeding with his federal claims in this court. Defendants contend that an absolute bar exists because the state court litigation, involving the same parties and the same dispute, reached a prior final judgment on the merits. …

“Defendants further contend that although Atwater attempted to preserve his federal law claims under the ‘England reservation,’ England [v. Louisiana State Bd. of Med. Exam’rs, 375 U.S. 411 (1964)] is inapplicable. … In contrast, Atwater was not ‘shunted’ from federal court for [R.R. Comm’n of Texas v. Pullman Co., 312 U.S. 496 (1941)] abstention reasons, but chose of his own volition to seek relief in the first instance from the state courts.

“Atwater, for his part, contends that this court’s stay and administrative closure of the federal case at the parties’ request was tantamount to Pullman abstention because he had suggested in the joint scheduling statement that the court stay the case based on Pullman abstention principles. There is nothing, however, in the record to suggest that the court adopted Atwater’s reasoning. The court did not analyze Atwater’s claims to determine if there were any difficult and potentially dominant state law issues that might complicate the resolution of the federal constitutional claims. Rather, the court assumed that, like many similarly situated plaintiffs, Atwater had chosen to proceed first in the local forum because he thought he had a greater likelihood of success there.

“Atwater next argues that the reservation of his federal law claims is effective because: (1) defendants waived any objections to his claim-splitting by agreeing to stay this case … and/or (2) the SJC acknowledged his reservation. However, defendants consistently voiced objection to the validity of Atwater’s purported reservation in their answers to Atwater’s state and federal complaints, in the joint statement to this court, and in their opposition to Atwater’s motion to reopen this case. Moreover, it is disingenuous for Atwater to suggest that the SJC reserved his federal claims or validated his reservation. The High Court only noted that Atwater sought to do so, and therefore his federal claims were not before the state courts.

“Finally, Atwater asserts that res judicata principles do not bar his federal law claims because: (1) an arbitration decision has no res judicata effects on subsequent §1983 civil rights litigation … and/or (2) a state court judgment does not foreclose subsequent §1983 civil rights litigation in federal court unless the claims were actually presented to and decided by the state court. … The first argument is a non-starter as defendants do not rely on the preclusive effects of the arbitration decision, but that of the lengthy state court litigation that concluded in the highest court of the state. The second argument is not the law in the First Circuit, where res judicata bars any subsequent claims, including §1983 claims, that could have been brought in an earlier-decided state litigation. …”

Atwater v. Commissioner of Education of the Commonwealth of Massachusetts, et al. (Lawyers Weekly No. 02-253-12) (7 pages) (Stearns, J.) (USDC) (Civil Action No. 06-11550-RGS) (June 20, 2012).

Mediation Confidentiality: Who, What, Where, When, How?

By Brian R. Jerome, Esq.

What Happens in Vegas…

Confidentiality is at the heart of a mediation session and is critical to a successful resolution.  The parties must be assured that they can share sensitive information at the session, where it is necessary to see that their true needs and interests may be met, without fear of subsequent disclosure to their detriment. Such confidentiality plays an important role both in the joint sessions involving all of the disputants at the mediation session, as well as in private caucuses which the mediator may have with one or more of the parties during the course of the session.  A mediator will seek openness and candor, particularly in such private caucuses, and it is often confidences that are shared in these private caucuses that are most helpful to the mediator in assisting the parties in sculpting a resolution that meets the needs of all parties involved.

The confidentiality of a mediation process is protected, in varying manners, by the terms of the mediation agreement signed, by statute or law, such as in Massachusetts by way of the mediator confidentiality statute, MGL  c. 233, s.23C, by various rules applicable to court connected ADR programs, and by judicial decisions.  As will be seen, in final analysis it is the written mediation agreement, sculpted by the parties to meet their specific needs, that affords disputants the best opportunity to assure the confidentiality of the mediation process.

Massachusetts’ Mediation Confidentiality Statute:

MGL c. 233, s.23C statesAll memoranda, and other work product prepared by a mediator and a mediator’s case files shall be confidential and not subject to disclosure in any judicial or administrative proceeding involving any of the parties to which such materials apply. Any communication made in the course of and relating to the subject matter of any mediation and which is made in the presence of such mediator by any participant, mediator or other person shall be a confidential communication and not subject to disclosure in any judicial or administrative proceeding; provided, however, that the provisions of this section shall not apply to the mediation of labor disputes. 

