Title: Tract 19051 Homeowners Ass’n v. Kemp

State: california

Issuer: California Supreme Court

Document:

1 
Filed 3/5/15 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
TRACT 19051 HOMEOWNERS                  ) 
ASSOCIATION et al., 
) 
 
 
) 
 
Plaintiffs and Appellants, 
) 
 
 
) 
S211596 
 
v. 
) 
 
 
) 
Ct.App. 2/4 B235015 
MAURICE KEMP et al., 
) 
 
) 
Los Angeles County 
 
Defendants and Respondents. ) 
Super. Ct. No. BC398978 
 
____________________________________) 
 
The issue before us in this case is the validity of an attorney fee award 
granted in favor of defendant homeowners under former section 1354, 
subdivision (c), of the Civil Code, a provision of the Davis-Stirling Common 
Interest Development Act (hereafter the CID Act).1  The CID Act applies to 
                                            
1  
In 2012, subsequent to all of the lower court proceedings in this matter, the 
CID Act was recodified.  The former provisions of the Civil Code were repealed and 
reenacted as new sections of the Civil Code.  (Stats. 2012, ch. 180, §§ 1-3, operative 
Jan. 1, 2014; see generally Recommendation:  Statutory Clarification and 
Simplification of CID Law (Feb. 2011) 40 Cal. Law Revision Com. Rep. (2010) 
p. 235.)  The specific provision at issue in this case — former section 1354, 
subdivision (c) — was repealed and reenacted without change as section 5975, 
subdivision (c). 
 
Because the former provisions of the CID Act are cited in the lower court 
opinions and briefing in this matter, to minimize confusion this opinion generally 
will refer to the relevant provisions of the act by their former section numbers.  
Former section 1354, subdivision (c) — the specific statute at issue here — will 
generally be referred to as former section 1354(c). 
 
(footnote continued on next page) 
2 
various types of development projects, but a common interest development for 
purposes of the act requires a project with a common area.  (See 9 Miller & Starr, 
Cal. Real Estate (3d ed. 2011) § 25B:1, pp. 25B-6 to 25B-7.)  Former section 
1354(c) — the attorney fee statute at issue here — provided in full:  “In an action 
to enforce the governing documents, the prevailing party shall be awarded 
reasonable attorney‟s fees and costs.”  (Added by Stats. 2004, ch. 754, § 1, 
p. 5838.)  The term “governing documents,” in turn, was defined in former section 
1351, subdivision (j) (as amended by Stats. 2002, ch. 1111, § 1, pp. 7117-7118, 
now § 4150) to mean the official documents governing “the operation of [a] 
common interest development.” 
The underlying lawsuit in this matter was filed by the Tract 19051 
Homeowners Association and a number of individual members of the association 
(hereafter plaintiffs) against defendant homeowner Maurice Kemp.  Plaintiffs‟ first 
amended complaint alleged that their housing development tract No. 19051 
(Tract 19051) — which included Kemp‟s property — is a common interest 
development within the meaning of the CID Act.  It further alleged that, pursuant 
to that act, there were valid restrictions applicable to defendant Kemp‟s property 
that were violated by his ongoing remodeling.  The trial court ultimately 
concluded that plaintiffs failed to establish that Tract 19051 constitutes a common 
interest development within the meaning of the CID Act and rendered judgment in 
favor of defendant Kemp and defendant Eric Yeldell, a subsequent purchaser of 
Kemp‟s property who had been permitted to intervene as a defendant in the action.  
                                                                                                                                                       
(footnote continued from previous page) 
 
