Protecting Against Disclosure of Prior Settlement Agreements at Trial

On July 22, 2015, the Court of Appeals reaffirmed its prior decision in Alfieri v. Solomon, 263 Or App 494 (2014), petition for review granted, 356 Or 516 (2014) that confidential communications made during and/or in furtherance of a mediation proceeding are protected and shall not be admitted into evidence in any subsequent adjudicatory proceeding under ORS 36.22. Yoshida’s Inc. v. Dunn Carney Allen Higgins & Tongue LLP, 272 Or App 436 (2015). ORS 36.22 states in pertinent part:

Except as provided in ORS 36.220 to 36.238, mediation communications and mediation agreements that are confidential under ORS 36.220 to 36.238 are 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.

In Yoshida, the Court of Appeals confirmed that communications which fall within the classification of a “mediation communication” under ORS 36.110(7) are protected from admissibility regardless of whether the communication was: (a) previously disclosed by a party in discovery, and/or (2) made in a case that is entirely separate from the one in which the communication is sought to be admitted. Of course, the privilege only applies so long as all parties previously agreed to keep the communication confidential and no exception to the mediation privilege otherwise found in ORS 36.222 applies.

The Yoshida decision, along with its predecessor, Alfieri, has a very real world practical effect to construction defect plaintiffs who have settled with one or more parties and are continuing to prosecute claims against non-settled defendants. The most common example is an owner who has settled with a general contractor (or developer) and is still seeking to pursue either direct or assigned claims against additional parties, most usually subcontractors, for additional damages stemming from defective construction. Often in those situations, the non-settled parties will seek to admit the owner’s prior settlement agreements as evidence of either the settled parties’ contributory fault and/or that the owner has somehow been made whole through the past settlements. Pursuant to Yoshida and Alfieri, owners hoping to avoid such evidence coming in at trial now have the case law ammunition to seek an appropriate motion in limine pre-trial.