Post-Mediation Statement by Mediator Not Admissible to Enforce Settlement

United Health Alliance, LLC v. United Medical, LLC, C.A. No. 7710-VCP (Del. Ch. May 6, 2013).

Issue Addressed: Whether a post-mediation e-mail by a mediator is admissible for purposes of enforcing the terms of a settlement reportedly reached during mediation. Short Answer:  No.

Brief Overview

This short but useful decision describes a situation involving a mediation during which the parties appeared to reach an oral settlement agreement.  Following the mediation, however, during their attempts to formalize their agreement into a written document, the parties disputed the scope of the release.  One of the parties received, in response to a post-mediation request, an e-mail from the mediator, and in that e-mail the mediator agreed with one party’s version of the release and settlement terms.  The party who received the e-mail from the mediator attached it as an exhibit to the motion to enforce the settlement.

This decision rules on the motion to strike the e-mail from the mediator based on several theories.  The court granted the motion to strike the post-mediation e-mail from the mediator based on the hearsay rule of evidence.

Highlights of Ruling

The basis of the court’s ruling was that the post-mediation e-mail from the mediator was hearsay and that none of the applicable exceptions applied, in part, because the mediation agreement prohibited any of the parties from forcing the mediator to testify, and therefore, the mediator was “not available” to be questioned about his e-mail.  See Delaware Rules of Evidence 801 and 802.

The court also recognized the following public policy in Delaware:  “There is a general policy that prohibits the introduction into evidence of communications made in connection with mediation.”  (emphasis added).  The court emphasized that the policy favoring confidentiality is not limited to communications made at the mediation, but extends to all communications made “in connection with the mediation,” which of course can include statements made after the mediation, to the extent that there is continuing mediation-related discussion or communication.

The court discusses Court of Chancery Rule 174 but that rule did not apply to this case because that rule only applies when the Chancellor or the Vice Chancellor presiding in the case, with the consent of the parties, refers the case to another member of the court for mediation purposes.  Nonetheless, the court referred to the policy expressed by that rule regarding the important confidentiality aspect of mediation proceedings.

However, the confidentiality policy for mediation does not apply if the parties waive that confidentiality.  In this case, the court determined that the parties waived that confidentiality by revealing in their court filings detailed information about the communications during the mediation.

The court refers to several decisions regarding the public policy in Delaware favoring confidentiality in connection with mediation, and the court also refers for support to the Uniform Mediation Act.

See generally recent Chancery decision highlighted on these pages here, by the same author of this opinion, that addressed an unrelated issue regarding the enforceability of a settlement agreement.