Winchester Community Assn. v. Perrotta CA3 ( 2021 )

Filed 7/20/21 Winchester Community Assn. v. Perrotta CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Placer)
----
WINCHESTER COMMUNITY ASSOCIATION, C085295
Plaintiff, Cross-defendant and (Super. Ct. No. SCV0029936)
Respondent,
v.
CHARLES FRANK PERROTTA et al.,
Defendants, Cross-complainants and
Appellants.
A dispute between the appellants, husband and wife Charles Frank Perrotta and
Charlotte Van Warmerdam Perrotta (collectively the Perrottas), and respondent
Winchester Community Association (Association) over the landscaping of appellants’
home that they purchased in respondent’s development is before us for a second time. In
the first appeal, we held a settlement agreement between the Perrottas and the
1
Association was enforceable, it required the Perrottas to submit both a landscape plan and
a site plan to the Association for approval before beginning work on their property, the
Perrottas submitted the necessary plans within the time required under the agreement, and
the Association prevented the Perrottas from performing the work under the settlement
agreement. We accordingly reversed the judgment entered in favor of the Association
and the postjudgment order awarding the Association attorney fees and costs and
remanded with directions.
The case before us now involves the trial court’s award on remand of attorney fees
to the Association as the prevailing party in the litigation. The Perrottas contend on
appeal they were entitled to recover fees under the Davis-Stirling Act (Act) as the
prevailing party, they are entitled to costs as a matter of law even if they are not entitled
to fees, and the award of fees and costs to the Association was excessive.
We conclude it was within the trial court’s discretion to find the Association as the
prevailing party, the Perrottas are not entitled to costs under Code of Civil Procedure
section 1032 as the trial court had discretion to determine the Association was the
prevailing party, and the amount of fees and costs awarded by the trial court was not
affected by a prior award of fees stemming from the Association’s successful anti-SLAPP
motion against the Perrottas. We shall affirm.
BACKGROUND
The relevant facts and procedure are taken largely from our opinion in the prior
appeal,1 supplemented where necessary by the records in this and the prior appeal.
Winchester is a common interest development governed by the Act, which is set
forth in Civil Code2 section 4000 et seq. and provides general rules for the governance of
1 Winchester Community Assn. v. Perrotta et al. (C075562, July 21, 2016) [nonpub.
opn.].
2 Undesignated statutory references are to the Civil Code.
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planned developments. The community is comprised of upscale, single-family homes in
the Sierra Foothills and is managed and maintained by the Association, which is
governed by a board of directors (Board) and subject to a recorded declaration of
conditions, covenants, and restrictions (CC&R’s), the Bylaws of the Association, and the
Design Guidelines and Regulations (Design Guidelines). All lot owners in the
community are members of the Association.
The Perrottas own lot 85, located at 1101 Holly Leaf Lane. As such, they are
members of the Association and subject to the CC&R’s, Bylaws of the Association, and
Design Guidelines. They purchased the lot, which had been in foreclosure, on September
30, 2009. At that time, the lot contained a residence that was nearly complete and a
driveway, but was devoid of any landscaping. The original owner/builder had submitted
a site plan that had been approved by the Winchester Design Review Committee
(Committee), but he had not submitted a landscape plan. It was a common practice, and
completely acceptable, for owners to defer submission of a landscape plan.
Pursuant to section 5.01(a) of the CC&R’s, subject to certain exceptions not
applicable here, “prior to submittal to the County for building permits and before
commencement of construction or installation of any Improvement within Winchester,
the Owner planning such Improvement must submit to the Design Committee a written
request for approval. The Owner’s request shall include structural plans, specifications
and plot plans satisfying the minimum requirements set forth in the Design
Guidelines . . . .” “The term ‘Improvement’ . . . includes, without limitation, the
construction, installation, alteration or remodeling of any Residence structures, garages,
out buildings, walls, fences, swimming pools, landscaping, landscape structures,
skylights, patios . . . or any other structure of any kind. Any clearing or grading of a
Homesite or alteration of natural drainage courses shall be considered a work of
‘Improvement’ requiring approval hereunder.”
3
The Design Guidelines set forth a “design review process,” which must be
followed for all major site and/or landscaping improvements. Improvement plans are
reviewed by the Committee, which evaluates such plans on the basis of the Design
Guidelines.
