Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Los Angeles County No. BD417472, Donna Fields Goldstein, Judge.
Cuneo & Hoover and J. Nicholas Cuneo for Appellant.
Paul F. Moore II for Respondent.
CROSKEY, J.
This is an appeal in a family law case in which the marriage of Maria Beetley (wife) and Kirk Beetley (husband) was dissolved and issues in the case other than child custody and visitation were resolved by mediation and judgment entered on the mediated settlement agreement. Wife has appealed from the judgment, contending the mediated settlement agreement and the judgment are (1) void for inclusion of unlawful provisions, (2) not enforceable because of the failure of the parties to comply with disclosure provisions in the Family Code prior to entering into the settlement agreement, and (3) not enforceable because of the failure of the trial court to consider certain matters that occurred during the mediation of the parties’ dissolution of marriage issues. None of these contentions has merit and therefore the judgment will be affirmed.
Unless otherwise indicated, all references herein to statutes are to the Family Code.
BACKGROUND OF THE CASE
The parties were married in 1994 and they separated just over ten years later. They have three minor children. Wife filed for dissolution of the marriage on December 2, 2004, soon after the separation occurred. The record shows that the case was contentious during the time it was pending in the trial court, with the parties making accusations against each other regarding, among other things, finances, maintenance of property, use of vehicles, community and separate status of property, care of the children, husband’s income, and whether the community has an interest in businesses operated by husband’s family (his father, uncle, and other family members). Hearings on orders to show cause and motions were held, and various orders were made by the trial court.
In August 2007, husband filed a motion seeking to have a written settlement agreement entered as a judgment under Code of Civil Procedure section 664.6. The written settlement agreement was entered into by the parties on April 16, 2007, after their mediation with a professional mediator, Barry Davis. The mediation took place through this court’s voluntary mediation services which were offered to the parties as an attempt to settle husband’s pending appeal of a trial court order. The parties agreed they would attempt to settle all of the issues in the case (other than custody and visitation), rather than only the issues in the appeal, which concerned an order for temporary support and attorney’s fees. A week before the mediation, wife’s then-current attorney sent a letter to the mediator that set out “a synopsis of the remaining issues in this case, and [wife’s] position with respect to same.” The letter shows that a copy of it was sent to wife and to husband’s attorney.
Code of Civil Procedure section 664.6 (§ 664.6) states: “If parties to pending litigate stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.”
On April 11, 2007, the parties and their respective attorneys met with mediator Davis and negotiated for ten hours. The result was the signing, by the parties and their attorneys, of a handwritten agreement that encompassed settlement of the case except for custody and visitation, and that expressly stated it is enforceable under section 664.6. Thereafter, wife’s attorney prepared a proposed judgment but wife refused to sign it and retained new counsel. At that point in the case, wife had been represented by a succession of attorneys. After accommodating wife’s new attorney’s request for several weeks of time to review the many boxes of documents in the case and the proposed judgment, husband’s attorney received notice that wife would not sign the proposed judgment. Husband responded by filing the section 664.6 motion to have the mediated settlement agreement enforced as a judgment.
In his section 664.6 papers, husband stated that the case had been pending for two and one-half years and wife had been represented by six firms of attorneys; that most of her attorneys filed motions to be relieved as counsel; and that wife employed forensic accountants for the case. Husband also set out a summary of the discovery wife initiated and noted that the mediation that produced the written settlement agreement was the parties’ second mediation. He also noted that the second mediator, during the weeks preceding the mediation, spent a total of more than 90 minutes speaking with wife; a total of 60 minutes speaking with wife’s boyfriend; and a total of two and one-quarter hours speaking with wife’s then current attorney and two of her former attorneys. Husband also noted that the mediated settlement agreement requires the parties to exchange their respective final declarations of disclosure (§ 2105), and that husband did serve his but wife did not.
In response to the section 664.6 motion, wife asserted that the parties’ mediated settlement agreement was not enforceable because the parties had not exchanged the section 2105 final disclosure declarations prior to entering into the settlement agreement. Wife also asserted the following: husband had not disclosed all of the community’s assets; at the time of the mediation she did not know the values of many of the assets listed in the parties’ preliminary disclosure statements, including the community’s interest in husband’s family’s business; the settlement agreement did not address all of the issues in the case; the final declaration of disclosure submitted by husband after the mediated settlement agreement was signed is inadequate in several specific ways; husband’s income and expense declaration included with that disclosure was not complete because it did not include the cash he receives from his family’s business; and her discovery in the case was still ongoing. She stated that the attorney who represented her at the mediation had only been her attorney for approximately one month when the mediation occurred.
