Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. YC060406. Michael P. Vicencia, Judge.
Law Offices of Robert Bruce Parsons and Robert B. Parsons, for Plaintiff and Appellant.
Waxler Carner Brodsky, Andrew J. Waxler and Danielle R. Sokol, for Defendant and Respondent.
BIGELOW, P. J.
Plaintiff and appellant Charles W. Gossett appeals from a trial court order sustaining a demurrer to Gossett’s complaint, without leave to amend. We affirm.
FACTS AND PROCEDURAL BACKGROUND
When reviewing a trial court order sustaining a demurrer without leave to amend “we accept as true the well-pleaded allegations in [the complaint]. ‘ “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.]” ’ ” (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) We also consider evidentiary facts found in exhibits attached to a complaint. (Satten v. Webb (2002) 99 Cal.App.4th 365, 374-375.)
The facts as pleaded in Gossett’s complaint are as follows. Gossett is a 50 percent shareholder and director of CRG Marine Laboratories, Inc. (CRG or the company), and also the company’s Chief Official Officer and Chairman of the Board. In 2007, CRG retained the law firm St. John, Wallace, Brenan & Folan (SWBF) to advise the company on employment matters. In 2008, an employment situation arose with one of CRG’s employees, Mark Baker. Baker claimed CRG owed him unpaid commissions. At SWBF’s recommendation, CRG agreed to mediate the dispute.
At the mediation, SWBF attorney John St. John represented CRG. According to the complaint, during the mediation St. John “remained silent, not even attempting to advocate CRG’s position which was set forth in its mediation brief.” When the mediator produced an e-mail message Gossett had purportedly sent to Baker regarding commissions, Gossett asked St. John for advice. The complaint alleged that St. John “remained silent, providing no advice or guidance of any kind and failing to respond to the arguments which the mediator was stridently making on behalf of [the employee.]” After Gossett agreed to pay Baker’s demanded commissions, St. John produced a settlement agreement and general release he had prepared in advance of the mediation but had not previously discussed with Gossett. When the mediator returned with the agreement—which the complaint alleged was “presumably modified and signed” by Baker—St. John told Gossett the agreement looked okay and he should sign it. Gossett skimmed the agreement and signed it.
The settlement agreement stated it was made and entered into by Baker, CRG, Richard Gossett, and Gossett. The agreement collectively referred to CRG, Richard Gossett, and Gossett as “defendants.” It provided that the settlement amount would be “paid by or on behalf of Defendants, jointly and severally, ” to Baker. Gossett and Richard Gossett signed the agreement for CRG.
According to the complaint, Richard Gossett is the other 50 percent shareholder and director of CRG. We will refer to Richard Gossett by his full name to avoid confusion.
Gossett was uneasy about the settlement agreement after it was signed and eventually asked his “personal attorney” to review it. Gossett’s attorney raised several concerns about the agreement, including that it rendered Gossett jointly and severally liable for the settlement payment. The attorney wrote St. John a letter asserting Gossett had not understood that he might be personally liable for the settlement payment under the agreement. The letter, which Gossett attached to the complaint, stated:
“Mr. Gossett was not advised by you as to the meaning or implication to him personally of the language of paragraph 1 of the Settlement and Release [setting forth the payment to be made jointly and severally]. Nor are we asserting that you had any duty to do so since you were acting at all times in your capacity as counsel to the corporation. [¶] However, because our client did not have the benefit of counsel to advise him personally on the Settlement and Release it will be necessary for us to file a rescission action on his behalf to the extent necessary to eliminate any personal liability on the part of Mr. Gossett to pay any portion of the settlement amount or to personally guaranty or underwrite any financing necessary for the corporation to pay the settlement amount.”
In August 2009, Gossett, in propria persona, filed a complaint for legal malpractice against SWBF. CRG was also named as a defendant. The complaint alleged SWBF was negligent in various ways including by failing to adequately research CRG’s potential claims and possible counterclaims, failing to advocate CRG’s position at the mediation, and failing to include a “financing contingency” in the settlement agreement since CRG did not have the cash to pay the settlement amount. As it related to Gossett individually, the complaint asserted SWBF was negligent in failing to inform him the settlement agreement referred to him as a “defendant” and that he would personally be jointly and severally liable with CRG to pay the settlement amount. The complaint additionally alleged SWBF was negligent in failing to inform Gossett “that he should consult with his own lawyer before signing the Settlement Agreement since the agreement was compromising [his] personal rights.” Gossett also purported to sue CRG derivatively to assert the company’s claims against SWBF.
