Refusing a Mediation Opportunity

By: Donald L. Swanson

“By providing you with this notice, [creditor’s name] is merely complying with the notice requirements under the Nebraska Farm Mediation Act. [Creditor’s name] does not, in any way, acquiesce to participation in the mediation process with you.”

–Two sentences from a creditor’s notice of mediation rights to a debtor under Neb. Rev. Stat. § 2-4801 et seq. (italics in original).

Every now and then, you see something and react with, “What the heck is that?!”

The portion of a mediation notice, in the photo above, is one of those things.

Background

Here’s the context. The recipients of said letter are a Nebraska farming couple. The letter is from an attorney for their primary creditor and is about their defaulted farm loans.

–Mediation Notice Requirement

The creditor is sending the letter because notice of mediation rights is required by law. Neb. Rev. Stat. § 2-4807(1) 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 . . . “

–Actual Mediation Is Not Required

Unfortunately, Neb. Rev. Stat. § 2-4808(2) also says:

“The parties shall not be required to attend any mediation meetings.”

Result

So, what the creditor says, in the letter noted above, is essentially this:

1. Before suing you, we are required to give you this notice of mediation rights;
2. But we are NOT required to actually attend a mediation with you;
3. So, you may want to mediate with us; but
4. Forget it, because we don’t want to mediate with you; and
5. We are perfectly within our legal rights to take this position.

What the heck?!

Anyway . . . I recently saw the letter. Couldn’t believe someone would actually say such a thing—directly, overtly and in writing! But the letter is for real.

Why?

So . . . why would a creditor take such a position?

Similar mediation laws exist in almost every farm state. Most of those laws require more of a creditor—like actually attending a mediation when the debtor wants to mediate. And such mediations, when they do occur, are highly effective in achieving settlements.

But this creditor wants none of that.

Conclusion

My answer to the “why” question is this: “I have no idea.”

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.