Orlofsky ADR Services

Can Conduct In a Mediation Be Tortious?

In Aung v. GEICO, MP/ 9:17-cv-856 (D.S.C. 2017), plaintiff was injured in an auto accident where the driver of the other car had very limited insurance. Plaintiff obtained a judgment against the other driver for over $500,000, but GEICO, her underinsured motorist carrier, paid only $50,000 of that judgment. Plaintiff sued both GEICO and the individual GEICO adjuster that worked on the case.

One part of plaintiff’s claim alleged that, in a mediation, defendants made an unreasonably low settlement offer of $2,500. Plaintiff further alleged that the individual GEICO adjuster attended the mediation without having the appropriate settlement authority as required by a local court rule. This failure to have the requisite settlement authority, plaintiff alleged, unnecessarily prolonged the litigation.

Defendants argued that the only remedy for the violation of a local court rule would be the imposition of sanctions by the judge presiding over the case. The trial court, however, disagreed, ruling that there was at least a possibility that this conduct, the failure to have appropriate settlement authority at a mediation, might support a negligence claim. It should be noted, however, that the issue arose on a motion to remand to state court, and defendants, therefore, had the heavy burden of showing that there was “no arguably reasonable basis for predicting that state law might impose liability.”