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Court finds mediation not so confidential

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Indiana Lawyer Focus

A decision earlier this year from the Indiana Court of Appeals has shaken the conventional wisdom that holds what is said in mediation stays in mediation and has raised the issue of how important confidentiality is in the alternative dispute resolution process.

The ruling came in Dennis Jack Horner v. Marcia (Horner) Carter, 34A02-1111-DR-1029. In the filing, the husband contended a mistake was made in the drafting of the mediated settlement divorce agreement and that the trial court erred in excluding the extrinsic evidence of this mistake.

soshnick-drew-mug.jpg Soshnick

On this point, the COA agreed that the trial court did err because the husband wanted to offer the mediation communications as evidence for a purpose other than those prohibited by the Alternative Dispute Resolution Rule 2.11.

The Horner case, decided by the COA in June, is headed to the Indiana Supreme Court.

Noting that the Horner decision has caught the attention of family law attorneys and judges across the state, Drew Soshnick, partner at Faegre Baker Daniels LLP, called it one of the two most significant decisions in family law within the last year. The other, he said, is Tricia L. Sexton v. Travis Sexton, 34A02-1111-DR-01059, which dealt with emancipation.

Attorneys and mediators have operated under the assumption, and caselaw has supported, that everything in a mediation is confidential. In the decision, Pamela S. Fackler v. Melvin J. Powell and M. Jack Powell Jr., Living Trust, 891 N.E.2d 1091, 1096 (Ind. Ct. App. 2008), the COA held the Alternative Dispute Resolution Rule 2.11 “expressly provide(s) that the parties may not waive the confidentiality requirement.”

With Horner, the court more narrowly construed ADR Rule 2.11 than in previous rulings. This, in Soshnick’s view, makes the Horner ruling more about what the court did not say rather than what it did say.

Specifically in Horner, the COA focused on the first sentence of Ind. Evidence Rule 4.08 which states, “Evidence … is not admissible to prove liability for or invalidity of the claim or its amount.”

The second sentence states that, “Evidence of conduct or statements made in compromise negotiations is likewise not admissible.” And the final sentence notes that compromise negotiations include alternative dispute resolution.

Soshnick believes the second and final sentences of Indiana Evidence Rule 4.08 could have been consequential to the decision.

Michael Kohlhaas, partner at Bingham Greenebaum Doll LLP, added that even if a mediated discussion does not directly address the validity or amount of claim, it is the whole reason why parties are in mediation. Still, he sees the decision as perhaps approaching the question of how can the court address possible mistakes because of miscommunication.

Writing for the court, Judge Nancy Vaidik stated, “Although confidentiality is an important part of the mediation, strict adherence to confidentiality would provide an undesirable result in this context – parties would be denied the opportunity to challenge issues relating to the integrity of the mediation process, such as a mistake, fraud, and duress.

“Allowing the use of mediation communication to establish these traditional contract defenses provides parties their day in court and encourages, rather than deters, participation in mediation.”

Family law lawyers see an opposite effect.

“I think for attorneys going into mediation with their clients, it’s going to cause them to be more thoughtful about how they communicate, what they say to the mediator or allow their client to say to the mediator,” Kohlhaas said.

Confidentiality is essential

The idea of opposing sides working together to reach a solution to their dispute was not initially given a warm acceptance. People still wanted to see someone in a robe making the decision, Soshnick said.

kohlhaas-michael-mug.jpg Kohlhaas

Over time, however, the use of mediation has become extremely common and almost preferred to a trial. The practice is utilized in a large percentage of personal injury cases, business contract disputes and family law cases.

“It’s good for families because it’s an easy, better way to resolve disputes,” Soshnick said. “It’s less expensive, more creative and typically provides unique solutions.”

Mediation is almost always suggested by one or both of the attorneys in these cases, or the court will likely order that the parties take a stab at reaching a settlement themselves, Kohlhaas said.

The advantage to mediation is that the parties can, as Soshnick pointed out, reach a unique solution that fits their particular situation.

Deborah Farmer Smith, managing partner at Campbell Kyle Proffitt in Carmel, describes being a mediator as her most favorite thing. The brainstorming that leads the parties to explore options and listen to each other can render creative solutions that the individuals and their lawyers might not have found. Moreover, the final agreement can contain elements that a court could not order.

“Judges can care a lot about people and they do,” Farmer Smith said. “Judges want to do their best but it remains that judges don’t have the luxury of being as detailed in an order as lawyers have in an agreement.”

smith-deborah-mug.jpg Farmer Smith

When both parties want to settle a matter and want the conflict to be over while accepting they are not going to get everything they want, the result of the mediation has pretty good staying power, Farmer Smith said. It is when the parties are not done with each other emotionally that disputes can arise after an agreement is signed.

A key in the process is the confidentiality that surrounds mediation. With limited exceptions, such as those for an admission of a crime or child abuse, all statements made in mediation are private.

