Would amend Civil Code § 5100 to exempt HOAs from having to comply with the Davis-Stirling Act’s balloting procedures where an election of directors is uncontested.
Current Status: Dead
FindHOALaw Quick Summary:
The Davis-Stirling Act currently requires HOA board elections to be conducted by secret ballot in accordance with the procedures set forth in Civil Code Section 5100 et. seq. (See “Elections Requiring Secret Ballots.”) AB 1426 (Irwin) would amend Section 5100 in order to exempt HOAs from having to comply with those procedures where an election of directors is “uncontested.” An “uncontested” election would be defined as an election where the number of candidates, including write-in candidates, does not exceed the number of directors to be elected at that election and the HOA has declared the election to be uncontested.
As currently proposed, AB 1426 would allow for an election to be declared uncontested if all of the following requirements are met: the election rules have been adopted and complied with, all declared candidates were nominated before the deadline for nominations, the inspector of elections has informed the board that the number of candidates does not exceed the number of directors to be elected, the board votes in open session to declare the election is uncontested after a hearing during an open board meeting where members are able to make objections, and the board provides general notice to the membership at least twenty (20) days before that board meeting. The notice must include the date, time, and place of the meeting, the board’s intention to vote to declare the election of directors is uncontested, the names of all candidates who will be declared elected if the board declares the election is uncontested, and the right of any member to attend the meeting to object to the board declaring the election uncontested before the board votes on the matter. The names of the candidates, the general notice, any objections, and the board vote shall be recorded in the meeting minutes. If the association’s governing documents provide for write-in votes, the association shall allow fifteen (15) days for a write-in candidate to submit his or her name to the inspector of elections. In the event one or more write-in candidates are timely submitted, which results in the total number of candidates exceeding the total number of directors to be elected, an election shall be held. If, after the 15 day period, the total number of candidates still does not exceed the total number of directors to be elected, the uncontested election results shall be sealed and become effective immediately. If an association’s governing documents do not provide for write-in votes, then the association must provide at least 15 days general notice of the self-nomination process.
This bill would also amend Civil Code § 5105 to provide general notice to the membership of the election and the nomination procedures (the “Call for Candidates”), at least sixty (60) days prior to any election of directors. Any member who is qualified, in accordance with the governing documents, shall not be denied the right to vote or to be a candidate for the board. This bill would amend Civil Code § 5145 to allow for a cause of action against the association for violation of rules required by Section 5105.
To read the current text of AB 1426, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 1426 as it progresses through the Legislature.
Would impose a fee of $75 to be paid at the time of recording of every real estate document, including association governing documents, and collection documents. Would increase the cost to a delinquent homeowner attempting to resolve the debt to the association.
Current Status: Chaptered
FindHOALaw Quick Summary:
Under existing law, there are programs providing assistance for emergency housing, multifamily housing, home ownership for very low and low-income households, and down payment assistance for first-time buyers. SB 2 (Atkins) would add Government Code § 27388.1 enacting the “Building Homes and Jobs Act.” The bill would make legislative findings and declarations relating to the need for establishing permanent, ongoing sources of funding dedicated to affordable housing development.
The bill would impose a fee of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded. This would include, but is not limited to, the following: deed, grant deed, trustee’s deed, request for notice of default, abstract of judgment, notice of default, assessment lien, release of lien, easement, notice of trustee sale, notice of completion, mechanic’s lien, maps, and CC&Rs. The fee shall be reduced, so that the fee, together with any charges or recording fees, shall not exceed a per parcel maximum charge of $225. Increasing the fees on recording documents that are generated in connection with an assessment delinquency (i.e., an assessment lien) will result in increased costs for the delinquent homeowner, as those fees would be incorporated into the delinquent homeowner’s debt pursuant to Civil Code Section 5650. (See “Collection Fees & Costs.”)
The bill would require that revenues from this fee, after deduction of any actual and necessary administrative costs incurred by the county recorder, be sent quarterly to the Controller for deposit in the Building Homes and Jobs Fund. The bill would provide that moneys in the fund may be expended for supporting affordable housing, home ownership opportunities, and other housing-related programs, as specified. This bill would declare that it is to take effect immediately as an urgency statute.
**UPDATE: SB 2 was signed by the Governor on September 29, 2017. Its changes to the law become operative immediately.
Would require the association to verify its janitorial service provider maintains a current and valid registration. HOAs which contract with unregistered and unlicensed janitorial contractors are subject to fines.
Current Status: Chaptered
FindHOALaw Quick Summary:
This bill would add Part 4.2 (commencing with Section 1420) to Division 2 of the Labor Code to require every janitorial business to register annually with the Labor Commissioner, and would prohibit an employer from conducting business without registration, and would authorize the commissioner to revoke a registration under certain circumstances. The bill would establish civil fines for specific violations of its provisions. HOAs which contract with an unregistered janitorial service may be subject to a civil fine of not less than $2,000 nor more than $10,000 in the case of a first violation, and a civil fine of not less than $10,000 nor more than $25,000 for a subsequent violation.
**UPDATE: AB 1978 was signed by the Governor on September 15, 2016. Its changes to the law will become operative on July 1, 2018.
(a) Notwithstanding any other law, any person shall be granted access to a gated community for a reasonable period of time for the sole purpose of performing lawful service of process or service of a subpoena upon displaying a current driver’s license or other identification, and one of the following:
(1) A badge or other confirmation that the individual is acting in his or her capacity as a representative of a county sheriff or marshal, or as an investigator employed by an office of the Attorney General, a county counsel, a city attorney, a district attorney, or a public defender.
(2) Evidence of current registration as a process server pursuant to Chapter 16 (commencing with Section 22350) of Division 8 of the Business and Professions Code or of licensure as a private investigator pursuant to Chapter 11.3 (commencing with Section 7512) of Division 3 of the Business and Professions Code.
(b) This section shall only apply to a gated community that is staffed at the time service of process is attempted by a guard or other security personnel assigned to control access to the community.
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.)
[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.
Mellen Law Firm, Matthew David Mellen and Sarah Adelaars for Defendants, Cross-complainants and Appellants.
Gagen, McCoy, McMahon, Koss and Richard C. Raines for Plaintiff, Cross-defendants and Respondent.
OPINION
[*765]
GROVER, J.—The Almanor Lakeside Villas Owners Association (Almanor) is the homeowners association for the common interest development where appellants James and Kimberly Carson own properties. Almanor sought to impose fines and related fees of $19,979.97 on the Carsons for alleged rule violations related to the Carsons’ leasing of their properties as short-term vacation rentals. The Carsons disputed both the fines and Almanor’s authority to enforce those rules, which the Carsons viewed as unlawful and unfair use restrictions on their commercially zoned properties. Almanor sued, contending that its enforcement of rules against the Carsons was proper under governing law and the covenants, conditions and restrictions (CC&Rs) for the development. The Carsons cross-complained for breach of contract, private nuisance, andintentional interference with prospective economic advantage. The Carsons contended their properties were exempt based on contract and equitable principles and argued Almanor’s actions amounted to an unlawful campaign to fine them out of business.
Following a bench trial, the court ruled against the Carsons on their cross-complaint but also rejected as unreasonable many of the fines that Almanor had sought to impose. The court upheld a subset of the fines pertaining to the use of Almanor’s boat slips and ordered the Carsons to pay Almanor $6,620 in damages. On the parties’ competing motions for attorney’s fees, the court determined Almanor to be the prevailing party and awarded $101,803.15 in attorney’s fees and costs.
On appeal, the Carsons challenge the disposition of their cross-complaint and the award of attorney’s fees in favor of Almanor. The Carsons contend that uncontroverted evidence supported a finding in favor of their breach of contract cause of action because they paid Almanor $1,160 in fines that the court ultimately disallowed. The Carsons also contend that the trial court abused its discretion when it deemed Almanor the prevailing party despite having disallowed amajority of the fines it sought to impose. The Carsons also challenge the amount of the attorney’s fees award in light of Almanor’s limited success at trial. Almanor responds that the Carsons have waived any appeal of alleged error in the court’s finding on damages because they failed to raise the issue in response to the trial court’s proposed statement of decision. As to the award of attorney’s fees, Almanor argues that the court correctly determined it to be the prevailing party and did not abuse its discretion in awarding Almanor’s full fees. For the reasons stated here, we will affirm the judgment as to the Carsons’ cross-complaint, the determination of Almanor as prevailing party, and the award of attorney’s fees.
[*766]
I. FACTUAL AND PROCEDURAL HISTORY
A. History of the Properties and Underlying Dispute
The Kokanee Lodge and Carson Chalets are located within the Almanor Lakeside Villa development on Lake Almanor in Plumas County.1 Almanor is a homeowners association operating under the Davis-Stirling Common Interest Development Act (Davis-Stirling Act), now codified at sections 4000 through 6150 of the Civil Code (see Civ. Code, former §§ 1350–1376). The lodge and two chalets (the properties) are among only a few lots in the Almanor development that accommodate commercial use; the development otherwise is strictly residential. The properties’ commercial designation stems from the historic use of the lodge, which preexisted the subdivision and operated as a hunting, fishing, and vacation lodge.
The Carsons purchased the properties in 2001 and 2005 for use as short-term vacation rentals. The properties are subject to the CC&Rs of the Almanor development. As relevant to this appeal, section 4.01 of the CC&Rs designated certain lots, including the properties, that could be utilized for commercial or residential purposes. Section 4.09 prohibited owners from using their lots “for transient or hotel purposes” or renting for “any period less than 30 days.” Section 4.09 also required owners to report any tenants to Almanor’s board of directors by notifying the board of the name and address of any tenant and the duration of the lease.
In approximately 2009, the Almanor board changed composition and began to develop regulations to enforce the CC&Rs. By way of example, the 2010 rules sought to enforce section 4.09 of the CC&Rs to limit rentals to a minimum of 30 days. The 2011 and 2012 rules exempted the commercial lots from the 30-day rental restriction but maintained the requirement to provide a copy of any rental agreement to the association seven days before the rental period. The rules also purported to regulate other aspects of association life affecting the properties, such as parking, trash storage, use of common areas, and issuing decals for any boats using Almanor boat slips. And they set a schedule of fines for violations.
The Carsons believed their properties were exempt from the use restrictions of the CC&Rs, including the section 4.09 restriction on short-term rentals and the related reporting requirements. Several historic factors supported this belief, including that the Carsons had operated the properties as a short-term vacation rental business for many years. The Carsons similarly did not believe that the rules adopted by the board in 2010, 2011, and 2012 applied to their properties.
[*767]
Although the Carsons initially tried to comply with the renter reporting requirements, they continued to insist that section 4.01 of the CC&Rs and the long-established commercial status of the properties exempted them from the use restrictions and related rules. The board issued its first fines against the Carsons in September 2010, and continued to fine theCarsons throughout 2011 and 2012 for a wide range of purported violations, which the Carsons disputed.
The Carsons had stopped paying homeowners association dues on the properties for about two years, for reasons unrelated to the dispute over fines. In June 2012, the Carsons paid $14,752.35 toward delinquent dues on the properties, instructing that all of the money be applied to unpaid dues, not to the disputed fines. They stated in writing that the lump payment brought them current on dues. At trial, the parties disagreed whether the June 2012 payment actually covered the balance of dues that the Carsons owed. According to the Carsons, Almanor improperly applied $1,160 of the payment toward the fines imposed in 2011. Almanor insisted that a balance of unpaid dues remained and was reflected on the following months’ bills to the Carsons, along with the unpaid fines, attorney’s fees, and accruing interest.
B. Trial Court Proceedings
In its trial brief, Almanor estimated that the Carsons owed about $54,000 in dues, fees, fines and interest. Having cross-complained for damages and equitable relief based on breach of contract, private nuisance, and intentional interference with prospectiveeconomic advantage, the Carsons sought to establish that Almanor’s imposition of fines was “totally unlawful,” arbitrary and unfair, and reflected an effort to try to “fine the Carson’s [sic] business out of existence.” They argued that the “CC&Rs clearly do not contemplate the commercial businesses that sit on the subdivision’s land. In fact, these commercial lots are exempt by contract, based on principles of waiver, and by public policy.” The Carsons asserted that they “have been nearly put out of business and, even if Cross-Defendant’s conduct halts now, they will have immense lost income for the next 5–10 years.”
After a bench trial, the court issued its tentative decision. It concluded that the 30-day minimum rental restriction imposed by section 4.09 of the CC&Rs presented an “obvious conflict” with section 4.01, which “expressly allow[ed] the Carsons to use their lots for commercial purposes (presumably including lodging, since the properties are, in fact, lodges).” Citing Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 386 [33 Cal. Rptr. 2d 63, 878 P.2d 1275] (Nahrstedt), the trial court determined that it would be unreasonable to strictly enforce the absolute use restrictions against the Carsons. It explained: “Given the conflict between Section 4.01 and 4.09, the [*768] general rule espoused in Nahrstedt, that a use restrictionin an association’s recorded CC&Rs is presumed to be reasonable and ‘will be enforced uniformly against all residents of the common interest development,’ should not apply.” The court noted, however, that it did “not … accept the Carsons’ argument that the conflict completely eliminates Almanor’s ability to impose reasonable use restrictions on the Carsons’ lots, consistent with the Carsons’ right to use their lots for commercial lodging purposes.”
Of the fines imposed in 2010, 2011, and 2012, the court concluded only the fines pertaining to the nonuse of Almanor’s boat decals were reasonable. Those fines amounted to $6,620, including late charges and interest. The court did not find adequate support for Almanor’s claim that the Carsons continued to owe unpaid dues. As to the Carsons’ cross-complaint, the court found they had not proven by competent evidence that Almanor’s alleged breaches of the CC&Rs caused damages or resulted in discernible lost profits.
The Carsons requested a statement of decision, asking whether they had suffered damages based on a former renter’s decision not to return to the properties after alleged mistreatment by Almanor board members, and whether violationsrelating to boat slips and decals had been properly imposed. The court issued a proposed statement of decision, to which neither party responded, followed by a final statement of decision and judgment. The final statement of decision was consistent with the tentative decision and repeated the court’s findings regarding the applicability of reasonable use restrictions to the Carsons’ properties. On the cross-complaint, the court concluded that even assuming Almanor had breached the CC&Rs, the Carsons had not proven damages. The Carsons were ordered to pay $6,620.00 in damages to Almanor, and they received nothing on their cross-complaint.
C. Cross-motions for Attorney’s Fees and Costs
The parties moved for attorney’s fees and costs pursuant to the fees provision of the Davis-Stirling Act, Civil Code section 5975. Civil Code section 5975 awards attorney’s fees and costs to the prevailing party in an action to enforce the CC&Rs of a common interest development.
Each side argued it was the prevailing party under the statute. Because the statement of decision confirmed that the properties’ commercial zoning did not preclude reasonable use restrictions in the CC&Rs, Almanor argued that it had achieved one of its main litigation objectives. Almanor also argued that having prevailed on a portion of the fines claimed, an attorney’s fees award was mandatory under the Davis-Stirling Act.
The Carsons asserted that they had achieved their main objective, which was to deny Almanor the financial windfall it sought and to establish that thefines were unreasonable and imposed a severe and unfair burden on their lawful, commercial use of the properties. They also argued that monetarily, Almanor had prevailed as to only $6,620 out of $54,000. The Carsons asserted that this net monetary recovery was insufficient because they had largely prevailed on the pivotal issue at stake. Both sides challenged the other’s request for fees as unreasonable and excessive.
The trial court held a hearing and took the motions under submission. In a brief written order, it deemed Almanor the prevailing party. The court granted Almanor’s motion for $98,535.50 in attorney’s fees and $3,267.65 in costs and denied the Carsons’ motion. The court annotated the final judgment to reflect the $101,803.15 in attorney’s fees and costs, in addition to the $6,620 in damages.
II. DISCUSSION
The Carsons’ appeal presents three distinct issues. We first considerwhether the trial court erred in disposing of the Carsons’ cause of action for breach of contract. We then consider the parties’ competing claims for attorney’s fees and whether the trial court erred in deeming Almanor the prevailing party. Last we consider whether the trial court abused its discretion in awarding Almanor its full attorney’s fees.
A. Disposition of the Carsons’ Cause of Action for Breach of Contract
The Carsons challenge the trial court’s determination that they failed to prove damages for their breach of contract cause of action. Almanor argues that the Carsons waived any alleged error regarding contract damages by failing to raise the issue in response to the court’s tentative decision.
