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Cal. Ap. Bars Attorney fees To Prevailing Party Who Refuses To First Mediate

Paul R. Fisher
Judith Stalk, Editor

Frei v. Davey, Court of Appeal of Calif, Fourth App. Dist, Div Three; 124 Cal. App. 4th 1506; 22 Cal. Rptr. 3d 429.

The standard form residential purchase agreement used in California has a recently added clause providing that a prevailing party in litigation or arbitration who refused (emphasis by the court) a request to mediate made before the commencement of such proceedings is barred from recovering attorney fees. This is the first published case in which this provision has been applied. "The new provision barring recovery of attorney fees by a prevailing party who refuses a request for mediation means what it says and will be enforced."

The court of appeals found that the Davies were the prevailing party on appeal, but that "Any award of attorney fees to the Davies was contingent on their compliance with the mediation provision found in paragraph 17A of the [standard form purchase and sale of residential real property] agreement... If the Davies refused the Freis' request for mediation, the Davies may not recover their attorney fees, despite the fact they were the prevailing parties in the litigation."

The Court lamented "It is also a graphic illustration of a case that should have been mediated at an early stage when the parties were only $18,540 plus expenses apart in their settlement positions. Hundreds of thousands of dollars in attorney fees have been spent and the parties have litigated through two trials and three appeals. The lesson? There is a good reason the mediation clause was in the Agreement and the legal consequences specified by the Agreement for refusing to mediate will be enforced." No party recovered any damages, and the sale of the house was not compelled.

Paul Fisher has resolved many hundreds of disputes as Mediator since 1986, and has heard hundreds of cases as Arbitrator since 1978. Paul has been a full time mediator since 1991. From 1971 until 1991, he was in a litigation practice. He is an adjunct professor of law at the Straus Institute for Dispute Resolution, Pepperdine School of Law. In 2001 Paul was named to the Distinguished Panel of Neutrals of New York's CPR International Institute for Conflict Prevention & Resolution. In 2002 he received the Los Angeles County Board of Supervisors Award for Case of the Year. In 2006 Paul was a discussion leader at the Harvard - International Academy of Mediators conference. Paul is a nationally published author, and frequent speaker. He has been selected as a 2007, 2008 and 2009 Southern California Super Lawyer in the area of dispute resolution.