Com. of PA, OAG v. The Baroness Consulting & Mediation, LLC & J. Von Schmeling

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Commonwealth of Pennsylvania, :

Office of Attorney General :

:

v. : No. 904 C.D. 2023

:

The Baroness Consulting and : Argued: April 8, 2025

Mediation, LLC and Juliane :

Von Schmeling, :

Appellants :

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE STACY WALLACE, Judge

HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION

BY JUDGE McCULLOUGH FILED: May 19, 2025

On August 28, 2020, the Commonwealth of Pennsylvania, by the Office

of Attorney General (OAG) (together, the Commonwealth), instituted an equity suit

against The Baroness Consulting and Mediation, LLC (Baroness), and Juliane Von

Schmeling (Von Schmeling) (together, Appellants), in which the Commonwealth

alleged that Appellants engaged in the unauthorized practice of law1 and thereby

violated the Unfair Trade Practices and Consumer Protection Law (CPL)2 in multiple

respects.

Appellants appeal3 from the May 25, 2023 order of the Court of Common

Pleas of Luzerne County (trial court), which, in pertinent part, directed Appellants to

produce certain records previously withheld by them pursuant to Section 5949(a) of

1

42 Pa.C.S. § 2524(a).

2

Act of December 17, 1968, P.L. 1224, as amended, 73 P.S. §§ 201-1 – 201-10.

3

Appellants originally appealed to the Pennsylvania Superior Court, which transferred the

case to this Court on August 21, 2023.

the Judicial Code, 42 Pa.C.S. § 5949(a), typically referred to as the “Mediation

Privilege” (Mediation Privilege or Privilege). Appellants contend that the trial court

erred in ordering the production of the documents, which they argue remain shielded

from discovery.

Upon review, we affirm in part, vacate in part, and remand for further

proceedings.

I. Facts and Procedural History

The facts pertinent to our disposition of this appeal are taken from the

Commonwealth’s complaint and the trial court record. Von Schmeling is not a licensed

attorney in Pennsylvania and did not graduate from a law school accredited by the

American Bar Association. Until sometime in 2015, Von Schmeling marketed

mediation services through her company, The Baroness-Family Law Consulting, LLC.

In September 2015, Von Schmeling received a letter from the OAG warning her to

cease and desist from continuing any business practices that constituted the

unauthorized practice of law. Von Schmeling continued to offer services through

another company, Baroness. The OAG alleges that Von Schmeling, through her

companies, in fact provided legal services and legal advice for an hourly fee and has

published advertisements offering services related to divorce, custody, child advocacy,

employment issues, pre- and post-nuptial agreements, co-parenting, and estate

planning.

In August 2020, the Commonwealth filed its civil suit against Appellants

in the trial court based on complaints it was receiving from Appellants’ former

customers that Von Schmeling was practicing law without a license. The

Commonwealth brought claims for violation of the CPL and Section 2524 of the

Judicial Code, which criminalizes the unauthorized practice of law, authorizes civil

2

suits to enjoin such practice, and provides that a violation also constitutes a violation

of the CPL. See 42 Pa.C.S. § 2524(a), (c).

On November 25, 2020, the Commonwealth propounded on Appellants

requests for the production of documents (RFPs), in which they sought several

categories of Appellants’ business records. Three of those categories are at issue in

this appeal:

D. A complete copy for each consumer’s file which

[Appellants] provided divorce, custody, support,

property settlement agreements, etc. services for. For

each consumer, provide any and all documents

including, but not limited to, intake and interview forms,

notes, engagement letters or retainer agreements,

pleadings, petitions, complaints, motions, stipulations,

proposed orders, correspondences, invoices, receipts,

and other communications which [Appellants]

prepared, drafted, or assisted with, or on behalf of

consumers in the Commonwealth of Pennsylvania

[(Request D)].

....

H. Copies of any and all documents, including but not

limited to agreements, stipulations, pleadings, petitions,

motions, applications, forms, deeds, estate tax returns

etc., in which [Appellants] assisted with, or prepared

and/or drafted on behalf of consumers which have been

filed with a Pennsylvania court or any other

adjudicative body within the Commonwealth of

Pennsylvania [(Request H)].

....

