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Recent Confidentiality Decisions ... In a Nutshell

by Jeffrey Krivis, Mariam Zadeh
December 2008
In light of the extensive blogosphere coverage that mediation confidentiality has received in recent months, we will keep this post short and sweet. The last year has yielded a host of decisions from across the country that has impacted the confidentiality protections afforded parties to a mediation.

We have summarized these cases with their respective citations so that the information is available and encapsulated in one area for easy reference.

Estate of Thottam, Case No. B196933 (Cal. App. 8/13/2008). Three siblings mediated a dispute concerning distribution of their deceased mother's estate and trust. At the outset of the mediation, the parties all signed a mediation confidentiality agreement. During the course of the mediation, a chart was prepared that delineated how the estate would be dispursed as among the three siblings. The chart was later introduced at trial by one of the siblings as evidence of the agreement over objection of the other two siblings. The trial court found the chart inadmissible, rejecting the introducing party's argument that any mediation confidentiality was waived pursuant to the provision in the confidentiality agreement stating that confidentiality would apply ". . . except as may be necessary to enforce any agreements resulting from the Meeting." (Emphasis added.) The appellate panel determined that the confidentiality agreement between the siblings that all matters discussed or agreed to in mediation "(2) shall not be used in any current or future litigation between us (except as may be necessary to enforce any agreements resulting from the Meeting") was an enforceable agreement even though made prior to any settlement being reached. The appellate court reversed the trial judge and decided that California Evidence Code §1123(c) requires neither that the express agreement in writing permitting disclosure be contained in the settlement agreement itself nor that it even be made at or after the time the settlement agreement is entered into. The California Supreme Court has declined to hear the Thottam case.

Simmons v. Ghaderi, Case No. S147848 (Cal. App. 7/21/2008). In this medical malpractice case, the defendant, Dr. Lida Ghaderi, gave her insurer consent during mediation to settle the case for $125,000. After the parties reached an agreement and the mediator drew up the contract, Dr. Ghaderi retracted her consent and left the mediation. The plaintiffs sought to enforce the settlement with a declaration from the mediator outlining the events as they transpired at the mediation. Dr. Ghaderi objected and claimed the mediator's declaration was a breach of mediation confidentiality and the oral settlement should be thrown out. The California Supreme Court agreed with Dr. Ghaderi, reversed the lower court's decision and held that the "Court of Appeal improperly relied on the doctrine of estoppel to create a judicial exception to the comprehensive statutory scheme of mediation confidentiality and that the evidence relating to the mediation proceedings should not have been admitted at trial."

Wimsatt v. Superior Court, (6/18/2007) 152 Cal.App.4th 137. In a legal malpractice action, the plaintiff-client claimed his attorney cut his settlement demand by more than half without his authorization. Plaintiff sought discovery of all mediation briefs, including the one prepared by his own lawyer, and e- mails sent the day before the mediation that quoted from the mediation brief to support his contention that he had not authorized the reduced demand. The Court of Appeal issued a writ of mandate directing the trial court to prohibit disclosure of the mediation briefs, holding that mediation confidentiality protects mediation communication in the context of a legal malpractice action arising from the handling of the underlying settlement process. The Court of Appeal reversed the decision, properly relying on Foxgate Homeowners' Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, Rojas v. Superior Court (2007) 33 Cal. 4th 407, Fair v. Bakhtiari (2006) 40 Cal.4th 189 , and the California Evidence Code and held firm to the position that there are no exceptions to strict mediation confidentiality, even where the result seems unjust. The Court of Appeal reaffirmed the importance of confidentiality to the mediation process and emphasized the Supreme Court's repeated refusal to "judicially create exceptions to the statutory scheme, even in situations where justice seems to call for a different result."

Hauzinger v. Hauzinger, 2008 NY Slip Op. 05781 (NY Ct. App., June 26, 2008). The New York Court of Appeals affirmed the Appellate Division's holding that where one party signs a waiver releasing the mediator from maintaining confidentiality and the other pary waives confidentiality by seeking disclosure from the mediator, the mediator is not allowed to assert a qualified privilege and is required to testify at trial if subpoenaed.

Williams v. Johanns, 2008 WL 36633 (D.D.C., January 2, 2008). Counsel for plaintiff was found in civil contempt by the U.S. District Court for the District of Columbia for filing a pleading containing statements made in mediation. the Court held a show of cause hearing and ultimately imposed a nominal fine noting the importance of confidentiality in the mediation process.

Rees v. Tingey Construction, Case No. 20060594 (Utah February 1, 2008). The trial court's order requiring counsel for a party to be deposed to determine whether the parties had orally agreed to settle during mediation was reversed. The decision was based on state law prior to the Utah Uniform Mediation Act taking effect on May 1, 2007.

Arben Corp. v. NYS Thruway Authority, Case No. 2008- 036-308 (NY Ct. Cl., February 26, 2008). In litigation over an alleged written settlement agreement, the New York trial court on a motion in limine ruled that post-mediation evidence from the mediator was permitted to determine whether or not a settlement agreement had been finalized and then breached. The court based its decision on a written agreement to mediate between the parties and on New York Law (CPLR 4547) which codifies the common law "settlement privilege." The court concluded that negotiations concerning the underlying dispute between the parties were protected by mediation confidentiality but that CPLR 4547 does not block efforts to prove the existence of a settlement agreement.

Biography



Jeffrey Krivis is the author of two books: Improvisational Negotiation: A Mediator’s Stories of Conflict about Love, Money, Anger—and the Strategies that Resolved Them, and How To Make Money As A Mediator And Provide Value To Everyone (Wiley/Jossey Bass publisher). He has been a successful mediator and a pioneer in the field for twenty-five years. Krivis serves as an adjunct professor of law at the Straus Institute for Dispute Resolution. He is also an Emeritus member of the board of visitors at Pepperdine. 


Mariam Zadeh was an active trial lawyer in New York City until September 11, 2001, at which time her life was dramatically changed. She moved to Los Angeles, obtained her L.L.M. in Alternative Dispute Resolution from the Straus Institute for Dispute Resolution at Pepperdine University, and became a partner with Jeffrey Krivis at First Mediation Corporation. Since joining Jeffrey Krivis, Mariam has successfully mediated employment, class actions, commercial, premises & professional liability, mass torts, medical malpractice, ERISA and other tort actions as well as matters pending on appeal. In 2007, Mariam was featured as a “Rising Star” in the Southern California Super Lawyers magazine and was profiled by the Los Angeles Daily Journal. She is a published author and frequently lectures and teaches at ADR workshops and classes throughout California.

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