In 2020, during the height of the COVID-19 pandemic and in a time when most, if not all, mediations were being conducted remotely, the North Carolina Court of Appeals issued an opinion which from a practitioner’s standpoint, complicated matters. This is opinion is Mitchell v. Boswell. The upshot of Boswell was that the parties to a dispute needed to be the signatories as opposed to, in Boswell, their attorneys.
In the pre-COVID-19 era, mediations were generally conducted in person parties physically present (unless excused by agreement or Court Order). As such, there was often little question as to who would sign the mediated settlement agreement in the event a matter was settled at mediation. The parties and attorneys would generally sign without much thought to that aspect of the process.
During the pandemic, however, attorneys and their clients were generally not physically in the same space. People were operating at times out of makeshift offices in their homes without full access to normal office equipment like scanners, copiers, and fax machines. Thus, attorneys would sometimes be asked to sign on behalf of our clients following the conclusion of a virtual mediation. This was not possible, though in light of Boswell.
Thankfully, this problem has been legislatively corrected. On June 18, 2021 Governor Cooper signed Senate Bill 255 into law. Prior to SB 255 being signed into law, N.C. Gen. Stat. § 7A-38.1(l) provided in pertinent part, “No settlement agreement to resolve any or all issues reached at the proceeding conducted under this subsection or during its recesses shall be enforceable unless it has been reduced to writing and signed by the parties against whom enforcement is sought.” SBB 255 adds the very helpful words, “…or signed by their designees” to the statute after the word “sought.”
Perhaps someone might challenge whether a signatory to a mediated settlement agreement was in fact a “designee;” however, that will likely be a very difficult argument. Despite the legislative correction provided by SB 255, it is no doubt still best practice to have all parties and attorneys sign a mediated settlement agreement, if practicable. In the event there is some impediment to doing so, it may make sense to include language in a mediated settlement agreement certifying that a non-party signatory is in fact the party’s designee.
It is likely that remote mediations will continue even absent health concerns. Thankfully, the North Carolina General Assembly has provided some relief to the practical considerations regarding signing a mediated settlement agreement when using technology to complete mediations remotely. Now a party will be unable to have “buyer’s remorse” following a remote mediation and argue that the mediated settlement agreement, signed by their designee (but not the party) is somehow unenforceable. If you have any questions regarding this legislative change or any other aspects of SB 255, we would be happy to discuss those changes with you.