Parties intended MSA to be admissible, enforceable, and subject to disclosure . . .
In affirmance, Second District holds that mediation privilege does not preclude admissibility of stipulated MSA that is product of mediation; stipulated MSA arrived at during prior dismissed disso may be basis for stipulated judgment in subsequent disso
In re Marriage of Daly and Oyster
(July 29, 2014)
California Court of Appeal 2 Civil B249255 (Div 1) 228 Cal.App.4 th 505, 175 Cal.Rptr.3d 364, 2014 FA 1650, per Chaney, Acting PJ (Johnson and Wiley, JJ, concurring). Los Angeles County: Cunningham, J, affirmed. For appellant: John Tkach, (626) 795-8992. For respondent: Varoujan Agemian, (818) 244-0294. CFLP §D.118.5.
Joanne Daly married David Oyster in 1981; they later had one child. The couple separated in 2004, and Joanne filed for divorce in 2005. Before David was served with the summons and petition, he and Joanne participated in mediation. The resulting stipulated judgment divided their real and personal property, provided for joint legal custody of their teenaged child, scheduled periods of physical custody and visitation, and set child support. It also provided the Joanne would pay David $2,000 a month for spousal support and designated their respective responsibility for filing and mediation fees and attorney‘s fees. Joanne and David represented that each had disclosed all assets, liabilities, income, and benefits in schedules and declarations. The judgment stated that it constituted an MSA to be confirmed as a stipulated judgment, to be operable as a trial court judgment in conjunction with a stipulated disso judgment, and to be enforceable by the trial court. However, neither this judgment nor any other document was ever filed in Joanne‘s pending disso. On May 31, 2011, the trial court dismissed Joanne‘s disso petition for lack of prosecution.
On June 13, 2011, Joanne filed her second disso petition, and asked the trial court to enter the parties‘ stipulated judgment as a disso judgment nunc pro tunc and to enforce it in her current disso proceeding. In a supporting declaration, Joanne stated that she mistakenly believed that the mediator would file the stipulated judgment, that she and David had never reconciled, and that the terms of the stipulated judgment had been performed. In opposition, David said he thought the stipulated judgment was preliminary and subject to further modification, that several of its provisions remained unperformed, and that he had never received Joanne‘s I&E declaration or assets schedule. The trial court declined to enter the stipulated judgment nunc pro tunc or to enforce it in the current disso proceeding. The court then scheduled a hearing on whether the stipulated judgment was enforceable.
At that hearing, David argued that the judgment was inadmissible under Ev C §1119 [mediation privilege]. The trial court didn‘t agree, determined that the stipulated judgment was an enforceable MSA, and made conflicting rulings as to whether full performance had occurred. On May 21, 2013, the lower court entered a judgment on reserved issues, based on the provisions of the 2006 stipulated judgment and a separate May 2012 spousal support order. This judgment also reserved jurisdiction over all other issues and concluded that the MSA was an enforceable contract on which judgment was to be entered, subject to a postjudgment motion to modify.
David appealed, but the Second District affirmed.
No hiding here . . .
David contended, as he had in the trial court, that the lower court should not have admitted the 2006 stipulated judgment into evidence in the 2011 proceedings because the judgment was protected by the mediation privilege. The justices acknowledged that the mediation privilege protects writings prepared in the course of mediation, but they noted that there are exceptions to that general rule. Ev C §1123, they explained, provides that the mediation privilege does not apply to a written settlement agreement reached in mediation which is designated as ” ’admissible or subject to disclosure or words to that effect ,‘ “ or that ” ’provides that it is enforceable or binding or words to that effect .‘ “ (Emphasis in opinion.) The justices reasoned that the ” ’words to that effect‘ “ provision was intended to recognize that persons who make agreements do not always use legalistic wording to express their intent and to ensure that trial courts are flexible in interpreting such agreements. Here, Joanne and David‘s MSA or stipulated judgment stated that it would be ” ’the operable court judgment‘ “ and would be enforceable by the trial court, which would also supervise the payment of obligations and the execution of necessary documents. Moreover, the panel noted, the trial court could not very well enforce or supervise the agreement if the parties intended that it would be inadmissible in court. Accordingly, the justices concluded that the mediation privilege did not preclude its admission by the trial court.
Parsing the prose . . .
David also argued that the stipulated judgment was intended to be used only in the first disso, but not in any subsequent proceeding. The panel found nothing in the MSA that precluded its use in the subsequent disso. Moreover, the issue was not whether it was admissible in a subsequent proceeding, but whether it was supposed to be confidential, which it clearly was not. In addition, the justices could find nothing in the record or the MSA provisions that would make it unenforceable in the later proceeding. There was no evidence that Joanne and David wanted to nullify the MSA and stipulated judgment if the divorce dragged on beyond five years. The judgment itself was intended as a property settlement affecting property whose nature had not materially changed in the intervening years. Finally, the justices agreed with David‘s contention that a final judgment could not be entered until he and Joanne had filed and served their FDDs and I&E declarations. They pointed out, however that the trial court‘s order on reserved issues was not a final judgment, as it contemplated further proceedings. Thus, there was time for the parties to comply with those requirements before the final judgment issued.
This opinion makes a lot of sense when it discusses the effect of the Ev C §1119(b) mediation privilege on the admissibility of a stipulated judgment arrived at in mediation. The justices‘ explanation of the ”words to that effect“ provision in Ev C §1123 is clear and their application of that provision to the judgment here is appropriate and understandable. The panel, however, drifts into the realm of ”have result, need reasoning“ when they give their reasons for determining that the 2006 stipulated judgment could form the basis for the May 2013 disso judgment. The justices would have been on more solid ground if they had simply characterized the 2006 judgment as an MSA that had independent legal significance and was separately enforceable as a contract, as the trial court did. They hint at that when they say that such a settlement ”effects the parties‘ final separation and independence by disjoining and fixing property and other rights going forward in perpetuity.“ The panel is on less firm ground when they rely on the fact that the judgment didn‘t say it couldn‘t be used later.
We also find it somewhat surprising that the judgment on reserved issues is not a final judgment because it is subject to modification, so that the parties still have time to file their FDDs. The opinion says that the judgment resolved custody, child and spousal support, and property division, but the trial court reserved jurisdiction ” ’over all other issues‘ “ and stated that the parties were free to pursue postjudgment modification if they wish to. The opinion doesn‘t make clear what the other issues might be, or why the modifiability of the judgment would mean that it was not final.