On December 10, 2015, in Alfieri v Solomon, 358 Or. 383, 365 P3d 99 (2015), the Oregon Supreme Court addressed, for the first time, the extent to which the confidentiality provisions of Oregon’s mediation statutes, ORS 36.100 to 36.238, prevent a client from offering evidence of communications made by his attorney and others in a subsequent malpractice action against that attorney.
The case arose when Plaintiff Alfieri retained Defendant Solomon, an attorney specializing in employment law, to pursue discrimination and retaliation claims against Alfieri’s former employer. During that case, Solomon filed administrative complaints with the Oregon Bureau of Labor and Industries and then a civil action against the former employer. Solomon advised Alfieri of the value of the claims prior to entering mediation, and the parties were unable to reach a resolution during the mediation. After the mediation session ended, the mediator suggested a settlement package and Solomon urged Alfieri to accept the proposed settlement, which included a confidentiality agreement. Alfieri signed the settlement agreement and Solomon continued to advise him regarding the settlement even after the agreement was signed.
Later, Alfieri sued Solomon for legal malpractice, alleging that Solomon’s representation had negatively affected the outcome of Alfieri’s case. In order to assert his claims in the legal malpractice case, Alfieri disclosed terms of the confidential settlement agreement, specifically disclosing facts about the mediator’s settlement proposal, Solomon’s conduct during the mediation, and private attorney-client discussions between Alfieri and Solomon relating to the mediation. Solomon moved to strike many of Alfieri’s allegations, arguing that they contained material that is inadmissible under Oregon’s mediation statute, which provides that: “[m]ediation communications are confidential and may not be disclosed to any other person”[i] and “parties to a mediation may agree that all or part of the terms of a mediation agreement are confidential.”[ii] The statute further provides that, to the extent that a mediation agreement or communication is confidential, it is “not admissible as evidence in any subsequent adjudicatory proceeding, and may not be disclosed by the parties or the mediator in any subsequent adjudicatory proceeding.”[iii]
The trial court partially granted Solomon’s motion, striking large portions of Alfieri’s complaint. With those allegations stricken, the trial court then granted Solomon’s motion to dismiss for failure to state a claim. Alfieri appealed both rulings.
Court of Appeals
The Court of Appeals affirmed in part and denied in part, first making a distinction between communications made while the mediation process was ongoing and those made after the settlement agreement was signed. The Court of Appeals held that all discussions between Alfieri and Solomon regarding the mediation that took place before the settlement agreement was signed were “mediation communications” made “in the course of or in connection with” the mediation process and, therefore, were inadmissible under the statute. These inadmissible statements included even attorney-client communications outside of the presence of either the mediator or other party. The court then held that any communications between attorney and client that took place after the settlement agreement had been signed were not “mediation communications” and, therefore, should not have been stricken. [iv] Both parties appealed.
Oregon Supreme Court
The Oregon Supreme Court performed a textual analysis of the term “mediation communications,” and found that there are four elements in determining whether something is a mediation communication, as defined in ORS 36.110(7). The Court found the first three elements explicitly listed in the statute: (1) whether it is a “communication,” (2) whether the communication is “in the course of” or “in connection with” a mediation, and (3) the identity of the recipient. The Court then added a fourth element: (4) the identity of the speaker.
The Court defined the first element by looking at the plain meaning and ordinary use of the term “communication,” finding that a “communication” is “the process by which information is exchanged.” Accordingly, the Court accepted that conversations and disclosures between attorney and client, as well as the attorney and other mediation parties may all be considered “communications.” The Court then determined that a communication is “in the course of” a mediation when the communication is made during a mediation proceeding, and that a communication is made “in connection with” a mediation when the communication relates to the dispute and its resolution. As to the third element, the Court held that the recipient must be one of the types of parties listed in ORS 36.110(7)(a)[v]. The Court then also found that, in order to be a confidential mediation communication, the person communicating also must be listed in ORS 36.110(7)(a), or else there could be situations where only half of a conversation is confidential.
Based upon this analysis, the Court ruled that statements made by mediators to parties about the dispute are “mediation communications” and, therefore, are inadmissible in future malpractice actions. The Court also ruled that an attorney’s statements made while participating in a mediation are inadmissible mediation communications, as are statements made by an attorney outside of the mediation proceeding, so long as the attorney is speaking for the client in connection with the mediation, to a person described in ORS 36.110(7)(a). However, the Court ruled that private attorney-client discussions between an attorney and client, taking place outside a mediation proceeding, are admissible in a subsequent malpractice case,.
The question left unanswered by Alfieri, is that of private attorney-client communications made during the mediation proceeding, in which the mediator is not present. This ambiguity exists because the court’s definition of mediation as “part of the ‘process’ in which the mediator is a participant” does not clarify whether the mediator must have direct involvement. Alfieri could be interpreted to mean that all discussions between any combination of participants at a mediation, including lawyer and client, constitute inadmissible mediation communications. However, Alfieri could also be interpreted to mean that private communications between an attorney and client can never be mediation communications, because the mediator is not involved in those private communications, and, therefore, would be admissible in future malpractice actions.
In light of this ambiguity, the best course of action for Oregon attorneys may be to have all parties, counsel, the mediator, and all other persons participating in the mediation, sign a mediation confidentiality agreement. The agreement should state that all communications of any kind between or among all or some of the parties, their counsel, the mediator, and others participating in the mediation that occur during the mediation, as well as any confidential mediation agreement executed by the parties, shall be confidential and subject to ORS 36.220(1) and (7). Additionally, the confidentiality agreement should state that the mediation began with the first contact by any party or counsel with the mediator and does not end until the execution of a confidential mediation agreement, or upon written notice from the mediator to the parties that the mediation is terminated, whichever happens first. Finally, the confidentiality agreement should state that the provisions of the agreement as to the mediation communications control to the extent that anything in the agreement is contrary to Alfieri v. Solomon.
[i] ORS 36.220(1)(a)
[ii] ORS 36.220(2)(b)
[iii] ORS 36.222(1)
[iv] Such communications would still be subject to the attorney-client privilege of ORS 40.225; however, that privilege belongs solely to the client, not to the attorney. ORS 40.225(2). See also, In re Conduct of Skagen, 342 Or 183, 149 P3d 1171 (2006) (holding “the lawyer-client privilege is a privilege of the client, not the lawyer.”) Id. at 213.
[v] “[A] mediator, a mediation program or a party to, or any other person present at, the mediation proceedings…”