Mediations

Mediation Philosophy: I know of no process better than mediation for resolving the disputes that are brought before me for resolution in that manner — and even, I might add, would have been the best process for resolving some of the disputes that are brought before me for resolution through arbitration.

At the beginning of the mediation process, it is essential that the mediator gain the parties’ trust in his or her impartiality and fairness, and confidence in his or her skill to get the job done. To accomplish this, the mediator must use subtle persuasion and tact — with a reasonable dose of humor added to the mix at the appropriate times — to gradually alter the initial mind-sets of the parties.

If the process is managed correctly, the parties will be led slowly away from the firm positions with which they entered to more flexible, introspective attitudes in which — perhaps for the first time — they try to view the dispute from their adversary’s perspective. It’s not easy, and invariably the mediation will reach (maybe more than once) a temporary impasse, where the mediator will employ his or her own creativity to suggest novel, alternative ways to solve the problems at hand — and urge the parties to do so as well. In addition, the mediator will ensure that the parties fully understand the future cost (both tangible and intangible) of failure to resolve the dispute.

All present — the parties, their counsel and the mediator — should play an active role, and the mediator should have the sensitivity to read the psychodynamics among those present. In the final analysis, the mediator will have acted as a facilitator to employ the skills he or she has learned from training and experience to assist the parties in reaching their own settlement of the dispute.

In many cases, resolution will occur at the end of the day. However, in a number of cases, it becomes clear that final settlement cannot take place until some other event occurs:

  • additional documentation is provided
  • further action by one or both of the parties is taken
  • a third party is brought into the process, at least informally
  • the outcome of a related legal proceeding becomes known

In such event, the mediator must be patient but persistent, remaining in frequent contact with the parties and rescheduling a further meeting or meetings if necessary. It may take days or weeks, but the final result will be worth the delay.

Experience as a Mediator: David Acton has mediated a wide range of types of cases, including disputes involving the following:

An asset purchase agreement dispute between the buyer and the seller of a business, which also involved a related transition services agreement.

A dispute between a general contractor and a subcontractor contracted to perform excavation and concrete work on a large new retail store. General contractor asserted right to withhold payment and supplement subcontractor’s workforce based on subcontractor’s failure to maintain work schedule and performance of defective work. Subcontractor maintained general contractor violated terms of contract and inappropriately withheld payment. Dispute was resolved when supplier to subcontractor was brought into mediation, resulting in a 3-way settlement whereby the general contractor paid the supplier a portion of the amount supplier was owed for material provided to subcontractor for the job, and also paid subcontractor a portion of its claim, and all three parties executed mutual releases.

Two fee disputes, one between three law firms and one between a professional firm and its client.

The claimant was a control systems subcontractor to an HVAC contractor engaged to work on construction of new high school. Respondent withheld partial payment from claimant on ground that the defective control system had led to malfunction of HVAC system, thereby causing school district to withhold full payment claimed by respondent. Dispute was resolved when school district was brought into mediation and agreed to perform tests to establish actual cause of HVAC system malfunction. Parties agreed to allocation of costs of tests.

A dispute between a distributor and an importer of herbal supplements wherein the distributor claimed that the importer violated the contract and the law by knowingly misrepresenting adulterated products as all natural supplements in an effort to subvert FDA regulations. The distributor claimed extensive damages for monies allocated for testing that were instead retained for personal gain.

A dispute between a school district and a general contractor who was hired to construct a new high school under a fixed-price contract. The dispute arose when the completion of the school was substantially delayed, resulting in significant damages to both parties. The parties eventually agreed that the delay was caused by substantial defects in the construction drawings and engineering report submitted to the parties by the architectural and engineering firm (the “A&E”) hired by the school district. Among other defects was a gross underestimation of the extent of rock in the site. The dispute was resolved when the parties agreed to join forces and permit the contractor to proceed against the A&E firm. The settlement included a substantial cash payment from the school district to the contractor, plus assignment by the former to the latter of all claims which the former may have had against the A&E firm, with the former to receive 50% of any amounts recovered by the latter on such claims, subject to a cap.

