John Doe v. Archdiocese Milwaukee
| Decision Date | 05 November 2014 |
| Docket Number | No. 13–3783.,13–3783. |
| Parties | John DOE, Claimant A–282, Appellant, v. ARCHDIOCESE OF MILWAUKEE, Debtor–Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
OPINION TEXT STARTS HERE
Daniel J. La Fave, Bruce G. Arnold, Francis H. LoCoco, Daryl L. Diesing, Lindsey M. Greenwald, Whyte Hirschboeck Dudek S.C., Milwaukee, WI, for Debtor–Appellee.
Jeffrey R. Anderson, Attorney, Michael G. Finnegan, Attorney, Jeff Anderson & Associates PA, St. Paul, MN, for Appellant.
Before FLAUM and WILLIAMS, Circuit Judges, and DOW, District Judge. *
“John Doe” settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese's motion for summary judgment by contending that his settlement was fraudulently induced. This argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation. Doe maintains an exception applies here, namely that the later action is “distinct from the dispute whose settlement is attempted through mediation.” Wis. Stat. § 904.085(4)(e). We, however, conclude that Doe's bankruptcy action is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese's responsibility for the sexual abuse Doe suffered. Doe seeks damages in both the mediation and bankruptcy for the same sexual abuse; he does not seek separate or additional damages for the alleged fraudulent inducement. We conclude the exception in Wisconsin Statute § 904.085(4)(e) does not apply, and so we affirm the judgment of the district court.
John Doe, who is deaf, attended St. John's School for the Deaf in Milwaukee, Wisconsin. He was sexually abused as a student there in 1974, when he was seventeen years old, by Father Lawrence Murphy. Doe participated in the Archdiocese of Milwaukee's voluntary mediation program in 2007. He reached a settlement of $80,000 for his claims against the Archdiocese for fraud, negligence, and sexual battery. Doe signed a settlement agreement containing a confidentiality clause, another clause providing that the parties could not introduce as evidence in later proceedings matters including views expressed or admissions made during the mediation proceedings, and a provision stating that the settlement was entered into “to otherwise resolve and settle all disputes between them.” These included “all claims of any nature that [Doe] has against the Archdiocese ... arising from any sexual abuse of [Doe] by Murphy ...”
The Archdiocese filed for relief under Chapter 11 of the United States Bankruptcy Code four years later. Doe filed a proof of claim (he is Claimant A–282) in the Archdiocese's bankruptcy proceeding for sexual abuse inflicted on him by Murphy. The proof of claim states that Doe was sexually abused by Murphy in 1974 and details the abuse. The Archdiocese objected to Doe's proof of claim on the basis that he participated in a mediation and executed a settlement agreement with a complete release in 2007 and moved for summary judgment.
Doe opposed the motion on the basis that he was fraudulently induced into settlement with the Archdiocese. Doe stated in an affidavit that the Archdiocese told him during mediation that $80,000 was the maximum amount of money it had available to pay him, that all the other sexual abuse survivors who signed settlement agreements were receiving $80,000, and that it would not be fair to pay him more than others. Doe also stated that the Archdiocese did not inform him that it was paying priests $10,000 to $20,000 to leave the Church and that he did not realize the extent of the Archdiocese's knowledge about Murphy's past history of abusing children. Doe asserts in the affidavit that had he known all this information, he would not have agreed to settle his claims for $80,000. Doe's brief on appeal states that the Archdiocese settled claims with some other survivors of sexual abuse for amounts from $100,000 to $200,000.
The bankruptcy court initially ruled that the bankruptcy action and 2007 mediation were distinct disputes and that admission of communications made during the mediation was necessary to prevent manifest injustice. As a result, it concluded that statements made in the mediation were admissible under Wisconsin Statute § 904.085(4)(e). The Archdiocese then subpoenaed the mediator who presided over Doe's mediation session. The mediator filed a motion to quash the subpoena, and the bankruptcy court allowed further briefing by the parties and held a hearing. The bankruptcy court reconsidered its earlier ruling and held that the bankruptcy proceeding and mediation were not distinct disputes, and, therefore that communications in the mediation were not admissible. It granted summary judgment in favor of the Archdiocese on Doe's fraudulent inducement claim, and the district court affirmed that decision. Doe appeals.
