United States District Court, D. New Mexico
MICHAEL GRIEGO, Personal Representative of the Wrongful Death Estate of ALEC J. JARAMILLO, Deceased, ANDREW JARAMILLO, and TERESA ROMO, Plaintiffs,
LABERTA DOUGLAS, as Personal Representative of the Estate of Russell E. Douglas, and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendants.
ORDER DENYING MOTIONS FOR SANCTIONS
WILLIAM P. LYNCH UNITED STATES MAGISTRATE JUDGE
parties in federal court are ordered to participate in a
settlement conference, what must they do to meet the
requirement of Federal Rule of Civil Procedure 16 that they
participate at the settlement conference in good faith? Must
they make a settlement offer during the conference? Are the
named parties required to attend the settlement conference?
These are the issues presented by the motions for sanctions
filed by both Plaintiffs and Defendants after the settlement
conference held on June 29, 2017. (Docs. 36, 42.)
case arises out of a fatal motor vehicle collision that
occurred in Grants, New Mexico on September 13, 2014. Alec
Jaramillo, who was 19 years old, was driving his 2001 Harley
Davidson motorcycle in the outside lane west on Santa Fe
Avenue, while 93 year old Russell Douglas, who had been
traveling east on Santa Fe Avenue in a 2014 Fiat, was turning
left into the U.S. Post Office. The motorcycle collided with
the passenger side of Mr. Douglas' Fiat, and Alec died at
the scene. Plaintiffs sued Mr. Douglas, claiming damages for
Alec's wrongful death and his parents' loss of
consortium, and also sued State Farm pursuant to New Mexico
law that allows the joinder of a party's insurance
company. Mr. Douglas died earlier this year, and Laberta
Douglas, his surviving spouse, was substituted as a defendant
in his place.
Douglas had automobile liability limits of $250, 000, and a
personal liability umbrella policy with a $1, 000, 000 limit.
Prior to the settlement conference, Plaintiffs demanded State
Farm's policy limits of $1, 250, 000 to settle their
claims. The Defendants responded by making an offer of
judgment of $250, 001.
attendance at the settlement conference for the Plaintiffs
were Michael Griego, the Personal Representative of the
estate of Alec; Andrew Jaramillo and Teresa Romo, Alec's
parents; and their attorneys. The Defendants appeared at the
settlement conference through State Farm Claim Team Manager
Scott Slavens and the Defendants' attorney. During
individual sessions with each side, I discussed the liability
and damages aspects of the case. Because Alec was killed in
the accident, the parties agreed that damages would be
substantial, although there was significant disagreement
about the likely amount of damages the jury would award.
major dispute between the parties concerned liability. The
Defendants took the position that the jury would likely find
that Alec's actions were the sole cause of the accident.
They relied upon the following facts: Alec was speeding; he
was improperly passing a pickup truck pulling a trailer on
the right, and the truck was able to stop without hitting Mr.
Douglas' car; Alec was distracted and not keeping a
proper lookout; he was riding a motorcycle with significant
modifications that made it difficult to control (it had no
speedometer or turn signals, it had replacement high profile
handlebars and no rear suspension); and he had THC in his
blood, indicating he may have been impaired while driving.
Plaintiffs' toxicologist reported that the presence of
THC was not clinically significant and would not have
impaired Alec. Plaintiffs recognized that the jury would
likely assess some comparative fault to Alec, but argued that
Mr. Douglas was primarily at fault for the accident because
he was inattentive, failed to yield the right of way, and
made an improper turn.
conference State Farm increased its settlement offer to
Plaintiffs. Plaintiffs did not respond to this offer,
and State Farm then made another offer to settle
Plaintiffs' claims. Plaintiffs refused this offer and did
not submit a counter offer, and the settlement conference
ended after approximately two hours and twenty minutes.
