A federal court recently considered the meaning of the phrase “to submit” in the context of a mediation clause in a construction contract to determine if a suit filed during a mediation was premature. In Arcadis U.S., Inc. v. Stryker Demolition & Env’t Servs., LLC, No. CV 20-0471, 2021 WL 785138 (W.D. La. Mar. 1, 2021), the U.S. District Court for the Western District of Louisiana determined that a party did not violate the subcontract’s mediation clause by filing a lawsuit after a mediation began because the contract merely required the matter to “be submitted for mediation” as a condition precedent to filing suit.
The specific language in the subcontract provided that “the matter shall be submitted for mediation under the Construction Industry Mediation Rules of the American Arbitration Association before having recourse to a judicial forum.” The adverse party argued that filing suit before a mediation had concluded violated this provision and constituted bad faith. The Arcadis court rejected this argument, reasoning that “without the capability to fully decide the dispute, the verb ‘submit’ in the mediation context means the satisfaction of this condition would require the parties to send or commit their dispute to their selected mediator for consideration or study.”
In further support of its ruling, the Arcadis court cited to the American Arbitration Association’s website, which states: “The AAA website includes a fillable PDF entitled ‘Submission to Mediation’ for parties to complete and file with the AAA to begin the mediation process. The AAA’s Construction Industry Mediation Rules include sample mediation clause language that implies submission to mediation occurs at the beginning of the alternative dispute resolution process.” The court further reasoned that if mediation is successful, any suit can be dismissed prior to the expense of trial and at minimal cost to all parties. For this reason, the filing of suit before mediation or while it is ongoing is not evidence the plaintiff will approach mediation in bad faith or with no intent to reach a compromise.
