Fourth District, Division One San Diego Appellate Court Affirms $127,000 Trial Costs/Fee Award Against Losing Homeowner—And Assesses Appellate Costs Against the Homeowner.
As Voltaire has been cited as saying, “I have only been ruined twice in my life. Once, when I sued and won. The other, when I sued and lost.” The result in a recent decision from the San Diego Court of Appeal underscores this message in bold fashion.
In homeowner association (HOA)-homeowner disputes, attorney’s fees are awarded through two primary avenues: (1) Civil Code section 1354, subd. (c); and (2) written fee clauses in CC&Rs. A losing homeowner got hit hard in a recent published decision. Harvey v. The Landing Homeowners Assn., Case No. D050263 (4th Dist., Div. 1 April 4, 2008, cert. for pub. on April 30, 2008) involved a homeowner challenging an HOA’s Board’s decision to allow certain homeowners to use inaccessible common area attic space for storage purposes. The homeowner lost this challenge both in the lower and appellate courts.
The result was devastating, unless the homeowner is extremely wealthy. The lower court awarded the defense, as prevailing parties, $10,220.46 in routine costs and $116,794.30 in attorney’s fees. But there was more. In affirming, the Court of Appeal ordered that the defense is entitled to recovery of appellate costs, which includes attorney’s fees allowable by statute or by contract.
Because these results can and do occur, a homeowner needs to watch his/her pocketbook very carefully in deciding whether it makes sense to challenge discretionary HOA decisions.