A New Judicial Exception to Mediation Confidentiality? The Cassel Case in California (Web)

A California appeals court has denied a Tarzana, Calif.-based law firm’s request to use state mediation confidentiality laws to bar the introduction of conversations about a mediation as evidence in a client’s malpractice suit against the firm.

In Cassel v. Superior Court of Los Angeles County, 2009 Cal. App. LEXIS 1811 (2d Dist. Div. 7 Nov. 12, 2009), a 2-1 Los Angeles California Court of Appeal panel held that a mediation confidentiality exclusion didn't apply to communications solely between a client and an attorney that reveal nothing that was said or done within the mediation session.

A dissent states that the statutory language contemplates protecting statements “made for the purpose of” mediation, not just admissions made “in the course of” a mediation–meaning that the statements outside of the mediation proceedings between the law firm and the client also should be protected.

Plaintiff Michael Cassel filed suit against his former attorneys for malpractice in connection with a 2005 mediation settlement.  The law firm, Wasserman, Comden, Casselman & Pearson, represented Cassel in connection with an ownership interest and license use with clothing company Von Dutch Originals LLC.

Cassel met with his attorneys to prepare for the case on Aug. 2-4, 2005.  On Aug. 4, 2005, Cassel and the opposing parties participated in a mediation that produced a $1.25 million settlement agreement.

But later, Cassel said that Wasserman Comden forced him to sign the agreement.  He filed a legal malpractice suit against his former attorneys.

The firm moved to exclude evidence of certain conversations and conduct between it and Cassel during the Aug. 2-4, 2005, period.  The parties had ageed that the lawyer-client privilege statutory scheme didn't apply in the suit.  But the firm claimed that those meetings were not allowed to be disclosed because of the California Evidence Code mediation sections.

Code Section 1120 does not allow evidence “otherwise admissible or subject to discovery outside of a mediation or a mediation consultation” to become “inadmissible or protected from disclosure solely by reason of its introduction or use in a mediation or a mediation consultation.”

But Wasserman Comden claimed that an exception in Section 1119 applied, and should bar the admissibility of the conversations with Cassel.  Section 1119 limits the admissibility of communications during the mediation process.  It “precludes admission or other disclosure of oral and written communications made ‘for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation,’” notes the appeals court majority opinion by Second District Court of Appeal Division Seven Associate Justice Frank Y. Jackson. 

The Evidence Code section also provides, “All communications, negotiations, or settlement discussions by and between participants in the course of a mediation or a mediation consultation shall remain confidential.”

The law firm contended it was a qualified as a mediation process “participant.” to protect its communications from introduction as evidence.

A trial court found the communications to be protected by the mediation confidentiality statute and excluded them on the grounds that they were inadmissible.

The Court of Appeals disagreed and reversed.

The law firm had “failed to demonstrate a sufficiently close link between the communications and the mediation to require application of mediation confidentiality,” writes Jackson, who was joined by Associate Justice Laurie D. Zelon.

The majority panel opinion also noted that the purpose of the mediation confidentiality rule was to facilitate communication between the two parties, not between a party and its attorney. Attorneys are “not within the class of persons which mediation confidentiality was intended to protect from each other–the ‘disputants,’ i.e., the litigants--in order to encourage candor in the mediation process,” according to the opinion.

There are several factors that weighed on the court's decision. First, the communication pertained to Cassel wanting his Wasserman Comden attorneys to honor his wishes, but resisting to the extent, the plaintiff claimed, that they breached their duties to him as his counsel.

Second, the communication did not contain information that had been revealed by the opposing side or the mediator during mediation.

Third, the start of the trial was only a few weeks away from the meeting dates.  The communications were for trial strategy preparation, not just for mediation.  Therefore, the court concluded that the communication between Cassel and his lawyers was not “oral or written communications made ‘for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation’ protected by section 1119.” . . .  

Cassel will now be allowed to present the communications evidence in his malpractice suit against his former attorneys.

In his dissent, Presiding Justice Dennis M. Perluss notes that not only does the majority misinterpret the Section 1119 exception, the opinion is “also inconsistent with the [California] Supreme Court’s repeated disapproval of ‘judicially crafted exception[s]’ to the mediation confidentiality statutes.”

“In the end,” writes Perluss, “the majority's [Evidence Code analysis] seems to be founded primarily on its concern that protecting private communications between a client and his or her lawyer under the rubric of mediation confidentiality may shield unscrupulous lawyers from well-founded malpractice actions without furthering the fundamental policies favoring mediation.”

Even it that is true, Perluss concludes, it is up to the state Legislature “to balance competing public policies and to create an exception to the statutory scheme governing mediation confidentiality where it finds it appropriate to do so.”  

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The local mediation community has taken notice.  Here are links to two Los Angeles ADR practitioners’ takes on this case:

1) Michael D. Young, a partner in Alston & Bird, at the IP ADR Blog,
and with discussion at the Settle it Now blog.

2)  The website/blog of Paul Fisher, of Fisher Mediation.

–Erika Myrill, CPR Intern