ALEXANDER v. SINGLETARY
Court of Appeal, Fourth District, Division 1, California
APPEALS from an order of the Superior Court of Riverside County, James T. Latting, Judge. Reversed.
Attorneys and Law Firms
Nethery/Mueller/Olivier, D. Martin Nethery, Martin A. Mueller and Jacqueline E. Bailey for Defendants and Appellants Tatum Singletary and Richard Davis.
Swajian Law, Gregory A. Swajian and Dawn M. Swajian for Plaintiff and Respondent.
McCONNELL, P. J.
*1 Civil Code 1 section 5975, subdivision (c) requires an award of attorney fees to the prevailing party in “an action to enforce the governing documents” of a common interest development. This appeal requires us to determine if this statute applies when a court rejects a homeowner’s action seeking a judicial declaration that documents related to a common interest development were unenforceable against him. The trial court denied Robert Alexander’s claims for declaratory relief and partition from the common interest development after concluding the documents were, indeed, enforceable. We conclude the statute applies because the gravamen of Alexander’s action involved the enforceability of the governing documents. Therefore, we reverse the trial court’s order denying attorney fees to prevailing defendants and appellants Tatum Singletary and Richard Davis (appellants). However, we may not grant relief to the defendants who did not appeal. On remand, we direct the court to determine and award attorney fees only to the appellants.2
In 1954, two developers purchased and subdivided a parcel of property into five lots (referred to as residences) with a common area. Each of the five residences adjoined the common area, which included a swimming pool, walkways, and landscaped areas. A grant deed recorded by the developers in 1955 (1955 Grant Deed) transferred the property now owned by Alexander (residence one) from the developers along with one-fifth interest in the common area. Similar grant deeds transferred property for residences two through five, each with a one-fifth interest in the common area to be held as tenants in common.
The grant deeds stated the real property interests were sold and conveyed subject to covenants running with the land for the mutual benefit of the owners of the entire development. The original property owners executed an agreement in 1955 (1955 Agreement), which was recorded along with the deeds. The 1955 Agreement provided for the care and maintenance of the common area of the development. The Agreement required regular meetings of the homeowners to provide for “gardening services and maintenance for the common area” and “maintenance of the swimming pool” and surrounding area, to insure and pay taxes for the common area, to provide the services of a bookkeeper to maintain records and “attend to details of administration,” and to enforce “the rights and interests of a majority of these parties or their successors, as concerns the common property and adjacent residences.”
*2 Alexander received title to his residence in 1991. Since that time, he paid his share of dues and assessments for maintenance of the common area and he participated in business related to the common area.
Alexander sued his four neighbors in 2016 for an order declaring the 1955 Agreement and restrictions in the 1955 Grant Deed were “unenforceable against him” and allowing him to partition his property from the common interest development. The original and first amended complaints noted the defendants contended the documents were enforceable. Alexander sought a judicial determination of the rights and responsibilities of the parties with respect to the common area. The second cause of action for partition incorporated the prior statements by reference and sought partition of Alexander’s undivided one-fifth interest in the common area based on his claim the agreements were unenforceable.
The defendants, Alexander’s four neighbors, answered the complaint by asserting a general denial of Alexander’s allegations along with affirmative defenses. Among their affirmative defenses, they asserted waiver based on a clause contained in the 1955 Agreement prohibiting partition. They also asserted the 1955 Agreement and the 1955 Grant Deed encumbered Alexander’s property as covenants running with the land, equitable servitudes, and as binding express contracts. Defendants also asked for a declaration that Alexander is bound by the 1955 Agreement and 1955 Grant Deed.
The court granted summary judgment for the defendant neighbors. The court determined the 1955 Grant Deed and the 1955 Agreement established a common interest development as contemplated by the Davis-Sterling Common Interest Development Act (Act; § 4000 et seq.). The court also determined the documents were binding and enforceable as to Alexander. The 1955 Grant Deed stated the common area was “appurtenant to [Unit 1] and may not be separated therefrom[.]” It further stated the grantee “waive[d] the right of partition of the common property ....” The court determined the provision waiving partition of the common area was specifically enforceable under the Act to prevent Alexander’s action for partition.
