BINDING AGREEMENTS IN MEDIATION

By Robert E. L. Wright, Mediator and Arbitrator

A federal district judge in Detroit has upheld rulings by a bankruptcy judge and a federal magistrate enforcing a settlement agreement reached in mediation. The Debtor/Defendant attempted to avoid the terms of the agreement by arguing it was merely an “agreement to agree,” not a binding settlement, and that it contained ambiguous and misleading terms which he misunderstood.

In an excellent review of Michigan law on settlements, the court found the handwritten “term sheet” which was signed by all parties and their counsel, contained all of the essential terms to form a contractually binding agreement. The court also found that the use of the pi symbol “p” has acquired specialized meaning and stood for “Plaintiff” in the term sheet, refuting the Debtor/Defendant’s contention he thought it referred to the bankruptcy trustee who did not participate in the mediation.

The base bankruptcy case is In re Deshikachar, Case No. 13-62545; Adversary Proceeding: Collins v Deshikachar, No. 14-4318; USDC EDMI Case No. 15-cv-11679 (3/3/2016).

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