Santisas Argument Did Not Apply To CC&R Statutory Fee Provision And Gravamen Of Plaintiffs’ Action Was Based On CC&Rs.
In Durack v. Wang, Case No. B276086 (2d Dist., Div. 7 Sept. 25, 2017) (unpublished), homeowners sued the HOA and several individual defendants for negligence and breach of fiduciary duty (among other claims), but referencing the CC&Rs in some portions of the operative complaint. Plaintiffs reached a settlement with all defendants except one HOA-affiliated individual defendant (Wang, who was an HOA board of director), with everyone preparing for trial, with plaintiffs asking for more money from Wang (although the other settling defendants wanted Wang included), and with plaintiffs voluntarily dismissing without prejudice shortly before the start of trial. The lower court refused to award attorney’s fees to Wang after the voluntary dismissal, an order reversed on appeal.
The appellate court initially determined that the Civil Code section 5975(c) applied, which allows the prevailing party reasonable fees and costs “[i]n an action to enforce the governing documents [under the Davis-Stirling Act].” Because this statutory provision applied, the pre-dismissal Santisas governing principle under Civil Code section 1717 did not come into play given it applies only to contract versus statutory fee shifting. That brought the appellate court to the key issue of whether plaintiffs’ actions were truly based on the CC&Rs. The reviewing court concluded “yes,” given that the CC&Rs were mentioned in salient portions of the complaint and the claims did seek to enforce CC&Rs. Beyond that, Wang did prevail on the two causes of action—she achieved her litigation objectives in obtaining demurrer dismissals and an eventual total voluntary dismissal. On remand, the trial court was directed to enter a fee award to Wang, but making sure that apportionment analysis was properly considered.
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