Presumption of undue influence does not arise in agreements reached through private mediation . . .
In affirmance, Third District holds that disso parties who reach agreement on MSA provisions by participating in private mediation may agree to make financial disclosures that do not strictly comply with statutory disclosure requirements
In re Marriage of Woolsey(October 22, 2013)
California Court of Appeal 3 Civil C067800 220 Cal.App.4th 881, 163 Cal.Rptr.3d 551, 2013 FA 1613, per Hoch, J (Hull, Acting PJ, concurring; Murray, J, concurring in result). Placer County: McElhany, J, affirmed. For appellant: Stephanie Finelli, (916) 443-2144. For respondent: Steven Burlingham, CFLS, (916) 332-8122. CFLP &setc;§D.118, J.220.127.116.11, P.69.20, T.33.6.10.
Clark and Anna Woolsey were married in September 2001; their two children, Grant and Claire, were born in July 2002 and February 2004 respectively. The couple separated around April 30, 2009,
and Anna and the kids moved back to California from Missouri. She filed for a legal separation in July. Hoping to reconcile, Clark convinced Anna to participate in private mediation through Live at Peace Ministries beginning in August. After two days of mediation, it was clear that reconciliation was not going to happen. The parties then mediated custody, property, and other issues. On August 23, 2009, they signed an MSA that resolved the custody and property issues and contained a communication plan. That same day, Anna served Clark with the legal separation petition. She followed up in September by filing a PDD and FDD, along with an I&E declaration. In October, the parties stipulated to an order granting Anna custody of the kids, except for specified visitation days for Clark in late October and at Thanksgiving. In January 2010, Anna amended her petition to a disso filing. Clark filed a PDD, but never filed a FDD.
In February 2010, Anna filed a motion to enforce the MSA under CCP §664.6 [entry of judgment reached by parties in writing or stated on record]. In opposition, Clark sought a trial, at which he appeared in pro per, questioned the child custody mediator, and testified on his own behalf. When his testimony concluded, Clark agreed to a post-trial briefing schedule. His brief made no mention of his not being permitted to present additional evidence or his alleged failure to receive a fair trial. The trial court granted Anna’s motion to enter judgment, awarded the parents joint legal custody of the kids, and set up a parenting schedule that made Anna the primary caregiver for the kids.
Clark appealed, but, in a partially published opinion, the Third District affirmed.
It says here in small print . . .
Clark argued that the MSA should be set aside because the parties failed to make the statutorily required financial disclosures. The justices noted that when the parties signed their MSA, Fam C §2104 required them to serve a PDD after or concurrently with the filing of a disso or legal separation petition, unless the trial court ordered otherwise for good cause. In addition, Fam C §2105 required the parties to serve an FDD and I&E declaration before or at the time that they signed an MSA for property or support issues, unless they waived the FDD or the trial court made a different order for good cause. However, the justices pointed out, in Elden v. Superior Court (Elden) (1997) 53 Cal.App.4th 1497, 62 Cal.Rptr.2d 322, 1997 CFLR 7526, 1997 FA 798, the court held that parties who settle disso issues through private mediation may also agree “ ‘to adopt other, more summary procedures for financial disclosure,’ ” and need not comply with Fam C §2104 or §2105. And, they agreed with that holding. Like the court in Elden, the panel reasoned that mediation provides divorcing parties with a less costly and more speedy way to resolve their issues. Moreover, they noted,there is a strong legislative policy favoring alternative dispute resolution, such as mediation. However, the justices found, that policy would be undermined if parties to mediation were required to strictly comply with the “disclosure rules designed for adversarial litigation.”
They disclosed enough . . .
Relaxing the requirements regarding disclosure, the justices said, did not mean that the parties need not comply with Fam C §2106 requirement for filing an FDD and I&E declaration, or a written waiver, before the judgment is entered. Here, however, both Anna and Clark had “made multiple disclosures of their finances” and their MSA reflected their discussions regarding assets and debts, property division, and various other financial issues regarding health insurance, other life insurance policies, and their children’s bank accounts. In addition, the MSA provided for division of multiple items of personal property, and stated that Clark could dispose of any such property not included or unwanted. Also, both parties had served PDDs. Anna had served an FDD and I&E declaration, but Clark failed to file an FDD. The justices determined that Clark could not now argue that lack of compliance with statutory disclosure requirements precluded the trial court from entering the disso judgment, since he was the one who “urged Anna to engage in mediation” and failed to file an FDD. The panel believed that it would not be right to allow a non-complying party to successfully set aside a judgment on a non-compliance basis, but might encourage that party to wait in the weeds to see if the judgment is favorable and then seek a better result if it is not by “pulling the non-disclosure card out of his or her sleeve on appeal or new trial motion.” Accordingly, they declined to do that here.
