Judge Orders Teresa Giudice To Pay $650 Per Hour For Court Mandated Mediation

On the most recent episode of The Real Housewives of New Jersey, Teresa Giudice’s counsel James Leonard, who seemed to prominently appear in many scenes, revealed that Teresa had paid her restitution. It was a cause for celebration … or was it? Teresa was relieved after Leonard said her restitution was fully paid but will she have to shell out more money for a mediator now that the bankruptcy judge in her case ordered mandatory mediation? At the July 18, 2016 hearing, the court ordered the parties to attend mediation. Mediation is a horse of a very different color.

In an Order dated August 1, 2016, the Hon. Stacey L. Meisel ORDERED …

1. The Parties shall participate in mediation in good faith
2. The Parties shall personally attend the mediation with counsel
3. Hon. Joel A. Pisano (retired) is appointed to serve as mediator
4. The mediator must promptly determine whether there is a basis for disqualification or whether the mediator is unable to serve for any other reason
5. The mediation must commence not later than 75 days after the entry of this order

Mediation Order – Judge Orders Teresa Giudice To Pay $650 Per Hour For Court Mandated Mediation

What does it mean to mediate in “good faith?” This is a term of art and courts have ruled that failing to reach an agreement at mediation is not evidence of bad faith. Basically, Teresa has to be receptive to all options. Moreover, there are decisions that say a party may be found to have mediated in bad faith by refusing to let the other side see certain documents requested during the mediation.  

Granted, Teresa might have escaped being held in contempt by participating in mediation but she cannot refuse wholesale to produce documents requested by the Trustee. Parties to a mediation cannot participate in bad faith acts, which implies the conscious doing of wrong for a dishonest purpose. It contemplates a state of mind deliberately operating with furtive design or ill will.  Thoughts?

U.S. Bankruptcy Judge Stacey L. Meisel’s Order indicates that “The Parties will compensate the mediator at the rate of $650.00 per hour. By agreement at the July 18th status conference, Teresa Giudice shall be solely responsible for the mediator’s fee.”

What are the terms of the mediator’s payment? Teresa must pay a retainer, if required by the mediator. The final fee must be paid within 15 days of the final mediation date unless the mediator has not issued a final invoice.  Page 5 of the Order specifically states, “Teresa Giudice shall continue to be solely responsible for payment of all invoices.”  

Here are some general guidelines about a mediator’s fee: Mediators often charge between $100 and $500 per hour. Although, based on my experience, the average hourly rate for a mediator seems to be $200. Typically the parties split the mediator’s fee equally. Mediators can set their own fee, which can be an hourly rate or a flat fee.

Why would Teresa have agreed to pony up this kind of dough? Chances are, she thinks that she can negotiate her way out of producing tax returns and bank statements, among other items, which she might have been required to hand over à la court order. She desired to get the case kicked from court to mediation. If discovery issues surrounding her bankruptcy filing and the Kridel Action were hammered out in court, Teresa knows she might have been ordered to produce documents and give testimony.

Remember, the court entered an Order denying the Trustee’s request to hear the Contempt Motion, which could have resulted in Teresa being fined $1,000 per day from July 13 if she didn’t produce documents or appear for a deposition.

READ: Teresa Giudice To Be Fined $1,000 Per Day For Contempt Of Court [EXCLUSIVE]

With mediation, she will only provide as many documents and as much testimony as she agrees to.  As long as she acts reasonably, she might not have to produce the laundry list of documents that the Trustee initially requested. However, the question then becomes, if she will not turn over proof and give her testimony surrounding the merits of the Kridel Action, the Trustee has nowhere to go but abandon that action because he has no evidence to corroborate Teresa’s claims.

Another interesting morsel handed down from the court: It was ORDERED that within 14 days of the entry of the Order, Teresa Giudice shall provide the Trustee with backup information and documentation regarding the current status of all of her pre-petition claims, and any claims arising from the bankruptcy case, including proof of payment in full of any claim, proof of any resolution of any claim, and current balance of claim.

The Trustee is not taking sides. He just wants to figure out whether there is a claim against Teresa’s former bankruptcy attorney, James Kridel, and the only way to do that is for Teresa to produce certain documents and explain her side under oath.

In a separate Order, the court granted in part the Trustee’s motion to retain Siegel & Siegel, P.C. in lieu of Carlos Cuevas and Anthony Rainone as special counsel. Note too that any action that Siegel & Siegel (Michael Kopelman) takes is stayed until the parties complete mediation.

Order Authorizing Limited Retention – Judge Orders Teresa Giudice To Pay $650 Per Hour For Court Mandated Mediation

The court ruled that Siegel & Siegel’s role shall be limited to the sole purpose of “prosecuting the bankruptcy estate’s interest once determined, if any, in the Kridel Action.” Should the Trustee wish to expand the capacity of Siegel & Siegel’s retention, the Trustee must seek further Order of the Court.

After the mediator Hon. Joel A. Pisano (retired) accepts the appointment, the parties must, within 7 days of entry of the Order, contact the mediator to schedule a telephone conference. The scheduling and location of all mediation sessions will be determined by the mediator. (Mediation sessions are commonly held in law firm conference rooms, hotels, and formal mediation conference centers across the country.) A mediator is appointed to help parties reach a compromise and avoid the “carnage of litigation.” Oftentimes, retired U.S. bankruptcy judges serve as mediators in bankruptcy cases.

No matter the identity and proclivity of the mediator, in general, mediation sessions can last a few hours or may drag on for months. I would expect the latter in this case. The judge presiding over the bankruptcy case has the power to terminate the mediation and decide it’s time to make decisions in a courtroom if there is a stalemate. Otherwise, a session can continue until the mediator concludes that no further progress is possible. Any settlement over discovery or the Kridel Action would probably need to be approved by the presiding bankruptcy judge in the case.

Grab your gavel, join the conversation, and tell us what you think about the $650 per hour mediator fee and the latest rulings by the court.

 

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