ADR Case Updates
Sellers Not Required To First Seek Mediation In Order To Recover Fees, 02/06/07
Attached is the recent Court of Appeal decision in Van Slyke v. Gibson, filed January 18, 2007 (2007 DJDAR 905), where fees were awarded to the Defendants (sellers) even though they filed a cross-complaint without first mediating pursuant to the mediation clause in the California Association of Realtors purchase contract. Plaintiff (buyer) accepted Defendants counteroffer, but failed to submit a lender prequalification letter as required in the counteroffer. Defendants then accepted an all-cash offer from another buyer. Plaintiff filed an action for specific performance against the Defendants, who cross-complained for interference with an economic relationship. The trial court found in favor of the Defendants and awarded them $94,974 in attorney fees against Plaintiff.
Affirmed. Mediation is a condition precedent to recovery of attorney fees by the party who initiates the action. Here, Plaintiff commenced the action, not the Defendants. In addition, Defendants dismissed Plaintiff from their cross-complaint well before trial, and claimed their fees were incurred in defending Plaintiffs specific performance action, not in prosecuting their cross-complaint. Defendants counsel also submitted a declaration stating that he proposed mediation before filing the cross-complaint, but Plaintiffs counsel refused.
In awarding fees to the Defendants, the trial courts decision was no doubt influenced by the finding that they came in front of this court with pristine hands [but] Van Slykes couldnt get any dirtier. The court also found that Plaintiffs deposit check bounced. Those facts made an award of attorney fees appropriate and justified, even though Defendants did not mediate before filing their cross-complaint.
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