DR Lakes, Inc. v. BRANDSMART USA, 4D01-2388.

• Decision Date: 26 June 2002
• Docket Number: No. 4D01-2388.,4D01-2388.
• Citation: 819 So.2d 971
• Parties: DR LAKES INC., a Florida corporation, and Joseph M. Della Ratta, Appellants, v. BRANDSMART U.S.A. OF WEST PALM BEACH, a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

819 So.2d 971

DR LAKES INC., a Florida corporation, and Joseph M. Della Ratta, Appellants, v. BRANDSMART U.S.A. OF WEST PALM BEACH, a Florida corporation, Appellee.

No. 4D01-2388.

District Court of Appeal of Florida, Fourth District.

June 26, 2002.

David P. Ackerman of Ackerman, Link & Sartory, P.A., West Palm Beach, for appellants.

Lucinda A. Hofman of Holland & Knight LLP, Fort Lauderdale, for appellee.

KLEIN, J.

This appeal arises out of a suit for specific performance in which the parties, after mediation, settled. Appellant seller, DR Lakes, Inc., claimed the settlement agreement contained a $600,000 clerical error and sought relief in a motion to enforce settlement. The trial court ruled that the statutory mediation privilege of confidentiality precluded evidence as to what occurred in mediation, leaving seller without the means to prove that there had been such an error. Seller appeals, and we reverse, holding that the privilege does not apply in this case.

The original agreement provided that the purchase price for this property, where Brandsmart USA is now located in West Palm Beach, would be determined by multiplying eight dollars times the number of square feet of property. The buyer, however, was to receive a $600,000 credit to defray the expense of constructing a road necessary for the development of the property. With this credit the purchase price was about $5.5 million. Before the transaction closed, a dispute arose, and buyer sued for specific performance and damages. Following court ordered mediation the parties entered into a settlement agreement which differed from the original contract by obligating the seller, in the event the road could be built in two phases, to construct the first phase.

In its motion to enforce the settlement agreement, seller alleged that there was a clerical error in the purchase price. More specifically, the parties had agreed in mediation that the buyer would no longer be entitled to a $600,000 reduction from the per square foot price because the obligation to build the road had been shifted from the buyer to the seller. The purchase price reflected in the mediation agreement and subsequently prepared closing statement, because of a clerical error, did not credit the seller with that $600,000.

At the evidentiary hearing on the motion to enforce settlement, buyer objected to any testimony as to what occurred at the mediation hearing based on section 44.102(3), Florida Statutes (2001), which provides:

Each party involved in a court-ordered mediation proceeding has a privilege to refuse to disclose, and to prevent any person present at the proceeding from disclosing, communications made during such proceeding. All oral or written communications in a mediation proceeding, other than an executed settlement agreement, shall be exempt from the requirements of chapter 119 [public meeting and record requirements] and shall be confidential and inadmissible as evidence in any subsequent legal proceeding, unless all parties agree otherwise.

The trial court agreed with the buyer that the statute precluded any evidence as to what occurred during mediation, which left seller unable to prove the clerical error.

The seller advances two arguments on appeal: (1) that the statutory privilege should not be applied under these circumstances, or (2) the buyer waived the privilege when its counsel discussed what occurred during mediation in opening statement at the hearing on the motion to enforce settlement. We reject the waiver argument because this was merely opening statement in a nonjury case which was a response to seller's opening statement, prior to the court ruling on the privilege issue.

Although there are cases holding that the statutory privilege applies where the issue is whether an oral agreement was reached in mediation,¹ there are no cases addressing whether the privilege applies where there has been a mutual mistake in a settlement agreement. Seller argues that we have carved out an exception to the privilege in Vitakis-Valchine v. Valchine, 793 So.2d 1094 (Fla. 4th DCA 2001), in which we held that duress imposed by a mediator on a party signing a mediation settlement agreement could be a ground for setting aside the agreement. In that case, however, although we acknowledged the confidentiality privilege, our opinion does not reflect that it was raised.

The reason for confidentiality as to statements made during mediation where a settlement agreement is not reached is obvious. Mediation could not take place if litigants had to worry about admissions against interest being offered into evidence at trial, if a settlement was not reached. Once the parties in mediation have signed an agreement, however, the reasons for confidentiality are not as compelling. There is, of course, no confidentiality as to "an executed settlement agreement." § 44.102(3).

Seller acknowledges that the statute is not ambiguous, but contends that it would be absurd to apply it here. Seller asks:

What if, for example, a $5,000 settlement is reduced to writing as $5,000,000? Could not a court look to what occurred during the mediation to resolve that mistake?

It is well-established in Florida that statutes, even where clear, should not be interpreted to produce absurd results. As our supreme court explained in Holly v. Auld, 450 So.2d 217, 219 (Fla.1984):

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