 
In addition, unless otherwise specified, all statutory references are to the 
Civil Code.  
3 
As part of the judgment, the trial court awarded defendants attorney fees under 
former section 1354(c). 
The Court of Appeal affirmed the trial court‟s judgment in favor of 
defendants on the merits, agreeing that plaintiffs had failed to prove that Tract 
19051 satisfies the requirements of a common interest development, but the 
appellate court reversed the trial court‟s award of attorney fees to defendants.  
Relying upon the prior Court of Appeal decision in Mount Olympus Property 
Owners Assn. v. Shpirt (1997) 59 Cal.App.4th 885, 895-896 (Mount Olympus), the 
Court of Appeal concluded that because both it and the trial court had found that 
the CID Act was not applicable, the trial court had erred in awarding attorney fees 
under former section 1354(c), a provision of that act. 
Defendants sought review of the attorney fee issue in this court, contending 
that the Court of Appeal‟s conclusion was not supported by the language of the 
applicable statute or by the Legislature‟s intent to adopt a reciprocal attorney fee 
provision.  We granted review to resolve the issue. 
For the reasons discussed hereafter, we conclude that the Court of Appeal 
erred in reversing the attorney fee award in favor of defendants.  First, the trial 
court‟s award of attorney fees is supported by the language of the statute: 
Plaintiffs‟ underlying lawsuit was an action to enforce the governing documents of 
a common interest development, and defendants were the prevailing party in the 
action.  Second, because plaintiffs clearly would have been entitled to an award 
under the statute had they prevailed in the action, denying defendants an award 
under the statute when they were the prevailing party would unquestionably 
violate the reciprocal nature of the statute and thus defeat the evident legislative 
intent underlying the statute.  As we shall explain, prior California decisions, 
interpreting and applying comparable statutory attorney fee provisions that 
mandate an award of attorney fees to the prevailing party, directly support this 
4 
interpretation of former section 1354(c).  Finally, the Court of Appeal decision in 
Mount Olympus, supra, 59 Cal.App.4th 885, upon which the Court of Appeal in 
this case relied in reaching a contrary result, is clearly distinguishable from the 
present case. 
Accordingly, we reverse the judgment of the Court of Appeal insofar as it 
reversed the attorney fee award in favor of defendants. 
I.  Facts and Lower Court Proceedings 
Tract 19051 is a housing development comprised of 94 single-family 
homes in the Baldwin Vista area of Los Angeles.  A voluntary homeowners 
association — known variously as the Tract 19051 Homeowners Association or 
the Cloverdale, Terraza, Stillwater, Weatherford Homeowners Association — is 
open to homeowners whose homes are within, or in the immediate vicinity of, 
Tract 19051. 
When Tract 19051 was subdivided in 1958, the developer recorded the 
declaration of restrictions (hereafter referred to as the declaration) that contained 
the restrictions at issue in the underlying lawsuit.  The declaration allowed any 
homeowner to sue to enforce its restrictions, but the original declaration, by its 
own terms, expired on January 1, 2000, and contained no provision for extending 
that date. 
In 2006, defendant Maurice Kemp acquired lot No. 22 of Tract 19051, 
which contained a one-story residence that Kemp substantially demolished in 
order to build a much larger 7,000 square-foot two-story home.  After Kemp 
began construction, a neighbor‟s attorney informed Kemp that the remodeling 
project was in violation of height and setback restrictions contained in the 
declaration. 
In September 2008, plaintiffs filed the underlying lawsuit against Kemp, 
alleging breach of the declaration and seeking injunctive and declaratory relief; the 
5 
first amended complaint explicitly alleged that Tract 19051 is a common interest 
development and claimed that plaintiffs were entitled to an award of attorney fees 
under former section 1354(c).  In response, defendant argued that the declaration 
had expired by its own terms on January 1, 2000.  Plaintiffs rejoined by 
maintaining that, under the terms of the CID Act, the termination date of the 
declaration had been extended to December 31, 2010, by a majority vote of the 
homeowners that occurred in December 1999.  (See former § 1357, subd. (b), 
added by Stats. 1985, ch. 874, § 14, p. 2780, now §§ 4265, 4270 [when the 
declaration of a common interest development does not provide a means for the 
property owners to extend the term of the declaration, the term may be extended 
by a majority of members].)  With regard to a development that does not qualify as 
a common interest development, a declaration of restrictions may be extended 
only by the unanimous vote of 100 percent of the property owners or by a vote of 
a lesser number of owners as provided in the declaration of restrictions.  (See 8 
Miller & Starr, Cal. Real Estate (3d ed. 2011) § 24:41, pp. 24-137 to 24-138 & 
fn. 9 [citing cases].)  It is undisputed that neither of the latter two methods was 
satisfied here.  
In denying a preliminary injunction sought by plaintiffs, the trial court 
found that the December 1999 vote by a majority of the Tract 19051 homeowners 
was not effective to extend the date of the declaration because “Tract 19051 is not 
a common interest development . . . .  Tract 19051 is a tract of individually owned 
single family residences that border upon streets that are dedicated to the public 
and are not owned in common by the homeowners or by the homeowners‟ 
association.”   
When the case ultimately was ready for trial, however, Kemp was on the 
verge of losing his property to foreclosure and did not appear in court. The trial 
court initially entered an interlocutory judgment for plaintiffs and granted them 
6 
attorney fees and costs under former section 1354(c), but reserved final judgment 
until plaintiffs provided proof that the declaration had been properly extended 
under the CID Act.  Meanwhile, a new homeowner, Eric Yeldell, purchased 
Kemp‟s home at a trustee‟s sale and was granted permission to intervene as a 
defendant in the ongoing lawsuit.  After further briefing and argument on 
additional questions relating to Tract 19051‟s status as a common interest 
development, the trial court found that plaintiffs had failed to establish that Tract 
19051 is a common interest development and consequently that plaintiffs‟ attempt 
to extend the declaration through the process authorized under the CID Act was 
unsuccessful.  The trial court vacated the interlocutory judgment in favor of 
plaintiffs, entered judgment for defendants, and awarded defendants attorney fees 
under former section 1354(c). 
The Court of Appeal agreed with the trial court‟s conclusion that plaintiffs 
had failed to establish that Tract 19051 was a common interest development 
within the meaning of the CID Act and consequently that the restrictions imposed 
by Tract 19051‟s original declaration had not been extended by virtue of the 
procedure authorized by the CID Act.  Accordingly, the Court of Appeal affirmed 
the trial court‟s judgment in favor of defendants on the merits. 
With regard to the trial court‟s award of attorney fees in favor of 
defendants, however, the Court of Appeal reversed.  In reaching this conclusion, 
the Court of Appeal stated in full:  “In Mount Olympus, supra, 59 Cal.App.4th at 
pages 895-896, we found that because the [CID] Act did not apply, the trial court 
had erred in awarding attorney fees under section 1354.  (See 12 Miller & Starr, 
Cal. Real Estate (3d. ed. 2008) § 34:66, p. 34-229 [„If the property described in the 
restrictions is not a “common interest development,” this provision for the award 
of fees does not apply.‟].)  Because the same rationale applies to this case, the 
attorney fee award under section 1354 must be reversed.”   
7 
Defendants petitioned for review of the Court of Appeal‟s determination 
regarding the attorney fee award, and we granted review limited to that issue.  
Accordingly, we accept the lower courts‟ determinations that Tract 19051 is not a 
common interest development within the meaning of the CID Act. 
 
