Many agreements and contracts, including most California real estate leases and purchase agreements, including a provision that requires the parties to attempt mediation before resorting to litigation. The recent appellate decision in Sequoia Evleshin et al. v. Stephen Meyer et al. (Cal. Ct. App., Nov. 6, 2025, No. H051869) underscores why parties should take this obligation seriously—and what can happen if they don’t.

The Case in Brief

The Evleshins purchased a home with wooded acreage in Santa Cruz from the Meyers. After closing the buyers claimed that the sellers breached the Residential Purchase Agreement and committed fraud and negligent misrepresentation by: failing to disclose material facts regarding the harvest of lumber on the property; failing to disclose all material facts related to the title, property, and report. ; failing to disclose facts related to the septic system; failing to vacate the property at the close of escrow; and delivering the property with rugs in damaged condition. ​

The buyers requested mediation., which the sellers initially rejected. However, two months later, before the lawsuit was filed, the sellers agreed to mediation. The buyers ignored that and filed their lawsuit.

The sellers won the lawsuit. The court found that the sellers had satisfied all their disclosure duties, did not conceal any information regarding logging operations or easements, and that the buyers failed to present credible evidence of damages.

The sellers sought their attorney fees, which the trial court denied on the grounds that the sellers had refused to mediate. The court of appeal reversed, because in fact that sellers had agreed to mediate two days before the lawsuit was filed.

The contract included two critical provisions:

  • attorney fees: .“25. ATTORNEY FEES: In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the nonprevailing Buyer or Seller, except as provided in paragraph 22A.”

  • mediation: : “22…. [¶] A. … The Parties agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action…. If, for any dispute or claim to which this paragraph applies, any Party (i) commences an action without first attempting to resolve the matter through mediation, or (ii) before commencement of an action, refuses to mediate after a request has been made, then that Party shall not be entitled to recover attorney fees, even if they would otherwise be available to that Party in any such action.”

After trial, the Meyers prevailed and sought to recover over $100,000 in attorney fees. The trial court denied their motion, finding that the Meyers had initially refused the Evleshins’ pre-suit request to mediate, and thus forfeited their right to fees under the contract. As discussed below, the court of appeal reversed that decision. The court concluded that the sellers’ retraction of their initial refusal to mediate complied with the agreement’s requirement to mediate disputes before resorting to court action. ​ Therefore, the sellers did not violate the mediation provision, and the trial court erred in denying their motion for attorney fees based solely on their initial refusal to mediate. ​ The case was remanded for further proceedings to determine whether the sellers’ later offer to mediate was valid and whether they were entitled to attorney fees.

What Is Mediation and Why It Works

Mediation is a voluntary process where a neutral third party helps people in conflict reach a mutually acceptable agreement. Unlike litigation, which is adversarial and often costly, mediation focuses on collaboration and communication. The mediator doesn’t impose a decision but facilitates dialogue so both sides can express their needs and explore solutions.

Why Mediation Often Works

  • High Success Rates: Mediation resolves disputes in about 85–90% of cases, compared to litigation where many disputes drag on for years.
  • Cost Savings: Resolving a dispute through mediation generally costs less than 10% of the total fees and expenses required to take a lawsuit through trial.
  • Faster Resolution: Most mediations conclude in 2–6 months, versus 12–36 months or longer for litigation.
  • Client Satisfaction: Over 90% of participants report high satisfaction, and compliance with mediated agreements is 80–90%, compared to 40–53% for court judgments.
  • Confidentiality: Unlike court proceedings, mediation is private—protecting sensitive information and relationships.

The Value of a Skilled Mediator

A trained and experienced neutral third party brings structure, fairness, and insight to the process. Skilled mediators know how to manage emotions, keep discussions productive, and guide parties toward common ground. Many mediators are retired judges, offering:

  • Deep Legal Knowledge: They understand how courts view cases and can help parties evaluate realistic outcomes.
  • Credibility and Trust: Their experience fosters confidence and respect, making resolution more likely.
  • Balanced Perspective: Retired judges excel at maintaining neutrality while steering discussions toward practical solutions.

The Appellate Court’s Ruling

The sellers appealed the trial court’s decision denying them their attorney fees, arguing that they later (still before the lawsuit was filed) expressed a willingness to mediate. The appellate court agreed with the sellers , holding:

  • The contract’s “fee disentitlement” provision is ambiguous: Does a party lose the right to fees forever if they initially refuse mediation, even if they later change their mind before suit is filed?
  • The court adopted a practical, policy-driven interpretation: If a party retracts their initial refusal and agrees to mediate before litigation begins, they do not forfeit their right to attorney fees.
  • The court reasoned that a strict, unforgiving rule would discourage parties from reconsidering their positions and would not serve the public policy of encouraging mediation.

The case was sent back to the trial court to determine whether the sellers’ later offer to mediate was genuine and timely.

Practical Takeaways

1. Always Respond Thoughtfully to Mediation Requests

If you receive a mediation request, do not ignore it or reject it out of hand. Even if you believe the other side is at fault, a flat refusal can jeopardize your right to recover attorney fees—even if you ultimately win.

2. If You Change Your Mind, Act Promptly

The appellate court’s decision gives parties some flexibility: If you initially refuse mediation but later agree (before a lawsuit is filed), you may still preserve your right to fees. But timing is everything. Once litigation begins, it’s too late.

3. Mediation Is Not Just a Formality

California courts and standard real estate contracts treat mediation as a serious, mandatory step. Failing to comply can have significant financial consequences.

4. Document Your Willingness to Mediate

If you are open to mediation, communicate that clearly and in writing. If there is any dispute later, you’ll want a record showing your good faith.

Conclusion

The lesson from Evleshin v. Meyer is clear: Do not refuse to mediate. Even if you believe you are in the right, refusing mediation can cost you tens of thousands of dollars in attorney fees. If you have questions about your obligations under a real estate contract or need guidance on dispute resolution, contact Turner Law Firm for experienced counsel.