On December 22, 2009, about three months after the Perrottas purchased their lot,
Kyle Bodyfelt, the Association’s property manager, directed the Perrottas to provide him
with a copy of their “landscape plan” by January 8, 2010. The Perrottas responded that
they were “focusing on completing the inside” of their residence and had yet to decide
what they wanted outside or “locate and hire a competent landscape designer.”
Accordingly, they advised Bodyfelt that May 30, 2010, would be a “more realistic” date
on which to submit the landscape plan.
On February 17, 2010, the Committee advised the Perrottas that their request for
an extension to May 30 was denied and directed them to submit a landscape plan by
March 19, 2010. The Committee explained that the Perrottas’ occupancy of the residence
“on a fairly regular basis without having submitted the required landscaping plans,”
constituted a clear violation of section 5.14(b) of the CC&R’s, which requires that “[a]ll
approved landscaping” be completed by the time the county issues a certificate of
occupancy.
In February or March 2010, the Perrottas retained Jeff Ambrosia, a licensed
landscape architect employed by Yamasaki Landscape Architecture, to develop landscape
construction documents for their property. At all relevant times herein, Ambrosia also
served as a consultant to the Committee, and as such, reviewed landscaping documents of
new homeowners. As a result, he was familiar with the CC&R’s and Design Guidelines.
The Perrottas instructed Ambrosia to prepare a landscape plan that would be accepted by
the Association.
4
On March 25, 2010, Ambrosia sent the Committee a diagram showing a secondary
driveway across the front of the residence that was intended to provide access to the front
door. The Committee denied the Perrottas’ request to install the proposed driveway.
On April 16, 2010, Bodyfelt and members of the Committee met with Charles
Perrotta and Ambrosia on the Perrottas’ property to discuss the proposed secondary
driveway. A week later, the Committee wrote to the Perrottas and proposed three
alternatives to the Perrottas’ proposed secondary driveway. Ambrosia responded to the
letter, noting that the options provided by the Committee “would require a tremendous
expense” and result in an unnecessary hardship.
On May 26, 2010, the Committee notified the Perrottas that it was standing by its
denial of their request for a “second driveway” and requested that the Perrottas meet with
members of the Board and the Committee on June 15, 2010, “to discuss . . . a time frame
for submittal and completion of landscape plans . . . .” The Perrottas advised the
Committee that they had business out of the area on June 15, 2010, and would be on
vacation in early July, and suggested a meeting in late July.
On July 16, 2010, the Board sent the Perrottas written notice of a hearing on
August 3, 2010, to address various alleged violations of the Association’s governing
documents, including the lack of landscaping and failure to submit “plans and fee[s].”
The Perrottas advised the Board that they were unavailable on August 3, 2010, and on
July 30, 2010, submitted a landscape plan for the property. According to Nancy Jakse,
the Board president, the landscape plan contained “a number of elements . . . that were
inconsistent with the site plan of the already approved plans” submitted by the prior
owner. Accordingly, the landscape plans were not approved.
The hearing went forward on August 3, 2010, without the Perrottas. The Board
determined that it needed more information and continued the hearing to October 6,
2010. Meanwhile, on August 4, 2010, the Committee wrote to the Perrottas and
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requested clarification as to whether they intended to use the previously approved site
plan or submit a modified plan of their own.
At the October 6, 2010, hearing, the Perrottas indicated that they intended to
complete the project according to the previously approved site plans, and Jakse informed
them that there were many elements on the previously rejected landscape plan for which
the Board had no “architectural information.” The Perrottas agreed to submit a new
landscape plan by the end of October 2010, and complete landscaping their property by
the end of January 2011. The deadline for submitting the revised landscape plan was
later extended to November 2010. Following the hearing, the parties continued to discuss
the Perrottas’ desire for a secondary driveway but were unable to resolve the issue. The
Perrottas did not submit a revised landscape plan by the end of November 2010, and in
January 2011, the parties agreed to mediate the dispute.
The mediation took place on April 1, 2011, before retired superior court judge
Darrel Lewis. Board president Jakse and Committee chair Richard Breaux represented
the Association at the mediation and were accompanied by the Association’s counsel.
