Quote of the Day - While I should be the last to say that the making of a profit was not in itself a pleasure, I hope I should also be one of those to agree that there were other pleasures than making a profit.
There's been much in the Courts lately about the admissibility of settlement agreements reached in mediation, and MIPTC has written about one such case before. Now, there's another one to add to the mix.
Let's go over the details first, and then you'll see why the Court ruled as it did. Apparently Tony Rael, Jr. was a wealthy man, worth over $6,000,000, partly as a result of owning a liquor store. Tony married and had three children. Tony divorced his wife and remarried Cruz Rael.
The children were apparently not happy and sued their father to appoint a conservator. Under the probate rules of the Los Angeles Court, the parties, which included Tony, Cruz and Tony's children had to go to mediation to see if they could work out their differences.
They went to the mediation, but one of Tony's children, Mark, didn't attend the last mediation when the rest of the parties signed a settlement agreement. The mediation agreement even included the required "waiver of inadmissibility," which is needed to get a confidential mediation agreement into evidence in court. Ultimately, Mark refused to sign the agreement and the matter went to trial.
Tony and Cruz, however, were signatories to the mediation agreement, and under that agreement, Tony promised to appoint Cruz as his executrix, among other things. Here's how the court put Tony's promises to Cruz (with some significant editing to make it more readable):
‘Tony named Cruz a beneficiary in his will and trust. Specifically, Tony left the following to Cruz: (A) his liquor store business and the liquor license, (B) the right to occupy space in one of his properties in order to operate the liquor store on a rent-free basis for two years after he died, and (C) up to $100,000 to pay off the balance of the Cruz's mortgage on her personal residence. The remainder of Tony's assets went equally to his three children.'
As you can probably guess by now, that's not how Tony's assets actually got divided. Not happy with the actual division, Cruz sued Tony's estate and claimed she was entitled to the deal that Tony promised her. As proof, she sought to introduce the agreement she and Tony signed in mediation.
Unfortunately for Cruz, the Court ruled that since everyone anticipated Mark would be a party to the mediation agreement and because he refused to sign it, there was no agreement. Therefore, the Court excluded the agreement from evidence, and Cruz simply lost her bid to enforce Tony's promises to her.