According to the complaint, neither CRG nor the Gossetts had the money to pay the settlement amount and they could not borrow the money. As a result, Baker filed suit against all three. CRG and Gossett incurred legal fees in defending against the lawsuit and CRG entered into a structured settlement to pay the settlement amount.
SWBF demurred to the complaint. SWBF argued Gossett’s complaint was barred because it was based on allegations of communications and conduct protected by the mediation confidentiality statutes, Evidence Code section 1115, et seq. SWBF further argued the complaint failed to state a claim because the firm only had an attorney-client relationship with CRG, not with Gossett individually, thus it owed him no duty. SWBF also contended Gossett had not satisfied the procedural requirements for a derivative action and could not represent CRG in propria persona.
Gossett did not file an opposition to the demurrer. At the hearing on the demurrer, he told the court he meant to sue as an individual rather than as a shareholder, and requested leave to amend his complaint. The trial court asked Gossett if he had an explanation for how he might amend the complaint to pursue his individual claims. He responded: “I do. I can’t explain it at the moment, but I do. I do want to amend it so that it does reflect [my position] more clearly.” The trial court sustained the demurrer without leave to amend and dismissed the complaint. Gossett timely appealed.
DISCUSSION
I. Applicable Legal Principles on Demurrers
“In reviewing the sufficiency of a complaint against a demurrer, we ‘treat[] the demurrer as admitting all material facts properly pleaded, ’ but we do not ‘assume the truth of contentions, deductions or conclusions of law.’ [Citation.] We liberally construe the pleading to achieve substantial justice between the parties, giving the complaint a reasonable interpretation and reading the allegations in context. [Citations.] When a demurrer is sustained, we must determine de novo whether the complaint alleges facts sufficient to state a cause of action under any legal theory. [Citation.]” (Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 692-693 (Martorana).) “However, because it is not a reviewing court’s role to construct theories or arguments which would undermine the judgment [citation], we consider only those theories advanced in the appellant’s briefs.” (Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 564.)
“Moreover, when a demurrer is sustained without leave to amend, we also must determine whether there is a reasonable possibility that the defect can be cured by amendment. [Citation.] If it can be cured, the trial court has abused its discretion in sustaining the demurrer without leave to amend and we reverse. [Citation.] If it cannot be cured, there has been no abuse of discretion and we affirm. [Citation.] The burden of showing that a reasonable possibility exists that the complaint can be cured by amendment rests squarely with the plaintiff. [Citation.]” (Martorana, supra, 175 Cal.App.4th at p. 693.)
II. The Mediation Confidentiality Provisions Bar Gossett’s Complaint
SWBF’s demurrer contended Gossett’s claims were barred by mediation confidentiality provisions. Gossett argues that the mediation confidentiality statutes do not apply because the communications he complains of were between Gossett and his attorney. He asserts the mediation confidentiality statutes do not apply to communications made between parties on the “ ‘same side’ of the equation” at a mediation. However, as SWBF points out, the California Supreme Court rejected this argument in Cassel v. Superior Court (2011) 51 Cal.4th 113 (Cassel). We find Cassel is controlling and the mediation confidentiality provisions bar Gossett’s claims.
Under Evidence Code section 1119, subdivisions (a) and (b), evidence of anything said or admissions made for the purpose of, in the course of, or pursuant to a mediation cannot be disclosed in a legal proceeding, with certain statutory exceptions. Writings prepared for the purpose of, in the course of, or pursuant to a mediation are also protected from disclosure. Under subdivision (c), “[a]ll communications, negotiations, or settlement discussions by and between participants in the course of a mediation or a mediation consultation shall remain confidential.”
Evidence Code section 1119, subdivisions (a) and (b) state: “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 or subject to discovery, and disclosure of the evidence shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given. (b) No writing, as defined in Section 250, that is prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation, is admissible or subject to discovery, and disclosure of the writing shall not be compelled, in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.”