N. True and correct copies of your complete file for the

customers listed below, and any and all documents

including, but not limited to, correspondences, receipts,

invoices, billing records, retainer agreements, any and

all documents, notes[,] memorandums, pleadings,

drafted by [Appellants] pertaining to the following

consumers:

3

1. Jennifer Bulkley

2. Jamie Kozemko

3. Michelle Davies

4. Marie Prizniak

5. Stacy Cresci

6. Jaye Lamoreaux

7. Marita Carey

8. Kurt Topfer

9. Lisa Bromage

10.Rise Brantley (Estate of John B. Brantley)

11.Cynthia Gebhardt

12.Rose Ann Garrahan-Bardzel [(Request N)]

(Reproduced Record (R.R.) at 00095a-97a) (emphasis added).

Appellants served answers and objections to the RFPs on February 9,

2021. Appellants therein objected to Requests D, H, and N,4 in pertinent part, on the

ground that the requested documents were protected by the Mediation Privilege. The

Commonwealth responded by filing motions to strike Appellants’ objections and to

compel production of the requested documents in full. Appellants in turn filed a motion

for a protective order and a privilege log detailing the documents withheld pursuant to

the Mediation Privilege. The trial court heard consolidated argument on the two

motions in October 2021, after which it granted the Commonwealth’s motion to

compel, denied Appellants’ motion for protective order, and directed Appellants to

provide “full and complete responses” to Requests D, H, and N, along with a privilege

log identifying any withheld documents. (R.R. at 203a-05a.)

In July 2022, Appellants submitted an amended privilege log, which

identified approximately 4,000 pages of documents allegedly protected by the

Mediation Privilege. The Commonwealth filed a motion for in camera review, which

ultimately was heard in May 2023 by Senior Judge Charles Saylor of the

4

Although Appellants also objected to other portions of the RFPs, those objections are not at

issue in this appeal.

4

Northumberland County Court of Common Pleas.5 On May 25, 2023, the trial court

denied the Commonwealth’s motion for in camera review and dispensed with the need

for an evidentiary hearing. Instead, the trial court concluded that the entries in

Appellants’ amended privilege log were detailed enough to permit individual rulings

on each item as to whether it was protected by the Mediation Privilege. The trial court

marked each of the items to indicate those that were privileged, those that were not,

and those that fell under the exceptions to the Mediation Privilege set forth in 42

Pa.C.S. § 5949(b). The trial court placed a checkmark next to documents to which the

privileged attached, a notation of “Not P” next to documents to which the privilege did

not apply at all because they did not “fall within the statutory time frame of a mediation

or did not fit the definition of ‘mediation communication,’” and a notation of “(b)(4)”

next to the documents that fell under an exception (documents that exist independent

of the mediation). (Trial Ct. Op. at 3) (unpaginated); (Trial Ct. Order, 5/25/2023, Ex.

1).6

Appellants appealed first to Pennsylvania Superior Court, which

transferred the case to this Court on August 21, 2023.7

5

In the interim, the original judge assigned to the matter, Judge Polachek Gartley, together

with the rest of the trial court judges in Luzerne County, recused themselves from the case. Senior

Judge Saylor thereafter was assigned.

6

By order dated July 21, 2023, the trial court clarified that it intended by its May 25, 2023

order to direct production of the non-privileged records identified in the amended privilege log, but

given the pendency of the appeal, no deadline could be established.

7

On November 20, 2024, we ordered that this appeal be argued. We further directed the

parties to file supplemental briefs addressing whether and when the Mediation Privilege protects

settlement documents and whether and by whom the Mediation Privilege may be waived. The parties

complied on March 24 and 25, 2025. Nevertheless, given our disposition and the fact that the trial

court did not address or create a record on the issue of waiver, we need not and do not address it here.

(Footnote continued on next page…)

5

II. Issues

There are two issues in this appeal: (1) whether the trial court’s May 25,

2023 order is an appealable collateral order pursuant to Pa.R.A.P. 313;8 and (2) whether

the trial court erred in ordering the production of five specific categories of documents

as not shielded from discovery by the Mediation Privilege.

III. Discussion

A. Collateral Order Doctrine9

Because the question goes to our jurisdiction over this appeal, we first

must determine whether the trial court’s May 25, 2023 order is appealable.

