NJSBA Family Law Section

I disagree 100% that parties should not sign a MOU at the conclusion of mediation. The case law is clear that if they do not sign the MOU at the end of the mediation, either can back out of what they agreed upon at mediation. Generally what most of us do is put in the MOU that the parties agree that the MOU terms are the major provisions of an agreement reached at mediation and are subject to a more formal MSA being prepared by the attorneys for the parties. But in my view, it undercuts the effectiveness of the mediation process for them not to sign a MOU if they have reached an agreement at mediation.

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

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The binding nature is a separate issue. If you make the MOU contingent on the parties entering into a more formal MSA, I don't see a problem. I think they still walk away with the thought that they are well on their way to a settlement. There's too much temptation for those who are difficult to begin with to simply change their minds and now they (and you) have wasted hours.

Maybe I have the "minority view", but in the mediations I do with attorneys present, the attorneys are happy that the clients sign a MOU at the conclusion of the mediation.

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

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In my view, the traditional "MOU" is not intended to be signed. However, if the parties (and their counsel) intend the parties to be bound by whatever terms are contained in the document, there is nothing wrong with the parties knowingly and voluntarily entering into a comprehensively drawn document. It takes more time and effort to do an "MOU" that is binding than a general listing of major terms. In some sense, it can be viewed as a partial or min-MSA. However, you need to be careful with the enforceable terms as drafted and must deal with "the rest of the stuff". One way that I've done that when we want to nail down the major terms agreed upon, but there are minor terms and "boiler plate" language left open, I put the following in the MOU:

Marital Settlement Agreement ("MSA"):  The above terms shall be incorporated into the parties' Marital Settlement Agreement ("MSA"), which will be drafted by ____. The terms herein include the major terms between the parties.  Therefore, the parties agree that there may be certain minor terms that need to be incorporated into their MSA that have yet to be negotiated. However, failure to agree to said minor terms shall not alter the parties' agreement to these major terms. If the parties cannot resolve the minor terms and language issues related to the MSA, they shall attend no fewer than two mediation sessions with a mutually acceptable mediator to resolve those terms. If those terms cannot be resolved in mediation, then the parties shall seek resolution from the court. However, resorting to the court to resolve the minor terms and MSA language issues shall not impact their agreement to the major terms detailed herein.

Thoughts?

In my view, the traditional "MOU" is not intended to be signed. However, if the parties (and their counsel) intend the parties to be bound by whatever terms are contained in the document, there is nothing wrong with the parties knowingly and voluntarily entering into a comprehensively drawn document. It takes more time and effort to do an "MOU" that is binding than a general listing of major terms. In some sense, it can be viewed as a partial or min-MSA. However, you need to be careful with the enforceable terms as drafted and must deal with "the rest of the stuff". One way that I've done that when we want to nail down the major terms agreed upon, but there are minor terms and "boiler plate" language left open, I put the following in the MOU:

Marital Settlement Agreement ("MSA"):  The above terms shall be incorporated into the parties' Marital Settlement Agreement ("MSA"), which will be drafted by ____. The terms herein include the major terms between the parties.  Therefore, the parties agree that there may be certain minor terms that need to be incorporated into their MSA that have yet to be negotiated. However, failure to agree to said minor terms shall not alter the parties' agreement to these major terms. If the parties cannot resolve the minor terms and language issues related to the MSA, they shall attend no fewer than two mediation sessions with a mutually acceptable mediator to resolve those terms. If those terms cannot be resolved in mediation, then the parties shall seek resolution from the court. However, resorting to the court to resolve the minor terms and MSA language issues shall not impact their agreement to the major terms detailed herein.

Thoughts?

The binding nature is a separate issue. If you make the MOU contingent on the parties entering into a more formal MSA, I don't see a problem. I think they still walk away with the thought that they are well on their way to a settlement. There's too much temptation for those who are difficult to begin with to simply change their minds and now they (and you) have wasted hours.

Maybe I have the "minority view", but in the mediations I do with attorneys present, the attorneys are happy that the clients sign a MOU at the conclusion of the mediation.

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

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Anne:

What do you (or any of you who are following this do) when you're the mediator for parties who attend without attorneys? Do you have them sign a MOU? Do you prepare a MOU and insist they have to take it to their own counsel before signing it?

