Appellate Court Found No Basis Under HOA Or Section 1717, But Did Affirm The Small Award Not Challenged By The Other Side—Chastising Defendants For Their Realistic Assessment This Was A Small Claims Matter Undeserving Of Large Fees, But Then Requesting $675,000.
We have to say that our California intermediate appellate courts get interesting fees decisions to consider, some head scratching in nature but interesting nonetheless.
California Housing Finance Agency v. Rothman, Case No. D068480 (4th Dist., Div. 1 Oct. 23, 2015) (unpublished) is one of them.
There, prevailing defendants tried to recoup $675,000 in attorney’s fees under HOA/contractual fee shifting provisions, even though admitting the matter should have been litigated in small claims court. However, the lower court only awarded them $525 in fees under Civil Code section 1717.5, which allows fee recovery for book accounts.
The appellate court rejected prevailing defendants’ challenge to the fee award, finding no basis for entitlement under the HOA (Civil Code section 1354) or contractual (Civil Code section 1717) fee shifting provisions. However, it affirmed the $525 fee award under section 1717.5, only because the Agency never appealed—finding little basis for it in the record also but sustaining the award given no cross-appeal by the other side.
Here is what they had to said on the defendants’ argument this should have been brought in the small claims venue: “The Rothman Defendants assert in their opening brief that this case should have been brought in small claims court. They lament the fact it was filed in superior court. Despite admitting that the case did not concern a high dollar amount in potential damages, they asked the superior court for $675,765 in attorney fees. ‘It is elementary that attorney fees must be reasonable.’ (Civic Western Corp. v. Zila Industries, Inc. (1977) 66 Cal.App.3d 1, 16.) Simply based on the Rothman Defendants’ own arguments and the limited record before us, we struggle to understand how the Rothman Defendants could even begin to argue that such fees are reasonable in a case that they maintain should have been brought in small claims court.”