Don’t tell anyone!

by Gene Roberts*

The Miami Herald reports that a mediated settlement agreement is no more. It seems that one of the parties told his daughter about the settlement and the daughter then talked about it on Facebook. The Third Court of Appeals “tossed out” an $80,000 settlement between Gulliver Preparatory School and Patrick Snay, its former headmaster. The opinion is here. Snay filed a motion to enforce the settlement agreement, but the court held that he violated a material term–the confidentiality term–and he cannot enforce the agreement. According to the court, Snay told his daughter about the terms of the agreement.

The confidentiality paragraph read:

13. Confidentiality. . . [T]he plaintiff shall not either directly or indirectly, disclose, discuss or communicate to any entity or person, except his attorneys or other professional advisors or spouse any information whatsoever regarding the existence or terms of this Agreement. . . A breach . . .will result in disgorgement of the Plaintiffs portion of the settlement Payments.

Photo: shine.yahoo.com

I’ve seen similar provisions in mediated settlement agreements, but I can’t say I’ve seen one where disgorgement was included as a remedy for violating a confidentiality provision.

Snay’s daughter posted on Facebook “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Interestingly, the trial court found that there was no breach. But the Florida Court of Appeals disagreed. Snay testified in a deposition that he told his daughter that the matter was “settled and we were happy with the results.”

What should Snay have said when asked about the litigation? The lawsuit was a matter of public record, as would be its dismissal. There was no discussion in the Court of Appeals’ opinion that Snay told his daughter the amount or terms of the settlement, just that the matter settled and Snay and his wife were happy with the results.

Perhaps the better practice is to outline in the mediated settlement agreement what can be said about the settlement. This is an approach that I’ve seen. Parties will agree to say that “the case has settled and we’re not allowed to talk about it” (the language is more formal than that, but you get the point). The fact that the case settled, at least in Texas, would likely be public record. Typically, one of the parties (and the mediator) would report, in writing, that the case had settled.So did Snay really breach the confidentiality provision of the mediated settlement agreement? According to the Third Court of Appeals, yes. And that’s understandable. But saying “we’re happy with the settlement” is ambiguous. That doesn’t mean the party received a lot of money, or if a defendant, settled for less than defense costs. Here, I’m not sure that the public policy behind confidentiality is satisfied by the decision. But this gives all parties to a mediated settlement agreement notice: don’t say anything about the settlement agreement unless the agreement specifically outlines what can be said.

One response to “Don’t tell anyone!

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