Generally, this Court’s appellate jurisdiction extends only to the review of

final orders. Rae v. Pennsylvania Funeral Directors Association, 977 A.2d 1121, 1124

(Pa. 2009). See also Pa.R.A.P. 341(a). A final order is one that disposes of all claims

against all parties or is entered as a final order pursuant to Pennsylvania Rule of

Appellate Procedure (Pa.R.A.P.) 341(c). Pa.R.A.P. 341(b). Discovery orders typically

are not final orders and must await final judgment for review. Smith v. Philadelphia

Gas Works, 740 A.2d 1200, 1203 (Pa. Cmwlth. 1999). Nevertheless, pursuant to the

“collateral order doctrine,” certain interlocutory orders may be appealable and

reviewable if they meet the three-part test set forth in Pa.R.A.P. 313(b). Thereunder,

On remand, nothing precludes the OAG from asserting, or trial court from considering, waiver of the

Privilege which, if applicable, would render discoverable any otherwise protected documents.

8

By Order exited January 29, 2024, we directed the parties to address in their principal briefs

the question of whether the trial court’s May 25, 2023 order constitutes an appealable, collateral order

pursuant to Pa.R.A.P. 313. Appellants complied with our Order and briefed the question. The

Commonwealth did not.

9

Whether an order is an appealable collateral order is a question of law subject to

a de novo standard of review and plenary scope of review. Shearer v. Hafer, 177 A.3d 850, 855 (Pa.

2018).

6

to be an appealable collateral order, (1) the order must be “an order separable from and

collateral to the main cause of action” (separability); (2) “the right involved must be

too important to be denied review” (importance); and (3) “the question presented is

such that if review is postponed until final judgment in the case, the claim will be

irreparably lost” (irreparable loss). Pa.R.A.P. 313(b); see also Brooks v. Ewing Cole,

Inc., 259 A.3d 359, 364 (Pa. 2021). The collateral order doctrine is construed narrowly,

and each prong must be satisfied before an otherwise interlocutory order will be

reviewed on appeal. Sylvan Heights Realty Partners, L.L.C. v. LaGrotta, 940 A.2d

585, 587 (Pa. Cmwlth. 2008).

In the seminal case of Ben v. Schwartz, 729 A.2d 547 (Pa. 1999), our

Supreme Court concluded that a discovery order compelling production of an agency’s

investigative files concerning complaints against a dentist was an appealable collateral

order. The Court in Ben noted that, with regard to such records, “the disclosure of

documents cannot be undone. . . . [T]here is no effective means of reviewing after final

judgment an order requiring the production of putatively protected material.” Id. at

552. Following Ben, our Supreme Court has reaffirmed in multiple cases that discovery

orders compelling the production of purportedly privileged information or documents

are immediately appealable as collateral orders. See, e.g., In re Estate of McAleer, 248

A.3d 416 (Pa. 2021) (attorney-client privilege); Commonwealth v. Williams, 86 A.3d

771 (Pa. 2014) (work product); Commonwealth v. Harris, 32 A.3d 243, 251 (Pa. 2011)

(“We reaffirm our holding in Ben . . . that orders overruling claims of privilege and

requiring disclosure are immediately appealable under [Rule] 313.”). See also

Township of Neshannock v. Kirila Contractors, Inc., 181 A.3d 467, 472 (Pa. Cmwlth.

2018) (orders purportedly directing disclosure of allegedly privileged documents are

immediately appealable as collateral orders pursuant to Rule 313). Compare K.H. v.

7

Department of Human Services, 315 A.3d 178, 184-85 (Pa. Cmwlth. 2024) (discovery

orders that preclude discovery of arguably privileged or protected material are not

immediately appealable as collateral orders).

Here, the trial court’s order, in part, directed the production of documents

and information identified in Appellants’ privilege log as protected by the Mediation

Privilege. Under the above precedent, we see no reason why the collateral order

doctrine would not apply in this case. If review of the trial court’s order was delayed

until after the entry of final judgment, the bell cannot be unrung and any review of the

issue would, at that point, be futile. We accordingly conclude that the trial court’s May

25, 2023 order is an appealable collateral order, and we will proceed to consider

Appellants’ issues on the merits.

B. Application of the Mediation Privilege10

Section 5949(a)-(c) provides, in pertinent part, as follows:

(a) General rule.--Except as provided in subsection (b), all

mediation communications and mediation documents are

privileged. Disclosure of mediation communications and

mediation documents may not be required or compelled

through discovery or any other process. Mediation

communications and mediation documents shall not be

admissible as evidence in any action or proceeding,

including, but not limited to, a judicial, administrative or

arbitration action or proceeding.

