THE CALIFORNIA MEDIATION PRIVILEGE

Suzanne Harris and David Marcus

As most family law practitioners already know, mediation can be a very effective and

powerful method to settle dissolution of marriage cases. Mediation allows for flexibility

in resolving a case, and typically results in far less attorneys fees to the parties than

does litigation. In addition to these advantages, there is one consequence of a

settlement reached in mediation which may be an advantage or disadvantage,

depending on the circumstances of the case. As will be explained below, because all

statements made in the course of mediation are confidential, setting aside an

agreement reached during mediation can be an extremely difficult, and sometimes an

impossible task.

The rules governing mediation in California are contained in several statutes, and in

case law interpreting those statutes. The key concept regarding mediation is

confidentiality. In very broad terms, all statements made in connection with mediation

can be precluded from introduction as evidence at a hearing unless both parties

explicitly waive mediation confidentiality. The mediation rules are, in reality, rules of

evidence, which is why they are set forth in the California Evidence Code.

* Suzanne Harris, Esquire is a partner with the Los Angeles, California family law firm of Harris · Ginsberg LLP

and David Marcus, Esquire is an associate with the firm. Ms. Harris may be contacted at sharris@harris-

ginsberg.com. Mr. Marcus may be contacted at dmarcus@harris-ginsberg.com.

These rules providing that statements made in the course of mediation are confidential

have become known as the “mediation privilege.” In a strict sense, the “mediation

privilege” is not actually an evidentiary privilege. The statutes concerning mediation

confidentiality never refer to a “privilege,” and the true privileges, such as the attorney-

client privilege, are contained in a different portion of the California Evidence Code.

Because the evidentiary rules governing mediation are so commonly referred to as the

“mediation privilege,” however, this article will employ that term.

The mediation statutes are contained at California Evidence Code Section 703.5, and in

Sections 1115 to 1128. An attorney involved in mediation in California is advised to

review these sections, which are highlighted in this article.

As noted above, the heart of the mediation privilege is confidentiality. Essentially, by

statute, the only statement or writing made in connection with mediation which can be

disclosed without the express consent of both parties is the agreement reached during

the mediation itself. Except for limited exceptions created by the courts, nothing else

said or written during or in the course of the mediation, or for the purpose of the

mediation, can be received in evidence, compelled in discovery, or compelled as

testimony in any proceeding. (California Evidence Code Section 1119; 1121, 1123).

One case, In re Marriage of Eisendrath (2003) 109 Cal. App. 4

351, summarized the

confidentiality provisions of mediation as follows:

“Section 1119 states the fundamental rule regarding confidentiality of

mediation communications. It provides: ‘(a) No evidence of anything said

or any admission made for the purpose of, in the course of, or pursuant to,

a mediation or a mediation consultation is admissible or subject to

discovery, and disclosure of the evidence shall not be compelled, in any

… civil action … in which, pursuant to law, testimony can be compelled to

be given. [¶] … [¶] (c) All communications, negotiations, or settlement

discussions by and between participants in the course of a mediation or a

mediation consultation shall remain confidential.”

A party cannot, however, utilize mediation to protect from discovery otherwise

discoverable evidence. (California Evidence Code Section 1120). In other words, if a

party sends a document to the mediator, and that document would be discoverable in

the absence of the mediation, the document remains discoverable.

Interestingly, a code section exists specifying when a mediation ends, but not when it

commences. For this reason, it is prudent for the parties and their attorneys to enter

into an agreement explicitly stating that they will engage in mediation with a specified

mediator to resolve some or all issues pending in their family law case. The agreement

should also specify when the mediation commences. Most mediators provide some

form of engagement agreement which will usually suffice for the purpose of that

determination.

Some guidance regarding this issue is found in the Section 1115(a), which defines

“mediation” as “a process in which a neutral person or persons facilitate communication

between the disputants to assist them in reaching a mutually acceptable agreement.”

So, a fairly straightforward agreement to establish the commencement of a mediation

could simply be that “Husband and Wife will retain retired Judge Smith, a neutral person

with no affiliation with either party or his or her attorney, to facilitate communication

between Husband and Wife to assist them in reaching a mutually acceptable

agreement. The parties intend the mediation to be ‘mediation’ governed by California

Evidence Code Section 1115 et. seq.”

