California Mediation and Arbitration

Confidentiality: Unlike Mediation, Collaborative Law Settlements Do Not Have Statutory Confidentiality Protection

The Lesson Here Is The Importance of Carefully Drafting Collaborative Law Agreements.

        How's this for a setup:  "Ling and Paul Mueller married in 2009 and separated in 2017. During their marriage, they cultivated cannabis and buried the proceeds on their property." What could possibly go wrong? Plenty.

        The Muellers engaged in a collaborative law session, "a non-judicial alternative dispute resolution process commonly used for marriage dissolutions." Ms. Mueller made some harmful admissions during the collaborative law process regarding how much of the buried proceeds she had dug up and what she had done with it. The trial judge "found both parties had 'significant credibility gaps' but that Paul's 'testimony and differences in credibility on different days pales in connection to [Ling], whom I could not believe most of what she said." Ouch. 

        The trial judge adjusted the division of proceeds in favor of Mr. Mueller. Ms. Mueller argued that her statements in the collaborative law process were confidential and should not have been introduced in evidence. She appealed. Mueller v. Mueller, A166577 (1/5  6/3/24) (Burns, Jackson, Simons). Affirmed.

        "We publish this case to highlight the importance of carefully drafting collaborative law agreements. Unlike mediations, our Legislature has not created an evidentiary privilege for collaborative law processes. (Compare Evid. Code, § 1119 with Fam. Code, § 2013.) If parties intend to keep the process confidential, they are responsible for drafting an enforceable contract that so provides."

"Window of the Space Cowboy Smoke Shop, which calls itself 'the highest head shop in the world,' in Breckenridge, Colorado." 2008. Carol M. Highsmith, photographer. Library of Congress.

Mediation/Family Law:Pro Per Father Was Given Fair Opportunity To Oppose Mother's Request For A Move-Away Order, Despite Feeling Ambushed By Mediator's Decision To Discuss The Issue

Under The Circumstances, The Mediator's Decision To Discuss The Mother's Move-Away Request Was "Understandable".

        In family law, disputes are often resolved through mediation.  In Alkebulan v. Dunham, D069434 (4/1  7/20/17) (Benke, O'Rourke, Dato) (unpublished), father, who was unrepresented by counsel, felt blind-sided when mother raised the issue of a move-away order with their year-old child at the mediation, and the mediator pursued the issue, recommending that the family court approve the mother's relocation to Texas and provide visitation for the father.  The trial court permitted the mother to relocate, and the father argued that the order had to be reversed because he was not given a fair opportunity to opposed the mother's request for a move-away order.

        The Court of Appeal noted that the mediation was set in response to the father's earlier request for an order that was filed in response to the mother's earlier statement she was planning to move out of state.   Under the circumstances, the mediator's willingness to discuss the issue was "understandable."  But even if the mediator made a mistake going forward, the trial court cured the problem by offering to send the parties back to mediation -- an offer the father declined, because he felt the mediator was biased.

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.

Mediator: Court of Appeal Reverses $313,206 Jury Award In Favor Of Whistleblowing Mediator

Mediator Gallup Walloped For Failure To Exhaust Administrative Remedies.

     Family services mediator Emily Gallup complained to her supervisor and other court management about “insufficient time for mediation appointments, inadequate review of records and gathering of facts, failure to consider criminal histories, failure to advocate for the best interests of the children, failure to offer separate mediation to domestic violence victims, and use of undue influence to pressure parents into mediated agreements.”  Following her complaints, she alleged “escalating criticism and punitive actions culminating in termination.”

     She successfully sued the Superior Court of Nevada County (SCNC) under the whistleblower statute, Labor Code section 1102.5(b) and received an award for $313,206.  The Court of Appeal, however, reversed the judgment, because she failed to exhaust administrative remedies, a requirement of Labor Code section 98.7.  Gallup v. Superior Court of Nevada County, C073452 (3rd Dist. March 30, 2015) (Blease, Nicholson, Duarte) (published). 

     The published case will be of interest chiefly to employment and labor law attorneys, because the case has a detailed discussion of the retroactivity of the application of the administrative exhaustion requirement to the whistleblower protections, following changes in the law.  The Court concludes the exhaustion requirement still applies retroactively despite changes made to the law in 2013.  In so ruling, the Court of Appeal followed Campbell v. Regents of University of California, 35 Cal.4th 311 (2005), as controlling authority, and rejected Lloyd v. County of Los Angeles, 172 Cal.App.4th 320 (2009) as non-controlling.

     The case is likely to be limited in its impact, as legislation passed in 2013, adding Labor Code section 244, states in part that “An individual is not required to exhaust administrative remedies or procedures in order to bring a civil action under any provision of this code, unless that section under which the action is brought expressly requires exhaustion of an administrative remedy . . . “  Mediator Gallup filed her action in April 2011.

