Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 4, 1995 TAG: 9503060020
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: STEPHEN FOSTER STAFF WRITER
DATELINE: BLACKSBURG LENGTH: Medium
Virginia's Supreme Court has been asked to settle a case from Western Virginia that could determine the fate of out-of-court mediation.
The Richmond court heard arguments this week in Snyder-Falkinham vs. Stockburger, which began after Blacksburg real estate developer Georgia Anne Snyder-Falkinham sued Bruce Stockburger, a lawyer in the Roanoke firm of Gentry, Locke, Rakes and Moore, over real estate ventures gone wrong. In the 1991 suit, she sought $10.5 million.
The underlying core of the case heard before the state's highest court Wednesday, however, is over the confidentiality of information that surfaced in mediation between the parties. The debate is over whether a Roanoke Circuit Court erred when it admitted supposedly confidential information into an open court hearing early last year, said Michael Horwatt, Snyder-Falkinham's McLean-based lawyer.
More than 40 states use mediation during civil suits as an alternative to arguing cases in court. Mediation generally is considered a faster and cheaper way to resolve such disputes because no records are kept, and lawyers assume that the proceedings will remain private.
If the Supreme Court rules against Snyder-Falkinham, Horwatt said, ``we can kiss mediation goodbye. No lawyer will allow a client to go into mediation without a guarantee of confidentiality.''
If it rules in her favor, he said, mediation can continue as an alternative to an overburdened court system. It also ``would put her back in the running'' in terms of her original case, he said.
It probably will be several months before the court rules on the case.
Snyder-Falkinham originally claimed that Stockburger had conflicts of interest he didn't reveal to her when he agreed to represent her in two trusts established through Crestar Bank by her late husband. His law firm represented the bank.
Nor did Stockburger tell her, she claimed, that he was representing former University of Virginia basketball star Ralph Sampson when he helped persuade her to become partners with Sampson's corporation to build a Blacksburg luxury town house project. That project eventually lost her millions of dollars, Horwatt said.
But after the two sides' attorneys settled the case through mediation in January 1994, her attorneys had the case dismissed.
Horwatt admitted that Snyder-Falkinham said during mediation proceedings that her lawyers had authority to speak for her, but argued that the authority did not extend to a final settlement or having the case dismissed. She hired Horwatt to have the case reinstated and appealed.
More importantly, Horwatt argued before the Supreme Court justices, because the authority was granted during mediation proceedings, Snyder-Falkinham's lawyers should not have been able to mention it in the subsequent hearing, where Horwatt tried to have the settlement ruled invalid.
However, Frank Miller, Stockburger's Richmond-based attorney, said this week that his opinion of the current case is simple.
``We think it is a simple appeal,'' he said. ``The issue is whether the case is settled.''
by CNB