Filed 12/1/15 Wasserman v. Ketelhut CA2/6

                    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.


                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       SECOND APPELLATE DISTRICT

                                                     DIVISION SIX


MORREY WASSERMAN, et al.,                                                  2d Civil No. B258642
                                                                  (Super. Ct. No. 56-2011-00403140-CU-
     Plaintiffs and Appellants,                                                  OR-VTA)
                                                                              (Ventura County)
v.

JEFFREY KETELHUT, et al.,

     Defendants and Respondents.




          Morrey Wasserman and Eileen Gabler appeal from an order requiring them to pay
attorney fees incurred by respondents Jeffrey Ketelhut and Marcella Ketelhut. Appellants
and other plaintiffs sued respondents to enforce the governing documents of a common
interest development. The attorney fees order was entered after appellants' voluntary
dismissal of their lawsuit. The order was pursuant to Civil Code section 5975, subdivision
(c),1 which provides, "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 trial court determined that, as to appellants, respondents were the prevailing
party.
          After appellants' voluntary dismissal, other plaintiffs in the same action continued to
seek the same relief that appellants had been seeking. Appellants argue that the voluntary

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    All statutory references are to the Civil Code.
dismissal did not result in the achievement of respondents' litigation objectives because they
still had to defend against the other plaintiffs' identical claims. Therefore, appellants
contend, respondents are not the prevailing party within the meaning of section 5975,
subdivision (c). We agree and reverse.
                                 Common Interest Development
          A "common interest development" includes "a real property development" that has a
"[c]ommon area that is owned either by an association or in common by the owners of [the
lots in the development] who possess appurtenant rights to the beneficial use and enjoyment
of the common area." (§§ 4100, subd. (c), 4175, subd. (a), 4185, subd. (a)(3).) "Governing
documents" means "documents, such as bylaws, operating rules, articles of incorporation, or
articles of association, which govern the operation of the common interest development . . .
." (§ 4150.)
                               Factual and Procedural Background
          In August 2011 Felipa Richland Eith and Stacy Wasserman, the wife of appellant
Morrey Wasserman, filed a complaint against respondents. A first amended complaint was
filed in April 2012. It named 13 plaintiffs, including appellants, and alleged nine causes of
action.
          The first amended complaint alleged as follows: The parties are owners of lots in a
28-lot development that "is governed by the Davis Stirling Common Interest Development
Act." (§ 4000 et seq.) The governing documents of the development provide that each lot
shall be used only " 'for the residence of one family and its domestic servants.' " In violation
of the governing documents, respondents are maintaining a commercial vineyard - Los
Robles Hills Winery - on their lot and are selling wine to the public. Their operations have
expanded into the development's common area.
          The first amended complaint sought an injunction prohibiting respondents from
operating a commercial vineyard and from encroaching upon the common area. It also
sought general and exemplary damages.
          In March 2014 appellants voluntarily dismissed their causes of action without
prejudice. Respondents moved for an award of attorney fees on the ground that, as to

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appellants, they were the prevailing party within the meaning of former section 1354,
subdivision (c), now section 5975, subdivision (c).
       Respondents sought an award of $190,208.27. Their present counsel declared that,
up to the date of appellants' voluntary dismissal, he had billed $114,278.22 in attorney fees.
Respondent Jeffrey Ketelhut declared that his former counsel had billed $75,930.05
($114,278.22 + $75,930.05 = $190,208.27).
       In their opposition to the motion for attorney fees, appellants noted that seven
plaintiffs (including appellants) had "dismissed their claims against [respondents]." But "the
claims against [respondents] continue to be prosecuted by six plaintiffs." Therefore,
appellants argued, respondents "plainly have not achieved their litigation aims. The action
against them is still being prosecuted by the remaining plaintiffs who may (and it is
contended will) win." Appellants continued: "Moreover, [appellants] did not dismiss their
claims because they have conceded the merits of [respondents'] case. . . . Both are in the
process of selling their homes and, once their homes have sold, neither of them will have
standing to continue prosecuting this action . . . . Further, former counsel never obtained
their consent to file a lawsuit against [respondents] and neither understood the true nature of
the First Amended Complaint that was being prosecuted." Appellants requested that the
trial court either deny the motion for attorney fees or continue it "until after a determination
of the claims of the remaining plaintiffs." Appellants did not submit declarations in support
of their opposition to the motion for attorney fees.
       In concluding that respondents were the prevailing party, the trial court found "not
persuasive" appellants' contention that they had dismissed their causes of action because
they were selling their homes. It noted that this contention was "unsupported by a
declaration." The court rejected appellants' assertion that they had not consented to the
lawsuit against respondents: Appellants "knew they were plaintiffs . . . . In any case, there
is no evidence from them as a part of the opposition to this motion that establishes" that they
did not understand "what was being sought on their behalf."
       The trial court ordered appellants to pay attorney fees of $156,614.47. This amount
"excludes all fees incurred before [appellants] became plaintiffs" upon the filing of the first

