Homeowner Associations/Mediation/Substantiation Of Fees: Homeowner Hit With Fee Recovery For Failing To Satisfy Mediation Condition Precedent In Settlement Agreement With HOA

 

$58,212 Was the Fee Price Tag for Noncompliance With Mediation Condition Precedent.

     Usually, we see what happened in the next case occurring instead under California Association of Realtor (CAR) sale/purchase form contracts, which have attorney’s fees clauses that are conditioned upon one or both parties attempting to mediate a dispute before resorting to arbitration/litigation. In the next case, a settlement agreement between HOA and homeowner stemming from a mold/water intrusion prior dispute dictated that homeowner pursue mediation first before resorting to the courts. She did not, suffering an adverse fee award in favor of HOA.

     In Adams v. Newport Crest Homeowners Assn., Case No. G044230 (4th Dist., Div. 3 Mar. 13, 2012) (unpublished), homeowner wanted to enforce the settlement agreement but not the part that indicated she should pursue mediation first. That was a big mistake, because the trial court granted the defense motion to enforce the settlement agreement--inclusive of the mediation condition precedent--and awarded it $58,212 (out of a requested $63,380) in attorney’s fees for prevailing on the motion to enforce under the settlement agreement fees clause.

     Justice Moore, writing for a 3-0 panel of our local Santa Ana appellate court, affirmed. The settlement agreement fees clause was broad, applying to “any dispute” concerning an obligation under the settlement agreement lost by homeowner. Entitlement established. Next, this was no interim resolution, but a final resolution of the proceedings at stake in the same litigation, with HOA meeting its objective to prevent homeowner from suing by leapfrogging the mediation process. (Don’t you just love that word, leapfrogging?) The amount of the fee award was adequately documented using very reasonable rates ($170 per hour), with HOA doing something smart off the bat--it only requested $63,380 in fees although documenting over $81,000. That gave HOA increased credibility when it came to having its fee petition reviewed both before the trial and appellate courts.

     BLOG UNDERVIEW--Leapfrog derives from a children’s game dating back to the 1590s--and we know that you get a mental picture of how that game was played!

Children playing “leapfrog” in Harlem circa 1930.  Wikimedia Commons.