Regarding the mediation itself, wife stated she did not understand that the mediation was intended to resolve all of the issues in the case rather than only the issues in husband’s pending appeal. She also stated that during the mediation she was under the influence of medications she was taking to relieve the stress of the case; the mediation lasted from noon to 10:00 p.m. and by the time she was given the settlement agreement to read and sign she was so tired and stressed that she was unable to read and comprehend it and she was “shaking and crying incessantly”; she did not understand that the agreement provided her with nonmodifiable spousal support for only 36 months; and she did not understand the agreement could be the basis of a judgment.
In husband’s reply papers, in addition to addressing wife’s issues, he stated that at the end of the mediation he saw wife speaking with the mediator “in an animated way,” and she was smiling and appeared to be happy with the mediation.
On December 14, 2007, the trial court issued a lengthy order confirming the written mediated settlement agreement and directing husband’s attorney to prepare the judgment. Husband’s attorney presented to wife’s attorney the judgment he prepared and asked that she have it signed. Wife’s attorney declined to do so and stated she was substituting out of the case. Pursuant to an ex parte application filed by husband, which wife opposed through her new attorney, the court signed the judgment on January 16, 2008.
Thereafter, wife filed a motion to have the settlement agreement and judgment set aside, and a timely notice of appeal from the judgment, and she changed attorneys again.
CONTENTIONS ON APPEAL
Wife contends the settlement agreement and subsequent judgment are void and unenforceable because they contain unlawful provisions. Additionally, wife contends the trial court erred in granting husband’s section 664.6 motion because the parties had not exchanged final declarations of disclosure prior to entering into the settlement agreement, and because the court refused to consider wife’s mental state at the mediation and husband’s failure to provide wife with a valuation of the family business.
DISCUSSION
1. The Impact of the Alleged Illegal Provision in the Settlement Agreement
The mediated settlement agreement contains the following provision: “[Wife] agrees that she will use her best efforts to cause the District Attorney to drop the criminal charges against [husband] now pending in the Malibu court and affirms that she will not testify against him as permitted by law.” Wife contends that (1) this provision is illegal under certain sections of the Penal Code (§§ 153 and 1377), and (2) Civil Code section 1608 renders the entire settlement agreement unenforceable.
Apparently the criminal charges against husband are the result of wife’s accusation that he physically assaulted her. Husband describes it as a “disputed allegation that [he] pushed [wife] in the shoulder once.”
Regarding wife’s first contention, we cannot determine the legality of the provision because it ends with the words “as permitted by law.” Do those words apply to a belief that wife could testify against husband if she chose to do so, or do the words govern the whole of the provision so as to denote recognition by the parties that the law may not permit her to attempt to have the District Attorney drop the charges? The settlement agreement does not so state. Husband argues the words were included in the provision “[b]ecause of the uncertainty of [the provision].” However, husband also asserts, with respect to a different issue in this case, that we cannot go behind the mediated settlement agreement because of the mediation privilege. Suffice it to say that the intent of the words “as permitted by law” will remain unknown, with the result that we cannot conclude the provision is per se illegal. Stated another way, we cannot say conclusively that the provision required wife to attempt to persuade the District Attorney to drop charges.
Civil Code section 1608 states: “If any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void.” For example, in Selten v. Hyon (2007) 152 Cal.App.4th 463, 468, the court held that the illegal portions of a contract could not be severed because there was but one consideration promised to the plaintiff by the defendant—a contingent fee in exchange for the many services by the plaintiff that were required by the contract, one of which was illegal. Here, whatever the legality of the promise made by wife respecting the pending criminal charges against husband, the enforcement of the settlement agreement is not impacted by section 1608 because that promise is part of many she made in exchange for many promises husband made.
Civil Code section 1599 states that “[w]here a contract has several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole or in part, the contract is void as to the latter and valid as to the rest.” Moreover, case law has permitted illegal portions of contracts to be severed or restricted when possible in order to avoid situations where a party gains an undeserved windfall or suffers an undeserved detriment if the entire agreement is voided, especially where full or partial performance of the contract has occurred. Courts seek to conserve the contractual relationship if severing or restricting an illegal provision furthers the interests of justice. Where the central purpose of the contract is not tainted with illegality, where the illegal provision is collateral to the main purpose of the contract, and where severance or restriction is possible, then the contract should be saved. (Templeton Development Corp. v. Superior Court (2006) 144 Cal.App.4th 1073, 1084.)
