Fourth District, Division Three Determines That Thrust of Lawsuit Was Not CC&R Enforcement and Lower Court Did Not Abuse Its Discretion In Finding No One Was the Prevailing Party For Purposes of a Fee Award.
Plaintiff and defendants are next-door neighbors in a South Orange County upscale residential common area project subject to CC&Rs. Plaintiff was upset because she allegedly approved defendants’ proposed renovation based on fraud: defendants intentionally concealed that the expansion of the upstairs master bedroom closet would significantly obstruct plaintiff’s ocean views. Plaintiff’s theory of the case was her consent was obtained by fraud, such that she would have objected to the renovation and the Architectural Committee would have denied permission to construct. Later, after construction started, plaintiff alleged that defendants and their workers caused damages based upon trespassing onto her property. She sued for intentional misrepresentation, injunctive relief and damages, and declaratory relief as to whether the CC&Rs contain view protection. Plaintiffs later amended to add trespass and nuisance claims. After some colloquy at a pretrial conference, plaintiff dismissed her declaratory relief count with prejudice after the trial judge indicated it was duplicative of the fraud claim. The lower court granted a nonsuit on the injunctive relief request. However, the jury awarded plaintiff $2,000 (presumably on the trespass/nuisance claims) for the reasonable costs to repair the physical damage to her side yard occurring as a result of defendants’ construction. Defendants sought attorneys’ fees as the prevailing party based upon Civil Code section 1354(c) (the fee-shifting provision relating to CC&R enforcement) or Civil Code section 1717 (the contractual fee-shifting provision predicated on fee recovery in CC&R provisions). The trial court found neither side prevailed, and defendants appealed.
In Dupont v. Leffler, Case No. G039566 (4th Dist., Div. 3 Nov. 5, 2008) (unpublished), our local Santa Ana appellate court affirmed. Defendants argued that plaintiff only prevailed on the trespass count, such that they were the "complete, unqualified" victors on the CC&R-based claims qualifying as prevailing parties for purposes of a fee award. (See Hsu v. Abbara, 9 Cal.4th 863, 875-876 (1995) [one of our Leading Cases].) Presiding Justice Sills, on behalf of a 3-0 panel, agreed with plaintiff that the gist of her action was not one to enforce the CC&Rs, but to seek redress for a fraud "bait and switch" or for trespass/nuisance damages resulting from defendants’ construction. (See Salawy v. Ocean Towers Housing Corp., 121 Cal.App.4th 664, 670 (2004).)
But the Court of Appeal went farther. Even if plaintiff’s action could be characterized as a CC&R enforcement action, the trial court still possessed discretion to determine the prevailing party under Civil Code section 1354(c). See Brawley v. J.C. Interiors, Inc., 161 Cal.App.4th 1126, 1137 (2008); Heather Farms Homeowners Assn. v. Robinson, 21 Cal.App.4th 1568, 1574 (1994). Based upon the record before it, the appellate panel could not conclude that the trial court abused its discretion in determining that neither side prevailed so globally so as to be deserving of a fee award.