Nonsuit Granted in Breach of Settlement Agreement
July 1, 2002
In a breach of settlement agreement case brought by a lawyer and his law firm, Russell S. Wollman and Barbara McCully successfully moved for nonsuit after plaintiffs' opening statement, which is rarely granted.
McCully and Wollman brought a motion in limine to exclude evidence of the written settlement agreement and any other written or oral communications made by the parties during the mediation based on Evidence Code section 1119, stating that evidence of anything said or any writing prepared in the course of, or pursuant to, a mediation is inadmissible.
Section 1119 can be overcome if all mediation participants agreed in writing or orally to disclose communications or if there was a binding settlement agreement signed by all participants for the purpose of showing fraud, duress or illegality on an issue.
It was undisputed that the parties executed a Confidentiality Agreement at the mediation, specifically outlining all communications during the course of the mediation were confidential, not subject to discovery, and could not be introduced into evidence.
Unable to show a statutory exception, plaintiffs contended three things. First, defendants were judicially estopped from claiming the protection afforded by section 1119 because defendants had brought a motion for judgment on the pleadings on grounds different than the inadmissibility of the settlement agreement. Secondly, defendants had waived the protection afforded by section 1119 when they referred to the settlement agreement in an unsuccessful motion for summary judgment brought pursuant to section 1119. Lastly, plaintiff felt these issues should be determined by the jury.
The court agreed with defendants that because estoppel and waiver are equitable doctrines, they were properly determined by the court, not a jury.
The court also agreed with defendants on the issue of waiver, finding that merely because defendants authenticated the settlement and confidentiality agreement in the motion for summary judgment and had not waived the protection of section 1119. See for example, Southern California Edison Co. v. Public Utilities Commission, 85 Cal.App.4th 1086, 1107 (2000) (waiver is the intentional relinquishment of a known right; burden is on party claiming waiver to prove it by clear and convincing evidence).
The court further agreed that defendants were not judicially estopped by virtue of their prior motion for judgment on the pleadings because the defenses were not inconsistent.
Based on the above, the court granted defendants' motion in limine and precluded plaintiffs from introducing evidence of the written settlement agreement and any communications made during the mediation.
Plaintiffs made their opening statement and Wollman moved for nonsuit on the ground that plaintiffs could not present any substantial, admissible evidence to support a verdict for plaintiffs under a breach of contract theory and that plaintiffs could not establish that a contract had been entered into by the parties. After giving plaintiffs the opportunity to reopen their case and plaintiffs' counsel's admission that he had no admissible evidence upon which to proceed, the court granted defendants' nonsuit.
