In Rancho Mirage County Club Homeowners Association v. Hazelbaker, (2016) 2 Cal.App.5th 252, the court of appeal affirmed a trial court award of attorneys’ fees to an HOA in a lawsuit filed to enforce the terms of a settlement agreement with a homeowner. The homeowner applied for and received approval from the HOA’s architectural review committee to make certain improvements to a patio area, however, the HOA contended that the homeowner made improvements that exceeded the scope of the approval and which would not have been approved had they been included in the application.
Pursuant to the mandatory alternative dispute resolution process included in the Davis-Stirling Act (Civil Code section 4000 et seq.), the HOA and the homeowner participated in a mediation. The mediation resulted in a settlement agreement that required the homeowner to make certain changes to its patio improvements within 60 days, and provided for a special assessment to be imposed on the homeowners to cover the HOA’s attorneys’ fees. When the homeowner failed to comply, the HOA filed a lawsuit seeking specific performance of the settlement agreement. The parties then reached another agreement about the modifications to the patio, but the parties could not agree on who should pay attorneys’ fees. Thus, the case proceeded to trial on the issue of whether the homeowner should pay the HOA’s attorneys’ fees pursuant to Davis-Stirling’s attorneys’ fee-shifting provision (Civil Code section 5975(c)). Section 5975(c) provides that in any “action to enforce the governing documents” of a common interest development, the losing party must pay the prevailing party’s attorneys’ fees. In this case, the homeowner argued that the lawsuit was not brought to enforce the CC&Rs, but to enforce the settlement agreement. The trial court disagreed, and awarded the HOA $19,000.00 in attorneys’ fees. The appellate court affirmed the trial court judgment, finding that both the mediation process and the litigation seeking to enforce the settlement agreement were “actions” taken to enforce the terms of the CC&Rs, and that the HOA was ultimately successful in achieving that goal.
©2016 Miles J. Dolinger. This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship.
Miles Dolinger
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