HOA, on Remand, Will Get to Renew Request for $252,767 in Defense Fees.
Here is an interesting one where an appellate court reversed the denial of a fee award as an abuse of discretion. The reason: HOA clearly prevailed when plaintiff dismissed 8 of 10 claims (some of them based on a fee-shifting statute) such that plaintiff cannot have claimed to prevail no matter what the ending on the two remaining claims.
You know we were going to love this one when it began this way:
“A party contemplating litigation to enforce the covenants, conditions, and restrictions (CC&Rs) of a condominium project should get the ‘ducks in a row.’ That is to say, such party should be ready to go forward procedurally and prove its case substantively. Failure to do subjects the losing party to an award of attorney fees.”
In Salehi v. Surfside III Condominium Owners’ Assn., Case Nos. B224263/B226400 (2d Dist., Div. 6 Nov. 14, 2011) (certified for publication), plaintiff (an attorney herself, in pro per) sued HOA for failure to maintain/repair the condo project and failure to maintain an adequate replacement reserve fund. On the eve of the trial in this one, plaintiff received an adverse decision on behalf of a client in a similar suit against the HOA. Although her expert had a serious heart condition, plaintiff opted to dismiss 8 of 10 claims rather than seek a trial continuance. Only fraud/misrepresentation claims remained, and plaintiff successfully obtained a trial continuance of these claims. HOA moved to recoup $252,767 in fees for the eight counts voluntarily dismissed by plaintiff. The trial court denied the request, reasoning that the eight count dismissals were motivated by plaintiff’s inexperience and poor decisions rather than any implied concession to the merits of HOA’s case.
HOA appealed, obtaining a reversal and chance to recoup fees on remand (aside from recouping costs on appeal as the winner).
The appellate court, in a 3-0 decision written with panache by Justice Yegan, found the fee denial was an abuse of discretion. Simply put, plaintiff did not prevail–she was not ready to proceed and dismissed out of faulty reasoning that should not impede HOA from obtaining fees under a mandatory CC&R enforcement fee shifting statute (Civil Code section 1354). Plaintiff did not “practically” prevail and certainly did not achieve her litigation objectives.
As an underview, Justice Yegan did observe that plaintiff never claimed that the fee award request was premature based on the pendency of the other two claims. However, the appellate court did point out “that prudence may dictate that the trial court postpone ruling on an attorney fees request until all causes of action have been resolved.”