Cross-Complaint Was A Separate, Simultaneous Action Subject to Mediation Condition Precedent.
As it now stands, a litigant subject to a CAR form contract often faces an attorney’s fees clause requiring mediation first except for certain situations (lis pendens action, unlawful detainer, and a few others). Obviously, this restriction applies to a litigant commencing a complaint. What about a litigant commencing a cross-complaint?
Our local appellate court, in a 3-0 opinion authored by Justice Rylaarsdam, answered this question “yes” in Castleton Real Estate & Development, Inc. v. Tai-Fu California Partnership, Case No. G044304 (June 28, 2012) (unpublished).
A cross-complainant did not attempt to initiate before filing a cross-complaint in a existing suit and was denied a later attorney’s fees request. On appeal, cross-complainant argued that the mediation condition precedent was not at play because the cross-complaint was only part of an existing action.
Wrong, said the appellate court. A cross-complaint is a separate, simultaneous action so the cross-complainant was subject to the mediation condition precedent because the litigant had indeed “commenced an action.” Also, the fees clause in the listing provision covered both contract and tort claims, so its fee recovery attempt ran out of luck when mediation was not pursued first.