(b) Exceptions.--

....

10

Discovery orders typically are subject to an abuse of discretion standard of review.

MarkWest Liberty Midstream & Resources, LLC v. Clean Air Council, 71 A.3d 337, 342 (Pa. Cmwlth.

2013). However, the applicability of an evidentiary privilege is a question of law, over which our

standard of review is de novo and our scope of review is plenary. Township of Neshannock, 181 A.3d

at 471 n.3.

8

(4) Any document which otherwise exists, or existed

independent of the mediation and is not otherwise covered

by this section, is not subject to this privilege.

(c) Definitions.--As used in this section, the following words

and phrases shall have the meanings given to them in this

subsection:

“Mediation.” The deliberate and knowing use of a third

person by disputing parties to help them reach a resolution

of their dispute. For purposes of this section, mediation

commences at the time of initial contact with a mediator or

mediation program.

“Mediation communication.” A communication, verbal or

nonverbal, oral or written, made by, between or among a

party, mediator, mediation program or any other person

present to further the mediation process when the

communication occurs during a mediation session or outside

a session when made to or by the mediator or mediation

program.

“Mediation document.” Written material, including copies,

prepared for the purpose of, in the course of or pursuant to

mediation. The term includes, but is not limited to,

memoranda, notes, files, records and work product of a

mediator, mediation program or party.

....

“Settlement document.” A written agreement signed by the

parties to the agreement.

42 Pa.C.S. § 5949(a)-(c). See also Pa.R.Civ.P. 4011(d) (prohibiting discovery of

mediation communications and mediation documents set forth in 42 Pa.C.S. § 5949).

The purpose of the Mediation Privilege has been cogently described by federal courts

interpreting its reach:

If participants cannot rely on the confidential treatment of

everything that transpires during mediation sessions[,] then

counsel of necessity will feel constrained to conduct

themselves in a cautious, tightlipped, non[]committal

manner more suitable to poker players in a high-stakes game

than to adversaries attempting to arrive at a just resolution of

9

a civil dispute. This atmosphere if allowed to exist would

surely destroy the effectiveness of a program which has led

to settlements, thereby expediting cases at a time when

judicial resources are sorely taxed.

Sheldone v. Pennsylvania Turnpike Commission, 104 F. Supp. 2d 511, 513 (W.D. Pa.

2000) (quoting Lake Utopia Paper Ltd. v. Connelly Containers, Inc., 608 F.2d 928,

930 (2d Cir. 1979)) (emphasis and editing removed). Further,

[h]aving no coercive power, a mediator is dependent upon

increasing communication, if not trust, between disputants.

The willingness of mediation parties to “open up” is essential

to the success of the process.

The mediation process is purposefully informal to encourage

a broad ranging discussion of facts, feelings, issues,

underlying interests and possible solutions to the parties’

conflict. Mediation’s private setting invites parties to speak

openly, with complete candor. In addition, mediators often

hold private meetings—“caucuses”—with each of the

parties. More overt assurances of confidentiality are

common. Mediators regularly require all present to promise

to keep mediation discussions confidential, and routinely

assure participants that the proceedings are confidential

(whether or not legal protection is certain).

Under such circumstances, mediation parties often reveal

personal and business secrets, share deep-seated feelings

about others, and make admissions of fact and law. Without

adequate legal protection, a party’s candor in mediation

might well be “rewarded” by a discovery request or the

revelation of mediation information at trial. A principal

purpose of the mediation privilege is to provide mediation

parties protection against these downside risks of a failed

mediation. Participation will diminish if perceptions of

confidentiality are not matched by reality. Another critical

purpose of the privilege is to maintain the public’s perception

that individual mediators and the mediation process are

neutral and unbiased.

10

Dietz & Watson, Inc. v. Liberty Mutual Insurance Co. (U.S. Dist., E.D. Pa, No. 14-

4082, filed January 28, 2015), 2015 WL 356949, at *2 (quoting Alan Kirtley, The

Mediation Privilege’s Transition from Theory to Implementation: Designing a

Mediation Privilege Standard to Protect Mediation Participants, The Process and The

Public Interest, 1995 J. Disp. Resol. 1, 8-10 (1995)).

