Kentucky Court of Appeals Enforces ICC Clause

The Kentucky Court of Appeals has ordered enforcement of a clause compelling the parties to med/arb through the Institute for Christian Conciliation. The case (Whitefield Academy, et al v Alford, et al, Case No. 2021-DA-0678-I, issued November 4, 2021) involves a Christian school in Louisville, Ky. When the parents enrolled their daughter in the school in 2016, the mother signed the school’s standard enrollment agreement, which included an ICC clause. Both mother and daughter signed the form for each subsequent school year until the daughter was expelled in early 2020. The parents believe the school discriminated against their daughter in expelling her, and sued the school in state court for breach of contract, negligence, intentional infliction of emotional distress, defamation, and invasion of privacy. The school asked the court to refer the case to the ICC pursuant to the contract clause.

The trial court determined that there was not a valid agreement to arbitrate, because the clause referred to the Rules of Procedure for Christian Conciliation, but the family did not receive a copy of the Rules.

On interlocutory appeal, the Court of Appeals reversed. The court construed the clause under the Federal Arbitration Act, and determined that the ICC Rules of Procedure were incorporated by reference, just as procedural rules of an agreement to arbitrate “are routinely incorporated by reference, and subsequently enforced by courts.” The Court noted, “Here, the plain terms of the enrollment agreement manifest a clear intent that the parties will arbitrate disputes.” (p. 18)

In addition to naming the school as a defendant, the parents also sued two school officials individually. The Court of Appeals ruled that the arbitration clause was generally applicable to the school officials as well, even though they did not personally sign the enrollment agreement.

Left unanswered were the questions of whether the student herself, who is a minor, as well as her father, who never signed the agreement, are also bound by the arbitration clause. The appellate court remanded those issues to the trial court. Two additional defendants, who allegedly published a story about the expulsion, were determined to be outside of the arbitration agreement, and the case against them can continue in the circuit court.

The Kentucky Court of Appeals reached the correct decision. The family offered no reason why the ICC clause should not be enforced. It is interesting that the Court treated the clause as if it referred only to arbitration, whereas it specifically requires that the parties first seek “biblically based mediation,” and proceed to arbitration only if “resolution and reconciliation do not result” from mediation.

Whoever drafted the ICC clause in the School’s enrollment agreement did not strictly adhere to the “Model Med/Arb Clause” long promoted by the ICC. Had they done so, they would have removed the basis for the trial court’s decision. The model clause states, “We have received and read” the ICC Rules “which are incorporated into this agreement by reference…” Since the enrollment agreement is completed online, the School could simply have hyperlinked the Rules to it, as the Court noted. This is what the ICC General Conciliation Clause now recommends.

The Whitefield version of the med/arb clause includes some other problematic departures from the model clause recommended by the ICC. For example, as the Court noted, the Whitefield version inter-changes the words “arbitrator” and “arbiter,” and in one place refers to “a panel of the arbitrator.” Selection of the arbitrators includes two partisan arbitrators who select the neutral – not a process preferred by the ICC.

This family may have some legitimate claims against the school, but there is no reason why they cannot find justice in a private Christian process. And they already agreed to it.

Apology Makes Things Worse

Here’s an example of an offender’s well-meaning apology just making matters worse.

Professor Bright Sheng, a long-time professor of music and composition at the University of Michigan, is teaching an undergrad composition seminar on Shakespeare this semester, and on September 10 he showed the 1965 film “Othello,” in which Laurence Olivier appears in blackface. As reported in the Michigan Daily, Prof. Sheng sent an apology that day, noting that the casting and portrayal “was racially insensitive and outdated.” Five days later, the dean of the School of Music sent a department-wide email acknowledging the incident and apologizing for what the students experienced. He also reported the incident to the Title IX office.

On September 16, Prof. Sheng sent a formal apology to the department, and this is the one that caused more harm. In the letter, Prof. Sheng – who was raised in China during the Cultural Revolution and came to the US as a graduate student in 1982 – acknowledges that showing that movie was “offensive and has made you angry,” and that he should have thought about it more carefully. Had he stopped there, it might have been fine.

But his apology letter goes on to defend himself. He says he has “never thought (of himself as) being discriminating against any race,” citing examples of how he has worked with people of color in the past. One of the students who was offended by the movie was also offended by this apology. She viewed it as “shallow” and making excuses. “Instead of just apologizing for it, he tried to downplay the fact that the entire situation happened in the first place.” Graduate music students weighed in, calling the apology “inflammatory.”

Professor Sheng now realizes his mistake. In an interview with the Michigan Daily, he noted, “In my formal apology letter to the whole composition department … I simply try to say that I do not discriminate. In retrospect, perhaps I should have apologized for my mistake only.”

