Fourth District, Division 3 Affirms Trial Court’s Finding That Neither Homeowner Nor HOA Prevailed for Purposes of Obtaining a Fee or Cost Award.
In a previous post (see May 17, 2008 post), we commented on how homeowner-homeowner association (HOA) disputes can be costly and can be financially devastating to the losing party (the homeowner, in the prior post). However, the denouement can end up with both sides bearing their own fees and costs. This frequently happens because lower courts determine that neither side prevailed. The “no winner” scenario happens to be the result in the case we discuss below, much to the likely chagrin of each side.
Pasternack v. Bear Brand Ranch Community Assn., Case No. G038572 (4th Dist., Div. 3 May 21, 2008) (unpublished) involved a homeowner dispute arising when the HOA maintained irrigation pipes on homeowners’ new property. At first, homeowner sued only for trespass, which had no basis for fee recovery. Later, homeowner amended to add a declaratory relief claim under Civil Code section 1354, which does have a fee recovery basis. HOA defended on the basis of a CC&R-created maintenance easement, which ultimately was defeated when the trial judge excluded such a theory as a matter of law at a later in limine motion hearing near trial. The trial judge encouraged the parties to settle, and they did just that but reserved the right to have the same judge determine which side was the prevailing party and what fees/costs should be awarded. (HOA paid homeowner $7,500 to resolve the trespass claim.)
Guess what happened? You guessed it based on the prior discussion—the trial judge decided neither side prevailed. Homeowner was not happy, claiming to have spent $413,983.50 on his lawyers. HOA was not happy, but only claimed having spent $28,122 in fees. Also, homeowner was denied recovery of routine costs because the trial judge determined homeowner’s claim involved costs not expressly authorized by statute or not reasonably incurred.
Homeowner appealed. Result on appeal? You guessed right again—affirmed.
The Court of Appeal did acknowledge that section 1354 was a predicate for an award of fees on homeowner’s declaratory relief claim and that a lawsuit settlement does not preclude one, necessarily, from claiming fees or costs as a prevailing party under either section 1354 or Civil Code section 1717.
However, Justice Fybel (writing for the unanimous appellate court), agreed with the “no prevailing party” determination by the lower court. The Court of Appeal found that the in limine motion ruling was only interim in nature and was not final for purposes of determining whether there was a prevailing party under the attorney’s fees statutes. (Slip Opn., at pp. 17-18.) Also, the appellate court found that homeowner failed to show why the routine costs were reasonably incurred under Code of Civil Procedure section 1032, an omission which will almost always be fatal on appeal.
At the end of the opinion, the appellate court came closely to expressing the view that the appeal was frivolous. It found that “[b]ut for the trial court’s motion in limine ruling, we would have granted the Association’s motion [for sanctions that the appeal indisputably has no merit].” (Slip Opn., p. 20.) This would have been even more sobering news for homeowner, who would have had to pay HOA’s attorney’s fees for appellate work. (PRACTICE POINTER—Appellate practice is an independent boutique area of the law; unless you have had experience with appeals before, the general practitioner or in pro per litigant is heading into dangerous waters.)