For the purposes of this section, a “mediator” shall mean any person not a party to a dispute who enters into a written agreement with the parties to assist them in resolving their disputes and has completed at least thirty hours of training in mediation and who either has four years of professional experience as a mediator or is accountable to a dispute resolution organization which has been in existence for at least three years or one who has been appointed to mediate by a judicial or governmental body.

This statute has rarely been the subject of review by the Courts in Massachusetts, which reflects how the principle of, and importance of, mediation confidentiality has been understood, sought, and adopted by those who participate in mediations. With rare exceptions, Massachusetts courts have strongly enforced the confidentiality provisions of both s.23C and confidentiality provisions contained in written mediation agreements.

Some examples follow:

I Can’t Dance, Don’t Ask Me:

Many of us who are long time mediators have had the occasion when a party to a mediation requests us to appear in Court to confirm various matters that may have arisen at a mediation and are disappointed when the neutral respectfully declines based upon the confidentiality provisions contained in the written mediation agreement and/or the provisions of the confidentially statute.  Even when the matter at issue is clear in the mind of the mediator and could be clarified with his testimony, a mediator must decline to share communications made at a mediation so as to enforce and maintain the strict, overriding, and critical principle of the confidentiality of the mediation process.

This issue was addressed in an important, yet unpublished opinion of a single justice of the Appeals Court, Judge Cynthia Cohen, in 2002, in cases involving the Archdiocese of Boston. In Francis Leary a/k/a/ and Others v. Father John J. Geoghan and Others, a Superior Court judge had ordered a mediator to testify at trial as to whether or not parties to a dispute had reached a settlement in the course of mediation. In so ruling, the trial judge held that confidentiality is a privilege held by the parties and not by the mediator. In so finding, she determined that if the parties were found to have waived the privilege, either affirmatively or as a byproduct of other actions, then the mediator could be compelled to testify. The mediator appealed the ruling to a single justice of the Appeals Court. That Single Justice found that “[U]nlike the mediation statutes in some other states, G.L. c. 233, sec. 23C confers blanket confidentiality protection on disclosure in judicial proceedings, without listing any exceptions …. Also unlike some other statutes, G.L. c. 233, sec. 23C, is silent as to whether confidentiality ever may be waived, and if so, by whom.”  The Single Justice went on to conclude that “whether or not the parties have chosen to maintain the confidentiality of the mediation, G.L. c. 233, sec. 23C, does not permit a party to compel the mediator to testify, when to do so would require the mediator to reveal communications made in the course of and relating to the subject matter of the mediation. Compelling such testimony, even if potentially helpful to the motion judge’s decision on the merits of the parties’ dispute, would conflict with the plain intent of the statute to protect the mediation process and to preserve mediator effectiveness and neutrality.”  See also 47 Mass. Prac., Mediation and Arbitration § 5.2 (2008 ed.)

In another case where a law firm was defending a claim of legal malpractice brought against them by a client who alleged he was coerced by his attorneys into a settlement at a mediation session, the defendant law firm sought documentary information and deposition testimony from the mediator concerning events at a mediation.  A Superior court judge denied such requests based upon the provisions of the written mediation agreement in place and the provisions of MGL c. 233 s. 23C. See In the matter of Charles Sutera, Jr., Suffolk Superior Court C.A. #: 03-2158F.

In contrast, in another case, a Justice of the Superior Court had considered an offer of settlement made in a mediation for purposes of determining whether an insurer had failed in bad faith to settle a claim. On appeal, the Supreme Judicial Court approved the trial judge’s consideration of the offer in mediation, finding that the offer had been put in issue by the plaintiff’s bad faith claim. Bobick v. U.S. Fidelity and Guar. Co., 439 Mass. 652, 658, 790 N.E.2d 653, 658 (2003). See also St. Paul Mercury Ins. Co. v. Dick Corp., 2005 WL 2525300 (Mass. Super.  Ct. 2005) (Gants, J.) (following Bobick, in ruling that the mediation privilege was waived when mediation discussions were put in issue by a bad faith claim).

