Foxgate Homeowners' Assn., Inc. v. Bramalea California, Inc

In Foxgate Homeowners' Assn., Inc. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, a construction defect action, the plaintiff homeowners' association moved for sanctions against the defendant developer and its attorney for failing to participate in good faith in court-ordered mediation, and to comply with an order of the mediator. ( Id. at pp. 4-8.) Attached to the sanctions motion were the report of the mediator and a declaration by counsel, both reciting statements made by the developer's attorney during the mediation, which tended to show obstructionist and possibly bad faith conduct. ( Id. at pp. 6-7.) The motion for sanctions was granted, and the developer appealed. ( Id. at p. 8.) The Court of Appeal concluded that, notwithstanding the provisions of Evidence Code sections 1119 and 1121, a mediator or party could report information "reasonably necessary to describe sanctionable conduct and place that conduct in context," and thus the mediator's report was appropriate. ( Foxgate, supra, 26 Cal.4th at p. 9.) The Supreme Court held this conclusion to be error, noting that the language in Evidence Code sections 1119 and 1121 was clear and required no judicial construction: "Section 1119 prohibits any person, mediator and participants alike, from revealing any written or oral communication made during mediation. Section 1121 also prohibits the mediator, but not a party, from advising the court about conduct during mediation that might warrant sanctions. It also prohibits the court from considering a report that includes information not expressly permitted to be included in a mediator's report. The submission to the court, and the court's consideration of, the report of the mediator violated sections 1119 and 1121." ( Foxgate, supra, 26 Cal.4th at pp. 13-14.) The court further concluded that the legislative intent underlying the mediation confidentiality provisions was clear: it was designed "to promote 'a candid and informal exchange regarding events in the past . . . . This frank exchange is achieved only if the participants know that what is said in the mediation will not be used to their detriment through later court proceedings and other adjudicatory processes.'" ( Id. at p. 14.) The court further noted that Evidence Code section 703.5 made arbitrators, judges and mediators persons incompetent to testify. ( Foxgate, supra, 26 Cal.4th at pp. 14-15.) Based upon all the foregoing, the high court held that "to carry out the purpose of encouraging mediation by ensuring confidentiality, the statutory scheme, which includes Evidence Code sections 703.5, 1119, and 1121, unqualifiedly bars disclosure of communications made during mediation absent an express statutory exception." ( Foxgate, supra, 26 Cal.4th at p. 15.)