By Brett Goodman
Under the Texas ADR Act, by either the motion of the court or a party, a pending dispute may be referred to mediation except when that dispute is subject to the Federal Arbitration Act. In this referral, an “impartial third party” must be appointed to mediate. To qualify for an appointment as an impartial third party, a person must have completed a minimum of forty hours of training in dispute resolution techniques in a course conducted by an alternative dispute resolution system or other dispute resolution organization approved by the court making the appointment. See Tex. Civ. Prac. & Rem. Code Ann. § 154.
The trial court has discretion in deciding that mediation is appropriate for the case and may consider several factors in the decision, including:
the nature of the dispute, the complexity of the issues, the number of parties, the extent of past settlement discussions, the posture of the parties, whether there had been sufficient discovery to permit an accurate case evaluation, the status of the case on the docket, and whether a referral would be appropriate at that particular time.
Walton v. Canon, Short & Gaston, 23 S.W.3d 143, 150 (Tex. App. 2000).
The Decker decision laid out a number of the considerations that come along with the trial court’s discretion. Decker v. Lindsay, 824 SW2nd 247, 250 (Tex. App.-Houston [1st District] 1992, no writ) The court may compel parties to attend mediation, but that is the furthest extent of its authority in that it cannot force a resolution to materialize from this mediation. Only when a party objects to mediation with a reasonable basis for doing so can a court be stripped of its power to refer a dispute to mediation, so a court can compel mediation without issue if it finds a party will not have a reasonable basis for objection.
Using the Decker framework along with the factors of use to a trial court in referring a dispute to mediation, courts on a case by case basis have made a fairly predictable determination of whether or not mediation is appropriate with a trend that the court’s discretion is broad. See In re Magallon, 09-07-438CV, 2007 WL 2962934 (Tex. App. Oct. 11, 2007) Although a trial court ordered mediation to be in good faith in In re Magallon, if a trial court does find mediation appropriate, both parties are compelled to attend. The court of appeals could not say that the trail court abused its discretion in finding the party who did not appear at mediation in contempt and neither party made an objection. Regardless of a dispute over the referral to mediation, the referral compels the parties to attend pursuant to the trial court’s discretion.
After the issue of compelling parties to meet in mediation has been resolved, it is true that a trial court may only compel the parties to meet but not more. Decker, 824 S.W.2d at 250. Thus, the court did say the judge in Decker overstepped the authority of a trial court by requiring not just that the parties meet, but that they negotiate in good faith and attempt to reach a settlement. Doing more than just compelling the parties to meet would not comport with the Texas ADR Act.
Also, a court may, in its discretion, decide that mediation would not be of benefit to the parties and thus not refer the case to mediation. Walton, 23 S.W. 3d at 150. Where a law firm brought suit against a former client for failure to pay legal dues, the client demanded mediation, claiming that it is required unless the trial court determines it inappropriate. Although the trial court did not make a determination of inappropriateness, there was a dispute over who would be the mediator. The court declared, “We may reasonably infer that the trial court found that referral for [mediation] would not have benefited the parties and would only have served as a delay.” In Texas, a trial court may refer a case to mediation at its discretion, but it is not forced to when it would find mediation would not be of benefit in the situation.
Brett Goodman is a summer intern at Karl Bayer, Dispute Resolution Expert. Brett is a J.D. candidate at The University of Texas School of Law. He holds degrees in Finance, Mathematics, and Spanish from Southern Methodist University.