Good Faith Effort To Mediate Was Supported By Substantial Authority And Argument That Offer To Mediate Was Made To The Wrong Intermediary Had Been Forfeited On Appeal
The DeSantises bought a commercial building occupied by a hospital tenant, only to discover too late that a hospital tenant was on the way out. The DeSantises prevailed on their claims for breach of contract, misrepresentation, and concealment and were awarded compensatory and punitive damages. The trial court denied their claims under California’s unfair competition law. The DeSantises were also awarded attorney fees. Both sides appealed, and in a 49 page unpublished opinion, the Court of Appeal affirmed, rejected all the parties’ claims. DeSantis v. Oakmont LLC, Case No. A128220 (1st Dist. Div. 5 Dec. 7, 2012) (Simons, Acting P.J.) (unpublished).
We have a side bar category: “Mediation: Condition Precedent,” We have posted about “those pesky provisions requiring that one request mediation before filing suit, or else risk losing attorney’s fees even if one prevails.” The issue of failure to comply with mediation, a condition precedent to receiving attorney’s fees, was raised on appeal in DeSantis by the losing defendant. Defendant ingeniously argued plaintiff’s attorney McMillan “improperly attempted to communicate with [defendant] about mediation through an insurance adjuster employed by [defendant’s] general liability carrier, and because the adjuster was not the actual or ostensible agent for [defendant], ‘McMillan could not give legally sufficient notice to Gloria Ruppert about mediation issues through’ the adjuster.”
Well, the argument, however clever, failed because it had not been made earlier and preserved for appeal. Besides, the Court said, no one was arguing that there was a lack of substantial evidence showing that plaintiff attempted to mediate in good faith.
Tip: Check out the notice provisions in the contract when offering to mediate. If you make an offer to mediate through an intermediary, pin down the authority of the intermediary. That’s usually not going to present a problem if the “intermediary” is the adverse party’s attorney.
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