Tie the bow immediately or the package may unravel before your eyes.
Inking the deal at mediation is the obvious best practice, yet on occasion one finds a cautionary tale to remind us. In this one, confidentiality—yes, that mediation citadel—plays an unexpected role in killing the deal.
Tuscany Custom Homes, LLC v. Westover, 490 P.3d 1039 (Co. App. Dec. 31, 2020). The parties orally agreed to settlement terms at mediation but computer problems prevented the signing of a term sheet. That evening, the mediator emailed counsel a summary of the terms, which he stated defense counsel would use to prepare a settlement agreement. Everyone confirmed by reply email the terms were correctly stated. However, two weeks later, the defendant refused to sign the settlement agreement and the plaintiff moved to enforce, attaching the emails as proof of the terms. The Court of Appeals reversed the trial court’s enforcement of the settlement agreement, holding the emails were “confidential mediation communications,” as defined in C.R.S. § 13-22-302, and thus inadmissible to prove the terms of settlement. So too was the draft settlement agreement because it was created at the behest of the mediator and not fully executed by the parties.
Hard Lesson Learned: Button up the terms before you go home, even if it’s been a long day and you’re having computer problems.