On November 9, West Virginia?s Supreme Court affirmed a circuit court?s authority to sanction an insurer for its failure to attend court-ordered mediation. Although the Supreme Court reversed the lower court?s award of hundreds of thousands of dollars in sanctions under the specific circumstances of the case, Casaccio v. Curtiss serves as a stark warning to insurers of the potential penalties for failure to appear.
In Casaccio, an insurance carrier?s representative appeared at mediation, but failed to notify the parties or the mediator in advance that another carrier had an interest in the outcome of the mediation and settlement, thus limiting the authority of the representative present to settle beyond certain amounts.
After the case ultimately settled, the lower court imposed sanctions on the second carrier and its in-house counsel for failing to attend two mediation sessions and for certain negotiation tactics the court perceived to be in bad faith.
On appeal, the Supreme Court ruled that, for purposes of its trial court rules, a party?s insurer is a ?party? to court-ordered mediation and therefore may be sanctioned for its unauthorized failure to participate, if a representative who has full decision-making authority is not present, in person, to:
- Examine and resolve issues; and
- Make decisions in connection with the mediation and settlement.
Fortunately for the involved carrier, the Court found the facts of record did not support the sanctions awarded by the lower court.
Should you have a question about a litigation matter affecting your business, please contact a member of the Steptoe & Johnson Litigation Team.