United States Fidelity & Guaranty Co. v. Dick Corp.

215 F.R.D. 503, 2003 U.S. Dist. LEXIS 9444
CourtDistrict Court, W.D. Pennsylvania
DecidedMay 28, 2003
DocketC.A. Nos. 01-698, 01-1638
StatusPublished
Cited by5 cases

This text of 215 F.R.D. 503 (United States Fidelity & Guaranty Co. v. Dick Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. Dick Corp., 215 F.R.D. 503, 2003 U.S. Dist. LEXIS 9444 (W.D. Pa. 2003).

Opinion

MEMORANDUM ORDER

CINDRICH, District Judge.

These cases arose out of the construction of the Pittsburgh Pirates new stadium, known as PNC Park. Pending now, however, is a novel issue regarding the scope of Pennsylvania’s mediation privilege. Several of the defendants and counter-plaintiffs, Dick Corporation/Barton Marlow, a Joint Venture (“DBM”), Dick Corporation, Barton Malow Company, The Sports and Exhibition Authority of Pittsburgh and Allegheny County (“SEA”), Pittsburgh Associates, and the Thornton-Thomasetti Group, Inc. (“TT”) (collectively “Defendants”), reached a settlement agreement among themselves and with several entities who are not parties to this lawsuit following a mediation conducted by a professional mediator. Plaintiff, United States Fidelity & Guaranty Co. (“USF & G”), seeks discovery of the documents comprising the settlement agreement.

[505]*505Magistrate Judge Sensenich, to whom this matter has been assigned, appointed retired Judge Louis Bechtle as Special Discovery Master. The order appointing the special master provided for appeals directly to the district court. In an excellent and well-reasoned report captioned “Special Discovery Master’s Final Ruling No. 1” (“Report”), Judge Bechtle determined that the “Confidential Settlement Agreement and Release” (the “Settlement Agreement”) and Amendment No. 4 to the Design and Construction Management Agreement (“Amendment No. 4”) were not privileged under Pennsylvania’s statutory mediation privilege and therefore, were discoverable. Defendants have appealed that determination.

We are satisfied that Judge Bechtle correctly interpreted the statute and applied it to the facts of this case and thus will deny the appeal and order the production of the Settlement Agreement and Amendment No. 4. We write this brief opinion because, as Judge Bechtle observed, there is a dearth of decisions from either state or federal courts concerning Pennsylvania’s mediation privilege and the meaning of the statute itself is not abundantly clear. We adopt the reasoning and borrow heavily from the language of Judge Bechtle’s Report.

The parties agree that the standard of review is the same as that which would apply to an appeal from a ruling of the Magistrate Judge pursuant to Local Rule 72.1.3(B) of the United States District Court for the Western District of Pennsylvania and 28 U.S.C. § 636(b)(1)(A). Accordingly, “[t]he district court is bound by the clearly erroneous rule in findings of facts; the phrase ‘contrary to law* indicates plenary review as to matters of law.” Haines v. Liggett Group, Inc., 975 F.2d 81, 91 (3rd Cir.1992).

From my reading of the findings of fact set forth by Judge Bechtle and those argued in the briefs of the parties, there does not appear to be much, if any, disagreement about the facts. Essentially, as Judge Bechtle found, the parties attempted to mediate their dispute before a professional mediator who conducted one session on November 30, 2000. The session did not result in an agreement, either formally or in principle. A second session was discussed, but when and if it would occur was not made clear. After the single mediation session, the parties continued to discuss a settlement on their own. During this time, the mediator had some follow up communications with the parties in which they apprised him of the ongoing settlement negotiations. Sometime between late December, 2000 and February, 2001, the parties reached a settlement agreement. The mediator had no further contact with the parties involving settlement negotiations or documents related to the settlement after December 20, 2001. A formal settlement agreement was entered into on or before February 2, 2002. Because these findings of fact are not clearly erroneous, the court will accept and adopt them for the purposes of this review.

That leaves us with the purely legal question of whether Judge Bechtle’s determination that the Settlement Agreement and Amendment No. 4 were not entitled to protection under Pennsylvania’s statutory mediation privilege, 42 Pa.C.S.A. § 5949, was correct under the facts as found and adopted by this court. That statute provides as follows:

(a) General rule — Except as provided in subsection (b), all mediation communications and mediation documents are privileged. Disclosure of mediation communications and mediation documents may not be required or compelled through discovery or any other process. Mediation communications and mediation documents shall not be admissible as evidence in any action or proceeding, including, but not limited to, a judicial, administrative or arbitration proceeding.

“Mediation” is “[t]he deliberate and knowing use of a third person by disputing parties to help them reach a resolution of their dispute.” 42 Pa.C.S.A. § 5949(c). A “mediation communication” is any communication, verbal, nonverbal, oral or written, that is “made by, between or among a party, mediator, mediation program or any other person present to further the mediation process when the communication occurs during a mediation session or outside a session when made to or by the mediator or mediation program.” Id. A mediation document eon[506]*506sists of “written material, including copies, prepared for the purpose of, in the course of or pursuant to mediation.” Id. Subsection (b)(4) of the statute excludes from the privilege “[a]ny document which otherwise exists, or existed independent of the mediation and is not otherwise covered by this section.” A settlement document,' to the extent that it is introduced to enforce the settlement embodied by it, is also exempted from the privilege. 42 Pa.C.S.A. § 5949(b)(1).

Given this statutory language, which circumscribes the breadth of the mediation, privilege, we agree with Judge Bechtle’s conclusion that neither the declaration of Bennett D. Greenberg, Esq. nor that of Profesr sor Eric Green, the mediator, control the determination. Mr. Greenburg unduly conflates the concepts of “settlement” as between parties and “mediation” as defined by the statute. He states that Mr. Green “... encouraged the parties to continue the mediation process and discussions prior to meeting with him again.” (Greenberg Dec. 119). It seems to us that the mediation process requires the presence, or at least the active participation, of a mediator. The statute refers to “mediation communication and mediation documents” and this language implies actual communication by the parties to the mediator and from the mediator to the parties. Otherwise, we would be hard pressed to distinguish between garden variety settlement discussions, which are not protected, and those which are a part of the mediation process and are privileged.

Nor does Mr. Greenberg’s assertion that he spoke to Mr. Green on at least two occasions prior to the settlement being reached confer privileged status on communications and documents shared only by the parties and not involving the mediator. That is because, as we construe the statute, communications purely between the parties and not involving the active participation of the mediator are not privileged. Of course, Pennsylvania Rule of Evidence 408, relating to compromise and offers to compromise, may be applicable to protect settlement negotiations.

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Bluebook (online)
215 F.R.D. 503, 2003 U.S. Dist. LEXIS 9444, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-dick-corp-pawd-2003.