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

This E-Mail message and any documents accompanying this E-Mail transmission contain information from the law firm of Drescher & Cheslow, P.A. which is "Privileged and confidential attorney-client communication and/or work product of counsel." If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution and/or the taking of or refraining from taking of any action in reliance on the contents of this E-Mail information is strictly prohibited and may result in legal action being instituted against you. Please reply to the sender advising of the error in transmission and delete the message and any accompanying documents from your system immediately. Thank you

Anne:

What do you (or any of you who are following this do) when you're the mediator for parties who attend without attorneys? Do you have them sign a MOU? Do you prepare a MOU and insist they have to take it to their own counsel before signing it?

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

This E-Mail message and any documents accompanying this E-Mail transmission contain information from the law firm of Drescher & Cheslow, P.A. which is "Privileged and confidential attorney-client communication and/or work product of counsel." If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution and/or the taking of or refraining from taking of any action in reliance on the contents of this E-Mail information is strictly prohibited and may result in legal action being instituted against you. Please reply to the sender advising of the error in transmission and delete the message and any accompanying documents from your system immediately. Thank you

Anna-Maria:

Maybe I am going to have to re-think my approach. But the following is important and played into my thinking:

The case law, Willingboro Mall, Ltd. V. 240/242 Franklin Avenue, LLC, 215 N.J. 242 (2013) states as follows:

"In summary, if the parties to mediation reach an agreement to resolve their dispute, the terms of that settlement must be reduced to writing and signed by the parties before the mediation comes to a close. In those cases in which the complexity of the settlement terms cannot be drafted by the time the mediation session was expected to have ended, the mediation session should be continued for a brief but reasonable period of time to allow for the signing of the settlement. We also see no reason why an audio- or video-recorded agreement would not meet the test of "an agreement evidenced by a record signed by all parties to the agreement" under N.J.S.A. 2A:23C–6(a)(1) and N.J.R.E. 519(c)(a)(1). See UMA Drafters' Comments, supra, at § 6, comment 2. To be clear, going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable."

To me, the issue is whether the parties wish the terms they agreed to at the conclusion of mediation to be enforceable. Nobody forces them to sign a MOU or term sheet, which expressly is made subject to a more formal MSA being executed. But I do wonder what service we, as mediators, are providing if one or both parties can just walk away because nothing is signed.

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

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Thoroughly agree with Bob and also agree with Chuck's suggested language when lawyers are involved in the mediation.

If no lawyers then the parties MUST first be given the opportunity to consult with attorneys before entering into any binding agreements.

Anna-Maria:

Maybe I am going to have to re-think my approach. But the following is important and played into my thinking:

The case law, Willingboro Mall, Ltd. V. 240/242 Franklin Avenue, LLC, 215 N.J. 242 (2013) states as follows:

"In summary, if the parties to mediation reach an agreement to resolve their dispute, the terms of that settlement must be reduced to writing and signed by the parties before the mediation comes to a close. In those cases in which the complexity of the settlement terms cannot be drafted by the time the mediation session was expected to have ended, the mediation session should be continued for a brief but reasonable period of time to allow for the signing of the settlement. We also see no reason why an audio- or video-recorded agreement would not meet the test of "an agreement evidenced by a record signed by all parties to the agreement" under N.J.S.A. 2A:23C–6(a)(1) and N.J.R.E. 519(c)(a)(1). See UMA Drafters' Comments, supra, at § 6, comment 2. To be clear, going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable."

To me, the issue is whether the parties wish the terms they agreed to at the conclusion of mediation to be enforceable. Nobody forces them to sign a MOU or term sheet, which expressly is made subject to a more formal MSA being executed. But I do wonder what service we, as mediators, are providing if one or both parties can just walk away because nothing is signed.

Robert E. Goldstein, Esq.
Drescher & Cheslow, P.A.

610 Bridge Plaza Drive

Manalapan, NJ 07726

(732) 972-1600
Fax (732) 972-0038
E-mail: [email protected]

IRS Circular 230 Notice: To ensure compliance with certain regulations promulgated by the U.S. Internal Revenue Service, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax-related penalties under the U.S. Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein, unless expressly stated otherwise.

