$156,614.47 Fee Recovery Went POOF! On Appeal.
Wasserman v. Ketelhut, Case No. B258642 (2d Dist., Div. 6 Dec. 1, 2015) (unpublished) is an interesting common interest development case where multiple plaintiffs were fighting defendants over various CC&R governing document claims about defendants operating a vineyard which encroached on certain CID common areas. (BLOG NOTE—California state fee cases today both involved wineries—tell you where the economy is going as far as people’s penchant to enjoy wines? Just sayin’ ….) Two of the plaintiffs voluntarily dismissed their claims based on wanting to sell their house and just get out, while the lawsuit between seven other plaintiffs and defendants lumbered along. The trial court, however, awarded defendants $156,614.47 in attorney’s fees under the CID governing documents fee-shifting provision, Civil Code section 5975(c).
The appellate court reversed the fee award against the two voluntarily dismissing plaintiffs.
The key issue was whether the defense truly prevailed on a practical level. (Salehi v. Surfside III Condominium Owners’ Assn., 200 Cal.App.4th 1146, 1150, 1153, 1156 (2011).) The appellate court determined that the voluntary dismissal did not render defendants the prevailing parties given that the battle was still being waged with seven other plaintiffs. Also, the equities predominated such that the fee award was an abuse of discretion because it was unfair to put the total fee burden on two plaintiffs for the efforts against multiple plaintiffs. The fee decision should have been postponed pending a determination of what ultimately occurred in the case; put another way, the prevailing party determination was premature under the circumstances. Interesting one!