Sanctions Available For Insurer's Failure to Attend Court-Ordered Mediation
In Robert Campagnone v. Enjoyable Pools & Spa Service & Repairs, Inc. (2008) ___ Cal.App.4th ___ [08 C.D.O.S. 6579], the California Court of Appeal, Third Appellate District, denied a motion for sanctions against an insurer for failing to attend a court-ordered mediation, and against a party and its attorneys for failing to notify the insurer of its obligation to attend. However, the court announced that parties and their counsel will be sanctioned in future cases if they fail to put an insurer with “potential insurance coverage” on notice of the insurer’s obligation to send a representative with full settlement authority to court-ordered mediations. The court also warned insurers with “potential insurance coverage” that they can be sanctioned if they fail to send a representative to the mediation.
The court based its holding on the Third Appellate District’s local rules include Local Rule 1(d)(9) which provides that all parties and their counsel of record must attend all mediation sessions in person and with full settlement authority. The rule also provides that, if a party has “potential insurance coverage applicable to any of the issues in dispute, a representative of each insurance carrier whose policy may apply also must attend all mediation sessions in person, with full settlement authority...”
The Court reasoned it has authority to impose such sanctions under the Appellate Rules of the California Rules of Court, Rule 8.276(a) and Local Rule 1(g). In addition, the Court explained that sanctions can be awarded against insurers because they are considered parties to a mediation.
Other Districts' and specific court's rules should be consulted to determine whether this ruling will have application outside of the Third Appellate District.
