Business & Insurance Litigation Newsletter for Indiana

Failure to Comply with Mediation Grounds for Dismissal

In Office Environments v. Lake States Insurance Company, 833 N.E.2d 489 (Ind. Ct. App. 2005), Office Environments brought a bad faith claim against its insurers, and the trial court ordered the parties to mediate pursuant to the Indiana Rules for Dispute Resolution. Office Environments, however, refused to pay for and participate in mediation. Consequently, Lake States moved to dismiss the case, with prejudice, for failure to comply with the mediation order, and the court granted the motion. On appeal, Office Environments contended that only the sanctions specifically authorized by ADR Rule 2.10 (cost and fees) could be imposed. The Court of Appeals disagreed, holding that the judge could dismiss a case for failure to comply with an order to mediate based on a violation of the court's own mediation order, rather than the ADR rules.

The court did, however, note that "not every case is appropriate for mediation," but emphasized that while parties may object to a mediation order, they cannot simply ignore the order.