ADR Case Updates
Mediator Cannot Testify, 10/04/2010
California and Federal Courts have rendered the following recent decisions regarding Alternative Dispute Resolution:
A more detailed summary and analysis is below.
In Radford v. Shelhorn (Aug. 19, 2010, Second District, Div. Six), 187 Cal. App. 4th 852, Radford filed a petition in probate challenging Shelhorn�s distribution of trust assets. The parties were ordered to mediation, where they reached a settlement that was reduced to a two-page agreement signed by both parties. The first page of the agreement contained a waiver of mediation confidentiality, and the second page included the substantive provisions of the settlement.
Later, Radford claimed she was not bound by the agreement and argued that the first page was not a part of the agreement. Shelhorn filed a motion to enforce the settlement agreement under Code of Civil Procedure section 664.6, and submitted declarations, including one signed by the mediator, in support of the motion. The trial court found that page one was a part of the settlement agreement, and granted the motion to enforce the settlement. Radford appealed and argued that the mediator�s testimony was barred by Evidence Code sections 703.5 (�no � mediator shall be competent testify��) and 1121 (mediator may not submit any �report, assessment, evaluation, recommendation, or finding of any kind�).
Affirmed. While the trial court erred in admitting the mediator�s testimony, the error was harmless since the court also considered the declarations of Shelhorn and her attorney. Evidence Code section 1119 allows such testimony of non-communicative conduct � that Radford signed a settlement agreement consisting of two pages. Indeed, Radford�s own declaration contained probative evidence that supports a two page agreement. Thus, the record contains sufficient evidence - absent the mediator�s declaration � to support the trial court�s finding that the settlement agreement contained two pages.
In Ruiz v. Podolsky (Aug. 23, 2010, Cal. Supreme Court), 50 Cal. 4th 838, the decedent signed a �Physician � Patient Arbitration Agreement� after visiting his orthopedic surgeon�s office for treatment of a fractured hip. The agreement provided for arbitration of all medical malpractice claims, including wrongful death claims, and stated that the parties intended the agreement to bind all parties whose claims arise out of or relate to treatment. Complications arose after the surgery resulting in decedent�s death. His surviving spouse and adult children brought a wrongful death action. Defendants moved to compel arbitration. The trial court granted the motion as to the spouse, but denied the motion as to the adult children. The Court of Appeal affirmed the trial court, and Defendants petitioned for review.
Reversed and Remanded. Code of Civil Procedure section 1295, authorizing arbitration of medical malpractice claims, was enacted as part of the Medical Injury Compensation Reform Act of 1975 (MICRA), in response to a perceived crisis regarding the availability of medical malpractice insurance, and is to be construed liberally. Under section 1295, patients and healthcare providers may enter into arbitration agreements subject to certain disclosures. The statute does not distinguish between malpractice claims asserted by a patient, the patient�s estate, or wrongful death claims brought by heirs. Therefore, consistent with the public policy underpinnings of MICRA, all medical malpractice claims � even claims brought by heirs that never signed the arbitration agreement � are subject to arbitration where the language of the agreement manifests such intent. Thus, decedent�s surviving spouse and adult children are subject to the arbitration provision and must arbitrate their claims against Defendants.
In Haworth v. Superior Court (Ossakow) (Aug. 2, 2010, Cal. Supreme Court), 50 Cal. 4th 372, Plaintiff asserted medical malpractice against her physician for performing plastic surgery on her lip. Pursuant to an arbitration agreement between the parties, the matter was submitted to arbitration. The arbitrator found in favor of the physician. Two months later, Plaintiff learned that the arbitrator had been publically censured as a judge in 1996 for engaging in �conduct prejudicial to the administration of justice, specifically for making sexual and ethnic jokes and slurs. Plaintiff moved to vacate the award under CCP section 1281.9, since the arbitrator had not disclosed a matter affecting his impartiality. The trial court agreed and the appellate court affirmed.
Reversed. Under section 1281.9, a proposed arbitrator must disclose all matters that could cause a reasonable person aware of the facts to reasonably entertain doubt that the arbitrator could be impartial. As a judge, the arbitrator�s conduct created an overall courtroom environment disrespectful toward staff members. Nevertheless, nothing in the censure would suggest to a reasonable person that the arbitrator could not be fair to a female litigant. His past actions were taken in an �ostensibly joking manner.� There was no evidence of intent to cause embarrassment or injury, or to coerce, vent, anger, or inflict shame. Specifically, there was no indication that the arbitrator�s conduct would cause him to favor a male physician over a female patient. Therefore, the trial and appellate court erred in finding to the contrary.
IN ADDITION, THE FOLLOWING ADDITIONAL CASES HOLD:
Johnson v. Gruma Corp., 614 F. 3d 1062 (Ninth Cir., Aug. 13, 2010, Arbitrator need not disclose his wife�s past relationship with party�s counsel);
Greenwood v. Compucredit Corporation, ___ F. 3d ___, 2010 WL 3222415 (Ninth Cir., Aug. 17, 2010, Arbitration provision in credit card agreement is void under Credit Repair Organization Act);
Critzer v. Enos (Aug. 30, 2010, Sixth District), 187 Cal. App. 4th 1242 (Court lacks authority to enforce settlement under Code of Civil Procedure section 664.6 where only three of five parties gave personal consent on the record to settlement);
Cotchett, Pitre & McCarthy v. Universal Paragon Corporation (Aug. 31, 2010, First District, Div. Five), __ Cal. Rptr. 3d __, 2010 WL 3637239 ($7.5M in attorney fees and expenses awarded by arbitrator based upon percentage of property value stipulated by agreement between parties is not unconscionable);
Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., ___ F. 3d ___, 2010 WL 3584060 (Ninth Cir., Sep. 16, 2010, Enforcement of arbitration clause is question for court to decide, and not arbitrator, when challenge to arbitration clause is independent of allegations of invalidity of entire contract); and
Polimaster Ltd. v. RAE Systems, Inc., ___ F. 3d ___, 2010 WL 3768064 (Ninth Cir., Sep. 28, 2010, District Court errs in confirming award based upon arbitration that was not conducted at Defendant�s site in Belarus, contrary to parties agreement).
The California opinions are posted at: http://www.courts.ca.gov/opinions.htm; and the Ninth Circuit opinions at: http://www.ca9.uscourts.gov/opinions/.
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