Cross-Complaint is Separate Action Subject to Mediation Requirement

  Unpublished opinions, while not a source of law which can be cited, point to published opinions and are valuable in understanding different scenarios in which well settled law has been applied. They also contain legal arguments which have been successful on appeal. I regularly review them. I am surprised how frequently they aid to my understanding of issues which are presented in my current cases.

  One such case is the unpublished opinion in Castleton Real Estate v. Tai-Fu California Partnership. Castleton sued Tai-Fu for real estate commissions under an exclusive listing agreement for the sale of real property. The agreement contained an attorney fee provision and also required mediation. The trial court found Castleton’s failure to request mediation before filing its complaint, as required by the fee provision, barred recovery of fees for both prosecution of its complaint and defending against the cross-complaint filed by Tai-Fu. On appeal, Castleton contended it was entitled to fees for its defense against the cross-complaint, as that initiated a separate action. The appellate court agreed.

   Castleton did not request mediation before filing its complaint, but Tai-Fu demanded it a month after it was sued. Although Castleton thereafter made efforts to mediate the matter, Tai-Fu refused to proceed and filed its cross-complaint. In doing so Tai-Fu commenced an action without first attempting to resolve the matter through mediation, having refused to mediate after requesting it. Tai-Fu’s amended complaint went on the offense by asserting causes of action for breach of fiduciary duty and elder abuse against Castleton and others. It was thus a separate action from the initial complaint.

   The take-away is that when a complaint is subject to a condition precedent, that same condition precedent applies equally to a cross-complaint seeking affirmative relief. The cost of mediation is minimal when compared to the cost of losing an attorney fee motion. Parties and their attorneys should think three times before refusing mediation for any reason.

  I consult with clients and accept cases involving agreements for the purchase and sale of real property, including those such as exclusive listing, purchase, and escrow agreements which may require mediation as a condition precedent to arbitration or civil suit. For other types of cases I accept, please scroll my “Home” and “My Practice” pages. If you are seeking a legal consultation or representation, please give me a call at 818.971.9409. – Michael Daymude

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