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
- 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.
- 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.