Dennis Jack Horner v. Marcia (Horner) Carter

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE ATTORNEY FOR
David W. Stone IV Brent R. Dechert AMICI CURIAE
Stone Law Office & Legal Research Kokomo, Indiana Indiana State Bar Assoc.
Anderson, Indiana Alternative Dispute
Resolution Section and
Indiana Assoc. of
Mediators
Andrea L. Ciobanu
Ciobanu Law P.C.
Indianapolis, Indiana
____________________________________________________________________________
In the FILED
Indiana Supreme Court Feb 12 2013, 10:59 am
_________________________________
CLERK
of the supreme court,
court of appeals and
No. 34S02-1210-DR-582 tax court
DENNIS JACK HORNER, Appellant (Petitioner),
v.
MARCIA (HORNER) CARTER, Appellee (Respondent).
_________________________________
Appeal from the Howard Circuit Court, No. 34C01-9803-DR-168
The Honorable Lynn Murray, Judge
_________________________________
On Transfer from the Indiana Court of Appeals, No. 34A02-1111-DR-1029
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February 12, 2013
Dickson, Chief Justice.
When the parties' marriage was dissolved in 2005, the trial court approved a settlement
agreement reached by the parties following mediation. Appellant's App'x at 19. In 2011, the
husband initiated the present proceeding, seeking in part "to modify the maintenance provision in
the Settlement Agreement," id. at 27, in order to terminate his liability for monthly housing pay-
ments to the wife after her remarriage. At the evidentiary hearing the trial court excluded from
evidence the husband’s testimony regarding statements he claimed to have made to the mediator
during the mediation process, and thereafter denied the husband’s request for modification of his
monthly housing payment obligation. The Court of Appeals affirmed the denial of relief, but
opined that the trial court’s exclusion of the husband’s testimony was in error, albeit harmless
error. Horner v. Carter, 969 N.E.2d 111, 118 (Ind. Ct. App. 2012). We granted transfer thereby
vacating the Court of Appeals opinion, except for those portions that are summarily affirmed
herein. Ind. Appellate Rule 58(A)(2).
1. Exclusion of Husband's Statements to Mediator During Mediation.
Indiana policy strongly favors the confidentiality of all matters that occur during media-
tion.
Alternative Dispute Resolution Rule 2.11 Confidentiality
Mediation shall be regarded as settlement negotiations as governed by Ind. Evi-
dence Rule 408. For purposes of reference, Evid. R. 408 provides as follows:
Rule 408. Compromise and Offers to Compromise
Evidence of (1) furnishing or offering or promising to furnish, or (2) ac-
cepting or offering or promising to accept a valuable consideration in compro-
mising or attempting to compromise a claim, which was disputed as to either va-
lidity or amount, is not admissible to prove liability for or invalidity of the claim
or its amount. Evidence of conduct or statements made in compromise negotia-
tions is likewise not admissible. This rule does not require exclusion when the ev-
idence is offered for another purpose, such as proving bias or prejudice of a wit-
ness, negating a contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution. Compromise negotiations encompass al-
ternative dispute resolution.
Mediation sessions shall be closed to all persons other than the parties of record,
their legal representatives, and other invited persons.
Mediators shall not be subject to process requiring the disclosure of any matter
discussed during the mediation, but rather, such matter shall be considered confidential
and privileged in nature. The confidentiality requirement may not be waived by the par-
ties, and an objection to the obtaining of testimony or physical evidence from mediation
may be made by any party or by the mediators.
Ind. Alternative Dispute Resolution Rule 2.11.
In Vernon v. Acton, we held that the mediation confidentiality provisions of our ADR
Rules "extend to and include oral settlement agreements undertaken or reached in mediation.
Until reduced to writing and signed by the parties, mediation settlement agreements must be con-
sidered as compromise settlement negotiations . . . ." 732 N.E.2d 805, 810 (Ind. 2000). Evi-
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dence of conduct or statements made in compromise negotiations or mediation is not admissible
except when offered for a purpose other than "to prove liability for or invalidity of the claim or
its amount." A.D.R. 2.11 (incorporating Evid. R. 408); see also Gast v. Hall, 858 N.E.2d 154,
161 (Ind. Ct. App. 2006), trans. denied. The admissibility provided for mediation evidence "of-
fered for another purpose" pertains to the use of such evidence only in collateral matters unrelat-
ed to the dispute that is the subject of the mediation. See A.D.R. 2.11 (incorporating Evid. R.
408).
During the hearing on the husband's petition to modify the mediated settlement agree-
ment, the trial court refused to allow the husband to testify as to his statements to the mediator
during the mediation session. The husband sought admission of this evidence to avoid liability
under the agreed settlement on grounds that it reflected neither his intent, nor his oral agreement
during the mediation.
The Court of Appeals concluded that the husband's statements during the mediation could
be admitted as extrinsic evidence to aid in the construction of an ambiguous agreement. We dis-
agree. Indiana judicial policy strongly urges the amicable resolution of disputes and thus em-
braces a robust policy of confidentiality of conduct and statements made during negotiation and
mediation.1 The benefits of compromise settlement agreements outweigh the risks that such pol-
icy may on occasion impede access to otherwise admissible evidence on an issue.
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The decision of the Court of Appeals, which we have vacated, expressed approval of a different
approach presented in the Uniform Mediation Act ("UMA") drafted by the National Conference of Com-
missioners on Uniform State Laws. For the purpose of preserving traditional contract defenses, the UMA
would permit disclosure and discovery of conduct and statements during mediation if not otherwise avail-
able, and subject to a cautious balancing to ascertain whether the need for such evidence substantially
outweighs the interest in protecting confidentiality. See Uniform Mediation Act § 6(b) ("There is no priv-
ilege under Section 4 if a court, administrative agency, or arbitrator finds, after a hearing in camera, that
the party seeking discovery or the proponent of the evidence has shown that the evidence is not otherwise
available, that there is a need for the evidence that substantially outweighs the interest in protecting confi-
dentiality, and that the mediation communication is sought or offered in: . . . except as otherwise provided
in subsection (c), a proceeding to prove a claim to rescind or reform or a defense to avoid liability on a
contract arising out of the mediation."). Indiana has not adopted the UMA, and we decline to follow its
approach to mediation confidentiality at this time. The Court acknowledges that efforts are presently un-
derway by the Alternative Dispute Resolution Section of the Indiana State Bar Association and the Alter-
native Dispute Resolution Committee of the Judicial Conference of Indiana to review and possibly pro-
pose modifications to the Indiana Rules for Alternative Dispute Resolution.
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In the present case, the husband's purported oral statements made to the mediator during
mediation clearly fall within the express inadmissibility of mediation evidence akin to the offer
or acceptance of a compromise on a claim of disputed liability or validity. A.D.R. 2.11 (incorpo-
rating Evid. R. 408). Furthermore, applying Vernon, the husband's testimony, seeking to estab-
lish and enforce an oral agreement allegedly reached in mediation, must likewise be treated as
confidential and inadmissible. The trial court was correct to exclude the husband's mediation
statements from evidence on his petition to modify the parties' settlement agreement.
2. Denial of Husband’s Petition to Modify Agreement.
With respect to the husband’s petition to modify the Property Settlement Agreement's
provisions obligating him to make house payments, we summarily affirm that portion of the de-
cision of the Court of the Appeals that affirms the trial court’s rejection of the husband’s claim.
Horner, 969 N.E.2d at 118–19; App. R. 58(A)(2).
Conclusion
The judgment of the trial court is affirmed.
Rucker, David, Massa, and Rush, JJ., concur.
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