 
II.  When a defendant homeowner prevails in an action to enforce the 
governing documents of an asserted common interest development by 
showing that the subdivision is not a common interest development, is the 
defendant homeowner entitled to attorney fees under former section 1354(c) 
(now section 5975, subdivision (c))?  
With regard to an award of attorney fees in litigation, 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.  (See, e.g., 
Trope v. Katz (1995) 11 Cal.4th 274, 278.)  The American Rule is codified in 
Code of Civil Procedure section 1021, which states in relevant part:  “Except as 
attorney‟s fees are specifically provided for by statute, the measure and mode of 
compensation of attorneys and counselors at law is left to the agreement, express 
or implied, of the parties . . . .”2 
As contemplated by the initial clause of Code of Civil Procedure section 
1021, 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.  (See generally 7 Witkin, Cal. Procedure (5th ed. 
                                            
2 
In addition to statutory attorney fee provisions, this court, relying upon its 
inherent equitable authority, has recognized three additional exceptions to the 
American Rule — the common fund, substantial benefit, and private attorney 
general doctrines — under which attorney fees may also be recovered.  (See 
generally Serrano v. Priest (1977) 20 Cal.3d 25, 34-47.)  The private attorney 
general attorney fee doctrine has subsequently been substantially codified in Code 
of Civil Procedure section 1021.5. 
8 
2008) Judgment, §§ 210-238, pp. 772-811 [discussing numerous examples of 
statutory provisions authorizing attorney fee awards].) 
Former section 1354(c) — the provision at issue here — is one of the 
legislatively created attorney fee provisions.  As noted above, former section 
1354(c), a provision of the CID Act, read in full:  “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.” (Stats. 2004, ch. 754, § 1, 
p. 5838.)3  The parties disagree as to the meaning and proper application of this 
provision in a case in which it is ultimately determined that no common interest 
development exists.  
The general principles that guide a court in determining the meaning and 
scope of a statutory provision are well established.  As we explained in People v. 
Cornett (2012) 53 Cal.4th 1261, 1265:  “ „As in any case involving statutory 
interpretation, our fundamental task here is to determine the Legislature‟s intent so 
                                            
3  
The term “governing documents” as used in former section 1354(c) was 
defined in former section 1351, subdivision (j) (as amended by Stats. 2002, 
ch. 1111, § 1, pp. 7117-7118, now § 4150) to mean “the declaration and any other 
documents, such as bylaws, operating rules, articles of incorporation, or articles of 
association, which govern the operation of the common interest development or 
association.” 
 
Former section 1354 read in full:  “(a) The covenants and restrictions in the 
declaration shall be enforceable equitable servitudes, unless unreasonable, and 
shall inure to the benefit of and bind all owners of separate interests in the 
development.  Unless the declaration states otherwise, these servitudes may be 
enforced by any owner of a separate interest or by the association, or by both. 
 
“(b) A governing document other than the declaration may be enforced by 
the association against an owner of a separate interest or by an owner of a separate 
interest against the association. 
 