Here, assuming arguendo the illegality of the subject provision, we note, as did the trial court, that after the parties signed the mediated settlement agreement, husband did what the agreement required him to do—he dismissed his appeal, and thereby gave up his appellate rights. Further, severing the challenged provision serves the interests of justice by facilitating resolution of a contentious marital case. We do not accept wife’s argument that enforcing the settlement agreement means that justice is thwarted because she will not receive “any consideration or equalizing payment for waiving her share of [husband’s] interest in [husband’s family’s business].” As discussed below, there is evidence she has no community interest in that business. Nor do we accept wife’s contention that it is unfair to enforce other “onerous” provisions of the settlement agreement, to wit, its limitation of spousal support to three years of nonmodifiable support. That is a provision to which wife agreed.
2. Sections 2105, 2106, and 2107 Do Not Require Reversal of the Judgment
Section 2105, subdivision (a) states in relevant part: “Except by court order for good cause, before or at the time the parties enter into an agreement for the resolution of property or support issues other than pendente lite support,... each party, or the attorney for the party in this matter, shall serve on the other party a final declaration of disclosure and a current income and expense declaration, executed under penalty of perjury on a form prescribed by the Judicial Council, unless the parties mutually waive the final declaration of disclosure.” (Italics added.) Subdivision (d) of section 2105 provides that the mutual waiver must be in writing, executed under penalty of perjury and contain several very specific representations.
Section 2106 provides in relevant part: “Except as provided in subdivision (d) of Section 2105..., absent good cause, no judgment shall be entered with respect to the parties’ property rights without each party, or the attorney for that party in this matter, having executed and served a copy of the final declaration of disclosure and current income and expense declaration.” (Italics added.)
Section 2107, subdivision (d) provides: “If a court enters a judgment when the parties have failed to comply with all disclosure requirements of this chapter, the court shall set aside the judgment. The failure to comply with the disclosure requirements does not constitute harmless error.” (Italics added.)
Subdivision (d) of section 2107 was added to that section in 2001. At least one thing stands out when reading subdivision (d) in conjunction with section 2106 and subdivision (a) of section 2105. Despite advising in subdivision (d) that when parties fail to comply with disclosure requirements such failure will not constitute harmless error and the court must set aside the judgment, the Legislature nevertheless left intact the provisions that allow parties to enter into settlement agreements (§ 2105, subd. (a)) and allow courts to enter judgments (§ 2106), without the parties having complied with the final disclosure requirements, so long as a court finds good cause for doing so.
Additionally, it has been held that despite section 2107’s directive that failure to comply with disclosure requirements will not constitute harmless error, that directive is “trumped” by California Constitution article VI, section 13. (In re Marriage of Steiner & Hosseini (2004) 117 Cal.App.4th 519, 527, [Steiner].) This constitutional provision states: “No judgment shall be set aside, or new trial granted, in any cause, on the ground of misdirection of the jury, or of the improper admission or rejection of evidence, or for any error as to any matter of pleading, or for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” (Italics added.) The Steiner court held that the failure of the spouses in that case to exchange final declarations of disclosure would not give them “the automatic right to a new trial or reversal on appeal when there is no showing of a miscarriage of justice.” (Steiner, at pp. 522, 528.)
Here, the parties did not exchange final declarations of disclosure prior to entering into the mediated settlement agreement, and there was no court order made prior to their entering into that agreement relieving the parties of having to make that exchange. However, the written agreement states that “[b]oiler plate language [would] be included in the judgment including waiver of inheritance, waiver of discovery and each party will serve a final declaration of disclosure.” As noted above, husband served a final disclosure after that agreement was made but wife did not serve hers. Wife contends husband’s final disclosure is materially insufficient.
