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California Family Law Report



Case of the Month (from CFLR Monthly)

February 2015

Agreement to make PDDs and FDDs inadmissible and/or nondiscoverable is invalid . . .


In writ proceeding, Second District holds that trial court erred by denying Mom’s motion to compel production of Dad’s FDD on grounds of mediation confidentiality; mediation confidentiality statutes do not apply to disclosures made for purpose of complying with Family Code statutory disclosure mandates


Lappe v. Superior Court (Lappe)

(December 19, 2014)

California Court of Appeal 2 Civil B255704 (Div 3) 232 Cal.App.4 th 774, 181 Cal.Rptr.3d 510, 2015 FA 1671, per Kitching, J (Klein, PJ, and Edmon, J, concurring). Los Angeles County: Lewis, J, petition granted. For petitioner: Claudia Ribet, CFLS, (310) 860-9162. For real party: James Donovan, (213) 629-4861, and Christopher Melcher, CFLS, (818) 591-3700. CFLP §§D.118.5, J.


Gilda Lappe filed for divorce from her husband, Dr. Murray Lappe in February 2011, after 16 years of marriage and the birth of two children. Gilda, a stay-at-home mom, and Murray, a medical doctor and “successful businessman,” later agreed to resolve their support and property issues through mediation, without counsel. As part of the mediation process, the parties signed declarations stating that each had served the other with a preliminary disclosure declaration (PDD) and final disclosure declaration (FDD). They also signed an MSA that, among other things, provided that Gilda would receive $10 million as her community property share of a community business, eScreen, Inc. The MSA also provided that the parties PDDs and FDDs would not be admissible in court and would be protected from disclosure under Ev C §1119(b), which precludes the discovery or admission of writings prepared for the purpose of, in the course of, or pursuant to mediation. On August 2, 2011, the trial court entered the parties’ stipulated disso judgment, which incorporated their MSA.


On April 24, 2012, Gilda filed an application to set aside the disso judgment on the grounds of fraud, perjury, duress, and mistake. In her supporting declaration, Gilda claimed that in January 2012, she learned that Murray was selling eScreen, Inc. for $75 million. She asserted that Murray failed to tell her that he planned to sell eScreen, and that she would not have accepted $10 million for her community share of the business if she had known about the sale. Gilda also served Murray with a request for production of documents, including his PDD and FDD. In opposition, Murray claimed that the PDD and FDD were protected from disclosure by the mediation confidentiality statutes. Gilda then filed a motion to compel. After the trial court appointed a referee to make recommendations regarding discovery, the referee concluded that the PDD and FDD were not protected by mediation confidentiality because the Family Code policy of fair and full disclosure between divorcing parties trumped the confidentiality statutes. Murray objected to the recommendation on the grounds that it impermissibly sought to carve out a judicial exception to mediation confidentiality and ignored the parties’ agreement that the disclosure declarations would not be discoverable. The trial court determined that the California Supreme Court’s rejection of judicially crafted exceptions to mediation confidentiality, coupled with the parties’ stipulated agreement precluding discovery or admission of their PDDs and FDDs per Ev C §1119, meant that the PDD and FDD were protected by mediation confidentiality. Accordingly, the trial court denied Gilda’s motion to compel.


Gilda petitioned the Second District for a writ of mandate, and the appellate panel issued the requested writ.


What the Family Code says . . .
The justices began by reviewing the statutory scheme that governs the Family Code disclosure requirements. They noted that the statutes carry out this state’s emphasis on full and fair disclosure of the assets and liabilities of the parties from the earliest stages of a disso proceeding to its conclusion. The PDD contains a general inventory of the parties’ assets and liabilities, while the FDD “requires far more extensive disclosures.” Specifically, the justices continued, Fam C §2105(b) mandates disclosure of “ ‘[a]ll material facts and information’ “ about the parties’ assets and liabilities, the value of the community assets, the amounts of the community liabilities, and each spouse’s earnings, accumulations, and expenses. In addition, the FDD must contain a complete and accurate written disclosure of any investment, business, or other income-producing opportunity that has arisen either pre or post-separation, and the parties have a continuing duty to augment and update the initial disclosures. Due to the sensitive nature of the information they contain, the panel explained, the FDDs and the PDDs are not required to be filed with the court, but must be served on the other party. And, the trial court may not issue a final disso judgment unless the FDDs have been served, except where there has been a valid waiver of the requirement, either stipulated by the parties or ordered by the trial court. The panel recognized that in Elden v. Superior Court (Elden) (1997) 53 Cal.App.4 th 1497, 62 Cal.Rptr.2d 322, 1997 CFLR 7526, 1997 FA 798, the court held that divorcing parties who settle their property and/or support issues through mediation do not have to comply strictly with the technical requirements of the disclosure statutes. Nevertheless, the justices emphasized, they are still required to serve each other with FDDs. Moreover, the panel noted, under Fam C §2107(e), the trial court may order the parties to provide PDDs and FDDs that they previously exchanged where one party files a motion to set aside the disso judgment.


