CALIFORNIA ATTORNEY'S FEES

Homeowner Associations, SLAPP: $6,300 SLAPP Fee Award In HOA’s Favor Affirmed On Appeal

Main Reason Is That Homeowner Did Not Oppose the Fee Request, So Waiver Occurred.

               In Trabuco Highlands Community Assn. v. Loeffler, Case No. G063862 (4^th Dist., Div. 3 July 1, 2025) (unpublished), HOA SLAPPed a state collection statutory action brought by a homeowner, with the lower court awarding mandatory SLAPP fees of $6,300 to HOA.  Homeowner appealed, not getting much traction.  Homeowner did not oppose the fee request below so any appellate challenges were waived based on not opposing at the trial court level.  (So. Cal. Gas Co. v. Flannery, 5 Cal.App.5^th 476, 483, fn. 7 (2016).)  Justice Delaney penned the 3-0 opinion.

Homeowner Associations, Prevailing Party: Homeowner’s Voluntary Dismissal Of HOA Without Prejudice Did Entitle HOA To Attorney’s Fees Under The Davis-Stirling Act Fee Shifting Provision

$148,142.26 Was The Fee/Costs Award Against Homeowner, Affirmed On Appeal.

               We frequently have posted on homeowner-HOA disputes.  They are contentious.  However, whoever prevails—and that can be a discretionary call—or if no one prevails can be a game changer in these disputes, much to the chagrin of one side or both sides.

               Jennings v. Bayside Court Owners Association Inc., Case No. A171339 (1^st Dist., Div. 5 June 27, 2025) (unpublished) is a good illustration of our opening observations, although the homeowner was on the losing end of the stick. 

               Homeowner sued HOA and many others for fraudulent deeds allegedly made in connection with common areas, with homeowner eventually dismissing HOA without prejudice after 16 months of litigation and after homeowner says he obtained relief against other defendants (but not the HOA).  HOA moved for costs and attorney’s fees under the Davis-Stirling Act fee shifting provision, with the lower court granting its full request—a total award of $148,142.26 based on a determination that the HOA prevailed.

               The 1/5 DCA affirmed.  Because the prevailing party determination under the Davis-Stirling Act is a pragmatic one, the lower court can determine that a party dismissed without prejudice did still obtain its litigation objectives.  In this case, HOA did obtain its primary objective to be dismissed from the case after 16 months of litigation, with homeowner not demonstrating that it obtained any significant relief against HOA (obtaining relief against other defendants was immaterial).  No abuse of discretion in this one.

Homeowner Associations, Prevailing Party: Where Homeowners Prevailed On Two Claims And HOA Prevailed On A Declaratory Relief Claim, Results Were Mixed ….

The Result Was That HOA Was Not Entitled To Prevailing Party Attorney’s Fees.

               “Prevailing party” determinations, frequently, depend on whether a trial judge believes a litigant truly met its litigation objectives.  Generally, if a result is a “mixed” good/bad result, the litigant does not obtain attorney’s fees under a fee-shifting statute.  That conclusion resonated and was buttressed by the end result in Pacific Horizon Holdings, LLC v. Meehan, Case No. B336898 (2d Dist., Div. 4 June 2, 2025) (unpublished).

               In a sober living dispute where HOA was alleged to block access to sober living tenants, HOA sought damages of $50,000, injunctive relief, and declaratory relief against homeowners.  The trial judge did not agree with the CC&R breach and nuisance claims brought by HOA, but she did uphold a declaratory relief claim granting HOA a limited express easement.  HOA moved for attorney’s fees of $204,000 as the prevailing party under the Davis-Stirling Act fee-shifting provision, Civ. Code, § 5975(c).  No fees were awarded by the lower court.

               HOA appealed, but to no avail.  The results were truly “mixed,” because HOA did not meet all of its litigation objectives.   It did not obtain any damages for CC&R breaches or nuisance, only succeeding in obtaining a judicial declaration of its CC&R rights moving forward.  Under these circumstances, the lower court did not abuse its discretion in determining HOA was not a “prevailing party” where results were mixed under the Davis-Stirling fee-shifting statute. 

Homeowner Associations: Complaint Allegations And Discovery Responses Revealed That Losing Plaintiffs’ Claims Were Based Partially On CC&Rs

This Meant That Fees Were Recoverable By The HOA Under The Davis-Stirling Act Fee Shifting Provision.

               In Smith v. Bridle Path Homeowners Association, Inc., Case No. B331987 (2d Dist., Div. 6 May 21, 2025) (unpublished), plaintiffs owning homes in a Simi Valley planned equestrian community sued an HOA for deciding to not maintain certain parkways and slopes adjacent to a bridle path and other common areas.  HOA won the case because the CC&Rs placed the maintenance responsibilities on individual homeowners.  The lower could then awarded HOA attorney’s fees of $174,984.90 under the Davis-Stirling fee shifting provision because the claims were based at least in part on the CC&Rs.

               The 2/6 DCA affirmed the fee award.  Both the allegations of the Complaint and plaintiffs’ discovery responses established the claims were based in part on the CC&Rs, which triggered fee shifting.  (See Civ. Code, § 5975(c); LNSU #1, LLC v. Alta Del Mar Coastal Collection Community Assn., 94 Cal.App.5^th 1050, 1082 (2023).)  Because plaintiffs’ claims related to the CC&Rs, there was no requirement to apportion between theories advanced at a trial where plaintiff lost. 

Homeowner Associations: HOA/Affiliated Defendants Properly Awarded $81,083 In Fees Under The Davis-Stirling Act After Plaintiff Voluntarily Dismissed Her Suit

Defense SLAPP Fees, Although SLAPP Grant Was Reversed, Were A Proper Element In The End, Because Litigation Sometimes Involves Unsuccessful Efforts—Giving Trial Judges Discretion On Whether to Award Fees For Those Efforts.

               In Mondragon v. Bergmann, Case No. B335486 (2d Dist., Div. 3 Apr. 30, 2025) (unpublished), plaintiff suing a homeowner’s association and related defendants did win an anti-SLAPP grant and adverse fee order, but later voluntarily dismissed her suit without obtaining a settlement or any judgment.  HOA then requested $81,083 in attorney’s fees under the Davis-Stirling Act’s fee shifting provision (which also included the anti-SLAPP fees reversed in the prior appeal).  The lower court determined the HOA side achieved their litigation objective in obtaining a dismissal of the suit, awarding the full amount requested.

               The 2/3 DCA affirmed the fee award against the plaintiff.   The HOA side did obtain their litigation objectives such that it affords the lower court discretion to determine that it prevailed notwithstanding the voluntary dismissal, citing Santisas, Saleh, and Haidet.  With respect to the anti-SLAPP fees also being included, that ruling was no abuse of discretion, because litigation sometimes involves unsuccessful work such that the lower court has discretion to determine if it should be awarded or not—with the appellate court citing City of Sacramento v. Drew and Simers for this proposition.

Homeowner Associations, Prevailing Party: HOA Owner Properly Denied Attorney’s Fees Because HOA Dismissed Complaint Against Him After Defeating Cross-Claims, So No One Technically Prevailed

HOA Did Get Prior SLAPP Fees For SLAPPing HOA Owner’s Cross-Complaint.

               Loma Linda Homeowners Assn. v. Aquino, Case No. D085390 (4^th Dist., Div. 1 Apr. 22, 2025) (unpublished) is a study on how lower and appellate courts “do justice,” within the confines of legal principles, in HOA owner and HOA disputes.  They are ugly, coming to disparate results—HOA owner wins big, HOA wins big, both sides get mixed results, or both sides go home unvindicated.  In this one, HOA owner did not get the fees he wanted.

               HOA owner was sued for delinquent fees, cross-complaining against HOA, several others, and the HOA attorneys for assessing fraudulent, delinquent assessments.  HOA dismissed its complaint after winning a SLAPP motion against HOA owner’s cross-complaint.  As pertinent for the appeal, HOA owner moved for prevailing party attorney’s fees under the Davis-Stirling Act (Civ. Code, § 5975(c)) to the tune of nearly $100,000, arguing the HOA’s voluntary dismissal of its action meant that HOA owner prevailed.  The lower court denied HOA owner’s request for fees.

               Aside from a deficient record and untimely augmentation request (issues that appellate attorneys would be keen on), the appellate court found that neither side prevailed in this case, finding that Hsu v. Abarra “prevailing party” principles applied under the Davis-Stirling Act fee-shifting statute.  HOA dismissed its complaint, and HOA owner did not prevail on his cross-complaint, such that the denial of fees was proper.

Homeowner Associations: Neighbors In A Tort Dispute Over Cutting Of Shrubs For A Better View Got Mixed Results—Prevailing Plaintiffs Were Properly Denied Attorney’s Fees Under The Davis-Stirling Act, But Were Entitled To Routine Costs For Winning

Plaintiffs’ Pleadings Showed They Were Not Suing To Enforce Governing CC&Rs.

