Fee Award to HOA Reversed Though Plaintiff’s Action Frivolous

   There was an interesting twist in a case brought by a homeowner against his HOA last week. The homeowner brought a civil action, asserting violations of association rules and the relevant statutory scheme. The trial court granted a second demurrer without leave to amend and granted the HOA attorney’s fees of approximately $15,000 pursuant to Civil Code section 1636.09(b). The trial court specifically found that the homeowner’s causes of action under Civil Code section 1636.9 were frivolous because the homeowner knew when the action was filed they were barred by the one-year statute of limitations. The appellate court reluctantly reversed the fee award in That v. Alders Maintenance Assn.

   The court found the specific language of section 1637.9(b) precluded an award of attorneys’ fees to the HOA. Subdivision (b) states:

“A member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (underscore added.)

  Since statutory attorney fee awards must be specifically authorized by a statute, the court simply looked to the statutory language to determine if a fee award was authorized to the prevailing HOA. Finding the language of the statute clear, the court held that a prevailing HOA is entitled to costs when the action is frivolous, but those costs do not include attorney’s fees.

 Tip: Make all contractual and statutory claims for fees in the trial court, with appropriate supporting evidence. The HOA argued it was entitled to attorney fees under the CC&Rs. The trial court rejected that argument because a copy of the CC&Rs was not provided to it, therefore there was no way to evaluate whether it included any provisions relating to elections, or that the action implicated any of the CC&Rs provisions. For the same reasons, the appellate court rejected this argument finding that the HOA failed to make the necessary evidentiary showing in the trial court.