Wife is the party who has the burden of proof imposed by the constitutional provision that requires a miscarriage of justice to set aside a judgment. She must demonstrate that the “error” in procedure with respect to exchange of final disclosure declarations, that is, husband’s and wife’s agreement that the exchange would take place after the mediated settlement agreement was signed, resulted in a miscarriage of justice. Wife states there is a miscarriage of justice because “she received no compensation whatsoever for the community property interest in the Le Mans Body and Paint business.” She states that when husband served his final declaration of disclosure he did not place a value on “the 6% interest in the Beetley Family Limited Partnership which owned the body shop” and instead he “simply put the word ‘unknown.’ ” She adds that when her own accountant examined the books of the husband’s family business, the accountant focused on the cash flow that husband received from that business so that there would be evidence regarding the amount of support husband could pay, and her accountant did not evaluate the value of the business. Husband asserts that the community has no interest in his family’s businesses, and he cites to a declaration submitted to the court.
The declaration is from a Stacy Sokol, who identified herself as corporate counsel to the “Beetley family entities.” Sokol stated that a business known as Zukie Enterprises, Inc. runs Le Mans Body and Paint, that Zukie is owned solely by husband’s father and uncle, and that husband has no interest in Zukie. Sokol also stated that Zukie leases real property from Beetley Brothers Corporation (BBC), the owner of the property, and the sole shareholder of BBC is the Beetley Family Limited Partnership. According to Sokol, the general partner of the Beetley Family Limited Partnership is Beetley Investment Corporation, and originally husband’s father and uncle were the only limited partners, but that currently, husband’s father and uncle and five other people are the limited partners, and husband is one of those five people. Sokol stated that husband has a six percent share in the limited partnership, and she concluded that husband’s six percent share is his own separate property because husband acquired his six percent share as a gift from his father during his marriage to wife.
Husband argues that this evidence shows he has no interest in Zukie Enterprises, Inc. dba Le Mans Body and Paint, that his work for Zukie as its employee does not impact the value of the real estate that Zukie leases from BBC, and that wife presented no evidence showing that the community has an interest in those businesses. He concludes that therefore a valuation of those businesses was not necessary and wife has not established that she would materially benefit from an evaluation of the businesses. We observe that wife had six months between the time she was served with Ms. Sokol’s declaration and the day she signed the mediated settlement agreement to obtain evidence contrary to Sokol’s presentation.
It is true that spouses have fiduciary duties to share information about community assets, including valuation, and that the spouse that is in the better position to obtain records or other information for an evaluation of an asset must do so and disclose the information to the other spouse, (In re Marriage of Brewer & Federici (2001) 93 Cal.App.4th 1334, 1345, 1348.) Here, the evidence in the record regarding the husband’s family’s businesses does come from husband, and it shows he owns an interest in one of the businesses and it is his separate property. The record does not support wife’s contention that she was injured by the lack of a valuation of Zukie Enterprises, Inc. dba Le Mans Body and Paint on husband’s final declaration of disclosure, and wife has not demonstrated that the parties’ agreement to change the timing of the exchange of final declarations of disclosure was prejudicial to her. Therefore, we do not find that the trial court’s decision to excuse there not being an exchange of final declarations of disclosure by the parties prior to their entry into the mediated settlement agreement constitutes grounds for reversing the judgment that was entered on that agreement.
3. Exclusion of Evidence of Wife’s Mediation Mental State Is Not Grounds for Reversing the Judgment
As noted above, in opposing husband’s section 664.6 motion, wife stated she did not understand that the parties would be mediating all of the issues in the case rather than only the issues in husband’s pending appeal, nor did she understand that mediated settlement of issues could be the basis of a judgment. She also stated she was under the influence of medications during the mediation; because the mediation lasted ten hours she was tired and stressed and “shaking and crying incessantly,” and was not able to read and understand the written agreement; and she did not understand that the agreement provided her with nonmodifiable spousal support for only 36 months.
The trial court found that the mediation privilege prevented it from considering this evidence of wife’s mental state at the mediation when it determined whether to grant husband’s section 664.6 motion. The trial’s decision does not constitute grounds for reversing the judgment. As noted above, the California Constitution directs that a court must examine “the entire cause” in determining whether there has been a miscarriage of justice. Here, examination of the entire cause is not possible because of the mediation privilege.
“Except as otherwise provided in this chapter: [¶] (a) No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible... in any... civil action,... [¶s] (c) All communications, negotiations, or settlement discussions by and between participants in the course of a mediation or a mediation consultation shall remain confidential.” (Evid. Code, § 1119.) Under section 1119, written and oral communications made during mediation may not be revealed. (Foxgate Homeowners’ Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, 13.)