Just no telling what she said . . .
Clark also contended that Anna imposed undue influence on him to get him to sign an unfair property division. The panel reminded him that Ev C §1119 mediation confidentiality provisions protect from disclosure anything that is said or admitted in mediation, without exception. Since neither the mediator nor any party is permitted to reveal any communication made during mediation, Clark’s claim of undue influence must fail. Moreover, the justices continued, per In re Marriage of Kieturakis (2006) 138 Cal.App.4th 56, 41 Cal.Rptr.3d 119, 2006 CFLR 10261, 2006 FA 1236, the presumption that an interspousal transaction that gives one spouse an advantage must have arisen from undue influence is not applicable where parties participate in private mediation. Besides, the panel said, nothing prevented Anna and Clark from deciding to make an unequal division of their property as part of their written MSA. And, the justices concluded, mediators generally seek to protect each party’s rights by making sure that neither one dominates the mediation process.
Rules, rules, and more rules . . .
Clark further maintained that the judgment should be set aside because it did not comply with the requirements of Placer County Local Rule 30.7, which provides that where one or both the disso parties is not represented by counsel, the unrepresented party’s signature on any settlement agreement must be notarized or acknowledged before the court clerk and must appear directly after a statement noting that the party has been advised to seek independent counsel but has declined to do so. In the trial court, the majority noted, the parties had acknowledged that the signatures on the MSA were theirs and the trial court had found that the mediation rules under which their mediation was conducted included an advisement of their right to be represented by counsel. Thus, the trial court rejected Clark’s argument, and the majority did the same, albeit on somewhat different grounds. The majority reasoned that a trial court may not adopt a local rule that imposes procedures which are in conflict with statutory requirements. As the Supremes said in Elkins v. Superior Court (Elkins) (2007) 41 Cal.4th 1337, 63 Cal.Rptr.3d 483, 2007 CFLR 10697, 2007 FA 1304, “local courts may not create their own rules of evidence and procedure in conflict with statewide statutes.” The majority justices noted that the statutes applicable to the entry of mediated MSAs do not contain the additional requirements imposed by Local Rule 30.7. Therefore, the majority concluded, that rule is invalid insofar as it requires signatures on MSA’s to be notarized or acknowledged before the court clerk and imposes an advisement regarding the right to counsel before a judgment can be entered.
Non-pub . . .
In the unpublished parts of the opinion, the panel found that (a) Clark was not denied a full and fair hearing; (b) the trial court was not required to order the parties to pursue further mediation or arbitration; (c) Clark’s failure to cite supporting legal authority meant that he forfeited his contention that Anna deceived him; (d) the trial court’s custody and visitation orders were not an abuse of discretion; and (e) Clark’s contentions regarding a statement of decision lacked merit.
In other words . . .
In a separate concurrence, Justice Murray concurred in the result, but wrote separately to disagree with the majority’s analysis regarding Local Rule 30.7. The justice would have found that the trial court had the authority to decline to apply the rule in the interests of justice, would have determined that the rule did not conflict with statutory requirements, and would have concluded that the rule was valid because it advanced statutory purposes.
This case looks like a situation of “be careful what you wish for.” Clark talked Anna into mediation, then didn’t like the result it brought. We wonder whether he fully realized the limits on challenging the result that are part of the mediation process. Whether he did or he didn’t, those limits thwart many of his efforts at reversal. As the panel points out, when parties chose an alternative approach to divorce, they may speed up the process and succeed in making the situation less adversarial, but there is a price to be paid for that choice. This case shows some of the ways in which payment is made. It also reminds us to make sure that our clients are aware of those limits when they make a decision to choose mediation in their family law matters.
The dissent believes that the majority goes too far in invalidating the entire local rule and would prefer to give the trial court the option of simply waiving its application, as the trial court did here. Clearly, the rule is designed to protect unrepresented parties in a time when the number of pro per litigants continues to rise. Giving the trial court the leeway that the dissent supports might be the best of both worlds, since it imposes requirements only on litigants who don’t have the protection that representation by counsel would afford them. However, that approach is subject to the old “slippery slope” argument we all remember so well. Invalidating the rule may seem harsh in this case, but sticking to a strict interpretation of the strictures on local rules can prevent courts from enforcing rules that go farther than the one here, like the one that the Supremes struck down in Elkins , which strictly limited live testimony in law and motion matters.