| Date: |
Wednesday, January 17, 2007 |
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JELD-WEN, INC. V. SUPERIOR COURT
(MARLBOROUGH DEVELOPMENT CORP., ET AL.)
CALIFORNIA APPELLATE COURT DECLARES THAT TRIAL COURTS DO NOT HAVE AUTHORITY TO ORDER PARTIES IN A COMPLEX CIVIL ACTION TO ATTEND AND PAY FOR PRIVATE MEDIATION
In a written opinion issued January 4, 2007, the California Court of Appeal, Fourth District, declared in Jeld-Wen, Inc. v. Superior Court (Marlborough Development Corp.), 2007 Cal.App. LEXIS 9, that a trial court exceeds its authority by mandating that the parties attend and pay for private mediation over their objection.
Factual Background
Petitioner Jeld-Wen, Inc. was an uninsured cross-defendant in a multi-party construction defect case involving over $500,000 in alleged costs of repair. After deeming the matter complex, the trial court proposed a case management order and appointed an individual as the mediator and/or mandatory settlement conference judge to mediate and conduct settlement conferences for a maximum of 100 hours at an hourly rate of $500. Additionally, the trial court ordered that all parties were to appear at the mediation and pay a pro rata share of the mediator’s fee.
Jeld-Wen objected to the mediation provisions as ordered by the trial court based upon California case and statutory law. After the trial court overruled the objection, Jeld-Wen failed to attend the mediation. The trial court subsequently ordered Jeld-Wen to attend the next mediation and imposed $200 in sanctions for violating the court’s prior order.
California Law
California Code of Civil Procedure section 1775 et seq., commonly referred to as the “Civil Action Mediation Program,” allows courts to order cases into mediation if the amount in controversy does not exceed $50,000 for each plaintiff. (See § 1775.5.) Additionally, any action may be submitted to court-sponsored mediation if all parties so stipulate. (See Cal. Rules of Court, Rule 3.870 .) After a case has been ordered to mediation, the parties must be informed that their participation is completely voluntary. (Rule 3.853.) Any party that voluntarily enters mediation may thereafter revoke its consent and withdraw from the dispute resolution process. (See Cal. Bus. & Prof. Code § 467.7(a); Kirschenman v. Superior Court (1994) 30 Cal.App.4th 832, 835.)
Based upon the foregoing authority, “the trial court must consider the expressed views of the parties before ordering a case to mediation and even after a case has been ordered to mediation, the mediator must respect the right of any party to withdraw from the mediation at any time.” (Jeld-Wen, Inc, supra, 2007 Cal.App. LEXIS at 6 [internal citations omitted].)
In holding that trial courts exceed their authority by ordering that the parties attend and pay for private mediation, the Jeld-Wen court distinguished Lu v. Superior Court (1997) 55 Cal.App.4th 1264 (hereinafter “Lu”), which held that trial courts could appoint a mediator for the specific purposes identified in section 639 . Interpreting Lu, and in conjunction with Rule 3.920, the Jeld-Wen court held that a trial court may: (1) appoint a referee to conduct a mandatory settlement conference in a complex case or (2) following the termination of a reference, appoint a person who previously served as a referee to conduct a mediation. (See Jeld-Wen, Inc, supra, 2007 Cal.App. LEXIS at 9.)
In distinguishing Lu, the Jeld-Wen court stated that “[w]hile a referee appointed under section 639 may conduct a mandatory settlement conference in a complex case, the referee here was not appointed under section 639 and the parties were ordered to attend and pay for private mediation, not a settlement conference.” (See Jeld-Wen, Inc, supra, 2007 Cal.App. LEXIS at 9-10.) While the Jeld-Wen court acknowledged that Lu “blurred the legal distinction between mandatory settlement conferences and private mediation,” the court declined to address such distinction because “the trial court here ordered Jeld-Wen to attend and pay for private mediation despite its objection.” (Id. at 10.)
In summarizing its decision, the Jeld-Wen court rejected “the suggestion that trial courts presiding over complex cases have the inherent authority to force a party to attend and pay for mediation over the party’s express objection . . . .” (Id. at 11.) Moreover, the Jeld-Wen court pointed out that “it makes little sense for a trial court to force an objecting party, such as Jeld-Wen, to expend the time and attorneys fees to attend mediation only to have the mediator excuse it” by request under Rule 3.853(2). (Id. at 12.) Accordingly, while trial courts can suggest that the parties in a complex action stipulate to mediation, “they cannot be forced or coerced over the threat of sanctions into attending and paying for private mediation . . . .” (Id.)
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