TO THE HONORABLE JUDGE OF SAID COURT:

The Association of Attorney-Mediators ("AAM") hereby submits its Amicus Curiae Brief to assist this Court with its consideration of Defendants' Motion For Summary Judgment, which seeks to enforce a settlement agreement reached at mediation, and the Plaintiffs' Motion For Summary Judgment, which seeks a declaration that such instrument is void and unenforceable.

OVERVIEW

Following the shooting death of Travis Allen, Travis' father, individually and on behalf of Travis' estate, and Travis' mother ("Plaintiffs"), filed this case against the City of Bellaire, Texas, as well as Bellaire police officers Michael Leal and Carle Upshaw ("Defendants"), and two other defendants that have been dismissed, alleging, among other things, that the officers violated Travis' civil rights and wrongfully caused his death. On July 25, 1998 the parties mediated this case with mediator M.A. "Mickey" Mills (who is not a member of AAM), and all parties and their attorneys executed a settlement agreement. Subsequently, Plaintiffs appeared before this Court claiming that the mediator had "bullied" them into signing the settlement agreement and asked the Court to invalidate the agreement and permit the case to proceed to trial before a jury. It is AAM's understanding that all parties waived "confidentiality" and testimony was heard by the Court about what occurred in the private mediation caucuses. This testimony was prominently reported in the Houston Chronicle on August 8. Presumably to rebut allegations made against him at the hearing and reported in the newspaper, the mediator requested the Court to permit him to testify about what occurred during the mediation, and another hearing was held; this testimony was also conspicuously reported in the Houston Chronicle. Defendants have filed a counterclaim against Plaintiffs seeking to enforce the settlement agreement.

AAM first became interested in this case because of the concern of many of its members that the widely publicized testimony about the confidential communications between the mediator and the respective parties, coupled with the Plaintiffs' allegations of mediator misconduct, will be injurious to the integrity of the mediation process. The primary legal issue now before this Court is the question of the enforceability of a written settlement agreement reached during mediation. As this is a legal issue of first impression for this Court, the Court has requested AAM to submit this Amicus Curiae Brief, and AAM is doing so as a friend of the Court to present AAM's view of law applicable, in general, to ADR settlement agreements.

AAM's primary concern is the integrity of the mediation process; AAM is not taking a position with respect to the final outcome of this particular case. At the hearings before this Court the parties waived confidentiality; the mediator was not compelled to testify, but chose to do so voluntarily. Plaintiffs have attached to their Motion For Summary Judgment affidavits from the Plaintiffs concerning confidential communications with the mediator. If the Defendants' motion is not granted, confidentiality questions may be presented at trial for determination by this Court. Thus, confidentiality, while not directly in issue, should be discussed first.

Rule 20(I) of the Local Rules for the United States District Court for the Southern District of Texas provides:

"Confidentiality; Privileges and Immunities. All communications made during ADR procedures are confidential and protected from disclosure and do not constitute a waiver of any existing privileges and immunities."

Additionally, the Order For Referral To Mediation promulgated for discretionary use by judges in the Southern District of Texas (but not issued in this case) provides:

"11. Confidentiality. Confidential information disclosed to a Mediator by the parties or by witnesses in the course of the mediation shall not be divulged by the Mediator. All records, reports or other documents received by a Mediator while serving in that capacity shall be confidential. The Mediator shall not be compelled to divulge such records or to testify in regard to the mediation in any adversary proceeding or judicial forum. Any party that violates this agreement shall pay full fees and expenses of the Mediator and other parties, including reasonable attorney's fees, incurred in opposing the efforts to compel testimony or records from the Mediator.

The parties shall maintain the confidentiality of the mediation and shall not rely on, or introduce in any arbital, judicial, or other proceeding: (a) views expressed or suggestions made by another party with respect to a possible settlement of the dispute; (b) admissions made by another party in the course of the mediation proceedings; (c) proposals made or views expressed by the Mediator; or (d) the fact that another party had or had not indicated willingness to accept a proposal for settlement made by the Mediator."

With respect to Texas law, Section 154.001 of the Texas

Alternative Dispute Resolution Procedures Act, Tex.Civ.Prac.&Rem.Code Section 154.001 et seq., ("ADR Act") provides:

"It is the policy of this state to encourage the peaceable resolution of disputes with special consideration given to . . . the early settlement of pending litigation through voluntary settlement procedures. "

In order to advance and protect the stated interests of the State of Texas in alternative dispute resolution, the ADR Act requires the mediator to keep confidential all communications made during a mediation:

Section 154.053(b). "Unless expressly authorized by the disclosing party, the impartial third party may not disclose to either party information given in confidence by the other and shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute."