               We have done many posts over the years on homeowner disputes, some involving HOAs-homeowners and some just between homeowners.  With respect to many HOA disputes, there is a Davis-Stirling Act fee shifting provision which allows the prevailing party in a dispute to enforce governing HOA documents (usually CC&Rs) to recover mandatory fees.  The thorny issue, especially in homeowner versus homeowner disputes, is whether the claims are truly ones to enforce governing HOA documents under Civil Code section 5975(c).  That was the crux of the dispute in Henkel v. Blasi, Case No. D082895 et al. (4^th Dist., Div. 1 Jan. 16, 2025) (unpublished).

               The homeowner versus homeowner dispute involved plaintiffs suing for defendants’ trespass onto their property to cut cap honeysuckle shrubs to obtain a better view, with accompanying cross-claims being at issue.  However, a close review of the pleadings show that tort claims were involved, not enforcement of HOA governing documents.  Although plaintiffs did obtain a favorable trespass verdict against defendants and also defeated the defense cross-claims, the lower court did issue two post-judgment rulings generating appeals:  (1) it denied plaintiffs’ request for attorney’s fees under the Davis-Stirling Act fee shifting statute (given that the parties finally agreed fees were not allowable under Civil Code section 1717), prompting on appeal by plaintiffs; and (2) it did sustain plaintiffs’ routine costs request of roughly $72,000, triggering an appeal by defendants.

               All results were affirmed on appeal.  With respect to the fee denial, which the appellate court reviewed under a de novo standard on Davis-Stirling Act fee entitlement, it found that the parties’ claims were not ones brought to enforce governing documents (different than one where the dispute might “arise out of or relate to” governing documents, one which is foreclosed by the Civil Code section 5975(c) language with narrower “to enforce” language).  The allegations of the pleadings must be consulted on fee entitlement in this area, with that examination showing that tort claims were involved, not amorphous references to governing documents given no direct governing document claim was brought.  (LNSU #1 v. Alta Del Mar Coastal Collection Community Assn., 94 Cal.App.5^th 1050, 1082-1083 (2023).)  On the costs appeal, the defense argued that there should be an offset for a good faith settlement with other parties, but this argument failed because the defense took the position defendants were not joint tortfeasors with the separate settling defendants, not to mention that plaintiffs were eligible for routine costs because they beat the defendants’ cross-complaint completely.

Homeowner Associations, Prevailing Party: 4/1 DCA Affirms Prevailing Party Status And $48,229.08 Attorney Fees Award To HOA That Filed Successful Demurrer And Was Dismissed From Action With Prejudice

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 (4^th 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.4^th 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.

Homeowner Associations: One Homeowner And HOA Properly Awarded A Grand Total Of $460,573.95 In Condo Noise Dispute Where Neither Party Won Their Arbitration Claims

However, Arbitrator Determined One Homeowner And HOA Prevailed, Hence The Awards.

               In this category, we have posted on many homeowner disputes where one side prevailed and obtained substantial fee awards under CC&Rs and the Davis-Stirling Act’s fee-shifting statute.  We also have posted on where both sides went away empty on fees because an arbitrator or trial judge found no one prevailed.  Well, here is another one that falls within category number one.

               Zokaei v. Mansoir, Case No. A167365 et al. (1^st Dist., Div. 3 Aug. 20, 2024) (unpublished) involved noise disputes between downstairs and upstairs condominium owners where there was a CC&R initial provision allowing for fee recovery in a civil action and later amended through a CC&R provision providing for mandatory arbitration of these disputes.  The parties, including HOA which was added to the dispute, had dueling demands and cross-demands on noise issues, with all parties praying for recovery of fees in their arbitration pleadings.  The arbitrator denied all parties’ arbitration claims, but the arbitrator determined one of the homeowners and the HOA prevailed.  After confirmation of the arbitration awards by the superior court, judgments were entered, in total, for the one homeowner/HOA and against the losing homeowner for $460,573.95.

               The fee awards were affirmed, after a scholarly discussion of fee principles relating to arbitrator fee awards.  First, all parties prayed for fees such that this issue was “teed up” for arbitrator determination.  Second, AAA arbitration rules allow for fee recovery where all parties requested it and the law allows, the case here.  Third, the CC&R arbitration amendment allowed for recovery of fees—such that even if this interpretation of the contractual provision was erroneous, it was not reviewable under Moshonov.  Fourth, the term “civil action” in the original CC&R provision might be rationally interpreted to include arbitration, especially where other amendments referred to arbitration. 

Homeowner Associations, Prevailing Party: Homeowner Only Achieving Marginal Success, But Not Removing Quorum Requirements Or Board Member Removals, Was Not A Pragmatic Prevailing Party

Davis-Stirling Act And CC&R Provisions Did Not Require A Fee Award To Homeowner.

               In Mays v. Oakview Homeowners Assn., Case Nos. D083707 et al. (4^th Dist., Div. 1 June 17, 2024) (unpublished), homeowner received a fairly limited mandate win to direct the HOA to conduct an election to replace board directors whose terms had expired.  However, the main litigation objectives of her proceeding—getting rid of a quorum requirement and removing certain directors—did not happen.  Homeowner moved for attorney’s fees of $57,775.81 plus a positive 1.5 multiplier under the Davis-Stirling Act and the CC&Rs.  The lower court denied the motion.

               Homeowner’s appeal on the fee denial was not successful.  The CC&Rs only related to delinquent assessments, not broader homeowner-HOA disputes.  On the Davis-Stirling Act fee request, the lower court did not abuse its discretion in deciding that homeowner did not achieve her main litigation objectives—the additional relief she requested and did not win on—results which properly led to a denial of fees to homeowner. 

Homeowner Associations: $156,476.33 Is The Fees/Costs Award Against An In Pro Per Plaintiff Who Lost A Demurrer To The HOA And A Subsequent Appeal

Fee Entitlement Was Justified Under Davis-Stirling Act And Vexatious Litigant Statutes.

               We have posted many times on how attorney’s fees and costs are the “tail that wags the dog in litigation” in homeowner-HOA disputes, resulting in hefty awards for the prevailing party or resulting in a large expenditure fees even though no one is deemed to have prevailed.    Harter v. Rancho Rios Homeowners Assn., Case No. D081285 (4^th Dist., Div. 1 Mar. 20, 2024) (unpublished) is an example of this for a non-prevailing, in pro per plaintiff.

               Plaintiff, who was declared to be a vexatious litigant and was required to post $50,000 as security, lost a demurrer successfully brought by HOA to his lawsuit.  The trial court awarded HOA prevailing party fees of $43,703.18.   Homeowner unsuccessfully appealed, which resulted in the grant of a fees/costs in HOA’s favor to the tune of $156,476.33 (inclusive of the $43,703.18 prior award) and an order to release the $50,000 security to partially satisfy the fee award.   Plaintiff again appealed.

               Unfortunately for him, plaintiff lost.  The appellate court found two bases for fee entitlement:  the Davis-Stirling Act (Civil Code § 5975(c)) and the vexatious litigant statutes (CCP §§ 391(c), 391.3).  The fee award was found to be no abuse of the lower court’s discretion, and the denial of a continuance request was not erroneous under the circumstances.

Homeowner Associations: Attorney’s Fees Are Not Fiduciary Duty Breach Tort Damages And $1.328 Million Fee Award Against Individual Directors Under Civil Code Section 5975 Reversed As A Matter Of Law.

Section 5975 Fees Only Awardable Against Nonprevailing HOA.

               In Colyear v. Rolling Hills Community Assn. of Rancho Palos Verdes, Case No. B308382 (2d Dist., Div. 4 Mar. 1, 2024) (partially published; fee discussion not published), plaintiff homeowner won a declaratory relief action based on a dispute over tree-trimming covenants in certain recorded Declarations, with the lower court awarding plaintiff over $1.328 million in attorney’s fees under Civil Code section 5975, the Davis-Stirling Act fee shifting provision involving CC&Rs against both the HOA and individual directors.  The appellate court reversed a breach of fiduciary duty judgment against HOA, determining that attorney’s fees are not damages for purposes of this tort.  With respect to the section 5975 fee award, the 2/4 DCA affirmed the fee award against HOA but reversed the award against individual directors, finding section 5975 did not apply to individual directors after reading sections 5975 and 5980 in tandem.

Homeowners Associations: 4/1 DCA Reverses As A Matter Of Law Adverse Fee Awards Against Homeowners Not Prevailing On Common Interest Development Open Meeting Act (OMA) Violations

Fees Are Not Awardable To Prevailing HOAs Under OMA Violations; Costs Were Not Proper Because Homeowners’ Action Was Not Frivolous, Unreasonable, Or Without Foundation.

            In LNSU #1, LLC v. Alta Del Mar Coastal Collection Community Assn., Case Nos. D080208/D081204 (4^th Dist., Div. 1 Aug. 25, 2023) (published), the 4/1 DCA had to decide, for an ordinary costs award, what “frivolous, unreasonable, and without foundation” meant with respect to a costs-shifting provision under the Common Interest Development Open Meeting Act (OMA), Civil Code § 4955(b), which allows costs shifting to a prevailing HOA if these prerequisites are met.

