Mediation, Confidentiality, Family Law: Lacking Mediation Privilege, Unmediated Spousal Settlement Is Set Aside Because Presumption Of Undue Influence Applied

Here’s A Good Example Of Why It Is Harder To Set Aside A Mediated Spousal Settlement Than An Unmediated, Negotiated Settlement.

     In Marriage of Cooke, B257791 (2/7 10/17/16) (Segal, J.) (unpublished), the wife moved for entry of a stipulation for judgment that she and her husband signed.  The opinion rather vividly describes the the scene in which the distraught, unfocused, weepy, and unrepresented husband met with his wife and signed the stipulation for judgment.  A month later, the husband changed his mind, and responded to the petition for marital dissolution, requesting other arrangements.

     The trial court vacated the stipulation, based on undue influence, and the wife appealed.

     The Court of Appeal explains that a presumption of undue influence applied to the stipulation for judgment, because the stipulation unfairly advantaged the wife, and the fiduciary relationship between husband and wife means that the advantage “presumes such transactions to have been induced by undue influence.”

     However, the presumption of undue influence does not apply to mediated settlements.  Therefore, the wife argued that the negotiated settlement should be treated like a mediated settlement.  The Court disagreed, pointing out:  “Divorce mediators generally work to balance the negotiating power between the parties.” 

      Whether or not that is empirically true, the parties can also take advantage of the mediation privilege to exclude evidence when there is a genuine mediation.

      Here, there was no mediation, just an unmediated, negotiated settlement.  Unable to rely on the mediation privilege, the wife fell back on the settlement negotiation privilege in Evid. Code sections 1152 and 1154, to argue that she would be unfairly prevented by the Evidence Code from introducing evidence to rebut the presumption of undue influence.  However, the protection of settlement negotiations only prevents the introduction of evidence to prove a defendant’s liability, or to preclude evidence of an injured party’s offer to discount a claim to prove the claim’s invalidity.  Those protections would not have prevented the wife from introducing evidence that the parties did not reach a binding contract.

     Affirmed.

     COMMENT:  If the parties had hired a mediator, the stipulation would almost certainly have been enforced.  The presumption of undue influence would not have applied, and the wife could have taken advantage of the mediation privilege.