Fourth District, Div. 1 Concludes That Not All Attorney’s Fee Awards Are Equal For Purposes Of Automatic Stay On Appeal.
In the next case, the Court of Appeal has gifted us with a 47 page opinion arising from the fact that homeowners in a condominium association installed two sandstone-colored windows, rather than two dark-brown windows, without receiving architectural approval. Chapala Management Corporation v. Stanton, D055532 (4th Dist., Div. 1 July 29, 2010) (certified for partial publication) (Chapala). The trial judge in San Diego, Steven R. Denton, granted a judgment for injunctive and declaratory relief declaring the homeowners in violation of the CC&Rs, requiring them to modify or replace their windows, and awarding attorney’s fees and costs. The judge ordered the homeowners to post a bond to stay collection of the attorney’s fees. The judge awarded the HOA $59,122.50 in attorney’s fees and $4,298.72 in costs.
The homeowners appealed from the judgment, without filing an undertaking, instead seeking a writ of supersedeas to stay the order requiring that they post an undertaking. (Note: “’Supersedeas’ is the appropriate remedy for a refusal to acknowledge the applicability of statutory provisions automatically staying the judgment while an appeal is pursued.” Chapala, n.8.)
In Chapala, the Court concluded that the trial judge acted within his discretion by awarding the HOA injunctive relief under the circumstances. The Court noted, however, “that were we to consider the matter de novo, we would question the Board’s business judgment in resorting to expensive and time-consuming litigation generating many thousands of dollars in legal fees, rather than electing to notify the Stantons of their violation and issue a directive that they paint or replace their windows with windows of an approved color . . . . If the Stantons did not comply, Association would have been reasonably within its authority to remedy the Stantons’ noncompliance by painting the two windows, charging the Stantons its expenses incurred in doing so, and recovering the minimal cost in an action at law.” But reasonable minds may differ under an abuse of discretion standard.
The Court decided to address on the merits whether attorney’s fees are nonroutine costs requiring an undertaking “for the guidance of trial courts”. The Court decided to address the issue, even though the HOA elected to concede the issue at oral argument (demonstrating that Courts of Appeal have rules that allow them to address issues when they want to, and other rules that allow them to not address issues when they don’t want to).
The general rule is that routine costs are stayed by appeal, without the need for an undertaking, whereas attorney’s fees, which are not routine, require an undertaking to stay enforcement. See our July 11, 2008 post, “Are Defense Fee Awards Encompassed Within the Appellate Automatic Stay or Must They Be Bonded?” If litigants had to file an undertaking to stay a routine cost award, then the filing of undertakings would become routine. But are some attorney’s fees awards routine, and some non-routine? Yes, according to the logic of Chapala.
Under Code of Civ. Proc. section 1033.5(10)(B), attorney’s fees are authorized as a cost item under section 1032 under any California statute that refers to the award of “costs and attorney’s fees”. Under Civil Code section 1354(c), pertaining to enforcement of CC&Rs, “the prevailing party shall be awarded reasonable attorney’s fee’s and costs.” Section 1354 is interpreted in Chapala to mean that attorney’s fees awarded under it “are awarded as a matter of right, and there is no discretion afforded to the trial court in granting or denying such fees, other than as to their reasonableness and amount.” Put another way, section 1354 fee awards look routine, and thus are encompassed by the stay. So all attorney’s fees awards are not equal when it comes to the undertaking requirement, at least according to Chapala.
Chapala declines to read Bank of San Pedro v. Superior Court, 3 Cal.4th 797 (1992) and Behniwal v. Mix, 147 Cal.App.4th 621 (2007) as equating all attorney’s fees awards with expert witness fees, which fees are non-routine, not encompassed by the automatic appeal stay, and therefore require an undertaking to stay enforcement. “We do not follow Behniwal to the extent its holding can be read to encompass a judgment solely for costs and attorney fees awarded to the prevailing party under Civil Code section 1354.”
The 3-0 opinion is authored by Justice O’Rourke.
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