Costs, Mediation: Fifth District Indicates, Quite Strongly, That Private Mediator Fees Are A Prime Candidate For Routine Costs Recovery In A Voluntary Mediation Situation

Court-Ordered Mediation Alone Should Not Determine If Costs Recoverable; However, Expert Witness Expenses Not Ordered By Lower Court Were Not Recoverable.

            The Fifth District, in Berkeley Cement, Inc. v. Regents of the University of California, Case Nos. F073455/F073586 (5^th Dist. Jan. 7, 2019) (partially published; expert fee costs discussion not published; mediation costs discussion published), confronted defense costs requests after it prevailed in front of a jury in a dispute over construction of a building on the Merced campus of the University of California. The trial judge awarded the defense $6,486.25 in expert witness fees for time spent taking their depositions and $15,590 for fees paid to mediators for a voluntary mediation agreed to by the parties.

            On appeal, the Fifth District deleted the expert witness fees costs, but affirmed the voluntary mediation expenses.

            In an unpublished discussion on the expert witness fees, the reviewing court could find no basis to sustain the costs award because this was not a court-ordered witness. (See, e.g., Ripley v. Pappadopoulos, 23 Cal.App.4^th 1616, 1624-1625 (1994); Baker-Hoey v. Lockheed Martin Corp., 111 Cal.App.4^th 592, 601-602 (2003).)

            The published discussion on the recoverability of voluntary mediation costs is significant, given that prior decisions only really dictated the recovery of court-ordered mediator fees. The Fifth District refused a categorical rejection of recovery of voluntary mediation costs, with expansive language indicating that mediation has become an accepted method of resolving cases in recent times. Otherwise, mediation costs could only be awarded in a case where $50,000 or less was in controversy—unnecessary line drawing in the ADR and modern litigation contexts. “We conclude mediation fees incurred for mediation that was not ordered by the court are not categorically nonrecoverable as ‘not reasonably necessary to the conduct of litigation.’ The question whether mediation fees should be awarded as costs in a particular matter must be determined based on the facts and circumstances of the particular action. [Plaintiff] does not contend the trial court erred in assessing the facts and circumstances of this case, when it made its determination that the mediation fees should be awarded.”

            BLOG OBSERVATION—Co-contributor Mike had the voluntary mediation costs issue pop up in a Stockton case, with the lower court determining that many reasons exist for voluntary mediation and with the mediation privilege making it difficult to determine if the mediation was truly reasonable and necessary. The Fifth District did not discuss this evidentiary complication, but its broad reasoning strongly suggests voluntary mediation costs should be recoverable in the absence of extenuating circumstances—Mike wish he had this case at an earlier point in time! But that demonstrates the importance of evolving jurisprudence.