Fees Properly Declined To Victorious Defendant Where One Suing Plaintiff Was Not A Legal Entity And The Other Plaintiff Was Not Sued Individually–First District, Division 5 Affirms Refusal To Award Fees in a Unique Case.
In our category “Cases: Homeowner Associations,” we previously have canvassed decisions awarding attorney’s fees to either HOAs or homeowners under Civil Code section 1354(c), a mandatory fee-shifting provision once a trial court exercises its discretion to determine who is a prevailing party. (Silver v. Boatwright Home Inspection, Inc., 97 Cal.App.4th 443, 449.) The next decision is rather sui generis—it involved a nonlegal entity (Irish Beach Clusterhomes Association Board of Governors) and its president (Mr. Moores) avoiding section 1354(c) fee exposure based primarily upon entity’s inability to sue and defendant’s failure to “prevail” against president individually.
Irish Beach Clusterhomes Assn. v. Farrell, Case Nos. A120147/A121049 (1st Dist., Div. 5 Jan. 21, 2009) (unpublished) involved a nonlegal entity and its president suing a homeowner couple for various breaches of the CC&Rs, and homeowner cross-complaining for declaratory/injunctive relief against the HOA’s board of governors and breach of fiduciary duty against HOA’s president. The trial court found against HOA/president, and awarded homeowners $1.00 for president’s breach of his fiduciary duties to the HOA. The lower court also denied attorney’s fees to suing homeowners.
Both sides appealed, with homeowners contesting the trial court’s refusal to assess fees against HOA and its president.
HOA/president’s appeal was doomed when everyone conceded that the HOA was not a legal entity capable of suing. This meant even the judgment against HOA and president in his agent capacity was void.
That squared attention directly on homeowners’ fee argument. Because HOA was not a legal entity, homeowners conceded that the court could not validly award fees against HOA. So, what about the failure to award fees against HOA’s president? “If Moores, acting as president of a nonexistent entity lacked the ability to sue or be sued, we conclude he also could not be ordered to pay attorney fees.” (Slip Opn., at p. 6.) Nothing in homeowners’ cross-complaint was directed at Moores individually (but only in a representative HOA capacity) such that this pleading could not anchor a section 1354(c) fee award.