Stewart v. Preston Pipeline Inc., H028333.

• Court: California Court of Appeals
• Citation: 36 Cal.Rptr.3d 901,134 Cal.App.4th 1565
• Decision Date: 20 December 2005
• Docket Number: No. H028333.,H028333.
• Parties: Darren STEWART, Plaintiff and Appellant, v. PRESTON PIPELINE INC. et al., Defendants and Respondents.

36 Cal.Rptr.3d 901 134 Cal.App.4th 1565 Darren STEWART, Plaintiff and Appellant,
v.
PRESTON PIPELINE INC. et al., Defendants and Respondents. No. H028333. Court of Appeal, Sixth District. December 20, 2005.

[36 Cal.Rptr.3d 903]

Scott Seabaugh, Law Offices of Scott Seabaugh, San Jose, for Plaintiff and Appellant.

William S. Caspari, Alameda, Fortune, Drevlow, O'Sullivan & Hudson, for Defendants and Respondents.

DUFFY, J.

134 Cal.App.4th 1568

As an encouragement to the open communication essential to successful settlement discussions, the Evidence Code, and in particular Evidence Code section 1119 (section 1119),¹ makes inadmissible any statements, writings, or other communications made in connection with mediation. We consider here whether this broad mediation confidentiality statute may be used by a settling party as a shield to prevent the admission of a purported settlement document signed at the conclusion of mediation

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in subsequent proceedings to enforce the settlement.

Plaintiff Darren Stewart sued as a result of personal injuries he sustained when his vehicle collided with a back hoe that fell off a truck owned by defendant Preston Pipeline Inc. and driven by defendant George Solinger (collectively, defendants). The dispute proceeded to mediation. At the conclusion of the mediation, a document—signed by plaintiff, plaintiff's attorney, and defendants' attorney—purported to memorialize a settlement and recited

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that the parties intended the settlement to be enforceable and exempt from certain confidentiality provisions of the Evidence Code. Plaintiff thereafter refused to accept the settlement check. Defendants brought alternative motions to enforce the settlement and for summary judgment under Code of Civil Procedure sections 664.6 and 437c, respectively. The court granted the latter motion and entered judgment in defendants' favor.

On appeal, plaintiff contends that the settlement agreement that was the basis for the court's summary judgment order was both inadmissible under section 1119 and unenforceable because it was not signed by all of the parties litigant. He cites Levy v. Superior Court (1995) 10 Cal.4th 578, 41 Cal.Rptr.2d 878, 896 P.2d 171 (Levy), which held that a written settlement agreement not signed by all settling litigants could not be enforced under the summary procedure specified in Code of Civil Procedure section 664.6. Plaintiff also argues that, assuming the agreement was admissible and enforceable, he was entitled to a trial on whether there was mutual consent, or (assuming there was mutual consent) whether he could rescind the agreement.

We hold that the settlement agreement was admissible under section 1123 (a statutory exception to mediation confidentiality) and was not rendered unenforceable as a result of its not having been signed personally by each of the parties. We conclude further that there was no triable issue of material fact that the parties settled the dispute. Because the trial court properly granted summary judgment, we will affirm.

PROCEDURAL HISTORY AND RELEVANT FACTS

On December 12, 2003, plaintiff filed a complaint against defendants for damages arising out of an accident occurring on September 30, 2003. Defendants answered by filing a general denial. The parties participated in a mediation proceeding on June 23, 2004. The mediation was attended by plaintiff, Dennis O'Brien (plaintiff's then-attorney), Thomas LemMon (defendants' attorney), and Helen Kong (a claims adjuster with Zurich American Insurance Company, defendants' insurer).

At the conclusion of the mediation, a document captioned "Confirmation of Settlement As A Result Of Mediation" (settlement agreement or agreement)² was signed by plaintiff, his attorney (O'Brien), and defendants' attorney (LemMon). The agreement provided that "[t]he plaintiff(s) and the defendant(s) herein agree that they have reached a full and final settlement of all

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claims." The concluding paragraph read: "The parties intend that this settlement is enforceable pursuant to the provisions of Code of Civil Procedure Section

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664.6; the parties agree that this Confirmation of Settlement is exempt from the confidentiality provisions of Evidence Code Section 1152, et seq."

Thereafter, LemMon forwarded to O'Brien the settlement check along with a proposed written agreement of settlement. Plaintiff refused to accept the settlement check tendered by defendants, asserting by letter (through new counsel, Scott Seabaugh) that "[t]here is no settlement of this matter." The next day, Seabaugh again wrote to LemMon, stating that he did "not believe that there was an agreement, enforceable or not, reached at the mediation. In any event, ... Mr. Stewart elects to rescind any settlement agreement" defendants alleged to have existed.

