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Rancho Mirage Country Club Homeowners Association v. Hazelbaker

California Court of Appeals, Fourth District, Second Division

August 9, 2016

RANCHO MIRAGE COUNTRY CLUB HOMEOWNERS ASSOCIATION, Plaintiff and Respondent,
v.
THOMAS B. HAZELBAKER, Individually and as Co-Trustee, etc. et al., Defendants and Appellants.

         APPEAL from the Superior Court of Riverside County. No. PSC1300860, John G. Evans, Judge.

          Matthew T. Ward for Defendants and Appellants.

          Epsten Grinnell & Howell and Anne L. Rauch for Plaintiff and Respondent.

          OPINION

          HOLLENHORST J.

         Defendants and appellants Thomas B. Hazelbaker and Lynn G. Hazelbaker own, through their family trust, a condominium in the Rancho Mirage Country Club development. Defendants made improvements to an exterior patio, which plaintiff and respondent Rancho Mirage Country Club Homeowners Association (Association) contended were in violation of the applicable covenants, conditions and restrictions (CC&Rs). The parties mediated the dispute pursuant to the Davis-Stirling Common Interest Development Act (Davis-Stirling Act or the Act), codified at sections 4000-6150 of the Civil Code[1] (formerly sections 1350-1376). The mediation resulted in a written agreement. Subsequently, the Association filed the present lawsuit, alleging that defendants had failed to comply with their obligations under the mediation agreement to modify the property in certain ways.

         While the lawsuit was pending, defendants made modifications to the patio to the satisfaction of the Association. Nevertheless, the parties could not reach agreement regarding attorney fees, which the Association asserted it was entitled to receive as the prevailing party.

         The Association filed a motion for attorney fees and costs, seeking an award of $31, 970 in attorney fees and $572 in costs. The trial court granted the motion in part, awarding the Association $18, 991 in attorney fees and $572 in costs. Defendants argue on appeal that the trial court’s award, as well as its subsequent denial of a motion to reconsider the issue, are erroneous in various respects.[2]

         For the reasons discussed below, we affirm.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         In November 2011, defendants applied for and received approval from the Association’s architectural committee to make certain improvements to the patio area of their property. Subsequently, however, the Association contended that defendants had made changes that exceeded the scope of the approval, and which would not have been approved had they been included in defendants’ November 2011 application.

         On June 19, 2012, the Association sent defendants a request for alternative dispute resolution pursuant to former section 1369.510 et seq., identifying the disputed improvements and proposing that the parties mediate the issue. Defendants accepted the proposal, and a mediation was held on April 8, 2013. A “Memorandum of Agreement in Mediation” dated April 9, 2013, was reached, signed by two representatives of the Association, its counsel, and Thomas Hazelbaker (but not Lynn Hazelbaker). The agreement called for defendants to make certain modifications to the patio, in accordance with a plan newly approved by the Association; specifically, to install three openings, each 36 inches wide and 18 inches high, in a side wall of the patio referred to as a “television partition” in the agreement, and to use a specific color and fabric for the exterior side of drapery. The agreement provided for the modifications to be completed within 60 days from the date of the agreement. It also provided for a special assessment on defendants’ property to pay a portion of the Association’s attorney fees incurred to that point, and included a prevailing party attorney fees clause with respect to any subsequent legal action “pertaining to the enforcement of or arising out of” the agreement.

         The modifications described in the mediation agreement were not completed within 60 days. The parties each blame the other for that circumstance.

         On September 4, 2013, the Association filed the present lawsuit, asserting two causes of action: (1) for specific performance of the mediation agreement, and (2) for declaratory relief. Subsequently, the parties reached agreement regarding modifications to the property, slightly different from those agreed to in mediation; instead of three 36-inch-wide openings, two openings of 21 inches, separated by a third opening 52 inches wide, were installed in the wall, and a different fabric than the one specified in the mediation agreement was used for the drapery. The modifications were completed by defendants in September 2014. The parties could not reach a complete settlement, however, because they continued to disagree about who should bear the costs of the litigation.

         On October 15, 2014, the Association filed a motion seeking attorney fees and costs pursuant to section 5975, subdivision (c). The motion sought $31, 970 in attorney fees, plus $572 in costs. On October 30, 2014, the hearing of the matter, initially set for November 10, 2014, was continued to November 25, 2014, on the court’s own motion. Defendants filed their opposition to the motion on November 14, 2014.

         At the November 25, 2014 hearing on the motion, the trial court noted that defendants’ “paperwork was not timely and the Court did not consider it.”[3] The court further observed that the bills submitted by the Association in support of its motion were heavily redacted, sometimes to the point where it could not “tell what’s going on.” The court declined to review unredacted bills in camera, and further remarked that “if I can’t tell what’s going on, I’m not awarding those fees.” At the conclusion of the hearing, the court took the matter under submission.

         On December 2, 2014, the trial court issued a minute order granting the Association’s motion, but awarding less than the requested amount; $18, 991 in attorney fees, plus $572 in costs. The trial court denied the Association’s motion with respect to fees incurred prior to the mediation, awarding $3, 888.50 in “[p]ost mediation fees” incurred by one law firm on behalf of the Association “starting 60 days post mediation, ” and $15, 102.50 in “litigation fees” incurred by another law firm. With respect to the “[p]ost mediation fees, ” the court commented as follows: “The court had great difficulty determining the nature of the billings because so much information was redacted from the billings. All doubts were resolved in favor of the homeowner.”

         Judgment was entered in favor of the Association on December 17, 2014, and on January 14, 2015, a notice of entry of judgment was filed. On January 21, 2015, defendants filed a motion for reconsideration of the trial court’s order regarding fees and costs. On February 27, 2015, after a hearing, the trial court denied the motion as untimely, further noting that the motion “did not set forth any new facts, law, or a chance in circumstances.”

         II. DISCUSSION

         A. The Association’s Lawsuit Is an “Action to Enforce the Governing ...


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