When the mediation ends is governed by Section 1125. Mediation ends, when (a) the

parties sign a written settlement agreement that fully or partially resolves the dispute, (b)

an oral agreement made in accordance with Section 1118 (recorded by a court reporter

with joinder by all parties and counsel and reduced to writing within 72 hours) is reached

that fully or partially resolves the dispute, (c) the mediator signs and sends a statement

to the parties that the mediation is terminated (without resolution), (d) a party provides

written notice to the mediator and to the other party that the mediation is terminated

(without resolution), (e) for ten calendar days there is no communication between the

mediator and either of the parties related to the mediation, however this time period may

be shortened or extended by agreement.

While many of these terminating conditions are obvious, counsel should be particularly

mindful of the ten day rule. If the mediation takes place over an extended period of time,

counsel should agree to extend this ten day period as appropriate. It is also prudent not

to entirely rely upon the passage of time to indicate that the mediation has ended. If

one party desires to end mediation, the careful approach is to send written notification to

the mediator and to the other party that the mediation had ended.

Sometimes in mediation the parties reach an agreement, but for certain reasons the

agreement is not put into a signed writing. For example, the parties, attorneys or the

mediator may be too exhausted from a full day of mediation to prepare a the writing

reflecting the agreement. Section 1118 provides very strict rules for the enforceablity of

an oral agreement reached in mediation. All of the following conditions must be met:

“(a) The oral agreement is recorded by a court reporter, tape

recorder, or other reliable means of sound recording.

(b) The terms of the oral agreement are recited on the record in the

presence of the parties and the mediator, and the parties express on the

record that they agree to the terms recited.

agreement is enforceable or binding or words to that effect.

(d) The recording is reduced to writing and the writing is signed by the

parties within 72 hours after it is recorded.

It is advisable to at least bring an audio recorder to the mediation sessions, and to

ensure that each of these procedural requirements are met. The most reliable method

of proving that the parties and the mediator were present when the agreement was

recited is to videotape the recitation of the agreement.

With regard to calling the mediator as a testifying witness, California Evidence Code

Section 703.5 provides (with certain exceptions not applicable here) that “no arbitrator

or mediator shall be compelled to testify, in any subsequent civil proceeding, as to any

statement, conduct, decision, or ruling, occurring at or in conjunction with the

[mediation]...” Nevertheless, the courts have grafted two non-statutory exceptions to

this provision, discussed below.

In a recent landmark opinion on the mediation privilege, California’s highest Court, the

California Supreme Court, held in Simmons v. Ghaderi (2008) 44 Cal. 4

570, that a

waiver of the mediation privilege could not be implied from a disclosure of statements

made during the mediation. A waiver of the confidentiality assured by the mediation

privilege must be explicit, joined in by both parties and must adhere to all statutory

procedural formalities. In the Simmons case, plaintiff claimed that an oral agreement

was reached during mediation, but the procedural requirements of Section 1118 were

not satisfied. Plaintiff sought to enforce the alleged oral agreement. During

subsequent litigation, the defendant disclosed statements which were made during the

mediation, but later sought to exclude from evidence other statements made during

mediation. Plaintiff argued that defendant impliedly waived the mediation privilege by

disclosing in that proceeding certain statements made during mediation. The Supreme

Court held that defendant did not waive the privilege, which could only be waived by an

explicit waiver. Voluntary disclosure of statements made during mediation, absent an

express waiver, does not constitute a waiver of the mediation privilege.

The Simmons v. Ghaderi opinion stated that only two exceptions existed to compel a

mediator to testify. One is where both parties explicitly waived the privilege. The

second is when disclosure is needed to protect a constitutional due process right. Since

neither exception existed in that case, the mediator could not be compelled to testify.

The Simmons v. Ghaderi case cited with approval another mediation privilege case in a

family law context, Marriage of Eisendrath (2003) 109 Cal. Appl 4

351. In Marriage of

Eisendrath the husband claimed that an agreement he signed, which was reached

during mediation, did not accurately set forth the true agreement of the parties. The

husband’s position was somewhat sympathetic. The agreement stated that the support

he was to pay would not be tax-deductible to him. He claimed that he overlooked this

provision, and that the support was supposed to be tax-deductible. The agreement also

provided that if the wife remarried, support would continue for a duration and in an

amount to be determined by wife. The husband claimed that this was a mistake, and

that he, not wife, was supposed to have this decision-making authority.

