Summary
In Elder v. The Schwan Food Company (May 12, 2011, B223911) [nonpub. opn.]) (Elder I), the jury concluded by special verdict that plaintiff Fred Elder was misclassified as an exempt employee and worked nine hours a day, and 45 hours per week.
Summary of this case from Elder v. Schwan Food Co.Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC390535, John P. Shook, Judge.
Righetti Glugoski, Matthew Righetti, John Glugoski and Mike Righetti for Plaintiff and Appellant.
Kutak Rock, Grace Y. Horoupian and Alan L. Rupe for Defendants and Respondents.
ALDRICH, J.
Appellant Fred Elder was misclassified as an exempt employee, and following a trial on his complaint for unpaid overtime wages, the jury concluded Elder worked five hours of overtime per week while employed by respondent The Schwan Food Company and Schwan’s Consumer Brands North America, Inc. (the company). The trial court calculated unpaid overtime wages and interest that fell short of a Code of Civil Procedure section 998 offer to compromise from the company. Based upon the trial court’s calculations, it denied some, but not all, of Elder’s attorneys’ fees and awarded the company costs incurred after the company’s offer to compromise.
Elder appeals from the judgment, contending the trial court miscalculated his remedy. He contends the trial court erred because he is entitled to: (1) restitution (amounting to an additional year of overtime wages) under the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.); (2) unpaid overtime for a statutory period alleged in a similar class action; and (3) civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.). We agree that this matter must be sent back to the trial court for a reconsideration of the restitutionary remedy and civil penalties. Since we reach that conclusion, we do not address the remaining issues presented on appeal.
Unless otherwise stated, all further statutory references are to the Labor Code.
Our review of this matter also requires us to consider whether to impose sanctions on Elder for failing to participate in court-ordered appellate mediation. We decline to impose sanctions on Elder based upon the limitations of the mediation confidentiality statutes (Evid. Code, § 1115 et seq.), which prevent us from considering statements made during mediation that might explain Elder’s failure to appear at the mediation. We also decline to impose sanctions on either party for violating appellate court rules.
FACTUAL AND PROCEDURAL BACKGROUND
Elder worked for the company as a customer sales representative for approximately five years supplying frozen pizzas to local grocery stores. He was classified as an exempt employee and did not earn overtime wages.
1. Putative Class Action for Unpaid Overtime
On May 8, 2008, Elder filed a complaint, alleging individual and class claims for violations of the Labor Code and, based upon these Labor Code violations, a UCL claim for unlawful and unfair business practices.
After filing the putative class action, Elder’s counsel filed a petition for coordination with another putative class action entitled Wastier v. Schwan’s Consumer Brands, North America, Inc. (Super. Ct. San Diego County, 2007, No. 37-2007-00069653-CU-OE-CTL). The petition was denied. On October 21, 2008, Elder opted out of the Wastier class.
Elder’s first amended class action complaint, which is the operative complaint, was filed before Elder opted out of the Wastier class. The amended complaint alleged numerous Labor Code violations on Elder’s behalf, and on behalf of the putative class. Only two causes of action are implicated in this appeal, that is, the failure to pay overtime pursuant to sections 510 and 1194, which is the basis for his UCL cause of action. The amended complaint also sought statutory penalties under section 558, and PAGA (§ 2698 et seq.). The putative class overlaps the Wastier class period (2003-2007) and sought to recover under the UCL for the four years preceding the filing of Elder’s initial complaint (2004-2008).
Before trial, the company served a Code of Civil Procedure section 998 offer to compromise in the amount of $16,270, plus reasonable attorneys’ fees and cost awarded by the court. The offer lapsed after 30 days.
2. Trial and Posttrial Attorneys’ Fees Award
The legal claims were tried before the equitable claims. After a six-day trial on the legal claims, the jury concluded Elder was misclassified as an exempt employee and rejected the company’s good faith defense. The special verdict asked the jury, “[h]ow many hours do you find Plaintiff Elder worked per day/per week?” The jury responded that Elder worked nine hours per day and 45 hours per week.
The UCL claim was briefed and argued to the trial court. At the conclusion of the argument, the trial court determined not to grant equitable relief. When asked for a clarification of the ruling, the trial court stated: “I’m saying that I’m accepting Schwan Foods’ points and authorities and opposition. That is the ruling.”
