Nathan D. Wirtschafter
Nathan D. Wirtschafter - Making Your Case in California

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The Wirtschafter Law Reporter

Vol. II, Q2

The Wirtschafter Law Reporter (“WLR”) is a quarterly publication of Nathan D. Wirtschafter Corp.

You may reach us by dialing (818) 660-2518, or +972-54-210-1776, or, please visit our website at www.ndwlaw.com, or contact us at ndw@ndwlaw.com.

Thank you,
Nathan Wirtschafter

Contents:

Litigator’s Corner:
Mediation and Confidentiality.

Mediation has become a critical method of dispute resolution.  Instead of each side presenting the case to a judge, the parties gather around a table and talk to each other.  Mediation empowers the parties to decide via bargaining, as opposed to placing their case in the hands of a third party such as a judge or arbitrator.  Mediation proceedings are usually simple and efficient at resolving disagreements.  However, because a mediation agreement requires compromise, no side ever gets all that it wants.
 
To encourage the frank discussion often needed to resolve a case at mediation, all communications made during a mediation are “confidential,” which means that they cannot be introduced as evidence at a subsequent trial or arbitration.  Also, the documents given to the mediator at or before the mediation are also protected.  Except for conduct giving rise to contempt, mediators are expressly prohibited from testifying about what happened at the mediation.  These restrictions were again recently upheld in Wimsatt v. Superior Court (2007) 152 Cal. App.4th 137.
 
Mr. Wirtschafter has acted as a mediator in over 20 Los Angeles Superior Court cases, as well as several real estate cases, in addition to representing clients at many mediation proceedings.  As a certified mediator, Mr. Wirtschafter understands that mediators want both to gain each side’s trust and to cause each side to doubt its case. 

He is able to use his experience as a mediator to advance his client’s interests at mediation.  Even if the case is not settled, it’s often possible to learn valuable information from the other side and see how opposing principals and counsel react to certain issues under stress.


Recent Cases:
Service of Process Under the Hague Convention.

The Hague Service Convention is an international treaty which authorizes service of persons living in foreign countries.  The United States has signed the treaty, along with many other countries including: Canada, China, France, Greece, Ireland, Israel, Italy, Japan, Korea, Mexico, Poland, Russian Federation, Spain and the United Kingdom.

The Hague Convention allows service under a variety of methods.  However, it is not clear if California recognizes service of process by ordinary mail as an approved method.

In Denlinger v. Chinadotcom Corp. (2003) 110 Cal. App.4th 1396, 1399-1400, a court of appeal reviewed several cases and held that the “better and more modern view” was that the Hague Convention authorizes service of process by ordinary mail unless the receiving nation has objected to service by mail.

On the other hand, in In re Alyssa F. (2003) 112 Cal. App.4th 846, 854, a different court of appeal—there are six in California—held that service of process may not be made by ordinary mail to countries, such as Mexico, which do not allow service of process by ordinary mail.  The court noted that service by registered mail would have been sufficient.

In an opinion issued last month, In re: George G.  --- Cal.Rptr.3d ----, 2008 WL 2133132 (Cal.App. 2 Dist.) yet another court of appeal followed In re Alyssa F.  The court of appeal found that service of process by ordinary mail did not effect service because such service is not permitted in either Mexico or California.  Thus, even though the parents of the minor child had actual notice of proceedings, failure to perfect service meant the completed proceedings were void.


Drafting Tip:
The Parole Evidence Rule Collides With a Choice of Law Clause.

“Choice of law” is a contractual term that specifies which law will apply to a dispute between the parties.  For example, the parties might agree that “the laws of the State of California shall govern any dispute concerning this agreement.”
 
The “Parole Evidence Rule” says that if the parties sign a contract which includes a clause which specifies that the contract is the sole memorial of the agreement, no further evidence, so-called “parole evidence,” can be introduced to explain or add terms to the contract.
 
These two principles can interact in unforeseen ways to determine the outcome of a dispute.
 
In Wilson Arlington Company v. Prudential Insurance Company of America 912 F.2d 366 (9th Cir. 1990) the parties signed a contract which had a clause preventing the introduction of parole evidence.  The contract also stipulated that Virginia law applied to any dispute concerning the contract.
 
After litigation commenced in a California court, Prudential claimed the contract was unclear and insisted that it needed to introduce “parole evidence” to help “clarify” what the parties really meant.
 
In California, broadly speaking, courts will admit parole evidence to allow the establishment of an ambiguity in the contract, in spite of the parole evidence rule.  In other words, even if a contract is clear, a California court will generally admit parole evidence, such as letters, drafts, emails, telephone conversations and so on, to help explain the agreement. 
 
In Wilson the parties had agreed to apply Virginia law, not California law, to any dispute.  Virginia continues to apply the “plain meaning” rule and interprets the language in a contract in accordance with its common usage.  In a contract choosing Virginia law, if the parties agree that the contract is the sole memorial of their agreement, no additional documents or information can be provided to supplement the contract.

In Wilson, had the court applied California law, the purchaser would have won.  Since it applied Virginia law, the seller won about $400,000.  The choice of law provision almost certainly decided the case.


 
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