Mediation: A Little History

Louisiana law favors the settlement of disputes. With a settlement, both sides agree to avoid costly litigation and obtain a certain, negotiated result. While neither side is completely happy with the result in a typical settlement, the case is at least closed and the financial and emotional drain of litigation is ended. But the recent decision in The Marietta Trust and The Warren Trust v. J.R. Logging, Inc., Fair Hills Farm, LLC, Jerry Avants, Jr., Thomas Keaty, Jr. and XYZ Insurance Company, 2016 CA 1136 (La. App. 1 Cir. 5/11/17) shows what can happen when one of the parties change their mind. This case is important because it calls into question whether an exchange of emails is sufficient to reach a final settlement.

The Marietta Trust case involved a dispute regarding the wrongful cutting of timber and the parties seemingly came to a resolution. Via email, the case was negotiated and the terms were agreed upon. Formal settlement documents were drawn up and money was exchanged. However, when the time came to execute the final documents, one set of defendants refused to sign the paperwork. This refusal to sign came after the attorney for these defendants directly stated in an email that his "clients have agreed to the settlement." Id. at *4. In response to the refusal to sign, the other parties filed a Joint Motion to Enforce Settlement Agreement which was denied by the Trial Court.

Settlement agreements are governed by the Louisiana Civil Code art. 3071 which provides that litigation can be resolved via settlement or compromise. A settlement agreement can take two forms: 1) recitation in open court; or 2) a writing. “The purpose of the writing requirement is to serve as proof of the agreement and the acquiescence therein.” Marietta Trust, 2016 CA 11336, Id. at *3. The writing must be signed by the parties or their agents. “Until the parties sign a written document or documents evincing their consent to the terms of the proposed agreement, a party is free to change his or her mind.” Id. at *3. Prior courts have found that emails meet the "writing" requirements. See, Geer v. BP America Production Co., 2014-450 (La. App. 3 Cir. 11/5/14), 150 So. 3d 621; Dozier v. Rhodus, 2008-1813 (La. App. 1 Cir. 5/5/09), 17 So. 3d 402.

The appellate court in Marietta Trust refused to enforce the "settlement." The court found that the exchange of emails was insufficient to meet the "writing" requirement of Civil Code article 3071 because neither the emails nor any other evidence showed that the attorney possessed "the express consent necessary to accept the terms of the settlement." Id. at *3.

When is a settlement not a settlement? Maybe when it came to you through your inbox. So, if an email from the attorney is not sufficient to perfect a settlement, what can we do? The answer offered by the 1st Circuit is to either: 1. Recite in open court; or 2. Obtain a writing that includes the client’s express consent given to the attorney to settle the case (presumably for the amount in the writing).

Many in the construction industry favor arbitration and often include an arbitration clause in their contracts. Although best practice dictates that both parties sign the contract to eliminate doubt as to legal enforceability, in practice, one or both parties sometimes fail to sign. Instead, the parties show their mutual “meeting of the minds” that an agreement has been reached by performing and accepting the work. However, if a dispute arises, will an arbitration provision in an unsigned contract be enforced?

In Patriot Construction & Industrial, LLC v. Buquet& LeBlanc, Inc., when a dispute arose over the subcontractor’s work, the general contractor sought to invoke the arbitration clause in its standard subcontract. The subcontractor argued that the unsigned, red-lined subcontract its estimator had returned to the general contractor was not enforceable, and thus neither was the arbitration clause. The court found agreement on price and scope but found that no agreement was reached on the other terms because the estimator did not have authority to bind the subcontractor. Further, a provision in the contract required that changes be initialed by both parties, yet the subcontractor’s authorized agent had not initialed any of the changes.

The Court held that the arbitration clause was not binding. The Court emphasized that Louisiana law favors arbitration; however, it held “arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute to which he has not so agreed.” The question of who is bound by an arbitration agreement is determined from the intent of the parties as expressed in the terms of the contract. If the contract is deemed void because it was not properly confected, any arbitration clause contained therein may likewise be void. This may be true even where neither party objected to the arbitration clause per se.

Although the Patriot Court stated that generally, to be subject to arbitration, a party must be a signatory to the contract containing the arbitration clause, a signature is not a statutory requirement to enforce an arbitration clause. Louisiana’s arbitration statute, La. R.S.9:4201, requires only that the arbitration agreement be in writing. It does not require a signed contract. The jurisprudence is clear that the law does not require a signed agreement to arbitrate.  See Hurley v. Fox, holding that the defendant-architect’s motion to confirm the arbitration award could not be denied merely on the ground that the plaintiff-homeowner never signed the contract. See also Rainey v. Entergy Gulf States, Inc., in which the Louisiana Supreme Court held that a party who drafts a contract and presents it to another for signature cannot claim the contract is unenforceable because that party never signed the contract. Even where the parties contemplate that both parties will sign the contract to signify acceptance, a contract may nevertheless be valid without both signatures where the non-signing party has availed itself of the agreement or taken action evidencing its acceptance of it.*

However, the result hinges on the parties’ intent – as determined by the written agreement. For example, where the written contract expressly conditions validity on both signatures, a missing signature is likely fatal to the enforcement of any arbitration clause contained in the contract.  See Huckaba v. Ref-Chem, LP, in which the U.S. Fifth Circuit invalidated an arbitration provision in an employment contract where the employee signed it but the employer – who sought to enforce the arbitration clause – did not.

