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Saturday, August 9, 2008
Supreme Court Confirms That What Happens In Vegas Stays In Vegas
On July 21, 2008, the California Supreme Court unanimously held that the Evidence Code statutes concerning mediation confidentiality do not permit judicially created exceptions.
In Simmons v. Ghaderi, S147848, the court reversed the holding of the Second District Court of appeal that defendant Ghaderi was estopped from invoking mediation confidentiality. The Supreme Court also stated that confidentiality cannot be impliedly waived.
In the underlying case, Dr. Ghaderi attended mediation in a medical malpractice action. Prior to mediation, the doctor gave her carrier written consent to settle for up to $125,000. During the mediation, the carrier offered $125,000 which was accepted and a settlement agreement was prepared by the mediator. At the last minute, instead of signing, Dr. Ghaderi walked out. At the trial court’s suggestion, the plaintiff amended the complaint to add a breach of oral agreement action. The breach of contract action was then bifurcated and tried first. During discovery, both sides submitted evidence of what happened during the mediation. Dr. Ghaderi’s counsel only asserted mediation confidentiality for the first time at trial.
The trial judge allowed evidence of what occurred during the mediation, including a declaration from the mediator, and found that an oral agreement had been created requiring Dr. Ghaderi to pay $125,000.
On appeal, the District Court upheld the trial court and ruled 2-1 that Dr. Ghaderi was estopped from asserting confidentiality.
Even on these seemingly bad facts for the doctor, the Supreme Court reversed the District Court and in so doing affirmed a line of cases starting with Foxgate Homeowners' Ass'n v. Bramalea California, Inc. (2001) 26 Cal.4th 1, that any exception to the mediation confidential statutes must be created by the Legislature. Apparently, Dr. Ghaderi’s malpractice action will now proceed. It will be interesting to see how that plays out.