Court Opinion

ID: 4263241
Source: CourtListenerOpinion
Date Created: 2018-04-12 13:30:32.809858+00
Date Added: 2024-06-11T07:49:21.801244
License: Public Domain

#28243-a-DG
2018 S.D. 32

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                  ****

WESTON LEE WINEGEART,                      Plaintiff and Appellee,

      v.

ERYN MARIE WINEGEART,                      Defendant and Appellant.

                                  ****

                  APPEAL FROM THE CIRCUIT COURT OF
                     THE SIXTH JUDICIAL CIRCUIT
                    HUGHES COUNTY, SOUTH DAKOTA

                                  ****

                       THE HONORABLE JOHN L. BROWN
                                  Judge

                                  ****

KATIE J. THOMPSON of
Olinger, Lovald, McCahren,
 Van Camp & Konrad, P.C.
Pierre, South Dakota                       Attorneys for plaintiff and
                                           appellee.

AL ARENDT
Pierre, South Dakota                       Attorney for defendant and
                                           appellant.

                                  ****

                                           CONSIDERED ON BRIEFS
                                           ON FEBRUARY 12, 2018
                                           OPINION FILED 04/11/18
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GILBERTSON, Chief Justice

[¶1.]         Eryn Marie Winegeart appeals the circuit court’s order to sell real

estate she jointly owned with Weston Lee Winegeart, her former spouse. The order

permits the payment of realtor fees, but Eryn asserts the parties orally agreed in

mediation to sell the property without paying realtor fees. We affirm.

                          Facts and Procedural History

[¶2.]         Weston and Eryn Winegeart first married in 2005, divorced, 1 then

married for a second time in 2012. The parties owned a home in Pierre, where they

resided with their three children: B.C., K.L., and J.C. On October 4, 2016, Weston

filed for divorce. Eryn subsequently obtained a protection order against Weston,

and both parties vacated the home. Weston moved to Texas.

[¶3.]         On January 9, 2017, the circuit court ordered the parties to undergo

mediation. The parties attended one mediation session on March 9. After the

session, Weston signed an agreement with a real-estate agent to list the jointly

owned real estate. The listing agreement included a commission for the realtor. On

March 10, a third party signed an agreement to purchase the property for $330,000.

Eryn refused to sign the purchase agreement, asserting that during mediation,

Weston had orally agreed to sell the property without paying for a realtor.

[¶4.]         On March 22, 2017, Weston filed a motion asking the court to order

Eryn to sign the purchase agreement. The parties deposed the mediator on

March 30. Over the objection of Weston’s attorney, the mediator testified that it

was his “understanding . . . that there were no Realtor commissions to be paid, that

1.      The first divorce occurred in Oklahoma.
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this was going to be a private sale.” The court held a hearing to consider the motion

on March 31. The court found that the parties had not entered into an enforceable

oral agreement in regard to realtor fees. The court granted Weston’s request and

ordered Eryn to sign the purchase agreement.

[¶5.]        On April 15, 2017, after the circuit court issued its order requiring

Eryn to sign the purchase agreement, the parties entered into a property-settlement

agreement. On April 18, the circuit court granted a divorce on the grounds of

irreconcilable differences. The court determined custody, set child support, and

incorporated the parties’ April 15 property-settlement agreement.

[¶6.]        Eryn appeals the circuit court’s March 31, 2017 order requiring her to

sign the purchase agreement. She asks this Court to enter an order requiring

Weston to pay her “the realtor fees incurred as a result of his violation of the oral

mediated agreement.” Thus, Eryn raises the following issue: Whether the court

erred by ordering her to sign the purchase agreement.

                                Standard of Review

[¶7.]        This appeal involves interpreting South Dakota’s Uniform Mediation

Act, SDCL chapter 19-13A. Statutory interpretation is a question of law reviewed

de novo. Pitt-Hart v. Sanford USD Med. Ctr., 2016 S.D. 33, ¶ 7, 878 N.W.2d 406,

409. The circuit court’s factual findings are reviewed under the clearly erroneous

standard. Aguilar v. Aguilar, 2016 S.D. 20, ¶ 9, 877 N.W.2d 333, 336.

