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Confidential is Confidential

by Phyllis Pollack
August 2011

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

In my April 16, 2010 blog, I discussed the appellate decision of Porter v. Wyner, Case No. B211398 (April 8, 2010) (“Porter”). In that decision, the Second Appellate District of the California Court of Appeal held that mediation confidentiality would not protect attorney-client communications. Thus, the appellate court held that the communications between an attorney and client were admissible even though they occurred during a mediation.

As one might suspect, this decision was appealed to the California Supreme Court. However, that court put it “on hold” pending its decision in Cassel v. Superior Court (2011) 51 4th 113 (“Cassel”). Once Cassel was decided, the California Supreme Court, on April 20, 2011, transferred Porter back to the appellate court with directions to reconsider it in light of Cassel. (Cassel held that mediation confidentiality applies to communications between a client and an attorney representing her during mediation.)

Upon reconsideration, the appellate court reversed its earlier ruling, and this time affirmed the trial court’s order granting a new trial finding that the introduction of communications made during a mediation constituted an “irregularity in the proceedings.” (Evidence Code §1128 and Code of Civil Procedure §657). Further, the appellate court remanded the matter back to the trial court to rule on the motion for judgment notwithstanding the verdict filed by the defendants.

Initially, Plaintiffs John Porter and Deborah Blair Porter sued the Manhattan Beach Unified School District and the California Department of Education on behalf of their son who required special education services. In that suit, the Porters were represented by Steven Wyner and Marcy Tiffany, the defendants herein (“Wyner Tiffany”).

This underlying action was resolved at mediation. Plaintiffs alleged that during this mediation, Wyner Tiffany agreed to reimburse the Porters for the attorneys’ fees and costs that the Porters had previously paid and further agreed to pay Mrs. Porter for services she rendered as a paralegal.

Once the settlement was documented and concluded, the instant dispute arose, with Wyner Tiffany denying it had ever agreed to these things.

Consequently, the Porters sued Wyner Tiffany for legal malpractice and related claims. During the litigation, Wyner Tiffany attempted to keep out of evidence all of the attorney-client communications made during the mediation on the grounds that they were protected by mediation confidentiality. Their attempts were denied and rebuffed by the trial court. At trial, Wyner Tiffany, initially, filed a motion in limine to exclude all such communications but withdrew it based on a waiver argument made by the Porters in their written opposition to this motion.

After a jury trial, the jury returned a verdict for the Porters and against the defendants, awarding Mrs. Porter her back wages of $211,000 as a paralegal and awarding the Porters $51,000 for breach of the attorney fee agreement.

About a month later, the California Supreme Court decided Simmons v. Ghaderi (2008) 44 Cal 4th 570 (“Simmons”). (simmons_v_ghaderi ) Based on this decision, the trial court granted Wyner Tiffany’s motion for new trial on the grounds that evidence concerning mediation in the underlying action was improperly placed before the jury. Although Wyner Tiffany also filed a motion for judgment notwithstanding the verdict (Motion for Jnov), the trial court held it was moot.

At that time, the appellate court reversed the order granting a new trial and remanded the matter back to the trial court to rule on the Motion for Jnov. It determined that mediation confidentiality applies only to communications between the disputing parties, and not to an attorney and his client – not even to those communications occurring when the mediator and/or opposing counsel are present during a mediation.

Now, and in light of the Supreme Court’s decision in Cassel, this same appellate court reached a far different conclusion. In its unpublished decision issued on July 27, 2011 (Porter), it held that mediation confidentiality applied, without exception, noting that the California Supreme Court ““. . .has repeatedly described the mediation confidentiality provisions as clear and absolute. . . .[T]hey must be strictly applied and do not permit judicially crafted exceptions or limitations, even where more competing public policies may be affected.”” (Id. at p. 13).

Thus, the appellate court rejected the Porters’ arguments that defendant Wyner Tiffany gave express written agreement to waive mediation confidentiality by signing the settlement agreement in the underlying action because (1) the settlement agreement did not contain an express waiver of confidentiality; and (2) it was not signed by all participants. Both are required under Evidence Code §1122. Moreover, Wyner Tiffany signed the agreement only approving “as to form” and not as acknowledging or agreeing to the substantive provisions.

Further, the appellate court concluded that Wyner Tiffany did not waive mediation confidentiality when its counsel made the strategic decision to waive it in open court by withdrawing its motion seeking to preclude the use at trial of what occurred during the mediation. The appellate court pointed out that there is no record that Wyner Tiffany itself agreed with their counsel’s oral waiver of this confidentiality: there is neither any oral consent on the record in open court nor a written agreement of waiver signed by them. The appellate court found that their counsel’s oral withdrawal of the motion in limine did not meet the requirements of Evidence Code §1122(a) stating what is needed to constitute a waiver. (Id. at p. 16-17).

Further, referring to Simmons, supra, the appellate court noted that the doctrines of estoppel, judicial estoppel and implied waiver are not exceptions to mediation confidentiality. (Id. at p. 17). Thus, the withdrawal of the motion in limine, even if deemed an implied waiver, was not sufficient to waive mediation confidentiality.

Consequently, and reversing itself completely, the appellate court held that the trial court erred in admitting evidence and testimony into the trial of what occurred during the mediation. Such admissions constituted an “irregularity in the proceeding” mandating a new trial. The appellate court also remanded the issue of defendants’ motion for judgment notwithstanding the verdict for review by the trial court based on the entire record.

Once again. . . mediations are confidential! What goes on in mediations, stays in mediations! No ifs, ands, or buts! No exceptions, no matter what!

Will the legislature take up the cause and make an exception to mediation confidentiality for legal malpractice actions?

We shall see!

. . . Just something to think about!

Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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Website: www.pgpmediation.com/index.htm

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