A Surprisingly Successful Pre-Lawsuit Mediation

Nebraska Pastureland

By Donald L. Swanson

Nebraska statutes contain a Farm Mediation Act (Neb. Rev. Stat. § 2-4801 et seq).

This Act requires a creditor to send notice of a mediation opportunity before attempting to collect a defaulted farm loan.  The statute says:

“At least thirty days prior to the initiation of a proceeding on an agricultural debt in excess of forty thousand dollars, a creditor . . . shall provide written notice directly to the borrower of the availability of mediation.”

What happens after the notice is entirely voluntary.

A Surprising Development

In my early career, I view this mediation notice requirement as a mere formality: a compliance detail creditors must satisfy before suing on a delinquent farm debt.  I do not, back then, see mediation as a viable, problem-solving tool.

But my view on this changes – all in a single day.  The change happens like this.

I am retained (back in 1987 or so) by a rural bank to, (i) file a lawsuit against a farmer to collect a delinquent farm loan, and (ii) then represent the bank in the bankruptcy proceeding that will undoubtedly be filed in response.

I send the mediation notice, as required by the above-quoted statute.  The farmer responds and wants to mediate.  A mediation session is scheduled.

In discussing the upcoming mediation with my client, I express doubts about the effectiveness of mediation.  And I opine that the mediation session will be a mere formality, with an exceedingly-low probability of achieving any resolution.

So, we agree that a bank officer will attend the mediation session with the bank’s home-town attorney – and that I won’t make the several-hour trip to attend.

Late in the afternoon of the mediation session day, I receive a telephone call from the bank officer (the call comes as a surprise because I did not calendar — and forgot about — the mediation session).

His first words are: “We settled the case!”

I remember being amazed . . . and baffled . . . and more-than-a-little embarrassed.  I say, in response, “That’s great!”  But what I’m really thinking is: “Oops!”  and “How did I miss this so badly?”


From that moment on, I’ve been a believer in mediation and its possibilities – even when prospects for settlement appear to be almost nil.  And this belief has proven, on multiple subsequent occasions, to be well-founded.



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