Prevailing Party, Sanctions, Special Fee Shifting Statute: Motel Owner And City Properly Found To Not Have Prevailed For Purposes Of Substandard Building Fee-Shifting Statute

Also, Motel Owner Properly Hit With Opposition Fees For Denied CCP § 128.5 Motion.

            In City of South Lake Tahoe v. Cobrae, Case No. C083568 (3d Dist. Aug. 5, 2019) (unpublished), City of South Lake Tahoe filed a petition seeking appointment of a receiver against a motel owner based on allegations that he had a substandard building in violation of several building violations.  Before the hearing on the petition, a property inspection demonstrated that nearly all the violations had been corrected, although there was conflicting evidence as to whether the corrections occurred before or after the filing of the petition.  City dismissed its petition with prejudice, with both parties filing dueling motions for attorney’s fees under Health and Safety Code section 17980.7(c)(11), which allows fees and costs to be awarded to a prevailing party under the Health and Safety Code building violation scheme.  The trial court denied fees to either party, although it did award City some fees for opposing a denied CCP § 128.5 motion brought by motel owner.

            All these determinations were affirmed by the Third District on appeal.

            It first dismissed an issue preclusion argument based on the petition dismissal, determining that this dismissal did not usurp the lower court’s ability to adjudge attorney’s fees and it was not established that the violations were corrected before the petition was filed.  The trial court determined that neither side prevailed on a pragmatic basis, because City did not obtain its receiver/obtain demolishment of the motel while motel owner did have to complete repairs and avoided the implied threat of demolition—good news and bad news for each.

            This pragmatic view of things was no abuse of discretion, according to the Third District.  With respect to the award of opposition fees to City, this was expressly authorized by CCP § 128.7(c)(1), and no safe harbor notice was required because City had no choice but to oppose such that giving notice to the other side would not mean anything (as well as not required under section 128.7(c)(1)).