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is shown in Loeffler v. Trabuco Highlands Community Association, Case No. G059753 (4th Dist., Div. 3 June 7, 2022) (unpublished).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!