ADR Case Updates
Bad Facts Make Bad Law - Court Ignores Mediation Confidentiality, 10/22/06
In the recent and attached case of Simmons v. Ghaderi, filed September 27 2006 (2006 DJDAR 13065), a split Appellate panel affirmed a trial court judgment enforcing an oral settlement agreement reached at mediation. The majority held that the mediation confidentiality statutes (Evidence Code, § 1115 et seq.) did not prevent the Plaintiff from introducing evidence of the oral settlement agreement even though there was no admissible evidence of an oral contract.
The case was a medical malpractice wrongful death action against Dr. Ghaderi. The parties attended mediation. Dr. Ghaderi had given her malpractice carrier written authority to settle for up to $125,000. The carrier settled the case for that amount. When informed of the settlement in the other room, Dr. Ghaderi said, "Good, because I am revoking my consent," and left the mediation. Plaintiff then amended the complaint to allege the oral agreement. The trial court severed the breach of contract claim, allowed Plaintiff to introduce evidence of the oral settlement agreement reached at mediation over Defendant's confidentiality objections, and entered a $125,000 judgment for Plaintiff.
Affirmed. Because Dr. Ghaderi did not raise the confidentiality objections until the trial when she realized the facts were unfavorable to her position (she had not disputed the events at mediation in pre-trial motions), the majority concluded that she was estopped from relying on mediation confidentiality. The dissent, however, concluded (correctly in my opinion) that mediation confidentiality prohibits the admission into evidence of statements made at mediation unless specific statutory exceptions are met, none of which were established here.
This decision demonstrates the old law school adage that bad facts make bad law. The majority's opinion may "feel good" because Dr. Ghaderi was not allowed to thwart the settlement, but such an approach would encourage a flexible approach to the statutes and erode the confidentiality protections that are crucial to successful mediations. Effective mediation depends on candid and confidential communication between the parties and mediator, which is less likely to occur if parties fear that their statements may be used against them in subsequent litigation. I predict we will see this case again when it is reviewed by the California Supreme Court.
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