When a lawsuit is filed to enforce a HOA’s governing documents (i.e., to enforce a provision of the HOA’s CC&Rs), the “prevailing party” in the lawsuit is entitled to an award of its attorney’s fees and costs. (Civ. Code § 5975(c); See also “Attorney’s Fees Recovery.”) This attorney’s fees provision of the Davis-Stirling Act “reflects a legislative intent that [the prevailing party] receive attorney fees as a matter of right (and that the trial court is therefore obligated to award attorney fees)” to the prevailing party. (Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1152.)
The Davis-Stirling Act does not define the term “prevailing party,” nor does it provide a metric or formula for making that determination. As a result, California Courts have “concluded that the test for prevailing party is a pragmatic one, namely whether a party prevailed on a practical level by achieving its main litigation objectives.” (Heather Farms HOA v. Robinson (1994) 21 Cal.App.4th 1568, 1574.) Where both sides achieve some positive net effect as a result of the court’s ruling, the determination of prevailing party is made by comparing the practical effect of relief attained by each party. (Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 775 (“Almanor”).) For example, being awarded only a fraction of the amount of fines initially sought by a HOA in a lawsuit to enforce its rules may provide some positive effect for the defendant homeowner. However, if the key issue in the lawsuit was the HOA’s right to enforce rules and to impose fines, the HOA may still be deemed the prevailing party entitled to recover its attorney’s fees. (Almanor.)
Related Case Law
- Almanor Lakeside Villas Owners Association v. Carson
(2016) 246 Cal.App.4th 761
[Attorney’s Fees; Prevailing Party] Where both sides achieved some positive net effect as a result of the court’s ruling, a prevailing party determination is made by comparing the practical effect of the relief attained by each; After resolving the issue of prevailing party in an action to enforce the governing documents, a trial court has no discretion to deny attorney’s fees.
- Heather Farms Homeowners Association v. Robinson
(1994) 21 Cal.App.4th 1568
[Attorney’s Fees; Prevailing Party] The determination as to who is the “prevailing party” entitled to its attorney’s fees under the Davis-Stirling Act is based on the court’s analysis of which party prevailed on a practical level. When that determination is made, the court’s ruling should be affirmed on appeal absent an abuse of discretion.
- Salehi v. Surfside III Condominium Owners Association
(2011) 200 Cal.App.4th 1146
[Attorney’s Fees; Prevailing Party] A HOA is deemed a prevailing party entitled to recover its attorney’s fees where the outcome of the lawsuit results in the HOA realizing its litigation objectives on a practical level.
Recovering Pre-Litigation Attorney’s Fees in HOA Disputes – Published on HOA Lawyer Blog (March, 2013)
Attorney’s Fees are Recoverable to Enforce Settlement Agreement Reached in ADR – Published on HOA Lawyer Blog (November, 2016)
Clarifying When a HOA may be Deemed the ‘Prevailing Party’ in an Enforcement Suit – Published on HOA Lawyer Blog (January, 2017)