COA Opinion on Mediated Settlement Agreements

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On Nov. 3, 2020, the North Carolina Court of Appeals issued opinion in a case entitled Mitchell v Boswell with a rather unremarkable holding that a mediated settlement agreement reached in a Superior Court ordered mediation is not enforceable unless signed by the party against whom enforcement is sought.  This result is unremarkable because the statute governing court ordered mediations specifically required that settlement agreements be in writing to be enforceable.

This case points up the issues that can arise when all parties are not present in person for a mediation.  In Mitchell, the parties themselves were out of state and participated by telephone, with the mediator and attorneys together in person.  The attorneys signed the mediated settlement agreement.  The mediator, a retired Superior Court Judge, also signed the settlement agreement and, gave an affidavit confirming that the parties reached the agreement signed by the attorneys which was presented to the court at the hearing when enforcement of the agreement was sought. 

In this time of remote virtual mediations, mediators and attorneys who want mediated settlement agreements to stand up need to make sure that there is something that amounts to a signature by all parties to the agreements.  In a footnote the court in Mitchell observed the availability of the Uniform Electronic Transactions Act enacted in North Carolina as GS § 66-311 et. seq.  While the entire Act should be consulted, pertinent provisions include:

§ 66-312(9) “Electronic signature” means an electronic sound, symbol, or process attached to, or logically associated with, a record and executed or adopted by a person with the intent to sign the record.

§ 66-315. Use of electronic records and electronic signatures; variation by agreement. (a) This Article does not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (b) This Article applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct. (c) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement. (d) Except as otherwise provided in this Article, the effect of any of its provisions may be varied by agreement. The presence in certain provisions of this Article of the words “unless otherwise agreed”, or words of similar import, does not imply that the effect of other provisions may not be varied by agreement. (e) Whether an electronic record or electronic signature has legal consequences is determined by this Article and other applicable law. (2000-152, s. 1.)

§ 66-317(d) If a law requires a signature, an electronic signature satisfies the law provided it complies with the provisions of this Article. (2000-152, s. 1.)

§ 66-319. Attribution and effect of electronic record and electronic signature. (a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. (b) The effect of an electronic record or electronic signature attributed to a person under subsection (a) of this section is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law. (2000-152, s. 1.)

It is usually not practical to get all the participants in a virtual mediation to print, sign and scan their signatures to an agreement.  One way that I have tried to get electronic “signatures” on mediated settlement agreements reached at Zoom mediations is to email the finalized settlement agreement to all the parties and ask them to to indicate their approval which I tell them orally and in the email will constitute their signature to the settlement agreement.  That should comply with the definition of electronic signature as it is a “process … adopted” by each person “with the intent to sign” the settlement agreement. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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