What Happens at Divorce Mediation Stays at Mediation
Two parties are divorcing after over thirty years of marriage. Husband is an automotive executive and wife is a stay-at-home mother who lacks recent work history.
During the divorce proceeding, the parties are referred to mediation -required in most county family courts- to settle their disagreements before the court allows the parties to proceed to a trial.
Domestic relations mediation and alternative dispute resolution have long been part of family law practice in Michigan. Mediation is a cost-effective method of resolving divorce disputes by utilizing a neutral third-party mediator. Under most circumstances that neutral third party will themselves be a local experienced divorce attorney that can guide the parties to a resolution of the parties own design.
If the parties reach agreement, the material terms of that agreement are reduced to a binding written document or recorded summary that will end-up constituting the judgment of divorce. These agreements cannot be set aside without a showing of fraud, mutual mistake, or duress.
What should a divorce lawyer do if they believe a showing can be made as to one of the basis to set aside the settlement agreement? Is it true -a hard and fast rule- that everything besides the material terms of the parties’ settlement agreement confidential and not subject to disclosure or further judicial scrutiny? What happens if the other spousal makes a material misrepresentation or the parties have a mutual mistake as to a material term of the settlement agreement, such as the objective value of an asset?
In the above hypothetical, husband has a pension that he represents can be immediately drawn upon after the parties’ divorce and the parties accordingly divide this retirement account. Upon division of this marital asset, wife finds out that she is only able to draw on that pension as an alternate payee when the participant-husband retires. This is contrary to the representations made during mediation and now wife seeks to set aside the judgment of divorce premised on fraud or mutual mistake.
Communications in mediation are broadly construed by the Michigan Court Rules and are just not limited to the settlement agreement that may be generated as a result of negotiations that end in an agreement.
MCR 2.412 (B) defines mediation communications to include statements whether oral or in a record verbal or nonverbal that occur during the mediation process.
Typically, communications during mediations are confidential in nature which is codified under Michigan Court Rules:
2.412(C). Mediation communications are confidential. They are not subject to discovery, are not admissible in a proceeding, and may not be disclosed to anyone other than mediation participants except as provided in subrule (D).
This allows for parties to have frank and open settlement discussions with the mediator about the strengths and weaknesses of their positions. The rules allow divorce litigants to try to come to a resolution without their settlement negotiations used against them subsequently in court. Mediation Summaries, discussions and even notes that are generated by the parties during mediation are considered subject to the confidentiality that is ensconced by statute and in the Michigan Court Rules.
There are a list of exceptions to the confidentiality in MCR 2.412. In the event that wife claims that there is fraud mutual mistake or duress the court does have discretion to examine evidence from that mediation. There is a two-prong test that the court must undertake in deciding whether or not the court can piece the veil of confidentiality that protects communications during the mediation process.
MCR 2.412(D)(12) (12) states:
The disclosure is in a proceeding to enforce, rescind, reform, or avoid liability on a document signed by the mediation parties or acknowledged by the parties on an audio or video recording that arose out of mediation, if the court finds, after an in-camera hearing, that the party seeking discovery or the proponent of the evidence has shown
(a) that the evidence is not otherwise available, and
(b) that the need for the evidence substantially outweighs the interest in protecting confidentiality.
When applying this analysis to our real-life scenario, it requires a party attempting to rescind or reform the settlement agreement to present this evidence in an in camera setting for the court to weigh the factors as to whether or not to allow the parties to present limited evidence for the purpose of setting aside or reforming a settlement agreement if there is a showing or fraud, mutual mistake, or duress during the mediation process.
The court could decide that the parties’ mediation summaries or handwritten notes may be introduced as evidence of what the parties' understanding was. At the same time, this does not create a “free for all” as to any confidential communications during mediation without the court making its in Camera analysis on each piece of evidence.
This is why our lawyers are very careful to emphasize, before a record of the settlement agreement is created, that once an agreement is recorded, it is usually binding unless the narrow circumstances discussed in this post are present. Sometimes, divorce litigants have a form of "buyer's remorse". Then, it is usually too late to change or avoid terms the litigant regrets or now sees as onerous.
In conclusion, although Michigan statute and court rule casts a large cloak of confidentiality over mediated settlement discussions, there are limited circumstances where evidence of what occurs in mediation is allowed in open court. We have experience in dealing with such cases; the stakes are usually high.
What happens in Mediation Does not always stay in mediation. If you are in need of a divorce lawyer to help resolve your divorce proceeding, we can help. Give us a call to schedule a free consultation.