United Health Alliance LLC v. United Medical LLC, C.A. No. 7710-VCP (Del. Ch. Nov. 27, 2013).
This Chancery opinion is noteworthy because it addresses the enforceability of an apparent oral settlement agreement reached in mediation. Although both parties claim to have reached an oral settlement agreement during mediation, during the subsequent confirmation of the details, a dispute arose as to whether the settlement included a general release or a partial release of all claims. The court determined after a hearing that even though oral agreements can be enforceable, in the circumstances of this case there was a failure to agree on a material term and therefore, the agreement was not enforceable.
This opinion is also helpful for its discussion of what types of evidence can be admissible as exceptions to the hearsay rule, as well as when the general rule about confidentiality and inadmissibility of statements by a mediator can be waived.
For further procedural and factual background information, refer to a prior Chancery decision in this case highlighted on these pages.
Obvious Practical Takeaway: If a settlement is reached at a mediation, finalize the important terms in a writing signed by the parties before the parties leave the mediation (regardless of how late the hour), if one hopes to be able to enforce the mediation.