Confidential or Not? Exploring the Admissibility of Settlement Discussions.
| Jurisdiction | California,United States |
| Author | Justin M. O'Connell |
| Publication year | 2017 |
| Citation | Vol. 39 No. 2 |
Justin M. O'Connell
Justin M. O'Connell is a partner at Cavassa O'Connell, located in Monterey, California, where his practice includes family law and civil litigation. Mr. O'Connell is a Certified Family Law Specialist, and served as a Commissioner on the California State Bar Family Law Advisory Commission from 2012 to 2015. He has been the professor of Property Law at the Monterey College of Law since 2007, and a member of the Alternative Dispute Resolution Executive Committee for the Monterey
Settlement negotiations, whether in the context of a mediation or outside of mediation, are essential to litigation. Courts encourage settlement of issues either directly between parties and/or counsel or through the use of alternative dispute resolution. Indeed, parties are statutorily required to communicate—to "meet and confer"—regarding most discovery disputes prior to bringing discovery motions. The psychological motivations for resolution are usually strong because most people want a voice in determining how their lives will unfold. Because of the policies encouraging private dispute resolution and the financial and personal costs associated with litigation, the majority of family law and civil cases are resolved through settlement.
The underlying purpose of settlement negotiations is to arrive at a satisfactory agreement, but lawyers should be aware of the evidentiary pitfalls of such negotiations. After all, not all negotiations resolve an entire case, and often issues remain to be litigated after settlement of part of the case. Lawyers should be aware of how the content of settlement negotiations could later be used as evidence in the remainder of the case, or even in other cases, as will be seen.
Lawyers have seemingly become comfortable in the belief that settlement communications hold a revered, sacrosanct, and protected status in our evidentiary system. They have faith that settlement communications are inadmissible, and that they have a "free pass" to communicate with the opposing party, or opposing counsel, without fear that the settlement negotiations could be admitted into evidence. As will be discussed in this article, this is a false notion. There is no blanket, absolute rule of inadmissibility of settlement communications, and it is incumbent on lawyers to know what is and what is not an admissible settlement communication. Likewise, lawyers should know what is and what is not a discoverable settlement communication. This article will look at statutory framework, case law, and underlying policies of these issues and explore settlement negotiations in the context of communications made both in and outside of mediation.
Division 8 of the Evidence Code ("Privileges") contains the statutorily defined evidentiary privileges, including the attorney-client privilege. Privileges are designed to protect communications between people in particular types of relationships and make the content, and possibly even the circumstances, of the communication both inadmissible and non-discoverable.
Division 9 of the Evidence Code ("Evidence Affected or Excluded by Extrinsic Policies") identifies evidence that is excluded for public policy reasons. Evidence Code sections 1115 through 1128, encompassing the so-called "mediation privilege," are found in Division 9. The "mediation privilege" is not a statutorily defined privilege. It operates somewhat like a privilege in practice, but in other ways it is unlike a privilege. Like the true Division 8 privileges, the "mediation privilege" protects communications made in the context of a particular relationship between persons, and renders them both inadmissible and non-discoverable. In contrast to the true, statutorily defined privileges, however, the mediation confidentiality statutes do not create a "privilege" in favor of any particular person, and cannot be impliedly waived. The mediation confidentiality statutes govern only the narrow category of mediation-related communications and are designed to provide maximum protection for the privacy of communications in that context.
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Mediation confidentiality carries out a policy of promoting a candid and informal exchange regarding facts and legal theories. Such an exchange is achieved only when the participants know that what is communicated in the mediation will not be used to their detriment in later court proceedings. The mediation process allows parties to openly discuss their case both with the mediator and each other. Agreement might be impossible if the mediator cannot overcome the parties' wariness about confiding in each other during mediation.1
Lawyers practice with the notion that the mediation veil cannot be pierced to reveal the communications that occurred during the mediation. That is a well-founded belief, but requires the existence of foundational facts: that 1) mediation occurred; and 2) the communication was "for the purpose of, in the course of, or pursuant to" the mediation. Such communications are protected from discovery and admissibility only when those foundational facts exist.
A. What is Mediation?This seems like an easy enough question to answer, since most litigators have experience with mediation in some way. But can the term actually be defined? Anyone who has participated in more than one mediation knows that there is no set format, no set way to handle parties or counsel, and no set way to review briefs and facts, but there is one universal understanding: What is said in mediation stays in mediation.
Evidence Code section 1115(a) 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." One might say, "Well that's nice, but what facts must be present to indicate that a mediation is underway?" The Law Revision comment to section 1115(a) indirectly addresses that question by focusing on the policy underlying mediation, rather than on formalities:
To accommodate a wide range of mediation styles, the definition is broad, without specific limitations on format. For example, it would include a mediation conducted as a number of sessions, only some of which involve the mediator. The definition focuses on the nature of a proceeding, not its label. A proceeding may be a "mediation" for purposes of this chapter, even though it is denominated differently.
However broad the definition of "mediation" was intended, the Legislature specifically excluded settlement conferences from the definition.2
In Eisendrath v. Sup. Ct., 109 Cal. App. 4th 351 (2003), a spousal support case, the court found that Evidence Code section 1119, which deals with confidentiality, encompasses communications by participants outside the presence of the mediator. The record is not clear about the timing of the mediation sessions, but husband claimed that the communications with his wife outside of the mediator's presence occurred "during the time period mediation was proceeding." As is common practice in family law mediation, the discussion might have occurred between mediation sessions. Applying the plain language of Evidence Code sections 1119 & 1121, the court found that a "mediation" was still in progress even though the parties were not in a mediator's presence when they discussed their settlement. It further found that the communications were materially related to the purpose of the mediation, so they were neither admissible nor discoverable. The two foundational elements were met to veil the communications with confidentiality.
In addition to recognizing the imprecise definition of mediation, Eisendrath distinguished mediation communications from privileged communications that fall under Division 8 of the Evidence Code. The confidentiality of privileged communications can be impliedly waived by the conduct of the holder of a privilege, such as where a client discloses advice from her attorney. However, the court noted that there is no way to impliedly waive the protection of mediation confidentiality. To the contrary, Evidence Code section 1122 requires an express waiver of confidentiality by all participants in mediation.
Eisendrath demonstrates that a mediation is not subject to a precise, temporal definition, but rather is a fluid concept. As stated in Civil Code section 3528: "The law respects form less than substance." Returning to the Law Revision Commission comment regarding the definition of a "mediation," it seems that court should properly cast a wide confidentiality net to include most discussions about a disputed issue so long as it appears that parties are contemplating further discussions with a...
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