            Two homeowners sued HOA for violations of the OMA, with the merits resolved against homeowners in the lower court and with the appellate court affirming the merits determination.  However, the lower court granted HOA $8,874.61 in routine costs, denying homeowners’ motion to strike/tax costs.  The lower court also granted HOA $348,306 in attorney’s fees (out of a requested $405,282.50) under the Davis-Stirling Act, Civil Code § 5975(c)) rather than the OMA costs shifting provision.

            The appellate court reversed the costs and fees awards against homeowners. 

The problem with the fee award is that homeowners did not bring a Davis-Stirling Act claim based on governing HOA documents, but rather the OMA.  Under the OMA, only ordinary costs—not attorney’s fees—are awardable in favor of a prevailing HOA.

Then, attention shifted to the ordinary costs award.  The appellate court construed the “frivolous, unreasonable, and without foundation” requirements to award costs to a prevailing HOA to incorporate the “any reasonable attorney” standard adopted in such cases as Smith v. Selma Community Hospital, 188 Cal.App.4^th 1, 33 (2010).  With that in mind, the homeowners’ positions were debatable and never decided before, such that there was legal uncertainty which did not justify imposition of routine costs under the circumstances.  Even though homeowners rejected HOA’s CCP § 998 offer, the specific OMA costs-shifting provision prevailed over the 998 costs-shifting mechanism. 

Homeowner Associations, Prevailing Party: HOA’s $139,977 Attorney’s Fees Award, Made After Homeowners Dismissed Their Lawsuit Without Prejudice And Did Not Pursue Arbitration Before The Case Dismissal, Was Properly Granted

“Prevailing Party” Definition Under Davis-Stirling Act Different Than Under Civil Code § 1717.

            In Matus v. Freedom West Homes Corp., Case No. A165736 (1^st Dist., Div. 2 Aug. 21, 2023) (unpublished), a group of homeowner plaintiffs filed a lawsuit against HOA, which was ordered into arbitration.  Plaintiffs dismissed their court case without prejudice 15 months later, with the record reflecting they had not initiated arbitration but were thinking about doing so.  The lower court awarded HOA $139,977 attorney’s fees as the “prevailing party” under the Davis-Stirling Act fee shifting provision, Civil Code § 5975(c). 

            The appellate court affirmed the fee award.  HOA did achieve its litigation goals by obtaining dismissal of the lawsuit, with nothing in the record showing that plaintiffs had commenced an arbitration.  The Court of Appeal acknowledged there is no rigid rule on who is a prevailing party under section 5975(c) when there is a without prejudice dismissal of a lawsuit, with such a determination vested within the discretion of the lower court—no abuse of discretion occurred here given plaintiff’s delay in even attempting to commence arbitration. 

            Plaintiffs, on appeal, tried to argue that Civil Code section 1717 principles applied because there was no final merits adjudication, but the appellate court made three observations in rejecting this argument: (1) section 1717 principles do not apply to the Davis-Stirling Act statutory fee shifting provision (Parrott v. Mooring Townhomes Assn., Inc., 112 Cal.App.4^th 873, 878-880 (2003)); (2) prevailing party fees under section 1717 would not be recoverable under the Santisas case [our Leading Case No. 6], but that is not dispositive of the analysis under statutory fee shifting provisions; and (3) section 1717 case law supported the lower court’s conclusion to award fees (Roberts v. Packard, Packard & Johnson, 217 Cal.App.4^th 822, 829-830, 833 (2013)). 

Homeowner Associations: 50% Pro-Rata Fee Award To HOA By Arbitrator Affirmed On Appeal

$17,093.50 Reduced Award Upheld, With HOA Able To Seek Pro Rata Fees For Winning On Appeal.

            In Fairly-Haze v. Whitesails Community Assn., Case No. B311574 (2d Dist., Div. 6 May 4, 2023) (unpublished), HOA primarily won an arbitration proceeding which involved assignment of a handicapped car space in return for a surrender of another space by homeowners.  The arbitrator also awarded HOA $17,093.50 in fees (50% of the requested amount) under the mandatory fee-shifting provision contained in the Davis-Stirling Act.

            The 2/6 DCA affirmed the fee award after upholding the merits ruling in favor of HOA.  Homeowners, themselves, clarified later in the proceeding that CC&Rs were involved, which triggered Davis-Stirling fee exposure.  The reduced amount of the fee award was not erroneous, with the appellate court determining HOA could seek a pro-rata shares of its attorney’s fees for winning the appeal.

Fee Clause Interpretation, Homeowner Associations, Reasonableness Of Fees: $132,070.40 Fee Award To Defendant Homeowners Was Affirmed On Appeal As Against Plaintiff Homeowners In Tree Obstruction Dispute

Plaintiffs Pled CC&Rs As A Basis For Nuisance Claim, So There Was Fee Entitlement Under Civil Code Section 1717, CCP Section 1021, And Civil Code Section 5975, With The Fee Award Being Reasonable After A Minor Haircut By The Trial Judge.

            Plaintiff homeowners sued neighboring homeowners in a tree obstruction action based on nuisance and defendants’ alleged violation of certain specified CC&Rs.  After everyone attended an unsuccessful mediation, the matter proceeded to trial and was decided in defendants’ favor.  The trial judge later awarded defendants, as against plaintiffs, attorney’s fees of $132,070.40 (reduced from the $143,381.76 “ask”). 

            Plaintiffs’ appeal in Mascaro v. Brown, Case No. B319419 (2d Dist., Div. 6 Jan. 19, 2023) (unpublished) was unsuccessful.  Although challenging fee entitlement, plaintiffs’ nuisance action was also based on CC&Rs, such that fee entitlement existed under Civil Code section 1717 (based on the CC&Rs fees provision), CCP section 1021 (same; broad CC&Rs fee provision), and Civil Code section 5975 (Davis-Stirling Act fee-shifting provision applicable where governing HOA documents are being enforced).  The fees for mediation work were allowable under section 5975(c) regardless of the CC&Rs’ specific language.  With respect to the amount of the fees awarded, the trial judge did not abuse his discretion given that there was competent fee substantiation in the form of invoices and the lower court did reduce some duplicative, unnecessary work.  Finally, the appellate court agreed that the defendants were also entitled to reasonable appellate fees for their win in the appeal.

Homeowner Associations: $456,330 Fee Award Against Homeowner, Split Between Two HOA Attorneys, Was Affirmed On Appeal

And, At That, It Was 30% Less Than the HOA Request For Award Of Fees!

            If you visit our “Homeowner Associations” category, you can see a vast array of awards both in favor of homeowners and in favor of homeowner associations (HOAs).  We will just say this, the trial court decisions on who gets fees are affirmed on appeal in a majority of situations, whether in favor of homeowners or in favor of HOAs (even if reduced somewhat more).  So, that is a counseling point.  Not to mention that HOAs and HOA directors often bring anti-SLAPP motions, which carry their own fee-shifting allocations, most often in favor of HOAs and HOA Directors.

            An illustration of how a losing homeowner had to bear fees after losing a CC&R violation issue is shown in Loeffler v. Trabuco Highlands Community Association, Case No. G059753 (4^th Dist., Div. 3 June 7, 2022) (unpublished).  What happened here is that homeowner lost a CC&R enforcement action (including an HOA election violation theory not allowing for fees), but the problem was that the gravamen was to avoid property assessments—a classic CC&R enforcement case such that this technical challenge based on an election theory did not work.  Just to put things in context, the basic dispute was over a $17,000 assessment dispute, but homeowner lost—ouch!  Given that fee entitlement was not really at issue, HOA moved for $937,637.50 in fees for the efforts of two sets of attorneys representing the HOA, with one firm requesting an hourly rate of $240 and the other attorney requesting $400 (which was reduced by the trial court to $240 per hour, in line with the other firm).  The lower court could not stomach close to a seven-figure request by the HOA, after observing that the HOA would spare no expense on the case so “there is enough blame to go around.”  So, it reduced the total HOA fee request by 30% to $456,330 (after reducing the $400 hourly rate work larger amount to $240 per hour), to be split between the two sets of attorneys.

            That award was affirmed by a 4/3 panel, in a decision authored by Presiding Justice O’Leary.  Fee entitlement was not really at issue under the Davis-Stirling Act or under the CC&Rs fees provision.  Even after the trial court pared the $937,637.50 request to $651,900 after a reduction in the hourly rate factor, the 30% reduction to $456,330 was no abuse of discretion.  We give the details to show you how trial judges approach HOA fee requests, with the opinion demonstrating how they can be costly against the losing party even after a lower court exercises its discretion to reduce a large HOA requested fee request.   Beware!

Homeowner Associations, Private Attorney General: Lower Court Got It Right In Denying Fees To Homeowner And HOA Which Did Not Meet Their Main Litigation Objectives, And Homeowner Was Not Successful Party Or Provided A Significant Benefit Under CCP § 102

Ending Appellate Court Comment Urges Homeowners and HOAs To Work It Out, Rather Than Run To Court, Saying “Amen” To Trial Judge’s Closing Observation.