The matter of determining Elder’s remedy was left to the court after both parties submitted posttrial briefs. The wage summary submitted for the court’s review listed pay periods ending May 15, 2004 through May 17, 2008. The court determined before trial that all damages prior to May 8, 2004 (four years before the filing date of Elder’s complaint) were excluded from evidence, rejecting Elder’s position that he was entitled to recover damages based upon the statutory period of the Wastier class action.
The trial court denied “in its entirety” Elder’s claim to recover civil penalties.
The final judgment awarded $9,944.42, in overtime, which was limited to the three-year period preceding the filing of Elder’s complaint, pre-judgment interest in the amount of $3,286.60, and post-judgment interest at the legal rate. Judgment was entered on February 19, 2010. The judgment contemplated the parties’ respective motions for fees and costs.
Elder sought to recover attorneys’ fees pursuant to section 1194 and costs as the prevailing party. The company filed a memorandum of costs, and moved to strike Elder’s costs incurred after the Code of Civil Procedure section 998 offer to compromise. The trial court granted the company’s motion, and denied a portion of Elder’s requested attorneys’ fees because the judgment was less than the offer to compromise. The trial court also awarded the company $21,091.98 in costs incurred after Elder did not accept the offer to compromise.
Elder timely appealed the judgment and the post-judgment attorneys’ fees and costs award.
DISCUSSION
1. Standards of Review
Elder raises three trial court errors that he contends resulted in the miscalculation of his remedy. We independently review questions of law. (Earley v. Superior Court (2000) 79 Cal.App.4th 1420, 1426.) We review for an abuse of discretion the trial court’s order declining to award restitution under Business and Professions Code section 17203. (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 179-180 (Cortez).) Likewise, we review the ruling on the in limine motion limiting the admission of evidence for an abuse of discretion. (Piedra v. Dugan (2004) 123 Cal.App.4th 1483, 1493.) To the extent the challenge to the trial court’s order denying civil penalties involves a statutory interpretation, our review is de novo, and we review the exercise of discretion in reducing the award for an abuse of discretion. (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1210-1211, 1213.)
2. The Trial Court Erred by Relying on the Company’s Defense to Deny Restitution for the UCL Violation
The trial court was bound by the jury’s verdict that the company violated the UCL by unlawfully failing to pay Elder overtime wages. (Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 159.) The trial court declined Elder’s request for restitution, which amounted to an additional year of overtime wages, by adopting the company’s briefs, and noting “there is nothing that I heard during the course of this trial that I felt that the Schwan Company here did anything egregious to Mr. Elder.” The trial court’s statement sent a mixed message that contains legal error.
While Cortez, supra, 23 Cal.4th 163, permits a court to consider equitable defenses in its exercise of discretion to fashion an equitable remedy, an equitable defense cannot defeat a UCL claim since “such claims arise out of unlawful conduct.” (Id. at pp. 168, 179-181; see also Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 543-544 [equitable defenses may not be asserted to defeat a UCL class certification motion].) As Justice Werdegar explained more fully in her concurring opinion in Cortez “in general, as between a person who is enriched as the result of his or her violation of the law, and a person intended to be protected by the law who is harmed by its violation, for the violator to retain the benefit would be unjust.” (Cortez, supra, at p. 182 (conc. opn. of Werdegar, J.).)
Once an unfair business practice has been established, the court has discretion to make such orders and judgments as may be necessary to restore money or property to any person in interest from whom the money or property has been obtained. (Bus. & Prof. Code, § 17203.) Restitution of unpaid overtime wages is an available remedy under the UCL. (Cortez, supra, 23 Cal.4th at pp. 178-179.) In fashioning a restitutionary remedy, the court “cannot properly exercise an equitable power without consideration of the equities on both sides of a dispute.” (Id. at p. 180.) This is so even when considering wage claims because “UCL remedies are cumulative to remedies available under other laws (§ 17205) and, as [Business and Professions Code] section 17203 indicates, have an independent purpose—deterrence of and restitution for unfair business practices. [Citation.]” (Id. at p. 179.)
Business and Professions Code section 17203 states in relevant part: “The court may make such orders or judgments... as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.”