Mediation/Confidentiality/Family Law/Settlement Agreement: Affirming Trial Court, Second District, Division 1 Agrees Stipulated Judgment Reached Through Mediation Is Enforceable, Despite Failure To File It In Dissolution Proceedings, And Dismissal Of Mari

Stipulated Judgment May Not Have Contained Magic Words, But It Was Sufficient To Express Parties’ Intent To Waive Confidentiality And Allow Enforcement

     Daly v. Oyster, B249255 (2/1 July 29, 2014) (Chaney, Johnson, Wiley) (published) deals with that nettlesome situation that sometimes arises after mediation when papers are not filed with the court, the case is eventually dismissed, and one of the parties then seeks to enforce the settlement. Does the confidentiality of mediation prevent introduction of the stipulated judgment into evidence? Has a party simply waited too long to enforce the agreement? Has the court lost jurisdiction to enforce?

    In 1981 Joanne Daly and David Oyster married. In 2004 they separated.  In 2005, Daly filed a marital dissolution petition.  In June 2006, the parties entered into a stipulated judgment following mediation.  In May 2011, the superior court dismissed Daly's petition for lack of prosecution.  In June 2011, Daly filed a second dissolution petition to enforce the stipulated judgment. Apparently wanting to open up the proceedings and seek modifications, Oyster objected to admission of the stipulated judgment on the ground it was protected by the mediation privilege, Evid. Code section 1119.

     The Court of Appeal, however, disagreed with Oyster.  One exception to mediation confidentiality is a written settlement agreement providing “that it is admissible or subject to disclosure or that it is enforceable or binding, or words to that effect.”  That little tail -- “words to that effect” – means that magic words are not necessary.  It is enough if the terms unambiguously signify the parties’ intent to disclose the agreement or be bound by it.  Such was the case here:  “The parties agreed the court would enforce the document, which it could not do unless the document was disclosed to it.” 

     Did the time to enforce the stipulated settlement run out, given that the divorce took longer than five years, and the underlying case was dismissed after five years?   No – there was no authority that the statute of limitations for asserting breach of the agreement created a deadline for seeking to enforce it.  But for good measure, even if a statute of limitations was running, Daly could have filed the stipulation until the case was dismissed in June 2011, after which she would have had four years to sue for breach of a written agreement.

     PRACTICE TIP:  Include language that your settlement agreement, achieved through mediation, is admissible, subject to disclosure to the court, enforceable, and binding, and you eliminate one problem encountered by Daly. 

Mediation/Confidentiality/Family Law: Conduct of Parties During Settlement Negotiations Can Support Sanction in Family Law Context

 

Whether the Mediation Confidentiality Was Violated Is Not Crystal Clear From the Opinion

     We are always pleased when a case has something to say about mediation – there are far fewer written opinions about mediation than about arbitration. 

     Aaronson petitioned to nullify her marriage with Oslica, on the ground of purported fraud relating to Oslica’s immigration status at the time of marriage.  The case did not go well for Aaronson, who was ordered to pay $15,000 of Oslica’s attorney’s fees and costs.  The trial court also sanctioned Oslica’s attorney. In re Marriage of Aaronson and Oslica, Case No. A128516 (1st Dist. Div. 2 May 22, 2012) (Haerle, Acting P.J., author) (unpublished).  Aaronson appealed, contending the fee order needed to be reversed because she was unemployed and because the trial court considered other improper factors.

     The Court of Appeal affirmed the order, finding that being unemployed was not a blanket protection from getting hit with attorney’s fees under Family Code section 271.  However – and this is why we have a post – among the allegedly “improper factors” that Aaronson challenged was the admissibility of settlement discussions showing that she had rejected settlement offers.  Family Code section 271 authorizes an award of attorney’s fees as a sanction for frustrating the policy of the law to promote settlement of litigation.   Aaronson argued that if settlement discussions are protected in the context of mediation (Evid. Code section 1119), then in her case, settlement discussions between counsel must be protected.

     The blanket protection of mediation communications (Evid. Code section 1119), however, is different from the protection of settlement discussions (Evid. Code section 1152).  As the Court of Appeal pointed out, not all settlement discussions are inadmissible – only settlement discussions to prove “liability” for a claimed loss or damage.  Here, the evidence was admitted after the judgment was entered, to consider whether there had been unreasonable conduct during settlement negotiations – the basis for the award of fees under section 271.

     The somewhat murky part of the opinion is whether or not the settlement discussions occurred during mediation.   True, just because the settlement discussions occurred between counsel does not mean that they occurred during mediation.  Unfortunately, the court’s explanation that “[h]ere . . . after the judgment was entered, the trial court considered evidence pertaining to unreasonable conduct during settlement negotiations in accordance with section 271,” does not clarify whether the settlement conversations occurred during or in connection with mediation.  Also, the court’s comment, “[w]e firmly reject the implication that Aaronson was sanctioned solely because her attorney rejected a settlement offer,” suggests even if Aaronson was sanctioned partly because her attorney rejected a settlement offer, and even if that rejection occurred during mediation, the evidence of rejection, even if wrongly considered, was harmless and irrelevant to the outcome.  If there was error, it must have been harmless, because “the appellate record is chalk-full of samples of both improper and wasteful litigation tactics.” 

     While the court has discussed mediation here, we’re not exactly sure what part is dictum and what part is holding.  The opinion makes perfect sense if the Court of Appeal is simply telling us that the settlement discussions between counsel were not part of a mediation, and therefore were admissible for a permissible purpose that did not involve establishing liability.