Voluntarily Dismissed Action Based on CC&Rs

Wednesday, September 27, 2017

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Voluntarily Dismissed Action Based on CC&Rs

Yields Attorney Fees to Prevailing Party—C.A.

By a MetNews Staff Writer

Plaintiffs who brought an action against their condominium homeowners’ association and several individual defendants, which was settled as to all defendants but one, and who then voluntarily dismissed their action against the hold-out defendant, are liable for her attorney fees as the prevailing party, the Court of Appeal for this district has held.

The decision by Div. Seven came Monday in an unpublished opinion by Justice John Segal. It reverses an order by Los Angeles Superior Court Judge Susan Bryant-Deason.

Bryant-Deason relied on Civil Code §1717(b)(2), which provides:

“Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.”

Segal noted that the nonconsenting defendant, Ada Wang, was seeking to vindicate her view of the requirements of the condominium covenants, conditions and restrictions (CC&Rs) relating to an alleged failure to maintain and repair common areas. Segal wrote:

“Section 1717, however, only applies to an ‘action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce the contract, shall be awarded....’ Because there is no attorneys’ fees provision in the CC&Rs (or in any other relevant document), section 1717 is inapplicable.”

The controlling statute, Segal said, was Civil Code §5975(c), relating to homeowners’ associations, which declares:

“In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”

No exception is set forth in that statute where there is a voluntary dismissal, Segal pointed out.

Even after the dismissal as to all defendants other than Wang, he said, the plaintiffs sought payment by her of up to $5,000.

The jurist observed that the plaintiffs “may now say they recovered the ‘lion’s share’ of what they sought in the case, but the record shows that, even after settling with the other defendants, they still wanted a ‘cub’s share’ from Wang.”

The opinion clears the way for Wang to resume seeking the $35,420 she claims is owed to her in attorney fees. The cumulative amount paid by the settling defendants was $45,000.

The case is Durack v. Wang, B276086.

Stephen C. Duringer and Edward L. Laird of the Duringer Law Group represented Wang while Christie Gaumer acted for the plaintiffs.

Laird commented yesterday:

“This decision demonstrates that in the HOA context, a homeowner or HOA who sues another homeowner cannot expect to be able to dismiss the action without consequence if it later turns out that the claims asserted are tenuous, the cost of litigation too much, or the claimant basically got what it wanted from other defendants. Here, the court held that Civil Code Section 5975 compelled a finding that a defendant who was dismissed before trial was the prevailing party for purposes of attorney fees.”

He continued:

“Significantly, the court found this to be a proper result even assuming that the dismissal didn’t have anything to do with the probability of success. There is no need to try and analyze who might have won at trial. By such dismissal, ‘on a practical level,’ the defendant obtained its litigation objectives. The same result generally follows even though the plaintiff may have been successful against other defendants. Moral, if you want to sue another homeowner in your HOA, do your due diligence and be ready to go the distance.”