HOA Pragmatically Achieved Prevailing Party Status By Achieving Its Litigation Objectives Through Its Successful Demurrer And Dismissal From The Case
Homeowners alleging their upstairs neighbors had created a nuisance with improperly installed floors filed a lawsuit against their HOA and others in Haidet v. Del Mar Woods Homeowners Assn., Case No. D082923 (4th Dist., Div. 1 October 21, 2024) (certified for publication on November 5, 2024). The HOA successfully demurred to the three causes of action against it in the homeowners’ initial complaint, with the trial court dismissing a breach of fiduciary duty cause of action without leave to amend and two other causes of action with leave to amend. However, homeowners elected to omit HOA as a defendant altogether when they filed their First Amended Complaint. Afterward, the trial court granted HOA’s motion for attorney fees under Civil Code § 5975(c) and request for dismissal with prejudice. Homeowners appealed – arguing that the trial court abused its discretion by declaring the HOA was a prevailing party and in awarding fees beyond those attributable to the breach of fiduciary duty claim.
The 4/1 DCA affirmed. A court is allowed to base its fees decision on a pragmatic definition of the extent to which each party achieved its litigation objectives where, as here, a statute does not define “prevailing party.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 621-622.) The HOA achieved its litigation objectives through a successful demurrer – which prompted the homeowners to omit it from their FAC – and through the judgment of dismissal with prejudice of all causes of action against it. As such, the 4/1 DCA found no abuse of discretion in the trial court’s determination that the HOA was the prevailing party, nor in its award of fees attributable to the HOA’s defense of the entire action.
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