The Cortez court, however, had no occasion to balance the equities and apply this rule. Instead, it stated “while we cannot foresee how any equitable consideration could defeat a claim for unpaid wages, we cannot foreclose the possibility that defendant has evidence that the trial court might consider relevant when, on remand, it fashions a remedy for plaintiff’s unfair business practice.” (Cortez, supra, 23 Cal.4th at p. 181.) The United States Supreme Court expressed a similar view when addressing the issue of a court’s discretion to award reimbursement for lost wages following an employee’s discharge in violation of the Fair Labor Standards Act of 1938 (FLSA), stating based upon the statutory purposes of the FLSA, “there is doubtless little room for the exercise of discretion not to order reimbursement” for lost wages. (Mitchell v. DeMario Jewelry (1960) 361 U.S. 288, 291-292, 296 [80 S.Ct. 332]; see also Marshall v. Chala Enterprises, Inc. (9th Cir. 1981) 645 F.2d 799, 802.) Justice Werdegar’s concurring opinion in Cortez echoes this same theme, that is, “equitable considerations normally should not lead a trial court to reduce or eliminate a UCL restorative order when it is established that the defendant committed an unlawful practice, but the defendant claims that its violation was unintentional or committed in a good faith belief the action was lawful.” (Cortez, 23 Cal.4th at p. 182 (conc. opn. of Werdegar, J.).)
The company presented no relevant evidence to balance the equities in its favor. Instead, the company presented its good faith defense previously rejected by the jury when determining that the company unlawfully failed to pay Elder overtime wages in violation of the Labor Code. In our view, both the trial court and the company tried the UCL claim anew and ignored the jury’s findings, which rejected that defense. This was error. The trial court has no discretion to disregard the jury’s verdict. (Hoopes v. Dolan, supra, 168 Cal.App.4th at p. 159.)
During argument, the company’s counsel stated: “And if you are saying that the jury’s verdict is what it is, and that as part of your discretion you are denying any claims beyond the jury verdict, I think both of us would agree that is completely within your discretion on the equitable claim.” Thereafter, the trial court confirmed it denied the equitable claim. Later during the hearing, Elder’s counsel asked for clarification on the computation of unpaid overtime: “Well, the plaintiff’s equitable statute of limitations on the 17200 claim is four years.” The trial court responded: “Well, I’m denying that. It is three years.”
We also cannot read into the trial court’s comments an exercise of discretion in fashioning a restitutionary remedy. The trial court’s comment that the company did not act in an “egregious” manner is ambiguous, and appears to refer to the company’s defense to the UCL claim. Given the ambiguity in the record before us, and the clarity of the law, the trial court’s decision not to award restitution cannot stand. Therefore, we remand for the trial court to reconsider the remedy and balance the equities. In doing so, the trial court must not overlook the jury’s verdict, the strong public policy directed at the enforcement of California’s overtime laws, and, for purposes of the UCL, as between the person enriched and the person harmed, it would be unjust for the company to retain the benefit.
3. The Trial Court Did Not Err in Granting Motion in Limine No. 3, Accepting the Statutory Period as Alleged in the Complaint
Elder challenges the trial court’s pre-trial ruling limiting the evidence to the four years preceding the filing of his complaint (2004-2008). Elder contends this ruling violates the class action tolling doctrine, which would have permitted him, as a former Wastier class member, to recover unpaid overtime for the four-year statutory period of the Wastier class action (2003-2007). In other words, Elder attempts to use the tolling doctrine to capture a year (2003) of unpaid overtime that otherwise would have been time barred. The trial court did not err.
Business and Professions Code section 17208 states in relevant part: “Any action to enforce any cause of action pursuant to this chapter shall be commenced within four years after the cause of action accrued....”
The tolling doctrine preserves an individual’s right to pursue claims and suspends the running of the statute of limitations while an alternative remedy, such as a class action, is pursued during the limitations period. As stated in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 [94 S.Ct. 756], commencement of a class action tolls the running of the applicable statute of limitations for all class members who upon denial of certification make timely motions to intervene. (Id. at pp. 552-553.) The policy considerations for the tolling doctrine are to preserve the efficiency of class actions while ensuring adequate notice to the defendant. (Id. at pp. 553-556.) California courts have recognized the American Pipe class action tolling rule. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1118-1122 [acknowledged tolling but declined to extend the tolling doctrine of American Pipe in that case]; see also Becker v. McMillin Construction Co. (1991) 226 Cal.App.3d 1493, 1501-1502 [applying tolling doctrine].)
American Pipe, however, does not address the situation in which a class is certified and the member opts out to file a separate action. Eisen v. Carlisle & Jacquelin (1974) 417 U.S. 156 [94 S.Ct. 2140], upon which Elder relies and the company rejects, discussed opt-out notices to class members to preserve their right to pursue a separate lawsuit, but that case did not specifically address this issue. (Id. at pp. 173-176, fn. 13.) The opt-out notice to pursue individual claims would be meaningless, however, if the statute of limitations for the absent class members had not been tolled. Crown, Cork & Seal Co. v. Parker (1983) 462 U.S. 345 [103 S.Ct. 2392], thereafter, clarified that the American Pipe rule tolled the statute of limitations to those seeking to bring individual actions in the event class certification is denied. (Id. at pp. 351-352, 353-354.)