            In Artus v. Gramercy Tower Condominium Assn., Case No. A161265 (1^st Dist., Div. 2 Mar. 30, 2022) (published), a homeowner sued an HOA over election voting rules and sale/leasing guidelines.  Homeowner lost one claim on demurrer, a second claim on an anti-SLAPP motion, and dismissed three others as moot based on unilateral changes to rules/guidelines by the HOA.  Then, both sides moved for prevailing party fees under the Davis-Stirling fee shifting provision, with homeowner also claiming fees under the private attorney general statute; both sides asked for over $300,000 in fees.  They submitted 1,867 pages of fee proceeding paperwork, and then charts and 217 more pages when the trial judge asked for more information.  The trial judge denied both fee motions in a detailed ruling, prompting an appeal by both sides (who had been before the appellate court before in the same dispute).

            The 1/2 DCA affirmed.  It initially decided that the abuse of discretion standard applied, even as to entitlement, because there was no clear “winner take all” prevailing party.   With respect to homeowner’s Davis-Stirling fee request, homeowner only obtained one out of four of her litigation objectives, obtaining some changes by the HOA to some rules/guidelines (many of which were technical in nature).  On the HOA side, HOA did not achieve its objective to fight Dr. Artus forever as far telling it how to govern, even though it did unilaterally make changes—to make changes after fighting so hard was a difficult pill to swallow as far as showing it pragmatically prevailed.  Finally, on homeowner’s 1021.5 request, she was not “successful” and the changes made by HOA did not benefit a wide number of other HOA members. 

            However, the appellate court had to quote and endorse the trial judge’s ending observation in this closing part of its opinion:  “‘I’m aware that there has been a long history of disputes between Dr. Artus and this association, I’m trying to send a message here. And that message is, don’t run to court. Run to try to work things out. Both sides.” To that we say ‘Amen.’”

Homeowner Associations, Prevailing Party: Trial Court’s Call That HOA Was Prevailing Party, Although Homeowners Had Partial Success, Was No Abuse Of Discretion

$157,146.44 Was Fee Assessment Against Homeowners Arising Out Of Landscape Dispute.

            In a somewhat complimentary unpublished decision to Harris v. Rojas (a Second District decision we posted on recently), the Third District in Winchester Community Assn. v. Perrotta, Case No. C085295 (3d Dist. July 20, 2021) (unpublished) had to review a discretionary “prevailing party” decision under the Davis-Stirling Act fee shifting statute by which the HOA was awarded $157,146.44 in attorney’s fees against homeowners in a landscaping submission dispute.  (Harris dealt with a denial of fees on a discretionary basis.)  Even the trial and appellate court acknowledged that homeowners gained some partial successes, but they were ultimately unsuccessful in invalidating a prior settlement agreement between the parties or in excusing themselves from a duty of performance as far as resolving the dispute.  The “prevailing party” determination was a discretionary one, and the lower court did not exceed the bounds of reason in coming to that conclusion as supported by some earlier caselaw.  (See, e.g., Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5^th 252, 256, 261 (2016) [reviewed in our August 13, 2016 post]; Almanor Lakeside Villas Owners Assn. v. Carson, 246 Cal.App.4^th 761, 775-776 (2016) [reviewed in our April 21, 2016 post].)

Homeowner Associations: Champir Decision, Unpublished Earlier, Now Certified For Publication

Homeowners Did Achieve Their Pragmatic Objective, So Davis-Stirling Fees Were Justified.

         In Champir v. Fairbanks Ranch Assn., Case No. D077384 (4^th Dist., Div. 1 June 22, 2021) (unpublished), which we reviewed when it was unpublished in our June 29, 2021 post, homeowners received a substantial fee award for prevailing against HOA under a Davis-Stirling Act fee shifting provision.  We can now report that this case was certified for publication on July 15, 2021.

Homeowner Associations, Mediation: $318,426 Fee Award To HOA Prevailing On Encroachment Issue Was No Abuse Of Discretion

Parties’ Inability To Mediate Was A Discretionary Factor To Weigh In The Fee Calculus.

            HOA, in Country Glen Oak Park Homeowners Assn. v. Garrett, Case No. B303220 (2d Dist., Div. 6 July 6, 2021) (unpublished), won a case to require removal of a pool equipment encroachment by homeowners as well as $820 in compensatory damages.  The trial court then awarded HOA $318,426 out of a requested $323,579 in attorney’s fees under the Davis-Stirling Act fee shifting provision (Civil Code section 5975(c)).  That award was affirmed on appeal.  HOA’s failure to mediate was only a discretionary factor to weigh in a fee assessment, Civil Code section 5960, with the record showing both sides could not come to terms on how to approach a mediation.  With respect to the award itself, HOA did prevail on the overriding encroachment issue so to enforce CC&Rs, and the record showed the lower court did look closely at the amount being requested as far as fashioning an award.  This case goes to show you how HOA disputes can be costly and earth-shattering with regard to fee award allocations.

BLOG COMMENT—It is with sadness that we announce that Hon. Edward J. Wallin (Ret.) recently passed away in late May of this year.  He was a long-time former sitting justice of the 4/3 DCA and a JAMS neutral, who co-contributor Mike appeared in front of, from time to time, during his tenures as an appellate justice and neutral.  He also is the author of our Mission Statement quote--"All too often attorney fees become the tail that wags the dog in litigation,"  Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993), which has been quoted often by both California and out-of-state decisions. 

Homeowners Association, Prevailing Party: No Abuse Of Discretion In Trial Court’s Determination That Plaintiffs Were Prevailing Party, Resulting In Fees Award Of $112,340, After Plaintiffs Dismissed Action.

Plaintiffs Dismissed Their Action Only After Achieving Their Main Litigation Objective.

            In Champir v. Fairbanks Ranch Assn., Case No. D077384 (4^th Dist., Div. 1 June 22, 2021) (unpublished), plaintiffs sued homeowners’ association for breach of the CCR’s stemming from association’s decision to install traffic lights at a location not approved by a majority of its voting members.  Plaintiffs also asserted causes of action for trespass, nuisance, declaratory relief and injunctive relief.  Following the trial court’s issuance of a preliminary injunction enjoining the association from construction of the traffic signal, association obtained written consent from a majority of its members to proceed, and the trial court granted association’s request to dissolve the preliminary injunction due to a material change in the facts.  Afterward, plaintiffs dismissed their remaining causes of action, and plaintiffs and association filed respective fee motions, each claiming to be the prevailing party under § 5975(c) of the Davis-Stirling Act (Civil Code §§ 4000-6150).  The trial court determined plaintiffs were the prevailing party and awarded them $112,340 in attorney fees. 

            Association appealed – asserting the trial court should have found it to be the prevailing party.  The 4/1 DCA found no abuse of discretion and affirmed – concluding substantial evidence supported the trial court’s determination that plaintiffs prevailed on a practical level.

            The Davis-Stirling Act mandates the award of reasonable attorney fees and costs to the prevailing party in an action to enforce the governing documents of a common interest agreement, but does not define prevailing party.  However, it is well established that “[t]he analysis of who is a prevailing party under the fee-shifting provisions of the Act focuses on who prevailed ‘on a practical level’ by achieving its main litigation objectives.”  (Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5th 252, 260 (2016), citing Heather Farms Homeowners Assn. v. Robinson, 21 Cal.App.4th 1568, 1574 (1994); Villa De Las Palmas Homeowners Assn. v. Terifaj, 33 Cal.4th 73, 94 (2004).)  In this case, plaintiff’s main litigation objective was to compel the association to comply with the CC&Rs and obtain majority approval from its members before installing the traffic light – and that is exactly what the association did following issuance of the preliminary injunction.  The fact that plaintiffs ultimately dismissed their action, only after achieving their litigation objective, did not deprive them of prevailing party status.

Homeowner Associations: $492,592 Fee Award To HOA And Neighboring Homeowners, Combined, Affirmed On Appeal After Homeowners Lost View Protection Dispute

HOA View Disputes Can Be Costly.

            Under this category, we have indicated that fee awards can be costly for homeowners and homeowner associations/directors/property managers/neighboring homeowners caught in the middle of “view protection” disputes.  The next case is yet another example of that.

            In Davis v. Irvine Terrace Community Assn., Case Nos. G057682/G058266 (4^th Dist., Div. 3 Jan. 5, 2021) (unpublished), one set of homeowners lost a “view protection” case against the HOA and neighboring homeowners.  The trial judge awarded $159,363 to HOA and $333,229 to the neighboring homeowners as prevailing parties in the dispute.

            The appeal by the plaintiff homeowners did not change things.  There was fee entitlement based on the CC&R nature of the dispute, notwithstanding whether a true common interest subdivision was involved.   (Tract 19051 Homeowner Assn. v. Kemp, 60 Cal.4^th 1135, 1143 (2015).)  With respect to the amount of the fee award, a one paragraph argument with string citations in opposition, with no real contest, did not justify why the result should be disturbed.  Ouch as to losing parties!   Justice Moore penned the 3-0 panel decision.

Homeowner Associations, POOF!: $109,760 Fees Award Went Away Based Upon Merits Reversal

$154,744 In Fees Was Requested.