Also noteworthy, an arbitration clause in a contract signed by both parties may nonetheless be invalid where the court finds that fraud, duress, or other vice was involved in the formation of the contract such that one party did not truly consent to the contract terms. In the recent case Mapp, LLC v. Floor and Decor Outlets of America, Inc., the U.S. Fifth Circuit held that a contract was unenforceable because it was found to be adhesionary – it gave the owner, which had superior bargaining power, sole discretion to invoke arbitration.

In Carver Theater, LLC v. Melancon, another noteworthy case, an arbitration clause in a written contract signed by both parties was enforced by the Court and resulted in an arbitration award. However, it was later determined invalid – and the award was also invalidated –where the party that initially sought to enforce arbitration later changed its position and argued that the contract was invalid.  The Court invalidated the arbitration award under the Louisiana arbitration statute, finding that the award was procured using “undue means.” In seeking to compel arbitration, the party argued that the contract was valid and required arbitration. Once in arbitration, that same party argued that the contract was invalid. This misrepresentation to the Court satisfied the statute’s narrow grounds for invalidating an arbitration award.**

As a final consideration, non-signatories such as subcontractors or sureties may be compelled to arbitrate where their subcontract or bond incorporates by reference the contract containing the arbitration clause and where the language in that arbitration clause is sufficiently broad, for example – any controversy or claim arising out of or related to the contract. See The Jewish Federation of Greater New Orleans, et al. v. Fidelity & Deposit Company of Maryland, holding that the surety was bound by the arbitration clause in the construction contract because its bond incorporated it by reference, even on its counterclaim for declaratory relief based on a defense that the performance bond had lapsed.

* See Harp v. Succession of Bryan, 2019-0062 (La.App. 1 Cir. 9/3/20), 313 So.3d 284; La. Civil Code art. 1927.

** La. R.S.9:4210(A).

References:

PatriotConstruction & Industrial, LLC v. Buquet & LeBlanc, Inc., 2023-557 (La. App. 3 Cir. 4/24/24), 387So.3d 784.

Hurley v. Fox, 520 So.2d 467 (La. App. 4 Cir. 1988).

Rainey v. Entergy Gulf States, Inc., 2009-572 (La.3/16/10), 35 So.3d 215.

Huckaba v. Ref-Chem, LP, 892 F.3d 686 (5th Cir.2018).

Mapp, LLC v. Floor and Decor Outlets of America, Inc., 2026WL 2265969, 25-30536 (5th Cir. 2026).

Carver Theater, LLC v. Melancon, 2024-0468 (La. App.4 Cir. 5/5/25), 417 So.3d 676. The court determined that the FederalArbitration Act and its severability doctrine did not apply in this case. Theresults may have been different under the FAA.

The Jewish Federation of Greater New Orleans, etal.  v. Fidelity & Deposit Company of Maryland, 273 F.3d 1094,2001 WL 1085096 (5th Cir. 2001) (unpublished).

You didn't expect to be here, but yet here you are -- stuck in a lawsuit over which you seem to possess little control. Now, your lawyer says he wants to "mediate" your case and wants a response from you soon. Unfamiliar with the process, you wonder if you should say "yes." Maybe a little history will help you to make your choice. Mediation arrived on the scene in Louisiana in the early 1990s. It offered an alternative to protracted litigation and the ordeal of trial. The theory was that mediation offered an efficient, cost-effective means of resolving a case and allowed the outcome to be determined by the litigants as opposed to the judge or jury.

In a state court trial, the outcome of your case rests in the hands of twelve unknown jurors or the judge. For all intents and purposes, once the case is submitted to the judge or jury, a litigant loses control of his or her destiny. Although judges and juries often get it “right," sometimes they do not. All you have to do is consider how many of the convicted are subsequently exonerated through a DNA analysis; how many cases get reversed on appeal; or, for a specific example, the O. J. Simpson acquittal which is often cited as an improper verdict. Mediation can put the decision-making back in your hands.

Mediation is generally an informal proceeding. The first step is for the parties to agree to mediate. The next, and very important step, is to select the mediator. You want a mediator familiar with your type of case. Then, you pick a date. Meditations usually last between a half-day to a full day. The mediation is attended by the mediator, the litigants and their attorneys in a confidential setting. It is important to understand that the mediator is simply the facilitator who “manages” the mediation. The “shots” are called by the parties through their attorneys. The decision as to whether to settle is solely in the hands of the parties. At the end of the day, cases are often resolved, perhaps most of the time. Even if the case does not settle at mediation, follow-up by the mediator often results in a settlement in the days and weeks that follow.

The process of mediation can be extremely valuable for these reasons: it can greatly reduce costs, fees and expenses; it gives the parties greater control over the outcome; it eliminates risk; and it allows closure and ends the distraction and emotional baggage clients often experience when in litigation. So now, when you are asked to mediate, you might let history be your guide.

By: Gracella Simmons, partner with Keogh Cox. As a mediator, she has successfully resolved a wide variety of cases over the past 15 years.