ADDESA v. ADDESA, 392 N.J. Super. 58 (App. Div. 2007), A-5515-04T3, April 13, 2007:

Where the parties decide to engage in voluntary mediation in order to avoid the costs and expenses related to counsel and litigation, a party’s failure to retain counsel cannot be held against her, particularly where the parties have a contractual and moral obligation to be open and honest. Mediation is intended to be a joint effort to amicably resolve the dissolution of the parties’ marriage and to do so at minimal cost. A property settlement agreement resulting from a voluntary mediation, like any privately negotiated PSA, may be reformed where there is unconscionability, fraud, or mistake and concealment. Indeed, there may be more reason to apply the principle in this context, since a mediator has no authority to compel disclosure and the process is dependent upon the candor and forthrightness of the parties.

Private mediations must remain confidential or they will have no beneficial impact. State v. Williams, 184 N.J. 432, 444-52 (2005) (stating in dictum that the criminal defendant’s need for the mediator’s testimony did not outweigh the need for confidentiality); Lehr v. Afflito, 382 N.J. Super. 376, 395 (App. Div. 2006) (in mediation conducted under court rule, R. 1:40-5, confidentiality required by R. 1:40-4(c) “did not substantially outweigh the private and public interests in protecting confidentiality”). There is no basis for distinguishing between uncounselled mediated agreements and other types of PSAs in terms of evaluating conscionability.

Courts possess the equitable authority to modify privately negotiated property settlement agreements. Conforti v. Guliadis, 128 N.J. 318, 323 (1992). This is because such agreements “must reflect the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriages.” Miller v. Miller, 160 N.J. 408, 418 (1999). While spousal agreements are presumed valid, only those agreements that are “fair and just” will be enforced. See Petersen v. Petersen, 85 N.J. 638, 642 (1981). A spousal agreement may be reformed when it is “unconscionable,” “it is the product of fraud or overreaching by a party with power to take advantage of a confidential relationship,” Dworkin v. Dworkin, 217 N.J. Super. 518, 523 (App. Div. 1987), or when, due to “common mistake[] or mistake of one party accompanied by concealment of the other, the agreement fails to express the real intent of the parties[.]” Miller, supra, 160 N.J. at 419.

The Uniform Mediation Act (”UMA”), N.J.S.A. 2A:23C-1 to -13, applies to mediations required “by statute, court rule or administrative agency rule, or []referred to mediation by a court, administrative agency, or arbitrator[.]” N.J.S.A. 2A:23C-3(a)(1). If an agreement was entered into after the statute was enacted, the UMA would apply by virtue of the parties’ agreement. See N.J.S.A. 2A:23C-3(a)(2),(3).

N.J.S.A. 2A:23C-5(a) provides that the confidentiality attaching to a mediation may be waived only if all of the parties to the mediation “expressly” agree to the waiver. However, the UMA provides exceptions to the broad rule of section 5(a), reflecting our present public policy and providing that “[t]here is no privilege . . . if a court . . . . 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 confidentiality, and that the mediation communication is sought or offered in: . . . . (2) . . . a proceeding to prove a claim to rescind or reform or a defense to avoid liability on a contract arising out of the mediation.” [N.J.S.A. 2A:23C-6(b).]

But even then, “[a] mediator may not be compelled to provide evidence of a mediation communication[.]” N.J.S.A. 2A:23C-6(c). See also N.J.S.A. 2A:23C-2 (definition of “mediation communication”).

NOTE: My legal and mediation services are offered to clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ.

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