As we reported in the January 2010 Edition of The Morrison Law Journal,
the California Court of Appeal, Second District ruled in the now depublished
opinion in Cassel v. Superior Court (2009) 101 Cal.Rptr. 501 ("Cassel") that
discussions between a party and his counsel in a mediation setting were not
within the ambit of California's Mediation Statute because they only involved a
"single participant" or party and were admissible in a subsequent legal
malpractice case. That opinion was seen by many in the legal community as a
departure from the California Supreme Court's decisions which have held that
the courts should refrain from crafting judicially created exceptions to the
Mediation Statute which mandates confidentiality for mediation protected
activities as prescribed under Evidence Code § 1119. See, Foxgate Homeowners
Association v. Bramalea California, Inc. (2001) 26 Cal.4th 1, Rojas v. Superior
Court (2004) 33 Cal.4th 407, Fair v. Bakhtiari (2006) 40 Cal.4th 189 and Simmons
v. Ghaderi (2008) 44 Cal.4th 570.
The facts of the Cassel are straightforward enough. In that case, an
individual, Michael Cassel, agreed in a mediation to the settlement of business
litigation to which he was a party. He later sued his attorneys who represented
him at the mediation for legal malpractice, breach of fiduciary duty, fraud and
breach of contract. His complaint alleged that, by bad advice, deception, and
coercion, his attorneys, who had an alleged conflict of interest, induced him to
settle for a lower amount than he had told them he would accept, and for less
than the case was worth. Prior to the trial of the legal malpractice case, the
lawyers who had previously represented Mr. Cassel, and who were now
defendants to Mr. Cassel's legal malpractice complaint, moved, under the
statutes governing mediation confidentiality to exclude all evidence of private
attorney-client discussions concerning mediation settlement strategies and the
attorney's efforts to persuade Mr. Cassel to reach a settlement in the mediation.
The trial court granted the attorneys' motion, but the Court of Appeal, in a split
decision, vacated the trial court's order.
In the Court of Appeal's decision in Cassel, that Court ruled that the
former client, Mr. Cassel, and the law firm which previously represented Mr.
Cassel acted as a "single participant" (i.e. a single "party") and that their
discussions during the mediation in the underlying action were admissible in the
subsequent legal malpractice action. It is noted that the Court of Appeal's
decision in Cassel was a split decision and was the subject of a stinging dissent
by Justice Perluss who commented that the majority's conclusion was "not only
at odds with the clear language of [Evidence Code] § 1119, subdivision (a), but
[was] also inconsistent with the Supreme Court's repeated disapproval of
'judicially created exception[s]' to the mediation and confidentiality statutes".
The California Supreme Court, upon the publication of the Court of
Appeal's decision in Cassel, acted quickly. First, on February 3, 2010, it granted
review. Thereafter, on January 13, 2011, that Court issued its own opinion in
Cassel v. Superior Court (2011) Westlaw 102710 wherein the California Supreme
Court reversed the judgment of the Court of Appeal. In the unanimous opinion
of the California Supreme Court (Justice Chin concurred but filed a separate
opinion), the Court ruled that an attorney's mediation related discussions with a
former client, absent an applicable waiver, came within the confidentiality
provisions of the Mediation Statute and were not admissible for purposes of
proving any claim of legal malpractice in a subsequent action.
With respect to the facts of the Cassel case, the California Supreme Court
stated, given the broad breadth of the Mediation Statute, that there could be no
judicially created exception for that case and, in general, there could be no
exception absent a violation of due process or an absurd result that "clearly
undermined" the purpose of the Mediation Statute.1 The Court went on to
indicate that it passed no judgment on the "wisdom of the mediation
confidentiality statutes" and commented that the legislature had simply decided
that the encouragement of mediation to resolve disputes requires broad
protection for the confidentiality of communications exchanged in relation to
1 Quoting the California Supreme Court in Cassel:
"[w]e must apply the plain terms of the mediation confidentiality statutes to the facts of
this case unless such a result would violate due process, or would lead to absurd results
that clearly undermine the statutory purpose. No situation that extreme arises here.
Hence, the statutes' terms must govern, even though they may compromise petitioner's
ability to prove his claim of legal malpractice."