Effective Mediation Strategies

OR HOW TO GET TO “FINE, I GUESS”

By Garrett Wait, Esq.

Your association has found itself in a dispute headed for mediation. Now the association, through its legal counsel and board of directors, must prepare and present the association’s case and then attempt to reach a settlement using the assistance of a third-party neutral. This is the time to set the association’s goals and preferred outcome.

Selecting a mediator and coordinating a date for mediation: Ideally, the association’s attorney and opposing counsel are well-acquainted with the local mediators. If not, the association and its counsel should look for cost-effective mediators with significant experience mediating homeowners association disputes.

While selecting a date for mediation, the parties are often subject to the whims of everyone’s calendar. While some associations and homeowners prefer to get the mediation done quickly, the better approach is to give the parties time to gather information and prepare for negotiations at the mediation.

Next, the parties must agree on whether the mediation will occur in person or via video conference. Certainly, video conference mediations are more convenient for the parties. Based on anecdotal evidence, however, an in-person mediation may be more likely to produce a settlement. Feeling trapped in a conference room during mediation often leads to compromise.

Once those logistical matters are taken care of, the association should ensure that its attorney has all of the facts related to the dispute. Depending on the nature of the conflict, that generally includes all relevant dates, invoices, witnesses, documentary and audio-visual evidence.

The association’s attorney will use this information to prepare a mediation brief, which should then be reviewed and approved by the board of directors. That brief is intended to inform the mediator of the facts and law, and to outline the association’s settlement position. This settlement position is a concrete demand that anchors the association’s initial offer for the mediator.

Once the association’s attorney has drafted the brief, and possibly received and reviewed the opposition’s brief, it is an appropriate time to sit down with the board, conduct a risk assessment of the case and set their expectations.

The board should then designate a director to attend the mediation on the association’s behalf alongside the manager and its counsel. Importantly, the board should grant that director broad settlement authority and freedom to bind the association to a reasonable agreement. That may include specific written instructions such as dollar amounts and dealbreakers. The director’s authority should be broad enough not to need

other directors’ input during mediation. Some boards may want more than one director to attend, but our experience is that can lead to a “too many cooks” situation.

Finally, on the day of mediation, the attending director should be on time and dressed for the occasion. During mediation, the mediator may ask the parties to participate in a joint session to address the mutually agreeable facts. The mediator may even ask the parties if they are willing to share briefs, even if they are confidential. Finding as much common ground as possible is one of the mediator’s primary goals to move the matter toward a settlement.

As important as it is to present a strong case, the association and its representatives should listen to the mediator. Most often, they are retired judges with significant trial experience. Their perspective can be invaluable. They can offer specific strengths and weaknesses that both sides should address. More often than not, the association may not be able to convince the other side that the association is correct, but it can soften their position using the mediator’s assistance.

The parties should use their time with the mediator wisely because the day can go by quickly. Presenting arguments should be relatively minimal and limited to the first hour. Substantive negotiations should take up most of the remainder time. The key is to try to narrow the issues and the sticking points. Attempt to determine what is on or off the table in any negotiation.

All participants should be prepared to compromise, and counsel’s initial risk assessment should help guide the board on whether an offered compromise is reasonable. The association should be aware that litigation is not the preferred outcome unless you have a “no-doubt” case.

Too often, people think of mediation as a win-or-lose situation. Depending on your mediator, they may remark that a good outcome is a settlement where both parties are “equally unhappy.” To get to “fine, I guess,” the association may need to get creative. Is there something besides money the HOA can offer? Be flexible, but remember the limits of the director’s authority and any limitations on the board in the law or governing documents.

If the parties reach an agreement, the best practice is to prepare and sign a written agreement in the mediation session. Preferably, the association’s attorney will come to the mediation with a template settlement and release agreement. Preparing settlement language during mediation can lead to a quicker resolution and avoid the potential for a party to back out.

After the mediation, the association’s representative should report the outcome to the board in an executive session. If the parties settled, great! Finalize the settlement agreement if that did not occur during mediation, sign it, and comply with the material terms. If parties did not settle, then additional follow-up may be necessary. Occasionally, the mediator may agree to continue the mediation to a later date. If that’s the case, the parties should take advantage. If the parties could not settle, the association should prepare for litigation.

The mediation process can be daunting for those who have never participated, but it’s merely an assisted negotiation.

The mediation process can be daunting for those who have never participated, but it’s merely an assisted negotiation. The association should do everything possible to assert its position while finding room for an agreement that avoids litigation. Prepare adequately, listen to the mediator, and do what you can to resolve the matter without going to court.

Garrett Wait, Esq.

Garrett Wait, Esq., of Kriger Law Firm specializes in community association law and has 11 years of experience in the industry.