When it comes to apologies – especially ones that are written – less is often more. What the offender views as explanation is viewed by the audience as excuse. The offender is trying to put this in context and reassure his audience that he’s not really a bad person – but this should come later, after the “victim” accepts the apology. If you’re apologizing and hear yourself getting to a “but” – I’m sorry for this BUT I am not really racist / I made a mistake this time BUT I’m overall a good person – stop! As Ken Sande notes in his book, The Peacemaker, the “but” acts as an eraser, wiping out the apology that preceded it. All the recipient hears is what sounds like an excuse. Professor Sheng’s letter may not have included an actual “but,” yet there was a component that turned the corner from apology into what sounded to some like self-serving statements.

Better to stick to the four R’s: Take Responsibility. Express Remorse. Offer Restitution. Make Reforms so it won’t happen again.

Mediating the Presence of a Bible

Should a Bible be included in a display honoring missing veterans near the entrance of a veterans’ hospital? A veterans hospital in Manchester, New Hampshire, thought so, but two U.S. Air Force veterans objected. Somehow the dispute ended up in federal court, but now the parties have agreed to mediation. Too bad they didn’t try mediation when the dispute first arose, but let’s hope this gets settled amicably in mediation.

Update to 9/2/21 Post

An update to my post of 2 September 2021, “Mediator Standards of Conduct Could Have Helped Here”: the mediator’s law firm has decided to withdraw from representing the one party in that case, thus removing the appearance of a conflict of interest. This means an appellate court decision on mediator conflicts of interest will have to wait for another day.

This case raises another interesting question: the guidance regarding a possible post-mediation conflict of interest applies to the mediator, but does it also apply to the mediator’s law firm? In this case, the subsequent professional relationship was between a mediation party and the mediator’s law firm, not with the mediator himself. It still smells like a conflict of interest to me, but it’s not so specified in the Mediator Standards of Conduct.

Mediator Standards of Conduct Could Have Helped Here

Where should lawyers seek guidance in determining potential conflicts of interest regarding mediation? Michigan’s Standards of Conduct for Mediators are an overlooked resource here. A recent case bears this out (Great Lakes Home Health Services Inc v Carolyn Ewing, lv gntd Michigan Court of Appeals Case No. 357907).

Mr. Mediator, an attorney with the M law firm, was appointed to mediate a case between two health care companies involving employees who left one company to work for the other. Two similar cases were filed in other counties, involving the same parties and the same allegations. A half-day mediation in May of this year did not result in an agreement.

Several weeks after the mediation, the M law firm agreed to represent the defendant health care company in all three cases. Plaintiff moved to disqualify the M law firm from representing the defendant, since one of the M firm’s lawyers had previously mediated a companion case. The trial court determined that the M law firm need not be removed, as long as an ethical screen was erected to prevent Mr. M from sharing any confidential information gleaned from the mediation with his law partners. Plaintiff was granted leave to appeal.

The M law firm points out that Mr. M is legally bound to maintain the confidentiality of the mediation, pursuant to the Agreement to Mediate that all parties signed. Is that sufficient? Can we trust that Mr. M won’t share with his partners any information regarding the plaintiff learned in the mediation? Even if he doesn’t actually share information, does it still look bad? Is there still an appearance of impropriety here such that the firm should decline the case? Where should lawyers look for answers?

Plaintiff asserts that the trial court relied on the wrong provision in the Michigan Rules of Professional Conduct. The M law firm says it consulted the Michigan Rules of Professional Conduct, two former chairs of the ADR Section of the State Bar of Michigan, as well as a lawyer who specializes in professional responsibility. What no one seems to have consulted are the Standards of Conduct for Mediators.

Michigan’s Standards of Conduct include Section III, Conflict of Interest. The first sentence states, “A mediator should avoid a conflict of interest or the appearance of a conflict of interest both during and after mediation.” This seems to me to be a clear case of an appearance of a conflict of interest after a mediation. Section III. G. addresses whether a mediator may enter into a relationship after the mediation is completed:

“In considering whether establishing … another professional relationship with any of the participants after the conclusion of the mediation process might create a perceived or actual conflict of interest, the mediator should consider factors such as time elapsed since the mediation, consent of the parties, the nature of the relationship established, and services offered.”

In this case, at least two of those factors argue against the M law firm taking the case: the time elapsed was just weeks, and the other party was strongly opposed. In addition, the nature of the relationship was a critical one: a lawyer/client relationship in pending litigation. While Mr. M wasn’t entering into that relationship himself, his law firm was. The Standards would recommend against this relationship.

Attorney-mediators are used to paying attention to potential conflicts at the front end of a case – has their firm represented one of these parties before. This case presents the interesting question of the firm representing a party after the mediation. The Standards of Conduct for Mediators offer guidance in a variety of ethical dilemmas, and they could have helped here.


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