Defendant Not Entitled to Fees Where Contractually-Based Complaint Voluntarily Dismissed And Not Entitled to Costs Under Discretionary Prevailing Party Provision.
Homeowner association (HOA)/homeowner disputes have resulted in us doing a fair amount of posts under our category “Homeowner Associations.” Here is one more to add to the list, with a homeowner seeking $64,572.84 in fees and costs although he was both at the trial and appellate court levels.
In Leadwell Homeowners Assn. v. Deppen, Case No. B224870 (2d Dist., Div. 1 Mar. 22, 2011) (unpublished), HOA sued defendant homeowner to obtain compliance under the CC&Rs, obtaining a TRO and preliminary injunction. After obtaining this relief, HOA dismissed the case voluntarily. Homeowner then moved to recoup $64,572.84 in fees/costs ($23,900 identifed as attorney’s fees). The lower court decided that the dispute was contract based and that the voluntarily dismissal meant no fee recovery was allowable under the Santisas rule [see our Leading Cases]. Homeowner was also denied recovery of routine costs. Homeowner appealed.
Presiding Justice Mallano, on behalf of a 3-0 panel, affirmed.
The appellate court agreed that the crux of the dispute was contractually based, as shown by the pleadings and the fact the lower court issued injunctive relief under the CC&Rs. (Defendant had argued that the nuisance claim was a tort, so that it conferred a right to fee recovery under the CC&Rs fee clause, but the Court of Appeal decided that the dispute was really contractually anchored.) That meant the voluntary dismissal cut off any fee exposure for HOA.
With respect to costs, the lower court properly had discretion to determine that homeowner was not the prevailing party. HOA started with a couple of procedural challenges, namely, homeowner did not timely appeal and he was foreclosed from relief because his costs request was not on a Judicial Council costs memorandum form. The appellate court rebuffed the procedural challenges, determining that (a) homeowner did timely appeal because he did so within the 180-day time frame given that no notice of entry had been served, and (b) use of the Judicial Council form is not mandatory in nature. Nonetheless, homeowner did not win on the merits. Code of Civil Procedure section 1032(a)(4) governed, giving the trial court discretion to determine if there was a prevailing party where a party recovers other than monetary relief. Here, HOA obtained a TRO and a preliminary injunction such that it had achieved its main litigation objective– meaning, of course, that homeowner could be deemed not to have prevailed for costs purposes.