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amended complaint. The court stated, "If [respondents] end up being prevailing parties as to
other plaintiffs, the issue of what they may be entitled to recover will be addressed at the
time those events occur."
                                 Meaning of "Prevailing Party"
       "In determining who is the 'prevailing party' within the meaning of section 1354
[now section 5975], the trial court should analyze 'which party . . . prevailed on a practical
level.' " (Salehi v. Surfside III Condominium Owners' Assn. (2011) 200 Cal.App.4th 1146,
1153 (Salehi), quoting from Heather Farms Homeowners Assn. v. Robinson (1994) 21
Cal.App.4th 1568, 1574.) Whether a party has prevailed on a practical level depends upon
whether it has realized its " 'litigation objectives.' " (Salehi, supra, 200 Cal.App.4th at p.
1150; see also Santisas v. Goodin (1998) 17 Cal.4th 599, 622 [where a "contract allows the
prevailing party to recover attorney fees but does not define 'prevailing party' . . . , a court
may base its attorney fees decision on a pragmatic definition of the extent to which each
party has realized its litigation objectives, whether by judgment, settlement, or otherwise"].)
" 'In assessing litigation success, Hsu v. Abbara (1995) 9 Cal.4th 863, 877 . . . , . . . instructs:
"[C]ourts should respect substance rather than form, and to this extent should be guided by
'equitable considerations.' " ' [Citation.]" (Salehi, supra, 200 Cal.App.4th at p. 1156,
quoting from Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1019.)
                                       Standard of Review
       A trial court's determination of who is a prevailing party under section 5975,
subdivision (c) "should be affirmed on appeal absent an abuse of discretion." (Heather
Farms Homeowners Assn. v. Robinson, supra, 21 Cal.App.4th at p. 1574; accord, Salehi,
supra, 200 Cal.App.4th at p. 1154.) " ' "[D]iscretion is abused whenever . . . the court
exceeds the bounds of reason, all of the circumstances before it being considered."
[Citation.]' [Citation.]" (Ibid.)
       We reject appellants' contention that the standard of review is de novo or independent
review. As discussed in the preceding section of this opinion, the legal question of statutory
construction has been decided in previous cases.



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                             The Trial Court Abused Its Discretion
       In its ruling the trial court observed, "Prevailing party status is determined by an
analysis of whether or not the party claiming to be a prevailing party has achieved its objects
[sic objectives] in the litigation." The trial court exceeded the bounds of reason in
concluding that respondents had achieved their litigation objective. Respondents' goal was
to defeat the instant action to enjoin them from operating a commercial vineyard and from
encroaching upon the development's common area. Despite appellants' voluntary dismissal
of their causes of action, six remaining plaintiffs continued to litigate the identical causes of
action. If they succeeded, respondents would lose everything that they had fought for in the
litigation.
       Moreover, the trial court's ruling was inequitable. Although at least six other
plaintiffs had been involved in the litigation from the filing of the first amended complaint
in April 2012 until appellants' voluntary dismissal in March 2014, the trial court imposed on
appellants the entire burden of paying respondents' attorney fees for this period.
       At the hearing on the motion for attorney fees, the trial court pondered the inequity of
placing the entire burden on appellants: "My bigger problem is the action isn't concluded.
And do I work . . . an [in]equity if I award fees against two people who have dismissed the
case and that potentially gives a free ride to those who are remaining in it who may also
either dismiss or have the case decided against them. So how do I balance those factors?"
       Respondents' counsel replied: "If the Court grants the motion, then . . . the two people
[appellants] who pay. . . would certainly, under the equities, be entitled to a recovery from
the joint plaintiffs in this case. . . . [¶] . . . [T]he burden should not be borne [by] my client,
who's done everything right." Counsel was assuming that respondents would eventually
prevail against the remaining plaintiffs, so that they and appellants would be jointly liable
for respondents' attorney fees. " 'When several parties . . . are jointly liable, and one has
paid more than his share, he may enforce contribution from the others.' [Citation.]"
(Graphic Arts Mutual Ins. Co. v. Time Travel International, Inc. (2005) 126 Cal.App.4th
405, 415.) But there was no basis for counsel's assumption that his client would eventually
prevail. The court should have considered the inequity of requiring appellants to pay