Nevertheless, in Pennsylvania, evidentiary privileges are not favored and

are strictly construed, and their utilization should be permitted by courts only to the

extent that excluding relevant evidence has a public good that transcends the typically

predominant principle that courts ought to employ all rational means for ascertaining

the truth. BouSamra v. Excela Health, 210 A.3d 967, 975 (Pa. 2019); Commonwealth

v. Spetzer, 813 A.2d 707, 717 (Pa. 2002). The party who asserts a privilege’s

application has the initial burden to prove that the privilege is properly invoked.

Township of Neshannock, 181 A.3d at 474. Then, the party who seeks to overcome the

privilege has the burden to establish an exception to its application. Id. (citation

omitted). To carry the initial burden, the party asserting the privilege must show, “by

record evidence such as affidavits, sufficient facts as to bring the communications at

issue within the narrow confines of the privilege.” Id. (citation, quotations, and editing

removed).

Here, Appellants challenge the trial court’s order directing the production

of five specific categories of documents under Requests D, H, and N: (1) settlement

documents; (2) financial records of the parties submitted in the course of mediation;

(3) Appellants’ billing records; (4) the identity of mediation parties; and (5) pleadings

drafted for mediation participants.11

11

Appellants include in their brief the Bates ranges for each category of documents they

challenge on appeal. See Appellants’ Br. at 7 n.7.

11

Before we address the specific categories of documents identified by

Appellants, we first address the Commonwealth’s broader argument that none of the

documents withheld by Appellants are subject to the Mediation Privilege because

Appellants were not, in fact, conducting mediations as defined in Section 5949(c).

(Commonwealth Br. at 17-24.) See also 42 Pa.C.S. § 5949(c) (defining “mediation”

as “[t]he deliberate and knowing use of a third person by disputing parties to help them

reach a resolution of their dispute”). The Commonwealth argues that Appellants were,

instead, unlawfully practicing law and rendering legal advice. This fact, according to

the Commonwealth, takes all of the disputed records out of the ambit of the privilege’s

application because the documents no longer or never were prepared or made “to

further the mediation process” or “for the purpose of, in the course of[,] or pursuant to”

mediation. See id. (defining “mediation communications” and “mediation documents,”

respectively).

Although we agree with the Commonwealth that, if Appellants were not

in fact conducting mediations but, rather, were unlawfully practicing law, none of the

documents, records, or communications associated with such law practice would be

protected by the Mediation Privilege. The problem with this argument is that the nature

of Appellants’ business is the very issue in the underlying lawsuit, which has not been

decided. Given the fact that this question remains outstanding, and given that the

statute does not include a blanket exception to the privilege for certain kinds of legal

proceedings, we cannot, in reviewing a trial court discovery order, make this

determination in the first instance. See Dietz & Watson, Inc., 2015 WL 356949, at *4-

*6 (in insurance bad faith action alleging bad faith settlement negotiations, documents

otherwise protected by the Mediation Privilege were not subject to disclosure merely

to further the policy interest of inhibiting insurance companies from engaging in bad

12

faith negotiations; nor were documents subject to privilege merely to encourage candid

discussion by insurers in settlement discussions; court would not “ignore the language

of the statute and weigh and choose between the parties’ competing policy arguments”

where Section 5949(a) clearly prohibited introduction of privileged documents in

“any” proceeding, with limited exceptions that did not include bad faith actions).12

We therefore will proceed to consider the application of the privilege to

the several categories of documents identified by Appellants.

1. Settlement Documents13

Appellants first contend that settlement agreements drafted in or pursuant

to mediation proceedings expressly are covered by the terms of Section 5949(a), as

evidenced in part by the exception contained in Section 5949(b)(1), which permits the

disclosure of “settlement documents” only in the limited circumstance where the

enforceability of the document is at issue. (Appellants’ Br. at 19-20.) See 42 Pa.C.S.

§ 5949(b)(1); see also id. § 5949(c) (defining “[s]ettlement documents” as “written

agreement[s] signed by the parties to the agreement[s]”). Appellants further argue that

such settlement agreements contain communications made to the mediator during the

mediation and also constitute the mediator’s work product, both of which are expressly

protected by the Mediation Privilege as “mediation communications” and “mediation

12

Importantly, we note that Pennsylvania is not 1 of the 13 states that has enacted the Uniform

Mediation Act. Pertinent here, Section 6(a)(5) of the Uniform Mediation Act exempts from the

Privilege’s protection mediation communications that are “sought or offered to prove or disprove a

claim or complaint of professional misconduct or malpractice filed against a mediator[.]” Uniform

Mediation Act § 6(a)(5) (amended 2003), available at

https://www.uniformlaws.org/committees/community-home?CommunityKey=45565a5f-0c57-

4bba-bbab-fc7de9a59110 (last visited May 19, 2025).

