Mediation Message No. 151


Berkeley Cement, Inc. v. Regents of the Univ. of California (2019) 30 Cal.App.5th 1153 (Berkeley Cement) provides that a trial court may award mediation fees as costs, whether the mediation is court ordered or privately agreed to. In that matter, after completing its construction job on the Merced campus of the University of California, Berkeley Cement sued the University for extra work outside of the contract. A jury found that the University had not breached the contract and, as to Berkeley Cement’s cross-complaint, that Berkeley had breached the contract but the University had not been harmed by the breach. Berkeley Cement appealed, in part, the award of mediation fees as costs.


In affirming the award of mediation fees as costs, Berkeley Cement noted that although mediation costs are not expressly allowable in the Code of Civil Procedure, that such costs “fall within the category of costs that may be awarded in the trial court’s discretion.” (At p. 1140.) Regardless, Berkeley Cement contended that the mediation fees were not reasonably necessary and, therefore, not assessable as costs because the mediation had been voluntary, rather than court ordered. (Note that, pursuant to Rule of Court 3.891, subd. (a)(1), a court may order that an action be mediated where “the amount in controversy, independent of the merits of liability, defenses, or comparative negligence, does not exceed $50,000 for each plaintiff.”)


The appellate court declined to adopt a blanket rule that fees incurred for mediation that is not court ordered are categorically not “reasonably necessary to the conduct of the litigation,” and thus not allowable as costs. (At p. 1141.) It reasoned that Berkeley Cement’s argument “would amount to a finding that mediation is reasonably necessary only in some cases in which the amount in controversy is $50,000 or less,  and is never reasonably necessary where the amount in controversy exceeds $50,000.” (At pp. 1141-1142.) Instead, Berkeley Cement holds that “mediation fees incurred for mediation that was not ordered by the court are not categorically nonrecoverable as ‘not reasonably necessary to the conduct of litigation.’ The question whether mediation fees should be awarded as costs in a particular matter must be determined based on the facts and circumstances of the particular action.” (At p. 142.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

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