July 1, 2009

U.S. Appeals Court Rules Judge's Comments during Settlement Conference Do Not Amount to Coercion - In a recent decision, the U.S. Court of Appeals for the 7th Circuit ruled that a judge's alleged analysis of a plaintiff's case as "meritless" during a judicial settlement conference did not amount to coercion to settle on the part of the judge. In the case, Gevas v. Ghosh (08-1538), the plaintiff argued that the settlement agreement should be voided because of the judge's comments. The court argued that coercion only occurs when "a judge threatens to penalize a party that refuses to settle;" judges are not prohibited from expressing their opinion about the merits of a case. The plaintiff also argued that he should not be held to the settlement agreement because he never formally agreed to its terms. Because no formal record was taken of the settlement conference or the terms of the agreement, the court also rejected this argument, stating that since neither party requested an official record be kept of the proceedings, they must rely on the recollection of the judge facilitating the settlement conference.

To read the full opinion, click here.

July 1, 2009

Illinois Federal District Court Launches Early Settlement Conference Program - The U.S. District Court for the Northern District of Illinois recently launched an early settlement conference program. Through the program, counsel for both parties request a pre-trial settlement conference after conferring with each other about settlement. The presiding judge may also direct plaintiff's counsel to confer with defense counsel to determine if a settlement conference would aid settlement. Conferences will be held with the assigned district or magistrate judge. The court has conducted a judicial settlement conference program since 1991; this new program is different in that it specifically encourages parties to participate in a settlement conference early in the litigation process.

To read a press release from the court about the program, click here. Magistrate Judge Morton Denlow, identified in the press release as one of the judges involved in the development of the program, is a member of the RSI Executive Committee.

July 1, 2009

Center for American Progress Calls on Federal Government to Support Mandatory Foreclosure Mediation - The Center for American Progress (CAP) released a report in June calling for the federal government to play an active role in promoting mandatory foreclosure mediation programs across the country. In the report, It’s Time We Talked: Mandatory Mediation in the Foreclosure Process, CAP reviews the foreclosure mediation programs currently in place in Connecticut, Pennsylvania, Florida and California. Based on its analysis of these programs, CAP then offers a list of best practices for foreclosure mediation. CAP encourages the federal government to direct more funding toward mandatory mediation programs at the state and local levels, and to require mediation for all federally-backed mortgages facing foreclosure, among other suggestions. CAP is a liberal think-tank in Washington, D.C.

Click here to access the full report.

July 1, 2009

Foreclosure Mediation Legislative Review - Previous editions of Court ADR Connection have highlighted proposed legislation to create foreclosure mediation programs in multiple states. Here are updates on those bills, and others:

Connecticut: Starting July 1, the statewide foreclosure mediation program that began last year will be mandatory for all eligible foreclosure cases. State legislators opted to pass legislation to require mediation when an initial evaluation of the foreclosure mediation program showed that 60% of mediated cases reached settlement, but only 34% of eligible cases went to mediation. According to the Connecticut Law Tribune, this change will require the state court system to double its staff to handle the increased mediation caseload.

Florida: A bill filed in the state legislature that would have established a statewide mandatory foreclosure mediation program was withdrawn from consideration in early May. However, the Task Force on Residential Mortgage Foreclosure Cases, established by the Supreme Court in March, continues its work to develop recommendations for a statewide, coordinated response to the state's foreclosure crisis. In its interim report, the task force announced that it would design an ADR foreclosure program for consideration by the Supreme Court. The task force's final report is due in August.

Indiana: Recently enacted legislation gives borrowers facing foreclosure the option of participating in a settlement conference. Lenders are required to notify borrowers about the settlement conference program. If a borrower chooses to participate in the program, both parties must participate in good faith.

Maine: A new law establishing a statewide foreclosure mediation program passed on June 15, and will apply to all foreclosure cases filed after January 10, 2010. Lenders will be required to notify homeowners of the mediation program. If a homeowner opts for mediation, all parties must participate in good faith. Cases will be mediated by court-assigned mediators who are trained in mediation and are familiar with mortgage assistance programs and other community resources.

Minnesota: Governor Tim Pawlenty vetoed legislation in May that would have given parties the option of mediating foreclosure cases. The bill required lenders to notify homeowners of their right to mediate. If homeowners requested mediation, lenders would have been required to participate. According to the Minnesota House of Representatives web site, Governor Pawlenty vetoed the bill because it did not incorporate his recommendations on how the program should be administered and funded.

Nevada: Legislation to create a statewide foreclosure mediation program went into effect July 1. If either the lender or borrower requests mediation, participation is mandatory for both parties. Cases will be mediated by senior justices, judges or other mediators as determined by the court. A mediation fee of no more than $400 will be shared by the lender and borrower. For more information about the program, visit the Nevada Supreme Court's web site.

New Mexico: Proposed legislation that would have authorized courts to order foreclosure cases to ADR died in committee in March.

June 9, 2009

Kansas City, Missouri, Eliminates Mediation and Dispute Resolution Services - Kansas City, Missouri, officials recently ended the city's Mediation and Dispute Resolution Services program due to budget constraints. According to Missouri Lawyers Weekly, the program mediated cases for free and handled up to 800 disputes each year, including cases referred by the local courts. In the Missouri Lawyers Weekly article, other mediation service providers in Kansas City predicted that the loss of the program would increase demand for their services, which are already at capacity.

To access the Missouri Lawyers Weekly article, click here (subscription required). For more information about the Kansas City program, click here. Read the city's press release about the cancellation of the program here.

June 9, 2009

Pennsylvania County Court Launches ADR Program with Private Firm - Faced with a backlog of cases after two judges pled guilty to federal corruption charges, the Luzerne County Court of Common Pleas partnered with a local mediation firm in April to launch an alternative dispute resolution program. According to The Citizens' Voice, a local newspaper, members of the firm, ADR Options Inc., will conduct settlement and conciliation conferences for civil cases and may also serve as special trial masters or judges pro tempore. The program will be managed by the deputy court administrator.

To read The Citizens' Voice article about the program, click here.

June 9, 2009

Massachusetts Legislature Considering Foreclosure Mediation Bill - The Massachusetts legislature is considering a bill that would establish a statewide mortgage foreclosure mediation program. Under the proposed legislation, courts would be required to inform borrowers about the program. When a borrower requests mediation, the lender is required to participate. Cases would be mediated by court employees who are trained in mediation and "relevant aspects of the law," and are familiar with community resources and assistance programs in the state. The foreclosure process would be suspended during mediation, which would begin no more than 10 days after a borrower's request and last no longer than 35 days.

To read the full bill, click here.