            One Ford Road Homeowners Assn. v. Johnson, Case No. G058269 (4^th Dist., Div. 3 Dec. 17, 2020) (unpublished), is just a reminder about how expensive HOA/homeowners disputes can be.  Here, HOA won a CC&R dispute which was reversed on appeal as a matter of law.  That resulted in an attorney's fees award to the HOA of $109,760 (out of a requested $154,744) going POOF!  Winning homeowners may get appellate fees later unless a settlement is reached.  But it does show how expensive these cases can be, as Justice Fybel—the author of a 3-0 opinion—so found.

Homeowner Associations, Special Fee Shifting Statutes: Trial Court’s Denial Of Civil Code Section 5975(c) Fees To Prevailing HOA Was Error

The Davis-Stirling Act Fee-Shifting Provision, Section 5975(c), Mandates The Award Of Fees To The Prevailing Party With The Trial Court's Only Discretion Being To Determine The Reasonable Amount Of Fees.

            Hope Ranch Park Homes Assoc. v. Rubin, Case No. B299932 (2d Dist., Div. 6 December 14, 2020) (unpublished) involved a $30,600 penalty assessed against a homeowner for failure to complete a home remodeling project by the deadline extended by the HOA and pursuant to the HOA's CC&Rs.  The trial court determined that the penalties were properly imposed by the HOA and that homeowner owed HOA $26,600 after having paid $4,000 of the penalty by the time of trial.  Additionally, the trial court awarded HOA $1,358.92 in costs, but denied HOA’s motion for attorney fees under Civil Code § 5975(c) – the Davis-Stirling Act fee-shifting provision.

            The 2/6 DCA reversed – finding the trial court erred in denying the HOA’s motion for fees because § 5975(c) mandates the award of attorney fees to the prevailing party.  “Attorney fees under section 5975 ‘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.’” (Chapala Management Corp. v. Stanton, 186 Cal.App.4th 1532, 1546 (2010); see also Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5th 252, 260-261 (2016) [trial court has no discretion to deny attorney fees to a prevailing HOA]; Salehi v. Surfside III Condominium Owners Assn., 200 Cal.App.4th 1146, 1152 (2011).)

            On remand, the panel instructed the trial court to exercise its discretion to determine the amount of reasonable attorney’s fees to which the HOA is entitled.

Homeowner Associations: $260,625 Attorney’s Fees Award To HOA and Two Homeowners Prevailing On CC&R Short-Term Vacation Rental Dispute Affirmed

$313,721 Was The Fee Order Request.

            We have many times indicated that HOA-homeowner disputes can be expensive as far as fee-shifting is concerned.

            Lastavich v. Nob Hills Homeowners Assn., Case No. D075466 (4^th Dist., Div. 1 Dec. 2, 2020) (unpublished) is an illustration of how this panned out in a real case.  There, plaintiff homeowner lost a short-term vacation rental dispute as far as how the CC&Rs read and what they prohibited.  The winning HOA and two homeowners moved for attorney’s fees of $313,721.  The trial judge awarded $260,625 against losing plaintiff homeowner, a determination affirmed on appeal once the CC&R merits issue was sustained. 

Appealability, Homeowner Associations: $180,442 Fees Award, $2,195 Expert Fee Award Under Section 998, And Certain Other Costs Awarded To HOA And Against Homeowner Sustained On Appeal

Good Pointer On Appealability—Separately Appeal § 998 Shifting Award As a Postjudgment Award, Or Be Damned!

            Kashani v. Wilshire House Assn., Case No. B296976 (2d Dist., Div. 1 Oct. 28, 2020) (unpublished) involved a HOA-homeowner dispute involving a right of first refusal battle to bid on a particular condo unit, with the HOA winning on summary judgment where the CC&Rs also had a fee-shifting clause.  HOA requested fees of $198,942, certain costs, and $2,195 in expert fees based on an unaccepted CCP § 998 offer.  In the end, the lower court awarded $180,442 in fees, awarded the expert fees, and awarded other costs with some reductions.

            Homeowner’s appeal was unsuccessful.  The lower court showed it did weigh reasonableness of fees issues by reducing the request by over $18,000.  Other routine costs awarded were no abuse of discretion.  As far as the section 998 expert witness fees which were recovered, the problem here was that homeowner failed to separately appeal a post-judgment ruling on these expenses, which left the appellate court without jurisdiction to consider any challenge to the expert fees.  (Pfeifer v. John Crane, Inc., 220 Cal.App.4^th 1270, 1316-1317 (2013).)  So, as we have stated many times before, separately, separately appeal fees and costs orders.

Deadlines, Homeowner Associations: Later Finding That HOA-Homeowner Settlement Agreement Was Invalid Presented Good Cause To File Fee Motion After 60-Day Deadline

Settlement Misconception By The Parties Allowed Dismissed Board Members To Seek Fees.

            In Gallian v. Gragnano, Case No. G057198 (4^th Dist., Div. 3 Sept. 15, 2020) (unpublished), HOA sued a homeowner for architectural violations under the CC&Rs, which prompted homeowner to crossclaim against the board members for indemnification, fault apportionment, and declaratory relief.  The board members were dismissed with prejudice, with HOA and homeowner reaching what they believed to be a binding settlement agreement which also bound board members (although not signed by them)—with the HOA attorney also representing the dismissed board members.  Later, when the HOA sought to enforce the settlement agreement, the trial judge found there was no meeting of the minds.  Well after the 60-day deadline for filing an attorney’s fees motion after the notice of dismissal was served, board members moved for fees as prevailing parties under Civil Code section 5975, the Davis-Stirling Act fee-shifting statute.  The lower court awarded board members $46,138 in fees, finding good cause to allow the fee motion filing based on the mutual misconception that the settlement agreement was binding.

            Homeowner’s appeal of the fee award did not alter the result in a 3-0 panel decision authored by Justice Ikola.

            Homeowner first argued that board members, after dismissal, could not file a fee motion.  This was dispatched easily because former parties after dismissal have collateral rights to seek fees and costs.  (Day v. Collingwood, 144 Cal.App.4^th 1116, 1124 (2006).)  Although the board members were not technical parties to the settlement agreement because they did not sign or expressly assent to its terms before the court, the circumstances at play—everyone’s belief the settlement agreement was valid such that no fees would be sought if it was—presented good cause to file the fee motion later.  “We would not expect a party attempting in good faith to negotiate a settlement to throw a wrench in the works by moving for an award of attorney fees during the negotiation.”  (Slip Op. at 6.)  Homeowner’s argument that the cross-complaint was not one to enforce the CC&Rs did not gain much traction, given that it was derivative of the HOA suit to enforce the governing common interest documents. 

Homeowner Associations, SLAPP: $2,510 SLAPP Fee Award Affirmed Because No Opposition Filed At Trial Level

Fifth District Did Not Have To Decide If Indigency Of Plaintiff, An Argument Not Raised Before The Trial Judge, Could Justify A Fee Reduction Under SLAPP Fee Statute.

            The plaintiff/appellant in Cruz v. Abdelaziz, Case No. F077506 (5^th Dist. May 6, 2020) (unpublished) got SLAPPed and then failed to file an opposition to a defense fee request, resulting in an adverse fee award of $2,510.  Plaintiff appealed, principally arguing that his indigency was a factor which was not considered.  Although the Fifth District acknowledged that this is a factor for a losing homeowner in a Davis-Stirling Act fee-shifting dispute (Garcia v. Santana, 174 Cal.App.4^th 464, 476-477 (2009)), this indigency argument was not raised below and thus was waived, especially given the lack of an opposition by plaintiff.  Fee order affirmed.

            BLOG COMMENT—Although the case did not involve an HOA dispute, we cross-reference to our topical category “Homeowner Associations” for readers who may need to use the reasoning in Garcia.

Homeowner Associations: $390,668 Fee Award To HOA Affirmed When Appellate Court Affirmed HOA Interpretation Of Palm Tree View CC&Rs And Accompanying Policies

HOA Interpretation Of Palm Tree View Policies Was Correct, Such That It Was The Prevailing Party.

            Over the years, because a lot of us live in common interest developments, we are used to seeing homeowner association fights with homeowners, many occurring based on view restriction or tree limitations—generating plenty of disputes by both sides.  In the next case, HOA prevailed and, with it, garnered a substantial attorney’s fees award under the CC&Rs prevailing fees provision and the Davis-Stirling Act fee-shifting section.  We have seen this before in our category “Homeowner Associations,” which can be easily accessed for prior decisions—many large, some for the HOAs and some for the homeowners.  But a lot are not good in the end, resulting in financial issues for the losing homeowners or special assessments for the HOA members bearing the brunt of a lot of HOA fights.

            In Maravich v. Dover Shores Community Association, Case Nos. G056152/G056965 (4^th Dist., Div. 3 Mar. 5, 2020) (unpublished), homeowners sued HOA because palm trees on other properties grew to detract from scenic views of the Eastbluff area of Newport Beach and dramatic night light views of Fashion Island.  The dispute centered on CC&Rs and policies granting the HOA discretion to take appropriate action for trees that “impede and block” views.  HOA sided with the downhill homeowners, finding it had discretion to allow the taller trees to stay. 

