by Donna Bader, Esq.
As a Mediator, I am frequently asked how mediation can work during appellate proceedings. After trial, there is now a winner and a loser, so why would mediation ever be successful in these situations? Below are a few of my observations and reasons why the parties should consider mediation before or while proceeding with an appeal:
1. Risk: During the appellate process parties are still taking a risk.
We know the parties take a risk by going to trial. At that point, there are no winners or losers. Even with a good case, a party is still taking a risk with the jury, the trial court’s evidentiary rulings, and how witnesses testify. While a respondent enjoys a higher level of success at the appellate level, there are no guarantees. There is always a chance the appellate court will reverse the judgment. In mediation, there is also a risk – usually much less than 50% - that the case may not settle. If it doesn’t, the parties can still proceed with the appeal.
2. Delay: An appeal will delay the resolution of the case.
Appeals can take one to two years, if not more, before they are resolved. If no bond or undertaking is posted, the respondent is taking a chance the money will disappear by the end of the case. The appellant could also become judgment-proof or discharge the debt in bankruptcy. Mediation can be conducted within 30-60 days of the parties’ agreement and, if successful, the case can be concluded in a relatively short period of time. If it doesn’t, the appeal can proceed without additional delay.
3. Reasons: There are no meritorious grounds for the appeal.
As an appellate attorney, I have learned the parties – or even their attorneys - do not always understand the function of an appeal. They may believe the appellate court will review the entire trial. Not true. The focus of the appeal is on judicial error and governed by certain principles:
- The judgment is presumed correct.
- The judicial error must be prejudicial.
- If there is no judicial error, the appellate court will not substitute its decision for that of the trial court.
- The record must reflect the error.
- An experienced appellate attorney and mediator can advise counsel and the parties privately of the merits of the case, the applicable standards of review, and likelihood of success on appeal.
4. Leverage: The appeal is being filed for purpose of obtaining leverage in negotiations.
An appellant may file an appeal to delay payment of the judgment or to harass the respondent. Appellate attorneys cannot ethically file an appeal solely to obtain an advantage in negotiations. Pursuing an appeal for the wrong reasons – harassment, improper delay, bad faith, or filing a frivolous appeal - can open the door to sanctions against both the lawyer and the appellant. (C.C.P. § 907; Cal. Rules of Court, rule 8.276(a)(1); see also Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) In private mediation, the mediator has the distinct advantage of understanding both the legal and factual reasons behind each party’s position, and therefore, can assist the parties in negotiating a settlement that addresses their positions.
5. Costs: Appeals are expensive.
Appellate attorneys typically work on a project or hourly basis, which is usually paid up front. If the appellate attorney agrees to take a case on a contingency, it is usually on behalf of the respondent, who is the winner below and has better odds of keeping the judgment. Even if the appellate attorney agrees to take the case on a contingency, the fee is usually at least three times greater than that of payment up front to compensate the attorney for the risk and deferred payment. Counsel should balance the uncertain costs of the appeal versus the known costs in retaining a mediator for a single day. Even if the case does not settle, the money is well spent learning the strength and weakness of the dispute.
6. Attorneys fees: Attorney’s fees provisions can double the cost of an appeal.
Attorney’s fees can be a major expense in a lawsuit. If the case involves an attorney’s fees provision, the losing party may end up paying attorney’s fees for both appellate attorneys. Appellants should not file an appeal if they are not in a position to take that risk. An experienced Mediator can address the viability of recovering attorney’s fees, which are typically negotiated as part of the settlement.
7. Success on the merits: Appeals based on lack of substantial evidence are hard to win.
Appeals based solely on the lack of substantial evidence are the hardest type of appeals to win. In these types of appeals, the appellants face “a daunting burden.” (Whitely v. Philip Morris, Inc. (2004) 117 Cal.App.4th 635, 678.) The appellate court is bound by the trial court’s resolution of disputed factual issues and must affirm the judgment so long as the judgment is supported by “substantial evidence.” (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) The appellate court will not reweigh the evidence, determine disputed facts or make credibility determinations. In addition, appellate proceedings are public. Private mediation gives the parties the ability and protection of submitting a confidential Mediation Brief that is viewed only by the Mediator.
8. The Record: The record is not adequate to show judicial error.
The appellant has the burden of showing judicial error on an adequate record. (Iliff v. Dustrud (2003) 107 Cal.App.4th 1201, 1209.) If the record doesn’t show the judicial error, the appeal will fail. In mediation, the parties can discuss issues and facts beyond the record.
9. Errors: The error is harmless, not prejudicial.
Plenty of mistakes can occur during a trial. A meritorious appeal must show judicial error and prejudice. If the error does not affect the party’s substantial rights and will not change the ultimate outcome of the case, then the appeal is a waste of time. (C.C.P. § 475; California Constitution, art. VI, § 13.)
10. Endurance: The party does not have the emotional stamina for an appeal.
Litigation is an endurance sport that requires emotional stamina. It can cause the break-up of a marriage or irretrievably damage relationships. Although mediation hearings can take hours, they are often concluded in a single day. Settling the case can provide a party with a sense of closure and can stop the bleeding.
11. Bond: If a bond or undertaking is not required, the respondent can enforce the judgment.
Money judgments are not automatically stayed on appeal and require a bond or undertaking to stay their enforcement. (Code Civ. Proc., § 917.1.) Appellate bonds can be expensive and hard to obtain. Because of the respondent is favored to win, most bonding companies have tough rules as to what they will accept as collateral for the bond. Most people simply cannot afford a bond. The failure to obtain a bond or undertaking can be enough to cripple even a good appeal. The respondent can proceed with enforcing the judgment, dragging the appellant to court for collection proceedings. These efforts can be expensive, time-consuming, and even embarrassing for the appellant.
12. Finality: The appellant cannot afford a retrial.
Quite often, a reversal of the judgment will require a new trial. Calculate the fees and costs for the first trial. A party should expect to pay almost the same costs again and perhaps almost the same in attorney’s fees. The first trial may have wiped out the party, who was hoping for a big win at the end, and how has to face the possibility of a second trial. One of the most common misunderstandings of mediation is the enforceability of the settlement. Since the parties with their counsel have fashioned and drafted their own terms with the assistance of their attorneys, the superior court can enforce the settlement agreement drafted and signed by the parties as a new contract.
Even if the appeal has merit, there are good reasons, only a few of which are listed above, to mediate the case, reach a resolution, and get on with life. Either way, the prudent counsel will offer this additional, effective alternative to the client.
Donna Bader is a Certified Specialist in appellate law, as certified by the State Bar of California, Board of Legal Specialization, with almost forty years of experience in civil writs and appeals. She has written over 400 appellate briefs and writ petitions. She is also a Mediator and Arbitrator with J.D.R. and has resolved disputes involving medical and legal malpractice, personal injury, business disputes, probate, trusts, and real estate transactions.