Federal Deposit Insurance Corporation v. White

The Federal Deposit Insurance Corporation (FDIC) (plaintiff) sued John and Donna White (defendants) for violating the state’s Uniform Fraudulent Transfer Act and for civil conspiracy in connection with the Whites’ debts. Before the civil trial, the FDIC referred the Whites’ case to federal criminal prosecutors; at that point, decisions relating to any potential criminal matter became the responsibility of a different federal agency. Following a civil trial, the jury returned a verdict in favor of the FDIC. The Whites contested the verdict, and the court ordered the parties to confidential mediation. According to the Whites and their attorneys, during the mediation the FDIC and the mediator intimated that the Whites could be criminally prosecuted if they did not agree to pay certain amounts in settlement of the case. Under alleged coercion, the Whites signed a settlement agreement. Subsequently, the Whites refused to abide by the agreement. The FDIC filed a motion to enforce the settlement agreement, while the Whites filed a cross-motion to set the agreement aside. The FDIC’s evidence showed that no threats had been made during the mediation, that the criminal referral had been made prior to trial and was out of the FDIC’s control, and that it was the Whites who asked for relief from any criminal prosecution during the mediation. At the same time, the FDIC sought to exclude the testimony of the Whites and their attorneys regarding the mediation communications on the grounds that the communications were privileged and inadmissible.