Mediation Term Sheet Enforced
A lawyer, Schlecht, proceeding pro se, settled his litigation against Northwestern Mutual Life Insurance in mediation. The parties executed a “Settlement Term Sheet Memorandum” which provided that the case would be terminated “in accordance with standard contractual language” to be drafted by Northwestern’s counsel. An experienced mediator represented to the court that the matter had been settled.
The draft settlement agreement included a “non-reliance” term which represented that the parties had “conducted an independent investigation of the facts and do not rely upon any statement or representation of the other party . . . other than as expressly provided for in the Agreement.” Schlecht refused to execute the settlement agreement, arguing that the non-reliance provision was a material term not agreed to by the parties. He moved to vacate the Term Sheet. The district court scheduled and held a hearing, but Schlecht failed to appear. The district court denied his application, and the Eighth Circuit affirmed.
The core issue, according to the Eighth Circuit, was whether the non-reliance provision was a material term of the settlement, or merely a standard provision of settlement agreements. In the court’s view, the non-reliance provision “restated concepts that were already in essence part of the settlement memorandum” such as the right to obtain advice from counsel. The court emphasized that the “phrasing of the non-reliance clause did not add or alter any settlement term or provision in the settlement memorandum, let alone a material term.” The Eighth Circuit noted that the term sheet “made plain that the final settlement documents would contain phrasing consistent with ‘standard contractual language’” and that Schlecht, an experienced attorney, did not question the representations made by Northwestern. The Eighth Circuit concluded that Schlecht “unambiguously agreed to settle the case” and affirmed the district court’s dismissal of his challenge to the enforceability of the mediation term sheet. Schlecht v. Goldman, 157 F.4th 963 (8th Cir. 2025).