Judge: Michael Shultz, Case: 20CMCV00237, Date: 2023-08-29 Tentative Ruling
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Case Number: 20CMCV00237 Hearing Date: March 5, 2024 Dept: A
20CMCV00237
Baberly Dacaldacal, et al. v. Grace Garden Homeowners Association, Estrella
Tietz (Doe 1)
Tuesday,
March 5, 2024, at 8:30 a.m.
[TENTATIVE] ORDER
DENYING DEFENDANTS’ MOTION FOR ORDER DETERMINING PREVAILING PARTY AND
REASONABLE ATTORNEY’S FEES
I.
BACKGROUND
The complaint alleges
that Plaintiffs bought a residential unit at a common interest development managed
by Defendant, Grace Garden Homeowners Association
(“HOA”). Defendant, Estrella Tietz, is the HOA’s president. Plaintiffs
allege that Defendants violated provisions of the Covenants, Codes, and
Restrictions (“CC&Rs”) by refusing to intervene in Plaintiffs’ parking
dispute with their neighbors, failing to keep common areas lighted, and for
building a pergola on the common area patio between Plaintiffs’ and Tietz’s
unit. Plaintiffs allege claims for (1) breach of governing documents, (2)
breach of fiduciary duty, (3) breach of the implied covenant of good faith and
fair dealing, (4) breach of the covenant of quiet enjoyment, (5) negligence,
and (6) negligent infliction of emotional distress.
Plaintiffs filed a voluntary
dismissal of the entire action on November 13, 2023.
II.
ARGUMENTS
Defendants request an award of attorney’s fees of $33,191.06
since they are the prevailing parties for purposes of Civ. Code, § 1717 and
Civ. Code, § 5975. The first cause of action is for breach of the CC&Rs,
which Plaintiffs sought to enforce.
In opposition,
Plaintiffs argue that fees under section 1717 are not recoverable where a party
voluntary dismisses an action. Attorney’s fees are recoverable under the
provisions of the CC&Rs in an action to enforce any provision of the
governing documents. However, none of the claims brought by Plaintiffs fall
within the scope of the provision. To recover fees under section 5975, the
prevailing party is the party who achieved their main litigation objectives on
a practical level. The fee request is not reasonable.
In reply, Defendants argue
that if a plaintiff alleges tort and contract claims, the prevailing party is
entitled to attorney’s fees under Civ. Code, § 1717 even if there is a
voluntary dismissal.
III.
DISCUSSION
A
prevailing party in an action to enforce a contract may recover attorney’s fees
and costs incurred if the contract so provides. (Civ. Code, § 1717.) The court
determines who is the “prevailing party” defined as the party who recovered a
greater relief in the action. (Civ. Code, § 1717 subd.
(b)(2).) However, there shall be no
prevailing party for purposes of this section where an action has been
voluntarily dismissed. (Id.)
Defendants
argue that they are entitled to fees relating to tort claims, citing Khan v. Shim (2016)
7 Cal.App.5th 49. Khan affirmed the
principle that where a plaintiff voluntarily dismisses an action, defendant
cannot recover attorney’s fees incurred to defend against contract claims under
Civil Code section 1717 subd. (b)(2). However, the defendant can recover fees as
costs incurred to defend against tort claims under Civil Procedure § 1032, “depend[ing]
on the wording of the parties' fee provision and whether it is broad enough to
encompass torts." (Khan at 57). While the first cause of action is based on contract, the
remaining claims sound in tort.
Defendants
contend that the attorney fee provision is broad enough to encompass both tort
and contract claims. Plaintiffs do not dispute the relevant paragraph which states:
“In
any legal action by an Owner(s) or the Association to enforce any provision in
the Governing Documents, the prevailing party shall be awarded reasonable
costs, including attorney's fees." (Reply decl. of Robert Schachter, Ex.
1, .pdf p. 8, section 15.06.)
Defendants focus on the terms “in any
legal action” contending the phrase is broad enough to encompass tort actions.
However, the type of “action” is limited to those “to enforce any provision of
the Governing Documents.” Cases cited by Defendants are factually
distinguishable because the fee provisions involved “arising out of” language.
(Santisas
v. Goodin (1998) 17 Cal.4th 599, ["arising out of the execution of
this agreement or the sale, or to collect commissions,"]; Drybread v. Chipain Chiropractic Corp. (2007) 151 Cal.App.4th 1063, 1071 [“… any action or other proceeding arising out of this Sublease …
concerning the subleased premise;”].)
Defendant’s other case authority involve dissimilar
language. (Thompson v. Miller (2003) 112
Cal.App.4th 327, 333; [“In any dispute under this
Agreement"]; San Francisco CDC LLC v. Webcor Construction L.P. (2021) 62 Cal.App.5th 266, 284 ["an
action against the other to enforce any of the terms of the Contract
Documents or because of the breach by either party of any of the terms
of the Contract Documents.”]
The second cause of action for breach of
fiduciary duty arises out of an alleged duty to act in good faith with members
of the HOA. (Complaint, ¶¶ 34-35.) The third cause of action for breach of the
implied covenant of good faith and fair dealing arises from the alleged breach
of the CC&Rs. The fourth cause of action does not seek enforcement of a
contract provisions, but rather seeks damages for Defendants’ alleged breach of
the right of quiet enjoyment. (Complaint, ¶¶ 46-49.)
Defendants also rely on Civil Code § 5975
which provides that "an action to enforce the governing documents, the
prevailing party shall be awarded reasonable attorney's fees and costs." (Civ. Code, § 5975.) For the
reasons previously explained, the Plaintiffs’ tort claims do not fall within
that limited scope of the provision.
IV.
COCONCLUSION
Accordingly, Defendants’ motion for attorney’s
fees is DENIED.