California
Appeals

 

Standard of Review Attorney Prevailing Party

ATTORNEY FEES[16]

Prevailing Party Determination

Ruling on the post-trial attorney fee motions, the trial court found that the Ritters were the “prevailing parties” and awarded them $531,159, including essentially 100% of all the attorney fees, expert witness fees and costs of suit incurred by the Ritters throughout the proceedings.  It denied and rejected the Churchill’s and the Directors’ request for their approximately $775,000 in defense fees and costs.  It denied the individual Directors’ request for their fees and costs because, even though they had been found not personally liable by the jury, the trial court included them in its limited injunction.  In their final contention, appellants argue that the trial court’s conclusion that the Ritters were the “prevailing parties” entitled to recover their entire $531,159 in attorney fees and costs was erroneous and must be reversed.  Appellants contend that the Ritters were not the prevailing parties because they lost in their effort to force the Churchill to fill all the slab penetrations throughout the building, which was the main reason the litigation become so intense and the Churchill’s main objective in defending it.

The parties here apparently that agree that the Churchill CC&R’s allowed for attorney fees and costs in disputes brought to “enforce the terms, covenants, conditions and/or restrictions of the Declaration . . . .”  A condominium owner who successfully sued homeowners association for breach of contract for failure to maintain common areas was the prevailing party entitled to recover attorney fees under attorney fee provision contained in the covenants, conditions and restrictions.  (Arias v. Katella Townhouse Homeowners Assn. Inc. (2005) 127 Cal.App.4th 847.)  “[I]n deciding whether there is a ‘party prevailing on the contract,’ the trial court is to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources.  The prevailing party determination is to be made only upon final resolution of the contract claims and only by ‘a comparison of the extent to which each party ha[s] succeeded or failed to succeed in its contentions.’  [Citation.]  [¶]. . . [¶]  We agree that in determining litigation success, courts should respect substance rather than form, and to this extent should be guided by ‘equitable considerations.’  For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective.  [Citations.]”  (Hsu v. Abbara (1995) 9 Cal.4th 863, 876-877, original italics.)

The trial court’s determination of the prevailing party for purposes of awarding attorney fees is an exercise of discretion which should not be disturbed on appeal absent a clear showing of abuse of discretion.  (Jackson v. Homeowners Assn. (2001) 93 Cal.App.4th 773, quoting Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 1139,1153, disapproved of on another point in Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 775, fn. 6.)  The trial court in this case made such a discretionary determination.  We only disturb such a determination when there is a clear showing of abuse of discretion.  (McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456.) 

Appellants contend the trial court abused its discretion finding the Ritters were the prevailing parties below because appellants “prevailed on the issues of greatest importance in the case.”  The jury found the failure of the Churchill to fire stop the slab penetrations in the common areas adjacent to the Ritters’ units was a breach of the CC&Rs.  The failure to take any remedial action was negligence, a breach of the CC&R’s and a breach of fiduciary duty.  Therefore, the Ritters prevailed on their legal causes of action and was awarded monetary damages by the jury.  Although the monetary damages were not substantial, the win also avoided the cross-complaint’s $80,000 plus in accumulated fees the Board attempted to assess against the Ritters for failing to correct the slap protrusions in their units. 

The Ritters also prevailed on their equitable counts.  There was substantial evidence that the slab protrusions constituted a fire hazard and the Ritters were well within their rights to seek injunctive relief to correct the ongoing nature of the Churchill’s violation.  The Ritters prevailed on their requested injunctive relief.  The Churchill was ordered to bring the issue of the slab penetrations to the attention of the full membership and obtain their vote on the issues of a special assessment to fire stop all slab penetrations.  This result accomplished a main litigation objective.  Appellants contend that the Ritters did not accomplish their litigation objective because they lost their effort to force the Churchill to fill all the slab penetrations throughout the building.  While correction of the entire structure might have been a litigation “dream,” it cannot be considered the main litigation objective.  First and foremost, the building codes do not mandate that these defects be remediated immediately.  If this was a code requirement, this lawsuit would have never occurred.  Absent a code requirement, there is no mechanism to force the modifications to be carried out.  The only available remedy was to take this extraordinary maintenance request to the full membership for their consideration.  This happened.  The fact that the membership did not vote to correct this defect in the building does not mean that the Ritters failed on their main litigation objective. 
Ritter & Ritter v. Churchill Cond. Assn. 7/22/08 CA2/8

 See Standard of Review Attorney Fee Award-Ritter & Ritter v Churchill-Dissent

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