By Bryan R. Rendzio / Published May 2021
It is almost inevitable that at some point or another your community association will find itself involved in a dispute that requires mediation. Navigating mediation can be confusing and frustrating for those who are unfamiliar with the process. Whether it involves a disagreement with an owner over covenants and restrictions or larger defect claims, it is important to understand the preparation, process, and purpose surrounding mediation.
Any discussion regarding mediation starts with a basic question: What is mediation, and how is it different from arbitration? Mediation and arbitration are distinct methods of dispute resolution. Arbitration is a process whereby a neutral third person or panel, called an arbitrator or arbitration panel, considers the facts and arguments presented by the parties and renders a decision. Depending upon the type of arbitration, the decision could be binding or non-binding.
Mediation, on the other hand, is the process whereby the neutral third person (i.e., the mediator) works to encourage and facilitate the resolution of a dispute between two or more parties. Mediation is an informal and non-adversarial process, with the objective of helping the parties reach a voluntary agreement. Unlike arbitration where the arbitrator renders a decision, the decision-making authority in mediation rests with the parties. Mediation is often referred to as self-determination.
The first step to a successful mediation is preparation by the attorneys and their clients. Attorneys and their clients should engage in a risk assessment of the case, taking into account the best-case and worst-case scenario. A candid discussion as to the client’s risk tolerance and potential exposure will help address client expectations for mediation.
The first step in the association’s client representative’s preparation for mediation is having the right mindset. Remember, mediation is negotiation. This is not about winning or losing. The goal is to obtain an acceptable settlement that is reasonable when compared to the probable outcomes and risks associated with an adjudicated decision by a judge, jury, or arbitrator. Understand that being “content” (i.e., somewhere between the spectrums of feeling that you “won” or “lost”) may be an acceptable achievement. Wins and losses are for trials and arbitrations. Rarely do participants truly feel they won after being subjected to a full trial or binding arbitration. The client representatives for the association need to discuss with the association’s attorney whether any of the client representatives will speak during a joint session in which all of the parties and their counsel are present. The essential question becomes: Is there more to be gained than lost by having my client make a brief presentation? With the right client in the right setting, a client presentation can be highly effective. However, with the wrong client in the wrong setting, a client presentation can have disastrous consequences and seriously damage the possibility of reaching a mediated settlement.
It is not just what the parties say that can make a difference at mediation. Appearance can signal as to how a party will likely present to a judge or jury. Be sure that any of the representatives who appear at the mediation are dressed professionally. They are an extension of the entire community for whom they are appearing.
Although no two mediations are identical, there is a general procedure for mediations involving associations. This typically entails a joint session where all parties and attorneys are in the same room (whether in person or through remote access platforms such as Zoom). The attorneys should prepare an effective position of the case to be offered during this joint mediation session. The joint mediation session can be the opportunity to show the other side the strengths of your case and the weaknesses in their case. After giving opening comments to the mediator and to each other, the parties then go to separate rooms. This is referred to as the caucus. In Florida, except for certain issues, everything that is discussed during mediation is protected by confidentiality.
It is a good practice to submit mediation summaries (also referred to as mediation statements) prior to the actual mediation session. Not only do summaries help inform the mediator about the case, but they also provide information to the other side regarding the strengths of your position and the weaknesses of their case. From a mediator’s perspective, there is no disadvantage to educating your opponent as to key legal or factual arguments in the case. Why show your cards? It is simple. Mediations are like icebergs. Just like an iceberg, much of the process is below the water and should be handled before the actual mediation session. The tip of the iceberg is the mediation session itself. Having parties go into a mediation session “cold” offers no benefit to any of the participants or the mediator. Valuable time gets wasted with arguments that should have been offered before the mediation session. This is the benefit of a mediation statement that is served upon the other side before mediation. While, as a mediator, I appreciate parties providing me with their statements, I find there is an invaluable opportunity lost when the statements are not provided to the other side as well.
In addition to strategic issues, there are also legal considerations that must be addressed before mediation, such as making sure the association representatives have settlement authority. Under Florida law, the client representative must have full and final authority to resolve the matter. The party representative must be the final decision maker with respect to all issues presented by the case and have the legal capacity to execute a binding settlement agreement on behalf of the party. Associations must either have a quorum of its board appear at the mediation or send a representative who has been pre-authorized by the board to accept a settlement that meets certain parameters that have been pre-approved by the board.
As important as it is to have the appropriate representative appear at mediation, it is equally crucial to have the right mediator for the dispute. The following factors should be considered when selecting a mediator:
In summary, mediation should not be viewed as just a box to check in order to get to trial or arbitration. Instead, mediation should be viewed as the opportunity for self-determination so that parties can decide their outcome on their own terms. Under-standing the preparation, process, and purpose of mediation, as well as choosing a qualified mediator and association representative, will increase your chances of a successful mediation.
Partner, Ansbacher Law
Bryan Rendzio is a partner at Ansbacher Law where he serves as the chair for the firm’s Alternative Dispute Resolution Practice Group. Mr. Rendzio is a former Circuit Court Judge, a Florida Supreme Court Certified Circuit Civil Mediator, AAA Mediator, and AAA Arbitrator as well as a Florida Supreme Court Approved Arbitrator. He may be reached at Bryan.Rendzio@ansbacher.net or by phone at (904) 737-4600.