Tuesday, June 19, 2007
C.A.: Mediation Briefs Not Discoverable by Malpractice Plaintiff
By TINA BAY, Staff Writer
Mediation confidentiality statutes prohibited a legal malpractice plaintiff from accessing mediation briefs from an underlying action to show that his former counsel made an allegedly unauthorized settlement demand, the Court of Appeal for this district ruled yesterday.
Div. Three granted a writ of mandate to the Los Angeles personal injury law firm of Magaña, Cathcart & McCarthy and partner William H. Wimsatt, preventing former client Corey Kausch from obtaining mediation briefs and related e-mails from an underlying lawsuit so that he could pursue a malpractice action against them.
Kausch retained Magaña to represent him in an action over injuries he sustained in a November 2003 airplane crash. Before filing suit, the plaintiff made a settlement demand between $3.5 and $5 million.
The case went to mediation in January 2006 before retired Los Angeles Superior Court Judge R. William Schoettler, but failed to settle. A second mediation session was held and resulted in a successful resolution of the case.
After settling, Kausch sued Magaña alleging it breached its fiduciary duty by lowering his settlement demand by more than one-half, to $1.5 million, without his authorization. Kausch had learned of Magaña’s potential breach from a “confidential mediation brief” submitted by the defendant to Schoettler in the underlying suit.
The brief, prepared before the second mediation by defense attorney Peter P. Brotzen of Dwyer, Daly, Brotzen & Bruno, stated that Kausch’s attorneys “have purportedly recently communicated a settlement demand in the sum of $1.5 million.”
In addition, several e-mails sent to Brotzen from Marc Goldstein, another attorney retained by Kausch, mentioned the statement in the mediation brief. Goldstein e-mailed Brotzen asking him to explain where he obtained the $1.5 million figure referenced in his brief, and Brotzen replied that Wimsatt mentioned it to him during a telephone conversation in which the lawyers discussed the value of a second mediation conference.
Goldstein also e-mailed Wimsatt asking whether he discussed a lower figure with defense counsel. Wimsatt replied that he had told Brotzen he thought a demand for half of Kausch’s original demand was more appropriate upon reevaluation, but that he had no authority to reduce the original demand.
In his deposition in the malpractice suit, Wimsatt stated repeatedly that he had not lowered Kausch’s settlement demand.
Kausch sent a letter to Brotzen asking for the name of the attorney who made the $1.5 million demand, intending to show that Wimsatt had lied in his deposition.
Magaña moved for a protective order to prevent Kausch’s discovery of the mediation briefs and emails. Those items, the defendants asserted, were shielded by mediation confidentiality statutes.
Los Angeles Superior Court Judge Rolf M. Treu denied Magaña’s motion, expressing his concern that “the [L]egislature did not intend confidentiality of mediation proceedings to be so complete as to shield perjury or inconsistent statements.”
Writing for the Court of Appeal, Justice Richard D. Aldrich said:
“We appreciate the trial court’s desire to avoid the strict limitations of mediation confidentiality in this case. . . .However, the Supreme Court has declared that exceptions to mediation confidentiality must be expressly stated in the statutes.”
The Evidence Code, which provides generally that all communications in the course of a mediation or mediation consultation are required to remain confidential, contains no public policy exception for situations involving legal misconduct, he explained.
But Aldrich pointed out that the result reached in Kausch’s case failed to enhance the purpose of mediation “because wrongs will go unpunished and the administration is not served.”
“The stringent result we reach here means that when clients, such as Kausch, participate in mediation, they are, in effect, relinquishing all claims for new and independent torts arising from mediation, including legal malpractice causes of action against their own counsel,” the justice wrote. “Certainly clients, who have a fiduciary relationship with their lawyers, do not understand that this result is a by-product of an agreement to mediate.”
He went on to note:
“Given the number of cases in which the fair and equitable administration of justice has been thwarted, perhaps it is time for the Legislature to reconsider California’s broad and expansive mediation confidentiality statutes and to craft ones that would permit countervailing public policies be considered.”
Presiding Justice Joan D. Klein and H. Walter Croskey concurred in the opinion.
Counsel on appeal were Los Angeles attorney George J. Stephan, of Luce, Forward, Hamilton & Scripps, for petitioners Magaña and Wimsett; and Westlake Village lawyer Craig D. Rackohn, of Rackohn and Rackohn, for Kausch.
The Association of Southern California Defense Counsel, as well as Southern California Mediation Association and Confidential Mediation & Dispute Resolution filed amicus briefs on behalf of the petitioners.
The case is Wimsatt v. Superior Court (Kausch), B196903.
Copyright 2007, Metropolitan News Company