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Quote of the Day - We are disappointed that the Court of Appeals has decided that, unlike every other client and attorney in this country, government attorneys and their clients do not enjoy the right to have confidential communications. - Charles Ruff
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Read Those Mediation Agreements Carefully: Confidentiality Has Exceptions

Just about every lawyer I know agrees on one thing:  There is an exception to every rule.  Even ones that are supposedly "absolute." There's been much ballyhoo lately about the confidentiality of mediations.  There's a rule prohibiting the admission into evidence discussions held in course of mediation.

So you know what's coming next, don't you?

Right.  The exception. 

So let's get to the setup.  Thresiamma Thottam's three children, Peter, Jameson, and Elizabeth, disputed the distribution of assets from her estate after her death. They were each co-trustees of her trust, and agreed to mediation.  So far, so good.

Then they signed a confidentiality agreement prohibiting matters discussed in the mediation from being used in future litigation "except as necessary to enforce any agreements resulting from" the mediation.

The big print giveth, and the small print taketh away.    

During the course of the mediation, Peter, Jameson and Elizabeth reached an agreement and created a chart detailing how the properties owned by the trust would be split up.  They each initialed the chart.  When Peter tried to enforce the contract in Court, the court would not admit the chart into evidence and ruled against Peter.

The appellate court in Thottam v. Thottam in the Estate of Thottam case reversed the trial court.  It ruled under California Evidence Code section 1123(c) that a written settlement agreement prepared in the course of mediation is admissible if all parties agreed in writing to its disclosure.   Although the three children expressly agreed not to disclose matters discussed in mediation, they did agree to the exception noted above.

If the trial court had admitted the chart, the appellate court reasoned, it would have corroborated Peter's testimony regarding the existence of a written agreement and undermined his siblings' claims that he breached his fiduciary duty in handling the real property.  The appellate court ruled its exclusion prejudiced Peter, and reversed the judgment against him.

While you may think discussions in mediation are completely or absolutely confidential, you may have agreed otherwise.

It always pays to read the fine print.

Update:  September 24, 2008.  James Thottam of Texas called to let me know that he and his sister Elizabeth dispute the appellate court's finding that they reached an agreement, and have filed a Petition for Certiorari to the California Supreme Court to overturn the ruling.  They are looking for amicus briefs, if any lawyer is willing to file one.  A copy of the "agreement" is contained in the Peition, if you'd like to see it.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, August 13, 2008 at 18:43 Comments Closed (2) |
 
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