PARTY “ESTOPPED” FROM RELYING ON MEDIATION CONFIDENTIALITY

SIMMONS v. GHADERI

Court of Appeal

Second Appellate District, Division 3

Case No. B180735, Filed September 27, 2006

FACTS

            In this medical malpractice case the parties went to mediation but did not reach a written settlement agreement.  The doctor had provided her insurance carrier with her written consent to settle the case for the amount of $125,000.00.  An offer in that amount was transmitted to the plaintiffs, who accepted unconditionally.  While the settlement was being reduced to writing the doctor informed the claims representative that she was revoking her consent to settle and left the mediation.

            Plaintiffs amended their complaint to include a cause of action for breach of oral settlement contract allegedly reached at mediation.  The doctor moved for summary adjudication, arguing that there was no valid contract because she did not sign the written settlement agreement.  She acknowledged that (1) she had given her consent for the insurance carrier to settle the case; (2) her counsel had made a $125,000.00 settlement offer to the plaintiff; and (3) she revoked her consent without executing the settlement agreement.  The trial court denied the motion because the settlement offer had been accepted, the carrier was operating within the insured’s consent, and her authorization appeared to have completed a contract before she revoked her consent.

            When the case went to trial the doctor argued for the first time in her trial brief that any attempt to introduce evidence of discussions, purported agreements or any form of communication at mediation or thereafter was barred by mediation confidentiality.  Following trial to the court, it entered judgment in favor of plaintiffs in the amount of $125,000.00. 

The doctor appealed, arguing that mediation confidentiality prevented plaintiffs from introducing any evidence of the oral settlement agreement. 

HOLDING

The appellate court affirmed in a 2-1 decision.  It held that the doctor was “estopped” from relying on mediation confidentiality.  It reasoned that the relevant facts, i.e. her consent to settle, the offer, the acceptance and her subsequent revocation of consent were all admitted and that the sole dispute was as to their legal effect. The doctor had not until the filing of her trial brief challenged the admissibility of these facts or the trial court’s authority to receive the evidence and to determine its legal effect.  She had stated the facts in a declaration, argued them in her motion and asserted that they were undisputed in her separate statement.  Under these circumstances the view of the majority was that the evidence had not been “compelled” in violation of Evidence Code, Section 1119.

            The court acknowledged that the California Supreme Court has precluded any judicially created exceptions to the mediation confidentiality statutes, but it disclaimed any intent to create such exception.  “We simply prevent a litigant from tardily relying on mediation confidentiality to shield from the court facts which she had stipulated to be true and had extensively litigated without raising such bar.”

            There was a lengthy dissent, pointing out among other things that for plaintiffs to prove the oral agreement, they would have had to meet the explicit requirements of the exceptions in Evidence Code §1118 and §1124, which provide that an oral agreement at mediation can be enforced only if it has been memorialized in the manner specified by statute.  These statutes are part of the overall scheme of mediation confidentiality and are intended to prevent inquiry into settlement negotiations that may or may not have come to fruition.

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