Find Out Why Court Reverses Award of Attorney Fees of $348,306 to Association

This case involved a dispute between the owners of two homes (“Owners”) that are part of a homeowners’ association consisting of 10 homes, and their homeowner’s association (“Association”). The two homes in question are owned by two different limited liability companies that are both managed by the same person. Owners commenced an action against Association in mid-2018 alleging that Association violated the California Open Meeting Act (“OMA”) by conducting board meetings and acting on Association business via emails and without having provided homeowners with notices and agendas in advance of the meetings, without allowing all homeowners to participate, and without making minutes of the meetings available to homeowners. Owners also contended that Association improperly conducted business in executive session board meetings that should have been conducted in meetings that were open to all association members, and thereafter failed to note the general nature of the business conducted in executive session in the minutes of the next open board meeting as required by the OMA. Association denied Owners’ claims and alleged many affirmative defenses, including a claim that the claims were barred based on alleged “unclean hands” on the part of Owners.

The trial court entered a judgment in favor of Association after finding that Owners had wrongfully attempted to take control of Association’s board of directors and were responsible for the failure to prepare the minutes that generally noted the business that was conducted in executive session, and that the email exchanges that Owners complained of were not board meetings under the OMA. Association then requested an award of $409,282.50 in attorney fees and all costs incurred. The trial court awarded Association attorney fees in the amount of $348,306, and all costs incurred. The court’s award of attorney fees was based on a finding that Association had prevailed on claims based on violations of Association’s governing documents and Owners’ efforts to enforce the governing documents and, as such, attorney fees were recoverable under Civil Code §5975(c).

Owners appealed the trial court’s judgment contending: