In Jeld-Wen, Inc. v. Superior Court (2007 D.A.R. 233 (January 4, 2007)), the California Court of Appeal held that trial courts do not have the authority to order parties in a complex civil action to attend and pay for private mediation.
Jeld-Wen was an uninsured cross-defendant in a multiparty construction defect case involving more than $500,000 in alleged costs of repair. The trial court proposed a case management order that included appointing 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. The order further stated that no party had established an economic inability to pay a pro rata share of the mediator's fee and provided deadlines to demand and conduct the mediation. The order also appointed a discovery referee to hear and determine all discovery disputes.
Jeld-Wen objected to the mediation provisions of the proposed order on the ground they were inconsistent with recognized case law and directly violated a court rule that allows a court to set only one mandatory settlement conference. The trial court overruled the objection and issued the order.
After Jeld-Wen failed to attend mediation, the other parties in the case moved for an order imposing monetary sanctions and compelling Jeld-Wen's appearance at the next mediation. The trial court granted the motion imposing monetary sanctions, concluding that no statute or rule conflicted with the mediation provisions of the order and that Lu v. Superior Court ((1997) 55 Cal.App.4th 1264), set forth its authority to appoint a mediator to conduct settlement conferences.
The trial court ordered Jeld-Wen to attend the next mediation session and pay $200 in sanctions for violating its order.
The appellate court directed the trial court to set aside its order. In its ruling, the court focused on the fact that mediation, by its very definition, is voluntary in nature. If the court orders a case to mediation it must be mindful of the parties and the mediator must respect the right of any party to withdraw from mediation at any time. While trial courts may encourage parties into private mediation, they cannot compel parties to privately mediate because such a notion runs contrary to the concept of mediation.
The appellate court wrote that trial courts may appoint a mediator and may appoint a referee to handle certain matters, such as discovery. However, the trial court is not authorized under statute to compel litigants to mediation.
In the conclusion of its opinion, the court noted that the impact of its decision will likely be minimal. It noted that while trial courts cannot compel parties in complex actions to stipulate to private mediations, in a large majority of cases, the parties will likely agree to private mediation. Therefore, it does not foresee any "apocalyptic consequences from this decision."
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