Other Settlement Procedures

(a) Order Authorizing Other Settlement Procedures. Upon receipt of a motion by the parties seeking authorization to utilize a settlement procedure in lieu of a mediated settlement conference, the court may order the use of the settlement procedures under subsection (b) of this rule, unless the court finds: that the parties did not agree on the procedure to be utilized, the neutral to conduct the procedure, or the neutral’s compensation; or that the procedure selected is not appropriate for the case or the parties. A judicial settlement conference may be ordered only if permitted by local rule. (b) Other Settlement Procedures Authorized by These Rules. In addition to a mediated settlement conference, the following settlement procedures are authorized by these rules: (1) Neutral evaluation under Rule 11 (a settlement procedure in which a neutral offers an advisory evaluation of the case following summary presentations by each party). (2) A judicial settlement conference under Rule 12 (a settlement procedure in which the court assists the parties in reaching their own settlement, if allowed by local rule). (3) Other settlement procedures under Rule 13 (a settlement procedure described and authorized by local rule pursuant to Rule 13). The parties may agree to arbitrate the dispute under the Family Law Arbitration Act, N.C.G.S. §§ 50-41 to 50-62, which shall constitute good cause for the court to dispense with the settlement procedures authorized under Rule 1(d). (c) General Rules Applicable to Other Settlement Procedures. (1) When the Proceeding Is Conducted. The neutral shall schedule and conduct the proceeding no later than 150 days from the issuance of the court’s order, or no later than the deadline for completion set out in the court’s order, unless the deadline is extended by the court. The neutral shall make an effort to schedule the proceeding at a time that is convenient to all 26 TOC Rule 10 participants. In the absence of agreement, the neutral shall select a date and time for the proceeding. The deadline for the completion of the proceeding shall be strictly observed by the neutral, unless the deadline is changed by written order of the court. (2) Extensions of Time. A party or a neutral may request that the court extend the deadline for completion of the settlement proceeding. The request for an extension shall state the reasons the extension is sought and shall be served by the movant on the other parties and the neutral. The court may grant the extension and enter an order setting a new deadline for the completion of the settlement proceeding. A copy of the order shall be delivered to all parties and the neutral by the person who sought the extension. (3) Where the Proceeding Is Conducted. Settlement proceedings shall be held in any location agreeable to the parties. If the parties cannot agree to a location, then the neutral shall be responsible for reserving a neutral place, making arrangements for the proceeding, and giving timely notice of the time and location of the proceeding to all attorneys and pro se parties. (4) No Delay of Other Proceedings. Settlement proceedings shall not be the cause for a delay of other proceedings in the case, including, but not limited to, the conduct or completion of discovery, the filing or hearing of motions, or the trial of the case, except by order of the court. (5) Inadmissibility of Settlement Proceedings. Evidence of statements made and conduct that occurs in a mediated settlement conference or other settlement proceeding conducted under this rule, whether attributable to a party, mediator, neutral, or neutral-observer present at the settlement proceeding, shall not be subject to discovery and shall be inadmissible in any proceeding in the case or in another civil dispute involving the same claim, except: a. b. c. in proceedings for sanctions under subsection (c) of this rule; in proceedings to enforce or rescind a settlement of the dispute; in disciplinary proceedings before the North Carolina State Bar or any agency established to enforce the Standards of Professional Conduct for Mediators or standards of conduct for other neutrals; or 27 TOC Rule 10 d. in proceedings to enforce laws concerning juvenile or elder abuse. As used in this subsection, “neutral observer” includes persons seeking mediator certification, persons studying dispute resolution processes, and persons acting as interpreters. No settlement agreement to resolve any or all issues reached at a proceeding conducted under this rule, or during its recesses, shall be enforceable unless the agreement has been reduced to writing, signed by the parties, and complies with the requirements of Chapter 50 of the General Statutes of North Carolina. No evidence otherwise discoverable shall be inadmissible merely because it is presented or discussed in a settlement proceeding. No mediator, neutral, or neutral-observer present at a settlement proceeding under this rule shall be compelled to testify or produce evidence in any civil proceeding concerning statements made and conduct that occurs in anticipation of, during, or as a follow-up to a mediated settlement conference or other settlement proceeding under subsection (c) of this rule. This includes proceedings to enforce or rescind a settlement of the dispute, except to attest to the signing of any agreement, and during proceedings for sanctions under this section, proceedings to enforce laws concerning juvenile or elder abuse, and disciplinary hearings before the North Carolina State Bar or any agency established to enforce the Standards of Professional Conduct for Mediators or standards of conduct for other neutrals. (6) No Record Made. There shall be no stenographic or other record made of any proceedings under these rules. (7) Ex Parte Communications Prohibited. Unless all parties agree otherwise, there shall be no ex parte communication prior to the conclusion of the proceeding between the neutral and a party or a party’s attorney on any matter related to the proceeding, except about administrative matters. (8) Duties of the Parties. a. Attendance. All parties and attorneys shall attend any settlement proceeding ordered by the court. b. Finalizing Agreement. 