Justices Take Up Mediation Privilege

Bad faith exception

The California Supreme Court agreed Wednesday to decide whether litigants in court-ordered mediations are entitled to confidentiality even if their attorneys act in bad faith.

Six justices voted to review a Second District Court of Appeal decision that said a mediator can breach the usual confidentiality and inform a judge when a party's bad faith results in the cancellation of settlement talks.

In urging the court to take the case, the petitioner's attorney said the decision turns mediation into an "antagonistic contest" where the mediator's least-favorite party can be punished.

The case, Foxgate Homeowners Association v. Bramalea California Inc., S087319, began in 1997 as a construction defect claim in Los Angeles Superior Court, where it was sent to mediation in front of retired Judge Peter Smith.

Smith ordered both parties to appear with their expert witnesses for five days of mediation. While Foxgate's lawyers and nine experts showed, only Bramalea's attorney, Ivan Stevenson, was on hand for the defense.

Smith filed a report with the trial court accusing Stevenson of delaying the mediation process. The mediation was cancelled and the trial judge sanctioned the lawyer to the tune of $30,000.

Stevenson appealed, arguing that anything said or done in mediation is confidential and can't be used in court. He also argued that California law bars mediators from submitting reports to judges.

The Second District disagreed, saying the Legislature didn't intend to protect parties who attempt to thwart the mediation process.

"Confidentiality is essential to make mediation work, so too is the meaningful, good faith participation of the parties and their lawyers," Justice Ramona Godoy Perez wrote for the court. "Without that, there will be few if any confidential statements to protect."

Perez was joined by Justice Orville Armstrong and Presiding Justice Paul Turner, who wrote a separate concurring opinion. However, the panel reversed the sanctions order, saying the judge had erred in issuing a written report.

Stevenson's lawyer, Jeffrey Boyle, argued in his petition that the Second District impinged upon the power of the Legislature when it created an exception to the confidentiality provision.

"Judge Smith's report, which blamed the cancellation of the September 1997 mediation upon appellants, and the subsequent act of the trial court issuing sanctions based upon that privileged information, are textbook examples of violations of the mediation privilege," Boyle wrote.

All but Chief Justice Ronald George voted to take up Foxgate.

General Practice, Solo, and Small Firm Section (GPSSFS) home page | ABA Network home page