In 2013, the NJ Supreme Court ruled in Willingboro Mall, LTD. v. 240/242 Franklin Avenue, L.L.C. that in order for an agreement coming out of mediation to be enforceable by the courts, it must be in writing and signed by all parties. I wrote extensively about that case.
Fast forward ten years and we have another published appellate case on essentially the same topic. The nuance in Gold Tree Spa, Inc. v. PD Nail Corp. is that this case was privately mediated. Willingboro Mall was a court-assigned case. Do the provisions of Willingboro Mall apply to non-court referred mediations?
Gold Tree Spa started out as a sale of two nail salons from the plaintiffs to the defendants. They paid a deposit and took possession of the salons. Negotiations broke down and the deal was never finalized. Plaintiff sued and the parties agree to go into voluntary (non-court-ordered) mediation. In the mediation, the mediator crafted a draft settlement agreement. Neither party signed the agreement. After the mediation concluded, one of the plaintiffs decided she did not want to settle and her attorney informed the other parties and the court.
The defendants filed a motion with the court to enforce the settlement. The trial court denied the motion, citing Willingboro Mall. The defendants asked for reconsideration, arguing that Willingboro Mall did not apply as it was applied to a court-referred case. The judge rejected those arguments and denied the motion for reconsideration. An appeal followed.
On appeal, the defendants again argued that Willingboro Mall does not apply. The appellate court simply said: “We are unpersuaded.”
Willingboro clearly applies and its holding is unambiguous: “[t]o be clear, going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable.” 215 N.J. at 263. The parties did not sign the draft settlement agreement and, therefore, it is unenforceable under Willingboro’s broad, bright-line rule. See id. at 262-63. While there is a distinction between the various forms of mediation, as indicated in N.J.S.A. 2A:23C-3, the differences are irrelevant when considering the policy behind the Willingboro decision. Justice Albin, writing for the Court, stated “mediation will not always be successful, but it should not spawn more litigation. . . . Instead of litigating the dispute that was sent to mediation, the mediation became the dispute.” Id. at 245. This case is exactly the situation Willingboro addresses––settlement through the mediation process only occurs when the parties agree in writing. In deciding this appeal, whether mediation is court-ordered or voluntary is a distinction without a difference.
So the court again upholds the principle that the court will not pierce the confidentiality of a mediation — regardless of how the dispute ended up in mediation — to determine whether an agreement had been reached. If you want to enforce a mediated agreement, put it in writing and sign it. Otherwise, it didn’t happen.
This provision is in my agreement to mediate. Learn more about mediation or contact me to get started.