Amis v. Greenberg Traurig LLP Acknowledges Supreme Court’s “Near Categorical Prohibition Against Judicially Crafted Exceptions To The Mediation Confidentiality Statutes”
Amis v. Greenberg Traurig LLP, No. B248447 (2/3 March 18, 2015) (Kitching, Aldrich, Lavin) (published) holds “a malpractice plaintiff cannot circumvent mediation confidentiality by advancing inferences about his former attorney’s supposed acts or omissions during an underlying mediation.”
Given that there are now many cases holding that mediation confidentiality statutes are just about ironclad, even in cases where a client alleges his attorneys committed malpractice during mediation, one may first wonder why this opinion was published. The important point made in this case is that even inferences about what must have been said by the attorneys to the client to induce the client to agree to a horrible settlement are not admissible.
Here, the client, Amis, alleged he was not advised his personal liability was nil, yet in mediation, he agreed to a settlement that put both Pacific Marketing Works, Inc. (Pacific), in which he was a minority shareholder, and himself personally, on the hook for $2.4M in the event of a default in payment by Pacific. Furthermore, a deal was in the works whereby a Japanese corporation was to acquire Pacific, and Amis expected that the acquisition would make it feasible to pay the settlement amounts agreed to in mediation. However, the settlement agreement failed to make the settlement payments contingent upon the acquisition of Pacific by the Japanese company. Of course, everything that could go wrong did go wrong: the acquisition didn’t go through, Pacific defaulted on the settlement payments, and Amis ended up personally liable and declaring bankruptcy.
Amis’s legal malpractice expert opined that Greenberg Traurig’s conduct fell below the standard of care and there was “no advice [GT] could have given to John Amis during mediation that would justify making John Amis Personally liable for payment of $2,400,000.”
This evidence – an inference about advice given in mediation – was inadmissible. Thus, Amis could not prove malpractice, and lost on summary judgment, which judgment was affirmed.
The upshot is that you cannot do indirectly, through inference, what you cannot do directly, i.e., admit evidence of what was said or not said in the mediation.
Recognizing the “seemingly unintended consequence” that mediation confidentiality protects lawyers from malpractice claims, the Court concludes that it “is for the Legislature, not the courts, to correct.”