Section 154.053(c). "Unless the parties agree otherwise, all matters, including the conduct and demeanor of the parties and their counsel during the settlement process are confidential and may never be disclosed to anyone, including the appointing Court."

In addition to this standard directed to the mediator, there is also a "blanket" mediator confidentiality standard imposed upon the mediation process:

"Section 154.073. Confidentiality of Communications in Dispute Resolution Procedures.

(a) Except as provided by Subsection (c) and (d), a communication relating to the subject matter of any civil or criminal dispute made by a participant in a alternative dispute resolution procedure, whether before or after the institution of formal judicial proceedings, is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial or administrative proceeding.

(b) Any record made at an alternative dispute resolution procedure is confidential, and the participants or the third party facilitating the procedure may not be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to process requiring disclosure of confidential information or data relating to or arising out of the matter in dispute.

(c) An oral communication or written material used or made a part of an alternative dispute resolution procedure is admissible or discoverable if it is admissible or discoverable independent of the procedure.

(d) If this section conflicts with other legal requirements of disclosure of communications or materials, the issue of confidentiality may be presented to the Court having jurisdiction of the proceedings to determine, in camera, whether the facts, circumstances, and context of the communications or materials sought to be disclosed warrant a protective order of the Court or whether the communications or materials are subject to disclosure."

In March 1998 the Texas Supreme Court's Advisory Committee on Court Annexed Mediations submitted its recommendations to the Supreme Court, including proposed ethical rules for mediations and mediators along with an enforcement system. The proposed rules provide that they are "promulgated by the Supreme Court of Texas to promote public confidence in the mediation process; . . ." The rules also provide that "the mediator shall protect the integrity and confidentiality of the mediation process . . ." and that "(b)efore, during and after the mediation session, the mediator should exercise reasonable diligence to protect the confidentiality of the process."

Rau & Sherman's Texas ADR and Arbitration Statutes, 1997, p. 44, has a relevant discussion of Section 154.073 of the ADR Act:

"Many proponents of ADR (and particularly of mediation) claim that confidentiality is critical to the success of the process. They maintain that parties will not speak freely if confidentiality is not guaranteed and that the ability to get to the heart of the dispute will be jeopardized. They also argue that the independence of the mediator would be undermined if she could be required to testify about the mediation at some future time."

"In opposition to a broad claim for mediation confidentiality is our tradition that all relevant evidence should be available in judicial proceedings. The right to 'every man's evidence' is a basic procedural principle only outweighed in the case of certain limited privileges. There are sometimes strong arguments for breaching the confidentiality of an ADR proceeding. One party may challenge a settlement agreement on the basis of fraud, coercion, or mistake in the ADR proceeding, and what occurred or what was said in an ADR proceeding may be critical to resolving some other dispute. A dispute may attract public interest, and the confidentiality may be challenged by the media or interest groups on the ground of a public right to know . . ."

"The debate was resolved in Texas in favor of broad confidentiality. The Texas ADR statute has one of the broadest ADR privilege provisions in the country. It is often credited with the rapid use of ADR in Texas since 1987, both voluntarily by disputants and by Court order."

In Matter of Omni Video, Inc., 60 F.3d 230, 232 (5th Cir. 1995) the United States Court of Appeals for the Fifth Circuit reaffirmed its earlier holding that "federal courts have the inherent power to enforce settlement agreements entered into by the parties . . . in a pending case . . ." In Omni Video summary judgment had been entered by the Bankruptcy Court, and affirmed by the District Court, to enforce a settlement agreement announced by the parties in open Court. The Fifth Circuit, in noting that it must first determine whether state or federal law applied, opined:

"And when, as here, extensive federal legislation exists but fails to address the specific issue to be decided, 'the pertinent analysis assesses whether there exists a valid and substantial federal interest or policy that requires the application of federal law as an exercise of interstitial lawmaking to protect and effectuate the federal scheme.' If a strong federal interest is not present, the Erie doctrine dictates the application of state law."

"We perceive no strong federal interest in the issue of the validity of settlements entered into to resolve a bankruptcy suit. Federal bankruptcy law fails to address the validity of settlements and this gap should be filled by state law. As we have held in federal diversity suits, a settlement is a contract and is best resolved by reference to state contracts law. Thus, since the alleged agreement was negotiated and to be performed in Texas, the settlement agreement entered by the parties will be interpreted under Texas law." (footnoted citations omitted). 60 F.3d at 232-233.