The defendant neighbors then sought their attorney fees as prevailing parties under section 5975, subdivision (c). The court denied the request for attorney fees, concluding the statute does not apply because Alexander’s action did not seek “to enforce” the governing documents.
The court concluded “the statute’s language limits awards to ‘actions to enforce governing documents,’ which is narrower language than for instance ‘actions involving the enforcement of governing documents.’ [¶] Ultimately, while this action involved the enforceability of governing documents, neither party specifically sought to enforce any specific provision of the governing documents such that the provisions of [section ]5975[, subdivision ](c) were triggered.” Two of four of the defendant neighbors appealed the order.
Appellants contend the court erred in its narrow interpretation of section 5975, subdivision (c) by concluding they were not entitled to fees because Alexander’s complaint was not phrased as seeking “to enforce” the governing documents. We agree.
*3 We independently review a determination of the legal basis for an attorney fee award as a question of law, particularly when the determination amounts to statutory construction. ( Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751.)
Although California “generally follows what is commonly referred to as the ‘American Rule,’ which provides that each party to a lawsuit must ordinarily pay his or her own attorney fees,” the “Legislature has established a variety of exceptions to the American Rule by enacting numerous statutes that authorize or mandate an award of attorney fees in designated circumstances.” ( Tract 19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142 (Tract 19051).) Section 5975, subdivision (c) is such an exception and provides as follows: “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.”
The Supreme Court determined a defendant homeowner who established community restrictions on a remodeling project were unenforceable under the Act was entitled to fees as the prevailing party under a statutory predecessor to section 5975, subdivision (c).3 The defendant homeowner prevailed because the other homeowners failed to establish their development constituted a common interest development within the meaning of the Act. ( Tract 19051, supra, 60 Cal.4th at pp. 1138–1139.)
In reaching this conclusion, the Supreme Court noted, “throughout its history, the attorney fee provision of the ... Act has provided for an award of attorney fees to the ‘prevailing party.’ ” ( Tract 19051, supra, 60 Cal.4th at p. 1145.) Prevailing party attorney fee provisions “generally reflect[ ] a legislative intent to adopt a broad, reciprocal attorney fee policy that will, as a practical and realistic matter, provide a full mutuality of remedy to plaintiffs and defendants alike. [Citations.] A statute that limited an award of attorney fees to the prevailing party only to cases in which it is ultimately determined that there are in fact governing documents of a common interest development to be enforced would deny mutuality of remedy to the defendants in any instance ... in which the plaintiffs would have obtained attorney fees had they prevailed in their claim, but the defendants would be denied attorney fees because they defeated the plaintiffs’ action by showing that no common interest development exists.” (Ibid.) The Supreme Court found nothing in the legislative history suggested such an intention. ( Id. at p. 1146.)
In Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 258 (Rancho Mirage) the appellate court determined section 5975, subdivision (c) applied to an action to enforce a settlement agreement reached in a mediation conducted pursuant to the Act. The court concluded the gravamen of the homeowner association’s complaint was that the defendant homeowners had not taken steps to bring their property into compliance with the applicable governing documents. “The relief sought by the complaint [was] an order requiring defendants to take those steps, and a declaration of the parties’ respective rights and responsibilities. The circumstance that the steps to bring the property into compliance with [the governing documents] were specified in a mediation agreement does not change the underlying nature of the dispute between the parties, or the nature of the relief sought ....” ( Id. at p. 259.)
