When can a mediated settlement agreement be set aside?
The First District Court of Appeal recently decided Pierce v. Pierce (In re Estate of Pierce), 2013 Fla. App. LEXIS 19597, 2013 WL 6438955 (Fla. Dist. Ct. App. 1st Dist. Dec. 10, 2013), which succinctly addressed the issue of when a mediated settlement agreement may be set aside or vacated.
Pierce involved a will dispute between two sisters, Linda and Tamra Pierce. After contentious litigation, the parties went to mediation. The morning after mediation, Linda had second thoughts about the settlement agreement and sought to set it aside (vacate). The lower court judge held that he could not find that Linda had “freely, knowingly and intelligently entered into the agreement.” The First DCA reversed, not only because the lower court’s finding was unsupported by competent substantial evidence, but also because the lower court applied the wrong standard. In order to set aside a mediated settlement agreement, there must be evidence of fraud, misrepresentation, coercion, or overreaching.
The First DCA wrote that “[i]t is well established that “mediation and settlement of family law disputes are highly favored in Florida law.” Griffith v. Griffith, 860 So. 2d 1069, 1073 (Fla. 1st DCA 2003). The Florida Probate Code has embraced this preference in section 733.815, Florida Statutes, which provides that “interested persons may agree among themselves to alter interests, shares, or amounts to which they are entitled in a written contract executed by them. The personal representative shall abide by the terms of the contract . . . .” (Emphasis added.) While much of the decisional law we cite on mediated settlement agreements arise from family law cases, we consider the rules expressed in those opinions to be applicable to a mediated settlement agreement arising in probate proceedings. Thus, as a general rule, “[t]he standard for disregarding a settlement agreement between parties is high” and “‘the fact that one party to the agreement apparently made a bad bargain is not a sufficient ground, by itself, to vacate or modify a settlement agreement.'” Griffith, 860 So. 2d at 1073 (quoting Casto v. Casto, 508 So. 2d 330, 334 (Fla. 1987)). Put succinctly, “[t]he inquiry on a motion to set aside an agreement reached through mediation is limited to whether there was a fraud, misrepresentation in discovery, or coercion.” Crupi v. Crupi, 784 So. 2d 611, 612 (Fla. 5th DCA 2001). See also Griffith, 860 So. 2d at 1072. Furthermore, it has been acknowledged that entering into a settlement agreement may be emotionally stressful, but “emotion is not grounds to set aside an otherwise duly-executed property settlement agreement.” Hahn v. Hahn, 465 So. 2d 1352, 1354 (Fla. 5th DCA 1985). See also O’Connor v. O’Connor, 435 So. 2d 344, 345 (Fla. 1st DCA 1983) (holding a property settlement agreement made “in good faith and free from fraud, deceit, duress, coercion or overreaching should be upheld by the court.”); Bailey v. Bailey, 300 So. 2d 294, 295 (Fla. 4th DCA 1974). In other words, where “the evidence establishes nothing more than that, upon reflection, [the party to the agreement] felt the terms of the agreement were not in her best interest[,] ‘[b]uyer’s remorse’ is not a sufficient basis for overturning a settlement agreement freely and voluntarily entered into.” Tanner v. Tanner, 975 So. 2d 1190, 1191 (Fla. 1st DCA 2008) (citing, generally, Casto).
In the Pierce case, the First DCA found that Linda had reviewed and corrected several drafts of the settlement agreement, was actively involved in negotiating the terms and provisions, and that she read and signed it; accordingly, absent evidence of fraud, misrepresentation, coercion or overreaching by Tamra, the mediated settlement agreement should not be set aside.
So the answer to the question “when can a mediated settlement agreement be set aside” is rare and only when there is evidence of fraud, misrepresentation, coercion, or overreaching.