“(c) In an action to enforce the governing documents, the prevailing party 
shall be awarded reasonable attorney‟s fees and costs.”  (§ 1354, as added by 
Stats. 2004, ch. 754, § 1, p. 5838.) 
9 
as to effectuate the law‟s purpose.‟  [Citation.]  „We begin with the plain language 
of the statute, affording the words of the provision their ordinary and usual 
meaning and viewing them in their statutory context, because the language 
employed in the Legislature‟s enactment generally is the most reliable indicator of 
legislative intent.‟  [Citations.]  The plain meaning controls if there is no 
ambiguity in the statutory language.  [Citation.]  If, however, „the statutory 
language may reasonably be given more than one interpretation, “ „ “courts may 
consider various extrinsic aids, including the purpose of the statute, the evils to be 
remedied, the legislative history, public policy, and the statutory scheme 
encompassing the statute.” ‟ ” ‟ ” 
In this case, each of the parties contends that the plain meaning of the 
statutory language supports its interpretation of the statute.  To repeat, the 
applicable statute reads in full:  “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.”  (Former § 1354(c), now § 5975, subd. (c).) 
Plaintiffs contend that even when an action is brought to enforce what the 
complaint expressly alleges is a governing document of a common interest 
development, if it is ultimately determined in the course of the litigation that a 
common interest development does not exist, the action cannot properly be found 
to be “an action to enforce the governing documents” of a common interest 
development within the meaning of former section 1354(c).  Plaintiffs assert in 
this regard:  “In order for [former] section 1354(c) to apply, there must be an 
action to „enforce‟ governing documents.  This necessarily means that there must 
be valid „governing documents‟ that are compliant with the Davis-Stirling Act to 
be „enforced‟ in the first instance.  Otherwise, the Act never applies, and the 
general rule that fees are not recoverable controls. . . .  If there is nothing to 
enforce, then there can be no action to enforce.” 
10 
Defendants, in contrast, contend that the plain language of the statute 
supports their position.  Defendants maintain that because the statute says that “the 
prevailing party” is entitled to recover attorney fees, the statute must be interpreted 
to be reciprocal, and “[r]ecovery is hinged solely on the basis of plaintiff‟s action, 
not whether a court ultimately determines that a subdivision is a common interest 
development.”  “[Plaintiffs] filed this action to enforce the governing documents 
. . . .  Thus, the reciprocal, mandatory fee-shifting should kick in, whether 
[plaintiffs or defendants] prevailed.” 
Focusing on the plain language of former section 1354(c), we conclude that 
defendants have the stronger argument.  When a lawsuit is brought to enforce what 
the complaint expressly alleges are the governing documents of a common interest 
development, the action would ordinarily be understood to be “an action to 
enforce the governing documents [of a common interest development]” as that 
clause is used in former section 1354(c).  Whether or not the plaintiff in the action 
is ultimately successful in establishing that the documents relied upon are in fact 
the governing documents of a common interest development would not affect the 
character or type of action that has been brought. 
Moreover, even if the language of former section 1354(c) is viewed as 
potentially ambiguous in this regard, as we explain the additional factors discussed 
hereafter, taken as a whole, clearly support defendants‟ contention that they were 
properly awarded attorney fees in this case under former section 1354(c). 
The legislative history of former section 1354(c) makes it clear that the 
Legislature has long intended to provide for an attorney fee award to the 
“prevailing party” in actions covered by the statute.  Although the initial version of 
former section 1354 in the original CID Act enacted in 1985 did not contain an 
attorney fee provision (Stats. 1985, ch. 874, § 14, p. 2777), when the statute was 
first amended in 1990 the following sentence was added to former section 1354:  
11 
“In any action to enforce the declaration, the prevailing party shall be awarded 
reasonable attorney‟s fees and costs.”  (Stats. 1990, ch. 1517, § 3, p. 7108, italics 
added.)  In 1993, the attorney fee provision (still providing for recovery by “the 
prevailing party”) was expanded and moved to former section 1354, subdivision 
(f).  (Stats. 1993, ch. 303, § 1, p. 2053.)  Then, in 2004, in a substantial revision of 
the CID Act, the attorney fee provision in question was moved from former 
section 1354, subdivision (f), to former section 1354(c).  (Stats. 2004, ch. 754, § 1, 
pp. 5838-5839.)  The 2004 amendment embodied the identical language that 
remained in effect at the time of the trial court‟s order in this case.  As noted above 
(ante, p. 1, fn. 1), as a result of the 2012 recodification of the CID Act, the 
identical language now appears in section 5975, subdivision (c). 
Plaintiffs claim that the 2004 amendment that moved the attorney fee 
provision from former section 1354, subdivision (f) to former section 1354(c) 
worked a substantive, narrowing change in the statute because the language of 
section 1354, subdivision (f) that provided “[i]n any action to enforce the 
governing documents” was changed to “[i]n an action to enforce the governing 
documents . . . .”  We are aware of no authority, however, to support the claim that 
in this context the two phrases (“any action” and “an action”) are reasonably 
interpreted to have different meanings, and other attorney fee statutes use the 
terms interchangeably.  (See, e.g., Lab. Code, § 218.5.)  Furthermore, plaintiffs‟ 
contention is directly contradicted by the report of the California Law Revision 
Commission that proposed the changes embodied in the 2004 amendment.  With 
respect to the change in question, the report stated that “the first sentence of 
former subdivision (f) is continued without substantive change in subdivision (c).”  
(Recommendation: Alternative Dispute Resolution in Common Interest 
Developments (Sept. 2003) 33 Cal. Law Revision Com. Rep. (2003) p. 711, italics 
added.) 
12 
Thus, throughout its history, the attorney fee provision of the CID Act has 
provided for an award of attorney fees to the “prevailing party.” 
As this court noted in Jankey v. Lee (2012) 55 Cal.4th 1038, 1046:  “The 
Legislature knows how to write both unilateral fee statutes, which afford fees to 
either plaintiffs or defendants, and bilateral fee statutes, which may afford fees to 
both plaintiffs and defendants.  „When the Legislature intends that the successful 
side shall recover its attorney’s fees no matter who brought the legal proceeding, 
it typically uses the term “prevailing party.” ‟ ”  (Italics added.)   
We have not found anything in the legislative history of former section 
1354(c) to indicate that the Legislature specifically considered the scenario in 
which an action that was brought to enforce the governing documents of a 
common interest development proved unsuccessful because the trial court 
determined that no common interest development existed.  As described below, 
however, past California decisions interpreting and applying other prevailing party 
attorney fee statutes demonstrate that the enactment of a prevailing party attorney 
fee provision generally reflects 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.  (See, e.g., Santisas v. 
Goodin (1998) 17 Cal.4th 599 (Santisas); Hsu v. Abbara (1995) 9 Cal.4th 863 
(Hsu); Mechanical Wholesale Corp. v. Fuji Bank, Ltd. (1996) 42 Cal.App.4th 
1647 (Mechanical Wholesale).  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, such as the 
present case, 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 
13 
development exists.  Had the Legislature intended to deny equal treatment to the 
defendants in such a common circumstance, one would expect such an intent to be 
reflected in the legislative history of former section 1354(c).  Nothing in the 
legislative history of the statute suggests, however, that the Legislature intended to 
deny attorney fees to the prevailing defendants in such an action and plaintiffs do 
not point to anything that would support such an intent. 
As just noted, a long line of California decisions have interpreted other 
prevailing party attorney fee statutes to permit recovery of attorney fees by a 
prevailing defendant in situations analogous to the present case.  Most of the 
relevant cases involve the interpretation and application of section 1717, 
subdivision (a), which provides that “[i]n any action on a contract” containing a 
provision authorizing one of the parties to the contract to recover attorney fees 
incurred to enforce the contract, the prevailing party “shall be entitled to 
reasonable attorney fees” “whether he or she is the party specified in the contract 
or not.” 
Section 1717 was at issue in Hsu, supra, 9 Cal.4th 863, in which the 
plaintiffs, prospective purchasers of real property, brought suit against the 
defendant property owners, alleging that the defendants had breached a real estate 
sales contract that contained an attorney fee provision.  The trial court found in 
favor of the defendants, concluding that the plaintiffs‟ purported acceptance of the 
defendants‟ offer was actually a counteroffer and that no contract had been 
formed.  Although the defendants sought attorney fees under section 1717, the trial 
court denied their request and, on appeal, the Court of Appeal upheld that denial.  
(Hsu, supra, at pp. 869-870.) 
On review, this court unanimously reversed the lower courts‟ denial of 
attorney fees to the defendants.  In the course of our opinion, we explained:  “It is 
now settled that a party is entitled to attorney fees under section 1717 „even when 
14 
the party prevails on grounds the contract is inapplicable, invalid, unenforceable or 
nonexistent, if the other party would have been entitled to attorney‟s fees had it 
prevailed.‟ ”  . . . [¶]  This rule serves to effectuate the purpose underlying section 
1717.  As this court explained, „[s]ection 1717 was enacted to establish mutuality 
of remedy where [a] contractual provision makes recovery of attorney‟s fees 
available for only one party . . . , and to prevent oppressive use of one-sided 
attorney‟s fees provisions. . . .‟  . . . The statute would fall short of this goal of full 
mutuality of remedy if its benefits were denied to parties who defeat contract 
claims by proving that they were not parties to the alleged contract or that it was 
never formed.  To achieve its goal, the statute generally must apply in favor of the 
party prevailing on a contract claim whenever that party would have been liable 
under the contract for attorney fees had the other party prevailed.”  (Hsu, supra, 
9 Cal.4th at pp. 870-871, citations omitted.)  Hsu was decided in 1995, but several 
of the cases it cited, as well as other similar cases, predated the enactment of the 
prevailing party attorney fee provision at issue here.  (See Bovard v. American 
Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 842; North Associates v. Bell 
(1986) 184 Cal.App.3d 860, 865; Jones v. Drain (1983) 149 Cal.App.3d 484, 489-
490; Care Constr., Inc. v. Century Convalescent Centers, Inc. (1976) 54 
Cal.App.3d 701, 707.) 
In Santisas, supra, 17 Cal.4th 599, we reaffirmed the rule set forth in Hsu, 
observing that a prevailing defendant is entitled to attorney fees under section 
1717 “when a person sued on a contract containing a provision for attorney fees to 
the prevailing party defends the litigation „by successfully arguing the 
inapplicability, invalidity, unenforceability, or nonexistence of the same 
contract.‟ . . .  To ensure mutuality of remedy in this situation, it has been 
consistently held that when a party litigant prevails in an action on a contract by 
establishing that the contract is invalid, inapplicable, unenforceable, or 
15 
nonexistent, section 1717 permits that party‟s recovery of attorney fees whenever 
the opposing parties would have been entitled to attorney fees under the contract 
had they prevailed.”  (Santisas, supra, 17 Cal. 4th at p. 611.) 
The rule reiterated by this court in the Hsu and Santisas decisions was 
applied to a different prevailing party attorney fee provision in Mechanical 
Wholesale, supra, 42 Cal.App.4th 1647.  In Mechanical Wholesale, the appellate 
court was called upon to interpret and apply former section 3176 (now section 
8558), which provided that “ „the prevailing party‟ ” shall recover its attorney fees 
“ „[i]n any action against . . . [a] construction lender to enforce . . . a bonded stop 
notice.‟ ”  (Mechanical Wholesale, supra, 42 Cal.App.4th at p. 1660.)  In that case, 
a contractor sued a construction lender to enforce a bonded stop notice, and sought 
attorney fees under former section 3176.  The defendant construction lender 
prevailed in the action by establishing that no bonded stop notice existed, and then 
sought attorney fees under former section 3176. 
The Court of Appeal in Mechanical Wholesale rejected the plaintiff‟s claim 
that because it had been determined that no bonded stop notice existed, the entire 
statutory scheme, including the related attorney fee provision, did not apply.  The 
court in Mechanical Wholesale explained:  “Here, there was „an action‟ „against a 
construction lender‟ on a „bonded stop notice‟ in which the construction lender 
was clearly the „prevailing party.‟  Under the statute, Fuji Bank [the construction 
lender] is entitled to its attorney fees.  That plaintiff did not have a legal right to 
claim the benefit of the stop notice provisions is irrelevant.  We need not be 
concerned as to why the stop notice claim was invalid; it is only necessary for Fuji 
Bank to have shown that it defeated the claim.  Such invalidity will not bar fees to 
which a prevailing party is otherwise entitled.”  (Mechanical Wholesale, supra, 42 
Cal.App.4th at p. 1661, fn. omitted.)  In the accompanying footnote, the 
16 
Mechanical Wholesale court cited the analogous authority under section 1717.  
(Mechanical Wholesale, supra, at p. 1661, fn. 14.) 
Plaintiffs in the present case do not deny that the action in this matter was 
brought to enforce what the complaint asserted were the governing documents of a 
common interest development, and that plaintiffs would have been entitled to 
recover attorney fees under former section 1354(c) had they prevailed in the 
lawsuit.  Accordingly, under the rationale of the Hsu, Santisas, and Mechanical 
Wholesale decisions, it follows that defendants should be entitled to recover 
attorney fees under former section 1354(c) inasmuch as they were the prevailing 
party in the action. 
Plaintiffs object to this conclusion on a number of theories, but, as we 
explain, none of the objections is meritorious. 
First, plaintiffs argue that permitting a prevailing defendant to recover 
attorney fees under former section 1354(c) in this setting is inconsistent with the 
provisions of former section 1374, another provision of the CID Act, which 
provided that “[n]othing in this title [the CID Act] may be construed to apply to a 
development wherein there does not exist a common area as defined in subdivision 
(b) of Section 1351.  [¶]  This section is declaratory of existing law.”  (As 
amended by Stats. 2005, ch. 37, § 3, p. 502.)4  The language of former section 
1374, however, is apparently addressed to provisions of the CID Act that apply to 
“a development” not to “an action,” and is at least ambiguous regarding the effect, 
if any, that the statute would have on the proper interpretation of former section 
                                            