                               Analysis and Decision

[¶8.]        Eryn argues the circuit court erred by entering its March 31, 2017

order requiring her to sign the purchase agreement. Eryn asserts that the parties

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entered into an enforceable oral agreement during mediation on March 9, 2017, and

that the court “abused its discretion in refusing to enforce” that agreement. Weston

raises a number of reasons to reject Eryn’s argument. First, as a matter of first

impression in South Dakota, he argues that communications occurring in the course

of mediation are confidential and cannot be used to prove the existence of an

agreement. Second, he argues that even if such communications could be used as

evidence of an oral agreement, Eryn signed a confidentiality agreement that

prevents relying on those communications. Third, he argues that even if the

parties’ mediation communications could be used as evidence to establish an oral

agreement in this case, the circuit court’s factual finding that he did not agree to

sell the home without paying realtor fees is not clearly erroneous. And finally, he

argues that even if Eryn is correct that the parties entered into such an agreement

on March 9, 2017, that agreement was superseded by the parties’ April 15, 2017

agreement.

[¶9.]        The question whether an oral agreement arising out of mediation is

enforceable is a question of first impression in this jurisdiction. South Dakota

adopted the Uniform Mediation Act (UMA) in 2008. SDCL chapter 19-13A. Under

the UMA, a mediation communication “means a statement, whether oral or in a

record or verbal or nonverbal, that occurs during a mediation or is made for

purposes of considering, conducting, participating in, initiating, continuing, or

reconvening a mediation or retaining a mediator.” SDCL 19-13A-2(2). As a general

rule, “a mediation communication is privileged . . . and is not subject to discovery or

admissible in evidence in a proceeding[.]” SDCL 19-13A-4(a); see also SDCL 19-19-

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515 (“All verbal or written information relating to the subject matter of a mediation

which is transmitted between any party to a dispute and a mediator or any agent,

employee, or representative of a party or a mediator is confidential.”). Thus, “[i]n a

proceeding, . . . [a] mediation party may refuse to disclose, and may prevent any

other person from disclosing, a mediation communication.” SDCL 19-13A-4(b)(1).

[¶10.]       The exceptions to the mediation-communication privilege enumerated

in SDCL 19-13A-6 seem to support the conclusion that an oral agreement occurring

in the course of mediation is unenforceable. The UMA specifically excepts

mediation communications “in an agreement evidenced by a record signed by all

parties to the agreement[.]” SDCL 19-13A-6(a)(1) (emphasis added). The specific

inclusion of written agreements in SDCL 19-13A-6 implies that nonwritten

agreements are not excepted from the mediation-communication privilege. See In re

Estate of Flaws, 2012 S.D. 3, ¶ 20, 811 N.W.2d 749, 754 (applying the canon of

construction expressio unius est exclusio alterius). Indeed, as the Utah Supreme

Court has noted, the Uniform Law Commission (ULC) “explained in a comment to

the Uniform Mediation Act that oral agreements were intentionally not included in

the list of exceptions to mediation privilege.” Reese v. Tingey Constr., 177 P.3d 605,

609-10 (Utah 2008) (emphasis added). As the ULC explained, the exception for

written agreements

             is noteworthy only for what is not included: oral agreements.
             The disadvantage of exempting oral settlements is that nearly
             everything said during a mediation session could bear on either
             whether the parties came to an agreement or the content of the
             agreement. In other words, an exception for oral agreements
             has the potential to swallow the rule of privilege. As a result,
             mediation participants might be less candid, not knowing
             whether a controversy later would erupt over an oral agreement.

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Unif. Mediation Act § 6 cmt. 2 (Unif. Law Comm’n, amended 2003).

[¶11.]         Judicial opinions from other jurisdictions agree that only written

agreements are enforceable under the UMA. Aside from South Dakota, the UMA

has been adopted by the District of Columbia and by the States of Hawaii, Idaho,

Illinois, Iowa, Nebraska, New Jersey, Ohio, Utah, Vermont, and Washington. 2 Of

these eleven other jurisdictions, it appears that five have had occasion to address

this question, and all five suggest that an oral agreement is unenforceable.

Billhartz v. Billhartz, No. 5-13-0580, 2015 WL 2058961, at *8 (Ill. App. Ct. May 4,

2015) (“The Uniform Mediation Act . . . contemplates that a signed, written

agreement is admissible and enforceable following mediation and that oral

communications generally are not.”); Shriner v. Friedman Law Offices, P.C., LLO,

877 N.W.2d 272, 290 (Neb. 2016) (“The Uniform Mediation Act . . . establishes a

privilege for mediation communications, which generally are not subject to

discovery or admissible in evidence in a proceeding.”); Willingboro Mall, Ltd. v.

