New Case on Enforcing Mediated Settlement Agreements Muddies the Waters Again

The new Estate of Thottham case on the enforcement of mediated settlement agreements is troublesome because

• it appears to contravene the holding of the Supreme Court in Fair v. Bahktiari (full opinion here)
• it turns upon the interpretation of one ambiguous sentence in the parties’ confidentiality agreement which I’m almost certain was not meant to create an exception to (or satisfy the requirements of) Evidence Code section 1123(c)
• it shows a remarkable persistence in the trial and appellate courts of the desire to enforce term sheets in non-compliance with the Evidence Code, privileging finality over the the parties’ reasonable expectations that all the proclamations about confidentiality will be honored.
• it creates uncertainty in the law, making it difficult for attorneys to guide their clients before, during and after mediation proceedings.

This is a ripe area for malpractice actions — binding parties to agreements they later claim were not reached.  The Supreme Court keeps saying — we mean what we say (Simmons v. Ghaderi) — no exceptions to the requirements of 1123(c).  Nevertheless, the trial and appellate courts find enforcing skeletal mediation term sheets (this one was a chart) nearly irrisistable.  They just can’t seem to get their minds around the idea that the point of mediation — a non-legal process — is to create a durable agreement that the parties all want to enforce.

If a mediated agreement were a consumer contract, there’d be a cooling down period during which the “buyers” could re-think a decision made in the heat of the moment with mediators and attorneys leaning on them to settle or else . . . . you know . . . whatever the parade of horribles is.   

Are parties bullied into settlement by mediators and even by their counsel?  Let’s look again at the definition of bullying:  the repeated and deliberate abuse of power by one person or group of people over another person or group.

I’m not suggesting that mediators and attorneys know they are abusing the power of their position and authority to “persuade” the parties to accept a settlement that leaves the taste of injustice in their mouths.  We just sometimes forget how much power we possess and how overwhelming our importuning can feel to someone unfamiliar with the legal system.  Think about how helpless you feel trying to communicate with someone who speaks another language.

I’ve observed mediations in which the mediator — repeatedly and, it can only be said, deliberately — abuses his or her authority to gain the consent of parties who are clearly not comfortable with settling their case on the terms proposed and are certainly not satisified with the “deal.”

Keep ’em in the room; wear them out; highlight their fears; diminish their hopes and then, when they’re at their weakest, put a pen in their hand, ask them to sign and then elevate that signed agreement above all else because what we’re after here is efficiency, brother, not justice — a term too many mediators feel forced to put in quotes.  “Justice.”  As if it could possibly be anything other than a cynical joke.

OK.  I misused this post to rant.

I’m going to come back and “brief” this case for you next, highlighting the traps for the unwary and commenting on the form agreement used by the Los Angeles Superior Court ADR panel — a form that is now mandatory.

HEAD’S UP FOR THE NEXT POST NEW LAW STUDENTS — THIS IS WHY IT’S IMPORTANT TO LEARN HOW TO DE-CONSTRUCT A LEGAL DECISION AND TEASE OUT THE HOLDING FROM THE RATIONALE, THE RULES AND THE DICTA. 

This Met News report, accurate as it is, doesn’t do justice to the traps and troubles lurking here.

Evidence Code Sec. 1123(c)’s exception to mediation confidentiality–providing that a written settlement agreement prepared in mediation is not made inadmissible or protected from disclosure if signed by parties, and all parties expressly agree in writing to disclosure–applied in appellant’s civil action to enforce chart prepared during mediation and signed by all parties which appellant claimed was a settlement agreement because estate beneficiaries, in agreement to mediate dispute over distribution of assets, agreed all matters discussed or agreed to in mediation would be kept confidential and not used in any litigation among them “except as may be necessary to enforce any agreements resulting from” mediation, and because chart–setting forth material terms which were sufficiently certain to provide a basis for determining what obligations to which parties had agreed–was a “settlement agreement.”

Estate of Thottam – filed August 13, 2008, Second District, Div. Four Cite as 2008 SOS 4917

                       

Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >