Mediation Clause: Fee Recovery Affirmed For Seller Where She Produced Evidence Of Not Receiving Mediation Requests

Evidence Code Section 641 Mailing Presumption Can Be Rebutted.

     In our category “Mediation,” we have seen that courts routinely enforce mediation clauses in real estate purchase contracts where the clauses are condition precedents to fee recovery. However, certain provisions are only triggered where the nonsuing party refuses mediation—which may require proof that the mediation request was actually received.

     That burden was not met in Kempton v. Clark, Case No. B213386 (2d Dist., Div. 1 Feb. 2, 2010) (unpublished).

     There, defendant seller prevailed in a real estate purchase agreement dispute and was awarded attorney’s fees under a standard attorney’s fees clause, but one requiring that the suing party first attempt mediation and one requiring the nonsuing party to accede to presuit mediation requests as conditions to fee recovery. Aggrieved purchasers appealed.

     Purchasers first argued that seller waived the right to fees because seller did not request mediation before filing her winning demurrer. Wrong, because the parties who initiated the action (the purchasers) are the ones required to request mediation, not the nonsuing seller. (Van Slyke v. Gibson, 146 Cal.App.4^th 1296, 1299 (2007).)

     Purchasers then claimed that seller forfeited fee recovery because she failed to respond to purchasers’ mediation request. The problem here was that, in spite of the Evidence Code section 641 presumption that a letter correctly addressed and properly mailed is received, the presumption was rebutted by seller’s testimony that she never received any mediation requests. (Craig v. Brown & Root, Inc., 84 Cal.App.4^th 416, 421 (2000).) Because the trial court credited seller’s testimony, seller could not have been deemed to refuse mediation when she never received any mediation request. Fee award affirmed.