            The trial judge rendered a “split” type of decision, although awarding HOA prevailing party fees of $390,668 (yep, no typo here).  On appeal, the appellate court went with the HOA interpretation of the tree ordinances, so the fee award was sustained completely.  Just goes to show you how HOA disputes can be prohibitively expensive for homeowners where fee-shifting provisions are in place.

            Justice Ikola authored the 3-0 opinion. 

Homeowner Associations, Special Fee Shifting Statutes: Error In Lower Court’s Narrow Interpretation Of Civil Code Section 5975(c) Led To Reversal Of Attorney Fees Denial To Prevailing Defendants

Gravamen Of Plaintiff’s Complaint Was On Enforceability Of The Governing Documents.

            In Alexander v. Singletary, Case No. D075943 (4^th Dist., Div. 1 January 21, 2020) (unpublished), one of five homeowners in a common interest development unsuccessfully sought judicial declaration that the governing documents were unenforceable as to him, and for partition from the development.

            As prevailing defendants, the other four homeowners moved for section 5975(c) (Davis-Stirling Act fee-shifting provision) attorneys’ fees.  The lower court denied – concluding Plaintiff’s action did not seek “to enforce” the governing documents.

            Two of the four defendants appealed, and the 4/1 DCA reversed – finding Plaintiff’s entire action revolved around the enforceability of the governing documents within the meaning of section 5975(c), and that Plaintiff could not avoid the fee provision simply because he phrased his complaint to seek a finding that the governing documents are “unenforceable.”

            The 4/1 DCA’s reversal applied only to the two defendants who appealed, with judgment considered final as to the two non-appealing defendants.

Homeowner Associations, Section 1717: $220,000 Fee Award To HOA Under CC&Rs Fees Clause Was Proper

Plaintiff’s Unsuccessful Action Was Founded On CC&Rs Rights, Not Just Solely Sounding In Tort; HOA; Directors Had Sought $322,840 In Fees.

            HOA and HOA directors were awarded $220,000 in attorney’s fees against an unsuccessful plaintiff bringing a suit to challenge HOA’s policies and CC&Rs about parking and the permitting process, as well as enforcement thereof.  In Merritt v. Gandhi, Case No. H043615 (6^th Dist. Dec. 20, 2019) (unpublished), the lower court based the fees award upon Civil Code section 1717 (CC&Rs) and section 5975 (the Davis-Stirling Act fee-shifting provision).  The Sixth District affirmed based on the section 1717 fee entitlement basis.  It found that the gravamen of plaintiff’s action was founded upon rights under the CC&Rs rather than sounding only in tort.  It also found the fee award to be reasonable, given that the lower court did not award the $322,840 in fees requested by HOA and the directors. 

Appealability, Homeowner Associations, Prevailing Party, Special Fee Shifting Statutes: Second District Affirms $67,458.07 Attorneys’ Fees Awarded To Prevailing Defendant On Remand

Gravamen of Plaintiffs’ Action Was Based On Governing CC&Rs Which Made Defendant Prevailing Party For Attorneys’ Fees Purposes When She Defeated The Action Through Demurrers And Plaintiffs’ Voluntary Dismissal.

            We first discussed our next case – Durack v. Wang, Case No. B293597 (2d Dist., Div. 7 November 18, 2019) (unpublished) – in a September 27, 2017 post.  In that appeal, Wang, who prevailed on demurrer against most of plaintiffs’ causes of action – with the remaining causes of action voluntarily dismissed by plaintiffs – challenged the trial court’s denial of her motion for attorneys’ fees. There, the 2/7 DCA found Wang to be the prevailing party under Civ. Code section 5975(c) [the Davis-Stirling Act] as Plaintiffs’ complaint sought to enforce CC&Rs.  With that, the 2/7 DCA reversed and remanded with direction to the lower court to enter a fee award to Wang with proper apportionment.

            On remand, Wang filed a peremptory challenge under Code Civ. Proc. § 170.6 to the trial judge who determined the first attorneys’ fees motion.  After the case was reassigned to a different department, Wang filed her second motion for attorneys’ fees seeking $72,158.57.  Plaintiffs opposed – seeking denial of Wang’s motion in its entirety – with the trial court finding the request to be “patently improper in light of the Court of Appeal’s direction to grant Wang’s motion for attorneys’ fees.”  After some apportionment and reductions, the trial court awarded Wang $67,458.07.

            Plaintiffs were not deterred.  They marched right back to the 2/7 DCA with a slew of failing arguments to support their claim that the trial court erred in awarding the fees as directed on remand.

            First, they argued the peremptory challenge should not have been accepted.  However, the proper procedure for such a review is a petition for writ of mandate.  Next, they argued the trial court failed to properly assess fee and non-fee claims.  This was without merit as the trial court had conducted an evaluation of the legal work Wang’s attorneys performed and appropriately reduced and apportioned for time spent litigating causes of action that did not allow Wang to recover fees. 

            Plaintiffs also focused two of their arguments on Wang’s specific factual defense – claiming she was not entitled to fees because she did not prevail on that specific defense, and because that defense was a lie.  Neither argument gained any traction because Civ. Code section 5975(c) did not require Wang to prevail on every issue or defense, just to achieve her main litigation objective – which she did by defeating all of the causes of action against her.  As to her specific defense being a lie, there was no “lie.”  The parties never resolved/litigated that issue with plaintiffs dismissing their complaint against Wang.

            Finally, plaintiffs attacked the fees charged by Wang’s counsel – claiming her counsel deferred work to a law clerk and submitted improper block billing entries to support the fees request.  To these arguments, the 2/7 DCA found the trial court had correctly ruled that legal assistant and support staff time is routinely included in fee awards – that, if anything, work delegated to the law clerk only served to reduce the amount of an otherwise reasonable fee award.  As to the examples plaintiffs cited as “block billing,” the 2/7 DCA came to no such conclusion.  Rather, they found them to be descriptive entries showing the amount of time spent on each specific task.  One exception to this was the 85.6 appellate work hours Wang’s counsel included in his declaration.  Although the declaration did not include detail, the 2/7 DCA found the significance of detailed time entries reduced for appellate work – with only a few kinds of tasks for which an appellate lawyer bills.  In this case, the amount of time cited was very reasonable given the filing of both an opening and reply brief, appearance for oral argument, and successful reversal of the trial court’s fee denial.

Allocation, Homeowner Associations, Interest, Special Fee Shifting Statutes, Standard of Review: Plaintiff Owner/Developer’s Award Of $1,673,691 In Damages and Entire Fee Request Upheld On Appeal

Defendant HOA’s Breach Of Owner/Developer’s Valid Contractual Access Rights Was The Common Core Involved In The Causes Of Action, So Apportionment Of Fees Not Required.

            In Millennium-Diamond Road Partners v. Diamond Bar etc., Case No. B285539 (2^nd Dist., Div. 3 Sept. 24, 2019) (unpublished), Owner/Developer Millennium sued HOA when it revoked Millennium’s access to undeveloped parcels of land Millennium had purchased for the purpose of developing residential properties. 

            The undeveloped parcels of land were landlocked and adjacent to a guard-gated residential community known as Diamond Bar Country Estates.  From 1997 until October 2013, Millennium had easement access via Country Estates – access that was abruptly revoked when a new group of board members began to oppose Millennium’s development.

            Substantial evidence doomed HOA at trial – with the trial court finding that HOA breached Millennium’s valid contractual access rights pursuant to CC&Rs, a second contractual agreement providing Millennium an option for access rights for which Millennium had tendered the required fee, and a recorded annexation agreement under which the Millennium parcels became a part of the Country Estates development. 

            HOA argued that the CC&Rs were not at play as Millennium had not paid monthly assessments.  HOA also claimed Millennium had failed to pay fees owed under the annexation agreement.  The trial court rejected both claims.  The language of the CC&Rs contradicted HOA’s argument– providing the HOA “no power to cause a forfeiture or abridgement of an Owner’s right to full use and enjoyment of his Lot” absent a judicial/arbitral order or foreclosure.  The annexation agreement did include a schedule of payments to be made to the HOA.  However, the first payment under the schedule was triggered by an event that had not yet occurred, so no annexation fees were yet due.

            At trial, Millennium’s expert testified and explained his computations of Millennium’s damages of $1,673,691 in detail.  HOA did not challenge his methodology or calculation, nor did it call its own expert witness regarding damages, and the trial court awarded the entire amount Millennium claimed as damages.  Additionally, the trial court awarded Millennium prejudgment interest at 10% with a start date of January 2014.

            Millennium’s win triggered an award of attorneys’ fees pursuant to Civil Code section 5975(c) which mandates the award of attorneys’ fees in a successful action to enforce the governing documents of a common interest development.  The trial court awarded the full amount requested with no apportionment.

