“Mediation” vs. “Settlement Conference”

The Need ForJudicial Clarif’Ication

By Edith R. Matthai and Steven S. Fleischman

sk 10 experienced litigators the difference between a “mediation” and a “settle ment conference” and you are likely to get 12 answers. The confusion in the rea is not surprising since California appellate courts have repeatedly, express ly refused to define the difference between “mediations” and “settlement conferences.” In many instances, the differences between a “mediation” and a “settlement confer ence” are academic only, particularly when the presiding officer is a sitting judge. But there is an important statutory distinction: the Evidence Code creates broad confiden tiality for :med tions” covering anything that was said or done and further prohibits a mediator from communicating with the Court, absent consent of the parties. (Evid. Code § 1121.) In contrast, “settlement conferences” themselves are not confidential.

1st quarter 2007 verdict 35 Mediation vs. Settlement Conference, (continued)

Instead, what is confidential are the those addressing confidentiality; are W’ construe rule 222 to pertain only parties’ demands and settlement offers, applicable to all mediation proceedings, to mandatory or voluntary settlement which cannot be introduced at trial to except for court-supervised settlement confrrences supervised by the court. It does prove liability under Evidence Code conferences (under Cal. Rules of Court, not apply to a volunta7y settlement confi’r section 1152. There is not the same rule 222) (Stewart v. Preston ence bejbre a private person arranged by statutory shroud of secrecy for “settle Pipeline, Inc. (2005) 134 Cal.App.4th the parties without request ofor notice ment conferences” that there is for 1565, 1572.) to the court, which was not on the court “mediations.” This distinction can cre “Settlement conferences” are gov calendar and where the parties were not ate confusion and a trap for the unwary erned by Rule 3.1380 of the California required to and did notfile settlement litigator, particularly when the term Rules of Court, which provides in confi’rence statements and was held with “mediation” is used to describe what is paragraph (a) that “On the Court’s own out use ofthe courti facilities and at no actually a “settlement conference.” motion or at the request of any party; cost to the county. California statutes and the the Court may set a mandatory settle (Id at pp. 1595-1596, italics added.) California Rules of Court refer sepa ment conference.” (Cal. Rules of Ct., The court went on to hold that the rately to “mediations” and “settlement rule 3.1380(a).) imposition of sanctions could not be conferences.” (See Evid. Code One of the few cases discussing the justified under the contempt powers of 11 17(b)(2); Family Code §5 20038(h), characteristics of a “settlement confer the court because the “voluntary settle 66034; Ins. Code § 10089.80, ence” is the 1987 decision of Raygoza ment conference did not involve any 10089.82; Cal. Rules Ct., rules v. Betteravia Farms (1987) 193 Cal. court proceeding or process.” (Id at p. 3.800(c), 3.85 1, 3.1380.) The most App.3d 1592. In Raygoza, the parties 1596.) important statutory distinction between agreed to have a “voluntary settlement Thus, the Raygoza court identified “mediations” and “settlement conferenc conference . . . before a retired judge, “settlement conferences” as having the es” is found in Evidence Code section whose fees for such services were to be following characteristics: 11 17(b)(2), which expressly provides shared equally by the parties.” (Id at that Chapter Two of Division Nine of a. being “mandatory” or “supervised p. 1594.) One party refused to partici by the court;” the Evidence Code, addressing media pate, which led to the trial court award and mediation tions confidentiality, ing sanctions under [former] Rule 227 b. conducted by a judicial officer, not does apply to “settlement confer of the California Rules of Court; at the rather than a private party; ences”: time, that rule authorized the imposi c. being placed on the court’s calen (b) This chapter does not apply to tion of sanctions for the failure to par dar, as opposed to being arranged either of the following: ticipate in any conference ordered by before a private party; (1) A proceeding under Part 1 (com a court. The Court of Appeal reversed d. conducted using the court’s facili mencing with Section 1800) of the imposition of sanctions, holding ties; and that what the parties had agreed to was Division 5 of the Family Code or e. no cost to the parties. Chapter 11 (commencing with Section not a “settlement conference,” because Mediation is 3160) of Part 2 of Division 8 of the it was voluntary and was not supervised defined in Rule Family Code. by the Court using Court facilities: 3.852(1) of the California Rules of Court, which was adopted January 1, settlement If a voluntary settlement confer (2) A confi’rence pursuant 2003, as “a process in which a neutral 222 ence is held by the parties which is not to Rule ofthe California Rules of person or persons facilitate communica Court. required by the rules or by a court order, tion between the disputants to assist the court has no authority to make an (Evid Code 1117(b), italics added.) them in reaching a mutually accept order of reimbursement or payment to able agreement.” (Cal. Rules Ct., rule Thus, “the confidentiality provided the county pursuant to rule 227. by [Evidence Code] section 1119 3.852(1).) Rule 222 provides for mandatory [does] not apply to. . . a mandatory Courts have declined to articulate settlement conferences and authorizes settlement conference (Cal. Rules of the differences between a “media other or additional conferences upon Court, rule 222).” (Rinaker v. Superior tion” and a “settlement conference.” request of all