Standard of Review
On appeal from a determination of failure of proof at trial, the question for the reviewing court is “‘whether the evidence compels a finding in favor of the appellant as a matter of law.’” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 466 [126 Cal. Rptr. 3d 301] (Sonic).) Specifically, we must determine “‘whether the appellant’s evidence was (1) “uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.”’” (Ibid., quoting In re I.W. (2009) 180 Cal.App.4th 1517, 1527–1528 [103 Cal. Rptr. 3d 538].) We are also guided by the principle that the trial court’s judgment is presumed to be correct on appeal, and we indulge all intendments and presumptions in favor of its correctness. (In re [*770] Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133 [275 Cal. Rptr. 797, 800 P.2d 1227] (Arceneaux).)
Waiver
(1) Almanor contends the Carsons failed to preserve for appeal the issue of damages from fines paid, which according to Almanor is actually a claim for offset.2Almanor points to Arceneaux, in which the California Supreme Court clarified the procedural basis for the presumption on appeal that a judgment or order of a lower court is correct. (Arceneaux, supra, 51 Cal.3d at p. 1133.) The court in Arceneaux held that pursuant to Code of Civil Procedure section 634,3 a litigant who fails to point the trial court to alleged deficiencies in the court’s statement of decision waives the right to assert those deficiencies as errors on appeal.4 (Arceneaux, at p. 1132.) Because the Carsons failed to raise the alleged error regarding damages when the court issued its proposed statement of decision, Almanor argues that any assertion of error is waived. The Carsons respond that Arceneaux and section 634 are inapposite because their appeal is not based on an issue that was omitted or treated ambiguously in the statement of decision.
(2) We agree that Arceneaux is of limited application because the Carsons’ appeal as to this issue is premised on an unambiguous factual finding in the statement of decision. A trial court’s statement of decision need not address all the legal and factual issues raised by the parties; it is sufficient that it set forth its ultimate findings, such as on an element of a claimor defense. (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 559 [66 Cal. Rptr. 3d 1].) Here the court’s statement of decision did not specifically reference the $1,160 damages claim now asserted by the Carsons, but the court did address the element of damages, finding that it had not been proven by competent evidence.5 Inasmuch as the trial court stated its finding on damages and did not omit the issue or treat it ambiguously, the Carsons’ [*771] failure to identify deficiencies in that aspect of the proposed statement of decision did not result in waiver of the type discussed in Arceneaux, supra, 51 Cal.3d at pages 1132–1133.
Because the Carsons never asked the trial court to make specific findings on the theory of damages they now appeal, the doctrine of implied findings remains applicable. That is, we presume that the trial court made the necessary factual findings in support of its ultimate finding on damages. (§ 634; Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 61–62 [58 Cal. Rptr. 3d 225] [appellate court infers all necessary factual findings in support of prevailing party on issue to support judgment, then reviews the implied findings under substantial evidence standard].) We turn to a review of those findings.
The Carsons’ Proof of Damages
To support their contention that the trial court erred in finding insufficient proof of damages on their breach of contract cause of action, the Carsons draw on the court’s findings that most of the fines imposed by Almanor were unreasonable. The Carsons assert that because Almanor imposed fines ultimately disallowed by the court, they must have proven a breach of the CC&Rs. They further assert that evidence of their payment of a portion of those fines was uncontroverted. The Carsons point to their June 2012 payment of $14,752.35 to bring the dues current on their properties and argue that Almanor applied $1,160 to fines the court determined were not owed. They argue that their payment constituted cognizable, measurable damage equivalent to the amount paid, plus interest. (Civ. Code, § 3302.) The Carsons argue that instead of considering this proof, the court focused solely on the Carsons’ evidence pertaining to loss of business income, which the court ultimately concluded was too speculative.
It is uncontroverted that the Carsons paid Almanor a lump sum of $14,752.35 intended to bring current the dues on the properties. However, whether this amount in fact paid the dues in full, or whether some went toward fines that ultimately were disallowed, is difficult to discern from the record. The trial court concluded as much when it reviewed the same evidence in connection with Almanor’s open book stated cause of action. Almanor used the same accounting and billing statements to try to prove its [*772] position on unpaid dues as the Carsons have cited on appeal as evidence that Almanor applied $1,160 toward disallowed fines. The court’s statement of decision demonstrated a careful review of this evidence and concluded: “The Court cannot, with any confidence, discern the amount of duesowed by the Carsons at any given time. Although it is undisputed that the Carsons fell behind at some point on their association dues, and that they made several large payments to Almanor to pay off some component of what they owed, the Court finds that Almanor has failed to carry its burden of proving the ‘amount owed’ on dues, which is a necessary element of their open book cause of action with respect to the dues component of any damage award.”
Moreover, the trial record does not reveal that the Carsons articulated this theory of contract damages. For example, in the cross-examination of Almanor’s accountant, who was responsible for Almanor’s billing during the relevant period in 2012, counsel did not raise the issue of $1,160 being improperly applied to fines. At closing argument on the cross-complaint, the record reflects no mention of this payment as a basis for contract damages. The damages case instead centered on the Carsons’ attempt to show lost profits and loss of business goodwill. At one point the trial court asked, “Where are the damages, the monetary damages associated with that alleged breach of contract?” The Carsons’ response referenced attorney’s fees to “enforcethe CC&Rs,” interference with quiet enjoyment, and lost customers.
The only mention of the $1,160 payment appeared in the Carsons’ supplemental written closing argument, in which they argued that Almanor “intentionally, or recklessly” mislabeled “rental violations” as “[s]pecial [a]ssessments,” resulting in Almanor paying rental violations instead of the dues as requested and required. That argument is not evidence sufficient to compel a finding that the Carsons suffered financial loss as a result of Almanor’s alleged breach of the CC&Rs. (Bookout v. State of California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486 [113 Cal. Rptr. 3d 356] [where the judgment is against the party with the burden of proof, it is “almost impossible” to prevail on appeal by arguing the evidence compels a judgment in that party’s favor].) The documentary evidence, which lacks any corroborating testimony to establish that Almanor shifted $1,160 of dues payment toward disallowed fines, does not satisfy the test for “‘“uncontradicted and unimpeached”’” evidence that leaves “‘“no room for a judicial determination that it was insufficient to support”’” the finding that the Carsons seek. (Sonic, supra, 196 Cal.App.4th at p. 466.)
On this record, the trial court’s finding that the Carsons failed to establish damages by competent evidence was sound, and the Carsons have notshown that evidence presented to the trial court should have compelled a contrary outcome.
[*773]
B. Determination of the Prevailing Party and Award of Attorney’s Fees
The Carsons and Almanor both claim to be the prevailing party, triggering an attendant award of fees and costs. The Carsons also contend that public policy and fairness require a reversal of the attorney’s fees award.
Statutory Scheme
(3) The Davis-Stirling Act governs an action to enforce the recorded covenants and restrictions of a common interest development. Civil Code section 5975 provides that the CC&Rs may be enforced as “equitable servitudes” and that “[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Civ. Code, § 5975, subds. (a), (c).) Reviewing courts have found that this provision of the Davis-Stirling Act “‘reflect[s] 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) whenever the statutory conditions have been satisfied.’” (Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1152 [132 Cal. Rptr. 3d 886] (Salehi), original italics, quoting Hsu v. Abbara (1995) 9 Cal.4th 863, 872 [39 Cal. Rptr. 2d 824, 891 P.2d 804] (Hsu).)
The Davis-Stirling Act does not define “prevailing party” or provide a rubric for that determination. In the absence of statutoryguidance, California courts have analyzed analogous fee provisions and 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 Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574 [26 Cal. Rptr. 2d 758] (Heather Farms); Salehi, supra, 200 Cal.App.4th at pp. 1153–1154.)
The California Supreme Court implicitly has confirmed this test. In Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94 [14 Cal. Rptr. 3d 67, 90 P.3d 1223], the court affirmed the award of attorney’s fees in an action to enforce a restrictive covenant under the Davis-Stirling Act, stating: “We conclude the trial court did not abuse its discretion in determining that the Association was the prevailing party [citation] … . On a ‘practical level’ [citation], the Association ‘achieved its main litigation objective.’” (Villa De Las Palmas, at p. 94, quoting Heather Farms, supra, 21 Cal.App.4th at p. 1574 and Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1020 [10 Cal. Rptr. 3d 865].)
[*774]
Determination of The Prevailing Party
(4) We review the trial court’s determination of the prevailing party for abuse of discretion. (Villa De Las Palmas Homeowners Assn. v. Terifaj, supra, at p. 94; Heather Farms, at p. 1574.) “‘“The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.”’” (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1339 [104 Cal. Rptr. 3d 219, 223 P.3d 77].) As the California Supreme Court has explained in the related context of determining theprevailing party on a contract under Civil Code section 1717, the trial court should “compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made … by ‘a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.’” (Hsu, supra, 9 Cal.4th at p. 876.)
The Carsons urge that they, not Almanor, attained their litigation objectives. They argue that but for their success in defeating most of the fines imposed by Almanor, they would have continued to face additional fines, making it impossible to continue to operate their business. They also argue that the trial court erred by focusing on net monetary recovery in determining who was the prevailing party.
In support of their position, the Carsons cite Sears v. Baccaglio (1998) 60 Cal.App.4th 1136 [70 Cal. Rptr. 2d 769] (Sears), in which the guarantor of a lease sued to recover $112,000 on a payment that he had made on the guaranty, which he contended was invalidated by a revocation. The defendant cross-complained for additional money under the guaranty. (Id. at p. 1140.) The trial court found that the guaranty was valid but that the plaintiff was entitled to recover some $67,000 plus interest because of payments the defendant had received in relation to the lease. (Id. at pp. 1140–1141.) Notwithstanding the plaintiff’s monetary recovery, the trial court deemed the defendant the prevailing party under the applicable fee provision and awarded attorney’s fees and costs. (Ibid.) The Court of Appeal affirmed the award, explaining: “The complaint and record demonstrate enforcement of the guaranty was the pivotal issue. [Plaintiff] received money not because the court found [defendant] liable for breach of contract. Instead, the court ordered [defendant] to return a portion of [plaintiff’s] payment because of the fortuitous circumstances [surrounding defendant’s receipt of other payments related to the lease].” (Id. at p. 1159.)
Whereas the pivotal issue in Sears was enforcement of the guaranty, the pivotal issue here was whether Almanor’s fines were enforceable under the [*775] CC&Rs and governing body of California law. It is true that the Carsons prevailed to the extent of the fines that the court disallowed. 6 That partial success substantially lowered the Carsons’ liability for damages and supported their position that the CC&Rs and associated rules couldnot impose an unreasonable burden on the properties. Yet by upholding a subset of the fines, the court ruled more broadly that Almanor could impose reasonable use restrictions on the Carsons’ properties, despite their authorized commercial use. That ruling echoed Almanor’s stated objective at trial that the association sought to counter the Carsons’ position that “because their lot is zoned ‘Commercial,’ they are not bound by the CC&R’s or the Rules.”
(5) The mixed results here are distinguishable from those in Sears, in which there was a clear win by the defendant on the pivotal issue of the guaranty, and the monetary award was fortuitous and unrelated to the determination of liability. (Sears, supra, 60 Cal.App.4th at p. 1159.) Where both sides achieved some positive net effect as a result of the court’s rulings, we compare the practical effect of the relief attained by each. (Hsu, supra, 9 Cal.4th at p. 876.) Here, the trial court’s findingseliminated many of the alleged rule violations that depended on the Carsons being in arrears on dues and rejected those fines by which Almanor tried to strictly enforce the absolute use restrictions on the Carsons’ lots. Insofar as the court found that some of the fines were enforceable, Almanor met its objective and satisfied the first part of the statutory criteria under the Davis-Stirling Act “to enforce the governing documents.” (Civ. Code, § 5975, subd. (c).) The fractional damages award does not negate the broader practical effect of the court’s ruling, which on the one hand narrowed the universe of restrictions that Almanor could impose on the properties, but on the other hand cemented Almanor’s authority to promulgate and enforce rules pursuant to the CC&Rs so long as they are not unreasonable under Nahrstedt. Thus the trial court rejected the Carsons’ position that the ambiguity in the CC&Rs “completely eliminate[d] Almanor’s ability to impose reasonable use restrictions on the Carsons’ lots, consistent with the Carsons’ right to use their lots for commercial lodging purposes.” The court also ruled entirely in favor of Almanor on the Carsons’ cross-complaint by finding that the Carsons’ alleged damages were unsupportedby competent evidence and too speculative.
Taken together and viewed in relation to the parties’ objectives as reflected in the pleadings and trial record, we conclude that these outcomes were [*776] adequate to support the trial court’s ruling.7 (Goodman v. Lozano, supra, 47 Cal.4th at p. 1339.) In reviewing a decision for abuse of discretion, we do not substitute our judgment for that of the trial court when more than one inference can be reasonably deduced from the facts. (Ibid.) The trial court did not abuse its discretion in determining Almanor to be the prevailing party.
Public policy
The Carsons argue that the fee award flouts public policy because it (1) creates disincentive for homeowners to defend against unlawful fines levied by the association and (2) rewards the association for acting in an egregious manner by imposing fines that were, for the most part, unlawful. The Carsons suggest that by granting attorney’s fees to Almanor, “the Court is stating that the Carsons should have paid the $54,000.00 that Respondent claimed was owed … , even though only $6,620.00 was actually owed, because they would be penalized for defending themselves and, in the end, owe an additional $101,803.15 in attorney’s fees for defending themselves.” The Carsons offer no direct authority to support their position but contend that this outcome contradicts California public policy which seeks to ensure that creditors do not overcharge debtors for amounts not owed.8
(6) This argument runs contrary to the statutory scheme governing the fee award in this case. As the trial courtcorrectly noted at the hearing on the competing motions for attorney’s fees, the Davis-Stirling Act mandates the award of attorney’s fees to the prevailing party. (Civ. Code, § 5975; Salehi, supra, 200 Cal.App.4th at p. 1152 [language of Civ. Code, § 5975 reflects legislative intent to award attorney’s fees as a matter of right when statutory criteria are satisfied].) After resolving the threshold issue of the prevailing party, the trial court had no discretion to deny attorney’s fees. (Salehi, at p. 1152.) Any argument concerning the magnitude of the fees award, especially in comparison to the damages awarded or originally sought, is better directed at challenging the reasonableness of the award amount. The amount to be awarded is distinct from whether an award is justified, and “‘the factors relating to each must not be intertwined or merged.’” (Graciano v. Robinson [*777] Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 153 [50 Cal. Rptr. 3d 273], quoting Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 647 [71 Cal. Rptr. 2d 632].)
C. Reasonableness of the Fee Award
The remaining question is whether the attorney’s fees award of $98,535.50 was reasonable. What constitutes reasonable attorney’s fees is committed to the discretion of the trial court. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095–1096 [95 Cal. Rptr. 2d 198, 997 P.2d 511] (PLCM Group).) “An appellate court will interfere with the trial court’s determination of the amount of reasonable attorney fees only where there has been a manifest abuse of discretion.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1004 [156 Cal. Rptr. 3d 26] (Monroy).)
The Carsons argue that the trial court abused its discretion by awarding fees which are “grossly disproportionate” to the monetary award and scale of success on the claims litigated.9 The Carsons point to section 1033, subdivision (a) for the proposition that the court, in its discretion, can disallow attorney’s fees and costs if a party obtains less than the statutory minimum to be classified as an unlimited civil matter. Yet their briefs on appeal offer no case or other authority to support the proposed application of section 1033, subdivision (a) to a mandatory fees award under Civil Code section 5975.
(7) The Carsons also argue that the trial court should have apportioned the award to reflect the court’s rejection of all but a single category of fines imposed, representing eight out of 88 fines. Again, the Carsons fail to cite any authority to support a reduction based on the degree of success in a Davis-Stirling Act case. We observe that “it is counsel’s duty by argument and citation of authority to show in what respects rulings complained of are erroneous … .” (Wint v. Fidelity & Casualty Co. (1973) 9 Cal.3d 257, 265 [107 Cal. Rptr. 175, 507 P.2d 1383].) Although we will not treat the Carsons’ arguments as waived, we caution that “‘an appellatebrief “should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.”’” (Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545 [35 Cal. Rptr. 2d 574], quoting In re Marriage of Schroeder (1987) 192 Cal.App.3d 1154, 1164 [238 Cal. Rptr. 12].)
Almanor does not respond to these arguments on appeal, though it argued in its attorney’s fees motion that when an owner’s association seeks to [*778] enforce CC&Rs and attains its litigation objective, based on the mandatory nature of the fee award, “it is irrelevant that the verdict/judgment amount is below $25,000.”
Discretion to Reduce or Eliminate Fees Under Section 1033
(8) Under section 1033, subdivision (a), if a plaintiff brings an unlimited civil action and recovers a judgment within the $25,000 jurisdictional limit for a limited civil action, the trial court has the discretion to deny, in whole or in part, costs to the plaintiff.10 (Carter v. Cohen (2010) 188 Cal.App.4th 1038, 1052 [116 Cal. Rptr. 3d 303]; Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 982–983 [104 Cal. Rptr. 3d 710, 224 P.3d 41] (Chavez).) Section 1033 relates to the general cost recovery provisions set forth in the Code of Civil Procedure. We briefly consider its applicability to the recovery of attorney’s fees under the Davis-Stirling Act.
In Chavez, the California Supreme Court examined the application of section 1033, subdivision (a) to an action brought under the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.), which grants the trial court discretion to award attorney’s fees to a prevailing party. (Chavez, supra, 47 Cal.4th at pp. 975–976.) The court in Chavez held that by its plain meaning, section 1033, subdivision (a) applies in the FEHA context and gives the trial court discretion to deny attorney’s fees to a plaintiff who prevails under FEHA but recovers an amount that could have been recovered in a limited civil case. (Chavez, at p. 976.) The court explained: “[W]e perceive no irreconcilable conflict between section 1033(a) and the FEHA’s attorney fee provision. In exercising its discretion under section 1033(a) to grant or deny litigation costs, including attorney fees, to a plaintiff who has recovered FEHA damages in an amount that could have been recovered in a limited civil case, the trial court must give due consideration to the policies and objectives of the FEHA and determine whether denying attorney fees, in whole or in part, is consistent with those policies and objectives.” (Chavez, at p. 986.)
(9) The reasoning of Chavez is of limited applicability here. Unlike the fee provision under FEHA, whichis discretionary and therefore not irreconcilable with section 1033, subdivision (a), the fee-shifting provision of the Davis-Stirling Act is mandatory. (Civ. Code, § 5975; Salehi, supra, 200 Cal.App.4th at p. 1152.) The circumstances in which a court might deny or reduce a fee award under a permissive statutory provision, like FEHA, such [*779] as because special circumstances “‘“would render such an award unjust,”’” do not apply equally where a statute mandates attorney’s fees to the prevailing party. (Graciano v. Robinson Ford Sales, Inc., supra, 144 Cal.App.4th at p. 160 [principles applicable to permissive attorney’s fee statutory provisions do not apply to mandatory fee-shifting statutory provisions].) Given its uncertain applicability to the recovery of attorneys’ fees under Civil Code section 5975 and counsel’s failure to suggest specific authority for its application, we decline to find an abuse of discretion in this context.
Discretion to Reduce Fee Award Based on Degree of Success
(10) The Carsons also contend that the trial court could have and should have apportioned the award to those attorney’s fees that Almanor incurred in proving the eight fines on which it succeeded. It is well settled that the trial court has broad authority in determining the reasonableness of an attorney’s fees award. (PLCM Group, supra, 22 Cal.4th at p. 1095.) This determination may, at times, include a reduction or apportionment11 of fees in order to arrive at a reasonable result. “‘After the trial court has performed the calculations [of the lodestar], it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the … award so that it is a reasonable figure.’” (PLCM Group, at pp. 1095–1096.)
We look to a few cases that address the justifications for reducing a fee award. In a case involving a mandatory fee-shifting statute similar to that under the Davis-Stirling Act, the appellate court upheld an attorney’s fees award of $89,489.60 for the defendant borrower and cross-complainant even though she recovered only a nominal $1 in statutory damages on her consumer debt-collection based claims. (Monroy, supra, 215 Cal.App.4th at p. 986.) The court deemed the borrower the prevailing party and found she was entitled to her full attorney’s fees relating to her successful cross-complaint based on the Fair Debt Collection Practices Act (FDCPA; 15 U.S.C. [*780] § 1681 et seq.),12 as well as to her defense of the plaintiff’s complaint. (Monroy at p. 987.) The Monroy court rejected the financial institution’s argument that the award should have been reduced to reflect the borrower’s limited degree of success. (Id. at pp. 1004–1005.)
Citing United States Supreme Court13 and California precedent in various statutory fee-shifting contexts for the proposition that “the degreeor extent of the plaintiff’s success must be considered when determining reasonable attorney fees,” the Monroy court concluded that the circumstances of the case did not warrant a reversal of the fee award for abuse of discretion. (Monroy, supra, 215 Cal.App.4th at pp. 1005–1006.) The court based its decision on factors including the borrower’s position as defendant and cross-complainant, her choice not to allege actual damages but to request only statutory damages under the FDCPA, the fact that the nominal award still represented a complete success and could prompt the financial institution “to cease unlawful conduct against other consumers.” (Monroy, at p. 1007.)
Reductions to the award of attorney’s fees also arise in cases applying California’s private attorney general statute.14 One such case, Sokolow, supra, 213 Cal.App.3d 231, involved alleged sex discrimination by a county sheriff’s department and a closely affiliated private mounted patrol that maintained a male-only policy. On cross-motions for summary judgment, the court ruled for the plaintiffs as to certain equal protection violations and imposed permanent injunctions on the patrol and the sheriff’s department directed at terminating their working relationship and any appearance of partnership. (Id. at pp. 241–242.) Yet the court denied the plaintiffs’ request for attorney’s fees under the applicable federal and state statutory fee provisions. (Id. at p. 242.)
The Court of Appeal reversed the attorney’s fees decision because the plaintiffs were the prevailing parties, but remanded to the trial court for a [*781] determination of the amount of reasonable fees. (Sokolow, supra, 213 Cal.App.3d at pp. 244, 251.) With respect to the fees under section 1021.5, the court noted that “a reduced fee award is appropriate when a claimant achieves only limited success.” (Sokolow, at p. 249.) The court offered specific examples of results that the plaintiffs had sought and failed to obtain through the injunction, such as “obtaining admission for women into the Patrol” or “entirely eliminating the County’s training and use of the Patrol for search and rescue missions.” (Id. at p. 250.) The court indicated that these “were important goals of appellants’ lawsuit which they failed to obtain.” (Ibid.) Thus, in arriving at an award of reasonable attorney’s fees, the court directed the trial court to “take into consideration the limited success achieved by appellants.” (Ibid.)
Similarly, in Environmental Protection Information Center v. Department of Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 222–224 [118 Cal. Rptr. 3d 352] (Environmental Protection), the court addressed attorney’s fees after the plaintiff environmental and labor groups had succeeded in part in challenging the validity of regulatory approvals related to a logging plan affecting California old-growth forests. With regard to the defendants’ arguments that any fee award should be reduced based on the plaintiffs’ limited success on the merits, the appellate court conducted a two-part inquiry.15 (Environmental Protection, at p. 239.) It firstdetermined that the environmental group plaintiffs’ unsuccessful claims were related to the successful claims, such that attorney’s work spent on both sets of claims were not practicably divisible. (Id. at p. 238.) The court explained that because the successful and unsuccessful claims were related, the trial court on remand would need to assess the level of success or “‘“significance of the overall relief obtained by the plaintiff[s] in relation to the hours reasonably expended on the litigation.”’” (Id. at p. 239, quoting Harman v. City and County of San Francisco (2007) 158 Cal.App.4th 407, 414 [69 Cal. Rptr. 3d 750].)
(11) We draw a few general conclusions from these cases. As we noted earlier, it is within the province and expertise of the trial court to assess reasonableness of attorney’s fees. Especially in certain contexts, such as in litigation seeking to enforce “‘an important right affecting the public interest,’” there is no question that degree of success is a “crucial factor” for that determination. (Environmental Protection, supra, 190 Cal.App.4th at pp. 225, fn. 2, 238.) Indeed, we find no indication that “degree of success” may not be considered, alongside other appropriate factors, in determining reasonable attorney’s fees in other contexts, including under Civil Code section 5975. “To the extent a trial court is concerned that a particular award is excessive, it has broad [*782] discretion to adjust the fee downward … .” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138 [104 Cal. Rptr. 2d 377, 17 P.3d 735].)
It does not follow from these generalizations, or from the record the Carsons have provided, that the trial court committed a manifest abuse of discretion by awarding the full attorney’s fees sought. Though the order granting Almanor’s motion for attorney’s fees is silent as to the court’s reasoning, the moving papers and declarations of each side, as well as the hearing transcript, reflect that the court thoroughly considered the briefing and argument of the parties.16 Also, the Carsons did not request a statement of decision with regard to the fee award. Under this circumstance, “‘“[a]ll intendments and presumptions are indulged to support [the judgment] on matters as to which the record is silent, and error must be affirmatively shown.”’” (Ketchum v. Moses, supra, at p. 1140, quoting Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [86 Cal. Rptr. 65, 468 P.2d 193].)
(12) Although the court in its discretion could have reduced the amount of the award to reflect the incomplete success of Almanor’s action, as in Monroy, supra, 215 Cal.App.4th at pages 1005–1006, there are ample factors to support the trial court’s decision. Almanor prevailed on only a minor subset of the fines that formed the basis for the monetary award requested, but that subset was sufficient to satisfy the statutory criteria of an action to enforce the governing documents. (Civ. Code, § 5975, subdivision (c).) In practical effect, Almanor’s limited success established a baseline from which it can continueto adopt and enforce reasonable use restrictions under the CC&Rs. Unlike the important goals of the sex discrimination civil rights lawsuit that the appellants failed to obtain in Sokolow, the objectives that Almanor failed to attain were primarily monetary. With respect to the time spent on the successful and unsuccessful aspects of Almanor’s suit (Environmental Protection, supra, 190 Cal.App.4th at p. 239), we note that the various fines do not represent different causes of action or legal theories dependent on different facts, but different instances of attempted enforcement based on the CC&Rs and a shared set of facts. Almanor’s fees, as established in its moving papers and supporting declarations, also accounted for its defense against the [*783] Carsons’ cross-complaint, which included the Carsons’ use of testifying expert witnesses. For these reasons, we do not find that the award of attorney’s fees, compared to the “‘“overall relief obtained”’” by Almanor, was so disproportionate as to constitute an abuse of discretion. (Ibid.)
III. DISPOSITION
The judgment on the Carsons’ cross-complaint and the award of attorney’s fees and costs to Almanor are affirmed. Respondent is entitled to its costs on appeal.
Rushing, P. J., and Márquez, J., concurred.
1 The venue of the underlying action is Santa Clara County, where the Carsons reside.
2 We need not resolve Almanor’s suggestion that the alleged damages be viewed as an offsetbecause, as we will explain, we do not find support in the record for the Carsons’ claim that uncontroverted evidence established that fines paid were damages resulting from Almanor’s alleged breach of the CC&Rs.
3 Undesignated statutory references are to the Code of Civil Procedure.
4 A litigant who wishes to preserve a claim of error and avoid the application of inferences in favor of the judgment must follow the two-step process set by sections 632 and 634. First, when the court announces a tentative decision, “a party must request a statement of decision as to specific issues to obtain an explanation of the trial court’s tentative decision.” (Arceneaux, supra, 51 Cal.3d at p. 1134; see § 632.) Second, when the trial court issues its statement of decision, a party claiming deficiencies must raise any objection “to avoid implied findings on appeal favorable to the judgment.” (Arceneaux, at p. 1134; see § 634.)
5 The Carsons had offered trial testimony of a longtime renter who chose not to return after 2012 because she and her group felt uncomfortable and scrutinized by certain Almanor homeowners and board members during their stay. The court found the testimony insufficient to establish a breach of the CC&Rs. On the subject of damages the Carsons asked the court to explain its decision on the evidence related to the renter who had decided not to return. The trial court’s proposed statement of decision addressed that evidence but did not address the $1,160 on which basis the Carsons now appeal. The Carsons did not object to the proposed statement of decision. (Cal. Rules of Court, rule 3.1590(g) [parties have 15 days from serviceof proposed statement of decision to serve and file any objections].)
6 Out of 88 fines that Almanor sought to enforce at trial, the trial court upheld only eight. Almanor admits that it did not attain all of its litigation objectives and that a total victory would have resulted in a higher monetary recovery had the court found that all of the fines imposed were reasonable and enforceable.
7 We do not find support in the record for the Carsons’ contention that until the motion for attorney’s fees, Almanor’s sole litigation objective had been to collect a monetary award. From the inception of the litigation, Almanor’s ability to collect a monetary award depended on the court finding that it was authorized to impose those rules and to fine for violations. Throughout the trial record, including in Almanor’s trial brief, opening and closing remarks, and supplemental closing argument, Almanor emphasized that it sought to enforce the CC&Rs and disabuse the Carsons of their belief that the commercial zoning of their property immunized them from the use restrictions.
8 In support of this point, the Carsons cite to the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.), which holds a debt collector liable to a debtor for violating the debt collection practices act (Civ. Code, § 1788.30).
9 The Carsons do not raise on appeal the trial court’s methodology or computation of time spent on the case.
10 Section 1033, subdivision (a) states that “[c]osts or any portion of claimed costs shall be as determined by the court in its discretion in a case other than a limited civil case in accordance with Section 1034 where the prevailing party recovers a judgment that could have been rendered in a limited civil case.”
11 The Carsons’ use of the term “apportion” is not entirely accurate. In the context of attorney’s fees awards, apportionment generally refers to divvying fees as between meritorious or paying parties in a multiparty case (see, e.g., Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 250 [261 Cal. Rptr. 520] (Sokolow) [fees statute did not address apportioning attorney’s fees between defendants, but court opined it would be “appropriate for the trial court to assess a greater percentage of the attorney fees award against the County rather than making an equal assessment between the County and the Patrol”]), or as between causes of action wherein a party has alleged multiple causes of action, only some of which are eligible for a statutory fee award (see, e.g., Chee v. Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1367–1368 [50 Cal. Rptr. 3d 40] [court granted in part defendants’ motions for attorney’s fees and apportioned the amount of fees requested to only those causes of action that “fell within the purview of Civil Code section 1354”]).
12 As with an attorney’s fees award under section 5975, part of the Davis-Stirling Act, the federal FDCPA provides for mandatory attorney fees to be awarded to the prevailing party, although courts have discretion in calculating the reasonable amount. (Monroy, supra, 215 Cal.App.4th at p. 1003.)
13 In Hensley v. Eckerhart (1983) 461 U.S. 424, 434–435 [76 L. Ed. 2d 40, 103 S. Ct. 1933], the Supreme Court addressed application of a fee-shifting statute in civil rights litigation (42 U.S.C. § 1988) when the plaintiffs had achieved only partial success. The fee provision in Hensley was permissive and provided that the court “may” in its discretion award the prevailing party a reasonable attorney’s fee. (Hensley, at p. 426.) Noting that when “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount,” the court held that the district court “may attempt to identify specific hoursthat should be eliminated, or it may simply reduce the award to account for the limited success.” (Id. at pp. 436–437.)
14 The fee recovery provision under this statute provides that a court “may award attorney’s fees to a successful party … in any action which has resulted in the enforcement of an important right affecting the public interest.” (§ 1021.5.)
15 The test articulated in Environmental Protection comes from a line of state court cases that refer to the approach set by the United States Supreme Court in Hensley, supra, 461 U.S. at page 434.
16 The court’s comments during the hearing on the motions for attorney’s fees at one point seem to indicate that the court did not believe that it could take into account the degree of success at trial. In a colloquy with counsel for Almanor, the court asked: “[O]nce the Court makes a determination of prevailing party, the only discretion the Court has with respect to the fee award is reasonableness of them, and that is not a function of how well they did at trial. There’s a threshold question, who’s the prevailing party, and then the next question, which is, are the fees reasonable?” We do not find this comment determinative because it reflects only part of an extended discussion at hearing, not the court’s final reasoning, after it heard from counsel for the Carsons and took the motions under submission. Even if the court had ascertained that it could consider degree of success, there were enough factors, as we have discussed, to support a full fees award.
[Encroachments; Trespass; Adverse Possession] A homeowner may not establish an adverse possession claim over HOA common area without showing that the homeowner paid all property taxes for the disputed area; Equitable easements may not be granted to an encroaching homeowner whose trespass was willful or negligent.
Everett L. Skillman for Defendants, Cross-complainants and Appellants.
Neuland, Whitney & Michael, Frederick T. Whitney and Jane A. Gaba for Plaintiff, Cross-defendant and Respondent.
OPINION
[988] ARONSON, J.—
Plaintiff, cross-defendant, and respondent Nellie Gail Ranch Owners Association (Nellie Gail) sued defendants, cross-complainants, and appellants Donald G. McMullin and Cynthia Jensen-McMullin (collectively, McMullins)1 to quiet title and compel the McMullins to remove a retaining wall and other improvements they built without Nellie Gail’s approval on more than 6,000 square feet of common area Nellie Gail owned adjacent to the McMullins’ property. Following a bench trial, the trial court entered judgment for Nellie Gail and awarded Nellie Gail its attorney fees. The McMullins appeal, claiming the trial court should have quieted title in them or at least granted them anequitable easement over the disputed property. We disagree and affirm the trial court’s judgment.
First, the McMullins contend Nellie Gail was equitably estopped to bring this quiet title action because it told the McMullins it would not pursue construction of the wall as a violation of the governing declaration of covenants, conditions, and restrictions (CC&R’s) and instructed the McMullins to work with Nellie Gail’s architect to develop a landscaping, irrigation, and drainage plan to screen the wall from view. The McMullins, however, forfeited this claim by failing to assert it at trial. Moreover, equitable estoppel requires the party asserting it to be ignorant of the true facts and to justifiably rely on the conduct or statements of another who has knowledge of those facts. The evidence supports the conclusion Nellie Gail did not know all of the facts and it made its statements after the McMullins knowingly constructed the retaining wall and other improvements on Nellie Gail’s property without obtaining the required written approvals from Nellie Gail. The McMullins therefore could not justifiably rely on Nellie Gail’s statements even if they did not forfeit the claim.
Second, the McMullins contend the trial court erred when it rejected their adverse possession claim because the McMullins failed to pay property taxes on the disputed property. The McMullins contend the disputed property had no value, and therefore they were excused from establishing that essential element. The McMullins were excused from paying property taxes only if they established no property taxes were levied or assessed on the disputed property during the relevant five-year period. Substantial evidence, however, supports the conclusion the disputed property had a value and property taxes were levied against it, but were assessed to the individual property owners in the community consistent with the law concerning property taxes on common areas owned by homeowners associations.
[989]
Next, the McMullins contend the trial court erred in granting Nellie Gail a mandatory injunction authorizing it to remove the retaining wall and other improvements at the McMullins’ expense, rather than requiring Nellie Gail to accept monetary damages as compensation for an equitable easementthat would allow the McMullins to maintain the wall and improvements. A property owner generally is entitled to a mandatory injunction requiring an adjacent owner to remove an encroachment, but a trial court has discretion to deny an injunction and grant an equitable easement if the encroacher acted innocently and the balancing of the hardships greatly favors the encroacher. Substantial evidence supports the trial court’s conclusion the McMullins were not innocent encroachers and therefore the court properly granted Nellie Gail an injunction.
Finally, the McMullins challenge the trial court’s award of attorney fees to Nellie Gail, but we lack jurisdiction to review that award because the court made it after entry of judgment and the McMullins neither identified the award in their notice of appeal nor filed a separate notice of appeal. We therefore dismiss that portion of the appeal challenging the fees award.
I. Facts and Procedural History
Nellie Gail Ranch is a 1,407-unit residential planned development on approximately 1,350 acres in Laguna Hills, California. Nellie Gail is the homeowners association the developer formed to own the common areas and administer the community’s CC&R’s. Thecommunity has horse trails, an equestrian center, parks, tennis courts, and other common areas Nellie Gail manages.
In December 2000, the McMullins purchased a home in Nellie Gail Ranch located at the end of a cul-de-sac on a hilltop with canyon views. The back of their property slopes down towards and abuts lot 274, which is an approximately 15-acre canyon lot owned by Nellie Gail and dedicated as open space. One of the community’s horse trails runs across lot 274 directly behind the McMullins’ property. The back left corner of the McMullins’ property also touches lot 273, which is an approximately 5-acre lot owned by Nellie Gail that is home to the community’s largest park.
The McMullins’ backyard has three retaining walls used to provide level, useable space because of their property’s sloping nature. There is a short three-foot retaining wall that separates their house and patio from their grass area. A second, nearly six-foot retaining wall separates their house, patio and grass area from a lower area where they have a swimming pool and deck. [990] The third retaining wall is a six-foot wall that separates all of these areas from the slope that leads to lots 273 and 274. Beyond this final retaining wall is a wrought iron fence that encircles the entire back portion of the McMullins’ property. The area between the final retaining wall and the wrought iron fence has a considerable slope.
Nellie Gail’s CC&R’s and its architectural review committee guidelines required homeowners to obtain written approval from the architectural review committee (Review Committee) before constructing or making significant alterations to any improvements on their property. In January 2008, the McMullins applied to the Review Committee to replaster their swimming pool, redo the pool deck, construct a bar area near the pool, install a solar heater for the pool, replace the wrought iron fence with an eight-foot retaining wall, backfill behind that new wall, install a large patio slab or sports court and garden in the flat area created, and build a staircase from the pool area down to the flat area behind the new retaining wall. The application included a site plan Donald prepared showing the location of the proposed improvements, and depicting the new retaining wall would be constructed in the same location as the existing wrought iron fence. The plan identified the property lines betweenthe McMullins’ property and their neighbors on either side, but did not identify the rear property line between the McMullins’ property and lot 274. The plan included two dashed lines that extended from the existing six-foot retaining wall that surrounded the backyard to the side property lines, but did not explain what those lines represented. Nellie Gail later discovered these unlabeled, dashed lines showed the rear property line’s location.
In February 2008, the Review Committee sent the McMullins a letter denying their application and explaining how it failed to comply with the CC&R’s and the committee’s guidelines. The letter also informed the McMullins that “a fully dimensioned site plan showing property lines, easement areas, setbacks and fully defined landscaping and drainage will be needed [for any future applications].”
Two weeks later, Donald prepared and submitted a new application with a revised, more detailed site plan. That plan again represented the new retaining wall would be constructed in the same location as the existing wrought iron fence, and also identified the property lines between the McMullins’ property and their neighbors, but not the property line betweenthe McMullins’ property and Nellie Gail’s lot 274. The plan also included the same dashed lines extending from the end of the existing, six-foot retaining wall without explaining what those lines represented. In March 2008, the Review Committee sent the McMullins a letter denying the revised application and explaining the reasons for the denial. This letter again notified the McMullins that any [991] future application must be accompanied by “a fully dimensioned site plan showing property lines” and other necessary information “from a licensed Civil Engineer.” The committee’s letter also suggested the McMullins submit a new application limited to just the pool-related improvements if they wanted to get started on their project.
The McMullins followed the Review Committee’s suggestion and submitted a new application limited to the pool-related improvements only, which included a staircase from the pool area down to the slope behind the existing six-foot retaining wall. In April 2008, the Review Committee sent the McMullins a letter approving this application subject to a few conditions, including one that prohibited the McMullins from modifying the grade on the slope behind their existingretaining wall.
Almost a year later, Cynthia went to the Review Committee’s office to submit a new application and plans for the retaining wall and sports court. She spoke with Sandi Erickson, the Review Committee’s community relations person. Cynthia testified Erickson said the plans were not necessary because the McMullins’ application already was approved. Cynthia asked Erickson to double-check her information, and after looking on Nellie Gail’s computer system, Erickson again told Cynthia she did not need to submit the plans because they had [**666] been approved. Erickson stopped working for Nellie Gail a few weeks after this conversation, and she did not testify at trial. Cynthia did not obtain written confirmation of this conversation or the Review Committee’s alleged approval for the retaining wall.
In May 2009, the McMullins obtained a building permit for the retaining wall from the City of Laguna Hills and began construction. None of the parties could explain how the McMullins obtained this permit when they did not have Nellie Gail’s written approval for construction of the wall. The appellate record only includes a copy of the permit; it does not include the application the McMullinssubmitted to the city.
Jeff Hinkle began working as Nellie Gail’s facilities and compliance manager in June 2009. That same month, he received a phone call from a resident informing him construction trucks were on the horse trail near the McMullins’ property. Hinkle spotted a cement truck and a pickup truck on the trail directly behind the McMullins’ property. After speaking with Nellie Gail’s general manager and reviewing its computer files to confirm the McMullins had obtained an approval to perform work on their property, Hinkle returned to the horse trail to speak with the McMullins’ contractor and Cynthia. In confirming the McMullins had an approval, Hinkle did not look at the plans or determine the type of work the McMullins were authorized to perform; he simply confirmed they had obtained an approval for some work. [992] Hinkle informed the contractor and Cynthia they needed a trail permit to have vehicles or equipment on the horse trail, and the contractor returned to Nellie Gail’s office with Hinkle to obtain the permit. During these visits to the trail near the McMullins’ property, Hinkle did not observe any construction work in progress. The wall had not been constructed, and he did not see [***11] any excavations for the wall footings.
In August 2009, Hinkle was in the park near the McMullins’ property and noticed they were building a wall at the back of the property. He returned to Nellie Gail’s office to check on the nature of the improvements the McMullins were authorized to construct. He discovered the McMullins’ approvals authorized work on their pool, the installation of solar panels on the slope behind the existing retaining wall, and a staircase from the pool down to the slope. He noticed one of the conditions for the approval prohibited the McMullins from modifying the slope and the approval did not authorize a new retaining wall. Hinkle then wrote the McMullins a letter directing them to immediately stop all work and to contact Nellie Gail to discuss their project.
At this point, the wall and related improvements essentially were completed and the McMullins were waiting for the city to sign off on the project. The work that remained was backfilling against the wall on the side facing lot 274, some minor finish grading, and completing the irrigation, drainage, and landscaping. Creation of the flat surface behind the wall and the sports court were complete, and a wroughtiron fence had been installed on top of the new retaining wall.
After receiving the cease and desist letter, the McMullins stopped work and began discussions with Nellie Gail about what was necessary to complete the project. Nellie Gail informed the McMullins its architect would inspect the wall and the McMullins should submit an application and detailed plans to the Review Committee for possible approval. The McMullins submitted the application and plans to the Review Committee on September 30, 2009. As with all previous applications, Donald prepared the site plan and failed to identify the location of the rear property line between the McMullins’ property and Nellie Gail’s lot 274. The site plan again included the unlabeled, dashed lines that extended from the original six-foot retaining wall that Nellie Gail later learned was the rear property line.
On October 15, 2009, the Review Committee sent the McMullins a letter denying their application for the retaining wall as constructed. The letter explained why the application was denied and what additional information the committee needed from the McMullins before it would approve the wall, including a dimensioned site plan by a licensed surveyor that depicted the [993] easement for the trail and the wall. The McMullins therefore hired a surveyor to conduct a survey and prepare a plan showing the relationship between the horse trail and the retaining wall. Donald told the surveyor not to include the rear property line on this plan. The McMullins submitted this plan to Nellie Gail before the end of October.
On November 10, 2009, Hinkle sent the McMullins an e-mail explaining that many of the problems concerning the wall could have been avoided if the McMullins’ plans had identified their rear property line. The e-mail also stated, “In any case, the wall was built and is on [Nellie Gail’s] property. Let’s move forward on how we can make this an amicable and reasonable resolution.” A week later, Nellie Gail’s board of directors considered in closed session how to address the issues surrounding the McMullins’ wall. The board voted and “agree[d] not to pursue the installation of the McMullin[s’] wall as a violation, and [to] direct the [Review Committee] to decide on appropriate screening options.” On December 9, 2009, Nellie Gail sent the McMullins a letter informing them of the board’s vote and instructing them to meet with Nellie Gail’sarchitect to finalize a landscaping, irrigation, and drainage plan to screen the wall.
After receiving this letter, the McMullins met with Nellie Gail’s architect and developed a landscaping, irrigation, and drainage plan for the areas on both sides of the wall. In January 2010, the Review Committee approved this plan and the McMullins implemented it at a cost of approximately $20,000. This expenditure was in addition to the approximately $150,000 they already spent to construct the retaining wall, sports court, and other improvements. Neither Nellie Gail nor the Review Committee, however, ever approved any of these improvements other than the landscaping, irrigation, and drainage relating to the screening for the wall.
In July 2010, the city sent a letter to both the McMullins and Nellie Gail explaining the wall was constructed entirely on Nellie Gail’s property and did not fully comply with the city’s requirements regarding the wall’s height and the slope adjacent to the wall. The city further informed the parties the wall could not remain in its current condition—either Nellie Gail must grant its approval for the wall and the wall must be brought into compliance with the city’s requirements, or the wall must be removed.
Based on the city’s letter, Nellie Gail wrote the McMullins in November 2010 to inform them the wall could not remain in its current, unapproved condition and the two sides should try to resolve the situation. Nellie Gail’s letter explained the McMullins never provided any plans that showed the location of the property line between the McMullins’ property and Nellie Gail’s lot 274 despite the Review Committee’s repeated requests. Nellie Gail [994] therefore requested that the McMullins obtain a professional survey showing all of the McMullins’ improvements in relation to the property line between the two properties, and that the parties engage in alternative dispute resolution after the survey.
When the McMullins did not immediately respond, Nellie Gail hired its own surveyor to locate the property line. Nellie Gail’s surveyor completed his investigation in March 2011, and determined the original six-foot retaining wall was constructed on the property line and the new retaining wall and improvements were built almost entirely on Nellie Gail’s property. The area between the property line and the new retaining wall totaled more than 6,100 square feet of lot274 (hereinafter, Disputed Property) and increased the total size of the McMullins’ lot from approximately 16,400 square feet to more than 22,500 square feet. Contrary to the McMullins’ repeated representations in their applications, Nellie Gail’s surveyor determined the retaining wall was built well outside the location of the previous wrought iron fence and enclosed more than 2,000 square feet of lot 274 that were not enclosed by the previous fence. In January 2012, the McMullins hired a surveyor to determine the relationship between the property line and the retaining wall. Their surveyor confirmed the retaining wall enclosed more than 6,100 square feet of Nellie Gail’s lot 274, and the parties stipulated at trial there was no significant difference between these two surveys.2
After receiving these surveys, the parties continued to explore possible resolutions for the problem. In July 2012, Nellie Gail conducted a vote of its members on whether to sell the Disputed Property to the McMullins based on an appraisal they obtained. The members overwhelmingly voted not to sell the Disputed Property to the McMullins. Of the 572 members who voted, only 142 voted in favor of the sale.
In June 2013, Nellie Gail sued the McMullins to quiet title to the Disputed Property in its name, to ask for an injunction requiring the McMullins to remove the retaining wall and all other improvements from the Disputed Property, and to request a declaratory judgment declaring the parties’ rights and duties under the CC&R’s. The McMullins answered and filed a cross-complaint against Nellie Gail seeking to quiet title to the Disputed Property in their name and a declaratory judgment regarding their rights and duties concerning the Disputed Property. They alleged they either acquired title to the Disputed Property through adverse possession or a prescriptive, implied, or equitable easement over the Disputed Property.
[995]
Following a six-day bench trial, the trial court entered judgmentfor Nellie Gail on all claims. The judgment declared the McMullins breached the CC&R’s by failing to accurately depict their property lines on the plans they submitted to the Review Committee, constructing the retaining wall and other improvements without the Review Committee’s approval or the city’s permission, and constructing the retaining wall and improvements on Nellie Gail’s property. The judgment further declared the McMullins did not acquire title to the Disputed Property by adverse possession because they failed to establish the essential elements of their claim, and the McMullins likewise did not acquire a prescriptive or equitable easement because they failed to establish the requisite elements. The court therefore quieted title to lot 274 and lot 273 in Nellie Gail and issued a mandatory injunction authorizing Nellie Gail to do the following at the McMullins’ expense: (1) remove the sports court; (2) cut down and remove the retaining wall to the existing grade in a manner that meets the city’s approval; and (3) “address the grade of the ground on the entirety of Lot 274 and Lot 273 in order to restore the area to a gradual open space slope and to restore the plantings onsaid Lot 274 and Lot 273 to native California vegetation.” Neither side requested a statement of decision.
Shortly after the trial court entered judgment, Nellie Gail filed a motion for attorney fees and costs. The court granted that motion, awarding approximately $187,000 in attorney fees and $10,000 in costs. Following the trial court’s ruling granting the fee motion, the McMullins filed their notice of appeal from the trial court’s judgment. The trial court later entered an amended judgment adding the attorney fees and costs to the judgment.
II. Discussion
A. We Infer the Trial Court Made All Necessary Findings Supported by Substantial Evidence Because the Parties Failed to Request a Statement of Decision
(1) “Upon a party’s timely and proper request, [Code of Civil Procedure] section 632 requires a trial court to issue a statement of decision following ‘the trial of a question of fact by the court.’ The statement must explain ‘the factual and legal basis for [the court’s] decision as to each of the principal controverted issues at trial . …’” (Acquired II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 970 [153 Cal.Rptr.3d 135] (Acquired II); [996] see Code Civ. Proc., § 632.)3 If the parties fail to request a statement of decision, the trial court is not required to provide one. (Acquired II, at p. 970.)
(2) “A party’s failure to request a statement of decision when one is available has two consequences. First, the party waives any objection to the trial court’s failure to make all findings necessary to support its decision. Second, the appellate court applies the doctrine of implied findings and presumes the trial court made all necessary findings supported by substantial evidence. [Citations.] This doctrine ‘is a natural and logical corollary to three fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error.’” (Acquired II, supra, 213 Cal.App.4th at p. 970.)
Here, it is undisputed the trial court conducted a six-day bench trial to determine the parties’ rights, duties, and interests in the Disputed Property. Similarly, no one disputes the parties did not request, and the court did not prepare, a statement of decision explaining the factual and legal basis for the court’s decision. We therefore infer the court made factual findings favorable to Nellie Gail on all issues necessary to support the judgment,and we review those findings under the substantial evidence standard. (Acquired II, supra, 213 Cal.App.4th at p. 970; Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 59–60 [58 Cal. Rptr. 3d 225].) We more fully address the specific standard of review applicable to each of the McMullins’ challenges in our discussion below.
The McMullins contend the doctrine of implied findings does not apply because all relevant facts were undisputed, and therefore the trial court did not resolve any factual issues in reaching its decision. Thus, the McMullins conclude they have raised only legal issues subject to de novo review. We disagree. There are many disputed factual issues underlying the court’s judgment. For example, the trial court had to determine the extent of the parties’ knowledge about the location of the McMullins’ rear property line, whether the McMullins deliberately failed to identify their rear property line on their submissions to Nellie Gail, and numerous other issues. Moreover, we do not independently review factual issues unless the facts are undisputed and no conflicting inferences can be drawn from the facts. (Montague v. AMN Healthcare, Inc. (2014) 223 Cal.App.4th 1515, 1521 [168 Cal. Rptr. 3d 123]; DiQuisto v. County of Santa Clara (2010) 181 Cal.App.4th 236, 270 [104 Cal. Rptr. 3d 93].) The McMullins failed to establish no conflicting inferences could be drawn from the evidence presented at trial.
[997]
B. The McMullins Forfeited Their Equitable Estoppel and Statute of LimitationsDefenses by Failing to Assert Them at Trial
The McMullins contend the trial court erred in quieting title to the Disputed Property in Nellie Gail because two of their defenses defeated Nellie Gail’s quiet title claim as a matter of law. First, the McMullins contend equitable estoppel barred Nellie Gail’s claim. Second, they contend section 318’s five-year limitations period bars Nellie Gail’s claim. The McMullins forfeited these defenses by failing to assert them at trial.
(3) “As a general rule, theories not raised in the trial court cannot be asserted for the first time on appeal; appealing parties must adhere to the theory (or theories) on which their cases were tried. This rule is based on fairness—it would be unfair, both to the trial court and the opposing litigants, to permit a change of theory on appeal … .” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2015) ¶ 8:229, p. 8-167.) “New theories of defense, just like new theories of liability, may not be asserted for the first time on appeal.” (Bardis v. Oates (2004) 119 Cal.App.4th 1, 13–14, fn. 6 [14 Cal. Rptr. 3d 89].) “‘Appellate courts are loath to reverse a judgment on grounds that the opposing party did not have an opportunity to argue and the trial court did not have an opportunityto consider. … Bait and switch on appeal not only subjects the parties to avoidable expense, but also wreaks havoc on a judicial system too burdened to retry cases on theories that could have been raised earlier.’” (Brandwein v. Butler (2013) 218 Cal.App.4th 1485, 1519 [161 Cal. Rptr. 3d 728].)
In their answer, the McMullins alleged boilerplate defenses based on equitable estoppel and the statute of limitations. Similarly, in the joint list of controverted issues the parties filed on the eve of trial, the McMullins identified these defenses as two of their 19 controverted issues for trial. The McMullins, however, thereafter abandoned those defenses by failing to raise either of them at trial.
The trial brief the McMullins filed neither argued these defenses nor identified them as issues for the trial court to decide. In his opening statement, the McMullins’ trial counsel stated he would present evidence to show the McMullins were entitled to maintain the retaining wall and other improvements on the Disputed Property based on three theories—adverse possession, prescriptive easement, and equitable easement. Counsel failed to mention equitable estoppel or the statute of limitations as a basis for the court to deny Nellie Gail’s quiet title claim. Similarly, in his closing argument, counsel argued the court should quiet title in the McMullins or grant them an exclusive easement over the Disputed Property based on adverse possession, prescriptive easement, or equitable easement. At no time during trial did the [998] McMullins assert that Nellie Gail was equitably estopped to bring a quiet title claim or that the statute of limitations barred Nellie Gail’s claim.
The McMullins fail to cite anywhere in the trial record where they mentioned the statute of limitations, and they cite just one page of the reporter’s transcript where their counsel uttered the words “equitable estoppel” during closing argument. This isolated utterance, however, is not sufficient to preserve the issue for appeal because the McMullins’ counsel did not utter those words while arguing Nellie Gail was equitably estopped to assert a quiet title claim. Indeed, it appears the McMullins’ counsel may have misspoke by mentioning equitable estoppel because he uttered that phrase when urging the trial court to grant an equitable easement, which, as explained below, is a separate doctrine that allows a landowner who constructed an improvement on an adjacentowner’s property to defeat that owner’s injunction request based on a balancing of the hardships or conveniences. (See, e.g., Tashakori v. Lakis (2011) 196 Cal.App.4th 1003, 1008–1009 [126 Cal. Rptr. 3d 838] (Tashakori).)
(4) Nonetheless, assuming the McMullins’ trial counsel meant to argue equitable estoppel, substantial evidence supports the implied finding the McMullins failed to establish the essential elements necessary for equitable estoppel. “‘“A valid claim of equitable estoppel consists of the following elements: (a) a representation or concealment of material facts (b) made with knowledge, actual or virtual, of the facts (c) to a party ignorant, actually and permissibly, of the truth (d) with the intention, actual or virtual, that the ignorant party act on it, and (e) that party was induced to act on it.”’ [Citation.] … Other, more general formulations have been proposed [citation], but all formulations require that the conduct of the party to be estopped induced action on the part of the complaining party. ‘Such causation is essential to estoppel . …’” (Stephens & Stephens XII, LLC v. Fireman’s Fund Ins. Co. (2014) 231 Cal.App.4th 1131, 1149 [180 Cal. Rptr. 3d 683].) “‘“‘[T]he existence of an estoppel is generally a question of fact for the trier of fact, and ordinarily the [fact-finder’s] determination is binding on appeal unless the contrary conclusion is the only one to bereasonably drawn from the facts.’”’” (J.P. v. Carlsbad Unified School Dist. (2014) 232 Cal.App.4th 323, 333 [181 Cal. Rptr. 3d 286].)
As the basis for their equitable estoppel claim, the McMullins cite Nellie Gail’s December 2009 letter and January 2010 e-mail, which informed the McMullins the board of directors decided not to pursue the unauthorized construction of the retaining wall and related improvements as a violation of the CC&R’s, and instructed the McMullins to work with Nellie Gail’s architect to develop a landscaping plan to screen the wall from view. In reliance on these letters, the McMullins assert they spent $20,000 to develop [999] and implement a landscaping plan for the area surrounding the retaining wall. That evidence is insufficient to equitably estop Nellie Gail from bringing a quiet title claim as a matter of law.
The McMullins ignore that these communications and their reliance on them occurred well after the retaining wall was constructed, and therefore they could not justifiably have relied on them in spending approximately $150,000 to construct the wall and related improvements that did not include the landscape screening, irrigation, and drainage around the wall. Moreover, the evidence supports the implied finding Nellie Gail did not know all of the essentialfacts because it was unaware of the extent of the McMullins’ encroachment onto its property when it voted not to pursue the wall as a CC&R’s violation and approved the plans to screen the wall. The evidence also supports the implied finding the McMullins were not ignorant of the facts because they concealed their rear property line’s location from Nellie Gail and knowingly started construction without Nellie Gail’s written approval.
Specifically, the record includes testimony from a member of Nellie Gail’s board of directors who participated in the vote not to pursue the retaining wall as a CC&R’s violation. That board member testified the board simply was looking for an amicable resolution to the situation, but did not know where the McMullins’ rear property line was or the extent of the encroachment when it voted. The record also reveals the trial court found the McMullins were not “innocent” in their construction of the wall because (1) they intentionally failed to identify their rear property line in each of the many plans they submitted despite Nellie Gail’s repeated request for them to identify property lines; (2) they knew where the property line was located because all of theirplans included a dashed, unlabeled line that approximated the rear property line’s location; and (3) they started construction based on an ambiguous oral statement from a Nellie Gail employee about the approval of their plans when they knew written approval from the Review Committee was required before construction could begin. Moreover, the city later informed both parties the wall was on Nellie Gail’s property and it could not remain there without Nellie Gail’s express approval. This evidence supports the implied finding the trial court rejected the McMullins’ equitable estoppel defense to the extent they did not forfeit it.4
[1000]
C. The McMullins Failed to Establish They Acquired Any Interest in theDisputed Property by Adverse Possession
The McMullins contend the trial court erred by failing to sustain their quiet title claim to the Disputed Property because they presented evidence sufficient to establish a claim to title by adverse possession. We disagree.5
(5) To establish they acquired title by adverse possession the McMullins must show (1) they possessed the Disputed Property under a claim of right or title; (2) they actually, openly, and notoriously occupiedthe Disputed Property in a manner that gave reasonable notice to Nellie Gail; (3) their possession and occupancy was adverse and hostile to Nellie Gail; (4) they continually possessed and occupied the Disputed Property for five years; and (5) they paid all property taxes levied and assessed on the Disputed Property during that five-year period. (Main Street Plaza v. Cartwright & Main, LLC (2011) 194 Cal.App.4th 1044, 1054 [124 Cal. Rptr. 3d 170].)
(6) The trial court found the McMullins’ adverse possession claim failed because they did not pay any property taxes on the Disputed Property.6 (See Mesnick v. Caton (1986) 183 Cal.App.3d 1248, 1260 [228 Cal. Rptr. 779] [“The adverse claimant’s failure to pay taxes on the land he claims is fatal to his claim”].) The payment of property taxes is a statutory requirement for adverse possession. (§ 325, subd. (b).) For section 325 purposes, a tax is levied when the county board of supervisors fixes the tax rate and orders payment of the taxes. A tax is assessed when the county assessor prepares the annual roll listing properties subject to taxation and their assessed value. (Hagman v. Meher Mount Corp. (2013) 215 Cal.App.4th 82, 90 [155 Cal. Rptr. 3d 192] (Hagman); see Allen v. McKay & Co. (1898) 120 Cal. 332, 334 [52 P. 828].)
The party claiming an interest based on adverse possession bears the burden to show either that “no taxes were assessed against the land or that if [1001] assessed he paid them.” (Gilardi v. Hallam (1981) 30 Cal.3d 317, 326 [178 Cal. Rptr. 624, 636 P.2d 588]; see Glatts v. Henson (1948) 31 Cal.2d 368, 372 [188 P.2d 745].) Section 325 requires that payment of the property taxes must be “established by certified records of the county tax collector.” (§ 325, subd. (b).) “Ordinarily, when adjoining lots are assessed by lot number, the claimant to the disputed portion cannot establish adverse possession because he cannot establish [he paid taxes on the portion of the adjoining property he occupied and possessed].” (Gilardi, at p. 326.)
The McMullins do not dispute they paid no property taxes on the Disputed Property. Instead, citing Hagman, they contend they were not required to pay taxes to establish their claim because the larger parcel that included the Disputed Property—lot 274—had no value, and therefore no taxes were levied and assessed against it. To show the Disputed Property had no value, the McMullins point to the recorded quitclaim deed transferring lot 274 to Nellie Gail in 1984 and recent property tax statements.
According to the McMullins, the recorded quitclaim deed showed lot 274 had no value because the deed states no documentarytransfer tax was required for the transfer because the consideration was less than $100. The McMullins contend the tax statements show lot 274 had no value because the statements did not show the county levied and assessed any specific property taxes against lot 274 and did not identify a specific value for the parcel. This evidence, however, fails to meet the McMullins’ burden to show no taxes were levied and assessed.
In Hagman, the adverse possession claimant presented evidence showing the holder of legal title applied for and obtained a property tax exemption for the property at issue during the entire period of adverse possession because the titleholder was a religious organization that used the property for educational purposes. (Hagman, supra, 215 Cal.App.4th at p. 86.) That exemption precluded the county from levying or assessing any property taxes against the property. The Court of Appeal therefore concluded the claimant was not required to pay property taxes to establish adverse possession because no property taxes were assessed or levied on the property during the period of adverse possession. (Id. at pp. 90–91.)
Here, the McMullins rely on evidence that fails to show lot 274 was exempt from property taxes, lot 274had no value, or no property taxes were levied and assessed on lot 274. The quitclaim deed transferred lot 274 from Nellie Gail’s original developer to Nellie Gail and dedicated the parcel as open space. Nowhere does the deed state lot 274 has no value and the McMullins do not cite any authority to support their assumption that the absence of any documentary transfer tax on this type of transfer establishes [1002] the property has no value. Moreover, at trial, the parties agreed lot 274 and the Disputed Property had value, but merely disagreed on what that value was. Similarly, although the property tax statements showed Nellie Gail was not billed for any property taxes on lot 274, and did not identify a specific value for that parcel, the tax statements stated, “common area values separately assessed.” (Capitalization omitted.)
(7) That statement is consistent with Revenue and Taxation Code section 2188.5’s assessment of property taxes for common areas owned by homeowners associations like Nellie Gail. That section provides that all parcels owned by individual homeowners that make up the association are assessed property taxes based not only on the value of their separate lots, but also on the value of their proportionate, undivided shareof all common areas owned by their homeowners association. (Rev. & Tax. Code, § 2188.5, subd. (a)(1).)7 Common areas like lot 274 therefore have value and property taxes are levied against them; those taxes are billed to and paid by the individual homeowners. (Lake Forest Community Assn. v. County of Orange (1978) 86 Cal.App.3d 394, 397 [150 Cal. Rptr. 286] [“pursuant to Revenue and Taxation Code section 2188.5, the real property taxes levied against the clubhouse and the parcel of land on which it is located are assessed to the separately owned residential properties owned by [the] Association’s members”].)
(8) The McMullins argue these authorities do not apply to lot 274 because there is no evidence to show the developer or Nellie Gail properly annexed lot 274 to make it part of the common areas governedby Nellie Gail under the CC&R’s. At trial, however, the McMullins stipulated that lot 274 is “‘Common Area’” as defined in Nellie Gail’s CC&R’s. Having tried the case based on that stipulation, the McMullins may not seek to repudiate it on appeal. (See People v. Pijal (1973) 33 Cal.App.3d 682, 697 [109 Cal. Rptr. 230] [“It is, of course, well established that the defendant is bound by the stipulation or open admission of his counsel and cannot mislead the court and jury by seeming to take a position on issues and then disputing or repudiating the same on appeal”].)
The McMullins therefore failed to meet their burden to show they were not required to pay any property taxes on the Disputed Property, and the trial court properly found their adverse possession claim failed as a result.
[1003]
D. The Trial Court Did Not Abuse Its Discretion in Granting Nellie Gail an Injunction Against the McMullins’ Encroachment
The McMullins contend the trial court erred in granting Nellie Gail a mandatory injunction that requires them to pay for removing the visible portions of the retaining wall and restoring the surrounding area to its natural condition. According to the McMullins, the trial court could not grant the equitable remedy of an injunction without first findingNellie Gail had no adequate remedy at law, and the record lacks substantial evidence to support the finding monetary damages was an inadequate legal remedy. The McMullins misconstrue the governing legal standards, and we conclude substantial evidence supports the trial court’s decision.
(9) In an action between adjoining landowners based on the defendant constructing an improvement on the plaintiff’s property, the plaintiff generally is entitled to a mandatory injunction requiring the defendant to remove the encroachment. (Brown Derby Hollywood Corp. v. Hatton (1964) 61 Cal.2d 855, 858 [40 Cal. Rptr. 848, 395 P.2d 896] (Brown Derby); Salazar v. Matejcek (2016) 245 Cal.App.4th 634, 649 [199 Cal. Rptr. 3d 705] (Salazar).) Under the doctrine of “‘balancing of conveniences’” or “‘relative hardships,’” a trial court has discretion to deny an injunction and instead compel the plaintiff to accept damages as compensation for a judicially created easement that allows the defendant to maintain the encroaching improvement. (Shoen v. Zacarias (2015) 237 Cal.App.4th 16, 19–20 [187 Cal. Rptr. 3d 560] (Shoen); see Tashakori, supra, 196 Cal.App.4th at pp. 1008–1009; Linthicum v. Butterfield (2009) 175 Cal.App.4th 259, 265 [95 Cal. Rptr. 3d 538] (Linthicum).)
“When a trial court refuses to enjoin encroachments which trespass on another’s land, ‘the net effect is a judicially created easement by a sort of non-statutory eminent domain.’ [Citations.] However, the courts are not limited to judicial passivity as in merely refusing to enjoin an encroachment. Instead, in a proper case, the courts may exercise their equity powers to affirmatively fashion an interest in the owner’s land which will protect the encroacher’s use.” (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 764–765 [110 Cal. Rptr. 2d 861] (Hirshfield).) That interest commonly is referred to as an equitable easement. (Shoen, supra, 237 Cal.App.4th at pp. 19–20; Tashakori, supra, 196 Cal.App.4th at pp. 1008–1009.)
(10) For a trial court to exercise its discretion to deny an injunction and grant an equitable easement, “three factors must be present. First, the defendant must be innocent. That is, his or her encroachment must not be willful or negligent. The court should consider the parties’ conduct to determine who is responsible for the dispute. Second, unless the rights of the public would be harmed, the court should grant the injunction if the plaintiff [1004] ‘will suffer irreparable injury … regardless of the injury to defendant.’ Third, the hardship to the defendant from granting the injunction “must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant. …’” (Hirshfield, supra, 91 Cal.App.4th at p. 759, italics omitted.) “Unless all three prerequisites are established, a court lacks the discretion to grant an equitable easement.” (Shoen, supra, 237 Cal.App.4th at p. 19.)
“Overarching the analysis is the principle thatsince the defendant is the trespasser, he or she is the wrongdoer; therefore, ‘doubtful cases should be decided in favor of the plaintiff.’” (Hirshfield, supra, 91 Cal.App.4th at p. 759; see Linthicum, supra, 175 Cal.App.4th at p. 265.) Moreover, “courts approach the issuance of equitable easements with ‘[a]n abundance of caution.’” (Shoen, supra, 237 Cal.App.4th at p. 21.) When courts compare the hardships or conveniences, the scales “begin tipped in favor of the property owner due to the owner’s substantial interest in exclusive use of her property arising solely from her ownership of her land.” (Shoen, supra, 237 Cal.App.4th at p. 20.)
(11) “‘When the court finds … that the defendant was not innocent, it should grant an injunction [because an essential element for denying an injunction and establishing an equitable easement is missing].” (Salazar, supra, 245 Cal.App.4th at p. 649, italics omitted, quoting Brown Derby, supra, 61 Cal.2d at p. 858.) “The defendant is not innocent if he wilfully encroaches on the plaintiff’s land. [Citations.] To be wilful the defendant must not only know that he is building on the plaintiff’s land, but act without a good faith belief that he has a right to do so.” (Brown Derby, supra, 61 Cal.2d at p. 859.) “Where the conduct is willful, it may be presumed that a defendant acted with full knowledge of the plaintiff’s rights ‘“‘and with an understanding of the consequences which might ensue . …’”’” (Salazar, supra, 245 Cal.App.4th at p. 649.) “The question whether thedefendant’s conduct is so egregious as to be willful or whether the quantum of the defendant’s negligence is so great as to justify an injunction is a matter best left to the sound discretion of the trial court.” (Linthicum, supra, 175 Cal.App.4th at p. 267.) “We review the trial court’s application of this doctrine for an abuse of discretion.” (Shoen, supra, 237 Cal.App.4th at p. 20.)
(12) Here, the trial court refused to grant the McMullins an equitable easement, and instead issued an injunction for the removal of the retaining wall and restoration of the surrounding area. The court found the McMullins were not innocent in constructing the wall on Nellie Gail’s property, and therefore did not satisfy the first of the three requirements described above. The record supports the court’s ruling because substantial evidence supports [1005] the implied findings the McMullins knew where their rear property line was located, they intentionally did not identify it, and they began constructing the wall knowing they did not have the necessary approvals from Nellie Gail.
For example, the evidence showed Nellie Gail denied several applications by the McMullins seeking approval for the retaining wall and related improvements. Each time, Nellie Gail told the McMullins in writing that anyfuture application must include “a fully dimensioned site plan showing property lines,” but the McMullins repeatedly submitted applications that failed to identify the rear property line. Indeed, the McMullins never submitted a plan identifying the location of their rear property line. The evidence also showed Donald prepared all of the plans the McMullins submitted to Nellie Gail, and each time he drew in a dashed, unlabeled line that Nellie Gail later discovered was the rear property line and showed the retaining wall and other improvements were on Nellie Gail’s property. Moreover, the applications repeatedly represented the retaining wall would be constructed in the same location as the original wrought iron fence, but the McMullins constructed the new retaining wall in a location that enclosed 2,000 square feet more than the original wrought iron fence. Finally, the trial court could rely on evidence that showed the McMullins constructed the retaining wall based on Erickson’s oral and ambiguous statement that she thought the McMullins’ plans had been approved, but the McMullins knew all of their previous plans for the retaining wall had been rejected in writing, they had not submitted [***41] any new plans since the last rejection, and a written approval from the Review Committee was required before construction could commence.
The McMullins point to the Review Committee’s approval of the landscape screening for the retaining wall as a basis for the trial court to grant an equitable easement and deny injunctive relief. As explained above, however, that approval occurred after the McMullins knowingly constructed the wall on Nellie Gail’s property without the Review Committee’s approval. Moreover, the $20,000 cost for the screening portion of the project amounts to less than 12 percent of the total cost for the project. On these facts, we cannot say the trial court abused its discretion in concluding the McMullins were not innocent, and therefore were not entitled to an equitable easement.
The McMullins also argue Nellie Gail should have known the location of the property line between the two properties, and Nellie Gail acquiesced in the McMullins’ construction of the retaining wall by failing to tell them to stop construction until the wall essentially was complete. These arguments, however, ignore the governing standard of review and improperly seek to reargue the evidenceon appeal. As explained above, we review the trial court’s decision to grant an injunction and deny an equitable easement under [1006] the abuse of discretion standard. (Shoen, supra, 237 Cal.App.4th at pp. 19–20; Linthicum, supra, 175 Cal.App.4th at p. 267.) The abuse of discretion standard includes a substantial evidence component: “We defer to the trial court’s factual findings so long as they are supported by substantial evidence, and determine whether, under those facts, the court abused its discretion. If there is no evidence to support the court’s findings, then an abuse of discretion has occurred.” (Tire Distributors, Inc. v. Cobrae (2005) 132 Cal.App.4th 538, 544 [33 Cal. Rptr. 3d 761].)
When we review the record for substantial evidence, we do not determine whether substantial evidence supports the factual conclusions advanced by the McMullins. Rather, we review the entire record solely to determine whether substantial evidence supports the trial court’s expressed and implied factual findings. If there is, our analysis ends; we may not substitute our deductions for those of the trial court. (Rupf v. Yan (2000) 85 Cal.App.4th 411, 429–430, fn. 5 [102 Cal. Rptr. 2d 157].) As explained above, we conclude substantial evidence supports the trial court’s finding the McMullins were not innocent, and therefore were not entitled to an equitable easement.
(13) In arguing monetary damages provided an adequate legal remedy that requiredthe trial court to deny injunctive relief, the McMullins fail to recognize the foregoing authorities governed the court’s decision whether to grant an injunction or require Nellie Gail to accept monetary damages instead. The McMullins rely on cases that discuss injunctive relief generally and involve different factual contexts. Reliance on these authorities is unavailing here because they do not address awarding injunctive relief when an adjoining property owner constructs an improvement that encroaches on his or her neighbor’s property.8 Under the foregoing authorities, whether Nellie Gail suffered irreparable injury or monetary damages provided an adequate legal remedy is addressed by the second element of the governing standard, [1007] but the court need not decide that issue where, as here, the court determines the defendant was not innocent and therefore was ineligible for an equitable easement. (See Brown Derby, supra, 61 Cal.2d at p. 858 [“The rationale behind the rule is … to prevent a wrongdoer from gaining control of land merely by paying a penalty of damages”].)
Finally, the McMullins challenge the terms and scope of the trial court’s injunction. First, they contend the injunction requires the city to issue permitsfor and approve the retaining wall’s demolition, but there is no guarantee the city will approve the demolition or issue any permits. Second, the McMullins contend the injunction is overbroad because it authorizes Nellie Gail to address the grade and ground cover on the entirety of lot 274 and lot 273 at the McMullins’ expense, but those lots total more than 20 acres and the McMullins’ construction disturbed much less than one acre. Neither of these arguments invalidates the injunction or requires our intervention at this time.
We will not speculate on the city’s position concerning the retaining wall’s demolition. The trial court has the authority to modify the injunction if necessary to comply with the city’s building code or other requirements. Moreover, the injunction essentially requires the wall to be removed in whatever manner the city requires. As for the McMullins’ concern Nellie Gail will attempt to regrade and replant the entire 20 acres at the McMullins’ expense, that too is based on nothing more than speculation. The trial court’s judgment includes a procedure for the McMullins to challenge the reasonableness of the expenses Nellie Gail seeks to impose on them and theymay seek to modify the injunction if necessary.
E. This Court Lacks Jurisdiction to Review the Trial Court’s Attorney Fees Award
The McMullins contend the trial court erred in awarding Nellie Gail attorneyfees under Civil Code section 5975, subdivision (c), because this lawsuit is not an action to enforce Nellie Gail’s governing documents, but an action to enforce the quitclaim deed transferring lot 274 to Nellie Gail. We lack jurisdiction to review the attorney fees award because the McMullins failed to timely appeal the award. We therefore dismiss that portion of their appeal.
(14) “‘An appellate court has no jurisdiction to review an award of attorney fees made after entry of the judgment, unless the order is separately appealed.’ [Citation.] ‘“[W]here several judgments and/or orders occurring close in time are separately appealable (e.g., judgment and order awarding attorney fees), each appealable judgment and order must be expressly specified—in either a single notice of appeal or multiple notices of appeal—in [1008] order to be reviewable on appeal.”’” (Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156, 1171 [50 Cal. Rptr. 3d 247] (Colony Hill); see Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284 [114 Cal. Rptr. 2d 898]; DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43 [99 Cal. Rptr. 2d 366] (DeZerega).) Indeed, “‘[w]hen a party wishes to challenge both a final judgment and a postjudgment costs/attorney fee order, the normal procedure is to file two separateappeals: one from the final judgment, and a second from the postjudgment order.’” (Torres v. City of San Diego (2007) 154 Cal.App.4th 214, 222 [64 Cal. Rptr. 3d 495].) “‘“[I]f a judgment or order is appealable, an aggrieved party must file a timely appeal or forever lose the opportunity to obtain appellate review.”’” (Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688, 693 [118 Cal. Rptr. 3d 581] (Silver).)
Here, the trial court entered judgment in Nellie Gail’s favor in early November 2014. In mid-December, the court granted Nellie Gail’s attorney fees motion and awarded Nellie Gail $187,000 in attorney fees and $10,000 in costs. The McMullins filed their notice of appeal on December 30, 2014, stating they appealed from “the judgment executed and filed on November 6, 2014.” Their notice of appeal did not identify the trial court’s ruling on Nellie Gail’s attorney fees motion or otherwise suggest the McMullins were appealing the attorney fees award. On January 21, 2015, the trial court entered an “Amended Judgment,” granting Nellie Gail’s attorney fees motion and amending the original judgment to include the attorney fees and costs award. The amended judgment stated the judgment “shall remain in all other respects as originally entered, and as modified to date, and shall retain its original entry date of November 6, 2014.” The McMullins did notfile a separate notice of appeal to challenge either the trial court’s ruling on the attorney fees motion or the amended judgment, and therefore we lack jurisdiction to review the attorney fees award.
Citing Grant v. List & Lathrop (1992) 2 Cal.App.4th 993 [3 Cal.Rptr.2d 654] (Grant), the McMullins contend their notice of appeal necessarily encompassed the trial court’s attorney fees award because the original judgment awarded Nellie Gail attorney fees and left a blank space for the amount to be inserted later, and the amended judgment expressly amended the original judgment nunc pro tunc to include the amount of fees. The McMullins misconstrue Grant and the court’s judgment and amended judgment.
(15) In Grant, the Court of Appeal determined it had jurisdiction to decide an appeal challenging a postjudgment award of attorney fees where the judgment identified in the notice of appeal expressly awarded attorney fees to the prevailing party and merely left the determination of the amount for postjudgment proceedings. (Grant, supra, 2 Cal.App.4th at pp. 996–997.) [1009] The foregoing authorities emphasize Grant established a narrow exception to the rule requiring a separate notice of appeal for a postjudgment attorney fees award, and that exception applies solely when “the entitlement to fees [is] adjudicatedby the original judgment, leaving only the issue of amount for further adjudication.” (DeZerega, supra, 83 Cal.App.4th at p. 44; see Silver, supra, 190 Cal.App.4th at p. 692; Colony Hill, supra, 143 Cal.App.4th at p. 1172.)
In Silver, for example, the appellant sought to challenge a postjudgment attorney fees award on his appeal from the underlying judgment that stated attorney fees were awarded to the respondent and left a blank space for the amount of fees to be inserted later. (Silver, supra, 190 Cal.App.4th at pp. 690–691.) The Court of Appeal concluded it lacked jurisdiction to review the attorney fees award because the trial court made the award after entry of judgment and the appellant did not file a separate notice of appeal challenging the award. Although the judgment stated fees were awarded and left a blank space for the amount, the Silver court concluded Grant did not apply because the record showed the trial court determined both entitlement to and the amount of fees in postjudgment proceedings. (Silver, at pp. 691–692.)
Here, the original judgment similarly stated Nellie Gail shall recover its attorney fees and left a blank space for the amount to be inserted later, but the record shows the trial court made no determination regarding attorney fees before entering judgment, and determined both Nellie Gail’s entitlement to and the amount of fees after entry of judgment.Grant therefore does not apply.
Contrary to the McMullins’ contention, the trial court’s amended judgment did not amend the original judgment nunc pro tunc and thereby bring the attorney fees award within the scope of their notice of appeal. Although Nellie Gail’s attorney fees motion requested that the trial court amend the original judgment nunc pro tunc to include the fees award, neither the trial court’s ruling nor the amended judgment stated the original judgment was amended nunc pro tunc. Rather, the amended judgment simply stated the original judgment was amended to include the attorney fees and costs award and the original judgment shall retain its original entry date.
(16) More importantly, a trial court’s authority to amend its judgment nunc pro tunc is limited to correcting clerical errors in the judgment. (APRI Ins. Co. v. Superior Court (1999) 76 Cal.App.4th 176, 185–186 [90 Cal. Rptr. 2d 171]; Lang v. Superior Court (1961) 198 Cal.App.2d 16, 17–18 [18 Cal. Rptr. 67].) Amending a judgment to include an award of attorney fees and costs when the court determined both the entitlement to and amount of fees after entry of judgment is not an amendment to correct a clerical error. [1010] Indeed, the Rule of Court addressing postjudgment awards of costs, including attorney fees, directs the court clerk to enter the award on the judgment. It does notauthorize the court or clerk to amend the judgment nunc pro tunc. (Cal. Rules of Court, rule 3.1700(b)(4).) If a judgment could be amended nunc pro tunc to include a postjudgment attorney fees award, an appellant would never have to file a separate appeal from a postjudgment order granting attorney fees, but that is contrary to the foregoing authorities. (Cf. Colony Hill, supra, 143 Cal.App.4th at p. 1172.)
(17) Finally, the McMullins contend we must liberally construe their notice of appeal to encompass the trial court’s postjudgment attorney fees award. Not so. The Colony Hill court rejected this same argument: “‘The rule favoring appealability in cases of ambiguity cannot apply where there is a clear intention to appeal from only part of the judgment or one of two separate appealable judgments or orders. [Citation.] “Despite the rule favoring liberal interpretation of notices of appeal, a notice of appeal will not be considered adequate if it completely omits any reference to the judgment [or order] being appealed.”’” (Colony Hill, supra, 143 Cal.App.4th at p. 1172; see Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 47 [269 Cal. Rptr. 228].) The McMullins’ notice of appeal unmistakably stated they appealed from the trial court’s November 6, 2014 judgment, and nothing else.
III. Disposition
The judgment is affirmed. The purported appeal from the trial court’s order awarding attorney feesand costs is dismissed for lack of jurisdiction. Nellie Gail shall recover its costs on appeal.
Bedsworth, Acting P. J., and Thompson, J., concurred.
1 We also refer to the McMullins individually by their first names to avoid confusion. No disrespect is intended.
2 The only area of disagreement was whether the Disputed Property included a few square feet of lot 273. Nellie Gail’s surveyor concluded it did not, but the McMullins’ surveyor concluded it did. Whether the Disputed Property included a portion of lot 273 is not significant to our analysis and the trial court nonetheless quieted title to both lots in Nellie Gail’s name. We therefore refer only to lot 274 for easeof reference.
3 All statutory references are to the Code of CivilProcedure unless otherwise stated.
4 We also note the McMullins asserted a quiet title claim in their cross-complaint that would support the trial court’s judgment quieting title to the Disputed Property in Nellie Gail. The McMullins contend Nellie Gail was equitably estopped to bring its quiet title action, but did not assert Nellie Gail was equitably estopped from defending the McMullins’ quiet title claim or that the trial court could not quiet title in Nellie Gail based on the McMullins’ claim.
5 The McMullins do not separately argue they were entitled to an interest in the Disputed Property by adverse possession. Rather, they raise their adverse possession argument as the basis for their contention Nellie Gail’s quiet title action was time-barred. We nonetheless consider the argument on its merits because the governing five-year limitation period on a property owner’s quiet title action against an adverse possessor is triggered when an adverse possessor begins to use and occupy the property to acquire title. An adverse possessor who claims the legal owner’s quiet title action is time-barred therefore bears the burden to establish all elements of an adverse possession claim to show the quiet title claim is time-barred. (Harrison v. Welch (2004) 116 Cal.App.4th 1084, 1095–1096 [11 Cal. Rptr. 3d 92].)
6 The trial court also found the McMullins failed to establish their possession and occupation of the Disputed Property was “open, notorious, and hostile,” but we need not address this finding because substantial evidence supports the court’s finding theMcMullins failed to pay property taxes.
7 In pertinent part, Revenue and Taxation Code section 2188.5, subdivision (a)(1), provides as follows: “[W]henever real property has been divided into planned developments as defined in Section 11003 of the Business and Professions Code, the interests therein shall be presumed to be the value of each separately owned lot, parcel, or area, and the assessment shall reflect this value, which includes all of the following: [¶] (A) The assessment attributable to the value of the separately owned lot, parcel, or area and the improvements thereon. [¶] (B) The assessment attributable to the share in the common area reserved as an appurtenance of the separately owned lot, parcel, or area.”
8 The McMullins in their rehearing petition fault us for not discussing the following statement from Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342 [1 Cal.Rptr.3d 32, 71 P.3d 296] (Intel Corp.): “Even in an action for trespass to real property, in which damage to the property is not an element of the cause of action, ‘the extraordinary remedy of injunction’ cannot be invoked without showing the likelihood of irreparable harm.” (Id. at p. 1352.)
Intel Corp. addressed whether a claim for trespass to chattels could be based on an employee’s unauthorized use of a company’s e-mail system. (Intel Corp., supra, 30 Cal.4th at pp. 1346–1348.) It did not address an adjoining landowner’s encroachment on his or her neighbor’s property by constructing an improvement. The quote on which the McMullins rely is merely dictum from the court’s response to an argument that actual injury was not an element of a claim for trespass to chattels when the only remedy sought is injunctive relief. (Id. at pp. 1351–1352.) Moreover, the McMullins fail to recognize the quote on which they rely addresses a trespass in general, which may include simple entry onto another’s land, but the cases discussed above address the more specific situation of a landowner encroaching on his or her neighbor’s property by constructing an improvement, not merely entering upon the property.
(a) A member shall, on an annual basis, provide written notice to the association of all of the following:
(1) The member’s preferred delivery method for receiving notices from the association, which shall include the option of receiving notices at one or both of the following:
(A) A mailing address.
(B) A valid email address.
(2) An alternate or secondary delivery method for receiving notices from the association, which shall include the option to receive notices at one or both of the following:
(A) A mailing address.
(B) A valid email address.
(3) The name, mailing address, and, if available, valid email address of the owner’s legal representative, if any, including any person with power of attorney or other person who can be contacted in the event of the member’s extended absence from the separate interest.
(4) Whether the separate interest is owner-occupied, is rented out, if the parcel is developed but vacant, or if the parcel is undeveloped land.
(b)
(1) The association shall solicit the annual notices described in subdivision (a) of each owner and, at least 30 days before making its own required disclosure under Sections 5300 and 5310, shall enter the data into its books and records.
(2) The association shall include in the solicitation required by paragraph (1) both of the following:
(A) Notification that the member does not have to provide an email address to the association.
(B) A simple method for the member to inform the association in writing that the member wishes to change their preferred delivery method for receiving notices from the association.
(c) If a member fails to provide the notices set forth in subdivision (a), the last mailing address provided in writing by the member or, if none, the property address shall be deemed to be the address to which notices are to be delivered.
(d)
(1) To the extent that interests regulated in Chapter 2 (commencing with Section 11210) of Part 2 of Division 4 of the Business and Professions Code are part of a mixed-use project where those interests comprise a portion of a common interest development, the association, as defined in Section 4080, shall be deemed compliant with this section if, at least once annually, it obtains from the time-share plan association a copy of the list described in subdivision (e) of Section 11273 of the Business and Professions Code, and enters the data into its books and records.
(2) Notwithstanding subdivision (e) of Section 11273 of the Business and Professions Code, the time-share plan association shall provide the list required by paragraph (1) to the association at least annually for this purpose.
(e) For the purposes of this section, a valid email address is one that, after a notice is sent, does not result in a bounce or other error notification indicating failure of the message. If the association delivers a notice to a member’s email address and finds that the email address provided is no longer valid, the association shall resend the notice to a mailing or email address identified by the member pursuant to Section 4040.
(Amended by Stats. 2022, Ch. 632, Sec. 1. (SB 1252) Effective January 1, 2023.)
[Amendments to CC&Rs; Rent Restriction] An amendment to the CC&Rs which empowered the HOA to evict tenants who violate the CC&Rs was held to be reasonable.
Law Firm of Kaiser & Swindells, Raymond T. Kaiser and J. Rodney DeBiaso for Defendant and Appellant.
Peters & Freedman and Laurie S. Poole for Plaintiff and Respondent.
OPINION
HOLLENHORST, J. —
David Pheil (Pheil) appeals a trial court order that reduced the percentage of votes necessary to amend the Mission Shores Association’s (the Association) declaration of covenants, conditions and restrictions (CC&R’s). (Civ. Code, § 1356.)[FN.1] Pheil challenges the order on the grounds the trial court erred in finding that (1) the amendment was reasonable (§ 1356, subd. (c)(5)); (2) the balloting conformed to the CC&R’s (§ 1356, subd. (c)(2)); and (3) there was no impairment to the security interest of mortgagees (§ 1356, subd. (e)(3)). We affirm the order.
I. PROCEDURAL BACKGROUND AND FACTS
The Association is the homeowners association which governs the Mission Shores common interest development (Mission Shores) located in Rancho Mirage and consisting of 168 separate interests (Homes), in addition to common areas and facilities. On May 12, 2004, the CC&R’s were recorded for the development.
In 2004, Pheil and his wife decided to purchase a vacation home in Rancho Mirage. At Mission Shores, the developer’s agent represented to Pheil and his wife that they would be allowed to rent or lease a home without restriction. According to the applicable CC&R’s, an owner may rent to a single family where the rental agreement is in writing and subject to the CC&R’s. In reliance on the agent’s representation, Pheil and his wife purchased a Home, which they rented, on occasion, to others. As a homeowner, Pheil is a member of the Association.
The board of directors for the Association (Board) is composed of five members, three of which were appointed by the developer. The developer owns 11 of the 168 Homes in the development. Concerned with how some homeowners were renting their Homes, on May 19, 2005, the Board [793] unanimously voted to accept proposed rule 2.10.2 of the CC&R’s (Rule 2.10.2), which provided, “No short-term rentals or leases of less than 30 days are allowed.” Pheil challenged the rule. This dispute came before Mediator Peter J. Lesser. A July 31, 2006, mediation did not resolve the dispute. On August 23, Pheil, through his attorney, mailed a “Demand for Internal Dispute Resolution” to Attorney James R. McCormick, Jr., an attorney for the Association, with respect to Rule 2.10.2.
In response to the dispute over Rule 2.10.2, the Board decided to amend the CC&R’s to provide the same temporal limitation on rentals. Additionally, the proposed amendment granted the Association the right to evict a tenant for breach of the governing documents and to impose the related attorney fees and court costs on the homeowner. On September 28, 2006, the Association mailed a cover letter, voting instructions, official ballot, the proposed amendment to the CC&R’s (Amendment), and two envelopes to all members of record of the Association. It presented a “redlined” version of article II, section 2.1 of the CC&R’s, showing precisely the language to be added and to be deleted. A deadline of November 13, 2006, was set to return the ballots. The owners were further informed the ballots would be tabulated at the Board meeting on November 15.
Article IV, section 4.4.3 of the CC&R’s sets forth the different types of voting “classes.” “Class A” consists of members of the Association who own a Home. Of the 168 Homes, 157 had been sold such that there were 157 owner votes. The remaining 11 Homes were still owned by the developer, who was entitled to three “Class B” votes per Home, or a total of 33 developer votes. In order for the Amendment to pass, the Association had to obtain at least 67 percent of the voting power of both classes. Thus, passage of the Amendment required 105 owner votes and 22 developer votes. On November 13, 2006, 132 of the 168 ballots were received. The inspectors of the election opened the ballots and tabulated the results. In the “Class A” category, 93 owner votes were in favor of the Amendment, 28 owner votes were against the Amendment, and 36 owner votes abstained. In the “Class B” category, all 33 developer votes were cast in favor of the Amendment. Because the Amendment garnered only 59 percent of the owner vote, it failed.
On March 8, 2007, pursuant to section 1356, the Association petitioned the trial court for an order reducing the percentage of affirmative votes required for passage of the Amendment and approving the Amendment based upon the number of affirmative votes actually cast constituting at least a majority of each voting class. A hearing date was set for April 9, 2007. The Association filed a notice of hearing, memorandum of points and authorities, [794] and supporting declarations. Notice of the hearing was mailed to each homeowner of record on March 23, 2007.
Pheil opposed the petition, objecting to the imposition of a 30-day minimum for leases on the grounds that this violated an alleged representation made by the developers of the project when he purchased his Home. In reply, the Association stated the reason for the minimum lease term was to prevent use of any Home as a hotel. The Association provided a declaration from its counsel regarding the prevalence of CC&R restrictions containing a 30-day minimum provision.
At the initial hearing on April 9, 2007, the trial court continued the matter to allow Pheil’s counsel to obtain copies of the supporting declarations. The second hearing was continued to allow the Association to hold its election of directors to see if the new Board would want to continue pursuing the petition. During the final hearing on May 25, 2007, the trial court indicated its intent to grant the petition.
By order dated June 12, 2007, the trial court found that the Association had complied with the requirements of section 1356, subdivision (c)(1) through (6) and that granting the petition was “not improper” under section 1356, subdivision (e)(1) through (3). Thus, the trial court granted the petition, which reduced the percentage required to amend the CC&R’s. Pheil filed the instant appeal.
II. STANDARD OF REVIEW
(1) “[S]ection 1356, part of the Davis-Stirling Common Interest Development Act (the Act), provides that a homeowners association, or any member, may petition the superior court for a reduction in the percentage of affirmative votes required to amend the CC&R’s if they require approval by `owners having more than 50 percent of the votes in the association….’ [Citation.] The court may, but need not, grant the petition if it finds all of the following: Notice was properly given; the balloting was properly conducted; reasonable efforts were made to permit eligible members to vote; `[o]wners having more than 50 percent of the votes, in a single class voting structure, voted in favor of the amendment’; and `[t]he amendment is reasonable.’ [Citation.]” (Peak Investments v. South Peak Homeowners Assn., Inc. (2006) 140 Cal.App.4th 1363, 1366-1367 [44 Cal.Rptr.3d 892], fn. omitted.)
The purpose of section 1356 is to provide homeowners associations with the “ability to amend [their] governing documents when, because of voter [795] apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration. [Citation.] In essence, it provides [an] association with a safety valve for those situations where the need for a supermajority vote would hamstring the association.” (Blue Lagoon Community Assn. v. Mitchell (1997) 55 Cal.App.4th 472, 477 [64 Cal.Rptr.2d 81].)
Section 1356, subdivision (c), gives the trial court broad discretion in ruling on such petition. Accordingly, on appeal, we review the trial court’s ruling for abuse of discretion. (Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 570 [71 Cal.Rptr.3d 299].)
III. WAS THE AMENDMENT REASONABLE?
Pheil contends that because three of the five seats on the Board were held by representatives of the developer, the developer “in fostering the petition was clearly acting for its own purposes and not [those] of the owners.” Specifically, Pheil claims there is no evidence that any individual homeowner complained about the rental of a home without temporal restriction. Instead, Pheil notes the evidence is limited to the vague determination by the Board and the self-serving declaration of the Association’s attorney. Given the facts that (1) the Board was controlled by the developer who was behind the petition; (2) this was not a case of homeowner apathy; and (3) the trial court’s words suggest that it thought the owners were entitled to a representative board, Pheil argues the trial court abused its discretion in finding the Amendment to be reasonable.
(2) Clearly, the Association was charged with the burden of proving the Amendment was reasonable. (Fourth La Costa Condominium Owners Assn. v. Seith, supra, 159 Cal.App.4th at p. 577.) “The term `reasonable’ in the context of use restrictions has been variously defined as `not arbitrary or capricious’ [citations], `rationally related to the protection, preservation and proper operation of the property and the purposes of the Association as set forth in its governing instruments,’ and `fair and nondiscriminatory.’ [Citation.]” (Ibid.)
Here, the Association argued that the need to restrict rentals to 30 days or more was to ensure the property would not become akin to a hotel. Mission Shores is a residential community. According to the Association’s attorney, “The overwhelming majority of the [CC&R’s] that [she] review[s], both in preparing restated [CC&R’s] and reviewing existing [CC&R’s], contain[s] provisions regarding minimum lease terms of thirty (30) days or longer….” As the trial court noted, “these kinds of restrictions are very common. And … many counties and cities have these restrictions that essentially when [796] you rent for less than 30 days, you’re essentially operating a hotel in a residential district.” Furthermore, the court observed, “there is a movement afoot to restrict homes from being on vacation rentals. It is not just in this project. It is throughout California. [¶] So for example … I have a home in San Luis Obispo County and they have a very strict rule about vacation rentals. I was just reading in the paper in Palm Springs they’re talking about passing a law restricting rentals to only 30 days or more.”
“A CC&R is unreasonable if it is arbitrary and capricious, violates the law or a fundamental public policy or imposes an undue burden on property, and it is reasonable unless it meets those criteria. [Citation.]” (Fourth La Costa Condominium Owners Assn. v. Seith, supra, 159 Cal.App.4th at pp. 577-578.) On the record before this court, we cannot find that the imposition of a 30-day minimum lease term is unreasonable. The provision applies to all owners who rent their Homes, the restriction does not violate public policy (see, e.g., City of Oceanside v. McKenna(1989) 215 Cal.App.3d 1420, 1426-1427 [264 Cal.Rptr. 275] [restrictions requiring owner occupancy and forbidding the leasing of units were reasonable in view of the city’s redevelopment goals of providing a stabilized community of owner-occupied units for low- and moderate-income persons]), and any burden to enforce the minimum lease term is outweighed by its beneficial value in preserving the residential character of the development.
With cursory argument and no citation to any legal authority, Pheil contends the Amendment is unreasonable because it grants the Association the right to evict tenants for breach of the CC&R’s and to impose attorney fees and costs on the owner. “[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration. [Citations.]” (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 594, p. 627.) Although we may deem this point waived, we note the Association addressed it on the merits.[FN.2]
(3) The Association argues this provision is reasonable. First, the Association notes that associations have been analogized to landlords for purposes of determining tort liability. (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 499-501 [229 Cal.Rptr. 456, 723 P.2d 573].) As such, if an association is held to a landlord’s obligations, it should equally benefit from any rights attributed to the landlord. We agree. Second, the Association argues that any tenant should be bound by the CC&R’s to the same extent that the homeowner is bound. In the event the homeowner fails [797] or refuses to take effective measures to assure his or her tenant is complying with the CC&R’s, the Association needs some means to assure compliance. We agree. Third, according to the Association, the enforcement remedies apply to any and all tenants in breach of the CC&R’s, and providing the Association with the right to enforce any breach of the CC&R’s does not violate public policy. (See, e.g., 1 Sproul & Rosenberry, Advising Cal. Common Interest Communities (Cont.Ed.Bar 2007 supp.) § 6.45, pp. 423-424.) Again, we agree. Nonetheless, in his reply brief, Pheil claims that commentators have criticized provisions allowing associations the right to enforce the CC&R’s against tenants as being “unlawful.” Reviewing the practice tip referenced by Pheil, we note the commentators merely caution practitioners to consider the risks involved. Specifically, an association may be liable for wrongful eviction given the fact that the association does not have possession of the property, and thus, is not the rightful party to bring the action. (Id. at pp. 424-425.)
(4) For the above reasons, we find that the trial court did not abuse its discretion in finding the Amendment to be reasonable.
IV. DID THE BALLOTING CONFORM WITH THE CC&R’S?
(5) According to Pheil, subdivision (c)(2) of section 1356 was not complied with because the letter that accompanied the ballot inaccurately portrayed the context of the Amendment and made improper reference to the ineffective rule. In response, the Association argues it complied with the procedures for amending the CC&R’s as governed by section 1363.03. According to that section, a secret ballot procedure must be used with a double envelope system, inspectors of the election must be appointed, and the results must be tabulated at a board meeting. (§ 1363.03, subds. (c), (e).) Here, the Association maintains it mailed the Amendment, the ballot, voting instructions, and two envelopes to each of its members. Furthermore, the results were tabulated at the Board meeting.
The Amendment clearly indicated the language to be added and the language to be deleted. Presenting the owners with a redlined version of the proposed Amendment constituted the reasonably detailed form the CC&R’s require. While Pheil claims the cover letter accompanying the ballot and other documents misled the owners, we note there is no evidence in the record that supports this claim. Not one owner submitted a declaration claiming he or she voted in a particular way solely due to the information contained in the cover letter. Moreover, as the Association points out, the [798] cover letter highlighted the fact that the Amendment would provide for a 30-day minimum leasing requirement and the ability of the Association to evict tenants.[FN.3]
Notwithstanding the above, Pheil claims the Association failed to give notice of the election results pursuant to section 1363.03, subdivision (g). That section provides, “The tabulated results of the election shall be promptly reported to the board of directors of the association and shall be recorded in the minutes of the next meeting of the board of directors and shall be available for review by members of the association. Within 15 days of the election, the board shall publicize the tabulated results of the election in a communication directed to all members.” The Association does not claim that it gave notice of the election results; however, it does claim the results were reported at the Board meeting on November 15, 2006, and recorded in the minutes of the Board meeting (which are available to each member). Thus, the Association argues that it provided the required notice to its members, but even if it had not, the petition was not precluded. We agree with the Association.
Pheil does not oppose the results of the election. Rather, he opposes the Amendment itself. Pheil does not provide any argument or legal citation to any authority as to the consequences which the Association should suffer given its failure to comply with section 1363.03, subdivision (g). Under the circumstances of this case, we find such failure to be trivial. Accordingly, we cannot agree that such failure should result in precluding the Association from proceeding with its petition. Moreover, we cannot find that the trial court abused its discretion in failing to find that the balloting did not comply with the CC&R’s.
V. DOES THE AMENDMENT IMPAIR THE SECURITY INTEREST OF MORTGAGEES?
In his final contention, Pheil argues that the CC&R’s require approval of 51 percent of first mortgagees who have previously requested notification [799] under two stated circumstances, namely, where any amendment affects the rights or protection granted to mortgagees and where any amendment could result in a mortgage being canceled by forfeiture. He claims the Association failed to give such notice and to obtain such approval. Again, we note that Pheil fails to support his claim with any legal argument with citation of authorities on the points made. His brief reference to section 1356, subdivision (e)(3), is insufficient. Nonetheless, given the fact that the Association addressed the merits of the issue, so will we.
(6) Section 1356, subdivision (e)(3), forbids the court from approving any amendment to CC&R’s that impairs the security interest of a mortgagee, if approval of a specified percentage of the mortgagees is required under the CC&R’s. According to article XIII, section 13.2.2 of the CC&R’s, the following amendments require 51 percent approval of the first mortgagees: “(a) Any amendment which affects or purports to affect the validity or priority of Mortgages or the rights or protection granted to Mortgagees, insurers or guarantors of first Mortgages. [¶] (b) Any amendment which would require a Mortgagee after it has acquired a Lot through foreclosure to pay more than its proportionate share of any unpaid Assessment or Assessments accruing before such foreclosure. [¶] (c) Any amendment which would or could result in a Mortgage being canceled by forfeiture, or in a Lot not being separately assessed for tax purposes. [¶] (d) Any amendment relating to (i) the insurance provisions in Article VIII, (ii) the application of insurance proceeds in Article IX, or (iii) the disposition of any money received in any taking under condemnation proceedings. [¶] (e) Any amendment which would subject any Owner to a right of first refusal or other such restriction, if such Lot is proposed to be transferred.” The Amendment does not fall under any item in this list.
In his reply brief, Pheil claims the temporal restriction on renting “clearly impacts the ability of owners to pay their mortgages.” However, Mission Shores is a residential development. Pheil has not provided any evidence to the contrary. Other than his claim that he was told he could lease or rent his home and that he thereafter on occasion rented it to others, there is no evidence that he needed to borrow money to purchase his home, that he obtained a non-owner-occupied loan, or that he purchased his home with the sole purpose of renting it out to pay the mortgage.
Accordingly, we conclude the trial court did not abuse its discretion in finding that there was no impairment to the security interests of mortgagees.
[800] VI. DISPOSITION
The order is affirmed. The Association is entitled to its costs on appeal.
Ramirez, P. J., and King J., concurred.
[FN.1] All further statutory references are to the Civil Code unless otherwise indicated.
[FN.2] The Association argues that this issue is waived because Pheil failed to raise it in his written opposition. While the Association discounts the fact that Pheil did raise the issue during oral argument before the trial court, we do not.
[FN.3] The cover letter provided, in part, the following: “The Association’s [CC&R’s] currently discuss[] rental of residences in a very broad manner. There are few protections afforded to the Owners against tenants who treat the Association not as their personal home, but instead as a weekend party place…. [¶] Enclosed is a proposed amendment of Article II, Section 2.1…. The purpose of the proposed amendment is to further define the rights and obligations of Owners who rent or lease their residences. Among other things and consistent with the current Rules and Regulations, the proposed amendment places a thirty (30) day minimum on any lease and provides the Association with the right, but not the obligation, to evict problem tenants on an Owner’s behalf if the Owner refuses to take corrective action.”
[Attorney’s Fees; ADR; Pre-Litigation] Pre-litigation attorney’s fees that are incurred in alternative dispute resolution (ADR) are recoverable by the prevailing party in subsequent ligation.
Robert J. Rosati for Defendant and Appellant.
Michael A. Milnes for Plaintiffs and Respondents.
OPINION
FRANSON, J.—
INTRODUCTION
This appeal involves a dispute between a homeowners association and property owners who built a cabana and fireplace in their backyard without obtaining prior approval from the homeowners association. The homeowners association contends the applicable governing documents prohibited the cabana and fireplace. Thus, the homeowners association concludes it properly denied the owners’ request for a variance and properly imposed a fine of $10 per day until the cabana and fireplace were removed.
The trial court interpreted the governing documents as allowing the cabana and requiring the fireplace to be 10 feet from the property line. Applying this interpretation, the court required the fireplace to be modified, concluded a variance was not needed for the cabana, and vacated the continuing fine. The trial court also awarded statutory attorney fees to the property owners after deducting 10 hours for the unsuccessful claims. The fee award included attorney time spent on prelitigation mediation.
[1131]
(1) In the unpublished portion of this opinion, we conclude that the trial court properly interpreted the governing documents of the homeowners association and, when awarding attorney fees, did not abuse its discretion by deducting only 10 hours of attorney time for the unsuccessful claims. In the published portion of this opinion, we address a novel issue of statutory construction concerning the scope of the attorney fees provision in the Davis-Stirling Common Interest Development Act (the Davis-Stirling Act) (Civ. Code, § 1350 et seq.). We interpret Civil Code section 1354, subdivision (c) to allow a prevailing party to recover attorney fees and costs incurred in prelitigation mediation.
We therefore affirm the judgment and the order granting the motion for attorney fees.
After Neil and Doredda Grossman (the Grossmans) obtained a judgment in their favor against defendant Park Fort Washington Association (the Association), they filed a motion requesting attorney fees for 331.9 hours that their attorney worked on their behalf. The attorney time included 38.1 hours incurred between July 12, 2007, and November 26, 2008, in connection with a mediation of the parties’ dispute. The mediation occurred before the lawsuit was filed in June 2009. The Grossmans’ motion also requested costs, including $875 paid as one-half of the fee charged by the retired justice who conducted the mediation.
[1132]
The Association’s opposition to the motion for attorney fees included the argument that the recovery for time spent on prelitigation mediation was not authorized by the attorney fees provision contained in Civil Code section 1354, subdivision (c).
Ultimately, the trial court granted the motion for attorney fees and awarded the Grossmans $112,665 in attorney fees. This award included compensation for the 38.1 hours incurred in the prelitigation mediation.
A. Statutory Provisions
The Davis-Stirling Act includes provisions addressing alternative dispute resolution (ADR), including the initiation of such nonjudicial procedures, the timeline for completing ADR, and the relationship between ADR and any subsequent litigation. (See Civ. Code, §§ 1369.510–1369.590.) Among other things, the legislation provides that an “association or an owner or a member of a common interest development may not file an enforcement action in the superior court unless the parties have endeavored to submit their dispute to alternative dispute resolution pursuant to this article.” (Civ. Code, § 1369.520, subd. (a).)
The Davis-Stirling Act also includes the following mandatory attorney fees provision: “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Civ. Code, § 1354, subd. (c).)
One way this attorney fee provision and the ADR requirements interact is addressed in Civil Code section 1369.580: “In an enforcement action in which fees and costs may be awarded pursuant to subdivision (c) of Section 1354, the court, in determining the amount of the award, may consider whether a party’s refusal to participate in alternative dispute resolution before commencement of the action was reasonable.”
B. The Association’s Contentions
The Association reads the statutory language in subdivision (c) of Civil Code section 1354 as authorizing only the recovery of fees and costs incurred in the action to enforce the governing documents. Based on this interpretation, the Association argues that the Grossmans are not entitled to recover fees and costs incurred in prelitigation ADR and the trial court erred, as a matter of law, in awarding such fees and costs.7
[1133]
The Association’s argument is purely textual. (See Scalia & Garner, Reading Law: The Interpretation of Legal Texts (2012) p. 16 [“exclusive reliance on text when interpreting [a statute] is known as textualism”].) It has not presented any legislative history that demonstrates, either directly or by implication, the Legislature intended to have attorney fees and costs incurred in ADR excluded from the award. Also, the Association has indentified no public policy that would be promoted by its interpretation of the statute.
C. Interpretation of Attorney Fees Statute
(2) Civil Code section 1354, subdivision (c) reads: “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” This text does not explicitly limit the recovery of attorney fees and costs to those items incurred in the lawsuit itself. Instead, it specifies two conditions that must exist before the award of reasonable attorney fees and costs is mandatory. The first statutory condition is the existence of an “action to enforce the governing documents … .” (Civ. Code, § 1354, subd. (c); see Salawy v. Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 670 [17 Cal. Rptr. 3d 427] [attorney fees provision expressly limits award to actions to enforce governing documents].) The second condition is the existence of a prevailing party. (Chapala Management Corp. v. Stanton (2010) 186 Cal.App.4th 1532, 1546 [113 Cal. Rptr. 3d 617] [attorney fees are awarded as a matter of right to the prevailing party].)
Here, the Grossmans satisfied both conditions. The lawsuit was an action to enforce terms in the master declaration of covenants, conditions, and restrictions easements recorded in September 1984 (CC&R’s)—particularly section 7.14 of the CC&R’s. It is undisputed that the CC&R’s are “governing documents” for purposes of the attorney fees provision in the Davis-Stirling Act. (See Civ. Code, § 1351, subd. (j) [“ ‘[g]overning documents’ ” defined].) In addition, the trial court determined the Grossmans were the prevailing party, a determination not challenged on appeal.
Thus, if the analysis is limited to the actual language in subdivision (c) of Civil Code section 1354, the critical word to deciding whether attorney fees and costs expended in ADR are recoverableis whether those fees and costs were “reasonable.”
(3) Our analysis of what is reasonable is affected by other provisions in the statutory scheme created by the Davis-Stirling Act. (See State Farm Mutual Automobile Ins. Co. v. Garamendi (2004) 32 Cal.4th 1029, 1043 [12 [1134] Cal. Rptr. 3d 343, 88 P.3d 71] [courts construe the words of a statute in context and with reference to the entire scheme of law of which they are a part].)
First, Civil Code section 1369.520, subdivision (a) requires a prospective plaintiff to endeavor to submit the dispute to ADR before filing a lawsuit to enforce the governing documents. This provision effectively makes ADR mandatory and, therefore, precludes a determination that the time and effort spent pursuing ADR was unreasonable per se.
Second, Civil Code section 1369.580 provides that a party’s refusal to participate in ADR before the start of the action could affect the amount of the attorney fees awarded. This provision strongly implies that the attorney fees a prevailing party spent trying to convince a recalcitrant party to submit the dispute to ADR could be recovered, if otherwise reasonable.
Lastly, we have not found, and the Association has not identified, any policy reasons for excluding attorney fees and costs incurred in ADR from the award given to a party that has pursued ADR and subsequently prevailed in a lawsuit involving the same dispute.
(4) Based on the foregoing, we conclude that a party does not act unreasonably when it spends money on attorney fees and costs during prelitigation ADR. The alternate view—that such expenditures are categorically unreasonable—is contrary to the strong public policy of promoting the resolution of disputes through mediation and arbitration. (E.g., Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 235, fn. 4 [145 Cal. Rptr. 3d 514, 282 P.3d 1217] [public policy favors arbitration as a means of dispute resolution].) Thus, when attorney fees and costs expended in prelitigation ADR satisfy the other criteria of reasonableness, those fees and costs may be recovered in an action to enforce the governing documents of a common interest development. (Civ. Code, § 1354, subd. (c).)
Thus, the trial court did not err in awarding those fees and costs.
The judgment and the order granting the motion for attorney fees are affirmed. The Grossmans shall recover their costs on appeal.
Levy, Acting P. J., and Gomes, J., concurred.
On January 15, 2013, the opinion was modified to read as printed above.
* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of the Facts, Proceedings, and parts I.–V. and VII. of the Discussion.
7 The attorney fees relate to 38.1 hours incurred between July 12, 2007, and November 26, 2008. The costs include $875 paid as one-half of the fee charged by a retired justice to conduct the ADR proceeding.