This E-Mail message and any documents accompanying this E-Mail transmission contain information from the law firm of Drescher & Cheslow, P.A. which is "Privileged and confidential attorney-client communication and/or work product of counsel." If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution and/or the taking of or refraining from taking of any action in reliance on the contents of this E-Mail information is strictly prohibited and may result in legal action being instituted against you. Please reply to the sender advising of the error in transmission and delete the message and any accompanying documents from your system immediately. Thank you

I hear you, Bob. Willingboro was a civil matter. I see families needing a lot more work before people can sign and walk away since there is so much continuing interaction in families after a divorce. I am concerned with the durability of any agreement when someone may sign after long hours,  just to settle and get out of there. I'd rather see them schedule another mediation or even attend that court appearance if necessary before they take up that pen.  If they want to sign that MOU fully understanding the consequences then of course, move on. I have seen attorneys though rushing to get something on paper and getting it signed to capture "the agreement".  I don't think that does service for the client either.  

I started following this thread last night and knew it was controversial by the tones going off on my cell phone during the six o'clock news.

I'm a Bob Goldstein friend but, respectfully, disagree.  If I'm mediating, and there is an agreement, I will report it to the Court (if an EM), but I won't do a writing to be signed, unless it is requested.  I certainly don't recommend it.  It's not a lot different from the bad old days when judges would try to force people into putting the "agreement on record", just so they can put it through and get another notch on their belt.  I haven't done that since the 1970s and am embarrassed that I ever succumbed to that kind of nonsense.

The chance that the "agreement" could fall apart from the time of the final mediation to the time of signing an MSA, is worth the risk, it seems to me.  If that would happen in a particular case, then the whole concept of having a signed and perhaps enforceable MOU in that same case is only going to lead to trouble anyway.  In other words if the agreement fell apart between the day of the mediation and the time to sign the MSA, then chances are it was going to fall apart anyway with a signed MOU  --  in which case you've got a potential Harrington situation, which is never a good result. 

The idea of tacking down the parties to an "agreement" at the mediation gives no opportunity of contemplation.  Each party should be able to sit with his/her  attorney, with the assistance of our digital wizardry, and analyze what the "agreement" really means.  In virtually all cases, that is important.  A party should know what the mediated agreement means in real terms.  That is not always done at mediation.

But even if it were done at mediation (I will often produce a disposable income schedule if it seems warranted.), what is so wrong with the attorneys going over the schedule with their clients on their own computers within a reasonably short period of time of the conclusion of mediation?  Maybe the mediator didn't take something in to consideration when he or she ran the numbers.  Maybe he or she just made a mistake.  Should an agreement be binding when a mistake is made and not caught when it perhaps could have been caught, given a little contemplative time?  Doesn't it make sense that the parties with their attorneys take the time to clarify and review before pen goes to paper? 

I realize that a lot of what I am talking about can be done in scenarios by the advocates before the mediation even takes place.  And if so, that's great.  But it's pretty rare that it happens, it seems to me.   It's even more rare that it's done by both advocates in advance.  And it's certainly  very rarely done by the mediator in advance. 

I started off with this rant by saying "if I'm mediating".  I really do not mean to limit my opinion from just the standpoint of the mediator.  If I'm the advocate, the aforesaid opinion is just as relevant – maybe more so.  I want my client to have a fully contemplated agreement.

Just my two cents.

While I may be in the minority, in my perfect world, an MOU reached at mediation without counsel present should not be signed and Mediators should not request that it be signed. Indeed, I believe that Mediators should not accept signed MOUs or MSAs in such situations. All litigants should have the right to have their attorneys review such agreements – something like an ounce of protection is worth a pound of cure. People make mistakes, including Mediators and without review by counsel, I can only wonder why the individual is paying an attorney. And yes, everyone does make mistakes, including Mediators and what happens when mistakes are discovered subsequent to execution?   

Exactly. 

And with all due respect to my fellow mediators, why would litigants want to rely totally on the mediator for the ultimate guidance in resolving their matrimonial case?  The mediator is certainly not imparting legal advice really.  He may think he is, or the parties may think he is, but he obviously just cannot be with both parties sitting alone in front of him.  The litigants are doing this all without legal representation.  It just makes no sense to me, never has.  Three heads are always better than one.