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respondents' attorney fees when the litigation might be resolved in favor of the remaining
plaintiffs. If this were to occur, appellants would not be able to enforce contribution from
them. Even if respondents were to prevail against the remaining plaintiffs, it would be
inequitable to require appellants to pay respondents' entire attorney fees up front and to
await the final resolution of the case before enforcing contribution from the other plaintiffs.
       In Salehi this court observed: "At no time has Salehi claimed that the trial court
should have awaited outcome of the two remaining causes of action before deciding who
was the prevailing party '[i]n [the] action.' (§ 1354, subd. (c) [now § 5975, subd. (c)].) We
only point out that prudence may dictate that the trial court postpone ruling on an attorney
fees request until all causes of action have been resolved." (Salehi, supra, 200 Cal.App.4th
at p. 1156.) Unlike Salehi, appellants requested that the trial court postpone ruling on
respondents' motion for attorney fees until the resolution of the remaining plaintiffs' causes
of action. The court abused its discretion in not granting the request.
                     Respondents Did Not Waive or Forfeit Their Rights
       Appellants argue that, because respondents "fail[ed] to seek a deferred ruling on their
attorneys' fees motion and oppos[ed] [appellants'] effort to defer a ruling," they waived or
"forfeited the right to seek a ruling after the enforcement action is resolved." (Italics
omitted.) Thus, "this court should reverse the trial court's ruling and compel it to enter an
order denying the fees motion with prejudice." (Bold and capitalization omitted.)
       " 'Whereas forfeiture is the failure to make the timely assertion of a right, waiver is
the "intentional relinquishment or abandonment of a known right." [Citations.]' [Citation.]"
(People v. Simon (2001) 25 Cal.4th 1082, 1097, fn. 9.) The doctrines of waiver and
forfeiture are inapplicable here. Respondents moved for an award of attorney fees on the
ground that, as a result of appellants' voluntary dismissal, respondents were the prevailing
party. Appellants, not respondents, had the right to seek to defer a ruling on the motion until
after the resolution of the litigation involving the remaining plaintiffs. If appellants had
failed to invoke this right below, they arguably would have waived or forfeited it. The right
was not respondents' to waive or forfeit. As respondents allege in their brief, they were not



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"under any obligation to concede that a ruling should be deferred until after the case had
been adjudicated against every remaining plaintiff."
                                         Disposition
       The order requiring appellants to pay respondents' attorney fees is reversed. The
matter is remanded with directions to defer ruling on respondents' motion for attorney fees
until after the litigation among the various parties has been resolved. Appellants shall
recover their costs on appeal.
              NOT TO BE PUBLISHED.



                                                        YEGAN, J.
We concur:



              GILBERT, P.J.



              PERREN, J.




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                                 Henry J. Walsh, Judge

                           Superior Court County of Ventura

                          ______________________________


             Thomas R. Freeman; Bird, Marella, Boxer, Wolpert, Nessim, Brooks,
incenberg & Rhow, for Appellants.


             Christopher E. Farenza, JeffreyJ. Gordon, Nicholas von der Lancken; Yoka &
Smith, for Respondents.




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