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The California Court of Appeals has ruled that a rule designed to improve case management cannot be used to make substantive judgments on a disputed mediation settlement, but that an allegation that the settlement is unenforceable does satisfy the "good cause" exception to the rule requiring dismissal of a case.
In Irvine v. Regents of University of California, No. G036259, 2007 WL 1113727 (Cal. Ct. App. April 16, 2007), Ms. Irvine had spent several years on a waiting list for an organ transplant, after allegedly being pushed down the donor priority list for business reasons by Defendant the University of California at Irvine Medical Center (UCI-MC).
All parties attended a private mediation session, which ended in an apparent agreement to settle the dispute for $50,000. However, before the trial court could dismiss the action, Irvine discovered new evidence indicating UCI-MC had withheld critical information.
Relying on California Court Rule 3.1385, which requires dismissal of cases that have been settled unless "good cause" is shown to the contrary, the trial court rejected Irvine's contention that fraud, duress, and technical disparities invalidated the agreement.
In reversing this ruling, the Court noted that the intent of Rule 3.1285 was nothing more than effective case management, that it was not designed for evaluating the validity of a mediated settlement. Indeed, rules concerning such evaluations contain procedural safeguards that likely would not have been met in this case.
Though it refused to rule on the merits of Irvine's claims against UCI-MC, the Court held that her allegations of an unenforceable agreement were enough to satisfy the "good cause" exception to the rule requiring dismissal of her case.
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