13

The settlement documents at issue are included in the trial court’s notated privilege log at

Bates nos. 30-57, 58-70, 157-83, and 379-84. See Trial Court Order, 5/25/23, Ex. 1; Appellants’ Br.

at 7 n.7.

13

documents.” The Commonwealth responds, once again, that any agreements drafted

by Appellants that went beyond mediation into the realm of legal practice are not

protected because the drafting of those documents, by definition, is restricted to

lawyers. The trial court agreed on this point, concluding that the Mediation Privilege

cannot operate to shield illegal activity and analogizing to the crime-fraud exception to

the attorney-client privilege. (Trial Ct. Op. at 5-6.)

First, and beginning where we ought with the statute itself, it is clear that

“settlement documents” clearly are intended to be privileged unless they are being

introduced in an action where their enforceability is at issue. 42 Pa.C.S. § 5949(b)(1).

The statute also contemplates that such agreements will be drafted in the course of

mediation and will be signed by the parties, presumably with the intent that they be

enforceable. Id. § 5949(c). These documents therefore have legal import, and the mere

drafting of them does not necessarily constitute the practice of law. Indeed, pro se

parties in business and myriad other contexts successfully draft legally binding

documents without the help of lawyers. We therefore disagree with the

Commonwealth that settlement agreements that might contain legally enforceable

terms regarding the matters before the mediator are necessarily exempted from the

privilege’s reach.

Second, other courts have concluded, we think correctly, that settlement

agreements and written settlement proposals that are drafted and/or exchanged during

mediation or at another time but which still have a sufficient nexus to the participation

of the mediator are privileged. For example, in United States Fidelity & Guaranty

Company v. Dick Corporation/Barton Marlow, 215 F.R.D. 503 (W.D. Pa. May 28,

2003), the court held that settlement agreements and proposals drafted during the

14

course of, and even after, mediation may be protected under the privilege, but only if

those documents bear a sufficient nexus to the participation of the mediator:

[D]iscussions among parties outside the presence of the

mediator and not occurring at a mediation proceeding are not

privileged. Where the mediator has no direct involvement in

the discussions and where the discussions were not

designated by the parties to be a part of an ongoing mediation

process, the rationale underlying the mediation privilege

([i.e.], that confidentiality will make the mediation more

effective) is not implicated. The mere fact that discussions

subsequent to a mediation relate to the same subject as the

mediation does not mean that all documents and

communications related to that subject are “to further the

mediation process” or prepared for the purpose of, in the

course of, or pursuant to mediation.

....

We do not think that our construction of the statute is at odds

with its salutary purpose of protecting those disclosures by a

party to a mediator in order to bring about specific

suggestions or guidance from the mediator as to an ultimate

resolution of the issues before the mediator. . . . [I]ncluded in

the “core” of these materials are documents such as

mediation position papers and specific information prepared

for mediation sessions. Also included are other documents

created by, and communications between the parties in

preparation for[,] the mediation sessions. We believe that

documents created subsequent to the mediation process may

be protected by the privilege to the extent that they have a

clear nexus to the mediation. These would include drafts of

settlement proposals agreed upon at mediation.

....

[W]e interpret the language of Pennsylvania’s [M]ediation

[P]rivilege as extending its protection to mediator-brokered

settlements, but not to settlements that were simply reached

following a mediation. Thus, there must be a sufficient

nexus between the mediator’s involvement with the parties

and the settlement reached by the parties.

15

Id. at 506-07 (some internal quotations omitted). See also id. at 506 (“It seems to us

that the mediation process requires the presence, or at least the active participation, of

a mediator. The statute refers to ‘mediation communication and mediation

documents[,]’ and this language implies actual communication by the parties to the

mediator and from the mediator to the parties. . . . [A]s we construe the statute,

communications purely between the parties and not involving the active participation

of the mediator are not privileged.”). The court in U.S. Fidelity ultimately concluded

that the settlement agreement at issue, drafted after the conclusion of the mediation and

without the involvement of the mediator, did not bear a significant enough nexus to the

mediation to invoke the protection of the Mediation Privilege. Id.