Dual Role of Neutral in MED-ARB:

In Modern Continental Construction Company Inc., v. Zurich American Insurance Company, Inc., et al,  Suffolk Superior Court No. 033197BLS1 ( April 19, 2006), Judge Peter Agnes, dealing with a case involving a combined Med-Arb agreement, found that the mediation confidentiality privilege applies even when the parties have entered into a “med-arb” agreement under which, if a mediation is unsuccessful, in a dual role, the mediator proceeds to serve as an arbitrator of the same dispute.   “The mere fact that the mediation portion of the ADR process did not result in an agreement or resolution does not serve as an implicit waiver of the privilege. Under the circumstances of this case, there has been no waiver of the blanket confidentiality privilege conferred by G.L. c. 233 § 23C, and therefore, to the extent that Garrett seeks documents produced during the mediation that were never resubmitted or otherwise independently utilized during the arbitration, Garrett’s motion must be denied.”

Requirement of Written Agreement under 23C:   

It is important to understand that under MGL s. 233, c.23C if the mediator is not appointed by a judicial or governmental body, the requirements of the statute are satisfied only after a written agreement to mediate has been executed.  See Erskine White et al v. Susan A. HOLTON, dba Gabriel Ames Associates, Superior Court No. 927915E, Oct.4, 1993.  For that reason, the mediator and the disputants should take all needed steps to assure that a written mediation agreement has been signed not only by all of the parties and their representatives, but also by all who participate in the mediation process whether in person or by other means such as videoconference or by telephone.  The mediation agreement generally only binds the persons who actually signed it. Accordingly, every participant in the mediation process should sign a confidentiality agreement, including parties and their lawyers, witnesses, observers, and those who are likely to come into contact with confidential information generated during the process of mediation.

In the Presence of the Mediator” under 23C:

Though MGL c. 233 states that only statements made “in the presence…..of a mediator,” are to be confidential, many Massachusetts commentators as well as certain judicial decisions suggest that this privilege should apply not only to statements made in the presence of a mediator, but to settlement discussions among the parties that occur after or as a result of participating in a mediation. See Fontanills v. Barron & Stadfeld, P.C., 2007 WL 2367630 (Mass. Super. Ct. 2007) (Curran, J.) (refusing to order the production of records of settlement negotiations because of, inter alia, “the longstanding doctrinal and policy preference that settlement negotiations are off limits”).  In Modern Continental Const. Co., Inc. v. Zurich American Ins. Co., 21 Mass. L. Rptr. 114, 2006 WL 1258760 (Mass. Super. Ct. 2006) (van Gestel, J.), the court applied the mediation privilege more broadly to encompass all documents exchanged in a mediation, not just to statements made in the presence of the mediator.  Please also see 49 Mass. Prac., Discovery § 4:16.

He May be Wise, But is he “Trained” under 23C?

In some situations, the parties may mutually chose a mediator who is wise, experienced, and respected, but nonetheless does not have the training required to apply the confidentiality provisions of the statute applicable. § 23C requires that a mediator have completed 30 hours of mediation training, however the type of training is not specified in the statute.

In Erskine White et al v. Susan A. Holton, dba Gabriel Ames Associates, Superior Court No. 927915E, Oct. 4, 1993, The Court refused to accept the mediator’s “hundreds of hours of training in conflict management” as a reasonable substitute.

Confidentiality in Cases Involving Government Entities:

When a governmental agency or other public entity is a party to a mediation, it may be subject to so-called sunshine or public meeting laws, which require that decisions and meetings of governmental boards, or even informal discussions in which a quorum of their members participate, be open to the public when documents generated in a mediation are received by a representative of the public agency they may become public records under statutes such as the federal freedom are firm of information act and its state counterparts.  Disputants must anticipate such disclosures and deal with them in the written mediation agreement and in any closing documents signed.

