Mediation Message No. 62


Simmons v. Ghaderi (2008) 44 Cal.4th 570 is one of the most important decisions concerning mediation in many years but the least understood. Since many attorneys are unfamiliar with the case and what it requires, I am discussing it once again. (I first wrote about this case in Mediation Message no. 45.)

In Simmons v. Ghaderi, the mother and brother of a deceased infant sought to enforce a settlement at a mediation against a defendant doctor in a medical malpractice matter. The doctor had orally agreed to settlement but then had second thoughts and did not sign the written agreement. In a subsequent court trial for breach of the oral settlement agreement, the court found the defendant had breached an enforceable oral contract. The appellate court affirmed the judgment.

In reversing the judgment, the Supreme Court first reaffirmed that Evidence Code sections 1118 through 1126 and the California Law Revision Commission’s comments to that statutory scheme unambiguously indicate that the Legislature “intended to apply (mediation) confidentiality broadly and to limit any exceptions to confidentiality to narrowly prescribed statutory exemptions.” Consistent with that policy, the Court proceeded to strictly apply the relevant statutory scheme.

As to the oral settlement agreement, which plaintiffs argued Ghaderi’s agents had entered into at the mediation, the Supreme Court noted that Evidence Code section 1124 requires several steps, as set forth in section 1118, for the admissibility of such an agreement. In substance, within 72 hours of the oral agreement, the parties must prepare and execute a written document in which they agree that its terms are binding on them.

On a practical level, Simmons v. Ghaderi is a primer on what parties must do at mediation to create an enforceable settlement agreement. If an oral agreement has been reached, they must comply with Evidence Code section 1118 (see above) to make it admissible. After the parties have reduced their understanding to a writing, they must include language which complies with both Evidence Code sections 1123 and 1122. Section 1123 states, in part, that such a writing is admissible and may be disclosed if it “(a) … provides that it is admissible or subject to disclosure, or words to that effect”; (or) “(b) … provides that it is enforceable or binding or words to that effect”; (or) “(c) All parties to the agreement expressly agree in writing, or orally in accordance with Section 1118, to its disclosure.” Section 1122(a)(1) provides, in part, that a writing prepared in the course of mediation is admissible if “All persons who conduct or otherwise participate in the mediation expressly agree in writing, or orally in accordance with Section 1118, to disclosure of the communication, document, or writing.” Thus, the effective, operative wording, for the enforcement of a written settlement agreement achieved because of mediation, should read, “It is the intent of the parties, pursuant to Evidence Code sections 1122(a)(1) and 1123(b) and Code of Civil Procedure section 664.6, that all of the terms of this agreement may be disclosed to a court of law and shall be enforceable and binding upon them in a court of law.”

In summary, every written mediation settlement agreement, to be enforceable, must contain language substantially similar to the above highlighted terms. It is recommended that attorneys who use form or standardized settlement agreements insert these words in brackets that can be deleted in their entirety if the settlement is arrived at by means other than mediation.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, August 2010

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