Second District, Division 6 Also Interprets Mediation Requirement in CAR Form Contract.
Buyers sometimes get confused over their obligations under CAR real estate form contracts, especially the ones involving an award of attorney’s fees (which clauses have been held to reach fraud/nondisclosure claims). One of the most frequent causes of confusion is the mediation requirement. Buyer’s failure to satisfy her end of the mediation requirement, coupled with a loss of her suit based on the statute of limitations, was deadly as far as fee exposure was concerned.
In Carradine v. Cowell, Case No. B210910 (2d Dist., Div. 6 July 13, 2009) (unpublished), residential real estate sellers prevailed after a court trial, with the judge determining that buyer’s fraud/nondisclosure suit was time barred. The trial court awarded sellers all of their attorney’s fees of $121,100 under a CAR fees clause with a mediation requirement. The award was affirmed by the Second District, Division 6, in a 3-0 opinion authored by Acting Presiding Justice Yegan.
Buyer argued that sellers were ineligible for fee recovery under the CAR fees clause because they refused to mediate. However, buyer misread the clause—it required her to pursue mediation before resorting to court action, something she did not do. Buyer thereby waived enforcement of this provision. Beyond that, the award was hardly an abuse of discretion; after all, sellers incurred fees because buyer waited too long to file her lawsuit—“There is nothing arbitrary, capricious or irrational about requiring appellant to pay the full cost of her intransigence.”
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