Women-Owned Business


August 09th, 2016/By Admin/In Newsletter

Pre-Litigation Mediation Provision Is Enforceable Condition Precedent

The Nevada Supreme Court recently held that a pre-litigation mediation provision in a valid contract is an enforceable condition precedent to the filing of a lawsuit.

In MB America, Inc. v. Alaska Pacific Leasing Company, MBA and Alaska Pacific entered into an agreement whereby Alaska Pacific agreed to become a dealer of MBA’s line of products.  After termination of the parties’ Agreement, a dispute arose regarding equipment purchases made by Alaska Pacific while acting as a dealer under the subject contract.

Correspondence between the parties evidence that MBA advised Alaska Pacific that the matter was subject to mediation pursuant to the underlying contract; while Alaska Pacific stated its belief that mediation did not apply.

MBA filed a complaint in District Court requesting declaratory relief and specific performance.  In response, Alaska Pacific filed a motion for summary judgment on the grounds that MBA had prematurely filed the complaint without first complying with the pre-litigation mediation provision.  The District Court found in favor of Alaska Pacific and awarded it attorneys’ fees as the prevailing party.  MBA appealed.

While the Nevada Supreme Court found that the District Court had mischaracterized mediation as an “administrative remedy” in the underlying case, its decision was nevertheless correct.  The letters between the parties neither constituted a formal request by MBA, nor a rejection by Alaska Pacific, to mediate the dispute.  Because the pre-litigation mediation provision constituted a condition precedent to litigation, and MBA initiated litigation without complying with that provision, the District Court’s order granting summary judgment in favor of Alaska Pacific was affirmed.

[This article is for informational purposes only and does not constitute legal advice. Do not act or rely upon any of the resources and information contained herein without seeking appropriate professional assistance.]

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