In Retzloff v. Moulton Parkway Residents’ Ass’n, (2017) Cal. App. LEXIS 727, the Fourth District Court of Appeal considered the novel question of whether attorneys’ fees can be included as part of the cost award to a ‘prevailing association’ under Cal. Civ. Code §5235(c).
Plaintiffs were former board members of Moulton Parkway Residents’ Association, No. One (“the Association”) who sued the Association for alleged violations of the Davis-Stirling Common Interest Development Act (Civ. Code §4000 et. seq.) which regulates the governance of common interest developments such as condominium communities and homeowners associations. Plaintiffs’ suit alleged that the Association regularly conducted business outside of scheduled board meetings and failed to make certain records available for inspection.
Plaintiffs voluntarily dismissed the initial suit without prejudice before the Association’s demurrer could be ruled on. Three months later, Plaintiffs filed a second suit that was practically identical to the first. The trial court sustained the Association’s demurrer in the second suit without leave to amend. The Association was declared the prevailing party for the purposes of any costs recovery. Thus, the Association moved for attorneys’ fees and costs. Pursuant to Cal. Civ. Code §5235(c), the trial court found Plaintiffs’ second action frivolous and awarded the Association $13,750.00 in attorneys’ fees and $1,688.60 in costs. Plaintiffs appealed the award of attorneys’ fees and costs arguing that §5235(c) does not entitle the Association to attorneys’ fees as part of a costs award.
Under Cal. Civ. Code §5235(c), “[a] prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation.” (Emphasis added). Because the definition of “any costs” in §5235(c) was a matter of first impression before the Court, the Fourth District looked to rulings on the language of similar statutes within the Davis-Stirling Common Interest Development Act for clarification.
The Court relied on the opinion in That v. Alders Maintenance Assn., (2012) 206 Cal. App. 4th 1419, where the relevant statute was Cal. Civ. Code §4955(b) which states, “[a] prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” In That, the Court concluded that the plain language does not support an award of attorneys’ fees stating, “if the Legislature had intended [Cal. Civ. Code §4955(b)] to include attorney fees as well as costs, it could have and would have said so.” The Fourth District agreed with Plaintiffs’ contention that §4955 and §5235, both enforcement statutes, were “the logical equivalent” of one another and thus the holding in That also applies to §5235.
The Fourth District reasoned further that Code of Civil Procedure §1021 only awards attorneys’ fees, “when specifically provided for by statute,” and that the plain language found in Cal. Civ. Code §5235(c) does not specifically provide for attorneys’ fees.
The ruling in Metzloff has brought further clarification to the issue of whether attorneys’ fees can be included in an award for costs to prevailing associations in enforcement actions brought pursuant to the Davis-Stirling Common Interest Development Act. Simply put, they cannot.
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