Condition Precedent: Non-Signatory To Contract Must Mediate To Recovery Attorney’s Fees, If Mediation Is A Condition Precedent To Fee Recovery In The Contract

The

The Wrinkle Here Is That The Prevailing Party Claimed She Did Not Need To Satisfy The Condition Precedent Because She Never Signed The Contract.

    Standard real estate purchase and sale agreements in California, e.g., California Association of Realtors forms, include a provision requiring mediation as a condition precedent that must be satisfied before a prevailing party can recover attorney fees. That requirement has been litigated often enough in California to become one of our sidebar categories: "Mediation: Condition Precedent". Yet it still trips up parties, as it did in our next case, Hsiao v. Lin, B271296 c/w B272366 (2/8 4/4/17) (Rubin, Flier, Grimes) (unpublished).

    Hsiao (buyer) sued Lin (seller) for breach of contract when the seller refused to proceed with the sale of a house. The seller Lin prevailed, because she never signed the contract – instead, her adult son did. Because Lin prevailed, she sought attorney's fees, which the superior court granted in a postjudgment order

    The problem for Lin was that the contract required mediation first in order to recover attorney's fees. The buyer requested mediation, and Lin refused the request. The Court held that the case is governed by Leamon v. Krajkiewcz, 107 Cal.App.4^th 424 (2003), requiring a prevailing seller who sued to quiet title to request mediation first in order to recover attorney's fees.

    The seller valiantly tried to distinguish Leamon on the grounds she did not sign the contract in the first place. But the Court found this to be "a distinction without a difference," because she was relying on the contract to recover attorney's fees. She could hardly rely on the benefit – recovering attorney's fees – without accepting the burden of mediating.

    Judgment affirmed; postjudgment order awarding attorney's fees to Lin, reversed.