ADR Case Updates
Mediation Confidentiality Does Not Protect Communications Between Attorney and Client, 11/17/09
Several decisions regarding ADR have been rendered since my last update of September 26, 2009, holding:
A more detailed summary and analysis is below.
In Cassel v. Superior Court (Wasserman, Comden, Casselman & Pearson, LLP), (Nov. 12, 2009, Second District, Div. Seven), __ Cal. Rptr. 3d __, 2009 WL 3766430, a divided Appellate Court held that mediation confidentiality does not protect communications between an attorney and client made outside the presence of opposing mediation participants and mediator in a subsequent malpractice claim by the client against the attorney. Plaintiff attended a mediation with his counsel in a federal trademark and copyright lawsuit that he had brought. The case settled at mediation for $1.25 million. Later believing that he settled for too little, Plaintiff then sued his former attorneys for malpractice claiming his attorneys forced him to accept the settlement against his wishes.
As the malpractice action proceeded to trial, defense counsel brought a motion in limine seeking to exclude the private conversations during the mediation between just Plaintiff and his counsel. Ruling that the communications were protected by the mediation confidentiality statutes in Evidence Code sections 1115 et seq., the trial court granted the motion and ruled that the conversations were inadmissible. Plaintiff sought a peremptory writ of mandate.
Writ granted. Under Evidence Code section 1119, communications made between participants and the mediator are confidential and inadmissible in order to encourage open and frank discussions, an essential requirement to effective mediation and settlement. However, since the lawyer and client are considered one �participant,� their private communications made outside the presence of opposing participants or the mediator, and solely between themselves, are not protected. Because Plaintiff and his attorney were considered the same participant, and since no other mediation participants or the mediator were present, such statements were not protected. Therefore, the trial court was directed to reverse its order granting the motion in limine since the statements were admissible.
The dissent would affirm the trial court and deny the writ. Evidence Code section 1119 does not limit itself to just statements made �for the purpose of a mediation.� Section 1119, subdivision (a), applies equally to statements or admissions made �for the purpose of a mediation.� In order to avoid statutory construction that would make those words unnecessary surplusage, mediation confidentiality must cover additional statements, not just those made �in the course of� the mediation proceeding itself. Therefore, private statements between the client and counsel developing strategy during the mediation would most certainly be �for the purpose of a mediation,� and thus protected.
The majority�s analysis may be founded on its concern that mediation confidentiality might shield lawyers from well-founded malpractice actions. However, because the Legislature must balance such competing public policy concerns, the dissent would enforce mediation confidentiality and rule the statements inadmissible. We may see this case again if the California Supreme Court grants review.
The additional cases and holdings are:
Laster v. AT&T Mobility LLC, ___ F. 3d ___ (9th Cir., Oct. 27, 2009), 2009 WL 3429559, (class action waiver in arbitration agreement is unconscionable where plaintiffs alleged that cell phone company maintained scheme to cheat them out of small sums via fraudulent advertising);
Toal v. Tardif, (Oct. 30, 2009, Fourth District, Div. Three), __ Cal. Rptr. 3d __, 2009 WL 3491065, (award resulting from arbitration agreement signed by attorney without client�s consent or ratification is invalid and cannot be confirmed by court); and
Balen v. Holland America Line, Inc., 583 F. 3d 647 (9th Cir., Oct. 2, 2009) (United Nations Convention on Recognition of Foreign Arbitral Awards allows claims under Seaman�s Wage Act to be arbitrated by foreign court).
The California Court of Appeal opinions may be viewed at: http://www.courts.ca.gov/opinions.htm; and the Ninth Circuit case at: http://www.ca9.uscourts.gov/opinions/.
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