240/242 Franklin Ave., LLC, 71 A.3d 888, 890 (N.J. 2013) (“[P]arties that intend to

enforce a settlement reached at mediation must execute a signed written

agreement.”); Akron v. Carter, 942 N.E.2d 409, 415-16 (Ohio Ct. App. 2010) (holding

mediation communications “privileged and . . . neither discoverable nor admissible”

where party sought to introduce those communications “in an effort to prove that an

oral contract of settlement arose out of the mediation”); Reese, 177 P.3d at 610

2.       Legislation proposing the adoption of the UMA has been introduced in
         Massachusetts and New York. This information was obtained from the
         Uniform Law Commission,
         http://www.uniformlaws.org/Act.aspx?title=Mediation%20Act (last visited
         April 10, 2018).
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(rejecting an oral-agreement exception to the mediation-communication privilege

and concluding that “a court can enforce only a mediation agreement that has been

reduced to writing”). While these decisions are not per se binding on this Court, the

Legislature has instructed that “[i]n applying and construing this chapter,

consideration should be given to the need to promote uniformity of the law with

respect to its subject matter among States that enact it.” SDCL 19-13A-13; see also

SDCL 2-14-13 (“Whenever a statute appears in the code of laws enacted by § 2-16-

13 which, from its title, text, or source note, appears to be a uniform law, it shall be

so interpreted and construed as to effectuate its general purpose to make uniform

the law of those states which enact it.”).

[¶12.]       Even so, additional analysis is required to apply the foregoing opinions

in this case. These opinions are premised on the evidentiary reality that if

mediation communications are not subject to discovery or admissible in evidence,

then generally the only way to prove the terms of an agreement is to reduce it to a

signed writing. See, e.g., Reese, 177 P.3d at 609-10. But South Dakota’s version of

the UMA potentially provides another avenue for establishing the terms of a

settlement reached during mediation that has not been reduced to writing. Under

§ 7(b)(1) of the UMA, “[a] mediator may disclose . . . whether a settlement was

reached[.]” But unlike every other jurisdiction that has adopted the UMA, the

South Dakota Legislature modified the language of our corresponding statute; thus,

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in South Dakota, a mediator may disclose “whether a settlement was reached and if

so the terms thereof[.]” SDCL 19-13A-7(b)(1) (emphasis added). 3

[¶13.]         The foregoing invites the question whether a mediator may disclose

the terms of an oral settlement reached during mediation. On one hand, an oral

settlement is a settlement, and SDCL 19-13A-7(b)(1) permits a mediator to disclose

the terms of a settlement. But on the other hand, “[e]xcept as otherwise provided in

§ 19-13A-6, a mediation communication is privileged as provided in subsection (b)

and is not subject to discovery or admissible in evidence in a proceeding unless

waived or precluded as provided by § 19-13A-5.” SDCL 19-13A-4(a). Thus,

SDCL 19-13A-4(a) omits SDCL 19-13A-7(b)(1) from the list of circumstances under

which the mediation-communication privilege does not apply. So the choice must be

made whether to add SDCL 19-13A-7(b)(1) to SDCL 19-13A-4(a)’s list of

circumstances under which the privilege does not apply, or to read the word

settlement in SDCL 19-13A-7(b)(1) to permit the disclosure of the terms of only a

settlement that has been reduced to writing.

