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Definition. “Alternative dispute resolution” means mediationarbitration, conciliation, or other nonjudicial procedure that involves a neutral party in the decision-making process. The form of alternative dispute resolution chosen pursuant to this article may be binding or nonbinding, with the voluntary consent of the parties. (Civ. Code § 5925(a).)

Annual Notice. Associations are required to annually provide members with the following language:

Failure of a member of the association to comply with the alternative dispute resolution requirements of Section 5930 of the Civil Code may result in the loss of the member’s right to sue the association or another member of the association regarding enforcement of the governing documents or the applicable law. (Civ. Code § 5965(a).)

Pre-Litigation IDR. An association may not file a civil action regarding a dispute in which the member has requested dispute resolution unless the association has complied with Civil Code § 5910 by engaging in good faith in the internal dispute resolution procedures after a member invokes those procedures. (Civ. Code § 5910.1.)

Pre-Litigation ADR. Neither associations nor their members may file an "enforcement action" in superior court unless the parties have "endeavored" to submit their dispute to alternative dispute resolution pursuant to Civil Code § 5930(a). Parties are required to offer alternative dispute resolution (ADR) if the anticipated litigation is:

When ADR is Not Required. ADR is not required:

Initiating a Request for ADR. As required by Civil Code § 5935, to initiate the process for prelitigation ADR, all parties to the dispute must be served with a Request for Resolution. The Request must include all of the following:

  1. A brief description of the dispute between the parties.
  2. A request for alternative dispute resolution.
  3. A notice that the party receiving the Request for Resolution is required to respond within 30 days of receipt or the request will be deemed rejected.
  4. If the party on whom the request is served is the member, a copy of this article.
    (See Sample ADR Request Form.)

Serving a Request for ADR. Service of the Request for Resolution shall be by personal delivery, first-class mail, express mail, facsimile transmission, or other means reasonably calculated to provide the party on whom the request is served actual notice of the request. (Civ. Code § 5935(b).) The Court of Appeal in Cabrini Villas v. Haghverdian (2003) also allowed for service by certified mail, provided there is a signed return receipt by the person being served.

Deadline to Respond & Complete ADR. A party on whom a Request for Resolution is served has 30 days following service to accept or reject the request. If a party does not accept the request within that period, the request is deemed rejected by the party. (Civ. Code § 5935(c).) if the party on whom a Request for Resolution is served accepts the request, the parties shall complete the alternative dispute resolution within 90 days after the party initiating the request receives the acceptance, unless this period is extended by written stipulation signed by both parties. (Civ. Code § 5940(a).)

Refusal to Participate. If a party unreasonably refuses to participate in alternative dispute resolution and the case proceeds to court, the court can take that into consideration when it comes to the award of attorneys' fees.

Section 5950, subdivision (a), requires a party commencing an action to file a certificate of efforts to resolve the dispute with the initial pleading. The certificate must state that either: “(1) Alternative dispute resolution has been completed in compliance with” sections 5925 et seq.; “(2) One of the other parties to the dispute did not accept the terms offered for alternative dispute resolution”; or “(3) preliminary or temporary injunctive relief is necessary.” (§ 5950.) In the first action, plaintiffs filed a complaint without a certificate. In the second action, plaintiffs filed a certificate that was deemed not to “comply with Civil Code section 5950.” The court reasoned that “to dismiss the first action, and re-file it without making any substantive changes or any additional attempt to engage in ADR was frivolous.” The court’s determination that the action was frivolous depended upon the conclusion that plaintiffs did not comply with section 5950. (Retzloff v. Moulton Parkway HOA (2017) 14 Cal.App.4th 742, 753.)

Certificate of Compliance. At the commencement of litigation, the party filing the action must include certificate stating that one or more of the following conditions is satisfied (Civ. Code § 5950(a)(3)):

  • ADR has been completed,
  • Other party did not accept ADR, or
  • Preliminary or temporary injunctive relief is necessary.

Demurrer. Failure to file a certificate of compliance is grounds for a demurrer or a motion to strike unless the court finds that dismissal of the action for failure to comply with this article would result in substantial prejudice to one of the parties. (Civil Code § 5950(b).)

Discovery.  An association is not required to provide plaintiffs with documents prior to ADR. ADR is not an excuse to engage in extensive discovery prior to litigation. (Retzloff v. Moulton Parkway HOA.)

Attorney's Fees. In Grossman v. Park Fort Washington Assn, the court changed the starting point for the award of attorneys' fees. Normally, any attorneys' fees incurred prior to the filing of the complaint are not awarded. Here, the court concluded that the pre-litigation ADR process mandated by the Davis-Stirling Act is the actual start of litigation. Accordingly, attorneys' fees expended in pre-litigation ADR can be awarded at the discretion of the court if the matter procedes to litigation.

CC&R ADR Provision. An association's CC&Rs may contain a provision compelling the association and members to use alternative dispute resolution instead of the courts to resolve disputes. Such provisions are enforceable provided, however, that the provision is strictly followed. (Mansouri v. Superior Court.)

IDR Comparison. See See ADR-IDR Comparison Chart.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

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