ADR Case Updates
Fees Incurred in Mediation Are Recoverable, 02/06/2013
In Grossman v. Park Fort Washington Association (2012) 212 Cal. App. 4th 1128, the court held that after prevailing in a dispute against their homeowner's association over a fireplace and cabana, the owners were entitled to $112,665 in attorney fees, including fees incurred during pre-litigation mediation.
Plaintiffs were homeowners and members of the Park Fort Washington Association (Defendant). They built a cabana and fireplace in their backyard without obtaining approval from the Defendant. Contending the applicable governing documents prohibited the improvements, Defendant imposed a fine of $10 per day until removal. The trial court interpreted the governing documents to allow the improvements, vacated the fine, and awarded Plaintiffs $112,665 in attorney fees based upon 331.9 hours of attorney time, including 38.1 hours incurred during pre-litigation mediation. Defendant argued that Plaintiffs were not entitled to fees incurred in pre-litigation mediation.
Affirmed. The Davis-Stirling Common Interest Development Act (California Civil Code § 1350 et. seq.) provisions address alternative dispute resolution and prohibit an association or member from filing an action without first submitting the dispute to ADR. The Act also includes a mandatory fee provision providing that in an action to enforce the governing documents, the prevailing party shall be entitled to reasonable attorney fees and costs. Defendant could offer no Legislative history that demonstrated the Legislature intended to exclude fees incurred in pre-litigation mediation. Thus, the trial court's award of $112,665 in attorney fees and costs, including those incurred during pre-litigation mediation, was correct.
In Addition, the Following Recent Cases Regarding Arbitration Hold:
Gray v. Chiu (2013) 212 Cal. App. 4th 1355 (In arbitration administered by ADR Services, Inc., arbitrator's failure to disclose that defense counsel had joined ADR Services is valid ground for vacating arbitration award);
Ahdout v. Hekmatjah (2013) 213 Cal. App. 21 (Because of public policy against compensating unlicensed contractors set forth in California Business and Professions Code ยง7031, trial court must review arbitrator's award that denied claim to disgorge compensation paid to unlicensed contractor); and
Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir. 2013) (Toyota may not compel arbitration of class action based on purchase agreement between customers and dealerships because Toyota did not sign agreements).
The California opinions are posted at: http://www.courts.ca.gov/opinions.htm, and the Ninth Circuit case at: http://www.ca9.uscourts.gov/opinions/.
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