Sang Ho Na v. Gillespie

Friedman, J. This appeal concerns the circuit court’s denial of Sang Ho Na’s Motion to Enforce Mediated Settlement Agreement following the parties’ voluntary, private mediation to determine custody of their daughter. Na argues that the circuit court erred when it denied his Motion to Enforce Mediated Settlement Agreement. Additionally, Na argues that the circuit court erred by ordering him to pay $85,000 in attorney’s fees to Malinda Gillespie, and in awarding primary physical custody to Gillespie with visitation to Na. For the reasons that follow, we affirm the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND Na and Gillespie are the unmarried parents of a daughter, born in July 2014. Na regularly visited the child, but she resided exclusively with Gillespie until November 20, 2015, when Na filed a Complaint for Custody and Other Relief in the Circuit Court for Howard County. Gillespie counterclaimed for custody, and on December 1, 2015 she filed a Request for Emergency Ex Parte Relief. An emergency pen-dente lite hearing was held that resulted in a temporary order granting joint legal custody to the parties with primary physical custody to Gillespie and visitation to Na until a full merits hearing could be held.

Prior to the merits hearing, the parties attended voluntary, private mediation. On the day of mediation, the parties, their counsel, and the mediator signed an Agreement to Mediate, by which they agreed to maintain the confidentiality of statements made and documents created during the mediation. The parties then proceeded with approximately nine hours of mediation. Meanwhile, outside, a snowstorm developed.

Due to the snow, the parties ended their mediation session without reducing any agreed-upon terms to writing. It is undisputed that counsel for both parties agreed to work toward drafting an outline of the various terms discussed during the mediation with the ultimate goal of submitting a consent order to the court. The parties disagree, however, on the extent to which any final agreement was reached on all of the disputed issues. In the days following mediation, counsel for the parties exchanged a number of emails regarding the preparation of a final written order.

In her emails to Na’s counsel, Gillespie’s counsel maintained the position that the parties had not “close[d] the loop on all items” and that the terms needed “some more specificity.” Na’s counsel, however, believed that the parties had reached a binding, enforceable settlement agreement during mediation. Ultimately, counsel exchanged contrasting drafts, but the parties were unable to agree on a final consent order. Due to these continued disagreements, Na filed a Motion to Enforce Mediated Settlement Agreement (“Motion to Enforce”), which Gillespie moved to dismiss. 1 On April 26, 2016, the Circuit Court for Howard County held a hearing on the Motion to Enforce, and both sides gave oral argument regarding whether the parties had reached a binding, oral settlement agreement during mediation. Na also sought to introduce documents and testimony from the attorneys and the mediator who participated in the mediation to prove the existence, and the terms, of the parties’ alleged settlement agreement.

Gillespie’s counsel objected, arguing that the confidential nature of the mediation barred any evidence of statements or documents made during the conference. The circuit court agreed with Gillespie, stating: One of the fundamental principles that makes mediation work is the concept of confidentiality [—] that I can say anything in my mediation with my opponent and it can’t be used against me in court ... [t]hese parties walked into that mediation with that expectation ... I find that anything that came out of the mediation that was not a written agreement is inadmissible and therefore I have to grant the motion to dismiss. The circuit court found that the Agreement to Mediate prohibited any discussion of the contents of mediation, and therefore the evidence Na wished to present was inadmissible.

As a result, the court denied Na’s Motion to Enforce. The court then held a three-day merits hearing, at the end of which it awarded the parties joint legal custody and primary physical custody to Gillespie with visitation to Na. The circuit court also ordered Na to pay $85,000 of Gillespie’s attorney’s fees. Na timely noted this appeal.

DISCUSSION I. Denial of the Motion to Enforce Mediated Settlement Agreement In reviewing the denial of a motion to enforce a settlement agreement, we review the circuit court’s factual findings for clear error and its legal conclusions de novo. Eastern Envtl. Endeavor, Inc. v. Indus. Park Auth. of Calvert Cnty., 45 Md.App. 512, 518-19 , 413 A.2d 1355 (1980).

Na challenges the circuit court’s denial of his Motion to Enforce on the grounds that the court improperly denied him the opportunity to present evidence to prove that he and Gillespie had in fact come to a final agreement on all the disputed issues related to custody of their daughter. Na argues that because the parties opted for voluntary, private mediation, none of Maryland’s mediation confidentiality statutes or rules apply, and that, as a result, he is entitled to prove the existence of the parties’ settlement agreement through testimony regarding the mediation discussions. Gillespie responds that even though the parties voluntarily attended mediation, Maryland law protecting confidentiality of mediation and the plain language of the parties’ Agreement to Mediate require that all communications arising out of the parties’ mediation remain confidential. Thus, Gillespie contends, any evidence offered by Na regarding the mediation is barred.