The Perrottas and their counsel were also present. The mediation continued all day and
ended with the formulation of a “Settlement Agreement.” The document is seven pages
in length, with one attachment. The mediator provided a three-page printed document
with general terms as a courtesy to the parties to expedite the formulation of the
agreement. Some of the provisions set forth therein are crossed out, while others have
been edited by hand. Specific terms negotiated by the parties and their attorneys are set
forth in four handwritten pages. The document was executed by the parties and their
attorneys.
The first three printed pages provided in pertinent part: “The parties hereby agree
to settle this dispute in its entirety on the terms set forth below.” “[E]ach party waives
. . . the right to any known claims” against the other. “It is the intent of the parties that
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this agreement is binding and enforceable.” “This Agreement represents the complete
understanding between the parties.”
The remainder of the agreement was handwritten. It provided in its entirety:
“This agreement pertains to driveway and landscape issues only. All other issues
are dropped at this time.
“Both parties agree that the goal of this agreement is to complete the landscaping
and driveway of the residence in question and to obtain a certificate of occupancy from
Placer County at the earliest practicable date.
“Perrotta agrees to obtain [a] signed final inspection from Placer County on all
permits relating to the subject property not later than September 15, 2011.3
“The above deadline of September 15, 2011 shall be extended by the number of
calendar days that elapse between the simultaneous submission date of landscape plans
and separate site plans to Winchester and the date Perrotta is notified of approval of both
said plans.
“The above deadline of September 15, 2011 shall be extended additionally by the
number of calendar days that elapse between the submission date of any necessary plans
to Placer County and the date Perrotta is notified of approval of said plan.
“Perrotta will submit payment of $300 simultaneously with submission of the
landscape plans to Winchester.
“Perrotta will submit payment of $5,000 as a compliance deposit to Winchester
simultaneously upon receiving the stamped site plans and landscape plans. Said deposit
shall be placed in escrow and returned to Perrotta upon completion of the site plans and
landscaping plans referred to above. See Section 5.3 of Winchester design guidelines and
3 The trial court assumed, and the parties did not dispute, that the Perrottas were
required to complete all construction, including landscaping, in order to obtain a “signed
final inspection” from the county.
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regulations. Final inspection of the property will be to determine that the Perrottas are in
compliance with the plans.
“Perrotta agrees to obtain a $75,000 completion bond, prior to starting
construction, wherein Winchester is solely named as beneficiary of the bond, to be paid
to Winchester in the event Perrotta fails to complete their obligations as specified in this
agreement. The parties agree that each party will pay 50% of the fees for obtaining this
bond.
“Winchester agrees to drop the April 6, 2011 compliance and fine meeting.
“The parties agree that in the event that Perrotta submits a landscape and/or site
plan which envisions construction of a second driveway/turnaround within the shaded
portion of the setback area as depicted in Attachment A & said plans are otherwise in
compliance with the Association[’s] governing documents & Design Review Guidelines,
the Association agrees to issue Perrottas a variance to permit construction of said
driveway [within] the shaded portion of the setback in Attachment A. The parties further
agree and understand that the Association’s issuance of a variance does not otherwise
supersede or replace any additional requirements that may be required by the County for
approval of said plan(s) &/or issue of a variance for construction [within] the setback.
“The Association further represents that as of the date of this agreement, the
Association is of the opinion that that Perrotta building structure is in compliance with
the Association’s governing documents and Design Review Committee Guidelines.”
On May 19, 2011, the Perrottas submitted a seven-page set of “Landscape
Development Plans” and a $300 landscape review fee to the Committee. The plans were
prepared by the Perrottas’ landscape architect Ambrosia. In addition to a “Cover Sheet,”
the plans consist of the following pages: “Amenities Plan”; “Hardscape Plan”; “Planting
Plan”; “Irrigation Plan”; “Lighting Plan”; “Planting Details”; and “Irrigation Details.”
Among other things, the plans showed property lines, site envelope, building envelope,
building footprint, proposed secondary driveway, fencing, retaining and seating walls,
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flagstone and asphalt paving, hot tub and concrete pad, pizza oven, stepping stones, metal
gate, existing rock shale, and existing drainage canal.
