Are statements made during Ella Cafe mediation admissible in subsequent legal proceedings?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
The parties agree that statements made during such mediation proceeding will not be admissible for any purpose in any subsequent legal proceeding.
- 14.2.4.
Notwithstanding the foregoing provisions of this Section 14.2., the parties' agreement to mediate will not apply to controversies, disputes, or claims relating to or based on past due amounts owed to Franchisor pursuant to this Agreement, the Marks, Copyrighted Works, or Franchisor's Confidential Information.
Moreover, regardless of this mediation agreement, Franchisor and Developer each have the right in a proper case to seek temporary restraining orders and temporary or preliminary injunctive relief in any court of competent jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, statements made during mediation are generally not admissible in later legal actions. Specifically, the FDD states that the parties agree that statements made during the mediation proceeding will not be admissible for any purpose in any subsequent legal proceeding. This encourages open and honest communication during mediation, as parties can speak freely without fear of their words being used against them in court.
However, there are exceptions to this rule. The agreement to mediate does not apply to disputes relating to past due amounts owed to Ella Cafe, the Marks, Copyrighted Works, or Ella Cafe's Confidential Information. In these specific cases, the typical rules of evidence would apply, and statements made during mediation could potentially be admissible. Additionally, Ella Cafe and the franchisee retain the right to seek temporary restraining orders and preliminary injunctive relief in court, regardless of the mediation agreement.
This inadmissibility clause aims to foster a more productive mediation process. Franchisees should be aware of these conditions and exceptions, understanding that while most statements during mediation are protected, certain financial and intellectual property-related disputes may not be covered by this protection. Franchisees should consult with legal counsel to fully understand the implications of this clause and how it might affect their specific circumstances.