Tag: extrinsic evidence

Extrinsic Evidence to Interpret a Mediated Settlement Agreement?

Mediated Settlement AgreementIn PNC Bank, N.A. v. Springboro Medical Arts (Ohio App. 2015), the parties concluded their mediation by signing a document that contained the “essential terms of the settlement.” The agreement further stated that counsel would later draft a settlement in “formal legal language” with such “additional documents” as were necessary. No formal document was drafted, however, and the defendant later contested the meaning of the mediation agreement.

The question before the court was whether it should consider extrinsic evidence in determining how to interpret the mediation agreement. The court decided that the mediation agreement was “fully integrated” and therefore no extrinsic evidence was permitted. The fact that the parties might later draft a more formal document did not mean the mediation agreement was not a binding contract that embodied a full meeting of the minds on all the essential terms.

What the parties did in this case – sign a written agreement at the end of the mediation, with the intent to later prepare a formal document – is very common, and very good, mediation practice. The court’s decision rightfully protects this practice from subsequent attempts to undermine the document signed at the end of the mediation. Buyer’s remorse, while not uncommon, should not be tolerated.