Contrary to the company’s assertion, the decision to opt out of a class whether certified or not is irrelevant to tolling. (See Adams Public School Dist. v. Asbestos Corp., Ltd. (8th Cir. 1993) 7 F.3d 717, 718, fn. 1.) When certification has been granted, the statute begins running again from the date when the class member exercises the right to opt out, because until that decision is made, the class member is deemed to be actively pursuing an alternative remedy. (Tosti v. City of Los Angeles (9th Cir. 1985) 754 F.2d 1485, 1489; Haro v. City of Rosemead (2009) 174 Cal.App.4th 1067, 1072, fn. 2; see also 8 Conte & Newberg, Newberg on Class Actions (2010 supp.) Employment Discrimination, § 24.99, pp. 68-69.)
Under the class action tolling principles, after opting out of the class, Elder could have filed a lawsuit for unpaid overtime based upon the same facts and circumstances as alleged in the Wastier class action. Elder, however, did not do so. Instead, before the certification issue was decided, Elder filed a putative class action alleging a different statutory period. Based upon the allegations in Elder’s complaint, the tolling doctrine does not apply. His UCL claim seeking unpaid overtime for the period of 2004 through 2008 was filed within the statutory period (Bus. & Prof. Code, § 17208 [four-year limitations period].) Thus, there was no reason to invoke the tolling doctrine to preserve his or the putative class claims. Since this is a pleading issue, not a tolling issue, the trial court did not abuse its discretion in denying the motion to exclude irrelevant evidence of unpaid overtime wages in 2003.
4. The Trial Court Erred in Denying Civil Penalties
Elder contends the trial court did not have discretion to forgo imposing any civil penalties under the Labor Code based upon the company’s good faith defense. Elder claims civil penalties are mandatory, and he is entitled to the maximum amount of $15,000, under section 558 for violation of section 510, one of the provisions included in PAGA (§ 2699.5), and section 1194, also specified in PAGA (§ 2699.5). Civil penalties are mandatory, but whether to award the maximum amount is left to the trial court’s discretion.
As noted, sections 510 and 1194 address overtime compensation. Section 510 requires any work in excess of eight hours in one day or 40 hours in one week to be compensated at the premium overtime rate. Section 1194 authorizes a civil action to recover unpaid overtime compensation.
Section 558, subdivision (a) states that any employer who violates a section of this chapter, which includes section 510, “shall be subject to a civil penalty[.]” (§ 558, subd. (a).) The penalty for an initial violation is $50 for each underpaid employee for each pay period. (Id., subd. (a)(1).) For each subsequent violation, the penalty is $100. (Id., subd. (a)(2).) Subdivision (c) of section 558 states: “The civil penalties provided for in this section are in addition to any other civil or criminal penalty provided by law.” These civil penalties are recoverable in a civil action brought under section 2699, subdivision (a). (See Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 379 & fn. 15, 381-382.)
Section 2699, subdivision (f) states for all provisions of the Labor Code in which a civil penalty is not specified, “there is [an] established... civil penalty.” Subdivision (f)(2) of section 2699 states the established penalty for persons who employ one or more employees is $100 for each aggrieved employee per pay period for the initial violation, and $200 for each aggrieved pay period for each subsequent violation.
In any action by an aggrieved employee seeking recovery of civil penalties under section 2699, subdivision (a) or (f), the trial court “may award a lesser amount than the maximum civil penalty... specified by this part if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” (§ 2699, subd. (e)(2).)
Interpreting these civil penalty statutes and the statutory framework according to its plain language, neither section 558 nor section 2699, subdivision (f) permit the exercise of discretion to outright deny civil penalties for a violation of the Labor Code. (See Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th at pp. 1209-1211.) Since the jury determined the company violated the overtime laws, Elder was entitled to recover civil penalties.
