All This Over Short-Term Rental Regulations Involving A Little Over $10,000 In Total Delinquencies.
This next case is somewhat frightening for all litigants and practitioners—no matter what substantive areas you practice in. It does echo our “Mission Statement,” which we have referenced many times but will not boar our steady readers with again. [See the “Mission Statement” on our home page if you are not already familiar with it.] Attorney’s fees and costs recovery can be the “alpha and omega” in litigation, especially if it hits a prevailing party hard (obtaining fees or not obtaining them), it does not give a prevailing party what that party’s expectation are, or it makes both parties bear their own fees and costs—or permutations of the above, mainly to the chagrin of the prevailing party unless the court awards all or substantially all of the requested fees/costs to the victor.
Well, the victor in the next case did get the spoils, which can happen in homeowner association – homeowner disputes.
What occurred in Watts v. Oak Shores Community Assn., Case No. B240337 (2d Dist., Div. 6 Mar. 2, 2015) (unpublished) is that three absentee owners of 2 different common interest development lots brought a suit challenging certain regulations allowing assessments for lots involving absentee owners renting to short-term renters. HOA made some assessments against the plaintiffs, a little over $10,000, resulting in a lawsuit against it and a resulting cross-suit targeted at the plaintiffs. HOA won, but here is the wowie factor: the trial court awarded HOA attorney’s fees of $1,180,646.50 under Civil Code former section 1354(c) and costs of $27,730. (Former section 1354(c) has been renumbered, and is now Civil Code section 5975(c).)
Plaintiffs’ appeal was unsuccessful. Although not challenging the validity of the governing documents per se, plaintiffs did challenge enforcement of the governing documents, which qualifies for fee shifting. The appellate court rebuffed the argument that the fee award was punitive, because plaintiffs never specifically contested any work entries and they could have avoided the whole controversy by paying the relatively small amount of assessments in the first place—maybe another way of saying, “you brought this all on yourselves.”
BLOG UNDERVIEW—One wonders if the ADR resolution procedures, specifically mediation, were pursued here, although the amount was a little over the $10,000 small claims jurisdictional limit. (Civ. Code, § 5930.)