Jakse and Breaux reviewed the plans and found them deficient. In a letter dated
May 25, 2011, Breaux informed the Perrottas that “per page 4 of the mediation settlement
agreement, you were required to simultaneously submit landscape plans and separate site
plans for approval. Since you failed to submit site plans for architectural review to
replace or modify the currently approved . . . site plan sheets . . . , no approval action can
be taken by the [Committee] relative to the landscape plans. As has been communicated
many times before, landscape plans must conform to approved architectural plans.”
Breaux continued, “There are numerous elements depicted on your landscape plans that
are beyond the scope of landscape review and must go through architectural approval;
e.g., the driveways, parking pad, spa, expanded deck, retaining walls, fencing, and gate.
Any element shown on sheets 1 and 2 of your currently-approved plans that you don’t
intend to install needs to be removed from your site plan. Similarly, any new or modified
elements must be shown with supporting engineering/architectural detail, if required.
The proposed site plan must also reflect the grading and drainage modifications that go
along with your new or modified elements.” Breaux further advised that the landscape
elements of the plans (planting, irrigation, & lighting) had been reviewed by the
Committee’s outside landscape review consultant, who saw no issues, but explained that
“approval of the landscape plans can only occur when site plans have been approved first
or simultaneously.” Finally, Breaux indicated that the “second driveway/turnaround”
depicted in the plans extended beyond the shaded area of the setback as agreed to in
attachment A to the settlement agreement and noted that “this issue will have to be
corrected” in order for “your site plan to be approved when you submit it.”
Shortly thereafter, Jakse, Breaux, Bodyfelt, and Ambrosia met on the Perrottas’
property to discuss the proposed secondary driveway. During the meeting, Ambrosia
acknowledged that the proposed driveway depicted in the plans extended beyond the area
9
provided for in attachment A to the settlement agreement and provided a revised layout,
which he “put on the ground so that [Jakse and Breaux] could see that it truly did fit
within the shaded area.” The Association was concerned that the county might not
approve the variance agreed to at the mediation, and Jakse suggested that the Perrottas
obtain approval from the county for the proposed driveway before submitting revised
plans to the Committee to avoid wasting money on engineering expenses.
Sometime prior to June 30, 2011, Ambrosia, on behalf of the Perrottas, submitted
“an exhibit [to the county’s planning division] that showed what [they] were trying to do”
in terms of the driveway. On June 30, 2011, the Perrottas met with the county’s senior
planner, and on August 22, 2011, were advised that the agency’s director had approved
their “request to construct the driveway as shown on the draft Yamasaki plan,” contingent
upon the submission of “a new grading plan for review and approval by the Placer
County Engineering and Surveying Division prior to initiating work on the driveway
and/or landscaping.” On September 19, 2011, the county advised the Perrottas that a
grading permit was not required.
Meanwhile, on August 30, 2011, the Association wrote to the Perrottas, reminding
them that the settlement agreement “requires you to ‘obtain a signed final inspection from
Placer County on all permits relating to the subject property not later than September 15,
2011,’ ” and noted that “[w]ith less than a month to complete your project, you have yet
to obtain landscape and site plans stamped by Winchester, and to pay the $5,000
compliance deposit, both of which are prerequisites to obtaining final County approvals.”
The Perrottas did not respond to the Association’s August 30, 2011, letter, and on
September 23, 2011, the Association sued the Perrottas for breach of the settlement
agreement and specific performance.
On October 10, 2011, Ambrosia, on behalf of the Perrottas, submitted a revised
10-page set of “Landscape Development Plans” to the Association. In addition to a
“Cover Sheet,” the plans consist of the following pages: “Amenities Plan”; “Grading &
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Drainage Plan”; “Grading Profile”; “Hardscape Plan”; “Construction Details”; “Planting
Plan”; “Irrigation Plan”; “Lighting Plan”; “Planting Details”; and “Irrigation Details.”
The proposed secondary driveway depicted in the revised plans falls within the area set
forth in attachment A to the settlement agreement. As compared to the May 2011 plans,
the revised plans “added a tremendous amount of detail in terms of grading, drainage,
[and] driveway layout,” and included elevations as requested by the Association.
