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Contract Provision Requiring Mediation Before Recovering Fees Is Upheld

Contract Provision Requiring Mediation Before Recovering Fees Is Upheld

June 10, 2012 by Mark H. Wagner

In Cullen v. Corwin, the Court of Appeals ruled that the trial court erred in awarding attorneys’ fees to the prevailing defendants where the parties’ contract provided that such fees were unavailable if the party seeking fees had refused to mediate the dispute.  After the lawsuit was filed, the plaintiff asked the defendant twice to agree to mediate and the defendant refused.  The trial court ruled that the demand for mediation had to be before litigation and thus the prevailing defendant was entitled to fees. The Court of Appeals disagreed and stated that there was no requirement that the demand for mediation take place before the filing of the lawsuit; the Court also indicated the contract did not allow for the prevailing party to insist that the plaintiff provide discovery responses before they agreed to mediate.  The Court held that based on the language of the contract that did not indicate the demand for mediation had to be a pre-litigation, and the public policy in favor of mediation, the prevailing defendant who refused to mediate was not entitled to fees.

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