            HOA appealed, but fared almost no better – achieving only a small victory related to the start date for calculation of the prejudgment interest.  The 2/3 DCA found substantial evidence supported the trial court’s decision, but remanded for prejudgment interest calculations to begin on March 23, 2017 instead of January 2014.  It further determined that the HOA had fashioned its appeal largely “as an attack on the factual findings of the trial court.”  Citing Waller v. Brooks (1968) 267, Cal.App.2d 389, 393, the 2/3 DCA stated that the HOA “misconceiv[ed] the function of an appellate court which is to review errors of law, and not to pass on questions of fact.”

            As to apportionment of the attorney fees, the 2/3 DCA found no abuse of discretion as Millennium’s causes of action were so intertwined, and involved a common core of facts which were directly related to enforcement of the governing documents, such that apportionment was impracticable.

Homeowner Associations: Adams Stirling Law Firm In Los Angeles Has An Excellent Summary Of Fee Shifting Provisions With Respect To HOA And Davis-Stirling Act Issues

Numerous Civil Code and CCP Provisions, As Well Case Law, Summarized By The Firm On Its Website.

            We would like to thank Adams Stirling, a Los Angeles law firm specializing in HOA issues, for its excellent summary of HOA and Davis-Stirling Act fees issues and case law, which we post verbatim below and which can be found on its Website.  We would note that the firm is headed by Adrian Adams and Hon. Larry Stirling (Ret.), who authored the Davis-Stirling Act legislation when he was a member of the California Legislature and before he was appointed as a judge (thereafter retiring and joining forces with Mr. Adams to form Adams Stirling).

            Thanks, Adams Stirling law firm for your synopsis below:

            American Rule. “With regard to an award of attorney fees in litigation, California generally follows what is commonly referred to as the ‘American Rule,’ which provides that each party to a lawsuit must ordinarily pay his or her own attorney fees.  The American Rule is codified in Code of Civil Procedure section 1021, which states in relevant part:  ‘Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .’”  (Tract 19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142.) 

            Pre-Litigation Legal Fees. Neither owners nor associations are entitled to legal fees incurred in a dispute that does not lead to litigation. For example, each side hires a lawyer and exchanges a series of letters with demands and counter-demands. If the matter is resolved or dies away, neither side is entitled to their attorney's fees. Civil Code 5975 only authorizes a prevailing owner to recover their reasonable attorneys’ fees and costs following the conclusion of a successful action (i.e. lawsuit)

            If, however, the dispute turns into litigation, the prevailing party is entitled to reasonable attorney's fees as determined by the court and depending on the nature of the dispute. The starting point for calculating attorney's fees begins with pre-litigation ADR. Because the amount of the award is discretionary with the court, the prevailing party could incur $50,000 in legal fees but be awarded only $20,000 or less by the court. Parties should never enter into litigation believing they will recover their legal fees. Recovery is always uncertain.

STATUTES: The following statutes provide for attorneys' fees and/or costs:

ADR costs		Civil Code §5955
Anti-SLAPP motion		Code of Civil Procedure §425.16
Assessment collection		Civil Code §5650(b), §5740, §5650(a), §5705(a), §5715(a), §5720(a),  §5685, §5658
Governing document enforcement		Civil Code §5975
Contract actions		Civil Code §1717
Escrow Disclosure violations		Civil Code §4540
Discriminatory CC&Rs		Civil Code §4225
Disputed charges		Civil Code §5658
Flags		Civil Code §4705(c)
Foreclosure		Civil Code §5730(a)
Inspection of records		Civil Code §5235
Managing agent		Civil Code §5380
Records inspection		Civil Code §5145
Satellite dishes		Civil Code §4725(d)
Small claims appeal		Code of Civil Procedure §116.780
Solar energy		Civil Code §714

CASE LAW

Marina Pacifica v. S.C. Fin. Corp. (2018). A party's failure to obtain its litigation objective does not automatically make the other party the prevailing party.

Artus v. Gramercy Towers (2018). Neither the language of the Davis-Stirling Act, nor the legislative history of the fee provision Artus invokes, evidences any intent on the part of the Legislature to depart from well-established principles that fees and costs are ordinarily not granted for interim success, and that the prevailing party is determined, and fees and costs awarded, at the conclusion of the litigation.

Retzloff v. Moulton Parkway Assn (2017). Former board members sued their association alleging the board was conducting business outside of meetings and failing to maintain and provide certain corporate records. Plaintiffs failed to attempt ADR as required by Civil Code §5950. The association demurred and the court sustained without leave to amend. As prevailing party, the association moved for attorneys' fees. The Court of Appeal reversed the lower court's award of attorneys' fees concluding that Civil Code §5235 does not authorize a court discretion to award fees to a prevailing association. A plain reading of “any costs” as used in section 5235(c) does not support the inclusion of attorney fees as costs. Section 5235(c) entitles a prevailing association to costs, not attorney fees and costs.

Almanor Lakeside Villas Owners Association v. Carson (2016). Even though the court struck down 90% of the fines levied by the association against and owner for a rental violation, the court decided the key issue was the association's right to enforce rules and impose fines for violations, thereby making it the prevailing party.

            The Davis-Stirling Act does not define “prevailing party” or provide a rubric for that determination. In the absence of statutory guidance, California courts have analyzed analogous fee provisions and concluded that the test for prevailing party is a pragmatic one, namely whether a party prevailed on a practical level by achieving its main litigation objectives. ( Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574 ( Heather Farms); Salehi, supra, at pp. 1153–1154.) The California Supreme Court implicitly has confirmed this test. In Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94, the court affirmed the award of attorney’s fees in an action to enforce a restrictive covenant under the Davis-Stirling Act, stating: “We conclude the trial court did not abuse its discretion in determining that the Association was the prevailing party … . On a ‘practical level’ 13 [citation], the Association ‘achieved its main litigation objective.’ ” (Ibid. [quoting Heather Farms, at p. 1574 and Rancho Santa Fe Assn. v. Dolan-King (2004) 115 Cal.App.4th 28, 46].)

Nellie Gail Ranch OA v. McMullin (2016). Failure to appeal a fee ruling deprives an appellate court of jurisdiction to decide the fee challenge.

Rancho Mirage Country Club HOA v. Hazelbaker (2016). An association's lawsuit to enforce a settlement agreement entered into during ADR is deemed an action to enforce the governing documents under the Davis-Stirling Act, which entitles the association to recover reasonable attorneys' fees.

Tract 19051 Homeowners Assn v. Kemp (2015). Prevailing owner can recover attorney fees under Civil Code section 5975(c) in a case brought by association against owner to enforce governing documents even though the court found the association didn’t exist. The Supreme Court held the plain reading of 5975(c) supports that the award of attorney fees is reciprocal in an action where the association brings the claim to enforce the governing documents regardless of whether the association exists. The recovery is based solely on the association’s claim to enforce the governing documents and not based on determining whether the association is a common interest development.

Grossman v. Park Fort Washington Assn. (2013). Normally, any attorneys' fees incurred prior to the filing of the complaint are not awarded. Here, the court concluded that the pre-litigation ADR process mandated by the Davis-Stirling Act is the actual start of litigation. Accordingly, it awarded attorneys' fees expended by the homeowner expended in pre-litigation ADR.

Salehi v Surfside III (2011). Susan Salehi sued her association alleging 10 causes of action. Three days before trial, she dismissed eight of her ten claims against the association. The association spent approximately $250,000 defending against her claims. Three days before trial, Salehi dismissed eight of her ten claims. The association subsequently sought recovery of the legal fees it incurred defending against Salehi's dismissed causes of action. The trial court denied the association’s request but the court of appeal reversed. The appellate court found that the association was entitled to recover attorneys fees from Salehi, reasoning that a party suing to enforce the CC&Rs must get their “ducks in a row” both procedurally and substantively before filing suit. Salehi had done neither.

That v. Alders Maintenance Assn (2012). That brought a frivolous election challenge. As the prevailing party, the association sought attorney's fees under the Davis Stirling Act. The award of attorneys' fees is allowable only when authorized by contract, statute or law. If a statute refers to the award of "costs and attorney's fees," attorney's fees are an item and component of the osts to be awarded and are allowable as costs. The court reviewed the statute (now Civ. Code 5145(b)) and concluded the statute did not authorize associations to recover attorney's fees.

Bear Creek Planning Committee v. Ferwerda (2011). If empowering language is provided for in the CC&Rs, architectural committees may adopt standards beyond those set forth in the CC&Rs, i.e., it can adopt new design standards related to the improvement or development of lots. However, a committee may not unilaterally establish an attorneys’ fees provision for itself. Attorneys’ fees must be reciprocal and contractual--the committee's fee provisions did not seek to clarify existing language in the CC&Rs. Rather, it was an inappropriate attempt by the committee to insert a new provision that bound homeowners without their approval. Nothing in the CC&Rs gave the committee the power to insert into their architectural standards an attorney fee provision that was never in the CC&Rs.

Parrott v. Mooring Townhomes Assn. (2003). Plaintiff sought a preliminary injunction against his association. When he failed to receive one, he dismissed his complaint. The court awarded the association attorneys' fees. A prevailing party is one who prevailed on a practical level.

