Friday, November 7, 2025
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Court of Appeal:
Judge Erred in Denying Fee Award Based on Prevailing Party’s Initial Refusal to Mediate
Opinion Says One-Time Rebuff of Invitation for Pre-Litigation Meeting Did Not Eviscerate Ability to Recover Under Contract
By a MetNews Staff Writer
The Sixth District Court of Appeal held yesterday that a trial judge erred in denying attorney fees to the prevailing parties in a real estate dispute, based on a contract provision precluding the recovery of litigation costs by one who “refuses to mediate after a request has been made,” saying that the defendants, who won in the litigation, did not forfeit such an award based on initially declining to discuss settlement where later acquiesced to doing so.
Justice Charles E. Wilson authored yesterday’s opinion, joined in by Acting Presiding Justice Allison M. Danner and Justice Daniel H. Bromberg. Wilson wrote:
“If, in fact, the [sellers] offered to mediate the dispute before the action was filed…, [they] did not forfeit their right to prevailing-party attorney fees due to their initial refusal to mediate.”
Following a three-day trial in May 2023, then-Santa Cruz Superior Court Judge Paul Burdick (now retired) ruled against the plaintiffs, Sequoia Evleshin and Nicole Evleshin on their complaint, and for the defendants, Stephen Meyer and Karin Meyer, on their cross-complaint.
That June, the Meyers filed a motion for $111,324 in attorney fees. Then-Santa Cruz Superior Court Judge Timothy Volkman (now a private mediator) denied the request, saying that the Meyers’ “refusal to mediate, per the terms of the contract,” operates as a bar to the recovery.
He cited the 2004 Frei v. Davey decision by Div. Three of the Fourth District Court of Appeal, which held that a prevailing party was precluded from recovering attorney fees under a similar contract provision by his refusal to mediate in accordance with the agreement’s terms.
Yesterday’s decision reverses the order denying fees.
Challenge to Rationale
Wilson noted:
“The Meyers, in asserting that the trial court erred in denying their motion, challenge the court’s rationale: namely, that because they had initially refused to mediate the dispute, they were barred under the Agreement from recovering prevailing-party attorney fees. The Meyers argue that, although they had initially rejected the Evleshins’ prelitigation request for mediation, the Meyers later (and, importantly, before litigation commenced) advised the Evleshins of their willingness to mediate.”
The jurist said that there were “two reasonable interpretations” of the provision tying the recovery of attorney fees to a willingness to mediate, one of which would preclude an award to a prevailing party who refused attempts to informally resolve a dispute “regardless of the circumstances following the refusal.”
Rejecting this reading of the provision, he wrote:
“Such a construction would not serve ‘the public policy of promoting mediation as a preferable alternative to judicial proceedings’ where mediation may result in a dispute ‘be[ing] resolved in a much less expensive and time-consuming manner.’…Rather, such an interpretation would potentially discourage mediation; if the party, through his or her initial refusal, has forfeited the right to prevailing-party attorney fees, there is less incentive to reverse that position before an action is filed.”
Saying that the interpretation also “ignores the practical realities of dispute resolution and litigation,” he opined:
“It is undeniable that emotions of parties embroiled in a dispute can sometimes run high, irrespective of whether the dispute has culminated in litigation. This can result in an evolution of positions taken by the parties. Applying the first interpretation to a party’s initial refusal of a pre-suit mediation request ignores the realistic and practical possibility that the refusing party may, upon reflection, change his or her mind about mediation before an action is filed.”
Rule Against Forfeiture
Citing the rule that forfeitures are disfavored, Wilson reasoned:
“The application of the first interpretation…results in the refusing party’s automatic forfeiture of the contractual right to prevailing-party attorney fees, regardless of whether he or she withdraws that refusal before an action is filed. Applying the [other available] interpretation, a party refusing a pre-suit request to mediate would be barred from recovering prevailing-party attorney fees only if he or she did not retract that refusal by agreeing to mediate before the action is filed.”
Finding Frei to be distinguishable, he said that “although [the Meyers] initially rejected mediation, it could be reasonably concluded that they did agree to mediation, both before and after the Evleshins filed the action.”
On appeal, the Evleshins argued that the Meyers, after initially rejecting mediation, were required to “unequivocally state that they were ‘accepting the offer of mediation,’ or words to that effect.” Addressing that contention, he wrote:
“The record does not reflect that the Evleshins made this argument before the trial court, or that the trial court specifically considered whether the July 10, 2021 e-mail was a specific and unequivocal offer to mediate. Therefore, on remand, the trial court is directed to make a finding on this question. If the trial court concludes that the Meyers did, in fact, make an offer to mediate (effectively retracting their prior May 31, 2021 refusal of the Evleshins’ request to mediate), it shall proceed to decide the merits of the Meyers’ motion for prevailing-party attorney fees….”
The case is Evleshin v. Meyer, H051869.
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