Defendants moved to amend their answer to allege additional affirmative defenses that the parties had agreed to settle the dispute. Over plaintiff's opposition and request for sanctions, the court granted the motion to amend. Plaintiff then moved to strike the portion of the amended answer that concerned the alleged settlement; the court denied that motion. Defendants moved to confirm the settlement under Code of Civil Procedure section 664.6; in the alternative, defendants moved for summary judgment pursuant to Code of Civil Procedure section 437c. Plaintiff opposed both motions, contending, inter alia, that the settlement agreement was inadmissible under section 1119 and was unenforceable. The court overruled plaintiff's evidentiary objection, denied the motion to enforce settlement, and granted the motion for summary judgment.

Judgment was entered on December 3, 2004.³ Plaintiff filed a timely notice of appeal, and the matter is a proper subject for appellate review. (Code Civ. Proc., § 437c, subd. (m)(1); see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2005) ¶ 10:384, p. 10-122.12.)

DISCUSSION

I. Issues On Appeal

Plaintiff challenges the three orders from the underlying judgment, namely, the orders granting leave to amend the answer, denying plaintiff's motion to

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strike portions of the answer, and granting summary judgment.⁴ While he makes several arguments, the thrust of plaintiff's appeal is that it was error to grant summary judgment based upon the settlement agreement, because it was (1) a mediation communication, inadmissible under section 1119, and (2) not a binding settlement agreement. Alternatively, plaintiff contends that, assuming arguendo the settlement agreement was admissible and a potentially binding settlement document, summary judgment was nonetheless improper. He asserts that there was a triable issue as to whether there was mutual consent; assuming mutual consent, there was nonetheless a triable issue as to whether he could rescind the agreement.

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After discussing the applicable standard of review, we will address these claims of error.

II. Standard Of Review

As we have acknowledged, "[c]onstruction and application of a statute involve questions of law, which require independent review." (Murphy v. Padilla (1996) 42 Cal.App.4th 707, 711, 49 Cal.Rptr.2d 722; see also Elyaoudayan v. Hoffman (2003) 104 Cal.App.4th 1421, 1428, 129 Cal.Rptr.2d 41 [construction and application of Code Civ. Proc., § 664.6 primarily questions of law].) Likewise, since summary judgment motions involve purely questions of law, we review the granting of summary judgment de novo. (Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 139, 127 Cal.Rptr.2d 145 [de novo review of "whether a triable issue of material fact exists and whether the moving party was entitled to summary judgment as a matter of law"]; Chavez v. Carpenter (2001) 91 Cal.App.4th 1433, 1438, 111 Cal.Rptr.2d 534.)

As will be evident from our discussion, post, the primary issues here concern the interpretation and application of sections 1119 and 1123 with respect to the admissibility of the settlement agreement (see pts. III. and IV., post), matters for our independent review. And our consideration of whether there were triable issues of material fact that made summary judgment inappropriate (see pt. V., post) is similarly governed by a de novo standard of review.

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III. Whether Settlement Agreement Was Admissible

Plaintiff contends that the mediation confidentiality provisions of section 1119 precluded introduction of the settlement agreement as evidence in support of defendants' summary judgment motion. He asserts that these confidentiality rights are absolute and that there were no applicable statutory exceptions—and, in particular, that the exception prescribed under section 1123 did not apply. We review sections 1119 and 1123 below and conclude that plaintiff's argument as to the inadmissibility of the settlement agreement cannot be sustained.

A. Mediation Confidentiality Under the Evidence Code⁵

The mediation provisions of the Evidence Code, commencing with section 1115, were enacted in 1997. (Stats.1997, ch. 772, § 3.)⁶ Section 1115, subdivision (a) defines "mediation" broadly as "a process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement." (See also Code Civ. Proc., § 1775.1, subd. (a) [containing same definition of "mediation" for pilot project for civil mediation in civil actions in

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Los Angeles County].) The Evidence Code provisions, including those addressing confidentiality, are applicable to all mediation proceedings, except for court-supervised settlement conferences (under Cal. Rules of Court, rule 222), family conciliation proceedings (Fam.Code, § 1800 et seq.), and mediation of visitation and custody issues (Fam.Code, § 3160 et seq.). (§ 1117, subd. (a).)

Section 1119 provides: "Except as otherwise...