PARROTT v. MOORING TOWNHOMES ASSN., INC.
(2013) 112 Cal.App.4th 873
Peter M. Parrott and Lane P. Parrott, in pro. per., for Plaintiffs and Appellants.
Swedelson & Gottlieb, David C. Swedelson and Melanie J. Bingham for Defendant and Respondent. [112 Cal.App.4th 874]
DOI TODD, J.-
Peter M. Parrott and Lane P. Parrott appeal the award of attorney fees
to respondent The Mooring Townhomes Association, Inc. (the [112 Cal.App.4th 875]
Association) after appellants voluntarily dismissed their complaint
seeking injunctive and declaratory relief against the Association.
Appellants contend (1) the trial court was without jurisdiction to award
attorney fees after the dismissal of the complaint, and (2) attorney
fees are barred by Civil Code section 1717, subdivision (b)(2). We
FACTUAL AND PROCEDURAL BACKGROUND
The Association is comprised of owners of town homes located in a common
interest development in Hermosa Beach, California. Appellants are
members of the Association by virtue of their ownership of one of the
town homes. On April 3, 2002, association members were notified that a
vote was to be conducted on April 13, 2002, to consider approval of an
assessment of $ 1,372,500, or $ 18,300 on each of the 75 owners, to
replace all of the exterior siding of the town homes with stucco.
Counsel for the Association informed the members that this "special
assessment" required a vote of 51 percent of a quorum for approval.
Appellants objected, asserting that the vote required a "super-majority"
of 75 percent, i.e., 57 members, pursuant to Section 7.01 of the
Association's Declaration of Covenants, Conditions and Restrictions
(CC&R's), as a "Restoration," or a 66 2/3 percent vote, i.e., 50
members, to change the "exterior appearance" of the town homes, pursuant
to section 9.01(d)(3) of the CC&R's. At the meeting, a simple
majority of 43 of the members approved the proposal.
On April 17, 2002, appellants filed suit against the Association for
injunctive and declaratory relief to invalidate the vote approving the
special assessment to replace the siding with stucco. On May 13, 2002,
appellants sought a temporary restraining order and preliminary
injunction, seeking to enforce the "super-majority" rule. The court
granted a preliminary restraining order to maintain the status quo, but
on May 31, 2002, denied a preliminary injunction and dissolved the
On June 14, 2002, the Association filed an answer to the complaint. On
June 18, 2000, appellants filed a request for dismissal of their
complaint without prejudice, which was entered by the clerk the same
Pursuant to Civil Code section 1354, subdivision (f), the Association
then moved to be determined the prevailing party and for recovery of
attorney fees incurred in defending the action. The court found the
Association to be the prevailing party and awarded it $ 9,000 in fees.
This appeal followed. [112 Cal.App.4th 876]
The Court Had Jurisdiction to Award Attorney Fees to Respondent
Appellants contend that the trial court "was ousted from subject matter
jurisdiction" by their dismissal of the lawsuit under Code of Civil
Procedure section 581, subdivision (b). Appellants argue that under Harris v. Billings (1993) 16 Cal.App.4th 1396,
1405 [20 Cal. Rptr. 2d 718], a trial court is without jurisdiction to
take further action after the plaintiff has voluntarily dismissed the
lawsuit. fn. 1
Appellants filed this lawsuit pursuant to Civil Code section 1354,
subdivision (a), which provides that an owner of a separate interest in a
common interest development may enforce covenants and restrictions as
set forth in a recorded declaration which is intended to be an
enforceable equitable servitude.
Subdivision (f) of Civil Code section 1354, pursuant to which the
Association sought recovery of its fees, provides as follows: "In any
action specified in subdivision (a) to enforce the governing documents,
the prevailing party shall be awarded reasonable attorney's fees and
costs. Upon motion by any party for attorney's fees and costs to be
awarded to the prevailing party in these actions, the court, in
determining the amount of the award, may consider a party's refusal to
participate in alternative dispute resolution prior to the filing of the
Relying on Harris v. Billings, supra, 16 Cal.App.4th at page
1405, appellants contend that because the statute does not define who is
a "prevailing party," the trial court was required to make this
"substantive determination" after the lawsuit had been dismissed and the
court had lost subject matter jurisdiction. But as the Association
points out, appellants rely on an incomplete statement of the rule set
forth in Harris, which provides in full: "Following entry of a
dismissal of an action by a plaintiff under Code of Civil Procedure
section 581, a 'trial court is without jurisdiction to act further in
the action [citations] except for the limited purpose of awarding costs and statutory attorney's fees.' " (Ibid., italics added, quoting Associated Convalescent Enterprises v. Carl Marks & Co., Inc. (1973) 33 Cal. App. 3d 116, 120 [108 Cal. Rptr. 782].)