On October 20, 2011, the Association advised the Perrottas that “[t]he tendered
landscape development plans will be held by the Association with the review of those
plans by the Association’s Design Review Committee being held in abeyance until such
time as a site plan is also furnished to the Association.”
On February 14, 2012, the Perrottas filed a cross-complaint against the
Association for cancelation and rescission of the settlement agreement and declaratory
relief. Among other things, the Perrottas sought a declaration that the Association
violated and continues to violate its own CC&R’s and Design Guidelines in the landscape
approval process.
The cross-complaint also alleged defamation, intentional infliction of emotional
distress, elder abuse, and breach of contract. Pursuant to the anti-SLAPP statute, Code of
Civil Procedure section 425.16, the Association filed a successful special motion to strike
the defamation, intentional infliction of emotional distress, elder abuse, and breach of
contract claims. The trial court awarded the Association $5,000 attorney fees for the anti-
SLAPP motion.
Following a five-day bench trial in May 2013, the trial court entered judgment in
favor of the Association and against the Perrottas. The trial court found that the Perrottas
breached the settlement agreement and ordered them to perform their obligations there
under the same. In particular, the trial court determined that the settlement agreement
constituted a valid and enforceable agreement and rejected the Perrottas’ claim that the
agreement was ambiguous as to whether they were required to submit both a landscaping
11
and a site plan to the Association for approval. The court found that “[u]nder a plain
meaning interpretation, the Settlement Agreement required [Perrotta] to submit both
landscape plans and site plans,” and determined that “no site plan [had] ever been
submitted.” The trial court rejected the Perrottas’ claim that the September 15, 2011,
deadline had been extended and ordered the Perrottas “to file a separate site plan . . . as
defined in the Appendix to the Design Guidelines, within 60 days from the date this
Judgment is entered.” The trial court found against the Perrottas on their cross-
complaint. In particular, the trial court found that the Perrottas’ claim that the
Association violated the CC&R’s and Design Guidelines in failing to approve the
Perrottas’ plans was superseded by the settlement agreement and therefore declined to
address it.
Following the trial, the court determined that the Association was the prevailing
party and entered a postjudgment order awarding the Association $159,269.61 in attorney
fees and costs.
The Perrottas appealed, contending (1) the settlement agreement was
unenforceable because it was never consummated, (2) even if it was enforceable, it did
not require them to submit a separate site plan in addition to a landscape plan, (3) the
September 15, 2011 deadline was extended approximately three months, and (4) even if
they were required to submit a separate site plan, the revised plans submitted on
October 10, 2011, included such a plan. The Perrottas also assert that the trial court erred
in declining to address their claim that the Association violated its own policies and
procedures, and awarding the Association attorney fees and costs.
We concluded the settlement agreement was enforceable and required that the
Perrottas submit both a landscape plan and a site plan to the Association for approval
before beginning work on their property, the September 15, 2011 deadline was extended
81 days, the trial court’s implied finding that the revised plans submitted in October 2011
did not include a site plan is not supported by substantial evidence, and the Association
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prevented the Perrottas from performing under the settlement agreement by refusing to
review those plans. Accordingly, we reversed the judgment entered in favor of the
Association, as well as the postjudgment order awarding the Association attorney fees
and costs, which was based on the judgment.
On remand, the Association filed a motion to strike or tax costs and renewed its
motion for attorney fees totaling an adjusted amount of $157,146.44 as the prevailing
party, while the Perrottas filed a bill of costs and a motion for $275,932.90 in attorney
fees.
The trial court found “the Association ultimately met its objective to force the
Perrottas to comply with the settlement agreement, and by extension, the CC&Rs.”
While the Perrottas achieved some positive net effects, “they were unsuccessful in
obtaining a finding of invalidity of the settlement agreement, or a violation by the
Association of the CC&Rs and Design under the Guidelines,” leading the court to
conclude the Association was the prevailing party. The court also found the amount
requested by the Association was reasonable and accordingly awarded it the full
$157,146.44, and granted its motion to strike or tax costs. The trial court denied the
Perrottas’ motion to tax or strike costs and for fees pursuant to the Act and section 1717,
finding the Association was the prevailing party. The court also modified its prior
judgment to include these orders and to conform to our ruling in the prior appeal.
