A state appeals court ruled that a will contestant waived the mediation privilege, prohibiting disclosure of mediation communications to non-participants, when both he and his opponent authorized the mediator to inform the trial judge of the results of the mediation. Rutigliano v. Rutigliano, Docket No. A-2797-11T1 (App. Div., October 15, 2012)

Plaintiff Vincent Rutigliano and defendant James Rutigliano are brothers and beneficiaries of their mother’s will. After her death, Vincent filed a complaint against James in which he asserted that James had fraudulently induced their mother to change her will to leave property she owned to James’ two children. James denied the allegations.

The court ordered the parties to attend mediation. A six-and-a-half hour mediation session was held. Both parties and their attorneys attended, and a settlement was reached. Afterwards, the mediator called the parties into a conference room and reviewed the terms of the settlement. However, the settlement was not put to writing at that time because Vincent had to leave for a previous obligation. Rather, the mediator notified the court that a settlement had been reached. James’ attorney stated that court notice was provided by the mediator, and that plaintiff did not object to the disclosure.

A week later, Vincent’s lawyer wrote to James’ lawyer stating that Vincent did not believe that a deal had been finalized. Vincent’s lawyer proposed to settle on new and different terms. In reply, James’ lawyer wrote that the settlement had been final and binding.

Defendant filed a motion to enforce the settlement. Plaintiff opposed the motion, arguing that the parties had never entered into a written settlement agreement and neither party should be able to present testimony concerning what happened during the mediation session because the mediation was confidential.

The trial judge held a hearing to consider defendant’s motion. The judge decided to exclude testimony from both parties’ attorneys or from the mediator, but he gave each party the opportunity to give limited testimony about what happened when the terms of the settlement were reviewed by the parties with the mediator.  The judge reasoned that such testimony did not violate confidentiality because the conference room discussions with the mediator occurred after the parties had completed the actual mediation process of negotiation and agreement. Thus, the judge ruled that neither party would be permitted to testify as to what happened while the case was actually being mediated, but the parties could testify about what took place when the terms of the settlement were being discussed and finalized after the mediation concluded.

James testified as to the settlement terms. Vincent did not testify because, he said, doing so would constitute waiver of mediation privilege. He also declined to cross-examine James. The trial court found James’ testimony credible, and concluded that the “absence of a written agreement at the time the parties left the mediation session is not a fatal flaw.” As a result, the court ordered enforcement of the settlement.

Vincent then appealed, arguing that the trial court wrongly allowed James to testify. The appellate court affirmed. The appeals court held that, although the law prohibits disclosure of mediation communications to non-participants, the law also recognizes that this mediation privilege may be expressly waived by the parties.

In this case, both sides agreed to let the mediator disclose the settlement to the court, through their failure to object to the proposed notice, so “there was no bar to either party disclosing the terms of the settlement or, if necessary, going to court to enforce that settlement,” the appeals court ruled. The court went on as follows:

Adopting [a] contrary view would mean that a party could complete the mediation; agree to all the terms of a settlement, authorize the mediator to notify the court of same, and then use the mediation privilege to prevent enforcement of the settlement.

The appeals court also upheld the trial judge’s fact findings, holding that there was sufficient evidence to conclude that a deal had been reached.

The case is annexed here – Rutigliano v. Rutigliano, Docket No. A-2797-11T1 (App. Div., October 15, 2012)