Mediation And Insurance Lawsuits

Cresson insurance lawyers as well as those insurance lawyers in the rest of the Dallas and Fort Worth area will usually be ordered to mediate a case prior to any Judge allowing the case to go to trial. The reason for this is because of the high success rate of mediation. The San Antonio Division of the Western District recently had a case where an insurer tried to expedite the mediation time line by filing an “Expedited Motion to Compel” mediation. The case is styled, Vinings Insurance Company v. Todd Hughes and Pasadera Builder, L.P.
Vining alleges the policies at issue in this case require the insured to “cooperate with Vining in the investigation or settlement of the claim or defense,” and may not “voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without Vinings consent.” The policies further state that Vinings will “pay those sums that the insured becomes legally obligated to pay as damages” to those claims to which the policy applies, and has the “right and duty to defend the insured against any suit seeking damages” covered under the policy.
Vinings argues that it will suffer irreparable and significant harm if the case proceeds to arbitration before the parties engage pre-arbitration mediation, because Pasadera will demand that Vinings satisfy any arbitration award with Mr. Hughes, and will also require Vinings to pay its private attorneys’ fees. Further, Vinings states that Mr. Hughes agreed to mediate the case with mediator Lee Shidlofsky before engaging in arbitration. Vinings does not state that Pasadera ever agreed to participate in mediation. Pasadera argues that it should not be compelled to mediation less than three weeks before the commencement of arbitration; it also argues that Vinings does not appreciate the significance of Mr. Hughes claim in the context of the Cordillera Ranch community where Pasadera has constructed many luxury homes.
A court may refer a case to mediation prior to considering any pleading on the merits where the parties previously entered into an agreement to mediate, or where the parties are otherwise required to mediate by law.
Vinings only cites one federal case in support of its argument that the case should be referred to mediation prior to arbitration. The case is not applicable to the facts of this case.
Vining has not presented any evidence or argument that a mediation agreement exists between itself and Pasadera, that Pasadera agreed to mediation, or that any relevant law exists that would require the parties to mediate before proceeding to arbitration. Further, Vinings’ argument focuses on an insurer’s contractual right to select counsel and control the defense of litigation against one of its insured. This argument may pottentially form a defense, should Pasadera seek to indemnify an award made to Mr. Hughes during arbitration, or reimbursement of private attorney’s fees. However, these arguments do not support compelling the parties to mediation, where no contractual or legal authority obligates this Court to do so.