Confidentiality Protections in Evidentiary Rules, Settlement Negotiations, and Offers to Compromise:

Settlement negotiations and offers to compromise have long been protected from admissibility in evidence in Massachusetts. See, e.g., Liacos Brodin Avery, Handbook of Massachusetts Evidence (7th Edition, and 2005 Cumulative Supplement), sec. 4.6. “This rule is founded in policy, that there may be no discouragement to amicable adjustment of disputes, by a fear, that if not completed, the party amicably disposed may be injured.” Strauss v. Skurnik, 227 Mass. 173, 175, 116 N.E. 404 (1917). Since mediation is a recognized method of amicable adjustment of disputes the protection of confidentiality applied to settlement negotiations and offers to compromise ought to apply as well to the materials gathered for and utilized in the mediation process.

In the Matter of the Reorganization of Electric Mutual Liability Ins. Co. Ltd. (Bermuda ) 425 Mass. 419, 422, 681 N.E.2d 838 (1997), the mediating parties entered into a written agreement of confidentiality regarding the materials gathered for and presented at the mediation. This written agreement provided yet another basis for keeping the mediation materials confidential. The agreement further demonstrated that reasonable precautionary steps were taken by the parties to the mediation to keep the material confidential. This Court held that mediation materials are protectable and not admissible as evidence and further, that there can be no waiver of the privileged status of these mediation materials. This Court further held that the work-product doctrine may also apply since most of the materials at issue contained information gathered in what is traditional preparation in anticipation of litigation protected by Mass.R.Civ. P. Rule 26(b)(3) and the cases interpreting it. See, e.g., Liacos Brodin Avery, Handbook of Massachusetts Evidence (7th Edition), sec. 13.4.10.

Likewise, in Targus Group Intern., Inc. v. Sherman, 21 Mass. L. Rptr. 217, 2006 WL 2205508 (Mass. Super. Ct. 2006) (van Gestel, J.), the court considered and enforced the terms of an agreement in principle reached at the end of a mediation, even while acknowledging that the “protection of confidentiality applied to settlement negotiations and offers of compromise ought to apply as well to mediation.”  See also Fontanills v. Barron & Stadfeld, P.C., 2007 WL 2367630 (Mass. Super. Ct. 2007) (Curran, J.) (refusing to order the production of records of settlement negotiations because of, inter alia, “the longstanding doctrinal and policy preference that settlement negotiations are off limits”).

Protections Afforded under Federal Rules of Evidence 408:

The best-known and most widely applied evidentiary rule as to confidentiality is the federal rules of evidence 408 and its state counterparts.  It states:

Rule 408. Compromise and Offers to Compromise

(a) Prohibited uses. Evidence of the following is not admissible on behalf of any party, when offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or contradiction:
(1) furnishing or offering or promising to furnish–or accepting or offering or promising to accept–a valuable consideration in compromising or attempting to compromise the claim; and
(2) conduct or statements made in compromise negotiations regarding the claim, except when offered in a criminal case and the negotiations related to a claim by a public office or agency in the exercise of regulatory, investigative, or enforcement authority.

(b) Permitted uses. This rule does not require exclusion if the evidence is offered for purposes not prohibited by subdivision (a). Examples of permissible purposes include proving a witness’s bias or prejudice; negating a contention of undue delay; and proving an effort to obstruct a criminal investigation or prosecution.

It should be noted that these rules are not guarantees of confidentiality.  Rule 408 governs what could be admitted into evidence during the trial but it does not limit what a party or lawyer can say in other contexts such as a discovery deposition, arbitration, informal conversation, or newspaper article. Rule 408 applies to hearings in federal courts, but not state courts or administrative proceedings. Rule 408 does not cover all information that is provided during settlement discussions but only evidence that someone furnished or offered valuable consideration in compromise or attempting to compromise a claim for the purposes of proving liability for any injury or invalid invalidity of the claim or its amount. Rule 408 also has many exceptions and does not provide an absolute bar as to introducing evidence about what occurred in the mediation. Rule 408 does not provide any protection as to comments made by a mediator. Parties who breach rule 408 usually risk only a judicial reprimand.

Rules of the Supreme Judicial Court SJC, Rule1:18, Uniform Rules on Dispute Resolution 9H:                                    

The importance of the principle of confidentiality in mediation is also reflected in its expression as an ethical principle within the rules on court-connected dispute resolution ado