4  
In the 2012 recodification of the CID Act, the substance of former 
section 1374 was reenacted as section 4201, which now provides:  “Nothing in this 
act may be construed to apply to a real property development that does not contain 
common area.  This section is declaratory of existing law.” 
17 
1354(c).  Looking beyond the statutory language, as defendants point out the 
legislative history of former section 1374 makes it clear that that provision was 
intended simply to protect residents of non-common-area subdivisions or 
community associations from being inadvertently subjected to the numerous 
obligations that the CID Act imposes upon common interest developments — 
including the election of a board of directors (former § 1363.03), the preparation 
and distribution of annual operating budgets (former §§ 1363, 1365), the levying 
of regular and special assessments (former § 1366), providing numerous notices to 
association members (former §§ 1365, subds. (e), (f), 1369.590, 1367.1, subd. (k), 
1378, subd. (c)), complying with the Common Interest Development Open 
Meeting Act (former § 1363.05), and making accounting records, meeting minutes 
and other documents available for member inspections (former § 1363, subd. (e)).  
(See Sen. Rules Com., Off. of Sen. Floor Analyses, Analysis of Assem. Bill 
No. 67 (1993-1994 Reg. Sess.) as amended June 23, 1994, p. 2; Sen. Local Gov. 
Com., 3d reading analysis of Assem. Bill. No. 67 (1993-1994 Reg. Sess.), as 
amended Apr. 21, 1994, pp. 1-2.)  Nothing in the legislative history of former 
section 1374 supports plaintiffs‟ claim that the provision was intended or should 
be interpreted to affect the interpretation and application of the prevailing party 
attorney fee provision of former section 1354(c) or to undermine that provision‟s 
reciprocal nature.  Indeed, the purpose of former section 1374 ― to protect the 
interests of homeowners who reside in non-common-interest developments ― 
would clearly not be served by denying attorney fees to a defendant who prevails 
in a lawsuit by showing that, contrary to the plaintiff‟s claim, the subdivision in 
question is not a common interest development.5   
                                            