1. If an agreement that resolves all issues in the dispute is reached at the neutral evaluation, judicial settlement settlement proceeding, then the essential terms of the conference, other or 28 TOC Rule 10 agreement shall be reduced to writing in a summary memorandum, unless the parties have reduced their agreement to writing in another form, signed the writing, and, in all other respects, complied with the requirements of Chapter 50 of the General Statutes of North Carolina. The parties and the parties’ attorneys shall use the summary memorandum to guide them in drafting any agreements or orders that may be required to give legal effect to the terms of their agreement. Within thirty days of the final agreements and other proceeding, all dispositive documents shall be executed by the parties and notarized, and all judgments or voluntary dismissals shall be filed with the court by such persons as the parties or the court designate. If an agreement that resolves all issues in the dispute is reached prior to the neutral evaluation, judicial settlement conference, or other settlement proceeding, or is finalized while the proceeding is in recess, then the parties shall reduce the terms of the agreement to writing and sign the writing, along with their counsel. The agreement shall comply with the requirements of Chapter 50 of the General Statutes of North Carolina. Any consent judgment or voluntary dismissal disposing of all issues shall be filed with the court within thirty days of the proceeding or before the expiration of the deadline for completion of the proceeding, whichever is later. 2. 3. When an agreement is reached upon all issues, all attorneys of record must notify the court within four business days of the settlement and advise the court who will sign the consent judgment or voluntary dismissal. c. Payment of the Neutral’s Fee. The parties shall pay the neutral’s fee under subsection (c)(12) of this rule, except that no compensation shall be required for a judicial settlement conference. (9) Sanctions for Failure to Attend Other Settlement Procedure or Pay the Neutral’s Fee. Any person required to attend a settlement proceeding or pay a neutral’s fee in compliance with N.C.G.S. § 7A-38.4A and these rules who fails to attend the proceeding or pay the neutral’s fee without good cause shall be subject to the contempt power of the court and any 29 TOC Rule 10 incurred by persons attending monetary sanctions imposed by the court. The monetary sanctions may include, but are not limited to, the payment of fines, attorneys’ fees, the neutral’s fee, expenses, and loss of the settlement earnings proceeding. A party seeking sanctions against a party, or the court on its own motion, shall do so in a written motion stating the grounds for the motion and the relief sought. The motion shall be served on all parties and any person against whom sanctions are being sought. If the court imposes sanctions, it shall do so after notice and a hearing in a written order making findings of fact, supported by substantial evidence, and conclusions of law. (10) Selection of Neutrals in Other Settlement Procedures. The parties may select any person whom they believe can assist them with the settlement of their case to serve as a neutral in a settlement proceeding authorized under these rules, except in a judicial settlement conference. Notice of the parties’ selection shall be given to the court and to the neutral by filing 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 or the court appearance during which potential settlement procedures are considered by the court. The motion shall state: (i) the name, address, and telephone number of the neutral selected; (ii) the rate of compensation of the neutral; and (iii) that the neutral and opposing counsel have agreed upon the selection and compensation. If the parties are unable to select a neutral by agreement, then the court shall deny the motion and order the parties to attend a mediated settlement conference. (11) Disqualification of Neutrals. Any party may move the court for an order disqualifying a neutral and, for good cause, an order disqualifying the neutral shall be entered. Good cause exists if the selected neutral has violated the standards of conduct of the North Carolina State Bar or any standards of conduct for neutrals adopted by the Supreme Court. (12) Compensation of Neutrals. A neutral’s compensation shall be paid in an amount agreed to by the parties and the neutral. Time spent reviewing materials in preparation for the neutral evaluation, conducting the proceeding, and making and reporting the award shall be compensable time. The parties shall not compensate a settlement judge. 30 TOC Rule 10 (13) Authority and Duties of the Neutral. a. Authority of the Neutral. 1. 2. Control of the Proceeding. The neutral shall at all times be in control of the proceeding and the procedures to be followed. Scheduling the Proceeding. The neutral shall make a good faith effort to schedule the proceeding at a time that is convenient to the participants, attorneys, and the neutral. In the absence of agreement, the neutral shall select the date and time for the proceeding. The deadline set by the court for the completion of the proceeding shall be strictly observed by the neutral, unless the deadline is changed by written order of the court. b. Duties of the Neutral. 1. Informing the Parties. At the beginning of the proceeding, the neutral shall define and describe for the parties: i. ii. iii. iv. v. the process of the proceeding; the differences between the proceeding ordered by the court and other forms of conflict resolution; the costs of the proceeding; the admissibility of conduct and statements as provided by N.C.G.S. § 7A-38.1(l) and subsection (c)(5) of this rule; and the duties and responsibilities of the neutral and the participants. Disclosure. The neutral has a duty to be impartial and to advise all participants of any circumstances bearing on possible bias, prejudice, or partiality. Reporting the Results of the Proceeding. The neutral, settlement judge, or other type of neutral shall report the results of the proceeding to the court within ten days, using a Report of Neutral Conducting Settlement Procedure Other Than Mediated Settlement Conference in Family Financial Case, Form AOC-CV-834, in accordance with Rule 11 and Rule 12. The NCAOC, in consultation with the Commission, may require the 2. 3. 31 TOC Rule 10 4. neutral to provide statistical data for evaluation of other settlement procedures. Scheduling and Holding the Proceeding. It is the duty of the neutral to schedule and conduct the proceeding prior to the completion deadline set out in the court’s order. The deadline for completion of the proceeding shall be strictly observed by the neutral, unless the deadline is changed by a written order of the court. History Note. 373 N.C. 708.