Statutory Language Did Not Encompass Losing Homeowners, So Concluded in a “Reluctant” Decision By the Appellate Court.
This next case demonstrates judicial restraint based on the appellate court’s construction of the governing statutory language. If they could have done otherwise, they would have — we surmise — but the panel left this “loophole” for the Legislature to address in the future.
In That v. Alders Maintenance Assn., Case No. G044799 (4th Dist., Div. 3 June 15, 2012) (certified for partial publication; fee discussion published), plaintiff homeowner lost a recall election challenge that the lower court found to be frivolous in nature, a merits determination affirmed on appeal. However, the lower court also awarded defendant HOA approximately $15,000 in attorney’s fees based on the unsuccessful frivolous action under Civil Code section 1363.09(b), which allows a prevailing homeowner member to recover reasonable fees and costs but only allows a prevailing HOA to recover “costs” in the event the action is to be found frivolous, unreasonable, or without foundation.
With reluctance, the appellate court reversed in a 3-0 opinion authored by Justice Moore.
Even though fees are recoverable as “costs” under CCP § 1033.5(a)(10), that only is dictated if fees are statutorily authorized, which brought the court back to section 1363.09(b). The problem is that if the Legislature had intended fees to be recoverable for frivolous actions, it could have drafted the ending language to say “reasonable fees and costs” rather than just “costs.” Also, other sections of the Davis-Stirling Act had very clear fee entitlement provisions, unlike the language in section 1363.09(b). The appellate court did agree that the Legislature should plug this “loophole.”
BLOG UNDERVIEW–There is also another lesson for all practitioners when seeking fees. State all the grounds for fee entitlement, and do it in the trial court or risk forfeiture on appeal. That happened here. HOA claimed on appeal that the CC&Rs (a contract) allowed for recovery of the fees, but the CC&Rs were never provided to the trial court such that the failure to raise/prove it meant this independent basis for fee recovery could not be considered.
Dr. Smith from “Lost in Space”: “Oh, the pain”