We conclude that both parties are partially correct, as we shall explain in the sections that follow. Na is correct that no Maryland statute or rule protecting mediation confidentiality applies to the voluntary, private mediation in this case. The parties’ Agreement to Mediate, however, constitutes a binding contract to maintain the confidentiality of all communications and documents related to their mediation. Therefore an evi-dentiary hearing, as Na requests, would be futile because all of the evidence that he wishes to offer is inadmissible.

We explain. A. Maryland Mediation Rules and Statutes The parties spend most of their efforts fighting about the applicability vel non of several statutes and rules regarding confidentiality in mediation, none of which are directly applicable to the voluntary mediation at issue in this case. Na contends that because these rules do not, by their terms, apply to voluntary, private mediations, he is entitled to present evidence of mediation communications that would otherwise be confidential. Gillespie argues that even though the confidentiality rules for court-ordered mediations do not literally apply to voluntary mediations, they are nonetheless instructive and should be construed broadly.

She suggests that, in accordance with Maryland’s policy of encouraging voluntary settlement of lawsuits, parties who voluntarily agree to mediate should be entitled to similar confidentiality protections as those parties who are referred to mediation by a court. We agree with Na that Maryland’s statutes regarding confidentiality in court-ordered mediations do not apply here. First, Title 17 of the Maryland Rules provides detailed rules governing confidentiality in Alternative Dispute Resolution, including mediation. By their express terms, however, these rules apply only when the matter is referred by a court to mediation, not, as here, where the parties undertake it voluntarily.

Md. Rule 17-101(a). Second, the Maryland Mediation Confidentiality Act, Title 3, Subtitle 18 of the Courts and Judicial Proceedings Article, provides another set of rules governing confidentiality of mediation. Md. Code Cts. & Jud. Proc.

(“CJ”) § 3-1801, et seq. Though this Act applies to all mediations ordered by administrative agencies or courts, it only applies to private mediations when the mediator certifies in writing that he or she will follow the Maryland Standards of Conduct for Mediators, which did not occur in this case. CJ § 3-1802. Third, Maryland Rule 5-408 is a rule of evidence which makes settlement negotiations inadmissible in many situations.

In this case, however, Rule 5-408 doesn’t apply because the parties do not dispute the “validity, invalidity, or amount of a civil claim in dispute.” Md. Rule 5-408(a). Therefore, none of these laws make the content of this mediation confidential. But, that does not mean the opposite is necessarily true. Gillespie argues that even if the laws and rules referenced by Na don’t apply, they reflect a policy in favor of mediation confidentiality.

See Gen. Motors Corp. v. Lahocki, 286 Md. 714 , 410 A.2d 1039 (1980) (discussing Maryland’s public policy in favor of compromise and settlement). While there is some attraction to this view, it is dangerous for courts to ignore the plain words of exclusion in a statute or rule. If the law says confidentiality doesn’t automatically apply in a certain situation, it is difficult for us to say that it does apply.

Perhaps the exclusion was the compromise that allowed the bill to pass. Fortunately, however, we need not resolve this question because here the parties themselves have contracted to maintain confidentiality. B. The Agreement to Mediate The circuit court found that the terms of the parties’ Agreement to Mediate clearly reflected an understanding that all parties involved in the mediation would be bound by confidentiality. Based on this understanding, the circuit court denied the Motion to Enforce because to prove his claim, Na would necessarily have to present confidential evidence.

Na argues that, although the Agreement to Mediate addressed the confidential nature of the mediation discussions, its terms do not preclude him from presenting evidence on the content of mediation to prove that the parties reached a final settlement. We agree with the circuit court that the Agreement to Mediate constitutes an enforceable contract, by which the parties clearly and unambiguously agreed to keep the content of mediation confidential. Maryland law recognizes the freedom of parties to contract as they see fit. Nesbit v. Gov’t Employees Ins.

Co., 382 Md. 65, 76 , 854 A.2d 879 (2004) (“As a general rule, parties are free to contract as they wish”) (cleaned up). 2 “Under the principles of freedom of contract, parties have a broad right to construct the terms of contracts they enter into as they wish.” Willard Packaging Co. v. Javier, 169 Md.App. 109, 122 , 899 A.2d 940 (2006). Parties who voluntarily engage in mediation, such as Na and Gillespie, therefore, are free to define the governing terms—including the scope of confidentiality—of their mediations by contract. Long v. State, 371 Md. 72, 74 , 807 A.2d 1 (2002) (quoting Slice v. Carozza Properties, Inc., 215 Md. 357 , 137 A.2d 687 (1958) (“the written language embodying the terms of an agreement will govern the rights and liabilities of the parties”)). To determine whether the confidentiality provisions of Na and Gillespie’s Agreement to Mediate are binding and enforceable, we apply the standard rules of contract interpretation.

Maryland follows the objective approach to contract interpretation. Ocean Petroleum, Co. v. Yanek, 416 Md. 74, 86-87 , 5 A.3d 683 (2010). This means that “the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have