Homeowner Association: Does An Action To Enforce A Settlement Agreement Out Of A Mandatory HOA ADR Provision Also Enforce CC&R Documents Under The Davis-Stirling Act?

You Betcha, Said 4/2 DCA In Recent Opinion Affirming Noncompliance With Settlement Agreement And Fee Recovery Of About $19,000 Against Homeowners.

     Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, Case No. E063272 (4^th Dist., Div. 2 Aug. 9, 2016) (published) involved a situation where an HOA and homeowners reached a mediated written settlement agreement under mandatory ADR Davis-Stirling Act provisions relating to patio improvement modifications. The lower court determined homeowners breached the agreement and awarded attorney’s fees of about $19,000 to HOA (well short of the approximate $32,000 requested by HOA).

     The 4/2 DCA affirmed the fee award on appeal. The critical legal issue was whether a settlement agreement resulting from the mandatory Davis-Stirling ADR process was an “action to enforce the governing documents” under the appropriate fee-shifting statute. It was, according to the appellate court, otherwise “the [ADR] process would discourage such resolutions, and encourage gamesmanship.” (Slip Opn. at p. 8.)