In a few short days, the year 2012 will arrive. By now, our entire nation has felt the impact of the mortgage foreclosure crisis. We have learned that the situation was far more grave than we were initially led to believe. Meanwhile, the cost of living continues to rise, while long standing benefits and income levels decrease. Will 2012 be another doom and gloom year? I sure hope not!
While not making headline news yet, there may be reason for hope that the worst of the real estate crisis is over. Maybe, developers will begin construction for homes in new and existing community associations while shrewd investors continue bargain hunting. There sure are some great real estate bargains out there.
It would be great if December’s good will and cheer lasted all year. It always seems around the middle of January that the well runs dry. When it does, there are two changes to court ordered mandatory mediation that every association board member should know.
The first comes to us from a December 19, 2011 Order from the Florida Supreme Court and is limited to lender foreclosure litigation. By way of background, a statewide managed mediation program for residential mortgage foreclosure cases began in 2009. The program was created to help alleviate the overcrowded court dockets caused by the residential foreclosure crisis and the mortgage litigation that followed in its wake. The Court determined “it cannot justify continuation of the program.” Nevertheless, cases already referred to the foreclosure mediation program remain subject to its requirements. No new cases will be referred. This foreclosure mediation program that was recently abolished should not be confused with the mediation that regularly occurs during litigation … which brings us to the second change you should know about.
Effective January 1, 2012, the Florida Rules of Civil Procedure require all parties attending mediation to take the following action in writing at least 10 days prior to the date of the mediation: 1) identify who will appear on behalf of the association, and 2) those attending must certify they have actual settlement authority.
On January 1, Rule 1.720 of the Florida Rules of Civil Procedure, will provide, in relevant part, that “a ‘party representative having full authority to settle’ shall mean the final decision maker with respect to all issues presented by the case who has the legal capacity to execute a binding settlement agreement on behalf of the party. Nothing herein shall be deemed to require any party or party representative who appears at a mediation conference in compliance with this rule to enter into a settlement agreement … unless otherwise stipulated by the parties, each party, 10 days prior to appearing at a mediation conference, shall file with the court and serve all parties a written notice identifying the person or persons who will be attending the mediation conference as a party representative or as an insurance carrier representative, and confirming that those persons have settlement authority.”
In plain English, this means that the board must provide its representative(s) attending the mediation with settlement authority without the need for further ratification and approval at a subsequent board meeting. Depending upon how this modified rule of Florida Civil Procedure is implemented and interpreted, it could require a majority of the board to attend the mediation so that the settlement can be approved right then and there. Alternatively, since there is an obligation to settle, perhaps it will be sufficient for the association’s representative attending the mediation to have full settlement authority subject only to “certain limits not to exceed” as decided by the board in advance of the mediation.
May your new year be filled with happiness and prosperity.