3.       While the mediation acts of the District of Columbia and the States of
         Hawaii, Idaho, Illinois, Iowa, Nebraska, New Jersey, Ohio, Utah, Vermont,
         and Washington also permit a mediator to disclose “whether a settlement
         was reached,” none of them permit a mediator to disclose the terms of such
         settlement. See D.C. Code § 16-4206 (West, Westlaw through Mar. 20, 2018);
         Haw. Rev. Stat. § 658H-7 (West, Westlaw through 2017 Reg. & Spec. Sess.);
         Idaho Code § 9-807 (West, Westlaw through 2d Reg. Sess. of 64th Legis.);
         710 Ill. Comp. Stat. § 35/7 (West, Westlaw through 2018 P.A. 100-578); Iowa
         Code § 679C.107 (West, Westlaw through legislation effective Apr. 2, 2018, of
         2018 Reg. Sess.); Neb. Rev. Stat. § 25-2936 (West, Westlaw through
         legislation effective Mar. 1, 2018, of 2d Reg. Sess. of 105th Legis.); N.J. Stat.
         Ann. § 2A:23C-7 (West, Westlaw through 2018 c.4 and J.R. No. 3); Ohio Rev.
         Code Ann. § 2710.06 (West, Westlaw through 2017 File 51); Utah Code Ann.
         § 78B-10-107 (West, Westlaw through 2017 1st Spec. Sess.); Vt. Stat. Ann.
         tit. 12, § 5718 (West, Westlaw through 2017-2018 Legis. Sess.); Wash. Rev.
         Code § 7.07.060 (West, Westlaw through 2018 Reg. Sess.).
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[¶14.]       SDCL 19-13A-7(b)(1) should not be read to permit a mediator to

disclose the terms of a purported oral settlement reached during mediation. As

noted above, the purpose of the mediation-communication privilege is to encourage

participants to be candid by shielding their negotiations from later disclosure. Unif.

Mediation Act § 6 cmt. 2. But if a mediator may disclose mediation communications

under SDCL 19-13A-7(b)(1), then the purpose of the mediation-communication

privilege can be easily subverted: while one party to a negotiation cannot disclose

settlement negotiations occurring during mediation, the same evidence could be

admitted by simply subpoenaing the mediator to testify. And as the ULC pointed

out in the model act, “nearly everything said during a mediation session could bear

on either whether the parties came to an agreement or the content of the

agreement.” Unif. Mediation Act § 6 cmt. 2. Thus, permitting a mediator to

disclose the terms of a purported oral settlement also “has the potential to swallow

the rule of privilege.” Id. But perhaps most important of all, this narrow reading

harmonizes SDCL 19-13A-7(b)(1) with its counterparts in other jurisdictions that

have enacted the UMA, thereby carrying out the Legislature’s directive to consider

chapter 19-13A in light of other jurisdictions’ treatment of the UMA. See SDCL 19-

13A-13.

[¶15.]       Even if SDCL 19-13A-7(b)(1) permitted a mediator to disclose

mediation communications relating to a purported oral agreement, Eryn was still

precluded under chapter 19-13A from introducing the mediator’s testimony in this

case. “[M]ediation communications are confidential to the extent agreed by the

parties or provided by other law or rule of this State.” SDCL 19-13A-8. In this case,

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the parties entered into a confidentiality agreement prior to engaging in mediation.

Under that agreement, the parties agreed to the following provision:

               5. Confidentiality: The parties and the mediator will abide by
               the following confidentiality provisions:
                  a. All discussions, representations and statements made
                  during the mediation will be privileged as settlement
                  negotiations. The parties will not attempt to discover or use
                  as evidence in any legal proceeding anything related to the
                  mediation, including any communications or the thoughts,
                  impressions or notes of the mediator. No document produced
                  in mediation which is not otherwise discoverable will be
                  admissible by the parties in any legal proceedings for any
                  purpose, including impeachment.
                  b. The parties will not subpoena the mediator, any members
                  of his staff or any legal records or documents of the mediator
                  in any proceedings of any kind.
                  c. The mediator will not discuss the mediation process or
                  disclose any communications made during the process to any
                  person except his staff as necessary.

(Emphasis added.) So regardless of whether the mediator’s testimony regarding the

terms of the purported oral settlement would normally be admissible under

SDCL 19-13A-7(b)(1), that testimony is not admissible in this case by agreement of

the parties.

