Jeld-Wen, Inc. v. Superior Court

• Court: California Court of Appeals
• Writing for the Court: McIntyre
• Citation: Jeld-Wen, Inc. v. Superior Court, 53 Cal.Rptr.3d 115, 146 Cal.App.4th 536 (Cal. App. 2007)
• Decision Date: 04 January 2007
• Docket Number: No. D048782.,D048782.
• Parties: JELD-WEN, Inc., Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent; Marlborough Development Corp., et al., Real Parties in Interest.

53 Cal.Rptr.3d 115

146 Cal.App.4th 536

JELD-WEN, Inc., Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent; Marlborough Development Corp., et al., Real Parties in Interest.

No. D048782.

Court of Appeal, Fourth District, Division 1.

January 4, 2007.

McAtee and Harmeyer, Jeff G. Harmeyer, San Diego, and Brett Norris for Petitioner.

No appearance for Respondent.

Cooksey, Toolen, Gage, Duffy & Woog, Phil Woog, and Paul K. Hoffman, Costa Mesa, for Real Parties in Interest.

McINTYRE, J.

In this case we hold that trial courts do not have the authority to order parties in a complex civil action to attend and pay for private mediation.

FACTUAL AND PROCEDURAL BACKGROUND

Jeld-Wen, Inc. is an uninsured cross-defendant in this multi-party construction defect case involving over $500,000 in alleged costs of repair. The trial court proposed a case management order (the order) that, among other things, deemed the matter to be complex within the meaning of section 19 of the California Standards of Judicial Administration for Complex Litigation and appointed an individual as the "Mediator and/or MSC [Mandatory Settlement Conference] Judge" under Code of Civil Procedure section 187 to mediate and conduct settlement conferences for a maximum of 100 hours at an hourly rate of $500. (All undesignated statutory references are to the Code of Civil Procedure.) The order stated that no party had established an economic inability to pay a pro rata share of the mediator's fee and provided deadlines to demand and conduct the mediation. Unless excused by the court or the mediator, all parties were to appear at the mediation with their insurance representatives or other individuals with settlement authority. The order also appointed a discovery referee under sections 187 and 639 and California Rules of Court, rule 244.2 to hear and determine all discovery disputes. (All undesignated rule references are to the California Rules of Court; effective January 1, 2007, the rules were reorganized and renumbered. Rule 244.2 has now been divided into rules 3.920-3.927. Throughout this opinion we shall cite to the new rule numbers and note the former number in brackets.)

Jeld-Wen timely objected to the mediation provisions of the proposed order on the ground they were inconsistent with case law and violated rule 3.1380 [former rule 222], which allows a court to set only one mandatory settlement conference. The trial court overruled the objection and issued the order. Thereafter, Jeld-Wen received a written settlement demand from the real parties in interest, which is represented to be in the amount of $2,799, and notice of two upcoming mediation dates. Jeld-Wen refused the settlement demand, claiming, among other things, it was not liable for any damages because it did not install the products and no discovery had been conducted showing that its products were defective. Accordingly, Jeld-Wen indicated it would not attend the mediation sessions, but invited further informal settlement discussions.

After Jeld-Wen failed to attend the mediation, the real parties in interest moved for an order imposing monetary sanctions and compelling its appearance at the next mediation. The trial court granted the motion, concluding that no statute or rule conflicted with the mediation provisions of the order and that Lu v. Superior Court (1997) 55 Cal.App.4th 1264, 64 Cal.Rptr.2d 561 (Lu) set forth its authority to appoint a mediator to conduct settlement conferences. The trial court ordered Jeld-Wen to attend the next mediation session and pay $200 in sanctions to it for directly violating the order. Jeld-Wen sought a writ of mandate directing the trial court to set aside its ruling; we issued an order to show cause.

DISCUSSION

Mediation is defined as a "process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement." (§ 1775.1, subd. (a); Evid.Code, § 1115; rule 3.852(1) [former rule 1620.2(a)].) During this process, a neutral third party with no decisionmaking power intervenes in the dispute to help the litigants voluntarily reach their own agreement. (Travelers Casualty & Surety Co. v. Superior Court (2005) 126 Cal. App.4th 1131, 1138-1139, 24 Cal.Rptr.3d 751 (Travelers).) Essential to the mediation process is the concept that the parties are in control of resolving their own dispute. (Id at p. 1139, 24 Cal.Rptr.3d 751; Saeta v. Superior Court (2004) 117 Cal. App.4th 261, 270, 11 Cal.Rptr.3d 610 [same]; see also, Advisory Com. com. to Cal. Rules of Court, rule 3.853 [former rule 1620.3] ["Voluntary participation and self-determination are fundamental principles of mediation"].)