In any respect, then each party takes the unsigned MOU (which, as you say,  obviously should be unsigned) to Joe Smoe, Esquire and tasks Mr. Smoe with drafting an MSA from the terms of the MOU.  Any legal advice being imparted there?  Probably not.  In any respect, probably Mr. Some's retainer agreement, under that scenario, would certainly relate that the party is not getting any legal advice.  Lawyer Smoe is just the scrivener. 

But I suppose that kind of scenario is for the simplest of cases, and perhaps there is no real harm done.  Lawyer Smoe has a final opportunity to make a wrong right.  If he is unable to do that, he can certainly withdraw; that usually gets the party's attention.

Respectfully, I don't think this is about having the boilerplate language available or filling in the blanks. It has been my experience in the matrimonial world that there is a certain dynamic in all marriages where one personality is somewhat more aggressive than the other. When the parties are by themselves with a Mediator and the sessions go on at length, it is, generally speaking, the more assertive personality will prevail and that is precisely why clients need legal advice. Within the field of Mediation, I think it is fair to say that there is an extremely fine line between "educating" the parties and "advising" the parties. Education is OK – advising is not. It has always been my understanding the Mediation attempts to bring parties together and let them decide what is best for themselves. Sounds good, but what happens when one party is demanding something that is unwarranted. Does the Mediator point out that such a demand may or does exceed the boundaries of objective practice? And what then happens at the end of the day and the pressure mounts to "get it done!!". It is all well and good for someone to draft an MOU for the parties to take to their lawyers but something entirely different to seek the signatures then and there without advice of counsel.

In the end, all Agreements should be exactly that – Agreements. Not subject to the heat of the moment. If it is a decent Agreement, I would hope that all attorneys worth their salt would so advise their clients and the Agreement can go forward. If not, there would have to be a reason – better not to have an Agreement that a party regrets for years to come than to wait a few hours to see if everyone can live with it.

I agree with Gerry. I do think there are some differences, as has been discussed, between a post-economic mediation when there are attorneys present, and a private mediation that the parties have attended without counsel. In representing a client in post-economic mediation, I sometimes feel the issues have been thoroughly enough discussed with the client for a signed agreement to be appropriate. If I am the mediator, with two parties who have not yet consulted with counsel, or don't have counsel present, I am not comfortable with the MOU being signed. I can't stop the parties from going off and signing it, but I advise them to use review counsel.

C. Megan Oltman

Oltman Law & Mediation

475 Wall St

Princeton, NJ 08540

http://moltmanlaw.com

(609) 947-0784

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Respectfully, I don't think this is about having the boilerplate language available or filling in the blanks. It has been my experience in the matrimonial world that there is a certain dynamic in all marriages where one personality is somewhat more aggressive than the other. When the parties are by themselves with a Mediator and the sessions go on at length, it is, generally speaking, the more assertive personality will prevail and that is precisely why clients need legal advice. Within the field of Mediation, I think it is fair to say that there is an extremely fine line between "educating" the parties and "advising" the parties. Education is OK – advising is not. It has always been my understanding the Mediation attempts to bring parties together and let them decide what is best for themselves. Sounds good, but what happens when one party is demanding something that is unwarranted. Does the Mediator point out that such a demand may or does exceed the boundaries of objective practice? And what then happens at the end of the day and the pressure mounts to "get it done!!". It is all well and good for someone to draft an MOU for the parties to take to their lawyers but something entirely different to seek the signatures then and there without advice of counsel.

In the end, all Agreements should be exactly that – Agreements. Not subject to the heat of the moment. If it is a decent Agreement, I would hope that all attorneys worth their salt would so advise their clients and the Agreement can go forward. If not, there would have to be a reason – better not to have an Agreement that a party regrets for years to come than to wait a few hours to see if everyone can live with it.

I hear you, Bob. Willingboro was a civil matter. I see families needing a lot more work before people can sign and walk away since there is so much continuing interaction in families after a divorce. I am concerned with the durability of any agreement when someone may sign after long hours,  just to settle and get out of there. I'd rather see them schedule another mediation or even attend that court appearance if necessary before they take up that pen.  If they want to sign that MOU fully understanding the consequences then of course, move on. I have seen attorneys though rushing to get something on paper and getting it signed to capture "the agreement".  I don't think that does service for the client either.