Fourth District, Division 2 Construes Arcane Provision, Streets and Highways Code Section 8831.
Streets and Highways Code section 8831 provides that costs, including reasonable attorney’s fees, are fixed by the court for costs incurred by a city in pursuing a foreclosure action for unpaid assessments to repay bonds for improvements such as sewers. This foreclosure fee-shifting provision was front and center in the next case we discuss.
In Hesperia Water District v. Myers, Case No. E046696 (4th Dist., Div. 2 Mar. 30, 2010) (unpublished), District filed to foreclose an assessment lien of $10,831.54 as provided by Streets and Highways Code section 8830 et seq., seeking recovery for penalties, attorney’s fees pursuant to section 8831, and costs. District moved to stay the foreclosure litigation because San Bernardino County had conducted a tax lien sale of the property and was holding excess proceeds of the sale. District intended to apply to satisfy its lien from the excess proceeds, but the County was required to hold the funds for at least one year after the sale. District agreed to hold off on the litigation for purposes of this tax sale offsetting, but only if defendant owner paid current special assessments as they became due. The action was stayed based on this agreement. However, you probably know what came next: defendant denied he was personally the owner (based on a complicated LLC controversy) and failed to keep current on special assessments. Later, in case management conference statements, defendant no longer denied he owned the property. District obtained summary judgment against defendant for delinquent assessment installments as well as later requested an award of $28,098.23 in fees and costs under section 8831. The trial court eventually granted District $3,532.60 in delinquent assessments, $15,000 for reasonable attorney’s fees, and $4,364.98 in litigation costs.
Defendant appealed the fee/costs award. It did not go well for defendant on appeal.
His main argument was that the fees/costs award should have been charged to the District’s excess proceeds claim against the County rather than maintained against defendant. As Justice McKinster, writing for a 3-0 panel, said, “He is mistaken.” This litigation was occasioned by the delinquency of the assessment payments, which is independent of the District’s excess proceeds claim to the County. Even the tax lien sale provisions did not support defendant’s argument. (See Rev. & Tax. Code, § 3712(f).)
Defendant also put a lot of emphasis on the argument that attorney’s fees in the litigation were “disproportionate” to the ultimate $3,532.60 recovery. Wrong, again, because there is no “proportionality” requirement in section 8831. (Accord, Bernardi v. County of Monterey, 167 Cal.App.4th 1379, 1397 (2008) [no general proposition that a fees award under a fee statute must be commensurate with or in proportion to the degree of success obtained in the litigation].)
Finally, defendant’s own conduct prolonged and increased the costliness of the litigation so that this weighed heavily in favor of the trial court’s award. After all, he failed to pay subsequent assessment installments, denied property ownership and then shifted course, and tried to unsuccessful displace blame onto others.
Section 8831 does not require a memorandum of costs procedure, so the trial court properly decided the fees/costs issues on noticed motion.
Affirmed, with District having the chance to recoup its appellate attorney’s fees in another law and motion proceeding before the trial court.
Unable to "tap" into the "excess proceeds" in his fight with the water district, the defendant may have felt like the thirsty shipmates in the Rime of the Ancient Mariner:
"Water, water, every where,
And all the boards did shrink ;
Water, water, every where,
Nor any drop to drink."
Comments