A federal court in California recently ruled that a company who did not mediate their dispute prior to filing suit, according to the agreement between the parties, will have its case dismissed. In Brosnan v. Dry Cleaning Systems Inc, plaintiff entered a dry cleaning franchise agreement with the defendant. The agreement stipulated that any disputes must be put to mediation before filing suit in court. That did not happen in this case.
Plaintiff argued that the case should be stayed (paused) until a mediation could be held. The court did not agree, holding that unlike in an arbitration case, there were no preliminary issues to be settled, and granted defendant’s motion to dismiss.
Hat tip to National Arbitration Forum.