Mediate Disputes Under Standard Residential Purchase Agreement!

    The California standard form residential purchase agreement provides that in most disputes the prevailing party may recover legal fees.  However, this right is subject to a condition. Paragraph 17A reads: “If, for any dispute . . . to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after [the making of] a request . . . , then that party shall not be entitled to recover attorney’s fees . . . .”

   After a lawsuit is filed and the defendant prevails, the issue then becomes whether there has been refusal by defendant to mediate when attorney’s fees are sought. In Cullen v. Corwin the issue was whether defendants Corwin, who prevailed on summary judgment due to the running of the statute of limitations, were excused from the mediation requirement.

   In reversing an award of attorney’s fees to Corwin, the court found that the factual record supported Cullen’s argument that Cullen had requested mediation on two occasions. It further found there was no evidence establishing Corwin’s assent to the requests, or a legally warranted reason to decline them. Since Corwin, not plaintiff Cullen, prevailed — the fact suit was filed prior to plaintiff requesting mediation was trivial.

   Corwin argued that Corwin was entitled to demand discovery responses prior to mediation to make mediation more “meaningful,” and because mediation without discovery responses was a “waste of time.” Corwin also wanted to pursue a summary judgment motion, first. The court did not find these reasons justified a refusal to mediate: The costly and time-consuming procedures connected with discovery are not a necessary adjunct to mediation proceedings that a party can demand before participating.

   Corwin lost an award of $16,500, plus a potential award of attorney’s fees on the appeal. As it turns out, mediation would not have been a “waste of time.”

  I consult with clients and accept cases involving the purchase and sale of real estate in California, including disputes between buyer and seller under Standard Residential Purchase Agreements. I will attempt to settle such disputes or will mediate, arbitrate, or prosecute or defend such claims in court on behalf of clients. 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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