A respondent's showing of a genuine material dispute regarding the terms of a mediated settlement agreement shifts the burden to the petitioner to show that the agreement was memorialized in writing or in open court under Washington court rules, according to a Washington state appellate court.

In Pryde v. Bjorn, No. 58333-6-I, 2007 WL 3348297 (Wash. Ct. App. Nov. 13, 2007), a dispute arose among family members regarding a shared real estate business. After the Pryde plaintiffs filed a suit against the Pryde defendants, alleging forgery, fraud, financial mismanagement, and misappropriation of funds, the parties agreed to mediate the dispute.

During the second mediation session, the parties seemed to reach a settlement, which Morgan, an attorney for the plaintiffs, was to reduce to writing and send to the defendants for approval. After drafting the agreement and sending it to the defendants' attorney, a period of time passed in which Smyth, attorney for some of the defendants, assured Morgan he was working on getting approval. After this delay, Smyth communicated a modified signed version of the settlement to plaintiffs' counsel, labeled a "counteroffer."

Plaintiffs later alleged that the agreement initially prepared by Morgan was the correct version, and sought to have it enforced by the trial court under Washington's Court Rule 2A. After ordering an evidentiary hearing on the matter, and hearing testimony from counsel and the mediator, the trial court found that no genuine dispute existed between the parties as to the terms of the settlement, that the Morgan's writing accurately reflected the terms of the settlement, and that the agreement was to be enforced. The defendants appealed the trial court's determination.

On appeal, the Court found that the a genuine dispute existed over the terms of the agreement, there was no valid writing as to the terms of the agreement, the defendants did not intend to be bound by the settlement terms in the plaintiffs' writing, counsel for defendants lacked settlement authority, and the plaintiffs' and defendants' writings differed in material terms, all rendering the settlement agreement unenforceable under Rule 2A. However, the Court agreed with the plaintiffs that the mediator's testimony at the trial court was proper under the Uniform Mediation Act (UMA).

According to the Court, the trial court erred in not finding a genuine dispute under Rule 2A, because defendants had successfully raised disputed factual issues. Once those disputed issues were raised, the Court noted that the plaintiff bore the burden under Rule 2A of showing that the agreement was admitted to in open court or memorialized in a valid writing. There was no evidence of admission of the settlement in open court. The Court did find that the language of the agreement was unambiguous, requiring the signatures of both parties before the parties would be bound to it. It also found that Smyth never expressly acknowledged that the plaintiffs' terms accurately reflected the agreed settlement. Without the signatures or the expression of intent to be bound, the writing requirement failed.

The Court also noted that, even if the writing or admission standards of Rule 2A were satisfied, the defendants had shown that attorney Smyth did not have the authority to settle for all the defendants, defeating any agreement that might have been reached with the plaintiffs. Furthermore, the Court found that the terms of Morgan's version of the settlement and the terms within Smyth's "counteroffer" were materially different as to the terms providing for an apology and a no-contact order.

Finally, the Court rejected the defendants' challenge to the propriety of the mediator's testimony at the trial court. The defendants claimed that the mediator was not allowed to testify as a neutral, but the Court noted that the UMA in effect at the time of the dispute provided that a mediator could disclose to courts "[w]hether the mediation occurred or has termination [and] whether a settlement was reached." Since the mediator's testimony was confined to these matters, and the parties had agreed to abide by UMA rules, the Court found that the mediator's testimony at the trial court was proper.