Fee Basis Existed and Fees Were Reasonable Given HOA’s Vigorous Litigation In The Matter.
Homeowner and HOA disputes are generally contentious and vigorous in nature; the problem is that the winner oft times “gets the spoils,” meaning a large fee recovery even for a victory that is maybe not that major.
The end result in Murphy v. Anaheim Hills Planned Community Assn., Case Nos. G050817/G050912 (4th Dist., Div. 3 Jan. 14, 2016) (unpublished) illustrates this vividly, authored by Justice Ikola on behalf of a 3-0 panel.
There, some homeowners challenged that a quorum was not present for an HOA director election, with homeowners winning. They then moved for recovery of attorney’s fees to the tune of $208,382.50 based on a $475 hourly rate. The trial judge awarded $147,595 based on a $350 hourly rate.
HOA’s challenges to the merits lost, as well as its challenges to the fee award.
First of all, there was a fee entitlement basis to the award. It was Civil Code section 5975, which allows for fee recovery with respect to enforcing CC&Rs. The appellate court found no difficulty finding this was the situation, with the election procedural statute simply being a vehicle to CC&R enforcement. (Accord, Kaplan v. Fairway Oaks HOA, 98 Cal.App.4th 715, 720 (2002).)
Second, the trial judge did not abuse his discretion in finding homeowners prevailed. Although one may have to wait and see what the pragmatic result of the “win” is, homeowners certainly voided the election and HOA’s subsequent postjudgment actions cannot attempt to nullify the significance of the past relief obtained by homeowners.
Third, the trial judge did factor in the failure to seek ADR, but this did not dispositively impact the fee award in this situation.
Finally, the amount of the fee award was not facially shocking in nature given that HOA litigated like crazy with resolve all along the way.