Court Scales Back Secrecy Of Mediation

February 28, 2000

Litigants' confidentiality rights during a court-ordered mediation session are trumped when their attorneys act in bad faith, the Second District Court of Appeal ruled Friday.

Discussions in front of mediators are inadmissible at trial. But a mediator is allowed to inform a judge when one of the participants acts badly, the court said.

"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 majority. "Without that, there will be few if any confidential statements to protect. These evidentiary privileges were enacted to promote and encourage mediation.

"We do not believe the Legislature intended them as immunity from sanctions, shielding parties to court-ordered mediation who disobey valid orders governing their participation in the mediation process, thereby intentionally thwarting the process to pursue other litigation tactics."

Justice Orville Armstrong joined Godoy Perez. Justice Paul Turner wrote a concurring opinion.

Foxgate Homeowners Association Inc. v. Bramalea California Inc., B124482, started as a construction defect claim in Los Angeles Superior Court in 1997. Soon after the case was filed, the trial judge ordered the parties to attend mediation in front of retired Judge Peter Smith.

Smith ordered the parties to appear with their expert witnesses for five days of mediation. While Foxgate's lawyers and nine experts showed up on the first day of mediation, only Ivan Stevenson, Bramalea's lawyer, showed for the defendants. Smith held one mediation session and canceled the rest because of Stevenson's unwillingness to bring his expert witnesses.

Smith filed a report with the trial court complaining that "Mr. Stevenson's real agenda was to delay the mediation process so he can file a motion for summary judgment.... As a result of Mr. Stevenson's obstructive bad faith tactics, the remainder of the mediation sessions were canceled at a substantial cost to all parties." Smith ended his report with his resignation.

Former Superior Court Judge Daniel Curry -- now of the Second District, Division Four -- subsequently sanctioned Stevenson $30,000 for his actions at mediation. Stevenson appealed, arguing that it is illegal for anything said or done in mediation to be later used in court. Further, California law explicitly bars mediators from submitting reports to judges.

But Godoy Perez said that provision is trumped by bad faith.

"If the mediator or an aggrieved party cannot tell the court about another party's sanctionable conduct, it is hard to imagine who else would do so," Godoy Perez wrote. "There is more at stake here than monetary sanctions, however. What if a party to a particularly fractious and emotional dispute attacked of threatened an opposing party or counsel during a mediation session?"

Ironically, the appeal court ordered the sanction reversed. Godoy Perez said Curry screwed up by failing to issue a written order on the matter.

"As a result, reversal and remand are required so the trial court may either prepare an appropriate written order or vacate its award sanctions," Godoy Perez wrote.