Wife argues that husband waived the mediation privilege when he included in his section 664.6 papers the abovementioned letter that wife’s attorney sent to the mediator the week before mediation concerning the issues that would be mediated, and when he argued in his papers that in the mediation wife “obtained almost everything she sought and then more.” Regarding the latter, this was a throwaway argumentative comment. Moreover, neither husband’s comment nor his use of the letter constitutes a waiver of the mediation privilege. The mediation privilege cannot be impliedly waived. (Evid. Code, § 1122; In re Marriage of Kieturakis (2006) 138 Cal.App.4th 56, 81.) Thus, absent an express written waiver of the mediation privilege by the mediator, wife, and husband, there is no waiver. (Ibid.) Courts have recognized that a spouse who claims that a mediated settlement agreement should not be enforced because of matters occurring in the course of mediation is at a disadvantage in terms of the ability to present evidence if there is no written waiver of the mediation privilege signed by the spouses and the mediator. (Keiturakis, supra, at pp. 81-82, 87.) But courts also recognize that such result is based on the policy favoring mediation and the need for confidentiality. (Keiturakis, supra, at pp. 81-82, 85-86, 87.)
The letter was sent to the mediator by wife’s attorney in lieu of a mediation brief. Such writings are protected from disclosure by the mediation privilege. (Wimsatt v. Superior Court (2007) 152 Cal.App.4th 137, 158.)
Here, in opposing husband’s section 664.6 motion, wife sought in her declaration to explain to the trial court her version of the mediation and what actually occurred as contrasted with what she expected from it, and her mental and emotional state insofar as they impacted her ability to engage in the mediation and understand its results. On appeal, she argues that these matters are not governed by the mediation privilege in section 1119 because that that privilege only applies to communications and writings exchanged during mediation proceedings. We disagree with wife’s analysis. The matters set out in wife’s declaration do not sit in a vacuum. They necessarily involve the questions whether wife did engage in the mediation process and what she was asked and told with respect to its parameters and effects, and whether she told anyone what her expectations were and explained to anyone about her asserted inability to engage in, or continue engaging in, the mediation and enter into the settlement agreement. We will not presume that she remained mute during the entire ten hours and did not indicate her surprise at/objection to mediation matters of which she now complains. By her declaration about the mediation, wife is asking to have the court look into what transpired at the mediation. We cannot consider such things as they fall under the mediation privilege.
DISPOSITION
The judgment from which wife has appealed is affirmed. Costs on appeal to husband.
We Concur: KLEIN, P. J., KITCHING, J.
Wife does not indicate that she objected to the trial court’s examination of the letter, but she argues on appeal that “[i]t is error for the Trial Court to consider this letter in support of [husband’s] motion to enforce the Settlement Agreement yet refuse to entertain any of [wife’s] evidence concerning the mediation proceedings.... ” Our review of the trial court’s order confirming the mediated settlement agreement as a judgment does not reveal that the court expressly relied on the letter. The order simply states that although the mediator was appointed to mediate the issues that husband raised in his appeal, “[t]he parties agreed to expand [the mediator’s] role and to mediate with him in an attempt to settle all financial and property issues in the case.” The trial court was informed of that expansion of the mediator’s role in husband’s attorney’s declaration submitted with husband’s section 664.6 moving papers, wherein the attorney stated that the mediator “inquired if the parties would meet regarding settlement of the entire case. The parties agreed.”
Nor are we persuaded that provisions in Evidence Code section 1128 warrant vacating the judgment. Section 1128 states: “Any reference to a mediation during any subsequent trial is an irregularity in the proceedings of the trial for the purpose of Section 657 of the Code of Civil Procedure [which addresses new trials]. Any reference to a mediation during any other subsequent noncriminal proceeding is grounds for vacating or modifying the decision in that proceeding, in whole or in part, and granting a new or further hearing on all or part of the issues, if the reference materially affected the substantial rights of the party requesting relief.” Wife contends that husband’s “disclosure of the statements made by [wife’s] attorney to the mediator materially affected [wife’s] rights in these proceedings and mandates setting aside the Settlement Agreement and Judgment thereon pursuant to Evidence Code Section 1128.” Wife does not explain how her rights were affected in opposing the section 664.6 motion. Moreover, her argument misses the point of section 1128. The Law Revision Commission Comment for that section states in relevant part: “An appropriate situation for invoking this section is where a party urges the trier of fact to draw an adverse inference from an adversary’s refusal to disclose mediation communications.”