Blog post by David C. Swedelson, California Condo Lawyer and HOA/ Community Association Attorney
We regularly handle cases where the owner has sued the association as a defense to their association’s claims against them. These cases sometimes go to trial as efforts to settle are not successful, and more often then not, the association prevails and recovers an award of attorneys’ fees. Often for substantial sums of money.
The case of Seltzer v. Eugene Burger Management Corp., an unpublished appellate court decision, is a perfect example as to why owners need to think twice before suing their association. Here, Seltzer filed a lawsuit against the association and its management. Seltzer, an attorney and owner of a condominium unit located in a Marin City condominium development known as The Headlands View Homes filed the lawsuit seeking, among other things, to enjoin what Seltzer alleged were unlawful actions on the part of the association’s management. The association then filed a cross-complaint alleging that Seltzer had damaged and destroyed trees without the association’s authorization (the trespass claims) and claims arising from Seltzer’s failure to pay assessments (the assessment claims).
This case should be a warning to homeowner litigants in homeowner vs. community association disputes that prevailing parties will be awarded attorneys’ fees, and they can be substantial, sometimes having a devastating impact on the owner that filed the lawsuit and often requiring a special assessment to all of the owners or increased regular assessments to pay for the fees and costs that are not awarded.
Seltzer, the homeowner, lost the case as against the defendants, and the association was awarded over $50,000 for unpaid homeowner assessments. The trial court awarded $304,464.63 in fees to defendants (other than the association) and to the association $236,976 in attorneys’ fees under Civil Code section 1354 (which allows for an award to the prevailing party in an action to enforce CC&Rs).
Homeowner/attorney Seltzer lost her appeal of the fee awards because the record clearly showed both her complaint and the association’s complaint involved enforcement of the CC&Rs, with the association also entitled to fees for collecting delinquent assessments under Civil Code section 1366(e)(1). While the trial court made significant reductions in the fee requests by the requesting parties, including a 25% reduction of association’s fee request primarily for what the court felt was “over litigating” the case, this type of judicial discount is not untypical and the fee award was still substantial.
Follow this link to read the entire appellate court decision. And although the decision was not published and cannot be cited as authority, it can still be used to demonstrate that the courts will award California community associations attorneys’ fees and costs in lawsuits seeking to enforce the association’s CC&Rs.
Comments? Questions? Write to David Swedelson via email: firstname.lastname@example.org