Appealability/Homeowner Associations/POOF!: Merits Reversal Also Meant Fee Award Went POOF! Even Though No Appeal From Fee Order Was Achieved

 

Important Nuance to Keep in Mind—Trial Court Directed to Vacate Fee Award.

     Bel Air Glen Homeowners Assn., Inc. v. Dowlatshahi, Case No. B243549 (2d Dist., Div. 1 Mar. 5, 2014) (unpublished) has a Monty Pythonesque quality about it.

     What happened was that an HOA Board of Directors got its directors’ collective hackles up when a homeowner, who was asked for a copy of a lease to different occupants (an attorney and his family) based on a CC&R requiring delivery of a lease upon demand, kept responding “there was no lease” and providing no other clarifying information. The problem was that attorney and family had been quitclaimed the condo unit; so, prior occupants truly did not have a lease, with the quitclaim deed being recorded later on. HOA finally sued former occupants and obtained a judgment for $2,000 is fines, plus $63,910 in attorney’s fees.

     Prior occupants appealed from the merits judgment, but not the fee award.

     The appellate court, in a silly walk sort of way, agreed with appealing parties that the quitclaim was not a lease, and they had no duty to provide the quitclaim rather than a lease.

     The reversal of the merits then brought the reviewing court with what to do about the fee award never appealed from (although it was a separately appealable order). Although the appeals court had no jurisdiction to review the award, it did indicate what the remedy was when a merits judgment is reversed: the trial court on remand should vacate the fee award. (Allen v. Smith, 94 Cal.App.4^th 1270, 1284 (2002).) $63,910 in fees to the HOA simply went POOF!, with the rest of the HOA members likely not being happy unless reserves covered the litigation—if not, special assessments might be coming to the chagrin of the HOA directors as well as members.