5  
In a similar vein, plaintiffs also rely on former section 1352 (now § 4200), 
which provides that “[t]his title applies and a common interest development is 
 
(footnote continued on next page) 
18 
Second, plaintiffs, like the Court of Appeal below, rely on the Court of 
Appeal decision in Mount Olympus, supra, 59 Cal.App.4th 885, but, as we shall 
explain, that decision does not support the denial of attorney fees to defendants in 
this case. 
In Mount Olympus, supra, 59 Cal.App.4th 885, the underlying controversy 
arose over a home remodeling project that was proposed and begun by the 
defendant homeowners, the Shpirts.  The home was located in a tract that was 
subject to a declaration of restrictions that had been recorded.  The Shpirts‟ next-
door neighbor, Ross, objected to the remodeling and claimed it violated the 
declaration of restrictions, which required, among other matters, that any proposed 
remodeling be submitted to the Mount Olympus Property Owners Association 
(MOPOA) for approval.  The Shpirts twice submitted plans to the MOPOA that 
were rejected.  Their third submission was tentatively approved by the MOPOA, 
subject to a number of conditions that included submission of a final plan to the 
MOPOA and the Shpirts‟ agreement to indemnify MOPOA should it be sued by 
Ross.  The Shpirts did not fulfill the conditions but instead proceeded to demolish 
a portion of the existing home, allowed the property to fall into disrepair, and 
engaged in a pattern of abusive conduct interfering with Ross‟s enjoyment of his 
property. 
                                                                                                                                                       
(footnote continued from previous page) 
 
created” whenever specified conditions are satisfied.  Former section 1352, 
however, predated the prevailing party attorney fee provision of former section 
1354(c) (see Stats. 1985, ch. 874, § 14, p. 2777), and thus clearly was not intended 
and cannot properly be interpreted to limit the scope of the latter provision‟s 
reciprocal effect.    
 