[112 Cal.App.4th 877] Appellants argue that Associated Convalescent Enterprises
"held that a trial court cannot make a substantive, prevailing party
determination in a case after a voluntary dismissal of the action has
been entered by the clerk." But appellants misstate the holding of the
case. The court in Associated Convalescent Enterprises held that
the defendants, against whom a lawsuit had been voluntarily dismissed by
the plaintiff, could not be considered prevailing parties under the
then language of Civil Code section 1717 because no final judgment was
rendered. (Associated Convalescent Enterprises v. Carl Marks & Co., Inc., supra,
33 Cal. App. 3d at p. 121.) But the appellate court never stated that
the trial court was without authority to make this determination after
the dismissal had been filed. To the contrary, the appellate court
specifically stated that because the prevailing party had a statutory
right to recover fees under section 1717, "such issue required a
judicial determination." (Associated Convalescent Enterprises, at
p. 120.) Nor do any of the other authorities cited by appellants state
that a trial court may not make a determination of "prevailing party"
status for the purpose of awarding statutory attorney fees after the
action has been voluntarily dismissed.
Appellants attempt to distinguish the case of Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568 [26 Cal. Rptr. 2d 758], but we find this case to be persuasive. In Heather Farms,
a homeowners' association dismissed its suit without prejudice against
an association owner in a dispute to enforce the association's
CC&R's after the parties had settled the action. The settlement
judge made a finding that there were no prevailing parties with respect
to the dismissal. (Id. at p. 1571.) Following the dismissal, the
homeowner sought recovery of his attorney fees as a "prevailing party"
under Civil Code section 1354. The trial court denied the request,
agreeing with the settlement judge that there was no prevailing party
within the meaning of section 1354. (Heather Farms, at p. 1571.)
The appellate court affirmed: "[W]e hold that a trial court has the
authority to determine the identity of the 'prevailing party' in
litigation, within the meaning of Civil Code section 1354, for purposes
of awarding attorney fees." (Id. at p. 1570.) The court clarified that such an analysis should be made by determining who prevailed on a "practical level." (Id. at p. 1574.)
 Accordingly, under Harris and Heather Farms, we
conclude that the trial court had jurisdiction to determine who was a
prevailing party under section Civil Code section 1354, subdivision (f),
for the purposes of awarding attorney fees after appellants' voluntary
dismissal. fn. 2
[112 Cal.App.4th 878] Civil Code Section 1717, subdivision (b)(2)Does Not Apply
Appellants also contend that the award of attorney fees was barred by Civil Code section 1717, subdivision (b)(2). fn. 3
Under section 1717(b)(2), attorney fees shall be awarded to a
prevailing party in an action on a contract that contains an attorney
fee provision, except "[w]here an action has been voluntarily dismissed
or dismissed pursuant to a settlement of the case, there shall be no
prevailing party for purposes of this section." Appellants assert that
since they were seeking to enforce voting provisions in the CC&R's,
which other cases have determined constitute contracts, fn. 4
and because the CC&R's contain an attorney fee provision (§ 6.24),
their voluntary dismissal of the action brings into play the bar of
section 1717(b)(2). The Association counters that section 1717(b)(2) has
no application where, as here, attorney fees were not sought under a
contract, but pursuant to statute (Civ. Code, § 1354, subd. (f)). We
agree with respondent.
To support their position, appellants rely primarily on the case of Santisas v. Goodin (1998) 17 Cal.4th 599 [71 Cal. Rptr. 2d 830, 951 P.2d 399]. But Santisas does not advance appellants' cause. In Santisas,
the plaintiffs, who were buyers of a residence, sued the sellers under a
real estate purchase agreement with an attorney fee clause. When the
buyers dismissed their action with prejudice before trial, the sellers
sought to recover their fees under the agreement. Our Supreme Court held
that section 1717(b)(2) barred the recovery of attorney fees on the
contract claim. (Santisas, at p. 617.) But unlike the situation here, the defendants in Santisas were not seeking to recover their attorney fees under an independent statute. Indeed, the Santisas
court itself specifically noted this distinction, stating, "The seller
defendants do not contend that their claim for attorney fees has a legal
basis that is both independent of the cost statutes and grounded in a
statute or other noncontractual source of law." (Id. at pp. 606-607.)
In Damian v. Tamondong (1998) 65 Cal.App.4th 1115 [77 Cal. Rptr. 2d 262], upon which the Association relies, the court also distinguished Santisas from the situation before it, which is far more analogous to the case at hand. In Damian,
the lender under an automobile sales contract, which contained an
attorney fee clause, sued the buyer to collect a deficiency judgment
after the vehicle had been repossessed. (Id. at p. 1118.) Prior
to trial, the lender voluntarily dismissed the action. The buyer then
sought to recover its attorney fees pursuant to Civil Code section
2983.4, part of the Rees-Levering Automobile Sales Finance Act. fn. 5 [112 Cal.App.4th 879]
Like appellants here, the lender opposed the fee request on the ground
that section 1717(b)(2) barred the award. The lower court agreed, but
the appellate court reversed. The appellate court held that section
1717(b)(2) does not bar a fee award where the prevailing party's right
to recover fees arises under a fee-shifting statute. In so holding, the
court observed that "numerous California courts have held that section
1717 does not control upon dismissal of an 'action on a contract' where a
fee-shifting statute, as opposed to a contract, authorizes an award of
attorney fees." fn. 6 (Damian,
at p. 1124, fn. omitted.) Thus, the court rejected the lender's
contention that even though attorney fees were being sought pursuant to
statute, the mere existence of an attorney fee provision in the parties'
contract brings the case within section 1717.
