Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, L.L.C. (069082)

71 A.3d 888, 215 N.J. 242
CourtSupreme Court of New Jersey
DecidedAugust 15, 2013
DocketA-62-11
StatusPublished
Cited by47 cases

This text of 71 A.3d 888 (Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, L.L.C. (069082)) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, L.L.C. (069082), 71 A.3d 888, 215 N.J. 242 (N.J. 2013).

Opinion

*245 Justice ALBIN

delivered the opinion of the Court.

One of the main purposes of mediation is the expeditious resolution of disputes. Mediation will not always be successful, but it should not spawn more litigation. In this ease, the parties engaged in protracted litigation over whether they had reached an oral settlement agreement in mediation. Instead of litigating the dispute that was sent to mediation, the mediation became the dispute.

Communications made during the course of a mediation are generally privileged and therefore inadmissible in another proceeding. A signed written settlement agreement is one exception to the privilege. Another exception is an express waiver of the mediation-communication privilege by the parties.

Here, defendant moved to enforce the oral settlement agreement and, in doing so, submitted certifications by its attorney and the mediator disclosing privileged communications. Instead of seeking to bar the admission of privileged mediation communications, plaintiff, in opposing the motion, litigated the validity of the oral agreement. In pursuing that course, plaintiff also disclosed mediation communications. In particular, plaintiff expressly waived the privilege on the record when questioning the mediator at a deposition and at an evidentiary hearing.

The Chancery Division found that plaintiff had waived the privilege and upheld the parties’ oral agreement at the mediation session. The Appellate Division upheld the oral agreement. We affirm the judgment of the Appellate Division.

To be clear, going forward, parties that intend to enforce a settlement reached at mediation must execute a signed written agreement. Had that simple step been taken, the collateral litigation in this case might have been avoided. In responding to the motion to enforce, plaintiff did not timely interpose the lack of a signed written agreement as a defense. Moreover, if plaintiff intended to defend based on the absence of a written agreement, it was obliged not to litigate the validity of the oral agreement by *246 waiving the mediation-communication pi-ivilege. This case should also serve as a reminder that a party seeking to benefit from the mediation-communication privilege must timely assert it.

I.

A.

This ease begins with a commercial dispute over the terms of the sale of the Willingboro Mall in Willingboro Township. In February 2005, Willingboro Mall, LTD. (Willingboro), the owner of the Willingboro Mall, sold the property to 240/242 Franklin Avenue, L.L.C. (Franklin). The specific terms of the contract for sale are not germane to this appeal. To secure part of Franklin’s obligation, the parties executed a promissory note and mortgage on the property. Willingboro claimed that monies due on August 3, 2005, were not forthcoming and filed a mortgage-foreclosure action on the mall property. Franklin denied that it had defaulted on its contractual obligations and sought dismissal of the complaint. The Honorable Ronald E. Bookbinder, J.S.C., directed the parties to participate in a non-binding mediation for potential resolution of the dispute.

B.

On November 6, 2007, a retired Superior Court judge conducted the mediation over the course of several hours in the offices of Franklin’s attorney, Joseph P. Grimes, Esq. 1 Willingboro’s manager, Scott Plapinger, and attorney, Michael Z. Zindler, Esq., appeared on behalf of the company. The mediator met privately with each side, conveying offers and counteroffers. At some point, Franklin offered $100,000 to Willingboro in exchange for settlement of all claims and for a discharge of the mortgage on the mall property. On behalf of Willingboro, Plapinger orally accepted the *247 offer in the presence of the mediator, who reviewed with the parties the terms of the proposed settlement. Plapinger also affirmed that he gave his attorney authority to enter into the settlement. The terms of the settlement, however, were not reduced to writing before the conclusion of the mediation session.

Three days later, on November 9, Franklin forwarded to Judge Bookbinder and Willingboro a letter announcing that the ease had been “successfully settled.” The letter set forth the purported terms of the settlement in eight numbered paragraphs. On November 20, Franklin’s attorney sent a separate letter to Willingboro stating that he held $100,000 in his attorney trust account to fund the settlement, that Franklin had executed a release, and that the monies would be disbursed when Willingboro filed a stipulation of dismissal in the foreclosure action and delivered a mortgage discharge on the mall property.

On November 30, 2007, Willingboro’s attorney told Franklin’s attorney that Willingboro rejected the settlement terms and refused to sign a release or to discharge the mortgage. In December, Franklin filed a motion to enforce the settlement agreement. In support of the motion, Franklin attached certifications from its attorney and the mediator that revealed communications made between the parties during the mediation. Among other things, the mediator averred in his certification that the parties voluntarily “entered into a binding settlement agreement with full knowledge of its terms, without any mistake or surprise and without any threat or coercion” and that the settlement terms were accurately memorialized in Franklin’s letter to the court.

Willingboro did not give its consent to the filing of either certification. However, Willingboro did not move to dismiss the motion, or strike the certifications, based on violations of the mediation-communication privilege. Instead, in opposition to the motion to enforce, Willingboro requested an evidentiary hearing and the taking of discovery, and filed a certification from its manager, Scott Plapinger.

*248 In his certification, Plapinger averred that he had reluctantly agreed to participate in a mediation that his attorney told him would be non-binding. Plapinger also certified to the substance of the parties’ discussions during the mediation. He asserted that as a result of his attorney’s relentless insistence he went into a room where the mediator summarized the settlement terms agreed upon by the parties. Plapinger stated that the “purported terms of a final and binding settlement” had not been reduced to writing and that if it had, he would not have signed it. According to Plapinger, after the mediation, his attorney told him that the agreement was “binding” and that he had to sign the settlement papers. He refused to do so.

The trial court ordered the taking of discovery and scheduled a hearing to determine whether an enforceable agreement had been reached during mediation.

C.

The parties deposed five witnesses, including the mediator, Willingboro’s manager, and Willingboro’s attorney. Before deposing the mediator, the parties agreed that they were “waiving] any issues of confidentiality with regard to the mediation process” and agreed that the testimony elicited could be used for purposes of the motion to enforce the settlement agreement only and not for purposes of the underlying foreclosure action.

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Cite This Page — Counsel Stack

Bluebook (online)
71 A.3d 888, 215 N.J. 242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/willingboro-mall-ltd-v-240242-franklin-avenue-llc-069082-nj-2013.