parties or by order of Court (1998) 62 Cal.App.4th 155, 164 In Foxgate Homeowners’Association court v. fn.3.) Another court has held that the Bramalea California, Inc. (2001) 26 “Evidence Code provisions, including Cal.4th 1, the California Supreme 36 verdict 1st quarter 2007 Court expressly declined a request confidentiality provisions, then they because of the substance of the settle made by two amici curiae, including should “make clear at the outset that ment procedure used, but only because the ASCDC, to clarify the differences something other than a mediation is of the terminology the parties and the between “mediations” and “settlement intended.” (Id at pp. 1166-1167.) Court used. conferences.” The court did so because Because the Court concluded that the Another variation on this issue was it was “clear” that the proceeding at parties engaged in a mediation, the involved in a recent decision decided issue was a mediation. (Id at p. 12, Court held that documents prepared by Division Three of the Fourth fn.8.) In Foxgate, the superior court for in anticipation of the mediation Appellate District on May 31, 2006 in appointed a retired judge to serve as were privileged under Evidence Code Lindsay v. Lewandowski (2006) 139 Cal. mediator and special master; the Court’s section 1122. (Id. at pp. 1168-1170.) App.4th 1618. In Lindsay the parties order specifically provided that the Arguably, the outcome would have been participated in a mediation before a mediation privilege applied. (Id at pp. different if a “settlement conference” retired judge that resulted in a written Thus, applying Raygoza 4-5.) the cri had been involved. stipulated settlement agreement. The teria, it is easy to see how the Supreme Similarly, in Travelers Casualty & written settlement agreement called for Court concluded that “mediation” a was Surety Co. v. Superior Court (2005) “binding mediation” in the event of a involved: it was before a retired judge, 126 Cal.App.4th 1131, the same court dispute between the parties. A dispute not a sitting judge, presumably not (Second Appellate District, Division arose and one party moved for judg using court facilities and was for a fee. Eight) expressly declined to clarify the ment based on the stipulated settlement Three years later in Rojas v. differences between a “mediation” and a under Code of Civil Procedure section Superior Court (2004) 33 Cal.4th 407, “settlement conference.” (Id. at p. 1139 664.6. The retired judge submitted the California Supreme Court again fn.8, citing Foxgate, supra.) The Court a declaration in which he explained declined an invitation by an amicus cur did so because the “parties have never what was meant by the phrase “binding iae to delineate the distinctions between contended that the Valuation Hearing mediation:” if the parties were unable a “mediation” and a “settlement confer was something other than a media to come to an agreement, each party ence” because the issue was not raised tion, even though the mediation took would make arguments and submit by any of the parties and all of the place as part of a voluntary settlement final offers to the judge, who would parties “assumed that a mediation took process.” (Ibid.) Thus, the Court cau select one offer or the other. In essence, place in the underlying action.” (Id. at tioned that its decision should not be if the mediation was not successful, p. 417, fn.4.) “construed as holding that all voluntary the “mediator” became an “arbitrator” In Doe 1 v. Superior Court (2005) settlement conference are mediations who would issue a final, binding ruling. 132 Cal.App.4th 1160, the Court which are subject to the rules concern Arbitration was compelled, the retired (Division Eight of the Second Appellate ing the conduct of mediation proceed judge rendered a decision, the arbitra District) declined to address the distinc ings.” (Ibid.) Because the Court held tion award was confirmed in superior tion because the issue was raised for that a “mediation” was at issue, the court and the losing party appealed. the first time at oral argument. The Court held that certain proceedings The Court of Appeal held that the Court noted the “conceptual difficul engaged in by the trial court violated stipulated settlement agreement was ties in distinguishing between a media the provisions of the Evidence Code uneforceable because of the uncertainty tion and a settlement conference when regarding mediation confidentiality. of the phrase “binding mediation.” a bench officer is presiding at those Both Doe land 7}avelers Casualty In the parties’ agreement, “binding talks.” However, the Court declined involved settlement proceedings which arbitration” was replaced with “bind to address the issue, instead concluding under Raygoza were arguably “settle ing mediation.” Thus, the Court held that a mediation took place because the ment conferences” and not “media that the parties clearly did not agree orders at issue referred to “mediation” tions.” In both cases, the settlement to “binding arbitration.” Yet, that is and nowhere did the Court order refer proceedings were conducted by a sit precisely what “binding mediation,” to [formerl Rule 222 of the California ting superior court judge, using court as applied by the lower court and the Rules of Court. (Id at p. 1166.) facilities that were free of charge to the retired judge, became: the “mediator” Recognizing the uncertainty in the law, parties. Yet, in both cases the appellate became an “arbitrator” and made an the Court provided guidance for par court held that they were “mediations” adjudication, rather than assisting the ties in the future: if the parties do not and, thus, subject to mediation confi parties in reaching a voluntary settle intend to be bound by the mediation dentiality under the Evidence Code not ment, the sine quo non of mediation.

