Residential Property Disputes

On the left side of this page, real estate professionals can view and download materials which explain the mediation requirement under the California Association of Realtors (CAR) contract. For attorneys, there are links below to Appellate Court decisions interpreting the mediation provision.

Selected Cases Interpreting the Mediation Clause of the CAR Contract

Cullen v. Corwin (2012) 206 Cal.App.4th 1074, 142 Cal.Rptr.3d 419
A party’s belief that discovery was necessary to make mediation more meaningful and that mediation without discovery responses was a waste of time did not excuse its participation. Mediation cannot be postponed until a party feels they have marshaled the strongest possible positions.

Lange v. Schilling (2008) 163 Cal.App.4th 1412, 78 Cal.Rptr.3d 356
Purchaser’s failure to demand mediation before filing suit precluded an award of attorney’s fees, even though the purchaser was able to contact the seller only through a mail drop, which it first learned of after hiring an investigator to serve the complaint. “Plaintiff had a clear and simple way to retain the right to attorney fees. All he had to do was attempt to mediate with sellers before he filed suit. Instead, he filed first and offered mediation later. Paragraph 17A bars recovery of any attorney fees by a prevailing party who does not first attempt mediation.”

Frei v. Davey (2004) 124 Cal.App.4th 1506, 22 Cal.Rptr.3d 429
Provision in the Residential Purchase Agreement barring recovery of attorney fees by a prevailing party who refuses a request for mediation “means what it says and will be enforced.” A mediation held shortly before the trial date does not cure an earlier refusal to mediate.

Blackburn v. Charnley (2004) 117 Cal.App.4th 758, 11 Cal.Rptr.3d 885
Parties who filed a lawsuit and recorded a lis pendens in order to protect their homes from resale to a bona fide purchaser and to preserve their right to seek specific performance were exempt from the mediation requirement in the Residential Purchase Agreement.

Leamon v. Krajkiewcz (2003) 107 Cal. App. 4th 424, 132 Cal. Rptr.2d 362
A party otherwise entitled to recover attorney fees under the Residential Purchase Agreement may not recover those fees if that party commences an action without first attempting to mediate the dispute. Enforcement of this condition serves the public policy of promoting mediation as a preferable alternative to judicial proceedings.

Johnson v. Siegel (2000) 84 Cal.App.4th 1087, 101 Cal.Rptr.2d 412
A party who initiates legal action based on the Residential Purchase Agreement must seek mediation as a condition precedent to the recovery of attorney fees. The mediation provision is mutual and reciprocal because it applies equally to either seller or buyer.