Waiver of Attorney-Client Privilege Trumps Mediation Confidentiality
The Court of Appeal opinion discussed in this article concerning John Porter et al. v. Steven Wyner et al., may have been overruled by the decision discussed in the article titled “California Supreme Court: No “Attorney Malpractice” Exception to Mediation Confidentiality” (January, 2011)
Edited by Judith Stalk
Mediation counsel beware! This is the second heads up. Communications between attorney and client, including promises made by the attorney during a mediation outside the presence of other parties, counsel or the mediator, are not protected by mediation confidentiality. Simply put, Ev. Code section 958, waiver of attorney-client privilege communications, trumps Ev. Code sections 1115 et seq, mediation confidentiality.
What follows is a paraphrase of the Court opinion. John Porter et al. v. Steven Wyner et al., 183 Cal. App. 4th 949; 2010 Cal. App. LEXIS 487, April 8, 2010, modified and rehearing denied, 2010 Cal. App. LEXIS 644 (Cal. App. 2d Dist., May 10, 2010).
Steven Wyner and his firm Wyner Tiffany, “Wyner”, represented John and Deborah Porter, “Porters”, in their claim against the Manhattan Beach School District and others in the underlying action. In the instant case the Porters claim that Wyner breached an oral agreement made during the mediation of the underlying action. Wyner allegedly promised to pay the Porters $51,000 from Wyner attorney fees ($1,600,000) it was to receive from defendants in the underlying action and failed to do so.
During trial in the instant action Wyner initially objected and later withdrew objections to the admission of evidence of communications between Wyner and the Porters with respect to the promises made during mediation. Wyner brought a motion in limine asking the trial court to bar the admission of any evidence subject to mediation confidentiality. The Porters opposed the motion arguing it would be unjust when there is a claimed breach of duty arising out of the attorney-client relationship, to allow a client or an attorney to bar the other from producing pertinent evidence. The Porters urged the trial court to apply Ev. C. Section 958 (all references to code sections are to the Evidence Code.) to preclude application of mediation confidentiality to communications between attorney and client. (Section 958 provides: “There is no privilege under this article as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.”) The jury returned a verdict for the Porters on their claim for breach of the attorney-client fee agreement. Wyner moved for a new trial and a motion JNOV. The trial court granted the motion for new trial and denied the motion JNOV. The parties filed cross appeals.
“The purpose, policy and intent behind mediation confidentiality is to protect the free flow of communication and ideas (e.g., demands/offers) that form the basis and structure of a successful resolution process. The confidentiality that is accorded mediation was never intended to protect communications or agreements between a client and his own counsel should a conflict arise between them. The attorney-client privilege, codified in section 954, already provides the necessary protection. Section 958, through its waiver procedure, allows a client to seek appropriate recourse should something occur that places him and his attorney on a conflict course. It provides that there is “no privilege” that covers “a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.” (Section 958.)
“To expand the mediation privilege to also cover communications between a lawyer and his client,… clients would be precluded from pursuing any remedy against their own counsel for professional deficiencies occurring during the mediation process as well as representations made to the client to induce settlement. The confidentiality aspect which protects and shrouds the mediation process should not be extended to protect anything other than a frank, candid and open exchange regarding events in the past by and between disputants [emphasis added]. It was not meant to subsume a secondary and ancillary set of communications by and between a client and his own counsel, irrespective of whether such communications took place in the presence of the mediator or not.”
Section 1115, subdivision (a) provides, ” ‘[m]ediation’ means a process in which a neutral person or persons facilitate communication between the disputants [emphasis added] to assist them in reaching a mutually acceptable agreement.” The disputants in a mediation process are not the attorney and his client; they are the parties who file the lawsuit.… The communications in the attorney-client relationship like the ones at issue in this case fall outside those to which the confidentiality applies.
“In our view, communications between an attorney and their client cannot be considered for the purpose of, in the course of, or pursuant to …’ a mediation. (Section 1119(a).)
“In certain circumstances this would enable confidentiality to be used as both a sword and shield by an attorney during the representation process. Specifically, a client who embarks upon the mediation process would face losing any recourse against his attorney for any breached side agreements, representations and deficiencies that might take place or come to light during the mediation.”
Mrs. Porter testified that the Porters met with the mediator and opposing counsel at one point during the mediation and were told that the federal defendants in the underlying action were concerned about a “double-dipping” issue relating to her lost earnings claim. She testified that afterwards Wyner advised her to resolve this issue by dropping her lost earnings claim. She claimed he assured her she would be paid out of the attorney fee recovery and that she waived her lost earnings claim after receiving this assurance from Wyner.
“The critical conversations admitted in this case were that Wyner advised Porter to drop her lost earnings claim, that he assured her she would be paid out of the attorney fee recovery, and that she waived her lost earnings claim after receiving this assurance from Wyner. Those statements were not made in the presence of the mediator; they were discussions solely between an attorney and his client.… Any discussions about that side deal were not between disputants to the mediation.”
“Here, the communications between the Porters, on the one hand, and Wyner, their attorneys, on the other hand, were not within the purview of the mediation confidentiality statutes.… We recognize that the broad policy of mediation confidentiality is to be strictly enforced and implied exceptions have not been met with acceptance by the California Supreme Court. However, the communications that have been denied protection here do not fall within the statute and no exception has been created. Quite the contrary, here we simply decline to extend the confidentiality component to a relationship neither envisioned nor contemplated by statute.”
Wyner’s JNOV is pending. Another case, Cassel v. Superior Court; Wasserman, Comden et al, Real Parties in Interest (–Cal.Rptr.3rd–, 2009 WL 3766430, Cal.App. 2 Dist., the same as the instant case), on the same issue is pending appeal before the California Supreme Court.