In Dietz & Watson, Inc., the plaintiff filed a bad faith action against its

liability insurer arguing that the insurer failed to engage in good faith settlement

negotiations in the underlying personal injury suit by unreasonably refusing to

contribute sufficient funds to settle the injury claim. The federal district court

considered whether the Mediation Privilege applied to shield from discovery certain

mediation documents withheld pursuant to the Mediation Privilege. 2015 WL 356949,

at *1-*2. In concluding that certain disputed documents were protected by the

Mediation Privilege, the district court rejected the plaintiff’s argument that the

Mediation Privilege should not apply at all in an action asserting an insurer’s bad faith

conduct during settlement negotiations. The district court instead concluded that the

withheld settlement documents were protected by the Privilege but only to the extent

that they were created with the involvement of the mediator or as part of an ongoing

mediation process. Id. See also U.S. Fidelity & Guarantee Co. v. Bilt-Rite

Contractors, Inc. (U.S. Dist., E.D. Pa., No. Civ.A.04-1505, filed May 16, 2005), 2005

WL 1168374, at *6 (written claim evaluation prepared by parties to mediation at the

16

request of the mediator for purposes of making settlement offers protected by the

mediation privilege).

The standard developed by the above federal cases is consistent with the

language of Section 5949 and the policy underlying the Mediation Privilege. We

therefore conclude that only those settlement documents that are created in the

presence, or with the assistance, of a mediator, or as part of an ongoing mediation

process involving the mediator’s facilitation, are shielded from discovery; in other

words, the documents must have a sufficiently established “nexus” to a mediation

process involving a mediator to be protected. Other settlement documents and

communications without such a nexus, although perhaps protected by other doctrines,

privileges, or rules, are not protected under this Privilege.

Here, the trial court categorically concluded that settlement agreements

and drafts thereof were not privileged because protecting settlement agreements and

their contents from disclosure would, in this context, “shield improper and unlawful

activity.” (Trial Ct. Op. at 6) (unpaginated). Without any analysis with regard to the

settlement documents at issue, their contents, and their “nexus” to the mediation itself,

we cannot determine whether the trial court erred in this respect. We accordingly will

vacate this limited portion of the trial court’s order and remand for further analysis and,

if necessary, in camera review by the trial court.

2. Financial Records of the Parties14

Next, Appellants contend that the trial court erred in ordering disclosure

of the financial records of parties provided during mediation, which include real estate

appraisals and related records. The trial court concluded that these documents fell

within the exception in Section 5949(b)(4), which excludes any documents that exist

14

The challenged financial documents are designated as Bates nos. 84-97, 145-48, 184-87,

395, 401-04, 426, and 4850-5492. See Trial Court Order, 5/25/23, Ex. 1; Appellants’ Br. at 7 n.7.

17

or existed independently of the mediation. (Trial Ct. Op. at 5) (unpaginated) (citing,

in part, Commonwealth v. Kunkle, 79 A.3d 1173, 1189 (Pa. Super. 2013) (documents

or materials that existed prior to or independently of the mediation, even though

discussed or introduced at the mediation, are not subject to the privilege)).

We agree with the trial court, although on slightly different grounds. First,

these documents would not, on their face, qualify as “mediation documents” at all

unless they were “prepared for the purpose of, in the course of[,] or pursuant to[,]

mediation.” 42 Pa.C.S. § 5949(c). To the extent that any of the financial records were

prepared for any other purpose or prior to a mediation, they are not mediation

documents and are not protected by the Privilege on their face. Second, even to the

extent that these financial records are “mediation documents,” they nevertheless exist

independent of the mediation. Banks, appraisers, actuaries, financial advisers, and

other such individuals and entities would have created or housed these records, and,

therefore, they exist independent of the mediation. Thus, because Appellants did not

carry their burden to establish the applicability of the Mediation Privilege to all of these

documents and because, in any event, the Commonwealth established the applicability

of an exception, we conclude that the trial court did not err in directing their production.

See also Stewart Title Guarantee Co. v. Owlett & Lewis, P.C., 297 F.R.D. 232, 238-39

(M.D. Pa. July 18, 2013) (expert report prepared 16 months prior to mediation but

submitted as an attachment to a mediation memo to the mediator was not privileged

because it existed independent of the mediation).