There are two code sections in California law which allow a party to seek relief from a

stipulated order or judgment entered into by mistake. (California Civil Procedure Section

473(b) and/or California Family Code Section 2122(e).) Husband brought a motion to

modify the agreement based on his version of what was agreed to during the mediation.

The court found that husband’s motion “relies wholly, or in large measure, on

confidential mediation communications that are admissible only with the parties’ express

consent.” The court held that absent express waivers from both parties of the mediation

privilege, no evidence of what transpired during the mediation could be admitted into

evidence. This effectively doomed husband’s case. The court in Eisendrath noted that

this rule “gives [wife] a substantial measure of control over [husband’s] ability to present

evidence.” The court justified this ruling, unfair as it was in application in Eisendrath, as

following from the plain meaning of the applicable statutes, and an assumption that the

Legislature which wrote the statutes was aware of and intended this outcome.

The mediation privilege is so protected, it even prevents disclosure of (non-criminal)

sanctionable misconduct. (Foxgate Homeowners’ Assn. v. Bramalea California, Inc.

(2001) 26 Cal. 4

1.)

One of the most important family law cases concerning the mediation privilege is In re

Marriage of Kieturakis (2006) 138 Cal. App. 4

56. This is a lengthy opinion, points of

which can only be touched upon in this article. The Court in Kieturakis enunciated

rules significantly enhancing the enforceability of settlement agreements reached in

mediation. The case involved a rule developed under California family law cases

whereby an agreement which advantages one spouse is presumed to have been

procured by undue influence. As an agreement procured by undue influence is invalid,

unless the party seeking enforceablity can overcome that presumption, spouses

entering into agreements advantaging one spouse over the other will find such

agreements unenforceable in California.

The Kieturakis case pitted the presumption of spousal undue influence against the

mediation privilege. As will be seen, the mediation privilege trumped the presumption of

undue influence. The court held that this presumption of undue influence between

spouses does not apply to agreements reached by spouses in mediation. If, therefore,

spouses mediating their family law matter reach an agreement during mediation, a

spouse (even a spouse disadvantaged by the agreement) who desires to set the

agreement aside, bears the burden of proving the facts to justify setting the agreement

aside and, further, cannot rely on any facts relating to the mediation itself.

In Kieturakis the wife and husband reached a written settlement agreement in

mediation. The agreement was merged into a Judgment. Approximately two years after

the agreement was signed, the wife brought a motion to set aside the Judgment and the

underlying agreement based on alleged fraud, duress and lack of disclosure. Among

various claims, the wife stated that “she acted under tremendous pressure” from the

husband to sign the agreement. She claimed that the husband reacted with

uncontrolled anger and threats when he learned that she retained an attorney. Because

of these threats, she alleged, she attended the mediation without her attorney. She

stated that she could not remember most of the mediation, cried during parts of the

mediation, and “just wanted it to end.” She claimed that when she met with her

attorney prior to the mediation, she could not remember most of the details regarding

the parties’ assets. Her attorney testified that the wife was clearly intimidated by her

husband. A psychologist and psychiatrist interviewed the wife and they testified on her

behalf that, essentially, she was depressed, insecure, and easily influenced by other

people.

Husband presented the testimony of a psychologist to refute wife’s experts. He also

presented oral testimony and written evidence from the mediator (over the mediator’s

objection) refuting wife’s claims that husband failed to disclosure the amount of royalties

he could receive in the future from an invention of his.

In the agreement, husband was awarded, without any offsetting payment to wife, his

medical practice, his business, and the future royalties from a product he invented

during the marriage. The court found that “there is no dispute that the [agreement]

favored [husband].”

The trial court found that because the agreement benefitted the husband, it was

presumed invalid, and that it was husband’s burden to offer evidence to defend himself.