*4 Here, although Alexander asserted the restrictions in the 1955 Agreement and the 1955 Grant Deed were unenforceable against him, his complaint expressly acknowledged and alleged the defendants contended the documents were enforceable restrictions. Alexander’s cause of action for declaratory relief sought “a judicial determination of the rights and responsibilities of the parties” with respect to the common area property due to this controversy and his cause of action for partition incorporated those allegations by reference. Thus, the gravamen or gist of Alexander’s complaint—his action—placed the question of the enforceability of the documents squarely before the court. (See Salawy v. Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 671 [a “plaintiff cannot avoid the attorney fees provisions (of the Act) if the essence of the claim falls within the enforcement of the governing documents”].)4
We disagree with the trial court’s conclusion that the action did not involve enforcement of provisions of the governing documents. First, the entire action revolved around whether the restrictions in the documents were enforceable against Alexander. Second, Alexander specifically disputed whether he was bound by the waiver of partition provision in the 1955 Grant Deed. Alexander wanted a judicial declaration on the issue of enforceability of this provision because, ultimately, he wanted to partition his property from the common area. He no longer wished to pay the annual fees for the care and maintenance of the common area or to be liable for accidents occurring in the area.
The fact Alexander phrased his complaint to ask the court to find the documents unenforceable does not allow him to avoid the attorney fee provision of the Act. Such an interpretation would undermine the purpose of mutuality of remedy embedded in the prevailing party statute. It would promote a race to the courthouse and artful pleading to avoid liability for attorney fees in disputes about the enforceability of governing documents. There is no indication in the legislative history that the Legislature intended such a result. As in Rancho Mirage, we see nothing in the Act to suggest “we should give more weight to the form of a complaint ... than to the substance of the claims asserted and relief sought, in determining whether an action is one ‘to enforce the governing documents’ in the meaning of section 5975.” ( Rancho Mirage, supra, 2 Cal.App.5th at p. 260.) Therefore, we conclude this case is an “action to enforce the governing documents” within the meaning of section 5975, subdivision (c) and the appellants, as the prevailing parties, are entitled to recover their attorney fees.
Although we conclude this is an action to enforce the governing documents within the meaning of section 5975, subdivision (c), we can only grant relief to the two parties who appealed the order denying the attorney fees motion. “Where only one of several parties appeals from a judgment, the appeal includes only that portion of the judgment adverse to the appealing party’s interest, and the judgment is considered final as to the nonappealing parties.” (City of Riverside v. Horspool (2014) 223 Cal.App.4th 670, 678.) There is no suggestion the appellants serve in any representative capacity for the nonappealing defendants and appellants have not established the issues in the order appealed from are so interwoven that reversal should extend to the entire order to warrant an exception to the general rule. (Ibid.) On remand, the trial court may determine and award the appropriate attorney fees for the appellants only.
The order denying attorney fees is reversed as to appellants Singletary and Davis only. On remand, the court is directed to enter a new order awarding appropriate attorney fees only to those defendants. In all other respects, the order is affirmed. Appellants shall recover their costs and fees on appeal.
1. Further statutory references are to the Civil Code unless otherwise stated.
2. We grant appellants’ request for judicial notice filed August 16, 2018, of copies of the Legislative Counsel’s Digest for the enacted amendments to former section 1354, the predecessor statute to section 5975, which are attached as exhibit D. (1990 Cal. Legis. Service, ch. 1517 (Assem. Bill 3689) (West), 1993 Cal. Legis. Service, ch. 303 (Assem. Bill 55) (West), 1996 Cal. Legis. Service, ch. 1101 (Assem. Bill 1317) (West), and 2004 Cal. Legis. Service, ch. 754 (Assem. Bill 1836) (West).) (Evid. Code, §§ 452, 459; Peart v. Ferro (2004) 119 Cal.App.4th 60, 81.) We deny the request as to the other documents submitted with the request (exhs. A–C).
3. “The specific provision at issue in [Tract 19051]—former section 1354, subdivision (c)—was repealed and reenacted without change as section 5975, subdivision (c).” ( Tract 19051, supra, 60 Cal.4th at p. 1138, fn. 1.)
4. Because we focus on the allegations in Alexander’s pleadings, we need not consider the effect of the defendants’ answer on the action.