Gilda Lappe and Murray Lappe were married to each other for 16 years and had two children together. On February 10, 2011, Gilda filed a petition for divorce and both parties agreed to settle their property through mediation without being represented by counsel. During the mediation, the parties signed declarations stating that they had disclosed all of their property to each other. In addition, the parties managed to execute a marital settlement agreement during the mediation. The agreement stated that Murray would pay Gilda $10 million for her interests in shares of eScreen, Inc. On August 2, 2011, the trial court entered a stipulated judgment which made use of the marital settlement.

Gilda found out five months after the judgment that Murray had sold all of his equity shares in eScreen and had reaped the sum of $75 million.

Gilda asserted that Murray had not told her that he would sell the equity in eScreen and had she known, she would not have agreed to give up her interest for $10 million. Based on the information that came to light, Gilda filed an application to set aside the judgment on grounds of fraud, perjury, duress, and mistake.

Together with the application to set aside the judgment, Gilda also served a request for production of documents on Murray, including a request for the declaration of disclosure. Murray objected on the grounds that it was protected by the mediation confidentiality statutes. Gilda subsequently submitted a motion to compel production.

The trial court appointed a referee to make a recommendation on the discovery dispute. The referee found that the declaration of disclosure was not protected because the document itself had independent legal significance. Murray objected and the trial court agreed, ruling that mediation confidentiality statutes barred compelled production of disclosure declarations. Gilda appealed, citing the fact that California law recognizes the vital importance of “full and accurate disclosure of all assets and liabilities” at the “early stages” of a marital dissolution proceeding to ensure fair and sufficient child and spousal support awards and to achieve a proper division of community and quasi-community assets and liabilities.

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