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Van Winkle: Decision pits mediation confidentiality against contract law

John R. Van Winkle
July 18, 2012
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By John Van Winkle

van-winkle-john-mug.jpg Van Winkle

In the recent case of Horner v. Carter, __N.E.2nd__ (Ind.Ct.App. 2012), 34A02-1111-DR-1029, the Indiana Court of Appeals held that evidence of mediation communications was admissible in a hearing to modify a 7-year-old mediated settlement agreement incorporated into a decree of dissolution. The court had two basic reasons for allowing the testimony of matters communicated during the mediation. First, the court ruled that the evidentiary exclusion provisions of ADR Rule 2.12 and Indiana Evidence Rule 408 did not require exclusion of the evidence because it was offered for a purpose other than “to prove liability for or invalidating of the claim or its amount.” The court ruled that the husband was offering the mediation communication to establish that a mistake had been made in the drafting of the agreement.

The second basis for the court’s ruling is arguably more problematic; that is, that the mediation confidentiality provisions of the ADR rules do not prohibit the admission of mediation communications when used to establish traditional contract defenses such as mistake, fraud and duress.

Clash of mediation confidentiality and substantive contract law

The Horner case highlights the difficulty that occurs when mediation confidentiality provisions collide with long-established contract common law. Courts have not reached unanimous conclusions. For example, in the case of In re Marriage of Kieturakis, 138 Cal.App.4th 56 (Ct.App.2006), the California Court of Appeals wrestled with the problem. In that case, two years after a mediated settlement agreement was reached in a dissolution of marriage, the wife sought to overturn the agreement alleging it had been reached under duress. The California Court of Appeals excluded the testimony of mediation communications, continuing in that state what has been considered to be a “super privilege” created by the California mediation statute.

In the article, “When Mediation Confidentiality and Substantive Law Clash: An Inquiry into the Impact of In Re Marriage of Kieturakis on California Confidentiality Law,” [8 Pepperdine Dis. Res. L. J, Article 7 (2012)], the journal editor discussed the Kieturakis case and the issue presented when mediated agreements are later challenged and parties seek to introduce evidence of mediation communications to support or defend against such challenges. Importantly, that article, as did the court in Horner, cited and discussed the provisions and comments of the Uniform Mediation Act. The UMA was drafted in 2001 by a joint effort of the American Bar Association’s Section of Dispute Resolution and the National Conference of Commissioners on Uniform State Laws, and was based not on the evidentiary exclusionary principles of Evidence Rule 408 but rather upon the establishment of a privilege for mediation communications.

Unlike California, however, where the mediation confidentiality provisions have been strictly enforced, the UMA recognized that in appropriate circumstances the mediation confidentiality should defer. The UMA provides in Section 6(B)(2)that the confidentiality privilege may not apply in certain instances in connection with proceedings “to prove a claim to rescind or reform or a defense to avoid liability on a contract arising out of mediation.” The UMA, however, provides important preconditions that must be met before mediation communications will be admissible.

The UMA requires an in camera hearing and weighing of interests

Although the Indiana Court of Appeals in Horner cited UMA Section 6(B)(2) and its comments for the proposition that the exception to the privilege created was to preserve traditional contract defenses, it did not discuss the important balancing and weighing of interests contemplated by that same section. The drafters of the UMA understood that there would be occasions when equities would require that evidence of what was done or said in a mediation be admitted into evidence.

The policy and process reasons for the confidentiality provisions were so critical, however, that the drafters wanted to ensure that such occasions were limited and that there would be process safeguards in place. Therefore, the UMA provides that no evidence of mediation communications should be admitted into evidence until and unless there is an in camera hearing in which the party seeking to use the evidence demonstrates that “the evidence is not otherwise available” and that “there is a need for the evidence that substantially outweighs the interest in protecting confidentiality.” Peter Robinson’s article, “Centuries of Contract Common Law Can’t Be All Wrong: Why the UMA’s Exception to Mediation Confidentiality in Enforcement Proceedings Should Be Embraced and Broadened,” 2003 J.Disp.Resol.135, (2003) is cited in Horner in support of the decision to allow the admission of mediation communication, but the decision does not refer to or discuss the critical weighing and balancing principles inherent in the UMA’s exception. Robinson in that article states: “While this exclusion provides the means to apply contract law when enforcing mediated agreements, the UMA reflects a strong commitment to the interests of mediation confidentiality by imposing numerous conditions and one problematic limitation on the implementation of the exception.” (2003 JDR at p.168)

Although Robinson concludes the UMA is flawed in that it prohibits mediator testimony, he underscores the importance of the in camera hearing and states that the “extreme remedy” of allowing the admission of mediation communications is only available after specific findings by a neutral authority. It is this balancing and weighing inherent in the in camera hearing which is missing from the discussion and holding of Horner.

Conclusion

It is submitted that the balancing and weighing of interests contemplated by the UMA and embodied in the requirement for an in camera hearing should be adopted by Indiana courts. Such a hearing ensures that traditional contract defenses and actions are preserved without unnecessary erosions of mediation confidentiality.

The question is how best to graft this requirement into our current law. A clarification or expansion of the holding in Horner by the Indiana Supreme Court would serve as one path. Because, however, the change or expansion of the law would create an affirmative obligation on the part of trial courts to conduct in camera hearings, it could be that the best course would be for the Indiana General Assembly to join the 11 other states, including our neighbors Ohio and Illinois, and adopt the Uniform Mediation Law. Although the adoption of the UMA in Indiana would require some tweaking of the ADR Rules, there would not be a radical departure from the manner in which those ADR Rules have been interpreted to date by the Indiana Supreme Court. Evidence of mediation communications should only be permitted if the court finds after an in camera hearing that the evidence is otherwise not available and that the interest in protecting mediation confidentiality is outweighed by the need for the evidence.•

__________

John Van Winkle is a full-time mediator and a former chair of the American Bar Association’s Section of Dispute Resolution. The opinions expressed are those of the author.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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