DISCUSSION
I
Prevailing Party
The Perrottas contend the trial court erred in finding the Association rather than
they were the prevailing party under the Act, and they were therefore entitled to fees and
costs under it, or in the alternative, the attorney fee provision in section 1717.
“ ‘The Davis-Stirling Act, enacted in 1985 [citation], consolidated the statutory
law governing condominiums and other common interest developments.’ [Citation.]
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‘The Davis-Stirling Act includes provisions addressing alternative dispute resolution
(ADR), including the initiation of such nonjudicial procedures, the timeline for
completing ADR, and the relationship between ADR and any subsequent litigation.’
[Citation.] [¶] Among other things, the legislation provides that ‘[a]n association or a
member may not file an enforcement action in the superior court unless the parties have
endeavored to submit their dispute to alternative dispute resolution pursuant to this
article.’ [Citation.]” (Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker
(2016) 2 Cal.App.5th 252, 258 (Rancho Mirage).)
The Act contains the following provision: “In an action to enforce the governing
documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”
(§ 5975, subd. (c).) This has been extended to include costs and fees expended in ADR
under the Act. (Grossman v. Park Fort Washington Assn. (2012) 212 Cal.App.4th 1128,
1134.)
In determining who is the prevailing party, a trial court is not bound by any “rigid
interpretation” of that term, but instead must determine “on a practical level” which side
prevailed. (Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568,
1574.) The trial court’s determination of the prevailing party is reviewed for abuse of
discretion. (Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94.)
“ ‘ “The appropriate test for abuse of discretion is whether the trial court exceeded the
bounds of reason. When two or more inferences can reasonably be deduced [from the
facts, the reviewing court has no authority to substitute its decision for that of the trial
court.” ’ [Citations.]” (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1339.)
The Perrottas claim they were the prevailing party by accomplishing their primary
objective, to show that they did not breach the settlement agreement and were entitled to
have the Association accept their October 2011 plans. They assert the cross-complaint
was essentially defensive in nature, and that a defendant who alleges an essentially
defensive cross-complaint may be the prevailing party notwithstanding an adverse result
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on the cross-complaint. The Perrottas additionally note that their answer to the
Association’s complaint included affirmative defenses such as failure of performance by
the Association, waived claims by the Association, and the Association’s breach excused
the Perrottas’ performance, which would help achieve their primary objective. In
addition, the Perrottas observe the Association refused their request to admit they
received the revised plans in October 2011, and refused to admit that it never responded
to this submission of completed plans.
The trial court was guided by two cases, Rancho Mirage and Almanor Lakeside
Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761 (Almanor). We are likewise
persuaded by these cases.
Rancho Mirage involved a dispute between a condominium owner and the
homeowner’s association regarding changes the owner made to the patio area of the
condominium unit. (Rancho Mirage, supra, 2 Cal.App.5th at pp. 255-256.) Pursuant to
mediation under the Act, the parties agreed for the owners to make certain modifications
within 60 days. (Rancho Mirage, at p. 256.) When the modifications were not made in
the allotted time, the association sued, seeking specific performance and declaratory
relief; subsequently the parties reached agreement on modifications slightly different
from those set forth in the mediation agreement. (Id. at p. 257.) The parties could not
agree on who should bear the litigation expenses, and the trial court ultimately awarded
attorney fees and costs to the homeowner’s association. (Id. at pp. 257-258.)
The award was affirmed on appeal. (Rancho Mirage, supra, 2 Cal.App.5th at
p. 256.) It found the trial court’s determination that the homeowner’s association was the
prevailing party on a practical level was “not beyond the bounds of reason.” (Id. at
p. 261.) While the owners focused on the differences between the modifications made
and those in the settlement agreement, the Court of Appeal noted that “[t]he ‘action’ at
issue in the section 5975 analysis includes not only the litigation in the trial court, but
also the prelitigation ADR process. [Citation.]” (Ibid.) The Court of Appeal found
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“[t]he Association wanted defendants to make alterations to their property to bring it in
compliance with the applicable CC&Rs, specifically, by installing openings in the side
wall of the patio, and altering the drapery on the patio. The Association achieved that
goal, with defendants completing the modifications to the patio in September 2014.”
(Ibid.)