Farm subsequently filed a motion for sanctions because
Plaintiffs' failed to make a settlement offer at the
conference. In response, Plaintiffs filed a cross motion for
sanctions because Laberta Douglas did not attend the
does not define what constitutes good faith participation at
a settlement conference. The advisory committee notes express
some caution about the use of settlement conferences, stating
that it is not the purpose of the rule “to impose
settlement on unwilling litigants” and that settlement
conferences “would be a waste of time in many
cases.” Fed.R.Civ.P. 16(c) advisory committee's
notes to 1983 amendment.
are at least three reasons why, under the circumstances,
Defendants should not be awarded sanctions because Plaintiffs
did not make a settlement offer at the settlement conference.
Plaintiffs' right to jury trial is guaranteed by the
Seventh Amendment to the U.S. Constitution, and courts must
be careful not to infringe on that right by focusing too
narrowly on settling cases to allow them to manage their
dockets efficiently. In re Novak, 932 F.2d 1397,
1404 (11th Cir. 1991). Courts consistently agree that a judge
may not coerce a settlement, or force a party to make an
offer at a settlement conference. See Negron v. Woodhull
Hosp., 173 F. App'x 77, 78-79 (2d Cir. 2006);
Gross Graphics Sys., Inc. v. DEV Indus., Inc., 267
F.3d 624, 627 (7th Cir. 2001); Dawson v. United
States, 68 F.3d 886, 897 (5th Cir. 1995); Domann v.
Vigil, 99-CV-0192 LH-LFG, ECF No. 111 at 2 (D.N.M. July
6, 2000). As the Fifth Circuit stated in Dawson:
“[T]here is no meaningful difference between coercion
of an offer and coercion of a settlement: if a party is
forced to make a settlement offer because of the threat of
sanctions, and the offer is accepted, a settlement has been
achieved through coercion." 68 F.3d at 897.
awarding sanctions would reward Defendants for violating the
Order Setting Settlement Conference, which orders the parties
to treat as confidential the information discussed and offers
made by the parties during the conference. (Doc. 18.) It also
would violate Local Rule 16.2(e), which provides that I may
not reveal to the trial judge information about offers and
statements made by the parties at the settlement conference.
The Tenth Circuit and other courts have recognized that
confidentiality is essential to the proper functioning of a
settlement conference program. See Clark v. Stapleton
Corp., 957 F.2d 745, 746 (10th Cir. 1992); William
v. Johanns, 529 F.Supp.2d 22, 23 (D.D.C. 2008).
Confidentiality contributes to the free flow of information
between the parties. Williams, 529 F.Supp.2d at 23.
Empirical research demonstrates that lawyers have serious
concerns about their ability to be candid and fully discuss
issues about the case with the judge at settlement
conference. Nancy A. Welsh, Magistrate Judges,
Settlement, and Procedural Justice, 16 Nev. L. J. 983,
1011 (2016). To the extent that parties fear that their
discussions at settlement conference will be used against
them later, they are more likely to behave strategically in
settlement talks and reach a bargaining impasse. Michael P.
Dickey, ADR Gone Wild: Is It Time for a Federal Mediation
Exclusionary Rule?, 25 Ohio St. J Disp. Resol. 713,
751-54 (2010). Confidentiality also protects the neutrality
of the settlement conference judge, which is important to the
parties' perception of the fairness of the process.
Id. at 754.
awarding sanctions when a party fails to make an offer at a
settlement conference will increase court hearings for
sanctions, with the court having to delve into a party's
motives for its actions at the conference. There has been an
explosion of motions since 1998 relating to good faith
participation at court-annexed ADR. Id. at
744-50.These additional court hearings could undercut the
premise that ADR helps reduce court congestion. Edward F.
Sherman, Court-Mandated Alternative Dispute Resolution:
What Form of Participation Should Be Required?, 46 SMU
L. Rev. 2079, 2093 (1993).
second issue presented in this case is whether the Defendants
should be sanctioned because Laberta Douglas did not attend
the settlement conference. The Federal Rules of Civil
Procedure and our Local Rules do not provide an answer for
this issue. Both Rule 16(c)(1) and Local Rule 16.2(c)
provides that a ...