The California Supreme Court has repeatedly described the mediation confidentiality provisions as “clear and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially crafted exceptions or limitations, even where competing public policies may be affected. (Simmons v. Ghaderi (2008) 44 Cal.4th 570, 580 (Simmons); Fair v. Bakhtiari (2006) 40 Cal.4th 189, 194...; Rojas v. Superior Court (2004) 33 Cal.4th 407, 415-416, ...; Foxgate Homeowners’ Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, 13-14, 17....)” (Cassel, supra, 51 Cal.4th at p. 118.) Accordingly in Cassel, the court rejected the very argument Gossett makes here. In that case, the appellant filed a complaint alleging his attorneys breached their professional, fiduciary, and contractual duties in a previous legal matter. (Id. at p. 119.) Several of the appellant’s claims were based on allegations that the attorneys improperly kept him at a mediation and pressured him to accept a settlement for an amount he and the attorneys had previously agreed was too low. (Id. at p. 120.) The attorneys moved in limine under the mediation confidentiality statutes to exclude evidence of communications between the appellant and the attorneys that were related to the mediation. (Id. at p. 121.) The trial court excluded mediation-related communications between the appellant and the attorneys, but the court of appeal reversed the trial court ruling, finding that the mediation confidentiality provisions did not apply to communications between a party and his or her own counsel.
Our high court reversed the court of appeal’s decision. The court noted its previous discussion in Simmons of revisions the Legislature made to the mediation confidentiality provisions that extended Evidence Code section 1119, subdivision (a) to “oral communications made for the purpose of or pursuant to a mediation, not just to oral communications made in the course of the mediation.’ [Citation.]” (Cassel, supra, 51 Cal.4th at p. 128.) The court then concluded:
“The obvious purpose of the expanded language is to ensure that the statutory protection extends beyond discussions carried out directly between the opposing parties to the dispute, or with the mediator, during the mediation proceedings themselves. All oral or written communications are covered, if they are made ‘for the purpose of’ or ‘pursuant to’ a mediation. (§ 1119, subds. (a), (b).) It follows that, absent an express statutory exception, all discussions conducted in preparation for a mediation, as well as all mediation-related communications that take place during the mediation itself, are protected from disclosure. Plainly, such communications include those between a mediation disputant and his or her own counsel, even if these do not occur in the presence of the mediator or other disputants.” (Cassel, supra, 51 Cal.4th at p. 128.)
In the case before us, the individual claims asserted in Gossett’s complaint are entirely based on what St. John said—or did not say—at the mediation. Gossett’s complaint asserted only two theories that related to his individual claims. First, Gossett alleged St. John did not properly advise him at the mediation about his personal liability under the proposed settlement agreement. Second, Gossett claimed St. John did not advise him to seek independent counsel before signing the agreement reached at the mediation. These are also the only theories Gossett advances on appeal. Gossett cannot prove these claims without introducing evidence of communications and communicative conduct at the mediation. As Cassel made clear, Evidence Code section 1119 renders such evidence inadmissible.
On appeal Gossett does not mention the claims he asserted in the complaint on behalf of CRG. Therefore our discussion does not include or address those claims.
Although Cassel was not decided when Gossett filed his opening brief, the decision was issued soon after, and SWBF relied upon it in its respondent’s brief. On reply, however, Gossett makes no attempt to distinguish Cassel and does not even acknowledge the case. Further, Gossett does not argue that the mediation confidentiality provisions do not bar his complaint for any reason other than the theory Cassel rejected. Nor does he advance any legal theory that would permit him to state a claim he could prove without running afoul of the mediation confidentiality provisions. Gossett has not shown a reasonable probability exists that his complaint could be cured by amendment. The trial court did not abuse its discretion by sustaining the demurer without leave to amend.
The mediation confidentiality provisions would bar Gossett from proving up his claims, whether or not SWBF owed him a legal duty. Thus we need not address Gossett’s additional arguments on appeal.
DISPOSITION
The trial court judgment is affirmed. Respondent shall recover its costs on appeal.
We concur: FLIER, J., GRIMES, J.