While documents subject to the mediation privilege may be inadmissible as evidence, an error in admitting the documents into evidence will not matter to the Court of Appeal, if admission of the evidence resulted in harmless error. That was the case in Lofton v. Wells Fargo Home Mortgage, Case No. A136626 (1/3 Oct. 22, 2014) (Siggins, McGuiness, Jenkins) (certified for publication).
Initiative Legal Group, APC (ILG) objected to a TRO freezing funds from a class action settlement while the trial court sorted out problems with the settlement. One of ILG’s contentions was that the trial court erred by relying on inadmissible evidence subject to mediation confidentiality. The Court of Appeal, however, brushed off this contention on the ground that “any potential error was harmless in light of the substantial admissible evidence before the court supporting its issuance of the TRO.” The admissible evidence included attorney letters to clients, an attorney declaration, and the record of settlement approval proceedings in the class action.
Furthermore, attorney letters related to settlement were not being introduced to establish the attorney’s liability for any loss, “but rather to establish the risk of imminent harm that would justify issuance of the TRO.” The Court reminds us that Evid. Code section 1152 is not an absolute bar to introducing settlement documents, because such documents may be admissible for purposes other than proving liability.
The case is a wild one involving a bungled class action settlement and the disbursement of settlement funds to clients and attorneys. It makes for interesting reading, and is the subject of an article on California Attorney’s Fees.
By Marc Alexander