Mount Olympus POA v. Shpirt (1997). An owner does not have the right to recover attorneys' fees under the Davis-Stirling Act if his HOA is a voluntary association of homeowners having no power to charge or collect assessments. Such associations do not fit the definition of a common interest developments under the Act.

Heather Farms HOA v. Robinson (1994). The court declined to adopt a rigid interpretation of the term "prevailing party" and, instead, analyzed which party had prevailed on a practical level. The court concluded that a a voluntary mutual dismissals as part of a global settlement does not create a prevailing party.

Homeowner Associations: Defendant Condo Owner Voluntarily Dismissed From Suit Against HOA And Condo Owner By Other Condo Owners Before Trial Improperly Denied Fee Recovery Under Both Davis-Stirling Act And Code Of Civil Procedure Section 1032(a)(4)

Suit Did Involve CC&Rs, And Defendant Did Prevail By Being Dismissed, Such That Reversal Means Defendant Condo Owner Will Get Some Fees On Remand.

            Fee entitlement and prevailing party determinations often are matters of law, as they were here where the pleadings and facts made a reversal of a fee denial – something which was directed by our local Santa Ana appellate court in Richardson v. Stevenson, Case No. G056112 (4^th Dist., Div. 3 Aug. 26, 2019) (unpublished).

            Of all things, this was a dispute challenging defendant condo owner’s successful HOA application to convert a window into a door, a decision challenged by another condo owner.  Plaintiff sued HOA and defendant for injunctive relief under the Davis-Stirling Act, not the CC&Rs directly (even though the claim arose from the CC&Rs).  Defendant condo owner was voluntarily dismissed from the action before trial and three years into the litigation for “tactical” reasons, leaving injunctive-based claims against the HOA.  The lower court denied defendant’s request for fees against plaintiff, not believing that plaintiff was suing under CC&Rs and not finding that defendant had prevailed because it was unknown whether the owner could convert window into a door.

            The 4/3 DCA, in an opinion authored by Presiding Justice O’Leary, reversed.    The first ground for denial did not hold up because the pleading showed that the CC&Rs were the basis for the suit (even though not directly sued upon), such that the Davis-Stirling Act was triggered because the case was a suit based on HOA “governing documents.”  Defendant also did prevail on two grounds:  (1) he was now a stranger to the case with the dismissal, which meant he achieved an important litigation objective to get out of the dispute; and (2) he prevailed under CCP § 1032(a)(4) which allows contractual attorney’s fees for non-contractual claims such as this suit under the Davis-Stirling Act.  (See Honey Baked Hams, Inc. v. Dickens, 37 Cal.App.4^th 421, 428 (1995).)

Homeowner Associations: Homeowners Were Not Catalysts For Easement Agreement Assumption, Because They Wanted A More Expansive Amendment

HOA Was Prevailing Party Under Easement Agreement Fees Clause, Awarded Its Fully Requested $51,460 In Fees. 

            In Lemley v. Aliso Homeowners Assn., Inc., Case No. B288789 (2d Dist., Div. 3 July 3, 2019; posted July 5, 2019) (unpublished), HOA and homeowners got entangled in an easement agreement dispute in which homeowners wanted specific performance/declaratory relief to enforce an amendment to the agreement, while HOA defended on the principal grounds of mootness because it recorded an assumption of obligations in the original easement agreement.  HOA won, was declared the prevailing party, and was awarded $51,460 in attorney’s fees under the easement agreement fees clause.  Homeowners appealed, claiming they were actually the prevailing parties as the catalyst for the HOA’s easement agreement assumption.  The appellate court affirmed the result below, determining that homeowners wanted an amendment, not an assumption, and that HOA did prevail by obtaining dismissal of homeowners’ suit.  (In fact, homeowners’ failure to appeal the prior dismissal on the merits cemented that they were not the catalysts for the assumption by the HOA.)

Homeowner Associations: Homeowner Prevailing In Unlawful Foreclosure Of Condo Unit Case Was Entitled To $434,000 In Damages And $720,000 In Attorney’s Fees

Both Civil Code Section 1354 (Now Section 5975) And CC&R Fee Clause Were In Play. 

            Yikes!  Talk about a change in fortune based on a prior appeal.  Homeowner finally won, obtaining damages and substantial attorney’s fees for hanging in there to the end.

            In Multani v. Castle Green Homeowners Assn., Case No. B278397 (2d Dist., Div. 7 May 28, 2019) (unpublished), HOA earlier won a summary judgment and $90,000 in attorney’s fees in connection with foreclosing on a HOA assessment lien.  However, that victory went away in an earlier appeal against the HOA.  Then, after a bench trial on remand, homeowners won—the lower court concluded that the HOA unlawfully foreclosed on an assessment lien by not giving a 90-day notice of the right to redemption in proper matter such that homeowner was entitled to $434,000 in damages for loss of the condo unit.  (The unit was sold at the assessment lien nonjudicial foreclosure for $20,200).  But that was hardly the end of the story.  Homeowner moved for fees under the Davis-Stirling Act fee shifting provision (former Civil Code section 1354, now section 5975) and the CC&Rs’ fees clause.  The lower court awarded them about $720,000 in fees as the prevailing party.

            Both the merits and fee rulings were affirmed on appeal.  What really sealed the deal for the appellate court was that the HOA argued the same bases for fee entitlement when winning them after the summary judgment motion—it could hardly shift course when the tide turned against it. 

Homeowner Associations, Private Attorney General, Section 1717: Defendant Homeowners Winning A Tree Dispute With Another Homeowner Neighbor Rightfully Denied Attorney’s Fees Under CC&Rs, Civil Code Section 1717, And Private Attorney General Statute

However, A Dissenting Justice Would Have Found Fee Entitlement Under CC&Rs And Section 1717.

           The next case, Shah v. Ross, Case No. B286783 (2d Dist., Div. 5 April 25, 2019) (unpublished), involved a situation where defendants/homeowner neighbors won a tree dispute initiated by fellow plaintiff homeowner. Defendants then sought fees under a CC&Rs fees clause, Civil Code section 1717 mutuality principles, and the private attorney general statute (CCP § 1021.5). The trial judge denied fees on all bases.

            A 2-1 majority of the 2/5 DCA affirmed, with a lengthy dissent by Presiding Justice Rubin.

            On a preliminary basis, the appellate court determined that the lack of a reporter’s transcript of the fee motion did not impede review because only legal construction of fee or statutory entitlement provisions was involved.

            The majority found that the CC&Rs fees clause did not apply to disputes between homeowners, but only a where the HOA was involved. They saw no reason to disturb reasoning to the same effect in Mount Olympus Property Owners Assn. v. Shpirt, 59 Cal.App.4^th 885, 893, 896 (1997). Section 1717 did not afford relief because mutuality only applied where there were putative persons who could be impacted by the fees clause, which was not the case. Finally, the private attorney general statute request properly was denied because the winning parties were vindicating their private interests in preventing a blocking of views by trees.

            Justice Rubin, in an 18-page dissent, believed that the CC&Rs were ambiguous such that fees were allowable in inter se homeowner disputes because certain provisions needed to be read together and other provisions where only the HOA was mentioned made no sense such that homeowner disputes had to be included within the ambit of the CC&Rs fees clause. He also did not like the analysis in Shpirt, which he felt was based on incomplete reasoning such that a “clean slate” approach was warranted. Lastly, Justice Rubin engaged in a section 1717 analysis by which he determined that it should be applied in this particular context based on amendments to the “parties” language in the statute some time ago.

Homeowner Associations: $19,233 In Attorney’s Fees And $815 In Litigation Costs To HOA Obtaining Injunction To Require Access To Condo Unit To Make Repairs Affirmed

HOA Satisfied Prelitigation Efforts To Resolve And Prevailed By Meetings Its Objectives.

            In Durant Towers Owners Assn. v. Winchester, Case No. B288966 (2d Dist., Div. 8 March 29, 2019) (unpublished), HOA sued defendant condo owner to obtain access to her unit in order to determine if water leakage from her unit was causing damage to a unit below. After ignoring efforts for voluntarily cooperating, HOA sued under the CC&Rs to obtain access to defendant’s unit. At an injunction hearing, defendant agreed to allow access on certain terms, but later reneged. HOA obtained injunctive relief, the repairs were eventually made, and the case was dismissed without prejudice. HOA moved for recovery of attorney’s fees and costs as the prevailing party against defendant, based on the Davis-Stirling Act’s fee-shifting provision for CC&R enforcement (Civil Code section 5975) as well as the CC&R fee provision itself. The lower court obliged, awarding HOA $19,233 in fees and $815 in costs.

            Defendant’s appeal was unsuccessful. She argued that HOA failed to exhaust administrative remedies, but that was rejected because (1) defendant thwarted voluntary efforts to gain access by the HOA, and (2) HOA’s certification of the need for injunctive relief in the complaint satisfied prelitigation efforts under Civil Code section 5950(a)(3). With respect to the claim that HOA did not prevail, it did obtain its main litigation objective to gain access and make repairs such that its voluntary dismissal did not change the fact it did meet its aims in the lawsuit.