Mediation: More Strong Support for Confidentiality by California's Top Court (Web)
July 22, 2008
California's highest court has reaffirmed the broad coverage of the state's mediation confidentiality statutes, refusing to recognize the equitable doctrine of judicial estoppel as an exception to the laws.
In Simmons v. Ghaderi, Docket No. S147848, 2008 Cal. Lexis 9071 (July 21, 2008)(PDF available here), the California Supreme Court reversed a state appellate court decision holding that communications made in mediation were admissible at trial after the defendant used stipulated to mediation events in pretrial proceedings. The Court held that the defendant should have been allowed to use the state’s mediation confidentiality statute to prevent the communications from being introduced at trial
The plaintiffs filed suit against Dr. Lida Ghaderi for medical malpractice. The plaintiffs’ family member had died after treatment. Before the parties began the mediation, Ghaderi executed an agreement to give settlement authority to her medical malpractice insurance provider for a $125,000 settlement.
Ghaderi retained the right to revoke her consent in writing. When Ghaderi's insurance provider and the plaintiffs made an oral agreement to settle the case for $125,000, Ghaderi stated that she was revoking her consent. She left the mediation location, and never signed the settlement agreement.
A week later, Ghaderi sent her insurance provider a written revocation of her consent to the settlement.
The plaintiffs returned to state court to enforce the settlement. In opposition to the plaintiffs' motion to enforce the settlement, Ghaderi argued that based on the facts from the mediation, the parties never entered into an enforceable contract.
Only after the trial court denied Ghaderi's motion for summary adjudication of plaintiffs' amended breach of contract claim, and nearly 15 months after the mediation, did Ghaderi raise California's expansive mediation confidentiality statutes. The trial court admitted evidence from the mediation that related to the plaintiff's breach of contract claim, and found for the plaintiffs. It ordered specific performance of the agreement and entered judgment in favor of plaintiffs for $125,000, plus prejudgment interest.
The Court of Appeal affirmed the judgment, and held that because Ghaderi had presented her own evidence of events from the mediation and did not object to its use in pretrial motions, Ghaderi was judicially estopped from asserting mediation confidentiality.
The Supreme Court’s unanimous reversal Monday noted the California Legislature's strongly expressed support for mediation confidentiality. The Court rejected the plaintiffs' argument that Ghaderi was estopped from asserting mediation confidentiality, noting that Ghaderi never induced the plaintiffs to act on misrepresented facts. The Court further held that California's mediation confidentiality statutes prohibited a mediation party from impliedly waving the statute’s protections.
“By laying down clear rules, the Legislature intended to reduce litigation over the admissibility and disclosure of evidence regarding settlements and communications that occur during mediation,” Associate Justice Ming W. Chin wrote for the 7-0 Court. “Allowing courts to craft judicial exceptions to the statutory rules would run counter to that intent.”