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Condo | HOA Lawyers

Owners Pay High Price of Litigation Against Association

Summary

Even where homeowners characterize their claims against an Association as civil rights violations, the claims involved in the parties’ rights under the declaration, and the declaration’s attorney’s fees provisions applied.

Facts

In 2011, David Merritt, a former HOA board member, and his wife, Salma, sued their Sunnyvale HOA, Classics at Fair Oaks (Classics), as well as three of its board members. The dispute centered on the Association’s covenants, conditions, and restrictions (“CC&Rs”) involving parking restrictions at the Classics. The HOA’s parking policy requires residents to pay for and obtain a permit for each vehicle parked on the street versus in the garage of each residence. The Merritts had a two-car garage, but only parked one car inside it. They argued that they can only park one car in the garage, because Salma is disabled, and needs additional space to enter and exit the vehicle when it is parked inside the garage.

The CC&Rs for the Classics also gave the HOA the authority to inspect a resident’s garage prior to issuing a permit for on-street parking. In order to issue a parking permit, the HOA rules required two vehicles to be parked in a two-car garage. The Merritts argued that allowing the HOA to inspect their garage was a violation of privacy and their civil rights. By not allowing them to park freely on the street in front of their house, the Merritts also claimed the HOA was violating the Americans with Disabilities Act.

Procedural History

The Merrits filed their complaint in the Santa Clara County Superior Court on March 2, 2011. After almost two years of litigation in the trial court and this court, the trial court issued an order declaring appellants to be vexatious litigants. Subsequently, on February 13, 2013, the trial court granted respondents’ motion for summary judgment on the Merrits’ three causes of action.

In its order on summary judgment, the trial court concluded that, for the third cause of action, the Merrits had presented “no admissible evidence to support their contention that the guest parking space at issue was privately owned by them as opposed to being part of the common area of the common interest development.”

The trial court also found that the Merrits could not establish that the common area parking was a public accommodation in light of several undisputed facts including provisions of the Association’s CC&Rs. Further, the trial court found that the Merrits’ second cause of action failed because respondents’ “[a]ctions authorized by and taken to enforce [the] CC&Rs and policies enacted pursuant to them … cannot be considered a serious invasion of privacy under these circumstances.” As to the first cause of action, the trial court rejected it as dependent on the other two deficient causes of action.

The Merrits’ appealed the trial court’s vexatious litigant and summary judgment orders. The Court of Appeals affirmed the trial court’s order designating the Merrits’ as vexatious litigants. In addition, the Court of Appeals denied the Merrits’ request to litigate their appeal of the order granting summary judgment.

While the Merrits’ vexatious litigant appeal was pending, the respondents (association and board members) filed a motion in May 2013, requesting $322,840 in attorney’s fees and $15,416 in costs. The trial court deferred decision on the motion pending the Merrits’ appeal. Following the Court of Appeals’ ruling on appeal, respondents filed another motion for attorney’s fees and costs seeking $15,453 in costs and $332,667.50 in attorney’s fees. The Merrits’ filed an opposition, a sur-reply, and a motion to amend their opposition. The trial court held that the respondents were entitled to attorney fees under the Association’s njh j CC&Rs provision that indicated, “in an action to enforce the governing documents [of an association], the prevailing party shall be awarded reasonable attorney’s fees and costs.” The trial court found that “an action” encompassed the entire judicial proceeding, including any defenses asserted, for purposes of an attorney fee. Because the Merrits asserted their rights under the CC&Rs to enforce parking policies, the court held that the provisions of the CC&R applied.

The Court of Appeals affirmed the trial courts decision, citing Merritt as a vexatious litigant. Because the HOA prevailed on this long-running lawsuit, the Merritts were ultimately ordered to pay $220,000 to the HOA for its reasonable attorney’s fees.

Lesson Learned
  1. Some owners are willing to go to extreme lengths to “prove” they are right, even when they are wrong; and
  2. Associations should review their declarations, bylaws and rules to ensure that specific language is incorporated to allow the association, if it is the prevailing party, to recover attorney’s fees and costs as a result of any action against it.

Merritt v. Ghandi, No. H043615 (Cal. Ct. App. Dec. 20, 2019) (unpublished opinion).

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