Where the Court of Appeal Went Wrong in Thottam Case

September 28, 2008 · Filed Under Mediation - General · Comment 

As preparations are underway on a petition for review to the Supreme Court of California, and having had a chance to read the appellants’ petition draft,  this Nevada County mediator is able to provide a little more insight into what went wrong and why the Supreme Court of California (I never refer to it by the demeaning name favored by cooler cats: “the Supremes”) should review and reverse the 2nd District Court of Appeal in the consolidated matters of In re Estate of Thottam, and Thottam vs Thottam, Case No. B196933, (2008 Daily Journal D.A.R. 10,570)  See earlier blog on Thottam.

During the mediation the parties reached what one of them would claim was an agreement and the others that it was not intended as a final or admissible agreement (a handwritten chart assigning certain assets to each of the parties), but was subject to further consideration and only potential inclusion in a final and formal written agreement.  (It is only a distraction that the party claiming it was a done deal was found to be not believable and dishonest by the trial judge, and that the appellate court thought he had been prejudiced by the exclusion of the chart.)  The trial judge refused admission of the chart into evidence on the grounds that admission was barred by the confidentiality provisions of Evidence Code 1119 and did not meet any of the exceptions of Section 1123.  He refused to regard a pre-mediation agreement that said the proceedings would be confidential except as necessary to enforce an agreement reached in the mediation as sufficient compliance with the statute.  That was a sensible conclusion as you will see.

Subsections (a) and (b) of that statute requires that to be admissible an agreement reached in mediation must contain language to the effect that it is to be binding and/or admissible in evidence.  Such language would make it clear that the parties intended an identifiable document to be free of the confidentiality constraints of Section 1119.  It would not make sense to hold that a pre-mediation agreement could satisfy those two subsections.  However, subsection (c) provides that “the” agreement can be admitted if all parties to it expressly so agree.  The Court of Appeal held that in view of the fact that subsection (c) does not contain a “time requirement”, the pre-mediation language was operative.  Bear in mind that nothing is said in the statute about a pre-mediation agreement clause, nor should it have.  Before the mediation there is little likelihood that the parties will all have agreed on exactly what an “agreement” will look like.  It is only after mediation that the question can be sensibly asked and answered:  “Has an agreement been reached and documented”.  This will be ascertained easily if either subsection (a) or (b) has been invoked by inclusion of the “binding” or “admissible” language.   An alternative way the existence of an agreement can be ascertained is if per subsection (c) “all parties to the agreement expressly agree” to its admissibility in evidence.  The near obvious and only logical interpretation of Section 1123 is that the legislature gave the parties an easy way to make their agreement admissible, but also protected the situation where all parties wanted it to be admissible even though they had failed to invoke (a) and (b).

The Court of Appeal here has read another alternative into the statute, to wit, if the parties agree in the pre-mediation agreement that the agreement reached in mediation shall be enforceable and free of the confidentiality provisions, then it will be admissible.  But, what does “it” refer to?  What is “the” agreement”?  How does the court ascertain whether an agreement was in fact reached?  The inexorable answer to each of these questions is that there is only one way, and that is to violate the very law and rule of confidentiality it is supposed to apply!  How can a court admit testimony of what went on in a mediation, what was intended by a writing created in the course of mediation, or whether all of the parties agreed that in its present form it was to be admitted in evidence and enforced, without violating Section 1119, which states clearly that neither oral communications within a mediation or such documents created in the course of it are admissible.  The California high court has consistently ruled that there are no exceptions that permit delving into the substance of mediation communications for such purposes.  The Court of Appeal in this case not only ignored its superiors, but the rational interpretation of the statute as well.