19 
Thereafter, MOPOA and Ross brought the lawsuit at issue in Mount 
Olympus against the Shpirts, alleging multiple causes of action, including 
(1) breach of contract (for violation of the tract‟s declaration of restrictions), 
(2) nuisance (for the accumulation of garbage on the property and the Shpirts‟ 
abusive conduct), and (3) enforcement of an easement assertedly possessed by 
Ross to an unobstructed view to the south and west of the Ross property.   
At the conclusion of the trial, the trial court found the Shpirts had violated 
the declaration of restrictions and had created a nuisance, and entered judgment in 
favor of Ross and the MOPOA.  After the judgment was issued, Ross sought 
attorney fees from the Shpirts based on four separate grounds:  (1) the attorney fee 
provision of the CID Act (then former § 1354, subd. (f), a statutory predecessor of 
former § 1354(c), the provision at issue in the present case), (2) the attorney fee 
provision contained in the declaration of restrictions, (3) an indemnity agreement 
assigning MOPOA‟s right to attorney fees to Ross, and (4) Code of Civil 
Procedure former section 2033 (now Code Civ. Proc., § 2033.420), which permits 
a party to recover the expense (including attorney fees) of establishing the 
genuineness of a document when the losing party failed to admit the genuineness 
in response to a request for admission. 
With regard to Ross‟s attorney fee request, the trial court concluded (1) that 
Ross was entitled to recover fees under the attorney fee provision of the CID Act 
because the tract was a common interest development, (2) that Ross was not 
entitled to recover fees on his own behalf under the declaration of reservations 
because that document did not authorize attorney fees in a suit between 
homeowners, and (3) that by virtue of the indemnity agreement between Ross and 
MOPOA, Ross was entitled to recover the share of attorney fees that MOPOA was 
entitled to recover under the declaration of reservations.  Because the trial court 
concluded that Ross was entitled to recover all of his own attorney fees under the 
20 
attorney fee provision of the CID Act, it did not separately consider his request for 
a portion of his attorney fees as authorized by Code of Civil Procedure former 
section 2033. 
The Court of Appeal in Mount Olympus affirmed the portion of the trial 
court‟s posttrial order awarding MOPOA‟s attorney fees to Ross under his 
indemnity agreement with MOPOA, but reversed the award to Ross of his own 
attorney fees under the attorney fee provision of the CID Act.  On that point, the 
Court of Appeal concluded that, contrary to the trial court‟s determination, the 
tract in which the Shpirts and Ross properties were located was not a common 
interest development within the meaning of the CID Act because there was not a 
common area owned by the individual property owners.  Finally, because the trial 
court had not addressed Ross‟s request for attorney fees under Code of Civil 
Procedure former section 2033 (concerning fees related to the Shpirts‟ alleged 
failure to admit the genuineness of documents), the Court of Appeal remanded the 
case to the trial court for consideration of that issue.  (Mount Olympus, supra, 
59 Cal.App.4th at pp. 892-896.) 
The Court of Appeal in the present case apparently viewed the Mount 
Olympus court‟s decision with respect to the attorney fee provision of the CID Act 
as holding that whenever a trial court finds that a housing development is not a 
common interest development within the meaning of the CID Act, attorney fees 
are not recoverable under the attorney fee provision of that act.  That 
understanding of the Mount Olympus decision, however, is mistaken.  Because in 
Mount Olympus it was Ross who was seeking attorney fees under the attorney fee 
provision of the CID Act on the ground that the action was one to enforce the 
governing documents of an alleged common interest development, the Court of 
Appeal‟s determination that the tract in question was not a common interest 
development meant that Ross was not the prevailing party in an action to enforce 
21 
the governing documents of a common interest development.  Although Ross was 
the prevailing party on other causes of action, insofar as the complaint purported 
to state a cause of action to enforce the governing documents of a common interest 
development, it was the defendants, the Shpirts, rather than the plaintiff Ross, who 
were the prevailing parties with respect to that cause of action. 
In sum, the Mount Olympus opinion held that a plaintiff who sought 
attorney fees under the attorney fee provision of the CID Act was not entitled to an 
award of attorney fees under that statute when the plaintiff failed to establish that 
the tract was a common interest development, even when the plaintiff prevailed on 
other causes of action.  The Mount Olympus decision, however, is not authority for 
denying a defendant, against whom an action to enforce the governing documents 
of a common interest development has been brought, the right to recover attorney 
fees under the statute when the defendant has prevailed in the action because the 
tract has been found not to be a common interest development.  Unlike the 
plaintiff in Mount Olympus, defendants in the present case are the prevailing party 
in an action to enforce the governing documents of a common interest 
development.6 
In addition to relying on Mount Olympus, supra, 59 Cal.App.4th 885, 
plaintiffs rely on two other Court of Appeal decisions, but neither decision 
supports their position. 
                                            
6  
As noted above (ante, p. 6), the Court of Appeal in this case also cited a 
passage from a real property treatise to support its conclusion reversing the 
attorney fee award in favor of defendants.  (See 12 Miller & Starr, Cal. Real 
Estate, supra, § 34:66, p. 34-229.)  The passage in question, however, relies for 
authority solely upon the Mount Olympus decision (see 12 Miller & Starr, at p. 34-
229, fn. 12), and thus provides no additional support for the Court of Appeal‟s 
determination. 
22 
In Blue Lagoon Community Assn. v. Mitchell (1997) 55 Cal.App.4th 472 
(Blue Lagoon), a majority of property owners in a common interest development 
voted to approve two amendments to the development‟s declaration of restrictions, 
but the amendments did not receive the supermajority vote required by the 
applicable declaration of restrictions.  The property owners favoring the 
amendments brought a petition in superior court utilizing a procedure authorized 
under former section 1356 (added by Stats. 1985, ch. 1003, § 1, p. 3222, now 
§ 4275), permitting a court to reduce the percentage of affirmative votes necessary 
to amend a declaration of restrictions of a common interest development under 
specified circumstances.  The proposed amendments were controversial within the 
development, however, and opposing homeowners hired an attorney and filed an 
objection to the petition.  Following a contested hearing, the trial court denied the 
petition.  Thereafter, the objecting homeowners sought an award of attorney fees, 
but the trial court denied the request. 
On appeal, the Court of Appeal in Blue Lagoon affirmed the trial court‟s 
determination, rejecting the objectors‟ argument that they were entitled to attorney 
fees under former section 1354(c).  The Court of Appeal explained:  “Viewed 
objectively, the purpose of Civil Code section 1356 is to give a property owners‟ 
association the ability to amend its governing documents when, because of voter 
apathy or other reasons, important amendments cannot be approved by the normal 
procedures authorized by the declaration.  [Citation.]  In essence, it provides the 
association with a safety valve for those situations where the need for a 
supermajority vote would hamstring the association.  When the limited purpose of 
section 1356 is fully understood it is obvious that a petition brought under this 
section is not an adversarial proceeding.  No defendants are named.  No rights are 
sought to be protected.  No wrongs are sought to be redressed.  As such, it cannot 
be said that by opposing the petition the objectors were enforcing the governing 
23 
documents and thus entitled to attorney fees and costs.”  (Blue Lagoon, supra, 55 
Cal.App.4th at p. 477.)  Thus, unlike this case, in which plaintiffs clearly brought 
an action to enforce the governing documents of a common interest development, 
the court in Blue Lagoon concluded that neither the petition nor the objection in 
that proceeding constituted an action to enforce the governing documents of a 
common interest development within the meaning of former section 1354(c).7 
Plaintiffs additionally rely on the case of Gil v. Mansano (2004) 121 
Cal.App.4th 739 (Gil), in support of their argument that an award of attorney fees 
is not authorized “where, as here, the statute is used defensively, and the language 
authorizing recovery of attorney‟s fees is limited to „actions to enforce‟ . . . .”  In 
Gil, the parties had entered into a release agreement that contained an attorney fee 
provision.  One party brought suit against the other, alleging fraud, and the 
defendant responded by maintaining that the suit was barred by the release 
agreement.  The trial court agreed with the defendant, entered judgment in its 
favor and awarded attorney fees to the defendant pursuant to the attorney fee 
provision of the release agreement. 
                                            