In 1993, the Legislature enacted the Civil Action Mediation Program (§ 1775 et seq.), which allows courts to order cases into mediation as an alternative to judicial arbitration. (§§ 1775.2, 1775.3, subd. (a), 1775.4.) In turn, the Judicial Council has established the procedures to be followed in submitting actions to mediation under the program (§ 1775, subd. (f); rule 3.870 et seq. [former rule 1630 et seq.]) and the minimum conduct standards for mediators in court-connected mediation programs (rule 3.850 et seq. [former rule 1620 et seq.]).

Courts participating in the Civil Action Mediation Program may order any case to mediation, paid for by the Judicial Council, if the amount in controversy does not exceed $50,000 for each plaintiff, without regard to questions of liability, defenses, or comparative negligence and whether or not the action includes a prayer for equitable relief. (§§ 1775.5, 1775.8, subd. (a), 1141.18, subd. (b); rule 3.871(a)(2) [former rule 1631(a)(1)].) In enacting this statutory scheme, the Legislature adopted the $50,000 lid in existence for the judicial arbitration statutes (§ 1141.10 et seq.). (§ 1141.11, subd. (a) & (b); Legis. Counsel's Dig., Senate Bill No. 401, 5 Stats. 1993 (Reg.Sess.), Summary Digest, p. 569.) Nevertheless, any other action may be submitted to court-sponsored mediation, regardless of the amount in controversy, if all the parties so stipulate. (Rule 3.871(a)(2) [former rule 1631(a)(2)].)

The amenability of an action to mediation is determined on a case-by-case basis (rule 3.871(c) [former rule 1631(b)]) and the court's determination must be made after consideration of the views expressed by the parties. (Rule 3.871(a)(1) [former rule 1631(a)].) Even after a case has been ordered to mediation, the mediator must inform the parties that participation in mediation is completely voluntary, refrain from coercing a party to continue its participation in the mediation and respect the right of each party to decide the extent of its participation or withdraw from the mediation. (Rule 3.853 [former rule 1620.3].) In fact, unless the parties have agreed to a binding award, any party who voluntarily enters mediation may revoke its consent and withdraw from the dispute resolution process. (Bus. & Prof.Code, § 467.7, subd. (a); Kirschenman v. Superior Court (1994) 30 Cal.App.4th 832, 835, 36 Cal. Rptr.2d 166 (Kirschenman) [holding that no sanctions could be imposed against parties who withdrew from voluntary mediation prior to appointment of mediator].) The Superior Court of San Diego County has also created its own Civil Mediation Program whereby parties to all general civil independent calendar cases, including construction defect and complex cases, can stipulate to mediation. (Super. Ct. San Diego County, Local Rules, rule 2.3.7.) Under this voluntary program, the parties are required to pay the mediator and equally share all fees and expenses, unless otherwise agreed. (Ibid.)

The case law and the statutory scheme outlined above emphasize the voluntary nature of mediation. (Travelers, supra, 126 Cal.App.4th at pp. 1138-1139, 24 Cal. Rptr.3d 751.) Significantly, the trial court must consider the expressed views of the parties before ordering a case to mediation (rule 3.871(a)(1) [former rule 1631(a)(1)]) and even after a case has been ordered to mediation, the mediator must respect the right of any party to withdraw from the mediation at any time. (Rule 3.853(2) [former rule 1620.3(b)].)

Citing the Lu decision, the real parties in interest suggest that trial courts have the inherent authority to order the parties in complex actions to attend and pay for private mediation. (Lu, supra, 55 Cal. App.4th 1264, 64 Cal.Rptr.2d 561.) As hereinafter explained, we conclude that a trial court exceeds its authority by mandating that the parties attend and pay for private mediation over their objection.

In Lu, the trial court appointed a referee under section 639 to act as a mediator in a complex case. (Lu, supra, 55 Cal. App.4th at p. 1267, 64 Cal.Rptr.2d 561.) The order provided that "[a]ll mediation sessions are deemed to be Mandatory Settlement Conferences of this Court" and required that the parties pay a pro rata share of the mediation expense unless otherwise ordered by the mediator. (Ibid.) The petitioner objected to the order and challenged it via writ of mandate, claiming the trial court lacked the authority to order it to participate in a private mediation. (Ibid.) The appellate court concluded that the net effect of the order was to allow a referee, rather than a judge, to conduct a settlement conference, and declined to address how or whether mediation differed from traditional court supervised settlement conferences. (Id. at p. 1270, 64 Cal. Rptr.2d 561.) Based on this conclusion, the Lu court avoided the issue of how the mediator/settlement judge would be compensated, noting that section 639 contemplated that referees would be compensated. (Id. at p. 1272, 64 Cal.Rptr.2d 561.)

Section 639 allows a trial court to appoint a referee to examine a long account, take an account, resolve an issue of fact, obtain information in a special proceeding or resolve discovery disputes. (§ 639, subd. (a).) However, the reference procedure of...