In agreeing with Soshnick’s view of the Horner decision, Andrew Mallor, of Mallor Grodner LLP in Bloomington, emphasized the importance of confidentiality.

He is concerned that Horner could open a door allowing individuals to raise issues with the settlement after the agreement has been signed. It is contrary to previous court decisions on the confidentiality of mediations and could bring about more litigation as disgruntled parties, citing Horner, say the language in the document is not what they intended.

The protection of confidentiality encourages individuals to “take extreme steps to compromise,” Soshnick said. If the parties are worried that taking the extra step could come back to hurt them if the case lands in court, they might be more cautious.

“It may have a chilling effect on what people say and how they say it,” he said.

Farmer Smith agreed with the other attorneys that the Horner ruling could make the parties less open in mediation sessions but, at present, she said, the COA decision served as a reminder to attorneys to make certain when an agreement is drafted that both sides understand what the words say.

Mediation sessions can go on for hours and the parties can get tired, which heightens the possibly of rushing to just get something done. Clients, frequently overwhelmed and stressed by the process, easily can become confused and sign an agreement while not fully aware of all the terms in the document.

Even if the Supreme Court upholds Horner, mediation will still be a valuable tool for dispute resolution, the attorneys said.

Farmer Smith does not see the decision as the first step on a slippery slope. Nothing is in the opinion, she said, that gives her a reason to believe the court will continue down the Horner path. •

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  • Truth
    The truth ought always trump confidentiality. It can't be the purpose of mediation to help one party to trick anorher or to profit from a mistake.

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  1. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  2. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

  3. Diversity is important, but with some limitations. For instance, diversity of experience is a great thing that can be very helpful in certain jobs or roles. Diversity of skin color is never important, ever, under any circumstance. To think that skin color changes one single thing about a person is patently racist and offensive. Likewise, diversity of values is useless. Some values are better than others. In the case of a supreme court justice, I actually think diversity is unimportant. The justices are not to impose their own beliefs on rulings, but need to apply the law to the facts in an objective manner.

  4. Have been seeing this wonderful physician for a few years and was one of his patients who told him about what we were being told at CVS. Multiple ones. This was a witch hunt and they shold be ashamed of how patients were treated. Most of all, CVS should be ashamed for what they put this physician through. So thankful he fought back. His office is no "pill mill'. He does drug testing multiple times a year and sees patients a minimum of four times a year.

  5. Brian W, I fear I have not been sufficiently entertaining to bring you back. Here is a real laugh track that just might do it. When one is grabbed by the scruff of his worldview and made to choose between his Confession and his profession ... it is a not a hard choice, given the Confession affects eternity. But then comes the hardship in this world. Imagine how often I hear taunts like yours ... "what, you could not even pass character and fitness after they let you sit and pass their bar exam ... dude, there must really be something wrong with you!" Even one of the Bishop's foremost courtiers said that, when explaining why the RCC refused to stand with me. You want entertaining? How about watching your personal economy crash while you have a wife and five kids to clothe and feed. And you can't because you cannot work, because those demanding you cast off your Confession to be allowed into "their" profession have all the control. And you know that they are wrong, dead wrong, and that even the professional code itself allows your Faithful stand, to wit: "A lawyer may refuse to comply with an obligation imposed by law upon a good faith belief that no valid obligation exists. The provisions of Rule 1.2(d) concerning a good faith challenge to the validity, scope, meaning or application of the law apply to challenges of legal regulation of the practice of law." YET YOU ARE A NONPERSON before the BLE, and will not be heard on your rights or their duties to the law -- you are under tyranny, not law. And so they win in this world, you lose, and you lose even your belief in the rule of law, and demoralization joins poverty, and very troubling thoughts impeaching self worth rush in to fill the void where your career once lived. Thoughts you did not think possible. You find yourself a failure ... in your profession, in your support of your family, in the mirror. And there is little to keep hope alive, because tyranny rules so firmly and none, not the church, not the NGO's, none truly give a damn. Not even a new court, who pay such lip service to justice and ancient role models. You want entertainment? Well if you are on the side of the courtiers running the system that has crushed me, as I suspect you are, then Orwell must be a real riot: "There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always — do not forget this, Winston — always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face — forever." I never thought they would win, I always thought that at the end of the day the rule of law would prevail. Yes, the rule of man's law. Instead power prevailed, so many rules broken by the system to break me. It took years, but, finally, the end that Dr Bowman predicted is upon me, the end that she advised the BLE to take to break me. Ironically, that is the one thing in her far left of center report that the BLE (after stamping, in red ink, on Jan 22) is uninterested in, as that the BLE and ADA office that used the federal statute as a sword now refuses to even dialogue on her dire prediction as to my fate. "C'est la vie" Entertaining enough for you, status quo defender?

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