What the Evidence Code says . . .
The panel then turned to the mediation confidentiality statutes. They were aware that Ev C §1119 makes the confidentiality provisions applicable to any oral or written communication made or “ ‘prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation.’ ” The justices explained that the confidentiality statutes were intended to encourage people to participate in mediation, to speak freely during mediation, and to “frankly exchange views, without fear that disclosures might be used against them in later proceedings.” The panel pointed out that per Ev C §1120(a), facts that are otherwise admissible or subject to discovery do not become inadmissible or nondiscoverable if used in mediation, nor can they be shielded from disclosure by putting them in confidential mediation documents. In addition, communications or writings can become admissible if the parties consent to their disclosure as set forth in Ev C §1122. However, the justices cautioned that the California Supreme Court has “categorically prohibited judicially crafted exceptions, even in situations where justice seems to call for a different result.”


What the justices say . . .
With all of that in mind, the justices then looked to see whether, as the trial court found, the mediation confidentiality provisions trumped the Family Code disclosure requirements. They acknowledged that judicially crafted exceptions to the confidentiality provisions are frowned upon. However, they didn’t think that was the real issue here, which was whether the mediation confidentiality statutes apply to disclosures mandated by the Family Code regardless of whether the parties participate in mediation. When they focused on the language of Ev C §1119, they saw that it makes confidential any writing prepared for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation. The PDDs and FDDs at issue here, the justices reasoned, did not fall within that definition, since they are prepared and exchanged pursuant to Family Code mandates and would be so prepared in the absence of mediation. The panel agreed with Gilda’s contention that the PDDs and FDDs were not created and exchanged because the parties were contemplating mediation and would use them as part of a negotiating strategy. Instead, they were created and exchanged because the Legislature mandated that the parties do so, in order to fulfill their duties of providing each other with full and fair disclosure of their assets and liabilities. Moreover, the justices continued, the fact that they were exchanged during mediation did not make the PDDs and FDDs writings that were prepared in the course of mediation. As the panel had noted before, per Ev C §1120, a writing that is otherwise admissible or subject to discovery does not become inadmissible or nondiscoverable if used in mediation. Therefore, the justices concluded, the mediation confidentiality statutes apply only where the writing or statement would not have existed if it hadn’t been prepared for or pursuant to mediation. And, since the PDDs and FDDs would have existed regardless of whether Gilda and Murray had agreed to participate in mediation, the mediation confidentiality statutes do not apply to them.


No can do . . .
The panel gave short shrift to the argument that the confidentiality statutes should apply because the parties agreed in their MSA that the PDDs and FDDs would not be admissible or discoverable. The justices described the MSA provision as an impermissible attempt to effect a contractual waiver of the Family Code disclosure requirements and found that such stipulations are contrary to the public policy of full and accurate disclosure of assets and liabilities in dissos. Summing up, the panel held that the trial court should have ordered production of the disclosure declarations and abused its discretion by failing to do so. The justices issued a writ of mandate directing the trial court to vacate its order denying Gilda’s motion to compel and to enter a new order granting her motion with respect to the PDDs and FDDs.





The trial court here was understandably leery of creating a judicially crafted exception to the mediation confidentiality statutes. The justices are too, but they get around that hurdle by simply changing the question. Instead of determining whether PDDs and FDDs are exceptions to the confidentiality statutes, the panel asks whether the statutes even apply to PDDs and FDDs and answers no. Some may say that by holding that the statutes don’t apply, the panel has created their own judicially crafted exception to those statutes. Others may find it ironic that the justices’ reasoning on the issue in the slip opinion comes right after they have quoted the California Supreme Court as saying that “ ‘[w]here competing policy concerns are present, it is for the Legislature to resolve them.’ ” Apparently, the panel believes that the Legislature has resolved the competing policy concerns in this case by limiting the scope of the mediation confidentiality statutes to writings prepared for the purpose of, in the course of, or pursuant to, a mediation or mediation consultation. And, by giving a narrow application to that statute, the justices here conclude that the confidentiality statutes don’t apply because the PDDs and FDDs are not writings that were prepared solely for that purpose. In so doing, the panel gives us a new rule for determining whether the confidentiality statutes apply: they don’t apply unless the writing in question would not have been prepared if the mediation had not occurred.



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