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Susan J. Salehi v. Surfside Iii Condominium Owners' Assoc

November 14, 2011


Thomas Hutchins, Judge Mark S. Borrell, Judge Superior Court County of Ventura (Super. Ct. No. 56-2008-00318743-CU-BC-VTA)

The opinion of the court was delivered by: Yegan, J.


(Ventura County)

(Super. Ct. No. 56-2008-00318743-CU-BC-VTA) (Ventura County)

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.


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."

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. (AA 240)

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 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

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 therefore obligated to award attorney fees) ...

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