Federal Rule of Procedure 56(a) provides that summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). That same standard applies in bankruptcy proceedings as well. Fed. R. Bankr.P. 7056. We review the grant of summary judgment to the Archdiocese de novo. See In re Solis, 610 F.3d 969, 971 (7th Cir.2010).
Doe maintains that the statements in his affidavit create a genuine issue of material fact and that summary judgment should not have been granted on his claim. The Archdiocese, however, contends that evidence of statements made during the mediation proceedings on which Doe relies is inadmissible under Wisconsin's mediation privilege statute.
This is a federal court proceeding, so the first question is whether Wisconsin's privilege law applies or whether federal common law controls. Federal Rule of Evidence 501 provides that “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.” That same rule governs actions in the bankruptcy court. SeeFed. R. Bankr.P. 9017. Doe argues that because his case is a federal bankruptcy case, state privilege law does not apply. But Doe's claim in the bankruptcy proceeding is a Wisconsin state-law claim of fraudulent inducement. Indeed, the only authority Doe cites in support of his fraudulent inducement claim is Wisconsin state law. See Appellant Br. at 10 (citing Kailin v. Armstrong, 252 Wis.2d 676, 643 N.W.2d 132, 145–46 (App.2002)). Wisconsin law provides the rule of decision governing Doe's fraudulent inducement contention, and because it does, Wisconsin mediation privilege law applies. Cf. Northwestern Mem. Hosp. v. Ashcroft, 362 F.3d 923, 925 (7th Cir.2004) (); Mem. Hosp. for McHenry Cnty. v. Shadur, 664 F.2d 1058, 1061 (7th Cir.1981) ().
Under Wisconsin law, “no oral or written communication relating to a dispute in mediation made or presented in mediation by the mediator or a party is admissible in evidence or subject to discovery or compulsory process in any judicial or administrative proceeding.” Wis. Stat. § 904.085(3)(a). There are exceptions, however, including the one at issue here, which provides:
In an action or proceeding distinct from the dispute whose settlement is attempted through mediation, the court may admit evidence otherwise barred by this section if, after an in camera hearing, it determines that admission is necessary to prevent a manifest injustice of sufficient magnitude to outweigh the importance of protecting the principle of confidentiality in mediation proceedings generally.
Wis. Stat. § 904.085(4)(e).
When interpreting a state statute, we apply the same principles of statutory construction that a state court would apply. See Karlin v. Foust, 188 F.3d 446, 457 (7th Cir.1999). Wisconsin courts begin their statutory interpretation by focusing on the plain language of the statute. State ex rel. Kalal v. Circuit Court of Dane Cnty., 271 Wis.2d 633, 681 N.W.2d 110, 124 (2004). That is because “[j]udicial deference to the policy choices enacted into law by the legislature requires that statutory interpretation focus primarily on the language of the statute,” which is given its “common, ordinary, and accepted meaning.” Id.
Doe argues that a manifest injustice would result if the statements from his mediation are not admitted. In support he argues there was a disparity of power during the mediation (Doe is deaf and did not have legal counsel with him at the mediation, although the Archdiocese says it did not either), maintains the Archdiocese misrepresented the amount it paid to other sexual abuse survivors in settlements and its ability to pay him, and contends the Archdiocese failed to disclose information to him regarding Murphy's history of abusing children. But as Doe recognizes, the text of § 904.085(4)(e) makes clear that the “manifest injustice” inquiry only arises if the proceeding is one that is “distinct from the dispute” whose settlement was attempted through mediation. Wisconsin does not allow the admission of mediation communications solely on the basis that manifest injustice would result were they not admitted. Rather, the disputes must be distinct. The threshold question here, then, is whether the claim Doe asserts in bankruptcy is an action or proceeding distinct from the dispute that was settled in the 2007 mediation.
There is little guidance addressing Wisconsin's “distinct from the dispute” requirement. The only Wisconsin appellate court to...
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