Case Summary: In Re Kieturakis, 138 Cal. App. 4 th 56 (Cal. Ct. App. 2006)

Issue: Whether mediation communications could be introduced as evidence where the party challenging the settlement agreement on the basis of fraud, duress, and lack of disclosure refuses to waive the privilege.

Rule: The mediation privilege is strictly construed; unless all parties expressly agree to waive the privilege, mediation communications are generally not to be disclosed. It is a "'super privilege'—impenetrable by public policies favoring disclosure" to which there are no applicable good faith or implied exceptions. [1]  Thus, where the disadvantaged party to a mediated settlement agreement claims to have acted under duress, thereby invoking a presumption of undue influence, and refuses to waive the confidentiality privilege, she can "prevent the other party from introducing evidence required to carry the burden of proving that no duress occurred." [2]

Facts: In 1999, as a part of the dissolution of their marriage, Anna Kieturakis and Marciej Kieturakis chose to mediate issues regarding the distribution of their marital assets. At the conclusion of the mediation sessions, the parties entered into a marital settlement agreement. Two years later, claiming duress, fraud, and undue influence, Anna sought to overturn the settlement agreement. During the trial, the court found the settlement agreement was more favorable to Marciej than to Anna. Under California family law, in certain circumstances, where an agreement is more favorable to one party than another, there is a presumption of undue influence and the favored party bears the burden of proving that he did not exercise influence to obtain such an advantage. To bear his burden of proof, Marciej sought to introduce evidence regarding Anna and Marciej's conduct during the mediation, communications from a third party regarding an appraisal which took place as part of the mediation, and e-mails from the mediator to Anna and Marciej which summarized the discussions which took place during the mediation sessions and highlighted the effects and significance of certain provisions of the mediation settlement agreement. Anna refused to waive the mediation privilege in order to prevent the mediation communications from being admitted. However, the trial court did admit the evidence reasoning that, "[t]o hold uphold the mediation privilege here would merely thwart this Court's ability and obligation to do justice in this particular case and undermine confidence in our judicial system." At the conclusion of the trial, the court, considering both the evidence the mediation communications and other testimony, denied Anna's motion to set aside the marital settlement agreement. Anna appealed this decision, including the trial court's decision to admit the privileged mediation communications over her objection.

Discussion: The appellate court affirmed the outcome of the decision on the grounds that Marciej should not have born the burden of proving that he did not exercise undue influence in obtaining an advantage in the mediated settlement agreement. Although the court did not rule directly as to whether the admission of the mediation evidence was proper (instead any error in admitting privileged evidence was harmless), the decision highlights the need for flexibility to be built into mediation confidentiality statutes. To prevent a disincentive to use mediation and to render fair results, courts should have the authority to balance the need for confidentiality in mediation against a party's need for evidence when conduct and communications occurring during the mediation process become an issue in subsequent litigation. As the deciding court notes in the opinion, the strict interpretation of the mediation statute renders all unequal mediated agreements as invalid where the party invoking a defense of duress or undue influence refuses to waive the privilege and creates a significant disincentive for parties to mediate marital property settlements. [3]

[1] In re Kieturakis, 138 Cal. App. 4 th 56, 63 (Cal. Ct. App. 2006).

[2] Id. at 63-64.

[3] Id. at 64-65.