## Facts

- A homeowners’ association sued a developer and related entities for construction defects.
- The trial court ordered the parties to attend mediation.
- During mediation, the mediator concluded the defense and its counsel did not participate in good faith and failed to comply with directives concerning attendance of experts.
- The mediator submitted a report to the court describing what occurred during mediation and recommending sanctions.
- Relying in part on the mediator’s report and mediation-related information, the trial court imposed monetary sanctions against the developer and its attorney.
- The Court of Appeal reversed the sanctions order but concluded a mediator could disclose limited mediation information to support sanctions for noncompliance or bad-faith participation.
- The California Supreme Court granted review to decide whether the mediation confidentiality statutes permit any exception for sanctions based on mediation conduct or communications.

## Issues

1. Whether Evidence Code §§ 1119 and 1121 permit a mediator or a party to disclose mediation communications or conduct to support sanctions for failure to participate in good faith or to comply with a mediator’s directives in court-ordered mediation.
2. Whether a court may rely on a mediator’s report describing mediation events and communications to impose sanctions.

## Decision

- The California Supreme Court held that Evidence Code §§ 1119 and 1121 do not allow disclosures of mediation communications or conduct to support sanctions, absent an express statutory exception.
- The Court rejected any judicially created “good faith” or sanctions exception to mediation confidentiality.
- The Court concluded the mediator’s report violated the statutory limits on mediator reporting and could not be used to support the sanctions order.
- The Court affirmed the Court of Appeal’s result reversing the sanctions, while disapproving the appellate court’s reasoning to the extent it recognized an implied exception allowing limited mediator disclosure.

## Legal Principles

- Evidence Code § 1119 broadly renders inadmissible and confidential all communications, negotiations, and settlement discussions made for, in the course of, or pursuant to mediation, unless an express statutory exception applies.
- Evidence Code § 1121 generally prohibits a mediator from submitting to the court any report, assessment, evaluation, recommendation, or finding about the mediation, except as expressly authorized by statute.
- Courts may not create implied exceptions to mediation confidentiality to facilitate sanctions proceedings based on what was said or done during mediation.
- A trial court’s sanctioning authority cannot override statutory mediation confidentiality; sanctions must rest on admissible, nonconfidential evidence (including conduct outside mediation) rather than mediation communications or mediator reports about the mediation.

## Conclusion

The court held that mediation confidentiality under Evidence Code §§ 1119 and 1121 bars mediators and parties from disclosing mediation communications or conduct to support sanctions for alleged bad-faith participation or noncompliance during mediation, and courts may not infer a sanctions-based exception absent express legislative authorization.


Foxgate Homeowners' Ass'n, Inc. v. Bramalea Cal., Inc., 26 Cal. 4th 1 (Cal. 2001)