Mediation: Buyer’s Refusal To Engage In Mediation Under CAR Residential Real Estate Contract Did Not Support Adverse Attorney’s Fees Award Against Buyer—Buyer Did Not Refuse To Mediate!

Appellate Court Did Note Differences In CAR Mediation Provisions Leading To A Different Result In Earlier Iterations Of CAR Contract.

            In Dilonell v. Chandler, Case No. B282634 (2d Dist., Div. 2 Oct. 24, 2018) (unpublished), plaintiff/prospective buyer was dinged with an attorney’s fees award of $26,400—a reduced amount—after a lower court denied buyer’s petition to arbitrate. A key to this determination was the trial judge’s finding that no agreement to arbitrate existed between seller and buyer because there was no electronic transmission acceptance “agreement” to a deal, based upon the doctrine of amanuensis. (That doctrine provides that where the signing of a grantor’s name is done with grantor’s express authority, the person signing the grantor’s name is not deemed an agent but is instead regarded as the mere instrument or the grantor—it is the signature of the grantor, although here is a heightened scrutiny to determine whether the signature is truly valid.) Because there was coercion, there was no deal between the parties.

            But the reversal was on the fees award—so how did that happen? Very easy. Buyer did offer to mediate, but seller said there was nothing to mediate based on the absence of an enforceable contract. The lower court determined that a defendant, in seller’s position, did not need to mediate in order to be entitled to attorney’s fees under the CAR mediation clause.

            The appellate court determined this was incorrect reasoning. The applicable CAR clause indicated that mediation disqualification applied to “any party,” which applied to a defendant seller refusing to mediate. In reaching this result, the reviewing court distinguished Van Slyke v. Gibson, 146 Cal.App.4^th 1296, 1299 (2007) and also showed how the CAR form mediation clauses had evolved to reach parties other than just a plaintiff commencing litigation with respect to the mediation condition precedent. In this regard, defendant rejected mediation and was precluded from obtaining fee recovery from the plaintiff buyer—reasoning in Frei v. Davey, 124 Cal.App.4^th 1506, 1520 (2004) reigned supreme in this one.