The parties dispute how to calculate the maximum penalty. In Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th 1157, the court construed similar language addressing an “initial” violation and a “subsequent” violation in a Labor Code provision imposing civil penalties. (Id. at pp. 1207-1209.) The statutory language that an “initial violation is to be imposed ‘for each failure to pay each employee, ’ ” contemplates that an “initial” violation can result in multiple penalties at the $50 level. (Id. at p. 1209.) This could only occur if the penalties were assessed at each pay period. (Ibid.) Since the statutory language “contemplates the imposition of repeated penalties for each pay period that an initial violation continues, a ‘subsequent’ violation (which carries a double penalty) must refer to something other than an underpayment that occurs after the first pay period.” (Ibid.) A subsequent violation occurs after the employer has been notified that it is violating a Labor Code provision. “Until the employer has been notified that it is violating a Labor Code provision (whether or not the commissioner or court chooses to impose penalties), the employer cannot be presumed to be aware that its continuing underpayment of employees is a ‘violation’ subject to penalties.” (Ibid.) After the employer has notice, any future or subsequent violations would be punished at twice the rate of the initial violation. (Ibid.)
We see no reason to depart from the Amaral court’s construction of the civil penalties statutes in the Labor Code. The civil penalty statutes at issue here contain similar, if not the exact, language previously construed. Section 558, subdivision (a)(1) refers to an initial violation “for each underpaid employee for each pay period, ” and section 2699, subdivision (f)(2) refers to an initial violation “for each aggrieved employee per pay period.” Thus, since there is no evidence of the company’s prior notice, the maximum penalty imposed under either statute against the company should be determined at the initial rate per pay period.
Section 2699, subdivision (e)(2), however, gives the trial court discretion to award a lesser amount than the maximum penalty. The discretion afforded the trial court is to reduce the civil penalties upon enumerated considerations in the statute. (§ 2699, subd. (e)(2); Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th at p. 1213; Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393-394.) Section 2699, subdivision (e)(2) describes the conditions under which a trial court may exercise its discretion, but there is no discretion to disregard the amount fixed by statute.
The trial court denied Elder’s claims for civil penalties “in their entirety, ” which misinterprets the civil penalty statutes. The trial court’s ruling also constitutes a failure to exercise discretion. (Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th at p. 1213.) Therefore, we reverse and remand for the trial court to assess civil penalties under PAGA, and to exercise its discretion pursuant to section 2699, subdivision (e)(2).
Since the trial court failed to exercise its discretion, it must determine in the first instance whether it would be unjust, as the company argues, for Elder to recover the maximum penalties under sections 558 and subdivision (f) of section 2699 for the same overtime violation.
In light of our conclusion that the trial court must revisit Elder’s remedy, we do not reach the merits of the attorneys’ fees appeal.
MOTIONS FOR SANCTIONS
The company’s motion for sanctions requires this court to address the mediation confidentiality statutes. (Evid. Code, § 1115 et seq.) As we previously have stated, the Supreme Court has time and again resisted attempts to narrow the scope of mediation confidentiality. (Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, 152.) “The court has refused to judicially create exceptions to the statutory scheme, even in situations where justice seems to call for a different result.” (Ibid.) Rather, the Supreme Court has broadly applied the mediation confidentiality statutes and has repeatedly curtailed the courts’ ability to formulate exceptions. (See Cassel v. Superior Court (2011) 51 Cal.4th 113, 119, 128, 138 [in legal malpractice action against attorneys who represented plaintiff in mediation, the mediation confidentiality statutes prohibit disclosure of private attorney-client conversations “for the purpose of, in the course of, or pursuant to, a mediation”]; Simmons v. Ghaderi (2008) 44 Cal.4th 570, 582-588 [litigation conduct not meeting the requirements for disclosure of an agreement reached in mediation did not estop litigant from asserting confidentiality or did not constitute a waiver]; Fair v. Bakhtiari (2006) 40 Cal.4th 189, 197-198, 199-200 [disclosure of a written settlement agreement reached in mediation must directly express the parties’ agreement to be bound]; Rojas v. Superior Court (2004) 33 Cal.4th 407, 416-417, 423-424 [writings prepared for the purpose of, and in the course of, or pursuant to, a mediation are confidential, protected from discovery, and not discoverable for “good cause”]; Foxgate Homeowners’ Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, 17-18 (Foxgate) [mediation confidentiality statutes prohibit any person, including mediator and participants alike, from revealing any written or oral communication made during mediation].)
This sanctions motion raises another issue related to the scope of the mediation confidentiality statutes. The company seeks sanctions against Elder because he failed to attend court-ordered appellate mediation. In support of the sanctions motion, the company relies upon Campagnone v. Enjoyable Pools & Spas Service & Repairs, Inc. (2008) 163 Cal.App.4th 566 (Campagnone), which discussed the mediation confidentiality statutes and the authority to impose sanctions for violating a local rule of the Third Appellate District mandating attendance at mediation. (Id. at pp. 570-571.) Campagnone held the failure to have all persons or representatives attend court-ordered appellate mediation “is conduct that a party, but not a mediator, may report to the court as a basis for monetary sanctions.” (Id. at p. 572.) Campagnone cautioned, however, reporting anything more might violate the mediation confidentiality rules. (Ibid.)