18

3. Appellants’ Billing Records15

The trial court concluded that Appellants’ billing records, including time

logs, bill sheets, payment receipts, and cancelled checks are not protected by the

Mediation Privilege because they are not relevant to the mediation. Relying on Levy

v. Senate of Pennsylvania, 65 A.3d 361, 372 (Pa. 2013), in which the Supreme Court

concluded that vouchers and invoices related to the payment for legal services were not

protected by the attorney-client privilege, the trial court concluded that these financial

documents in no way disclose confidential communications from the mediation. (Trial

Ct. Op. at 4-5) (unpaginated). We agree and conclude that Appellants’ financial

records relating to charges billed to mediation participants clearly are not mediation

communications and were not created for or during the mediation. They accordingly

are not protected.

4. The Identity of the Parties in Mediation16

The trial court concluded that the identity of mediation parties is not a

mediation document or communication and analogized to our attorney-client privilege

cases indicating the names of clients are not protected by the privilege. (Trial Ct. Op.

at 4 (unpaginated) (citing Levy, 65 A.3d at 370)). We agree. The identities of the

parties who participated in mediations with Appellants are not communications or

documents and clearly are not protected by the Mediation Privilege.

15

The challenged billing records are designated as Bates nos. 7-10, 132-33, 188-93, 196-201,

211-12, 226, 269-74, 353-56, 361-62, 443-44. See Trial Court Order, 5/25/23, Ex. 1; Appellants’ Br.

at 7 n.7.

16

Appellants indicate that the challenged names are those of the parties identified in

“File#100-119.” (Appellants’ Br. at 7 n.7.)

19

5. Pleadings Drafted for Mediation Participants17

Appellants lastly challenge the trial court’s order to the extent that it

directed the production of pleadings and other court documents drafted by Appellants

for mediation participants. First, and most obviously, any documents prepared for or

during mediation that subsequently were produced or filed in any legal proceeding are

not subject to the Mediation Privilege because they were made public in court

proceedings. Second, even to the extent not produced or filed in court, any court

documents drafted by a mediator during mediation cannot be considered “mediation

documents” because they do not serve the purpose of the mediation. Rather, they are

drafted specifically for parties to consider filing. This is particularly so after an

agreement has been reached by the parties. Legal pleadings and forms filled out in

whole or in part by a mediator, whether before or after an agreement has been reached

by the parties, cannot constitute “mediation documents” because they are not prepared

for the purpose of, in the course of, or pursuant to mediation. They are drafted for the

purpose of rendering legal advice or suggesting particular legal action.

IV. Conclusion

The trial court did not err or abuse its discretion in directing disclosure of

all categories of documents identified by Appellants in this appeal, with the exception

of documents identified as settlement documents. We accordingly affirm the trial court

in all respects, except with regard to its rulings regarding such settlement documents.

With regard to those documents, we vacate the trial court’s order and remand for a

17

The challenged pleadings are designated as Bates nos. 13-18, 21-75 (30-70 also identified

by Appellants as privileged settlement documents), 119-29, 138, 145-48 (also identified by

Appellants as privileged financial records), 157-87 (157-83 also identified by Appellants as privileged

settlement documents; 184-87 also identified by Appellants as privileged financial records), 202-07,

219-25, 255-60, 275-328, 343-52, 392-94, 396-400, 425, 427-28. See Trial Court Order, 5/25/23, Ex.

1; Appellants’ Br. at 7 n.7.

20

ruling as to those documents’ discoverability as analyzed in accordance with the

principles outlined in this Opinion. The trial court may on remand, as necessary,

reconsider its ruling on the Commonwealth’s motion for in camera review in this

limited respect.

________________________________

PATRICIA A. McCULLOUGH, Judge

21

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Commonwealth of Pennsylvania, :

Office of Attorney General :

:

v. : No. 904 C.D. 2023

:

The Baroness Consulting and :

Mediation, LLC and Juliane :

Von Schmeling, :

Appellants :

ORDER

AND NOW, this 19th day of May, 2025, the May 25, 2023 order of the

Court of Common Pleas of Luzerne County is hereby AFFIRMED, in part, and

VACATED, in part, as set forth in the foregoing Opinion. This matter is remanded

to the trial court for further proceedings consistent with the foregoing Opinion.

Jurisdiction relinquished.

________________________________

PATRICIA A. McCULLOUGH, Judge