1st quarter 2007 verdict 37 Mediation vs Settlement Conference, (continued)

The Court of Appeal also noted the haz zards involved in recognizing “binding mediation:” would the arbitration rules, the court-ordered mediation rules, the mediation confidentiality rules or some mix of rules apply. In his concurring opinion, Justice Sills criticized what he thought was the use of “Madison Avenue and MBA types” taking over “what we once called private judging” and the improper use of “softer” terms to describe settlement conferences (“mediations”) and arbitra tions (“binding mediation”). Yet, even WHOISA Justice Sills referred to a “settlement conference as the old fashioned term for TRIAL LAWYER mediation,” even though as discussed herein there are important differences. AND IS The upshot is that attorneys must be precise in the language and terminol AVAILABLE 24-7 ogy they use in describing any settle ment procedure, because the differences Jack Daniels in procedure can affect the enforcabil ity of the result. The authors of this Lifetime Achievement Award 2007, article believe that the criteria laid out Los Angeles Chapter, American Board of in Raygoza provide a good distinction Trial Advocates (ABOTA) between “settlement conferences” and “mediations:” settlement conferences are Voted Super Lawyer in 2007 conducted by sitting judges, using court President of Cal ABOTA, 1996 facilities without charge to the parties. President, Los Angeles Chapter ABOTA, 1994 “Mediations” are conducted by retired judges or private persons, using private Call Courtney Zito or facilities, for a fee. But what these Rosemarie Chiusano at Judicate West authors think is irrelevant: judicial clari fication is needed on this issue.O 310-442-2100 Edith Matthai is a shareholder in Robie 6 Matthai, a Profi’ssional Corporation, and is a past president ofASCDC and current president of CD C. Steven Fleischman is an appellate attorney with thefirm.

38 verdict 1St quarter 2007