7  
Indeed, in a separate passage in the Blue Lagoon decision, the Court of 
Appeal clearly rejected the plaintiffs‟ argument that the attorney fee provision of 
former section 1354 should not be read as intended to afford reciprocal attorney 
fee rights.  In commenting on the potential consequences of the objectors‟ 
position, the Blue Lagoon court observed:  “This argument is shortsighted.  In this 
case, the objectors „won.‟  But what if the Association had „won‟ and the petition 
had been granted?  If we were to hold, as the objectors urge, that they are the 
prevailing party and thus entitled to attorney fees because they successfully beat 
back the majority‟s efforts to amend the declaration, then is the Association 
entitled to its costs and fees against the objectors when they successfully bring a 
petition under Civil Code section 1356?  If the objectors‟ analysis were correct, 
the answer would have to be yes.”  (Blue Lagoon, supra, 55 Cal.App.4th at 
pp. 477-478.) 
24 
The Court of Appeal in Gil, in a two-to-one decision, reversed the attorney 
fee award, interpreting the attorney fee provision in the release agreement, which 
authorized attorney fees when “action” was brought to enforce the agreement, to 
authorize such fees only when a party filed a lawsuit to enforce the release and not 
when a party proffered the release as a defense to a lawsuit.  (Gil, supra, 121 
Cal.App.4th at pp. 742-745.)  One Court of Appeal justice dissented in Gil, 
maintaining that the majority had taken too narrow a view of the term “action” to 
enforce the release as used in the attorney fee provision in the release.  (Id. at 
pp. 746-747 (dis. opn. of Armstrong, J.).)  A subsequent Court of Appeal decision 
agreed with the dissenting justice in Gil on this point.  (See Windsor Pacific LLC 
v. Samwood Co., Inc. (2013) 213 Cal.App.4th 263, 275-276.) 
Without expressing any view on the merits of the Gil decision itself, we 
observe that, in any event, Gil provides no support for plaintiffs‟ position here.  
Unlike the defendant in Gil, defendants in this case did not defend the action by 
claiming that the declaration of Tract 19051 was the governing document of a 
common interest development and by seeking to enforce the declaration as a 
defense to the action.  Here, it was plaintiffs who filed an action to enforce the 
declaration as an asserted governing document of a common interest development.  
Thus, even under Gil, it is clear that the lawsuit here constituted an action to 
enforce the governing documents.  Because defendants were the prevailing party 
in such an action, they are entitled to recover attorney fees under former section 
1354(c). 
25 
 
III.  Conclusion 
For the reasons discussed above, the judgment of the Court of Appeal is 
reversed insofar as it reversed the trial court‟s attorney fee award in favor of 
defendants. 
 
 
 
 
 
 
CANTIL-SAKAUYE, C. J. 
 
WE CONCUR: 
 
WERDEGAR, J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J. 
CUÉLLAR, J. 
KRUGER, J.
 
1 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Tract 19051 Homeowners Association v. Kemp 
__________________________________________________________________________________ 
 
Unpublished Opinion XXX NP opn. filed 5/15/13, 2d Dist., Div. 4 
Original Appeal 
Original Proceeding 
Review Granted 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S211596 
Date Filed: March 5, 2015 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Richard L. Fruin, Jr. 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Marcia J. Brewer; Law Office of Mifflin & Associates and Ken Mifflin for Plaintiffs and Appellants. 
 
Robert L. Jones, in pro. per., for Plaintiff and Appellant. 
 
No appearance for Defendant and Respondent Maurice Kemp. 
 
Turner Law Firm and Keith J. Turner for Defendant and Respondent Eric Yeldell. 
 
 
 
 
 
 
 
2 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Marcia J. Brewer 
400 Corporate Pointe, Suite 800 
Culver City, CA  90230 
(310) 670-5325 
 
Keith J. Turner 
Turner Law Firm 
429 Santa Monica Boulevard, Suite 500 
Santa Monica, CA  90401 
(310) 454-6190