Initiating Settlement Procedures

(a) Purposes of Mandatory Settlement Procedures. These rules are promulgated under N.C.G.S. § 7A-38.4A to implement a system of settlement events, which are designed to focus the parties’ attention on settlement, rather than on trial preparation, and to provide a structured opportunity for settlement negotiations to take place. Nothing in these rules is intended to limit or prevent the parties from engaging in settlement procedures voluntarily, either prior to or after those ordered by the court under these rules. (b) Duty of Counsel to Consult with Clients and Opposing Counsel Concerning Settlement Procedures. In furtherance of the purposes set out in subsection (a) of this rule, upon being retained to represent any party to a district court case involving a family financial issue, including equitable distribution, child support, alimony, postseparation support, or a claim arising out of a contract between the parties under N.C.G.S. §§ 50-20(d), 52-10, or 52-10.1, or under Chapter 52B of the General Statutes of North Carolina, counsel shall advise his or her client regarding the settlement procedures approved by these rules. At, or prior to, the scheduling and discovery conference mandated by N.C.G.S. § 50-21(d), counsel for a party shall attempt to reach an agreement with opposing counsel on an appropriate settlement procedure for the action. (c) Ordering Settlement Procedures. the court shall (1) Equitable Distribution Scheduling and Discovery Conference. At the scheduling and discovery conference in equitable distribution cases, or at an earlier time as specified by local rule, issue a scheduling order. The scheduling order must include a requirement that the parties and their counsel attend a mediated settlement conference or, if the parties agree, another settlement procedure conducted under these rules, unless excused by the court under subsection (d) of this rule or by the court or mediator under Rule 4(a)(2). The court shall dispense with the requirement to attend a mediated settlement conference or other settlement procedure only for good cause shown. (2) Scope of Settlement Proceedings. Any other family financial issue existing between the parties at the time that the equitable distribution settlement proceeding is ordered, or at any time thereafter, may be discussed, negotiated, or decided at the equitable distribution settlement proceeding. In judicial districts where a custody and visitation mediation program has been 5 TOC Rule 1 established under N.C.G.S. § 7A-494, a child custody or visitation issue may be the subject of settlement proceedings ordered under these rules, but only by agreement of all parties and the mediator, when the parties have been exempted from, or have fulfilled, the program requirements. In judicial districts where a custody and visitation mediation program has not been established, a child custody or visitation issue may be the subject of settlement proceedings ordered under these rules by agreement of all parties and the mediator. (3) Authorizing Settlement Procedures Other Than a Mediated Settlement Conference. The parties and their attorneys are in the best position to determine which settlement procedure is appropriate for resolving their dispute. Therefore, the court shall order the use of any settlement procedure authorized under Rule 10, Rule 11, or Rule 12, or by local rule of the district court in the county or judicial district where the case is pending, if the parties have agreed upon the procedure to be used, the neutral to be employed, and the amount of compensation of the neutral. If the parties have not agreed on all three items, then the court shall order the parties and their attorneys to attend a mediated settlement conference conducted under these rules. If the parties wish to use a another settlement procedure, then the parties must submit a Motion for an Order to Use Settlement Procedure Other Than Mediated Settlement Conference or Judicial Settlement Conference in Family Financial Case, Form AOC-CV-826, at the scheduling and discovery conference, which shall include: a. b. c. d. the settlement procedure chosen by the parties; the name, address, and telephone number of the neutral selected by the parties; the rate of compensation of the neutral; and a statement indicating that all parties consent to the motion. (4) Content of the Order. Using an Order for Mediated Settlement Conference in Family Financial Case, Form AOC-CV-824, the court shall: a. b. require that a mediated settlement conference or other settlement proceeding be held in the case; establish a deadline for the completion of the mediated settlement conference or proceeding; and 6 TOC Rule 1 c. require the parties to pay the neutral’s fee at the conclusion of the mediated settlement conference or proceeding, unless otherwise ordered by the court. If the settlement proceeding ordered by the court is a judicial settlement conference, then the parties shall not be required to compensate the neutral. The court’s ruling on the motion shall be contained in the court’s scheduling order or, if no scheduling order is entered, shall be on the Order for Mediated Settlement Conference in Family Any scheduling order Financial Case, Form AOC-CV-824. entered at the completion of a scheduling and discovery conference held pursuant to local rule may be signed by the parties or their attorneys, in lieu of submitting the forms referenced in these rules for the selection of a mediator. (5) Court-Ordered Settlement Procedures in Other Family Financial Cases. a. By Motion of a Party. Any party to a dispute involving a family financial issue, which was not previously ordered to a mediated settlement conference, may move the court for an order requiring the parties to participate in a settlement procedure. The motion shall be in writing, state the reasons why the motion should be granted, and be served on the nonmovant. Any objection to the motion or any request by a party for a hearing on the motion shall be filed in writing with the court within ten days of the date the motion was served. Thereafter, the court shall rule upon the motion and notify the parties or their attorneys of the ruling. If the court orders a settlement proceeding, then the proceeding shall be a mediated settlement conference conducted under these rules. The court may order other settlement procedures if the circumstances outlined in subsection (c)(3) of this rule have been satisfied. b. By Order of the Court. Upon its own motion, the court may order the parties and the parties’ attorneys to attend a mediated settlement conference in any dispute involving a family financial issue or in a contempt proceeding involving a family financial issue. The court may order a settlement procedure other than a mediated settlement conference only upon motion of the parties and a finding that the circumstances outlined in subsection (c)(3) of this rule have been met. The court shall consider the ability of the parties to compensate the 7 TOC Rule 1 mediator or neutral for his or her services before ordering the parties to participate in a settlement procedure under subsection (c)(5) of this rule and shall comply with the provisions of Rule 2 regarding the appointment of a mediator. (d) Motion to Dispense with Settlement Procedures. A party may file a motion to dispense with the settlement procedure ordered by the court. The motion shall state the reasons relief is sought and, for good cause shown, the court may grant the motion. Good cause may include, but is not limited to, the fact that (i) the parties have participated in a settlement procedure, such as nonbinding arbitration or early neutral evaluation, prior to the court’s order to participate in a mediated settlement conference; (ii) the parties have elected to resolve their case through arbitration under the Family Law Arbitration Act, N.C.G.S. §§ 50-41 to 50-62; or (iii) one of the parties has alleged domestic violence. Comment Comment to Rule 1(d). If a party is unable mediation for good cause. Rule 4 permits a party to attend the conference electronically under certain circumstances, and Rule 7 permits parties to attend the conference and obtain relief from the obligation to pay the mediator’s fee. to pay the costs of the mediated settlement conference or lives a significant distance from the conference site, then the court should consider Rule 4 and Rule 7 prior to dispensing with History Note. 373 N.C. 708.