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Litigation News
by: Michael Pott and John Whitefleet
The California Supreme Court recently reaffirmed that oral statements made during a mediation proceeding are inadmissible at trial. The case, Simmons v. Ghaderi (No. S147848, 7/21/2008), was based on a mediation dispute involving a medical malpractice action filed against a physician. During the mediation, the Defendant was represented by an attorney from her insurance company who she had given written authorization to settle the dispute for $125,000. However, after the Plaintiffs orally accepted the offer of $125,000, and while the settlement agreement was being reduced to writing, the Defendant seemingly had a change of heart, revoked her consent to settle, and left the mediation.
Plaintiffs, seeking to recover the $125,000, filed a breach of contract action against the doctor arguing that she was bound by the oral settlement agreement that her insurance company agreed to on her behalf during the mediation. At trial, Defendant argued that Plaintiffs were precluded from introducing any evidence regarding the mediation proceedings based on California's Mediation Confidentiality Statutes. However, the trial court disagreed and the Court of Appeals affirmed holding that there was an enforceable contract and that Defendant was barred from asserting mediation confidentiality since she had already offered into evidence information regarding what had happened during mediation.
On review, the California Supreme Court reversed. The Court pointed to the comprehensive nature of the confidentiality statutes as a clear indication of the Legislature's intent to limit the admissibility of communications made during mediation proceedings to the narrowly defined exceptions that are explicitly set forth by statute. The Court held that there are no implied exceptions to mediation confidentiality and, as a result, any communications made "for the purpose of or pursuant to a mediation" are inadmissible unless the parties have a signed, written agreement stating otherwise.
From a practical standpoint, it is important to remember that anytime mediation leads to a settlement, the material terms of that agreement should immediately be reduced to writing and signed by all the parties. Furthermore, if any of the information regarding the mediation may be relevant to a future proceeding, then the settlement agreement should include a provision that explicitly authorizes the disclosure of that information.
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