Almanor involved a dispute in which the homeowners association sought to
impose fines and related fees for the property owners’ alleged rules violations related to
the owners’ leasing of their properties as short-term vacation rentals. (Almanor, supra,
246 Cal.App.4th at p. 765.) The defendant property owners disputed both the fines and
the association’s authority to enforce restrictions on their properties. (Id. at pp. 766-767.)
They filed a cross-complaint “for damages and equitable relief based on breach of
contract, private nuisance, and intentional interference with prospective economic
advantage,” as well as establishing the imposition of fines was unlawful, arbitrary, and
unfair. (Id. at p. 767.) The trial court ruled against the defendants on the cross-
complaint, but also rejected many of the fines, upholding only $6,000 of the $54,000 in
fines assessed by the homeowner’s association. (Id. at pp. 767-768, 769.) It found the
homeowner’s association to be the prevailing party and awarded it costs and fees under
the Act. (Id. at pp. 768-769.)
The Court of Appeal affirmed the award of costs and fees. (Almanor, supra,
246 Cal.App.4th at p. 765.) It found the pivotal issue in the litigation was whether the
fines were enforceable under California law and the CC&Rs. (Id. at pp. 774-775.) While
the defendants’ partial success on the fines imposed substantially reduced their liability
for damages and supported their position that the rules could not impose an unreasonable
burden on their property, “by upholding a subset of the fines, the court ruled more
broadly that Almanor could impose reasonable use restrictions on the Carsons’
properties, despite their authorized commercial use. That ruling echoed Almanor’s stated
objective at trial that the association sought to counter the Carsons’ position that ‘because
16
their lot is zoned “Commercial,” they are not bound by the CC&R’s or the Rules.’ ” (Id.
at p. 775.) Finding Almanor was the prevailing party was not an abuse of discretion. (Id.
at p. 776.)
We likewise find no abuse of discretion in finding the Association to be the
prevailing party. Both in the events leading up to the mediation and those after, the
Association sought to get the Perrottas to submit acceptable landscaping plans and then
landscape their home in accordance with the CC&R’s and the settlement agreement.
While the Perrottas sought to submit the necessary plans following the agreement, a
dispute over their timely compliance led to the instant litigation. In response to the
Association’s suit, the Perrottas claimed, at trial and on appeal, that they did not breach
the agreement and that the agreement was invalid and unenforceable. While they
ultimately succeeded in establishing that they had not breached the agreement and that
the Association prevented them from completing one of their obligations, the Perrottas
nonetheless failed to establish that the settlement agreement was invalid or that they were
excused from their duty of performance.4
We are unpersuaded by the Perrottas’ claim that their failure to prevail on the
cross-complaint should be overlooked as the claims therein were essentially defensive in
nature. This argument is based on Hsu v. Abbara (1995) 9 Cal.4th 863, where the
Supreme Court held a trial court may not find there was no prevailing party under section
1717 “when the court renders a simple, unqualified decision in favor of the defendant on
the only contract claim in the action.” (Hsu, at pp. 865-866.) The Perrottas rely on
footnote 10 of the Hsu opinion, which states in full, “When there are cross-actions on a
contract containing an attorney fees provision, and no relief is awarded in either action, a
4 Among the affirmative defenses raised by the Perrottas was that performance of
their landscaping obligations was excused by the Association’s failure of performance
and the Association’s actions also excused their duty to perform.
17
trial court is not obligated to find that there is no party prevailing on the contract for
purposes of section 1717. If the court concludes that the defendant’s cross-action against
the plaintiff was essentially defensive in nature, it may properly find the defendant to be
the party prevailing on the contract.” (Id. at p. 875, fn. 10.) This does no more than state
a court has the discretion to determine a cross-complaint was defensive rather than a
focus of the litigation when determining the prevailing party. It was within the trial
court’s discretion to conclude the cross-complaints were more than merely defensive
when determining who prevailed in this litigation.5
In applying the abuse of discretion standard to the trial court’s determination of
the prevailing party under the Act, we are mindful that we cannot substitute our decision
for that of the trial court. Whether or not we agree with the court’s decision is
immaterial. Since the determination that the Association is the prevailing party does not
exceed the bounds of reason, it must be upheld on appeal.6
II
Costs Were Properly Awarded to the Association
The Perrottas claim they are entitled to costs pursuant to Code of Civil Procedure
section 1032.