Appellants criticize Damian for not following the proposition in Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698 [75 Cal. Rptr. 2d 376], Jackson v. Homeowners Assn. Monte Vista Estates-East (2001) 93 Cal.App.4th 773 [113 Cal. Rptr. 2d 363] and Wong v. Thrifty Corp. (2002) 97 Cal.App.4th 261
[118 Cal. Rptr. 2d 276] that application of section 1717(b)(2) is
mandatory in contract cases. But these cases are not applicable because
in each case the parties were moving to recover attorney fees pursuant
to a contract and not, as here, a fee-shifting statute.
Appellants also argue that applying Civil Code section 1354, subdivision
(f), but not section 1717(b)(2), violates the rule that statutes which
relate to the same subject matter should be harmonized to give effect to
both. We disagree.  Section 1717(b)(2) deals only with attorney fee
provisions in contracts and limits the "prevailing party" specifically
"for purposes of this section." But here, the Association was not
seeking to enforce a contractual attorney fee provision. To the
contrary, it was seeking recovery of its fees under an independent
fee-shifting statute, and a prevailing party would be entitled to its
fees under this statute even without a contractual fee provision. (See,
e.g., Heather Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at p. 1572.) As the court in Damian v. Tamondong, supra, 65 [112 Cal.App.4th 880] Cal.App.4th at page 1124 noted, the Legislature could have made the attorney fee statutes uniform, but chose not do to so.
We conclude that because the Association sought to recover its attorney
fees pursuant to a fee-shifting statute, and not pursuant to a contract,
section 1717(b)(2) did not bar an attorney fee award.
The order awarding attorney fees is affirmed. Respondent to recover its costs and attorney fees on appeal.
Boren, J., and Nott, J., concurred.
Appellant's petition for review by the Supreme Court was denied January 28, 2004. George, C. J., did not participate therein.
The Association contends that appellants waived this jurisdictional
issue by failing to assert it below. But appellants did raise this issue
before the trial court in their pleading entitled "Notice of Objection
to Entry of Proposed Judgment Due to the Court's Lack of Subject Matter
Jurisdiction." In any event, a court's lack of subject matter
jurisdiction is never waived and can be raised for the first time on
appeal. (Ash v. Hertz Corp. (1997) 53 Cal.App.4th 1107,
1110-1112 [62 Cal. Rptr. 2d 192]; Weil & Brown, Cal. Practice
Guide: Civil Procedure Before Trial (The Rutter Group 2003) PP 3:126,
3:128, p. 3-38.)
Because appellants do not otherwise challenge the trial court's
particular finding that the Association was the prevailing party or the
reasonableness of the amount of attorney fees awarded, we do not address
those issues here.
FN 3. For convenience, we will hereafter refer to Civil Code section 1717, subdivision (b)(2) as section 1717(b)(2).
FN 4. See, e.g., MacKinder v. OSCA Development Co. (1984) 151 Cal. App. 3d 728, 738-739 [198 Cal. Rptr. 864]; Huntington Landmark Adult Community Assn. v. Ross (1989) 213 Cal. App. 3d 1012, 1023-1024 [261 Cal. Rptr. 875].
Civil Code section 2983.4 provides: "Reasonable attorney's fees and
costs shall be awarded to the prevailing party in any action on a
contract or purchase order subject to the provisions of this chapter ...
FN 6. The Damian
court also cited to Weil & Brown, California Practice Guide: Civil
Procedure Before Trial (The Rutter Group 1997) paragraphs 11:39.20 to
11:39.22, pages 11-23 to 11-24 for the proposition that "section
1717(b)(2) does not apply where fees are awardable by statute to the
'prevailing party'; in such cases, the trial court must determine which
party prevailed on a practical level." (Damian v. Tamondong, supra,
65 Cal.App.4th at p. 1125.) Appellants note that in Wegner et al.,
California Practice Guide: Civil Trials and Evidence (The Rutter Group
2002) paragraph 17:153.1, page 17-71, the authors state "Statutory
provisions authorizing attorney fees to the 'prevailing party' are not
subject to the definition of 'prevailing party' in ... Civ[il Code
section] 1717." In their reply brief, appellants ask us to correct this
misstatement in a published opinion. We decline to so because we find it
to be a correct statement of the law.