California Evidence Code Section 1119(b) prohibits the discovery of writings prepared for or during private mediation. However, a recent appellate case holds that this confidentiality does not bar the discovery of mandated financial disclosure declarations. Lappe vs. Superior Court, 232 Cal.App. 4th 774. In Lappe, the wife sought a dissolution of her marriage. The parties agreed not to hire counsel and to resolve their issues through mediation. During mediation the parties signed declarations stating that each had served the other with a statutorily required preliminary and final Declaration of Disclosure. Family Code Section 2103. During the mediation the parties reached an agreement which was later incorporated into a Stipulated Judgment.
In both the settlement agreement and Stipulated Judgment, the wife agreed to accept cash in full satisfaction of her community property interest in a family business. The husband later sold the business for over three times the value agreed to in mediation. The wife then petitioned to set aside the Judgment on the grounds of fraud, perjury, distress and mistake. To support her petition the wife served discovery on husband requiring him to produce the Declaration of Disclosure he had served on her before the entry of Judgment. The husband refused relying upon the mediation confidentiality of Evidence Code Section 1119(b). The Trial Court upheld husband’s objection to wife’s discovery request.
The wife appealed and the Court of Appeals reversed explaining that each spouse has an initial and continuing duty to provide a full and complete financial disclosure in a dissolution proceeding pursuant to Family Code Sections 2100 et. seq. It further held that these disclosure requirements are mandatory and have few exceptions which did not apply to this case. The Court further noted that parties seeking dissolution who utilized private mediation must execute and serve final Declarations of Disclosure before a Court may enter Judgment. Family Code Section 2106. Although California Evidence Code Sections 1115-1128 recognize mediation confidentiality, the facts contained in a mediation communication are not automatically considered confidential. The Disclosure Declarations required under Family Code Section 2106 are not specifically covered under the categories of confidential documents outlined in Evidence Code Section 1119. The Court went on to hold that the Declarations of Disclosure in Lappe were not created for the mediation, but rather were made to comply with the Family Code Disclosure requirements. Further, the Court held that Evidence Code Section 1120 provides that mediation may not be used by husband in this case to shield documents from disclosure. In order to be properly shielded and confidential, the documents must have existed only for the mediation and not required for the entry of Judgment pursuant to the Family Code.
The take away from Lappe is that parties should not expect mediation to protect them from the Disclosure requirements of Family Code Section 2100 et. seq.
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