A dispute between a franchisor which manufactured a specialized type of construction material and its largest franchisee which arose when the franchisee, pursuant to the agreement between the parties, notified the franchisor that it had received an offer from a third party to purchase its business, The franchisee claimed that the franchisor failed to exercise its right to purchase the business on the same terms as agreed to with the third party, which it had notified the franchisee that it would do. The franchisee claimed that the franchisor’s conduct caused the franchisee to lose the opportunity to sell the business during the most favorable economic, market, and competitive conditions, thereby substantially reducing the value of the franchisee’s business. Extensive negotiations led to a satisfactory outcome for both parties.

A breach of contract involving a dispute under a software development agreement between the provider and the client.

A breach of contract involving a dispute under a media advertising contract between a sponsor and the radio station which sold the time.

A breach of contract involving a two commission sales agreement cases, one of which involved international parties and issues.

A breach of contract involving an employment agreement case between an employer, an employee and an alleged co-conspirator with whom the employee formed a competitive business entity.

A breach of contract involving a three manufacturing agreement cases, one of which involved international parties and issues.

A breach of contract involving a case involving licensing for manufacture and sale.

A breach of contract involving a securities agreement case between an investor and a broker-dealer/financial advisor.

A breach of contract involving a dispute over the unilateral termination of a management agreement between a management services company and a non-profit international organization. The conflict centered on the validity of termination based on contract language, and whether fee negotiation efforts were done in good faith. The claimant established that termination by the respondent was really prompted by the desire to change management companies, which ultimately lead to settlement of the dispute.

A breach of contract involving a unilateral termination by a manufacturer of a distributorship agreement because of a default under a separate agreement by a distributor affiliated with the first distributor, and a refusal by the manufacturer to repurchase from the first distributor, upon such termination, products that the manufacturer deemed obsolete.

These most recent nine cases mediated involved amounts of money in dispute ranging from $100,000 to $2,000,000, with the average amount being $575,000.

Representative Issues Handled as a Mediator: Construction cases mediated have included the following issues: delay damages, failure to perform, owner interference, and design errors.

In commercial cases mediated, the following representative issues have arisen:

  • whether the conduct of the parties effectively changed the compensation arrangement from being one on a percentage-of-recovery basis to being one on a fixed-hourly-fee basis
  • whether interference by the customer was the sole cause of late and incomplete delivery by the provider under a software development contract
  • whether the frequent change of specifications by the customer was the primary cause of failure of a manufacturing device produced by the supplier to deliver the desired product
  • whether an employee breached a “non-piracy” agreement with his employer and whether he was liable under RICO for theft, conversion of commissions and conspiracy with a codefendant to illegally convert commissions
  • when a purchaser suddenly terminated its long-standing relationship with an exclusive supplier, how the cost of unusable finished inventory, raw materials, plates, dies and tooling should be allocated
  • whether, under a license to manufacture and sell, the licensee has properly accounted for and paid royalties and other sums claimed by the licensor
  • whether a broker-dealer/financial advisor violated a duty to certain clients by recommending investments that were inconsistent with the clients’ investment goals, history, financial condition, ages and stages in life
  • whether a contract drafted by one party was sufficiently ambiguous to enable the other party to unilaterally terminate it on the ground that the drafting party was in default under the contract
  • whether a manufacturer was justified in refusing to repurchase, at full initial cost, the entire line of the manufacturer’s products that remained unsold by a distributor at the time of termination by the manufacturer of the distributorship agreement with that distributor.

Multi Party Mediation Experience:

In a construction dispute between an owner and a general contractor, the errors of the owner’s architect and engineer became a crucial factor in resolving the dispute once the owner and general contractor were shown that they had more to gain than to lose by working together to focus the claim for delay damages on the architect and engineer. A dispute between a general contractor and a subcontractor was successfully resolved once a third party supplier who had brought suit against both of them for failure to pay for supplies delivered to the project had been brought into the settlement negotiations.

In a case involving RICO and a claim for treble damages, the defenses of the codefendants placed them at odds with each other vis-à-vis the claim against them by the employer of one of them for theft, conspiracy and conversion of commissions.

In a dispute between three law firms over how to allocate among them the substantial fee ultimately earned by an attorney who had worked consecutively for all three of them on a protracted case, the issues centered on the respective amounts of time the attorney had spent on the matter while at each firm and, conversely, on the related costs incurred, respectively, while working at each firm.

Years of Practice as a Mediator: 15+

Total Number of Cases Mediated: 40-50 (most in the last three years)

Mediation References: