Smith, Merrill & Peffer, Charles E. Merrill and Karl R. Molineux for Defendant and Appellant.
Abend, Lepper, Jacobson, Schaefer & Hughes and Gary M. Lepper for Plaintiff and Respondent.

OPINION
PETERSON, P. J.

In this case, we hold that a trial court has the authority to determine the identity of the “prevailing party” in litigation, within the meaning of Civil Code ^{fn. 1} section 1354, for purposes of awarding attorney fees; and that a defendant dismissed without prejudice in an action to enforce equitable servitudes thereunder is not, ipso facto, such prevailing party.

I. Factual and Procedural Background

This is a dispute over attorney fees incurred in an action to enforce the covenants, conditions, and restrictions (CC&R’s) which govern a residential planned unit development in Walnut Creek. Appellant in this action, Wayne Robinson, owned two units in the development. In January 1988, Heather Farms Homeowners Association, Inc. (association), the entity charged with enforcing the CC&R’s, sued Robinson alleging he had made unauthorized modifications to his units. As so frequently happens in modern litigation, the complaint spawned a complex series of cross-complaints and subsidiary actions which eventually entangled the association itself, the association’s attorneys, appellant’s corporation, various real estate agents, and the persons who purchased appellant’s units while the litigation was pending.

After several years of litigation, the actions were assigned to a trial judge (the Honorable Peter L. Spinetta) who, recognizing the complexity of the dispute, referred the matter to a second judge (the Honorable James J. Marchiano) for a special settlement conference. After two days of discussion, Judge Marchiano negotiated a settlement which resolved the litigation completely.

Only one aspect of that settlement is relevant to this appeal. While Robinson expressly declined to participate in any agreement with the association, the settlement nonetheless required the association to dismiss its suit against Robinson “without prejudice.” However, Judge Marchiano cautioned [1571] that this should not be interpreted as meaning that Robinson had prevailed: “The Court is making a specific finding that there are no prevailing parties with respect to that issue [the dismissal without prejudice] and that the Court and the law [favor the] resolution of disputes. This dismissal is part of an overall complex piece of litigation … that’s been resolved by a negotiated settlement. There are no winners. There are no favorable parties in this case.”

At the conclusion of the settlement, Robinson filed a memorandum seeking to recover his costs from the association. He claimed that since the object of the association’s suit was to enforce the development’s CC&R’s, the “prevailing party” in the litigation was entitled to recover attorney fees and costs under section 1354. Robinson maintained that since he had received a dismissal, he was the “prevailing party” and the association was obligated to pay his attorney fees of over $479,000, and his litigation costs of approximately $20,000.

The association conceded that section 1354 was applicable, but argued Robinson was not the “prevailing party” within the meaning of that section.

The trial court ruled that Robinson was the prevailing party for purposes of his general litigation expenses (filing fees, deposition costs, jury fees, etc.) and, thus, was entitled to recover those costs from the association, but that Robinson was not entitled to recover his attorney fees under section 1354. As to the latter issue, the court agreed with the settlement judge and concluded there was no “prevailing party” in the litigation within the meaning of section 1354. This appeal followed.

II. Discussion

The issue in this case is whether the trial court properly ruled that Robinson was not the “prevailing party” in the litigation within the meaning of section 1354. Section 1354 states that CC&R’s may be enforced as “equitable servitudes” by “any owner of a separate interest or by the association, or by both,” and that the “prevailing party” in any enforcement action “shall be awarded reasonable attorney’s fees and costs.” ^{fn. 2}

[1a] The pivotal question here is how does a court determine who is the “prevailing party” for purposes of section 1354. The section itself provides no guidance and the issue has apparently not been decided by any court. [1572]

Robinson claims the court was obligated to adopt the definition found in the general cost statute, Code of Civil Procedure section 1032, subdivision (a)(4), which states a ” ‘[p]revailing party’ ” includes “a defendant in whose favor a dismissal is entered ….” Robinson argues that, since he was the recipient of a dismissal and was awarded his general litigation costs, he must also be deemed the prevailing party for purposes of section 1354.

However, the premise for this argument, that a litigant who prevails under the cost statute is necessarily the prevailing party for purposes of attorney fees, has been uniformly rejected by the courts of this state. (See McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456 [282 Cal.Rptr. 828] [“We emphatically reject the contention that the prevailing party for the award of costs under [Code of Civil Procedure] section 1032 is necessarily the prevailing party for the award of attorneys’ fees.”].) Furthermore, Code of Civil Procedure section 1032, subdivision (a) only defines ” ‘[p]revailing party’ ” as the term is used “in [that] section.” It does not purport to define the term for purposes of other statutes.

The association, for its part, claims the trial court was required to adopt the definition found in section 1717, subdivision (b)(2) which states, “Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” However, section 1717 only applies “In any action … where the contract specifically provides that attorney’s fees and costs … shall be awarded ….” (Subd. (a), italics added.) Here, both sides agree there was no contract upon which attorney fees might be based. Instead, fees were sought pursuant to statute. ^{fn. 3}

While the definition of “prevailing party” found in section 1717, subdivision (b) or in Code of Civil Procedure section 1032 might otherwise be persuasive as to the meaning intended in section 1354, under the principle that similar language used in statutes “in pari materia” should be given similar effect (see, e.g., Isobe v. Unemployment Ins. Appeals Bd. (1974) 12 [1573] Cal.3d 584, 590-591 [116 Cal.Rptr. 376, 526 P.2d 528]; Housing Authority v. Van de Kamp (1990) 223 Cal.App.3d 109, 116 [272 Cal.Rptr. 584]), that rule of construction is of little help here. Section 1717, subdivision (b) and Code of Civil Procedure section 1032 are both “in pari materia” with section 1354 in a broad sense, yet they provide conflicting definitions of the critical term. Neither party to this appeal has supplied a principled reason why we should select one definition over the other.

Faced with this lack of authority, we examine how the courts have dealt with similar statutes. In Winick Corp. v. Safeco Insurance Co. (1986) 187 Cal.App.3d 1502 [232 Cal.Rptr. 479], the issue was whether a defendant, who obtained a dismissal with prejudice because the plaintiff failed to timely serve the summons, was a prevailing party within the meaning of section 3250 and entitled to attorney fees. The court observed that the term “prevailing party” as used in section 3250 had not been definitively interpreted, so it analogized the problem to a Supreme Court case in which the issue was whether a party had prevailed for purposes of awarding attorney fees under Code of Civil Procedure section 1021.5, the private attorney general statute. Noting the court in that case conducted a ” ‘pragmatic inquiry’ ” into whether a party prevailed, the Winick court conducted a similar pragmatic inquiry and concluded a defendant, who obtains a dismissal with prejudice because the plaintiff fails to timely serve the complaint, has also prevailed and is entitled to attorney fees. (187 Cal.App.3d at pp. 1506-1508.)

In Donald v. Cafe Royale, Inc. (1990) 218 Cal.App.3d 168 [266 Cal.Rptr. 804], the plaintiff, a physically disabled man, filed suit against a restaurant alleging it had violated the Civil Code by failing to provide him adequate access. Among other things, the plaintiff sought an injunction under section 55 barring the restaurant from continuing its violation in the future. While the suit was pending, the restaurant became insolvent and closed. The trial court ruled the restaurant was the prevailing party on the injunction and awarded it attorney fees. The plaintiff appealed the award and the appellate court reversed: “In the instant case [the plaintiff] filed his section 55 cause of action in order to enjoin [the restaurant’s] operation in violation of the pertinent statutes and administrative code provisions. The cessation of … operation of the restaurant achieved that result. Under these circumstances, it was an abuse of discretion for the court to determine that by going out of business and rendering the issue moot, [the restaurant] ‘prevailed’ for purposes of attorney fees. Neither party prevailed for purposes of an award of attorney fees on the cause of action for injunctive relief.” (218 Cal.App.3d at p. 185.)

In Elster v. Friedman (1989) 211 Cal.App.3d 1439 [260 Cal.Rptr. 148], the residents of a duplex sued their noisy neighbors and sought an injunction [1574] barring harassment under Code of Civil Procedure section 527.6. When the matter came to trial, the parties entered into a stipulated judgment wherein each side agreed not to harass the other. The trial court ruled that the plaintiffs had prevailed in the suit and awarded them attorney fees under Code of Civil Procedure section 527.6. The defendants then challenged this award and the appellate court affirmed. After noting the term “prevailing party” as used in that section had not been defined, the Elster court analyzed who had “prevailed” as a practical matter: “At bench, respondents wanted appellants to stop playing their music too loudly, to stop telephoning them in the middle of the night, and generally to leave them alone. Respondents got precisely that from the settlement. It is irrelevant that they were symmetrically bound by the injunction, since nothing in the record even hints that they were anything but the victims in this case. The injunction forbade respondents from doing what they apparently had never done and had no apparent desire to do. To consider this significant would be to elevate form over substance. [¶] We hold that the trial court did not abuse its discretion in concluding that respondents prevailed.” (211 Cal.App.3d at p. 1444.)

[2] Winick, Donald, and Elster all share a common theme. In each case, the court declined to adopt a rigid interpretation of the term “prevailing party” and, instead, analyzed which party had prevailed on a practical level. Donald and Elster further clarify that the trial court must determine who is the prevailing party, and that the court’s ruling should be affirmed on appeal absent an abuse of discretion. We conclude similar rules should apply when determining who the “prevailing party” is under section 1354.

[1b] Applying those rules here, we note that both the judge who conducted the special settlement conference, and the judge who ruled on the attorney fee request concluded there was no prevailing party in this litigation. We see no reason to doubt those rulings. The association voluntarily dismissed its complaint against Robinson as part of a global settlement agreement, not because he succeeded on some procedural issue or otherwise received what he wanted. That dismissal apparently was more the result of Robinson’s obdurate behavior rather than any successful legal strategy. While it might be possible to conjure a scenario where a litigant who refuses to participate in a settlement and then receives a voluntary dismissal without prejudice could be deemed the prevailing party, that is certainly not the case here.

Furthermore, the record before us is inadequate to seriously challenge the trial court’s rulings. While we have copies of the complaint and some of the cross-complaints, and are generally aware of the parties involved, we have no way of measuring the truth of the allegations which were made. [1575] [3] Robinson, as appellant, has the obligation to prove error through an adequate record. (9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 418, pp. 415-416.) He has not done so.

III. Disposition

The order is affirmed.

King, J., and Haning, J., concurred.

A petition for a rehearing was denied February 15, 1994, and appellant’s petition for review by the Supreme Court was denied April 13, 1994. Mosk, J., and Kennard, J., were of the opinion that the petition should be granted.

---

 

FN 1. Unless otherwise indicated, all subsequent statutory references are to the Civil Code.

FN 2. Section 1354 was recently amended. (See Stats. 1993, ch. 303, § 1.) The language quoted above is now contained in subdivisions (a) and (f).

FN 3. This fact distinguishes the present case from the cases cited by the association. The question in Mackinder v. OSCA Development Co. (1984) 151 Cal.App.3d 728 [198 Cal.Rptr. 864], and in Huntington Landmark Adult Community Assn. v. Ross (1989) 213 Cal.App.3d 1012 [261 Cal.Rptr. 875], was whether attorney fees could be awarded under a fee clause contained in a development’s declaration of restrictions. In both cases, the court concluded that the declarations were contracts within the meaning of section 1717 and applied the rules for awarding attorney fees set forth in that section. (Mackinder v. OSCA Development Co., supra, 151 Cal.App.3d at pp. 738-739; Huntington Landmark Adult Community Assn. v. Ross, supra, 213 Cal.App.3d at pp. 1023-1024.) Here, by contrast, the CC&R’s do not include an attorney fees clause so fees were sought under a statute, section 1354.

Procter, Slaughter & Reagan, Slaughter & Reagan, William M Slaughter and Gabriele M. Lashly for Defendant and Appellant and for Defendant and Respondent.
Susan J. Salehi, in pro per., for Plaintiff and Respondent and for Plaintiff and Appellant.  

OPINION
YEGAN, J.-

A party contemplating litigation to enforce the covenants, conditions, and restrictions (CC&Rs) of a condominium project should get the “ducks in a row.” That is to say, such party should be ready to go forward procedurally and prove its case substantively. Failure to do so subjects the losing party to an award of attorney fees. Here, a condominium owner, Susan J. Salehi, filed such a suit in propria persona against a condominium association (Association). In defending the suit, Association incurred attorney fees of a quarter million dollars. Based on faulty reasoning, Salehi dismissed eight of the ten causes of action on the eve of trial. She prevailed on no level whatsoever, let alone on a “practical level.” But the trial court denied Association any attorney fees, and Association appealed. We conclude that the denial was an abuse of discretion as a matter of law. Salehi did not realize her “litigation objectives” on these causes of action. Association did realize its “litigation objectives” and was the prevailing party on a “practical level.” It is entitled to attorney fees as mandated by the Legislature. We express no opinion on the amount of attorney fees that should be awarded on remand.

Salehi has filed her own appeal, which we conclude to be without merit. Accordingly, we reverse the order denying attorney fees and affirm in all other respects.

ASSOCIATION’S APPEAL

Factual and Procedural Background

In March 2004 Salehi, a licensed California attorney, purchased a condominium unit in Surfside III (Surfside), “a 309 [unit] condominium/townhome community in 8 buildings covering 15 acres adjacent to the ocean in Port Hueneme.” The community is governed by the CC&Rs which provide that Association “shall have the duty of maintaining, operating and managing the Common Area of the project.” [1151]

In May 2008 Salehi, in propria persona, filed a complaint against Association. The operative pleading alleges 10 causes of action. The gravamen of the complaint is that, in violation of the CC&Rs, Association failed to “appropriately maintain and repair Surfside” and to “maintain an adequate reserve fund for the replacement of the common area facilities.”

The fourth and sixth causes of action alleged negligent misrepresentation and fraud. These two causes of action were based on Association’s alleged failure to disclose Surfside’s physical and financial problems to Salehi before she purchased her condominium unit.

Salehi represented Paul Lewow in a similar Ventura County lawsuit against Association (case no. 56-2008-00313595-CU-BC-VTA). Like Salehi, Lewow had also purchased a condominium unit in Surfside. This matter was tried to the court, which issued a statement of decision on January 8, 2010. The trial court concluded that Lewow had failed to prove his case. Judgment was subsequently entered for Association.

Trial in the instant case was scheduled to begin on January 11, 2010, three days after the issuance of the statement of decision in the Lewow case. On January 4, 2010, Salehi informed Association’s counsel that Mark Rudolph, her expert on construction and building maintenance, had notified her that he had “a serious heart condition which will require surgery to repair.” Because Rudolph’s medical condition rendered him unavailable for trial, Salehi told counsel that she had “decided to dismiss all but the fraud and negligent misrepresentation causes of action without prejudice.” On January 8, 2010, the same day that the statement of decision was issued in the Lewow case, Salehi filed a request to dismiss without prejudice all of the causes of action except the fourth and sixth for negligent misrepresentation and fraud. The court clerk entered the dismissals as requested by Salehi.

On January 11, 2010, Salehi successfully moved to continue the trial on the remaining fourth and sixth causes of action because of Rudolph’s unavailability. She submitted Rudolph’s declaration and a medical report verifying his heart problems. According to Rudolph, on January 4, 2010, he informed Salehi “of the severity of [his] health condition.” Rudolph further declared: “I have very little energy and have been advised to avoid stress, curtail my activities as much as possible, and get as much rest as possible. [¶] . . . I am not able to participate in the trial at this time. I expect that the surgery will be sometime this month and . . . expect between six to eight weeks to recover.” The trial was continued to May 10, 2010.

In February 2010, Association moved to recover its attorney fees of $252,767 incurred in defending against the eight causes of action that Salehi [1152] had voluntarily dismissed. The motion was made pursuant to Civil Code section 1354 (section 1354), subdivision (c), which provides: “In an action to enforce the governing documents” of a common interest development, “the prevailing party shall be awarded reasonable attorney’s fees and costs.” Association claimed that the adverse decision in the Lewow case had motivated Salehi to request the dismissals: “Salehi must have realized that she would lose at her trial as well. In order to cut her losses, Salehi voluntarily dismissed” all of the causes of action except those for negligent misrepresentation and fraud.

In her declaration in opposition to the motion, Salehi explained that she had requested to dismiss only those causes of action as to which Rudolph was an essential witness because she believed that the trial court would not grant a continuance. Since the causes of action would be dismissed without prejudice, she could refile them later after Rudolph had recovered from surgery. At that time, Salehi believed that she would be able to proceed without Rudolph on the remaining negligent misrepresentation and fraud causes of action since they did not concern specific construction problems.

In a minute order, the trial court denied the motion for attorney fees. The court stated that, in rendering its decision, it had been guided by Heather Farms Homeowner’s Assn. v. Robinson (1994) 21 Cal.App.4th 1568 (Heather Farms). Based on Heather Farms, the court determined that Association was not a “prevailing party” for purposes of attorney fees within the meaning of section 1354 because it had not “prevailed on a practical level.” The court rejected Association’s claim “that the dismissal[s] [were] motivated by the adverse decision in the related” Lewow case. The court concluded: “In the final analysis, . . . the dismissal[s] seem[] to be due more to [Salehi’s] inexperience and poor decisions than any implied concession to the merits of [Association’s] case.”

Association is the Prevailing Party

[1] Section 1354 does not define “prevailing party.” It only provides that “the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Id., subd. (c).) “The words ‘shall be [awarded]’ reflect a legislative intent that [the prevailing party] receive attorney fees as a matter of right (and that the trial court is thereforeobligated to award attorney fees) whenever the statutory conditions have been satisfied.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 872.)

Association contends that, pursuant to Code of Civil Procedure section 1032 (section 1032), it was entitled to attorney fees as “costs.” Association relies on two subdivisions of section 1032. Subdivision (b) of section 1032 [1153] provides: “Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Subdivision (a)(4) provides: ” ‘Prevailing party’ includes . . . a defendant in whose favor a dismissal is entered. . . .”

[2] “[T]he premise for [Association’s] argument, that a litigant who prevails under the cost statute is necessarily the prevailing party for purposes of attorney fees, has been uniformly rejected by the courts of this state. [Citation.] Furthermore, . . . section 1032, subdivision (a) only defines ‘ “[p]revailing party” ‘ as the term is used ‘in that section.’ It does not purport to define the term for purposes of other statutes.” (Heather Farms, supra, 21 Cal.App.4th at p. 1572; accord, Galvan v. Wolfriver Holding Corp. (2000) 80 Cal.App.4th 1124, 1128-1129 [definition of “prevailing party” in section 1032 inapplicable to Civil Code section 1942.4, subdivision (b)(2), which awards attorney fees to “prevailing party” in action for damages resulting from landlord’s collection of rent for substandard housing]; Gilbert v. National Enquirer, Inc. (1997) 55 Cal.App.4th 1273, 1276 -1277 [section 1032 definition inapplicable to Civil Code section 3344, subdivision (a), which awards attorney fees to “prevailing party” in action for unauthorized use of another’s name, voice, signature, photograph, or likeness].)

In denying Association’s motion for attorney fees, the trial court relied on Heather Farms, supra, 21 Cal.App.4th 1568. There, a homeowners’ association brought an action against a homeowner, Robinson, to enforce the CC&Rs of a residential development. The complaint “spawned a complex series of cross-complaints and subsidiary actions” involving numerous parties. (Id., at p. 1570.) After years of litigation, all of the parties except Robinson signed a settlement agreement. “[T]he settlement nonetheless required the association to dismiss its suit against Robinson ‘without prejudice.’ ” (Ibid.) The judge who negotiated the settlement found that there were no prevailing parties: ” ‘This dismissal is part of an overall complex piece of litigation . . . that’s been resolved by a negotiated settlement. There are no winners. There are no favorable parties in this case.’ ” (Id., at p. 1571.) Robinson subsequently moved to recover his attorney fees pursuant to section 1354. Robinson “maintained that since he had received a dismissal, he was the ‘prevailing party’ . . . .” (Ibid.) The trial “court agreed with the settlement judge and concluded there was no ‘prevailing party’ . . . within the meaning of section 1354.” (Ibid.)

[3] The appellate court upheld the trial court’s ruling. It concluded that, in determining who is the “prevailing party” within the meaning of section 1354, the trial court should analyze “which party . . . prevailed on a practical level.” (Heather Farms, supra, 21 Cal.App.4th at p. 1574.) Applying this [1154] analysis, the appellate court reasoned that there was no prevailing party because the homeowners’ association had dismissed its action against Robinson “as part of a global settlement agreement, not because he succeeded on some procedural issue or otherwise received what he wanted.” (Ibid.)

[4] In Santisas v. Goodin (1998) 17 Cal.4th 599, our Supreme Court implicitly applied the Heather Farms rationale to the award of contractual attorney fees: “[A]ttorney fees should not be awarded automatically to parties in whose favor a voluntary dismissal has been entered. In particular, it seems inaccurate to characterize the defendant as the ‘prevailing party’ if the plaintiff dismissed the action only after obtaining, by means of settlement or otherwise, all or most of the requested relief, or if the plaintiff dismissed for reasons, such as the defendant’s insolvency, that have nothing to do with the probability of success on the merits. . . . If . . . the contract allows the prevailing party to recover attorney fees but does not define ‘prevailing party’ or expressly either authorize or bar recovery of attorney fees in the event an action is dismissed, a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise. [Citation.]” (Santisas v. Goodin (1998) 17 Cal.4th 599, 621-622.)

Here, the trial court determined that Association was not the prevailing party for purposes of attorney fees. “We review the trial court’s decision for abuse of discretion. (Heather Farms, supra, 21 Cal.App.4th at p. 1574.) ” ‘[D]iscretion is abused whenever . . . the court exceeds the bounds of reason, all of the circumstances before it being considered.’ [Citation.]” (State Farm Mut. Auto. Ins. Co. v. Superior Court, In and For City and County of San Francisco (1956) 47 Cal.2d 428, 432.) “In deciding whether the trial court abused its discretion, ‘[w]e are . . . bound . . . by the substantial evidence rule. [Citations.] . . . The judgment of the trial court is presumed correct; all intendments and presumptions are indulged to support the judgment; conflicts in the declarations must be resolved in favor of the prevailing party, and the trial court’s resolution of any factual disputes arising from the evidence is conclusive. [Citations.]’ [Citation.] We presume the court found in [Salehi’s] favor on all disputed factual issues. [Citation.]” (Strasbourger Pearson Tulcin Wolff Inc. v. Wiz Technology, Inc. (1999) 69 Cal.App.4th 1399, 1403.)

Thus, we presume that the trial court credited Salehi’s proffered reasons for dismissing without prejudice all of the causes of action except the fourth and sixth. According to Salehi, she requested the dismissals not because Association had prevailed in the Lewow case, but because her construction and building maintenance expert was unavailable. She intended to refile the dismissed causes of action after the expert had recovered from surgery. She [1155] did not dismiss the two causes of action for negligent misrepresentation and fraud because she believed that her expert would not be a necessary witness on those causes of action. Later, when a more experienced attorney advised her that the expert might be necessary for rebuttal, she decided to move for a continuance on the remaining causes of action. We are bound by the trial court’s acceptance of Salehi’s explanation for the dismissals. (See e.g., In re Marriage of Greenberg (2010) 194 Cal.App.4th 1095, 1099.) But that does not mean that Salehi prevails on Association’s appeal.

[5] We must conclude that the trial court abused its discretion as to who was the prevailing party. Its ruling exceeds the “bounds of reason.” We are hard pressed to explain how it reached its conclusion or how the holding of Heather Farms aids Salehi. The record does not suggest that Salehi would have prevailed on the merits. It does not appear that she was ready to go forward procedurally and prove the case substantively. To say that she was, somehow, the prevailing party on a “practical level” or that she realized her “litigation objectives” is to do violence to these legal phrases of art. Association was ready to defend on the merits and cannot be faulted because Salehi dismissed these causes of action.

Heather Farms is readily distinguishable. There, the dismissal was mandated by the terms of a global settlement. Here, the dismissals were based on Salehi’s faulty reasoning. The expert’s unavailability because of illness constituted good cause for a continuance. Salehi recognized that she had good cause for a continuance when, three days after the dismissals, she requested a continuance on the remaining fourth and sixth causes of action because of the expert’s illness. The trial court confirmed the showing of good cause by continuing the trial for four months to May 10, 2010.

When Salehi filed her request for dismissals on January 8, 2010, she should have known that her expert’s unavailability would constitute good cause for a continuance. The trial court would have abused its discretion had it denied a continuance in these circumstances. The expert was an essential witness, and Salehi had learned of his illness only seven days before the trial date. Rule 3.1332(c)(1) of the California Rules of Court provides: “Circumstances that may indicate good cause [for a continuance of the trial] include: . . . The unavailability of an essential lay or expert witness because of death, illness, or other excusable circumstances . . . .”

Instead of moving for a continuance on all of the causes of action, as a competent attorney would have done, Salehi dismissed eight of them. These dismissals were unnecessary because she was entitled to a continuance. The trial court would have abused its discretion had it denied a continuance in these circumstances. [1156]

[6] “In assessing litigation success, Hsu v. Abbara (1995) 9 Cal.4th 863, 877, . . . instructs: ‘[C]ourts should respect substance rather than form, and to this extent should be guided by ‘equitable considerations.’ ” (Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1019.) Even though Salehi’s dismissals were based on reasons unrelated to “the probability of success on the merits” (Santisas v. Goodin, supra, 17 Cal.4th at p. 621), it is unfair to deprive Association of its reasonable attorney fees. Because of Salehi’s dismissals, Association “realized its litigation objectives.” (Id., at p. 622.) The dismissals were due to Salehi’s faulty reasoning. To shield her from attorney fees liability would reward what the trial court characterized as her “poor decisions.” [7] She should not be able to take advantage of her own fault or wrong. (Civ. Code, § 3517.)

We make one further observation. At no time has Salehi claimed that the trial court should have awaited outcome of the two remaining causes of action before deciding who was the prevailing party “[i]n [the] action.” (§ 1354, subd. (c).) We only point out that prudence may dictate that the trial court postpone ruling on an attorney fees request until all causes of action have been resolved.

SALEHI’S APPEAL

Factual and Procedural Background

Almost four years before the 2008 filing of the instant action (the 2008 action), Salehi filed a separate action (the 2004 action) against Association alleging five causes of action: nuisance, breach of contract, breach of fiduciary duty, negligence, and declaratory relief (Ventura County Case No. Civ.229468). The gravamen of the 2004 action was that, in violation of the CC&Rs, Association had failed to maintain and repair the common area water pipes above Salehi’s unit. As a result of this failure, water had leaked from the pipes into her unit. The leaks had damaged Salehi’s property and had caused the growth of toxic mold. The 2004 complaint alleged that, before Salehi purchased her unit, Association had been “notified of incidents of common area water leakage, and other common area water intrusion in [Salehi’s] unit, and into other units, in the Surfside III complex.”

In August 2005 the parties signed a “Settlement Agreement and Mutual Release” that disposed of the 2004 action. Association agreed to pay Salehi $110,000. The parties agreed to release each other from all claims “which they ever had, may now have or may hereafter have . . . by reason of any act or omission, matter, cause or thing arising out of or connected with the Complaint, or which could have been alleged in the Complaint, including [1157] without limitation, any representation, misrepresentation or omission in connection with any of the above . . . .”

The agreement included an express waiver of the protection afforded by Civil Code section 1542 (section 1542), which provides: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” The agreement set forth section 1542 verbatim and provided: “It is the intention of the Parties hereto that the foregoing general releases shall be effective as a bar to all actions, causes of action, suits, claims or demands of every kind, nature or character whatsoever,known or unknown, suspected or unsuspected, fixed or contingent, referred to above, except those reserved in this Agreement.” (Italics added.) “[T]he parties hereby acknowledge that they are aware that they or their attorneys may hereafter discover claims and facts in addition to or different from those which they now . . . believe to exist with respect to the subject matter of or any part to this release, but that it is nonetheless the intention of the Parties to hereby fully, finally, and forever settle and release any and all disputes and differences, known or unknown, suspected or unsuspected, as to the released matters.” (Italics added.) Thus, in 2005, Association “bought peace” with Salehi for any theoretical claims she may have had.

The 2008 action was filed almost three years after the signing of the Settlement Agreement and Mutual Release. At the time of trial of Salehi’s two remaining causes of action for negligent misrepresentation and fraud, Association made a pretrial motion in limine to exclude “all evidence of the fraud and misrepresentation which occurred prior to the signing [of] the release” in August 2005. Association contended that Salehi “cannot pursue any claims for damages which occurred before August . . . 2005, because she released all known and unknown claims against Association in the Settlement Agreement and Mutual Release.” The granting of the motion in limine would dispose of Salehi’s two remaining causes of action, since they were based on Association’s alleged failure to disclose Surfside’s physical and financial problems to Salehi before she purchased her unit in March 2004.

Salehi argued that the release applied only to known and unknown claims related to the common area plumbing leaks that had damaged her individual condominium unit. Salehi declared that, when she signed the release in August 2005, she “did not, and could not know that there was a complex-wide failure of the plumbing system and essentially every other major component of the common areas.” In her complaint in the 2008 action, Salehi alleged that Association had failed “to maintain, upkeep, and adequately repair the common areas, including but not limited to the drainage and [1158] sewage systems, the fresh water plumbing, the security gates, the roofs, the building exteriors and stairways, the elevators, the carports, the utility buildings, the subflooring,[] railings, balconies, patios, sidewalks, asphalt roadways, [and] lighting . . . .”

The trial court granted the motion in limine and entered judgment in favor of Association. Association filed a memorandum of costs in the amount of $7,056. The trial court denied Salehi’s motion to tax costs.

Non-Preclusive Effect of Order Denying Summary Adjudication of Issues

Before Association’s motion in limine, a different judge had denied its motion for summary adjudication on the issue of whether the 2005 release barred Salehi’s claims in the 2008 action. Salehi argues that, by granting the motion in limine, the trial court in effect reversed this earlier ruling without complying with Code of Civil Procedure section 1008, which limits a court’s jurisdiction to grant an application to reconsider its prior order.

[8] Salehi “has cited no case, and we know of none, suggesting that section 1008 bars the judge to whom a case is assigned for trial from ruling on an issue of law as to which another judge has previously denied summary adjudication. To read the statute that broadly would be a prescription for calcified and pointless trial proceedings grinding inexorably toward reversal on appeal for errors that could easily have been corrected but for a perceived lack of power to do so.” (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 766.) “The non-preclusive effect of denial is explicitly recognized in the directive that a grant of summary adjudication as to some issues ‘shall not operate to bar’ relitigation of other issues ‘as to which summary adjudication was either not sought or denied.’ (Code Civ. Proc., § 437c, subdivision (n)(2).)” (Id., at p. 766, fn. 18.)

Evidence on the Issue of Claimed Ambiguity Of the 2005 Settlement Agreement

Salehi contends that the trial court erroneously “refused to allow [her] to present evidence concerning [her] intent in entering into the [2005] agreement.” We disagree. In support of her contention, Salehi cites page 95 of the reporter’s transcript of the hearing on the motion in limine. But this citation does not support her contention. At page 95 of the reporter’s transcript, Salehi asked the court to “find that [the 2005 release] is ambiguous and accept extrinsic evidence.” The court replied that it “could take evidence on the issue as to whether or not it’s ambiguous.” Salehi responded: “The [1159] evidence is what I’ve cited in the opposing papers, that the language that is in the recitals limits it. It explains, it shows the intent of why I signed the settlement agreement.”

[9] The trial court properly permitted Salehi to present extrinsic evidence as to whether the 2005 agreement was ambiguous. “[P]arol evidence is properly admitted to construe a written instrument when its language is ambiguous. . . . [¶] The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine ‘ambiguity,’ i.e., whether the language is ‘reasonably susceptible’ to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step – interpreting the contract. [Citation.]” (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)

[10] Although Salehi told the court that her opposition to the motion in limine contained the relevant extrinsic evidence concerning her intent, it in fact contained no competent extrinsic evidence. Salehi declared, “I never intended to settle any claims other than for the specific repairs stated in the settlement agreement . . . .” Salehi did not indicate whether she had communicated this intent to Association. “[E]vidence of the undisclosed subjective intent of the parties is irrelevant to determining the meaning of contractual language.” (Winet v. Price, supra, 4 Cal.App.4th 1166, fn. 3.) “It is the outward expression of the agreement, rather than a party’s unexpressed intention, which the court will enforce. [Citation.]” (Id., at p. 1166.)

2005 Settlement Bars 2008 Claims

[11] Salehi asserts that the trial court should have let the jury determine whether the parties intended the 2005 release to encompass her claims in the 2008 action for negligent misrepresentation and fraud. Because there was no conflicting competent extrinsic evidence as to the parties’ intent, the interpretation of the release was a question of law for the court, not a question of fact for the jury. (City of Hope Nat. Medical Center v. Genentech Inc. (2008) 43 Cal.4th 375, 395; Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865.)

We “independently construe the writing to determine whether the release encompasses the present claim[s]” for negligent misrepresentation and fraud. (Winet v. Price, supra, 4 Cal.App.4th at p. 1166.) We conclude that the 2005 release bars the remaining two 2008 claims. [1160]

In Winet v. Price, supra, 4 Cal.App.4th 1159, the appellate court interpreted a release with similar language. Price was an attorney who performed services for Winet. Price sued Winet to recover legal fees, and the parties settled the matter. As part of the settlement, the parties released each other from all claims, whether known or unknown. Each party was represented by counsel during the negotiation of the release. Fifteen years later, Winet was sued concerning a partnership agreement that Price had drafted before the settlement agreement was signed. Winet cross-complained against Price, alleging that Price had committed malpractice in drafting the partnership agreement. Price moved for summary judgment, arguing that the release encompassed the malpractice claim. The trial court granted the motion.

[12] The appellate court upheld the trial court’s ruling. In determining “that the release was designed to extinguish all claims extant among the parties,” whether known or unknown, the appellate court considered the following factors: “First, Winet was represented by counsel and was aware at the time he entered into the release of possible malpractice claims against Price relating to certain services Price had rendered to him [but not relating to the drafting of the partnership agreement]. With this knowledge and the advice of counsel concerning the language of (and the import of waiving) section 1542, Winet expressly assumed the risk of unknown claims. Second, it is significant that the parties were able to, and did, fashion language memorializing their agreement to preserve identified claims from the operation of the release when such was their intention . . . . Finally, Winet was represented by his own counsel, who explained to Winet the import of the release in general and of the waiver of section 1542 in particular. Under these circumstances we may not give credence to a claim that a party did not intend clear and direct language to be effective. [Citation.]” (Winet v. Price, supra, 4 Cal.App.4th at p. 1168, fn. omitted.)

The rule and rationale of Winet apply here. Like Winet, Salehi was also represented by counsel during the negotiation of the release. In the absence of evidence to the contrary, we presume that counsel explained to Salehi “the import of the release in general and of the waiver of section 1542 in particular.” (Winet v. Price, supra, 4 Cal.App.4th at p. 1168.) The settlement agreement states: “THE PARTIES ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY LEGAL COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE § 1542 . . . .” Moreover, because Salehi was an attorney in her own right, she should have understood the import of the section 1542 waiver.

When Salehi signed the release in August 2005, she was aware of possible claims against Association in addition to the water leakage claims pertaining to her own unit. In a letter to Association months before the signing of the [1161] release, Salehi stated that Dura-Flo, a plumbing contractor, had estimated it would cost “over $1.2 million to line all of the copper pipes only.” Salehi inquired, “Which is correct: We have few plumbing problems or we have such extensive problems that we need a $1.2 million fix?” Salehi asked Association to “provide details to support [its] response including any inspection or estimate to repair the drains.” So, Salehi knew, or should have known, of additional theoretical claims. Despite this knowledge, she “expressly assumed the risk of unknown claims.” (Winet v. Prince, supra, 4 Cal.App.4th at p. 1168.)

Finally, “it is significant that the parties were able to, and did, fashion language memorializing their agreement to preserve identified claims from the operation of the release when such was their intention . . . .” (Winet v. Price, supra, 4 Cal.App.4th at p. 1168.) For example, the release expressly did not apply to Salehi’s “obligation to pay Homeowner Association dues and assessments” or to “any obligations or restraining orders created by virtue of Ventura County Superior Court Case Number CIV229468 [the 2004 action].”

Accordingly, we reject Salehi’s argument that the 2005 release did not apply to unknown claims against Association that arose prior to the release. “If an argument such as this were given currency, a release could never effectively encompass unknown claims. A releasor would simply argue that release of unknown or unsuspected claims applied only to known or suspected claims, making it ineffective as to unknown or unsuspected claims.” (Winet v. Price, supra, 4 Cal.App.4th at p. 1167.)

Denial of Motion to Tax Costs

Salehi contends that the trial court abused its discretion in denying her motion to tax costs because “the costs which [she] sought to have taxed were incurred in defending the dismissed causes of action and were not reasonable or necessary for trial of the two remaining causes of action.” Salehi’s contention is without merit. Association sought costs pursuant to the costs statute, section 1032. Association was entitled to costs on the dismissed causes of action pursuant to subdivision (a)(2) of section 1032, which provides, ” ‘Prevailing party’ includes . . . a defendant in whose favor a dismissal is entered . . . .”

[13] Moreover, Salehi has forfeited the contention that costs “were not reasonable or necessary” as to the two remaining causes of action because she failed to provide supporting legal argument with references to the record. “[T]he trial court’s judgment is presumed to be correct, and the appellant has the burden to prove otherwise by presenting legal authority on each point [1162] made and factual analysis, supported by appropriate citations to the material facts in the record; otherwise, the argument may be deemed forfeited. [Citations.]” (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655-656.) “The appellant may not simply incorporate by reference arguments made in papers filed in the trial court, rather than brief them on appeal. [Citation.]” (Id., at p. 656.)

CONCLUSION

The order denying Association’s motion for attorney fees is reversed, and the matter is remanded to the trial court for determination and award of reasonable attorney fees to Association. The judgment as to causes of action four and six and the post -judgment order denying Salehi’s motion to tax costs are affirmed. Association shall recover its costs on both appeals.

Gilbert, P.J., and Perren, J., concurred.

Marcia J. Brewer; Law Office of Mifflin & Associates and Ken Mifflin for Plaintiffs and Appellants.
Robert L. Jones, in pro. per., for Plaintiff and Appellant.
No appearance for Defendant and Respondent Maurice Kemp.
Turner Law Firm and Keith J. Turner for Defendant and Respondent Eric Yeldell.

OPINION

CANTIL-SAKAUYE, C. J.

The issue before us in this case is the validity of an attorney fee award granted in favor of defendant homeowners under former section 1354, subdivision (c), of the Civil Code, a provision of the Davis-Stirling Common Interest Development Act (hereafter the CID Act).^{[FN. 1]} The CID Act applies to various types of development projects, but a common interest development for purposes of the act requires a project with a common area. (See 9 Miller & Starr, Cal. Real Estate (3d ed. 2011) § 25B:1, pp. 25B-6 to 25B-7.) Former section 1354(c) — the attorney fee statute at issue here — provided in full: “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Added by Stats. 2004, ch. 754, § 1, p. 5838.) The term “governing documents,” in turn, was defined in former section 1351, subdivision (j) (as amended by Stats. 2002, ch. 1111, § 1, pp. 7117-7118, now § 4150) to mean the official documents governing “the operation of [a] common interest development.”

The underlying lawsuit in this matter was filed by the Tract 19051 Homeowners Association and a number of individual members of the association (hereafter plaintiffs) against defendant homeowner Maurice Kemp. Plaintiffs’ first amended complaint alleged that their housing development tract No. 19051 (Tract 19051) — which included Kemp’s property — is a common interest development within the meaning of the CID Act. It further alleged that, pursuant to that act, there were valid restrictions applicable to defendant Kemp’s property that were violated by his ongoing remodeling. The trial court ultimately concluded that plaintiffs failed to establish that Tract 19051 constitutes a common interest development within the meaning of the CID [1139] Act and rendered judgment in favor of defendant Kemp and defendant Eric Yeldell, a subsequent purchaser of Kemp’s property who had been permitted to intervene as a defendant in the action. As part of the judgment, the trial court awarded defendants attorney fees under former section 1354(c).

The Court of Appeal affirmed the trial court’s judgment in favor of defendants on the merits, agreeing that plaintiffs had failed to prove that Tract 19051 satisfies the requirements of a common interest development, but the appellate court reversed the trial court’s award of attorney fees to defendants. Relying upon the prior Court of Appeal decision in Mount Olympus Property Owners Assn. v. Shpirt (1997) 59 Cal.App.4th 885, 895-896 (Mount Olympus), the Court of Appeal concluded that because both it and the trial court had found that the CID Act was not applicable, the trial court had erred in awarding attorney fees under former section 1354(c), a provision of that act.

Defendants sought review of the attorney fee issue in this court, contending that the Court of Appeal’s conclusion was not supported by the language of the applicable statute or by the Legislature’s intent to adopt a reciprocal attorney fee provision. We granted review to resolve the issue.

For the reasons discussed hereafter, we conclude that the Court of Appeal erred in reversing the attorney fee award in favor of defendants. First, the trial court’s award of attorney fees is supported by the language of the statute: Plaintiffs’ underlying lawsuit was an action to enforce the governing documents of a common interest development, and defendants were the prevailing party in the action. Second, because plaintiffs clearly would have been entitled to an award under the statute had they prevailed in the action, denying defendants an award under the statute when they were the prevailing party would unquestionably violate the reciprocal nature of the statute and thus defeat the evident legislative intent underlying the statute. As we shall explain, prior California decisions, interpreting and applying comparable statutory attorney fee provisions that mandate an award of attorney fees to the prevailing party, directly support this interpretation of former section 1354(c). Finally, the Court of Appeal decision in Mount Olympus, supra, 59 Cal.App.4th 885, upon which the Court of Appeal in this case relied in reaching a contrary result, is clearly distinguishable from the present case.

Accordingly, we reverse the judgment of the Court of Appeal insofar as it reversed the attorney fee award in favor of defendants.

I. Facts and Lower Court Proceedings

Tract 19051 is a housing development comprised of 94 single-family homes in the Baldwin Vista area of Los Angeles. A voluntary homeowners [1140] association — known variously as the Tract 19051 Homeowners Association or the Cloverdale, Terraza, Stillwater, Weatherford Homeowners Association — is open to homeowners whose homes are within, or in the immediate vicinity of, Tract 19051.

When Tract 19051 was subdivided in 1958, the developer recorded the declaration of restrictions (hereafter referred to as the declaration) that contained the restrictions at issue in the underlying lawsuit. The declaration allowed any homeowner to sue to enforce its restrictions, but the original declaration, by its own terms, expired on January 1, 2000, and contained no provision for extending that date.

In 2006, defendant Maurice Kemp acquired lot No. 22 of Tract 19051, which contained a one-story residence that Kemp substantially demolished in order to build a much larger 7,000 square-foot two-story home. After Kemp began construction, a neighbor’s attorney informed Kemp that the remodeling project was in violation of height and setback restrictions contained in the declaration.

In September 2008, plaintiffs filed the underlying lawsuit against Kemp, alleging breach of the declaration and seeking injunctive and declaratory relief; the first amended complaint explicitly alleged that Tract 19051 is a common interest development and claimed that plaintiffs were entitled to an award of attorney fees under former section 1354(c). In response, defendant argued that the declaration had expired by its own terms on January 1, 2000. Plaintiffs rejoined by maintaining that, under the terms of the CID Act, the termination date of the declaration had been extended to December 31, 2010, by a majority vote of the homeowners that occurred in December 1999. (See former § 1357, subd. (b), added by Stats. 1985, ch. 874, § 14, p. 2780, now §§ 4265, 4270 [when the declaration of a common interest development does not provide a means for the property owners to extend the term of the declaration, the term may be extended by a majority of members].) With regard to a development that does not qualify as a common interest development, a declaration of restrictions may be extended only by the unanimous vote of 100 percent of the property owners or by a vote of a lesser number of owners as provided in the declaration of restrictions. (See 8 Miller & Starr, Cal. Real Estate (3d ed. 2011) § 24:41, pp. 24-137 to 24-138 & fn. 9 [citing cases].) It is undisputed that neither of the latter two methods was satisfied here.

In denying a preliminary injunction sought by plaintiffs, the trial court found that the December 1999 vote by a majority of the Tract 19051 homeowners was not effective to extend the date of the declaration because “Tract 19051 is not a common interest development. . . . Tract 19051 is a [1141] tract of individually owned single family residences that border upon streets that are dedicated to the public and are not owned in common by the homeowners or by the homeowners’ association.”

When the case ultimately was ready for trial, however, Kemp was on the verge of losing his property to foreclosure and did not appear in court. The trial court initially entered an interlocutory judgment for plaintiffs and granted them attorney fees and costs under former section 1354(c), but reserved final judgment until plaintiffs provided proof that the declaration had been properly extended under the CID Act. Meanwhile, a new homeowner, Eric Yeldell, purchased Kemp’s home at a trustee’s sale and was granted permission to intervene as a defendant in the ongoing lawsuit. After further briefing and argument on additional questions relating to Tract 19051’s status as a common interest development, the trial court found that plaintiffs had failed to establish that Tract 19051 is a common interest development and consequently that plaintiffs’ attempt to extend the declaration through the process authorized under the CID Act was unsuccessful. The trial court vacated the interlocutory judgment in favor of plaintiffs, entered judgment for defendants, and awarded defendants attorney fees under former section 1354(c).

The Court of Appeal agreed with the trial court’s conclusion that plaintiffs had failed to establish that Tract 19051 was a common interest development within the meaning of the CID Act and consequently that the restrictions imposed by Tract 19051’s original declaration had not been extended by virtue of the procedure authorized by the CID Act. Accordingly, the Court of Appeal affirmed the trial court’s judgment in favor of defendants on the merits.

With regard to the trial court’s award of attorney fees in favor of defendants, however, the Court of Appeal reversed. In reaching this conclusion, the Court of Appeal stated in full: “In Mount Olympus, supra, 59 Cal.App.4th at pages 895-896,we found that because the [CID] Act did not apply, the trial court had erred in awarding attorney fees under section 1354. (See 12 Miller & Starr, Cal. Real Estate (3d. ed. 2008) § 34:66, p. 34-229 [`If the property described in the restrictions is not a “common interest development,” this provision for the award of fees does not apply.’].) Because the same rationale applies to this case, the attorney fee award under section 1354 must be reversed.”

Defendants petitioned for review of the Court of Appeal’s determination regarding the attorney fee award, and we granted review limited to that issue. Accordingly, we accept the lower courts’ determinations that Tract 19051 is not a common interest development within the meaning of the CID Act.

[1142]

II. When a defendant homeowner prevails in an action to enforce the governing documents of an asserted common interest development by showing that the subdivision is not a common interest development, is the defendant homeowner entitled to attorney fees under former section 1354(c) (now section 5975, subdivision (c))?

With regard to an award of attorney fees in litigation, California generally follows what is commonly referred to as the American Rule, which provides that each party to a lawsuit must ordinarily pay his or her own attorney fees. (See, e.g., Trope v. Katz (1995) 11 Cal.4th 274, 278.) The American Rule is codified in Code of Civil Procedure section 1021, which states in relevant part: “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties. . . .”^{[FN. 2]}

As contemplated by the initial clause of Code of Civil Procedure section 1021, the Legislature has established a variety of exceptions to the American Rule by enacting numerous statutes that authorize or mandate an award of attorney fees in designated circumstances. (See generally 7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, §§ 210-238, pp. 772-811 [discussing numerous examples of statutory provisions authorizing attorney fee awards].)

Former section 1354(c) — the provision at issue here — is one of the legislatively created attorney fee provisions. As noted above, former section 1354(c), a provision of the CID Act, read in full: “In an action to enforce the governing documents [of a common interest development], the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Stats. 2004, ch. 754, § 1, p. 5838.)^{[FN. 3]} The parties disagree as to the meaning and proper application of this provision in a case in which it is ultimately determined that no common interest development exists.

[1143] The general principles that guide a court in determining the meaning and scope of a statutory provision are well established. As we explained in People v. Cornett (2012) 53 Cal.4th 1261, 1265: “`As in any case involving statutory interpretation, our fundamental task here is to determine the Legislature’s intent so as to effectuate the law’s purpose.’ [Citation.] `We begin with the plain language of the statute, affording the words of the provision their ordinary and usual meaning and viewing them in their statutory context, because the language employed in the Legislature’s enactment generally is the most reliable indicator of legislative intent.’ [Citations.] The plain meaning controls if there is no ambiguity in the statutory language. [Citation.] If, however, `the statutory language may reasonably be given more than one interpretation, “`”courts may consider various extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing the statute.”‘”‘”

In this case, each of the parties contends that the plain meaning of the statutory language supports its interpretation of the statute. To repeat, the applicable statute reads in full: “In an action to enforce the governing documents [of a common interest development], the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Former § 1354(c), now § 5975, subd. (c).)

Plaintiffs contend that even when an action is brought to enforce what the complaint expressly alleges is a governing document of a common interest development, if it is ultimately determined in the course of the litigation that a common interest development does not exist, the action cannot properly be found to be “an action to enforce the governing documents” of a common interest development within the meaning of former section 1354(c). Plaintiffs assert in this regard: “In order for [former] section 1354(c) to apply, there must be an action to `enforce’ governing documents. This necessarily means that there must be valid `governing documents’ that are compliant with the Davis-Stirling Act to be `enforced’ in the first instance. Otherwise, the Act never applies, and the general rule that fees are not recoverable controls. . . . If there is nothing to enforce, then there can be no action to enforce.”

Defendants, in contrast, contend that the plain language of the statute supports their position. Defendants maintain that because the statute says that [1144] “the prevailing party” is entitled to recover attorney fees, the statute must be interpreted to be reciprocal, and “[r]ecovery is hinged solely on the basis of plaintiff’s action, not whether a court ultimately determines that a subdivision is a common interest development.” “[Plaintiffs] filed this action to enforce the governing documents. . . . Thus, the reciprocal, mandatory fee-shifting should kick in, whether [plaintiffs or defendants] prevailed.”

Focusing on the plain language of former section 1354(c), we conclude that defendants have the stronger argument. When a lawsuit is brought to enforce what the complaint expressly alleges are the governing documents of a common interest development, the action would ordinarily be understood to be “an action to enforce the governing documents [of a common interest development]” as that clause is used in former section 1354(c). Whether or not the plaintiff in the action is ultimately successful in establishing that the documents relied upon are in fact the governing documents of a common interest development would not affect the character or type of action that has been brought.

Moreover, even if the language of former section 1354(c) is viewed as potentially ambiguous in this regard, as we explain the additional factors discussed hereafter, taken as a whole, clearly support defendants’ contention that they were properly awarded attorney fees in this case under former section 1354(c).

The legislative history of former section 1354(c) makes it clear that the Legislature has long intended to provide for an attorney fee award to the “prevailing party” in actions covered by the statute. Although the initial version of former section 1354 in the original CID Act enacted in 1985 did not contain an attorney fee provision (Stats. 1985, ch. 874, § 14, p. 2777), when the statute was first amended in 1990 the following sentence was added to former section 1354: “In any action to enforce the declaration, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Stats. 1990, ch. 1517, § 3, p. 7108, italics added.) In 1993, the attorney fee provision (still providing for recovery by “the prevailing party”) was expanded and moved to former section 1354, subdivision (f). (Stats. 1993, ch. 303, § 1, p. 2053.) Then, in 2004, in a substantial revision of the CID Act, the attorney fee provision in question was moved from former section 1354, subdivision (f), to former section 1354(c). (Stats. 2004, ch. 754, § 1, pp. 5838-5839.) The 2004 amendment embodied the identical language that remained in effect at the time of the trial court’s order in this case. As noted above (ante, p. 1, fn. 1), as a result of the 2012 recodification of the CID Act, the identical language now appears in section 5975, subdivision (c).

Plaintiffs claim that the 2004 amendment that moved the attorney fee provision from former section 1354, subdivision (f) to former section 1354(c) [1145] worked a substantive, narrowing change in the statute because the language of section 1354, subdivision (f) that provided “[i]n any action to enforce the governing documents” was changed to “[i]n an action to enforce the governing documents. . . .” We are aware of no authority, however, to support the claim that in this context the two phrases (“any action” and “an action”) are reasonably interpreted to have different meanings, and other attorney fee statutes use the terms interchangeably. (See, e.g., Lab. Code, § 218.5.) Furthermore, plaintiffs’ contention is directly contradicted by the report of the California Law Revision Commission that proposed the changes embodied in the 2004 amendment. With respect to the change in question, the report stated that “the first sentence of former subdivision (f) is continued without substantive change in subdivision (c).” (Recommendation: Alternative Dispute Resolution in Common Interest Developments (Sept. 2003) 33 Cal. Law Revision Com. Rep. (2003) p. 711, italics added.)

Thus, throughout its history, the attorney fee provision of the CID Act has provided for an award of attorney fees to the “prevailing party.”

As this court noted in Jankey v. Lee (2012) 55 Cal.4th 1038, 1046: “The Legislature knows how to write both unilateral fee statutes, which afford fees to either plaintiffs or defendants, and bilateral fee statutes, which may afford fees to both plaintiffs and defendants. `When the Legislature intends that the successful side shall recover its attorney’s fees no matter who brought the legal proceeding, it typically uses the term“prevailing party.“‘” (Italics added.)

We have not found anything in the legislative history of former section 1354(c) to indicate that the Legislature specifically considered the scenario in which an action that was brought to enforce the governing documents of a common interest development proved unsuccessful because the trial court determined that no common interest development existed. As described below, however, past California decisions interpreting and applying other prevailing party attorney fee statutes demonstrate that the enactment of a prevailing party attorney fee provision generally reflects a legislative intent to adopt a broad, reciprocal attorney fee policy that will, as a practical and realistic matter, provide a full mutuality of remedy to plaintiffs and defendants alike. (See, e.g., Santisas v. Goodin (1998) 17 Cal.4th 599 (Santisas); Hsu v. Abbara (1995) 9 Cal.4th 863 (Hsu); Mechanical Wholesale Corp. v. Fuji Bank, Ltd. (1996) 42 Cal.App.4th 1647 (Mechanical Wholesale). A statute that limited an award of attorney fees to the prevailing party only to cases in which it is ultimately determined that there are in fact governing documents of a common interest development to be enforced would deny mutuality of remedy to the defendants in any instance, such as [1146] the present case, in which the plaintiffs would have obtained attorney fees had they prevailed in their claim, but the defendants would be denied attorney fees because they defeated the plaintiffs’ action by showing that no common interest development exists. Had the Legislature intended to deny equal treatment to the defendants in such a common circumstance, one would expect such an intent to be reflected in the legislative history of former section 1354(c). Nothing in the legislative history of the statute suggests, however, that the Legislature intended to deny attorney fees to the prevailing defendants in such an action and plaintiffs do not point to anything that would support such an intent.

As just noted, a long line of California decisions have interpreted other prevailing party attorney fee statutes to permit recovery of attorney fees by a prevailing defendant in situations analogous to the present case. Most of the relevant cases involve the interpretation and application of section 1717, subdivision (a), which provides that “[i]n any action on a contract” containing a provision authorizing one of the parties to the contract to recover attorney fees incurred to enforce the contract, the prevailing party “shall be entitled to reasonable attorney fees” “whether he or she is the party specified in the contract or not.”

Section 1717 was at issue in Hsu, supra, 9 Cal.4th 863, in which the plaintiffs, prospective purchasers of real property, brought suit against the defendant property owners, alleging that the defendants had breached a real estate sales contract that contained an attorney fee provision. The trial court found in favor of the defendants, concluding that the plaintiffs’ purported acceptance of the defendants’ offer was actually a counteroffer and that no contract had been formed. Although the defendants sought attorney fees under section 1717, the trial court denied their request and, on appeal, the Court of Appeal upheld that denial. (Hsu, supra, at pp. 869-870.)

On review, this court unanimously reversed the lower courts’ denial of attorney fees to the defendants. In the course of our opinion, we explained: “It is now settled that a party is entitled to attorney fees under section 1717 `even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other party would have been entitled to attorney’s fees had it prevailed.'” . . . [¶] This rule serves to effectuate the purpose underlying section 1717. As this court explained, `[s]ection 1717 was enacted to establish mutuality of remedy where [a] contractual provision makes recovery of attorney’s fees available for only one party . . ., and to prevent oppressive use of one-sided attorney’s fees provisions. . . .’ . . . The statute would fall short of this goal of full mutuality of remedy if its benefits were denied to parties who defeat contract claims by proving that they were not parties to the alleged contract or that it was never formed. To achieve its [1147] goal, the statute generally must apply in favor of the party prevailing on a contract claim whenever that party would have been liable under the contract for attorney fees had the other party prevailed.” (Hsu, supra, 9 Cal.4th at pp. 870-871, citations omitted.) Hsu was decided in 1995, but several of the cases it cited, as well as other similar cases, predated the enactment of the prevailing party attorney fee provision at issue here. (See Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 842; North Associates v. Bell (1986) 184 Cal.App.3d 860, 865; Jones v. Drain (1983) 149 Cal.App.3d 484, 489-490; Care Constr., Inc. v. Century Convalescent Centers, Inc. (1976) 54 Cal.App.3d 701, 707.)

In Santisas, supra, 17 Cal.4th 599, we reaffirmed the rule set forth in Hsu, observing that a prevailing defendant is entitled to attorney fees under section 1717 “when a person sued on a contract containing a provision for attorney fees to the prevailing party defends the litigation `by successfully arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract.’ . . . To ensure mutuality of remedy in this situation, it has been consistently held that when a party litigant prevails in an action on a contract by establishing that the contract is invalid, inapplicable, unenforceable, or nonexistent, section 1717 permits that party’s recovery of attorney fees whenever the opposing parties would have been entitled to attorney fees under the contract had they prevailed.” (Santisas, supra, 17 Cal. 4th at p. 611.)

The rule reiterated by this court in the Hsu and Santisas decisions was applied to a different prevailing party attorney fee provision in Mechanical Wholesale, supra, 42 Cal.App.4th 1647. In Mechanical Wholesale, the appellate court was called upon to interpret and apply former section 3176 (now section 8558), which provided that “`the prevailing party'” shall recover its attorney fees “`[i]n any action against . . . [a] construction lender to enforce . . . a bonded stop notice.'” (Mechanical Wholesale, supra, 42 Cal.App.4th at p. 1660.) In that case, a contractor sued a construction lender to enforce a bonded stop notice, and sought attorney fees under former section 3176. The defendant construction lender prevailed in the action by establishing that no bonded stop notice existed, and then sought attorney fees under former section 3176.

The Court of Appeal in Mechanical Wholesale rejected the plaintiff’s claim that because it had been determined that no bonded stop notice existed, the entire statutory scheme, including the related attorney fee provision, did not apply. The court in Mechanical Wholesale explained: “Here, there was `an action’ `against a construction lender’ on a `bonded stop notice’ in which the construction lender was clearly the `prevailing party.’ Under the statute, Fuji [1148] Bank [the construction lender] is entitled to its attorney fees. That plaintiff did not have a legal right to claim the benefit of the stop notice provisions is irrelevant. We need not be concerned as to why the stop notice claim was invalid; it is only necessary for Fuji Bank to have shown that it defeated the claim. Such invalidity will not bar fees to which a prevailing party is otherwise entitled.” (Mechanical Wholesale, supra, 42 Cal.App.4th at p. 1661, fn. omitted.) In the accompanying footnote, the Mechanical Wholesale court cited the analogous authority under section 1717. (Mechanical Wholesale, supra, at p. 1661, fn. 14.)

Plaintiffs in the present case do not deny that the action in this matter was brought to enforce what the complaint asserted were the governing documents of a common interest development, and that plaintiffs would have been entitled to recover attorney fees under former section 1354(c) had they prevailed in the lawsuit. Accordingly, under the rationale of the Hsu, Santisas, and Mechanical Wholesale decisions, it follows that defendants should be entitled to recover attorney fees under former section 1354(c) inasmuch as they were the prevailing party in the action.

Plaintiffs object to this conclusion on a number of theories, but, as we explain, none of the objections is meritorious.

First, plaintiffs argue that permitting a prevailing defendant to recover attorney fees under former section 1354(c) in this setting is inconsistent with the provisions of former section 1374, another provision of the CID Act, which provided that “[n]othing in this title [the CID Act] may be construed to apply to a development wherein there does not exist a common area as defined in subdivision (b) of Section 1351. [¶] This section is declaratory of existing law.” (As amended by Stats. 2005, ch. 37, § 3, p. 502.)^{[FN. 4]} The language of former section 1374, however, is apparently addressed to provisions of the CID Act that apply to “a development” not to “an action,” and is at least ambiguous regarding the effect, if any, that the statute would have on the proper interpretation of former section 1354(c). Looking beyond the statutory language, as defendants point out the legislative history of former section 1374 makes it clear that that provision was intended simply to protect residents of non-common-area subdivisions or community associations from being inadvertently subjected to the numerous obligations that the CID Act imposes upon common interest developments — including the election of a board of directors (former § 1363.03), the preparation and distribution of annual operating budgets (former §§ 1363, 1365), the levying of regular and [1149] special assessments (former § 1366), providing numerous notices to association members (former §§ 1365, subds. (e), (f), 1369.590, 1367.1, subd. (k), 1378, subd. (c)), complying with the Common Interest Development Open Meeting Act (former § 1363.05), and making accounting records, meeting minutes and other documents available for member inspections (former § 1363, subd. (e)). (See Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Assem. Bill No. 67 (1993-1994 Reg. Sess.) as amended June 23, 1994, p. 2; Sen. Local Gov. Com., 3d reading analysis of Assem. Bill. No. 67 (1993-1994 Reg. Sess.), as amended Apr. 21, 1994, pp. 1-2.) Nothing in the legislative history of former section 1374 supports plaintiffs’ claim that the provision was intended or should be interpreted to affect the interpretation and application of the prevailing party attorney fee provision of former section 1354(c) or to undermine that provision’s reciprocal nature. Indeed, the purpose of former section 1374 — to protect the interests of homeowners who reside in non-common-interest developments § would clearly not be served by denying attorney fees to a defendant who prevails in a lawsuit by showing that, contrary to the plaintiff’s claim, the subdivision in question is not a common interest development.^{[FN. 5]}

Second, plaintiffs, like the Court of Appeal below, rely on the Court of Appeal decision in Mount Olympus, supra, 59 Cal.App.4th 885, but, as we shall explain, that decision does not support the denial of attorney fees to defendants in this case.

In Mount Olympus, supra, 59 Cal.App.4th 885, the underlying controversy arose over a home remodeling project that was proposed and begun by the defendant homeowners, the Shpirts. The home was located in a tract that was subject to a declaration of restrictions that had been recorded. The Shpirts’ next-door neighbor, Ross, objected to the remodeling and claimed it violated the declaration of restrictions, which required, among other matters, that any proposed remodeling be submitted to the Mount Olympus Property Owners Association (MOPOA) for approval. The Shpirts twice submitted plans to the MOPOA that were rejected. Their third submission was tentatively approved by the MOPOA, subject to a number of conditions that included submission of a final plan to the MOPOA and the Shpirts’ agreement to indemnify MOPOA should it be sued by Ross. The Shpirts did not fulfill the conditions but instead proceeded to demolish a portion of the existing home, allowed the property to fall into disrepair, and engaged in a pattern of abusive conduct interfering with Ross’s enjoyment of his property.

[1150] Thereafter, MOPOA and Ross brought the lawsuit at issue in Mount Olympusagainst the Shpirts, alleging multiple causes of action, including (1) breach of contract (for violation of the tract’s declaration of restrictions), (2) nuisance (for the accumulation of garbage on the property and the Shpirts’ abusive conduct), and (3) enforcement of an easement assertedly possessed by Ross to an unobstructed view to the south and west of the Ross property.

At the conclusion of the trial, the trial court found the Shpirts had violated the declaration of restrictions and had created a nuisance, and entered judgment in favor of Ross and the MOPOA. After the judgment was issued, Ross sought attorney fees from the Shpirts based on four separate grounds: (1) the attorney fee provision of the CID Act (then former § 1354, subd. (f), a statutory predecessor of former § 1354(c), the provision at issue in the present case), (2) the attorney fee provision contained in the declaration of restrictions, (3) an indemnity agreement assigning MOPOA’s right to attorney fees to Ross, and (4) Code of Civil Procedure former section 2033 (now Code Civ. Proc., § 2033.420), which permits a party to recover the expense (including attorney fees) of establishing the genuineness of a document when the losing party failed to admit the genuineness in response to a request for admission.

With regard to Ross’s attorney fee request, the trial court concluded (1) that Ross was entitled to recover fees under the attorney fee provision of the CID Act because the tract was a common interest development, (2) that Ross was not entitled to recover fees on his own behalf under the declaration of reservations because that document did not authorize attorney fees in a suit between homeowners, and (3) that by virtue of the indemnity agreement between Ross and MOPOA, Ross was entitled to recover the share of attorney fees that MOPOA was entitled to recover under the declaration of reservations. Because the trial court concluded that Ross was entitled to recover all of his own attorney fees under the attorney fee provision of the CID Act, it did not separately consider his request for a portion of his attorney fees as authorized by Code of Civil Procedure former section 2033.

The Court of Appeal in Mount Olympus affirmed the portion of the trial court’s posttrial order awarding MOPOA’s attorney fees to Ross under his indemnity agreement with MOPOA, but reversed the award to Ross of his own attorney fees under the attorney fee provision of the CID Act. On that point, the Court of Appeal concluded that, contrary to the trial court’s determination, the tract in which the Shpirts and Ross properties were located was not a common interest development within the meaning of the CID Act because there was not a common area owned by the individual property owners. Finally, because the trial court had not addressed Ross’s request for attorney fees under Code of Civil Procedure former section 2033 (concerning [1151] fees related to the Shpirts’ alleged failure to admit the genuineness of documents), the Court of Appeal remanded the case to the trial court for consideration of that issue. (Mount Olympus, supra, 59 Cal.App.4th at pp. 892-896.)

The Court of Appeal in the present case apparently viewed the Mount Olympus court’s decision with respect to the attorney fee provision of the CID Act as holding that whenever a trial court finds that a housing development is not a common interest development within the meaning of the CID Act, attorney fees are not recoverable under the attorney fee provision of that act. That understanding of the Mount Olympus decision, however, is mistaken. Because in Mount Olympus it was Ross who was seeking attorney fees under the attorney fee provision of the CID Act on the ground that the action was one to enforce the governing documents of an alleged common interest development, the Court of Appeal’s determination that the tract in question was not a common interest development meant that Ross was not the prevailing party in an action to enforce the governing documents of a common interest development. Although Ross was the prevailing party on other causes of action, insofar as the complaint purported to state a cause of action to enforce the governing documents of a common interest development, it was the defendants, the Shpirts, rather than the plaintiff Ross, who were the prevailing parties with respect to that cause of action.

In sum, the Mount Olympus opinion held that a plaintiff who sought attorney fees under the attorney fee provision of the CID Act was not entitled to an award of attorney fees under that statute when the plaintiff failed to establish that the tract was a common interest development, even when the plaintiff prevailed on other causes of action. The Mount Olympus decision, however, is not authority for denying a defendant, against whom an action to enforce the governing documents of a common interest development has been brought, the right to recover attorney fees under the statute when the defendant has prevailed in the action because the tract has been found not to be a common interest development. Unlike the plaintiff in Mount Olympus, defendants in the present case are the prevailing party in an action to enforce the governing documents of a common interest development.^{[FN. 6]}

In addition to relying on Mount Olympus, supra, 59 Cal.App.4th 885, plaintiffs rely on two other Court of Appeal decisions, but neither decision supports their position.

[1152] In Blue Lagoon Community Assn. v. Mitchell (1997) 55 Cal.App.4th 472 (Blue Lagoon), a majority of property owners in a common interest development voted to approve two amendments to the development’s declaration of restrictions, but the amendments did not receive the supermajority vote required by the applicable declaration of restrictions. The property owners favoring the amendments brought a petition in superior court utilizing a procedure authorized under former section 1356 (added by Stats. 1985, ch. 1003, § 1, p. 3222, now § 4275), permitting a court to reduce the percentage of affirmative votes necessary to amend a declaration of restrictions of a common interest development under specified circumstances. The proposed amendments were controversial within the development, however, and opposing homeowners hired an attorney and filed an objection to the petition. Following a contested hearing, the trial court denied the petition. Thereafter, the objecting homeowners sought an award of attorney fees, but the trial court denied the request.

On appeal, the Court of Appeal in Blue Lagoon affirmed the trial court’s determination, rejecting the objectors’ argument that they were entitled to attorney fees under former section 1354(c). The Court of Appeal explained: “Viewed objectively, the purpose of Civil Code section 1356 is to give a property owners’ association the ability to amend its governing documents when, because of voter apathy or other reasons, important amendments cannot be approved by the normal procedures authorized by the declaration. [Citation.] In essence, it provides the association with a safety valve for those situations where the need for a supermajority vote would hamstring the association. When the limited purpose of section 1356 is fully understood it is obvious that a petition brought under this section is not an adversarial proceeding. No defendants are named. No rights are sought to be protected. No wrongs are sought to be redressed. As such, it cannot be said that by opposing the petition the objectors were enforcing the governing documents and thus entitled to attorney fees and costs.” (Blue Lagoon, supra, 55 Cal.App.4th at p. 477.) Thus, unlike this case, in which plaintiffs clearly brought an action to enforce the governing documents of a common interest development, the court in Blue Lagoon concluded that neither the petition nor the objection in that proceeding constituted an action to enforce the governing documents of a common interest development within the meaning of former section 1354(c).^{[FN. 7]}

[1153] Plaintiffs additionally rely on the case of Gil v. Mansano (2004) 121 Cal.App.4th 739 (Gil), in support of their argument that an award of attorney fees is not authorized “where, as here, the statute is used defensively, and the language authorizing recovery of attorney’s fees is limited to `actions to enforce’. . . .” In Gil, the parties had entered into a release agreement that contained an attorney fee provision. One party brought suit against the other, alleging fraud, and the defendant responded by maintaining that the suit was barred by the release agreement. The trial court agreed with the defendant, entered judgment in its favor and awarded attorney fees to the defendant pursuant to the attorney fee provision of the release agreement.

The Court of Appeal in Gil, in a two-to-one decision, reversed the attorney fee award, interpreting the attorney fee provision in the release agreement, which authorized attorney fees when “action” was brought to enforce the agreement, to authorize such fees only when a party filed a lawsuit to enforce the release and not when a party proffered the release as a defense to a lawsuit. (Gil, supra, 121 Cal.App.4th at pp. 742-745.) One Court of Appeal justice dissented in Gil, maintaining that the majority had taken too narrow a view of the term “action” to enforce the release as used in the attorney fee provision in the release. (Id. at pp. 746-747 (dis. opn. of Armstrong, J.).) A subsequent Court of Appeal decision agreed with the dissenting justice in Gil on this point. (See Windsor Pacific LLC v. Samwood Co., Inc. (2013) 213 Cal.App.4th 263, 275-276.)

Without expressing any view on the merits of the Gil decision itself, we observe that, in any event, Gil provides no support for plaintiffs’ position here. Unlike the defendant in Gil, defendants in this case did not defend the action by claiming that the declaration of Tract 19051 was the governing document of a common interest development and by seeking to enforce the declaration as a defense to the action. Here, it was plaintiffs who filed an action to enforce the declaration as an asserted governing document of a common interest development. Thus, even under Gil, it is clear that the lawsuit here constituted an action to enforce the governing documents. Because defendants were the prevailing party in such an action, they are entitled to recover attorney fees under former section 1354(c).

[1154]

III. Conclusion

For the reasons discussed above, the judgment of the Court of Appeal is reversed insofar as it reversed the trial court’s attorney fee award in favor of defendants.

WERDEGAR, J., CHIN, J., CORRIGAN, J., LIU, J., CUÉLLAR, J. and KRUGER, J., concurs.

---

 

FN 1. In 2012, subsequent to all of the lower court proceedings in this matter, the CID Act was recodified. The former provisions of the Civil Code were repealed and reenacted as new sections of the Civil Code. (Stats. 2012, ch. 180, §§ 1-3, operative Jan. 1, 2014; see generally Recommendation: Statutory Clarification and Simplification of CID Law (Feb. 2011) 40 Cal. Law Revision Com. Rep. (2010) p. 235.) The specific provision at issue in this case — former section 1354, subdivision (c) — was repealed and reenacted without change as section 5975, subdivision (c).

Because the former provisions of the CID Act are cited in the lower court opinions and briefing in this matter, to minimize confusion this opinion generally will refer to the relevant provisions of the act by their former section numbers. Former section 1354, subdivision (c) — the specific statute at issue here — will generally be referred to as former section 1354(c).

In addition, unless otherwise specified, all statutory references are to the Civil Code.

FN 2.  In addition to statutory attorney fee provisions, this court, relying upon its inherent equitable authority, has recognized three additional exceptions to the American Rule — the common fund, substantial benefit, and private attorney general doctrines — under which attorney fees may also be recovered. (See generally Serrano v. Priest(1977) 20 Cal.3d 25, 34-47.) The private attorney general attorney fee doctrine has subsequently been substantially codified in Code of Civil Procedure section 1021.5.

FN 3. The term “governing documents” as used in former section 1354(c) was defined in former section 1351, subdivision (j) (as amended by Stats. 2002, ch. 1111, § 1, pp. 7117-7118, now § 4150) to mean “the declaration and any other documents, such as bylaws, operating rules, articles of incorporation, or articles of association, which govern the operation of the common interest development or association.”

Former section 1354 read in full: “(a) The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both.

“(b) A governing document other than the declaration may be enforced by the association against an owner of a separate interest or by an owner of a separate interest against the association.

“(c) In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (§ 1354, as added by Stats. 2004, ch. 754, § 1, p. 5838.

FN 4. In the 2012 recodification of the CID Act, the substance of former section 1374 was reenacted as section 4201, which now provides: “Nothing in this act may be construed to apply to a real property development that does not contain common area. This section is declaratory of existing law.”

FN 5. In a similar vein, plaintiffs also rely on former section 1352 (now § 4200), which provides that “[t]his title applies and a common interest development is created” whenever specified conditions are satisfied. Former section 1352, however, predated the prevailing party attorney fee provision of former section 1354(c) (see Stats. 1985, ch. 874, § 14, p. 2777), and thus clearly was not intended and cannot properly be interpreted to limit the scope of the latter provision’s reciprocal effect.

FN 6. As noted above (ante, p. 6), the Court of Appeal in this case also cited a passage from a real property treatise to support its conclusion reversing the attorney fee award in favor of defendants. (See 12 Miller & Starr, Cal. Real Estate, supra, § 34:66, p. 34-229.) The passage in question, however, relies for authority solely upon the Mount Olympus decision (see 12 Miller & Starr, at p. 34-229, fn. 12), and thus provides no additional support for the Court of Appeal’s determination.

FN 7. Indeed, in a separate passage in the Blue Lagoon decision, the Court of Appeal clearly rejected the plaintiffs’ argument that the attorney fee provision of former section 1354 should not be read as intended to afford reciprocal attorney fee rights. In commenting on the potential consequences of the objectors’ position, the Blue Lagoon court observed: “This argument is shortsighted. In this case, the objectors `won.’ But what if the Association had `won’ and the petition had been granted? If we were to hold, as the objectors urge, that they are the prevailing party and thus entitled to attorney fees because they successfully beat back the majority’s efforts to amend the declaration, then is the Association entitled to its costs and fees against the objectors when they successfully bring a petition under Civil Code section 1356? If the objectors’ analysis were correct, the answer would have to be yes.” (Blue Lagoon, supra, 55 Cal.App.4th at pp. 477-478.)