## Facts

- Gary Vick and Carolyn Vick contracted with Bantam Properties, Inc. to construct an office building.
- After construction, a dispute arose between the Vicks and Bantam concerning the completed project.
- The parties participated in mediation conducted under the Texas Alternative Dispute Resolution Procedures Act (Texas ADR Act).
- The mediation resulted in a written settlement agreement between the Vicks and Bantam.
- Under the agreement, Bantam assigned to the Vicks “all claims for repairs, corrections, and warranty work” related to the building.
- Bantam also agreed to use its “best efforts” to cause subcontractors to cooperate with the Vicks regarding corrections and warranty-related work.
- Bill Waits, a subcontractor on the project, was not a party to the settlement agreement.
- The settlement agreement did not identify specific warranty claims or particular subcontractor obligations.
- Months later, the Vicks sued Bantam and Waits, asserting breach of the settlement agreement and fraud/fraudulent inducement, alleging the defendants did not cooperate in good faith on warranties and corrections.
- To support the fraud theory, the Vicks relied heavily on an affidavit from Gary Vick describing alleged misrepresentations made during the mediation about enforceability against subcontractors, cooperation obligations, and assignment of warranty/correction claims.
- Bantam and Waits objected that the affidavit recounted mediation communications and was therefore confidential and inadmissible under the Texas ADR Act.
- The trial court sustained the objections and granted summary judgment for Bantam and Waits on the fraud claim, and the Vicks appealed.

## Issues

1. Whether the Texas ADR Act makes mediation communications confidential and inadmissible when offered to prove fraud or fraudulent inducement in connection with a mediated settlement agreement.
2. Whether, after excluding evidence of mediation communications, the Vicks produced competent summary-judgment evidence raising a genuine issue of material fact on fraud/fraudulent inducement.

## Decision

- The court of appeals affirmed the trial court’s summary judgment for Bantam and Waits on the Vicks’ fraud claim.
- It upheld the exclusion of affidavit testimony describing statements made during mediation as confidential and inadmissible under the Texas ADR Act.
- It declined to recognize a broad, nonstatutory fraud exception to the ADR Act’s confidentiality protections.
- With the mediation-related evidence excluded, the Vicks failed to present admissible evidence of a false representation sufficient to raise a fact issue on fraud and thus could not defeat summary judgment.

## Legal Principles

- Mediation communications covered by the Texas ADR Act are confidential and generally not admissible in later judicial proceedings, absent an applicable statutory exception.
- Courts will not create an extra-statutory exception to mediation confidentiality simply because a party alleges fraud in the making of a mediated settlement agreement.
- Summary-judgment proof must be competent and admissible; evidence barred by statute cannot be used to create a fact issue.
- A plaintiff opposing summary judgment on fraud must present admissible evidence of each required element, including a material false representation.

## Conclusion

Vick v. Waits held that the Texas ADR Act’s confidentiality rules barred the Vicks from using mediation-session statements to prove they were fraudulently induced into a settlement. Because the affidavit evidence central to the fraud theory was inadmissible, the Vicks lacked competent proof of a false representation and could not raise a genuine issue of material fact. The court therefore affirmed summary judgment for the contractor and subcontractor on the fraud claim.


Vick v. Waits, 2002 Tex. App. LEXIS 3982 (2002)