Bailey, J.
Case Summary
Amid proceedings to dissolve their marriage, Russell G. Berg (“Husband”) and Stacey L. Berg (“Wife”) entered a mediated settlement agreement (the “Settlement Agreement”) concerning the disposition of marital property, inter alia. The trial court adopted the Settlement Agreement in its dissolution decree. Wife later filed a Trial Rule 60(B) motion, alleging that an account was omitted from a balance sheet used at mediation. Wife raised alternative grounds for relief. On the one hand, Wife sought to avoid the Settlement Agreement by alleging fraud, constructive fraud, misrepresentation, mutual mistake, or other misconduct. On the other hand, Wife sought to enforce the Settlement Agreement by alleging that Husband breached a warranty contained therein. Upon a motion to correct error, the trial court entered sua sponte findings and awarded Wife half of the value of the account. Husband appeals, arguing that the judgment depends on inadmissible evidence of what occurred at mediation.
We agree that the judgment granting Wife relief under Trial Rule 60(B) relies on mediation evidence. As to admissibility, we conclude that the mediation evidence is admissible only to enforce the Settlement Agreement—an issue collateral to the mediated dispute. Moreover, although the mediation evidence is admissible for this purpose, we ultimately discern no proper basis to uphold the judgment. We therefore reverse. [Footnote omitted.]
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Husband argues that the court “relied on inadmissible evidence in granting” Wife relief under Trial Rule 60(B). Br. of Appellant at 13. Specifically, Husband asserts that mediation evidence—i.e., evidence of what transpired at mediation—“is subject to the [Indiana Rules for] Alternative Dispute [Resolution] and is deemed confidential, and not admissible[.]” Id. at 16. [Footnote omitted.]
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Notably, Indiana Evidence Rule 408 has an exception that allows such evidence to be admitted “for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.” Ind. Evidence Rule 408(b). The Indiana Supreme Court has explained that this exception allows mediation evidence to be used “in collateral matters unrelated to the dispute that is the subject of the mediation.” Horner v. Carter, 981 N.E.2d 1210, 1212 (Ind. 2013)….
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Wife offered evidence of what transpired at mediation, contending that the parties relied on an incomplete marital balance sheet. Husband argues that the judgment cannot stand without evidence of what occurred at mediation. We agree with Husband. Although Wife directs us to evidence of two incomplete balance sheets, that evidence—standing alone—does not indicate that the parties actually relied on an incomplete balance sheet. In other words, even if Wife proves that a balance sheet at one point omitted the account, Wife may feasibly recover only if that omission was not later remedied at mediation. [Footnote omitted.] Thus, mediation evidence is essential to the judgment. Having concluded as much, we must consider whether the evidence is admissible under Rule 408. As to admissibility, we generally review an evidentiary ruling for an abuse of discretion. Patchett v. Lee, 60 N.E.3d 1025, 1028 (Ind. 2016). However, when the ruling “depends on the interpretation of a statute, case law, or a rule of evidence,” the ruling “presents a legal question [that] we review de novo.” Id.
Here, Wife offered the evidence to either (1) avoid the Settlement Agreement or (2) enforce the Settlement Agreement. The trial court admitted the evidence for both purposes, finding that Wife was entitled to relief under either approach.
Avoidance
The trial court found that, under the circumstances, Wife could avoid the Settlement Agreement due to fraud, constructive fraud, mutual mistake, misrepresentation, or other misconduct. Regarding those various grounds for relief, the mediation evidence was used to shed light on why Wife agreed to the disposition of assets in the Settlement Agreement. We conclude that, under our Supreme Court’s binding precedent in Horner, mediation evidence cannot be admitted for that non-collateral purpose. As in Horner, the evidence is “akin to the offer or acceptance of a compromise on a claim of disputed liability or validity.” 981 N.E.2d at 1212. Thus, the evidence must be excluded under Evidence Rule 408 in light of Indiana’s “robust policy of confidentiality of conduct and statements made during negotiation and mediation.” Id.
Without the mediation evidence, there is insufficient evidence to find that Wife could avoid the Settlement Agreement. 9 Thus, to the extent the judgment in favor of Wife is based on principles of contract avoidance, the trial court erred. [Footnote omitted.]
Enforcement
The court also found that Wife was entitled to relief because Husband breached a warranty in the Settlement Agreement. Under Horner, discussions involved in negotiating and reaching a final settlement agreement are excluded from subsequent disputes unless the dispute involves a distinct collateral matter. 981 N.E.2d at 1212. Enforcement of the terms of the Settlement Agreement would be such a collateral matter…
Having resolved the evidentiary issue, we turn to whether the trial court properly granted relief based on a breach of a warranty….
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Critically, both warranties are mutual. That is, Husband and Wife assumed responsibility for the factual assertions. Therefore, assuming arguendo that the factual assertions in both warranties were untrue, both Husband and Wife breached the warranties. It is also notable that Husband and Wife made similar factual assertions when they “declar[ed that] there has been a full disclosure of all their assets and liabilities and that this [Settlement A]greement is a final and complete settlement of all of their property rights and payments[.]” Id. at 18.
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As earlier discussed, Wife may not avoid the Settlement Agreement. Therein, Wife asserted that all assets had been disclosed and reflected in the terms. Wife is estopped from claiming that her assertions are untrue.12 See id.; cf. Gray v. State, 78 Ind. 68, 71-72 (1881) (determining that parties to an instrument were estopped from disputing the truth of a recital in the instrument); Lebo v. Bowlin, 189 N.E. 397, 399 (Ind. Ct. App. 1934) (en banc) (“[I]t is the law that a recital of a particular fact is the basis for an estoppel.”). Thus, we discern no proper basis to uphold the judgment on a theory that Husband breached a warranty.
Conclusion
Because the proffered mediation evidence is inadmissible to prove a ground for contract avoidance, Wife is bound by the terms of the Settlement Agreement. Moreover, although mediation evidence potentially can be used to address collateral issues, in this case, Wife is estopped from pursuing such an action. Thus, we conclude that the trial court erred in granting the motion to correct error and awarding Wife half of the value of the account.
Reversed. Altice, J., concurs. Crone, J., dissents with opinion.
Crone, Judge, dissenting.
In support of her motion for relief from judgment, Wife submitted ten exhibits to substantiate her claim that Husband’s stock account had been omitted from the marital estate – a fact that Husband does not dispute – as a result of either mutual mistake or fraud….n my view, this argument falls far short of establishing that the trial court abused its discretion in relying on Wife’s exhibits. Husband cites no authority for the proposition that “discussions and communications had in anticipation of mediation” are inadmissible pursuant to Evidence Rule 408. And, as Wife points out, the handwritten marital balance sheet mentioned in paragraph six, which was prepared during mediation, is essentially cumulative of her counsel’s notes mentioned in paragraph seven, which were prepared before mediation, as neither exhibit includes Husband’s stock account among the parties’ assets.
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