The opinion of the court was delivered by: District Judge Susan J. Dlott
ORDER GRANTING DEFENDANTS' MOTION TO STRIKE FEBRUARY 20, 2006
This matter is before the Court on Defendants' Motion to Strike February 20, 2006 Email from Lawrence A. Glassmann (hereinafter "Motion to Strike"). (Doc. 15.) For the reasons that follow, the Court GRANTS Defendants' motion.
The events setting in motion the current dispute date back decades, beginning in the late 1980s when Defendant Lea Ward became an underwriter in the English insurance market. In connection with that position, Ward incurred certain liabilities. On March 11, 1998, The Society of Lloyd's ("Lloyd's) obtained a judgment against Ward in an English court in the amount of £224,138.15 ("English Judgment"). Subsequently, Lloyd's commenced an action in this Court, case no. 1:04-CV-191, to domesticate the English Judgment ("Collection Action"). The Court ultimately entered summary judgment for Lloyd's in that suit.
Meanwhile, Lloyd's learned that Ward had transferred approximately $2,000,000 in assets to two separate trusts of which she is a beneficiary. Accordingly, Lloyd's sued Ward,
Defendants Alfred and Betty Moore, and other parties, case no. 1:05-cv-32, alleging claims for common law fraud and fraudulent transfer ("Fraud Action"). On January 3, 2006, the Court granted summary judgment for the Defendants on Lloyd's common law fraud claim, but denied summary judgment on the fraudulent transfer claim.
After the Court issued its summary judgment opinion in the Fraud Action, the parties agreed to submit the remaining matters to arbitration and mediation. (Arbitration and Mediation Agreement, Doc. 1 Ex. B.). The parties executed an Arbitration and Mediation Agreement ("the Agreement"), under which the parties agreed to a procedure known as arb-med. The parties chose a single panelist, Lawrence A. Glassmann, to arbitrate and mediate the dispute. Pursuant to the procedure set forth in the Agreement,*fn1 the arbitration occurred first. At the close of the arbitration, Glassmann rendered a decision, but did not reveal it to the parties. Instead, the parties attempted to mediate the dispute. During the course of the mediation, on February 20, 2006, Glassmann sent Society of Lloyds an email communicating his opinions about the strengths and weaknesses of Lloyd's case and urging Lloyd's to reach a settlement with Defendants.
Having become clear to all involved that further mediation would not yield a settlement, the parties agreed to the revealing of the arbitrator's decision. On February 21, 2006, Glassmann revealed his decision, wherein he found for the Defendants and ordered Lloyd's to pay the cost of arbitration.*fn2 The following day, Defendants sent Lloyd's a proposed order dismissing with prejudice the remaining claims in the Fraud Action, pursuant to a clause in the Agreement stating that "upon the Arbitrator making known his decision in the event the parties cannot agree in Mediation . . . Lloyd's and Respondents will dismiss the Case with prejudice and execute a full release and hold harmless of all Claims against the other." (Id. at ¶ 13.) Lloyd's agreed to the proposed order and on February 24, 2006, the Court entered an order dismissing the Fraud Action with prejudice and allotting the parties 60 days to reopen the action, upon good cause shown, if settlement was not consummated.
Nearly three months later, Lloyd's filed the instant action seeking to vacate the arbitration award on the basis that Glassmann based the award on matters outside the scope of the Agreement. In support of its Motion to Vacate the Arbitration Award (doc. 1), Lloyd's relies almost entirely on the comments Glassmann included in his February 20, 2006 email. Defendants move the Court to strike this email, arguing that it constitutes a confidential mediation communication under the Uniform Mediation Act, Ohio Rev. Code §§ 2710.01 et seq. ("the Act"). Lloyd's responds that the Act does not shield Glassmann's communication because:
(1) the email discussed matters outside the scope of the Agreement; (2) the Act applies only to mediation rather than to hybrid arb-med procedures; (3) the parties waived any confidentiality or privilege that might otherwise apply; and (4) the parties agreed in advance that such communications would not be privileged.
Ohio Rev. Code § 2710.03 provides, in relevant part, as follows:
(A) Except as otherwise provided in section 2710.05 of the Revised Code, a mediation communication is privileged as provided in division (B) of this section and is not subject to discovery or admissible in evidence in a proceeding unless waived ...