Trial Court Properly Denied Fee to Either Side, Says Court of Appeal.
Don’t assume that the prevailing party determination for an award of routine costs and attorney’s fees under Civil Code section 1717/fee-shifting statutes is the same. They do differ, as the next case demonstrates.
In Duclos v. Marina Pacifica Homeowners Assn., Inc., Case Nos. B213053/214116 (2d Dist., Div. 7 Mar. 25, 2010) (unpublished), Long Beach HOA and homeowner each won pieces of a special assessments donnybrook contest. HOA won summary adjudication on five claims, but homeowner won a bench trial on two claims by which he was awarded a permanent injunction and limited restitution of $7,500. The trial court denied homeowner his routine litigation costs and also denied HOA its attorney’s fee request. Each side appealed.
The appellate panel affirmed everything except reversing the part of the orders by which routine costs were denied to homeowner.
Homeowner did recover $7,500 in limited restitution, which was a “net monetary recovery” entitling him to litigation costs as matter of right. (See, e.g., Michell v. Olick, 49 Cal.App.4th 1194, 1198 (1996) [statutory directive of Code of Civil Procedure section 1032 is clear even though plaintiff prevailed on a single, insignificant claim among several unrelated and unmeritorious claims]; Chinn v. KMR Property Mgt., 166 Cal.App.4th 175, 188 (2008).) HOA alternatively argued that no costs should be allowed because homeowner could have obtained this award in a limited civil court case, which allowed the trial court discretion to deny costs. (Code Civ. Proc., § 1033(a).) The problem with that argument is that a permanent injunction cannot be obtained in a limited civil case, such that the provision was inapplicable. (Ytuarte v. Superior Court, 129 Cal.App.4th 266, 275 (2005).)
That brought the Court of Appeal to HOA’s claim that it should have been awarded attorney’s fees. At the outset, the trial court does have broad discretion to determine there was no prevailing party under Civil Code section 1717 when there was good news and bad news for both parties—as was the case here. (Ajaxo Inc. v. E*Trade Group, Inc., 135 Cal.App.4th 21, 58 (2005).)
HOA argued that Civil Code section 1354 entitled it to fees for enforcing governing documents (such as CC&Rs) against homeowners. However, homeowner actually prevailed on the governing document claims, with HOA only prevailing on a Davis-Stirling Common Interest Development Act enforcement claim (not an enforcement claim based on the governing documents). So, no dice to the fee arguments raised by HOA.
BLOG FAVORITE QUOTE BY THE TRIAL COURT—“This has become a fool’s errand that, although I’ve thrown some things out hoping that peace would break out, if your client is adamant he wants a merits ruling on this, he’ll get a merits ruling.”