At the trial, the wife had refused to waive the mediation privilege, seeking to prevent the

husband from introducing any evidence in his defense of what transpired during the

mediation. The trial court would not allow wife’s claim of the mediation privilege to

prevent husband from offering this evidence. Instead, the trial court allowed the

husband, over the wife’s objection, to introduce evidence of what transpired during the

mediation, including evidence from the mediator. The trial court ruled that the

husband’s evidence defeated the wife’s claim, that he had met his burden of proof, and

ruled that the agreement was enforceable.

The Court of Appeal held that the trial court erred in permitting husband’s evidence to

come in over wife’s objections and that the mediation privilege trumped the undue

influence presumption. As the wife did not waive the mediation privilege, it reasoned,

then none of hudband’s evidence of what transpired during the mediation should have

been admitted at the hearing. (In holding that the presumption of undue influence was

outweighed by the mediation privilege, however, the Court of Appeal concluded that the

trial court should not have placed the burden of proof on husband, that instead wife

carried the burden of proof and that, indeed, wife did not meet her burden.)

The opinion presents three reasons why the undue influence presumption must bend to

the mediation privilege. First, the Court reasoned, the presumption does not apply to

mediated agreements because mediators, by definition, work to balance any

imbalances in negotiating skills between the parties, and to minimize any actual undue

influence. In this case, the trial court erred when it admitted evidence of the mediation

over wife’s objection. There are virtually no exceptions to the mediation privilege: either

both parties waive the privilege, or no evidence of what transpired during mediation is

admissible. In light of this rule, applying the presumption of undue influence would

mean that any party to an unequal agreement could claim the mediation privilege, and

automatically prevail because the other party would be prevented from offering any

evidence to overcome the undue influence presumption. This result is contrary to the

policy of the law to promote mediation. The court recognized that its holding advantages

parties defending a mediated agreement, but that was a price it was willing to pay to

uphold mediated agreements.

Second, because several years had passed since the agreement was signed, the policy

of the law favoring finality of judgments puts the burden of proof on the party seeking to

set aside an agreement.

Third, the agreement stated that the parties entered into it “fully aware of the contents,

legal effect and consequences of this agreement and its provisions.” It also state that

the parties entered into it “voluntarily, free from duress, fraud, undue influence, coercion

or misrepresentation of any kind.” Although these provisions could themselves be the

product of undue influence, a court should give them at least some meaning. It was the

wife’s burden to prove the undue influence in light of these recitals in the agreement.

Finally, at the end of the opinion the court made an intriguing statement. The court

stated that it offered no opinion as to whether a mediator’s testimony could be

compelled (over the objection of the mediator) even if both parties waived the mediation

privilege. That issue is left for another day.

Another interesting aspect of the mediation privilege was raised in a very recent case,

Cassel v. Wasserman, Comden, Casselman & Pearson, L.L.P. (2009) 179 Cal .App. 4

152. In Cassel, client sued its attorneys for malpractice. (This case is subject to

possible further appellate review.) The client claimed that his attorney forced him to

accept a settlement lower than the amount he instructed his attorneys to accept. The

attorneys argued that, pursuant to the mediation privilege, all evidence of conversations

between the attorney and the client, held outside of the presence of the other party or

the mediator, are inadmissible in the malpractice action. The Court of Appeal ruled in

favor of the client. The court reasoned that the attorneys “failed to demonstrate a

sufficiently close link between the communications and the mediation to require

application of mediation confidentiality to the communications.” The dissent argues that

the communications should be protected because they were clearly made for the

purpose of the mediation. The majority opinion, according to the dissent, “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.” Instead of creating a “malpractice” exception

to the mediation privilege, the proper recourse is to request the Legislature to create a

“malpractice” exception to the mediation privilege. Until then, for so long as the Cassel

opinion remains valid law, the attorney should be aware that all discussions between an

attorney and client could be admissible evidence if the client brings a malpractice action

against the attorney.

CONCLUSION

Mediation is a powerful tool to resolve cases in an efficient manner. The client should

be cautioned, however, that because of what has been called the “super-privilege”

afforded the mediation process, he or she will likely forfeit the ability to set the

agreement aside. Despite these disadvantages, the benefits to mediation in most

cases will outweigh the cost of litigation or attempting to settle a case without the

assistance of a mediator.