Goff, J.
Alternative Dispute Resolution (A.D.R.) plays an important role in our justice system. Because our public policy strongly favors the amicable resolution of disputes, we encourage parties to communicate openly and honestly during A.D.R. proceedings such as mediation. For this reason, communications during settlement negotiations are deemed confidential.
The question here is whether documents produced in anticipation of mediation fall under this confidentiality requirement. We conclude that they do and hold that the trial court erroneously admitted a marital balance sheet prepared for mediation to allow Wife to avoid the parties’ settlement agreement. But, because the trial court also found that Husband had breached the settlement agreement, we affirm the trial court.
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Wife argues that the trial court properly admitted her evidence to allow her to avoid the contract because the information was exchanged before mediation (thus falling beyond the reach of Rule 408) and because the evidence was discoverable outside of mediation under A.D.R. Rule 2.11(B)(2). She also argues that, even if the evidence isn’t admissible for that purpose, it is admissible to prove that Husband breached the warranty. Husband, on the other hand, argues Wife’s evidence should be excluded under Indiana A.D.R. Rule 2.11 and Indiana Rule of Evidence 408. He also characterizes the warranty as a mutual warranty and argues that Wife cannot now argue that the assets and debts weren’t correctly revealed or reflected.
I. Wife’s evidence was inadmissible to avoid the Agreement under Indiana Evidence Rule 408.
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A. Information exchanged specifically to assist in mediation, but disclosed prior to mediation, falls under Rule 408.
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Because Rule 408 is intended “to promote candor by excluding admissions of fact,” communications to facilitate settlement “are not admissible into evidence.” Worman, 805 N.E.2d at 376–77. And here, the contents of the balance sheet are “admissions of fact” that certain assets and debts exist and about the value of the assets and quantity of the debt. These “facts” established the point from which the parties would negotiate at the mediation itself. That the admission of fact occurred prior to the formal mediation proceeding doesn’t remove it from the ambit of the mediation process if it was made for the purpose of reaching a settlement agreement.
B. The balance sheet isn’t admissible as evidence discoverable outside of settlement negotiations.
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C. Challenging the validity of the Agreement is not a collateral matter for the purposes of 408(b)’s exception.
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Rule 408 applies, and Wife’s evidence is inadmissible to avoid the Agreement. Because the trial court relied on this inadmissible evidence to find that fraud, constructive fraud, mutual mistake, or misrepresentation had occurred, this finding cannot be the basis for Wife’s relief. [Footnote omitted.]
II. A warranty clause in which “each of the parties” warrants “one to the other” doesn’t preclude a party from demonstrating breach of warranty.
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Conclusion
The trial court incorrectly determined that fraud, constructive fraud, mutual mistake, or misrepresentation had occurred, but because the trial court didn’t abuse its discretion in finding that Husband had breached the warranty clause of the Agreement, we affirm the trial court.
Rush, C.J., and David, Massa, and Slaughter, JJ., concur.