[¶16.]         Even if the mediator’s testimony were admissible, Eryn still has the

burden of proving the elements of a contract. The “[e]lements essential to existence

of a contract are: (1) [p]arties capable of contracting; (2) [t]heir consent; (3) [a]

lawful object; and (4) [s]ufficient cause or consideration.” SDCL 53-1-2. “‘There

must be mutual assent or a meeting of the minds on all essential elements or terms

in order to form a binding contract.’ Whether there is mutual assent is a fact

question determined by the words and actions of the parties.” Vander Heide v. Boke

Ranch, Inc., 2007 S.D. 69, ¶ 20, 736 N.W.2d 824, 832 (quoting Read v. McKennan

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Hosp., 2000 S.D. 66, ¶ 23, 610 N.W.2d 782, 786). As noted above, a circuit court’s

“factual findings will not be disturbed unless they are clearly erroneous.” Aguilar,

2016 S.D. 20, ¶ 9, 877 N.W.2d at 336.

[¶17.]       The circuit court found that Eryn did not meet her burden of proving

the parties had a meeting of the minds. During the hearing on Weston’s motion to

require Eryn to sign the purchase agreement, the court said: “I don’t see a mediated

agreement. I see a draft.” Indeed, during that hearing, Eryn’s attorney admitted

that the first draft agreement he submitted following the mediation did not include

a provision forbidding the payment of realtor fees. If anything, that draft supports

Weston’s claim that the parties did not reach an agreement regarding realtor fees

during the March 9, 2017 mediation. Eryn’s attorney also admitted at the hearing

that the parties then revised the first draft several times, making numerous

additions. Only then did Eryn’s attorney produce a draft that included a provision

forbidding the payment of realtor fees. And perhaps most telling, the April 15, 2017

agreement that Eryn signed explicitly states: “[P]arties disagree as to the

employment of a real estate broker[.]” (Emphasis added.) In light of the foregoing,

the court’s factual finding that there was not a meeting of the minds is not clearly

erroneous; even considering the mediator’s testimony, “a complete review of the

evidence” does not create “a definite and firm conviction that a mistake has been

made.” Id.

[¶18.]       Finally, even if the mediator’s testimony were admissible and the

circuit court’s factual finding on mutual assent were clearly erroneous, Eryn would

still not be entitled to relief. As noted above, the parties both signed an agreement

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dated April 15, 2017—after the purported oral agreement of March 9, 2017. “The

execution of a contract in writing . . . supersedes all the oral negotiations or

stipulations concerning its matter which preceded or accompanied the execution of

the instrument.” SDCL 53-8-5. The April 15 agreement includes the following

provision:

             1. COMPLETE AGREEMENT: Each of the parties is fully and
             completely informed of the financial and personal status of the
             other and each has given full thought to the making of this
             Agreement, and all obligations herein contained and each of the
             parties understands the agreements and obligations assumed by
             the other with the express understanding and agreement they
             are in full satisfaction of all obligations for which each of the
             parties now has or might hereafter otherwise have toward the
             other.

(Emphasis added.) Not only does the April 15 agreement not forbid the payment of

realtor fees, it expressly acknowledges that the parties disagreed on that term:

             [T]he parties hereto agree that the Plaintiff shall market the
             family residence as expeditiously and in the most cost effective
             manner as possible; parties disagree as to the employment of a
             real estate broker; the minimum price the parties agree to will
             be the sum of $325,000. The parties agree that in the event the
             house is sold, all of the outstanding expenses, including advance
             taxes, closing costs, mortgage, and any other personal services
             owed shall be paid out of said sale proceeds. Any deficiency from
             the sale is Plaintiff’s responsibility; and any profits shall be split
             equally between the parties.

Eryn cannot now modify the April 15 agreement by extrinsic evidence of an earlier

purported agreement. Roseth v. Roseth, 2013 S.D. 27, ¶ 15, 829 N.W.2d 136, 142.

Thus, the question whether the parties entered into an oral agreement on March 9,

2017, that forbade the payment of realtor fees is immaterial.

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                                    Conclusion

[¶19.]       Eryn is not entitled to relief. South Dakota’s Uniform Mediation Act

does not permit a mediator to disclose the terms of a settlement produced in

mediation unless that settlement has been reduced to writing. Even if the

mediator’s testimony were normally admissible, Eryn signed a confidentiality

agreement that precluded the introduction of such evidence. Additionally, if the

mediator’s testimony were considered, the circuit court’s finding that the parties did

not mutually assent to selling their home without paying realtor fees still would not

be clearly erroneous. And in any event, Eryn cannot rely on the purported oral

agreement of March 9, 2017, to modify the written agreement of April 15, 2017.

[¶20.]       We affirm. Weston’s request for appellate attorney’s fees is granted in

the amount of $10,400.

[¶21.]       ZINTER, SEVERSON, KERN, and JENSEN, Justices, concur.

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