We accept that Elder did not attend the court-ordered appellate mediation. However, Campagnone and the mediation confidentiality statutes state that we cannot inquire further into communications during the mediation. Therefore, under Campagnone, the company is permitted to report to the court that Elder did not attend the mediation, but the mediation confidentiality statutes (Evid. Code, § 1119) prevent Elder from presenting a non-sanctionable excuse disclosed during the course of mediation. This is an anomalous and unfair result.
Evidence Code section 1119 governs the general admissibility of oral and written communications generated during the mediation process. Subdivision (a) states in pertinent part “[n]o evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation... is admissible or subject to discovery, and disclosure of the evidence shall not be compelled, in any... civil action....” Subdivision (b) bars discovery of any “writing... prepared for the purpose of, in the course of, or pursuant to, a mediation....” Subdivision (c) of Evidence Code section 1119 states “[a]ll communications, negotiations, or settlement discussions by and between participants in the course of a mediation... shall remain confidential.” There is an exception for oral or written settlement agreements if the statutory requirements for disclosure are met. (Evid. Code, §§ 1118, 1123; Simmons v. Ghaderi, supra, 44 Cal.4th at pp. 582-588.)
In Foxgate, supra, 26 Cal.4th 1, the Supreme Court addressed whether a mediator could report bad faith conduct to participate in mediation and concluded that under the confidentiality provisions of Evidence Code sections 1119 and 1121, a mediator may not submit to the court, and the court may not consider, a report of communications or conduct by a party that the mediator believes constituted a failure to comply with court-ordered mediation and to participate in good faith with the mediation process. This is so even if there is no sanction for a party’s refusal to cooperate. (Foxgate, supra, at p. 17.) The Supreme Court noted, “the Legislature has weighed and balanced the policy that promotes effective mediation by requiring confidentiality against a policy that might better encourage good faith participation in the process.” (Ibid.)
Evidence Code section 1121 states in relevant part: “Neither a mediator nor anyone else may submit to a court..., and a court... may not consider, any report, assessment, evaluation, recommendation, or finding of any kind by the mediator concerning a mediation conducted by the mediator, other than a report that is mandated by court rule or other law and that states only whether an agreement was reached, unless all parties to the mediation expressly agree otherwise in writing, or orally in accordance with Section 1118.”
Neither Foxgate nor Campagnone permits us to consider evidence as to whether Elder’s absence from mediation was in bad faith, as the company suggests, or whether, as Elder suggests, he had a valid excuse for his absence. The parties’ declarations on this point expressly refer to communications during mediation. Thus, these declarations are inadmissible under the mediation confidentiality statutes. (Evid. Code, §§ 1119, subds. (a), (c), 1121; Foxgate, supra, 26 Cal.4th at pp. 17-18; Campagnone, supra, 163 Cal.App.4th at p. 572.)
We realize, as we stated in Wimsatt v. Superior Court, supra, 152 Cal.App.4th 137, the construction of the mediation confidentiality statutes may seem to lead to unjust results. (Id. at pp. 152-156, 163-164.) As the Supreme Court acknowledged in Foxgate, supra, 26 Cal.4th at page 17, its holding left unpunished sanctionable conduct. Likewise, these limitations prohibit us from learning circumstances that would exonerate a party defending a sanctions motion alleging bad faith conduct during mediation. The Legislature, however, has weighed and balanced the policy that promotes effective mediation by requiring confidentiality against a policy that might better encourage participation in the mediation process. It is for the Legislature, not the courts, to balance the competing policy concerns. (See Wimsatt v. Superior Court, supra, at pp. 163-164.) As we stated in Wimsatt, the harsh and inequitable results have not gone unnoticed. We have repeatedly implored the Legislature to reconsider California’s broad and expansive mediation confidentiality statutes. Given the limits upon which the Legislature has placed upon us, we decline to impose sanctions on Elder.
We also decline both parties’ motions for sanctions for violating appellate court rules.
DISPOSITION
The judgment is reversed and remanded to the trial court for further proceedings not inconsistent with this opinion. The motions for sanctions are denied. No party shall recover costs on appeal.
We concur: KLEIN, P. J., CROSKEY, J.