Court of Appeal Finds that Mediation Confidentiality Does Not Protect Attorney-Client Communications

In Porter v. Wyner (Cal.App. 2 Dist., April 08, 2010) --- Cal.Rptr.3d ----, 2010 WL 1382368, the Court of Appeal considered whether the mediation privilege cvers communications between attorney and client made in the course of a mediation. The Court described the dipuste as follows:

Wyner Tiffany had previously represented the Porters in a separate lawsuit brought by the Porters against the Manhattan Beach Unified School District and the California Department of Education. The instant lawsuit arose as a result of Wyner Tiffany's failure to follow through on a promise that was allegedly made to the Porters during a mediation of that underlying action wherein Wyner Tiffany promised to pay the Porters certain proceeds from their attorneys' fees. Though Wyner Tiffany initially objected to the admissibility of the communications made during the mediation of the underlying lawsuit, they later withdrew the objection. At trial, evidence of the communications between Wyner Tiffany and the Porters with respect to the promises made at the mediation were admitted. Approximately a month after the trial court entered judgment, it granted a motion for new trial because it believed the then newly decided case of Simmons v. Ghaderi (2008) 44 Cal.4th 570, 80 Cal.Rptr.3d 83, 187 P.3d 934 (Simmons), mandated such a result.

Appellants claim the trial court erred in granting the new trial, as the communications between an attorney and its client do not fall within the purview of mediation confidentiality. Wyner Tiffany contend the trial court properly granted their motion for a new trial because the jury's consideration of confidential mediation communications created an irregularity in the proceedings statutorily mandating a new trial. Wyner Tiffany also cross-appeal, contending the trial court erred in ruling their motion for a judgment notwithstanding the verdict (JNOV) was moot.

Slip op. at 1.

A split Court of Appeal panel held that communication between attorney and client do not fall within the protection of mediation confidentiality. After reviewing the confidentiality provisions of Evidence Code Section 1119, et seq., the Court held:

The purpose, policy and intent behind mediation confidentiality is to protect the free flow of communication and ideas (e.g.demands/offers) that form the basis and structure of a successful resolution process. The confidentiality that is accorded mediation was never intended to protect communications or agreements between a client and his own counsel should a conflict arise between them. The attorney-client privilege, codified in section 954, already provides the necessary protection. Section 958, through its waiver procedure, allows a client to seek appropriate recourse should something occur that places him and his attorney on a conflict course. It provides that there is “no privilege” that covers “a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.” (§ 958.)

Slip op. at 7. The Court expressed concerns that extending mediation confidentiality to attorney-client communications would make it impossible for clients to waive the attorney-client privilege and would have a chilling effect on the use of mediations. Ibid.

The Court also expressed concern that if it allowed mediation confidentiality to include attorney client communications, it would lead to a slippery slope wherein all attorney-client communications in a mediated case could be considered as being confidential, "virtually every discussion between an attorney and his client during the course of representation could be considered as falling within that definition because any discussion may be used for a mediation purpose down the line." Slip op. at 8.

Finally, the Court distinguished the decision in Simmons v. Ghaderi (2008) 44 Cal.4th 570, 80 Cal.Rptr.3d 83, 187 P.3d 934, in which the California Supreme Court held that mediation confidentiality must be strictly construed and prevents introduction of evidence that a doctor consented to the settlement of a medical malpractice action where the doctor refused to sign a written settlement agreement. The Court held that the Simmons decision's strict protections for mediation communications did not apply to the statements at issue here, since they were not subject to confidentiality in the first place.

I believe that the Porter majority reached the correct result. Attorneys must remember that the clients are the holders of the attorney-client privilege and may waive the privilege when they believe that their attorneys have acted inappropriately. As the Porter majority noted, expanding mediation confidentiality to include attorney-client communications would eviscerate this important public protection.

Litigating and Mediating

People frequently ask whether I intend to give up my law practice so I can mediate full time. The answer is no. I enjoy litigation too much. Sound strange? Let me explain.

A very successful trial lawyer I know once told me what he loved so much about doing trials. "I get to just talk to the judge and jury. At a certain point everything falls into place, and it's like the other attorney isn't even there. Whatever he has to say, it doesn't even matter."

I'm not as smooth as this guy, but I do enjoy being in Court, and I do sometimes have the sense that it's just me and the judge or jury, and the other lawyer is out in the cold. It doesn't matter what he or she says, because I know that I'll have a better answer and that I'll prevail.

It feels similar to the way that athletes describe being "in the zone." You don't have to think about what you're going to do next or worry that you're going to make the wrong move. Everything you do, everything you say, just works.

A quick example: I was in Court a couple of weeks ago on my clients' motions for summary adjudication of the defendant's independent contractor and exemption defenses. I felt very comfortable with our position, the facts, and the law. The defense made a couple of good arguments, but I had better responses.

Maybe more importantly, I felt completely at ease with myself and the situation, and I could focus completely on the judge's concerns. I was able to tune out the typical bs from the other side, focus on what mattered to the judge, respond to his concerns, and lead him to where I needed him to go.

The judge took the matter under submission, but I remained confident that we would win, which we did. To be honest, whether we had won or lost, it was this amazing sense of being in control of the situation without trying to be in control that I enjoyed so much.

When you feel like that, how can you lose?

A Tough Mediation with a Happy Ending

I mediated a very tough case this past week. Two parties who had done business many times over the last several years agreed to an equipment lease. Before performance, the lessee renegotiated the contract price, and the lessor agreed, but there was some dispute over the final price, and the parties didn't put anything in writing. After performance, the lessee used a variety of tactics to try to avoid paying at all, and the lessor sued.

The case went to binding abitration. I came in after introduction of evidence and just before the arbitrator was set to hand down a decision. The lessee argued that the contract was uncertain and unenforceable because the parties did not have a meeting of the minds on the lease price. The lessor denied this and claimed the full lease price.

The mediation was very highly charged. The lessee argued that the price demanded was too high and unfair. He insisted that the parties had not completed a contract at the time of performance. When I explained that I thought he was going to lose the arbitration, he became defiant, claimed poverty, made a low-ball offer, and insisted that he would not pay a penny more. The lessor also took a hard line, not wanting to accept a penny less than his arbitration demand.

We went through several rounds of negotiation. We explored the parties' interests and options for continuing to do business together. We discussed their risk tolerance and their desire to resolve the dispute. When we finally got down to the numbers, and both sides bargained hard, but made reasonable concessions to make a deal happen.

Each party ultimately agreed to compromise as a way of putting the matter behind them and avoiding further damage to their relationship.

This was a very tough, but rewarding experience for me as a mediator. It took much perserverance, cajoling, careful listening, evaluation, facilitation - basically every trick I know - but in the end I helped the parties resolve the dispute. I understand that the settlement funds have been paid already and that the parties have moved forward. In fact, they sent me this to show their appreciation for my work:



Two tough negotiators who put this mediator through his paces.