“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.” (Code Civ. Proc., § 1032,
subd. (b).) “ ‘Prevailing party’ includes the party with a net monetary recovery, a
defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor
5 At oral argument, there was a dispute between the parties as to whether the
Perrottas breached the settlement agreement by failing to pay the $5,000 deposit. We do
not address the dispute, as it is unnecessary to resolve this appeal.
6 Since there is a separate statutory ground for fees and costs, it is unnecessary to
consider the attorney fee provision for contract claims in section 1717. (Rancho Mirage,
supra, 2 Cal.App.5th at p. 260.)
18
defendant obtains any relief, and a defendant as against those plaintiffs who do not
recover any relief against that defendant. If any party recovers other than monetary relief
and in situations other than as specified, the ‘prevailing party’ shall be as determined by
the court, and under those circumstances, the court, in its discretion, may allow costs or
not and, if allowed, may apportion costs between the parties on the same or adverse sides
pursuant to rules adopted under Section 1034.” (Id., subd. (a)(4).)
The Perrottas assert they are statutorily entitled to costs because the Association
was denied relief on its complaint and the Perrottas were denied relief on their complaint,
making them, as defendant to the action, the prevailing party. The Association obtained
other than monetary relief here, a judgment that the Perrottas were bound to comply with
the settlement agreement and must complete the landscaping of their property and obtain
a final inspection within 56 days of the issuance of our remittitur. It was therefore within
the trial court’s discretion to determine the prevailing party. As with the award of
attorney fees, the implied finding that the Association was the prevailing party for the
purposes of awarding costs was within the trial court’s sound discretion.
III
The Fees and Costs were Proper
The Perrottas’ final contention is the fees and costs should be lowered by
$14,222.50. According to the Perrottas, pursuant to the anti-SLAPP motion, the
association sought $19,222.50 in fees but was awarded only $5,000 by the trial court.
This amount was not included in the awards of costs and fees reversed by this court in the
first appeal. The Association did not seek the $5,000 it received for the anti-SLAPP
motion in its motion for fees on remand, but on remand, sought an additional $14,222.50
in fees related to its work on the motion, which the trial court awarded. They contend the
trial court was bound by the original award as the Association did not timely move for
reconsideration of the original award pursuant to Code of Civil Procedure section 1008.
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The Association asked for only $11,615 in fees associated with the anti-SLAPP
motion in the original proceedings. The $14.222,50 amount asserted by the Perrottas on
appeal is supported by a citation to the opposition to the Association’s motion for
attorney fees they filed in the trial court on remand. That amount is determined by the
Perrottas’ counsel by identifying entries in the billing records submitted by the
Association that counsel believed were attributable to the anti-SLAPP motion.
Even assuming the Perrottas cite sufficient facts to support their claim, it was
within the trial court’s authority to reconsider its earlier ruling on its own motion. A trial
court retains jurisdiction to reconsider any final order. (Le Francois v. Goel (2005)
35 Cal.4th 1094, 1103-1104.) A court may reconsider a prior ruling so long as it notifies
the parties and allows briefing and argument on the issue. (Id. at p. 1008.) Whether and
how much the Association’s fees should be reduced because of the $5,000 awarded for
the anti-SLAPP litigation was before the trial court, the matter was briefed, and the court
held a hearing on the issue of costs and fees. It was within the trial court’s discretion to
conclude the Association was entitled to additional fees related to the anti-SLAPP
motion, or that the fees disallowed in the original were fairly attributable to the remaining
litigation.7
7 This inference is supported by the fact that the anti-SLAPP motion obtained the
dismissal of only four of the Perrottas’ seven cross-claims. It was within the court’s
discretion that the $5,000 originally awarded was attributed to work associated with the
dismissed claims, and the Association sought on remand fees related to work relevant to
the claims not dismissed in the anti-SLAPP motion, but upon which the Association
ultimately prevailed.
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DISPOSITION
The judgment is affirmed. Respondent shall recover its costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(2).)
/s/
BLEASE, Acting P. J.
We concur:
/s/
HULL, J.
/s/
MURRAY, J.
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