Confidential settlement agreements may not remain confidential
We have learned that mediation confidentially is protected in California by contract law, by the plain meaning of statutory law, and by our highest state court’s confirmation that our statutory law means what it says. But what about our settlement agreements; what about the anticipated results of our mediations, are they confidential too?
The answer, as found by the Second California District Court of Appeal in the case of In re Estate of Thottam (2008) (PDF) 165 Cal.App.4th 1331, is that it depends upon the agreements of the parties and the plain meaning of the applicable statute.
Evidence Code Section 1123 provides that:
A written settlement agreement prepared in the course of, or pursuant to, a mediation, is not made inadmissible, or protected from disclosure, by provisions of this chapter if the agreement is signed by the settling parties and any of the following conditions are satisfied:
(a) The agreement provides that it is admissible or subject to disclosure, or words to that effect.
(b) The agreement provides that it is enforceable or binding or words to that effect.
(c) All parties to the agreement expressly agree in writing, or orally in accordance with Section 1118, to its disclosure.
(d) The agreement is used to show fraud, duress, or illegality that is relevant to an issue in dispute.
In other words, a settlement agreement is "not made inadmissible" (is not confidential) if the agreement provides that it is admissible, the agreement provides that it is enforceable, the parties to the agreement agree to its disclosure, or the agreement is used to show fraud, duress, or illegality.
The importance of these distinctions was made clear in Estate of Thottam, which involved a dispute among siblings regarding the distribution of assets from their deceased mother’s estate. Before the mediation of this dispute, all three siblings and the mediator signed a “mediation and facilitation confidentiality agreement.”
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