The Court then discussed Tex.RCiv.P. 11 (which requires that an agreement to settle a pending suit must be in writing, signed, and filed with the Court, or made in open Court and entered of record). The Court determined that the oral statements made in open Court met the requirements of Rule 11 and created a binding agreement under Texas law. The Court further stated:

"In the light of these circumstances, summary judgment was appropriate to enforce the settlement reached by the parties and read into the record. Furthermore, this decision is supported by this Court's policy that valid settlement agreements should be enforced. 'Litigants may not disavow compacts thus made and approved, for avoiding the bargain would undermine its contractual validity, increase litigation, and impair efficient judicial administration.'"

. . . "The parties entered an enforceable settlement and the bankruptcy Court, acting within its power as a federal Court, enforced this agreement with a judgment. Because we agree that the appellee was entitled to judgment as a matter of law, we AFFIRM." (footnoted citations omitted) 60 F.3d at 233-234.

In Valley Ranch Dev. Co. v. F.D.I.C., 960 F.2d 550 (5th Cir. 1992), the Plaintiff's claims included RICO violations and securities fraud. At mediation the parties orally agreed on a settlement suggested by the mediator, but could not agree on settlement documents. Two years later the FDIC representative orally agreed to accept the earlier proposed settlement, subject to FDIC approval, which was never obtained. The Plaintiff attempted to enforce the settlement agreement, but the trial Court refused to do so. The Fifth Circuit affirmed the trial Court, holding that Texas law applies to the enforcement of settlement agreements in Texas diversity cases. The Court also noted that, under Tex.RCiv.P. 11, this settlement "never met the Texas standards for an enforceable agreement." 960 F.2d at 553-554.

See also Smith v. Smith, 154 F.R.D. 661 (N.D.Tex 1994) where the magistrate judge quashed the subpoena of a mediator, relying upon comity and the expectations of the parties and the mediator that the ADR Act's mediator privilege provision would apply as a basis for applying Texas law. After a lengthy analysis of the ADR Act, the District Court affirmed the magistrate's order, but declined to decide whether a mediator privilege exists under federal law.

Thus, Texas law, including the ADR Act, should be applied to determine the enforceability of this written settlement agreement.

Section 154.071 of the Texas ADR Act is captioned "EFFECT OF WRITTEN SETTLEMENT AGREEMENT" and reads, in part, as follows:

"(a) If the parties reach a settlement and execute a written agreement disposing of the dispute, the agreement is enforceable in the same manner as any other written contract." (emphasis added).

(b) The Court in its discretion may incorporate the terms of the agreement in the Court's final decree disposing of the case. "

In recent years many cases relating to the ADR Act and to mediation settlement agreements have been decided by Texas courts, so a discussion of some of the more important cases is appropriate. Mantas v. Fifth Court of Appeals, 925 S.W.2d 656 (Tex. 1996) involved a written settlement agreement executed by the parties during a mediation that had been ordered by the Fifth Court of Appeals. (A judgment for $209,423 had been obtained by Barnett against Mantas in the trial Court, and an appeal of the case to the Court of Appeals had been perfected.) Pursuant to the mediation settlement agreement Mantas paid $160,000 to Barnett, who signed a release of judgment, a joint motion to dismiss the appeal, and an agreed order dismissing the appeal. However, later the same day before the documents were filed with the Court of Appeals, Barnett withdrew his consent to the settlement, claiming that his attorneys improperly distributed the settlement funds without his authorization and that he was fraudulently induced to execute the settlement agreement.

Mantas filed a motion with the Court of Appeals to declare the settlement agreement and release of judgment to be valid and enforceable and to dismiss the appeal with prejudice. The Court of Appeals denied the motion, relying on Cadle Co. v. Castle, 913 S.W.2d 627 (Tex.App.-Dallas 1995, writ denied) where the Court had held that enforcement of a disputed settlement agreement, even if reached at a Court-ordered mediation, must be determined in a breach-of-contract cause of action under normal rules of pleading and evidence. Mantas then filed a separate suit to enforce the agreement and asked the Court of Appeals to abate the appeal pending resolution of the enforcement suit, but the Court denied the request. An original mandamus proceeding was then filed with the Texas Supreme Court, which, in a per curium opinion, held: