Mediating Probate Cases: Make Sure Everyone Is Notified

The Court of Appeals has invalidated a portion of a mediated settlement agreement as to a party who was not present at the mediation due to lack of notice. In this probate case, In re Meddie Allen Brown (unpublished per curiam opinion of the Court of Appeals, issued April 9, 2020, Docket No. 342485), the decedent left three children, Randall, Barbara and Mark. Randall was personal representative and trustee, and Mark petitioned the probate court to remove him, alleging that Randall had undue influence over their father, and that he failed to keep them informed about the estate. The case was sent to mediation. Barbara did not attend. Why she did not remains a mystery.

Mediation Agreement Without Sister

In the mediation, the two brothers reached a settlement whereby Randall would pay Mark and Barbara $1,000,000 each for withdrawing all their claims. When Randall petitioned the court to close the estate based on the mediation agreement, both Mark and Barbara objected on the ground that Barbara had not been notified about the mediation and did not sign the agreement. The probate court ruled that Barbara was bound by the actions of the fiduciary, Randall, and that Barbara had received sufficient notice of the mediation and chose not to participate.

Court of Appeals: Fiduciary Must Notify

The Court of Appeals disagreed. It found that the only notice of the mediation received by Barbara was the probate court’s pre-trial scheduling conference order advising that the mediator had been selected and that mediation must be completed by June 7, 2017. The fiduciary is obligated under MCR 5.120 to notify and inform all interested persons regarding any contested matter, and Randall failed to do that. The Court also noted that Barbara could not be bound by the mediation agreement because neither she nor anyone with authority to represent her signed the agreement, as required under MCR 2.507(G).

Randall suggested on appeal that, under MCR 2.411(C)(1), the mediator is supposed to contact the parties to schedule mediation, and the fact that the mediator did not contact Barbara is further evidence that she was not considered a party to the mediation required to receive notice. The Court did not believe this relieved the fiduciary of his obligation to notify under MCR 5.120. The Court thus vacated the court order that the mediated settlement agreement was binding and enforceable upon Barbara.

The Court acknowledged that Barbara did know about the mediation, through the scheduling order sent her by the probate court. It also noted that Barbara provided an affidavit averring that she was not aware of the mediation’s occurrence until after it was completed. The Court seems to have overlooked Barbara’s lack of credibility to make the larger point that a party cannot be bound to a mediated settlement if that party does not attend the mediation, unless there is clear notice and designation of a representative who will attend the mediation on the party’s behalf.

Mediator Must Notify?

While the Court blames the fiduciary, Randall, for not notifying Barbara, the Court could have read MCR 2.411(C)(1) to make the mediator bear some of the burden as well. It requires the ADR clerk to send a copy of the mediation order “to each party,” then for the mediator to “confer with the parties” to schedule the mediation. In this case, the court sent a notice to Barbara as a party, but the mediator apparently did not “confer” with her. Why not? The opinion implies (in a footnote) that the mediator notified only Trustee Randall and Petitioner Mark, and not the third sibling, Barbara, because Barbara did not join in filing the petition. Perhaps the mediator assumed that, since Barbara was not a named party, she did not need to be notified; or that one of her brothers would represent her interests also. The mediator in this case is experienced, and it’s hard to believe that he just chose not to contact the third sibling of a three-sibling estate case, especially when it became clear that the settlement would involve her share of the estate. There must be more to the story, but confidentiality may preclude us from finding out.

This case is reminiscent of Peterson v Kolinske, another unpublished Court of Appeals case involving an estate mediation (unpublished per curiam opinion of the Court of Appeals, issued April 17, 2018, Docket No. 338327), where one of the adult children, Theresa, was unable to attend the mediation, so the mediation agreement was held to be valid only as to the siblings who signed it in the mediation. The Court of Appeals noted that, although Theresa was given notice of the mediation, she was merely an interested person, “not a party to the proceedings,” and a written agreement to alter estate distribution is effective only via a written agreement executed by all who are affected by its provisions, MCL 700.3914.

Lesson for Mediators

The lesson for mediators seems to be that, if you want the agreement to be enforceable against all the participants named in it, you need to lean on the fiduciary to make sure s/he notifies them all about the mediation, and has them clearly designate a representative if any one of them chooses not to attend the mediation. Taking the two cases together, it also appears that mediators cannot rely on the legal definition of a “party” in deciding whom to notify about a mediation, pursuant to MCR 2.411(C)(1). In probate cases, the mediator would be wise to notify all potential beneficiaries, and not to proceed unless they all plan to attend or clearly designate a representative.