Filed 4/19/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

ALMANOR LAKESIDE VILLAS 

OWNERS ASSOCIATION, 

Plaintiff and Respondent, 

v.

JAMES CARSON et al., 

Defendants and Appellants.

 H041030

 (Santa Clara County

 Super. Ct. No. 1-12-CV230676)

The Almanor Lakeside Villas Owners Association (Almanor) is the homeowner’s 

association for the common interest development where appellants James and Kimberly 

Carson own properties. Almanor sought to impose fines and related fees of $19,979.97

on the Carsons for alleged rule violations related to the Carsons’ leasing of their 

properties as short-term vacation rentals. The Carsons disputed both the fines and 

Almanor’s authority to enforce those rules, which the Carsons viewed as unlawful and 

unfair use restrictions on their commercially zoned properties. Almanor sued, contending 

that its enforcement of rules against the Carsons was proper under governing law and the 

Covenants, Conditions and Restrictions (CC&Rs) for the development. The Carsons 

cross-complained for breach of contract, private nuisance, and intentional interference 

with prospective economic advantage. The Carsons contended their properties were 

exempt based on contract and equitable principles and argued Almanor’s actions 

amounted to an unlawful campaign to fine them out of business.

Following a bench trial, the court ruled against the Carsons on their crosscomplaint but also rejected as unreasonable many of the fines that Almanor had sought to 
2

impose. The court upheld a subset of the fines pertaining to the use of Almanor’s boat 

slips and ordered the Carsons to pay Almanor $6,620.00 in damages. On the parties’ 

competing motions for attorney’s fees, the court determined Almanor to be the prevailing 

party and awarded $101,803.15 in attorney’s fees and costs. 

On appeal, the Carsons challenge the disposition of their cross-complaint and the 

award of attorney’s fees in favor of Almanor. The Carsons contend that uncontroverted 

evidence supported a finding in favor of their breach of contract cause of action because 

they paid Almanor $1,160 in fines that the court ultimately disallowed. The Carsons also 

contend that the trial court abused its discretion when it deemed Almanor the prevailing 

party despite having disallowed a majority of the fines it sought to impose. The Carsons 

also challenge the amount of the attorney’s fees award in light of Almanor’s limited 

success at trial. Almanor responds that the Carsons have waived any appeal of alleged 

error in the court’s finding on damages because they failed to raise the issue in response 

to the trial court’s proposed statement of decision. As to the award of attorney’s fees, 

Almanor argues that the court correctly determined it to be the prevailing party and did 

not abuse its discretion in awarding Almanor’s full fees. For the reasons stated here, we 

will affirm the judgment as to the Carsons’ cross-complaint, the determination of 

Almanor as prevailing party, and the award of attorney’s fees. 

I. FACTUAL AND PROCEDURAL HISTORY

A. HISTORY OF THE PROPERTIES AND UNDERLYING DISPUTE

The Kokanee Lodge and Carson Chalets are located within the Almanor Lakeside 

Villa development on Lake Almanor in Plumas County.1 Almanor is a homeowners 

association operating under the Davis-Stirling Common Interest Development Act

(Davis-Stirling Act), codified at sections 4000–6150 of the Civil Code (formerly 

 

1

The venue of the underlying action is Santa Clara County, where the Carsons 

reside. 
3

Civ. Code, §§ 1350–1376). The lodge and two chalets (the properties) are among only a 

few lots in the Almanor development that accommodate commercial use; the 

development otherwise is strictly residential. The properties’ commercial designation 

stems from the historic use of the lodge, which preexisted the subdivision and operated as 

a hunting, fishing, and vacation lodge.

The Carsons purchased the properties in 2001 and 2005 for use as short term 

vacation rentals. The properties are subject to the CC&Rs of the Almanor development.

As relevant to this appeal, section 4.01 of the CC&Rs designated certain lots, including 

the properties, that could be utilized for commercial or residential purposes. Section 4.09 

prohibited owners from using their lots “for transient or hotel purposes” or renting for 

“any period less than 30 days.” Section 4.09 also required owners to report any tenants to 

Almanor’s board of directors by notifying the board of the name and address of any 

tenant and the duration of the lease.

In approximately 2009, the Almanor board changed composition and began to 

develop regulations to enforce the CC&Rs. By way of example, the 2010 rules sought to 

enforce section 4.09 of the CC&Rs to limit rentals to a minimum of 30 days. The 2011 

and 2012 rules exempted the commercial lots from the 30-day rental restriction but 

maintained the requirement to provide a copy of any rental agreement to the association 

seven days before the rental period. The rules also purported to regulate other aspects of 

association life affecting the properties, such as parking, trash storage, use of common 

areas, and issuing decals for any boats using Almanor boat slips. And they set a schedule 

of fines for violations.

The Carsons believed their properties were exempt from the use restrictions of the 

CC&Rs, including the Section 4.09 restriction on short term rentals and the related 

reporting requirements. Several historic factors supported this belief, including that the 

Carsons had operated the properties as a short term vacation rental business for many 
4

years. The Carsons similarly did not believe that the rules adopted by the board in 2010, 

2011, and 2012 applied to their properties.

Although the Carsons initially tried to comply with the renter reporting 

requirements, they continued to insist that section 4.01 of the CC&Rs and the longestablished commercial status of the properties exempted them from the use restrictions 

and related rules. The board issued its first fines against the Carsons in September 2010,

and continued to fine the Carsons throughout 2011 and 2012 for a wide range of 

purported violations, which the Carsons disputed. 

The Carsons had stopped paying homeowner’s association dues on the properties 

for about two years, for reasons unrelated to the dispute over fines. In June 2012, the 

Carsons paid $14,752.35 toward delinquent dues on the properties, instructing that all of 

the money be applied to unpaid dues, not to the disputed fines. They stated in writing 

that the lump payment brought them current on dues. At trial, the parties disagreed

whether the June 2012 payment actually covered the balance of dues that the Carsons 

owed. According to the Carsons, Almanor improperly applied $1,160 of the payment 

toward the fines imposed in 2011. Almanor insisted that a balance of unpaid dues 

remained and was reflected on the following months’ bills to the Carsons, along with the 

unpaid fines, attorney’s fees, and accruing interest.

B. TRIAL COURT PROCEEDINGS

In its trial brief, Almanor estimated that the Carsons owed about $54,000 in dues, 

fees, fines and interest. Having cross-complained for damages and equitable relief based 

on breach of contract, private nuisance, and intentional interference with prospective 

economic advantage, the Carsons sought to establish that Almanor’s imposition of fines 

was “totally unlawful,” arbitrary and unfair, and reflected an effort to try to “fine the 

Carson’s [sic] business out of existence.” They argued that the “CC&Rs clearly do not 

contemplate the commercial businesses that sit on the subdivision’s land. In fact, these 

commercial lots are exempt by contract, based on principles of waiver, and by public 
5

policy.” The Carsons asserted that they “have been nearly put out of business and, even 

if Cross-Defendant’s conduct halts now, they will have immense lost income for the next 

5-10 years.” 

After a bench trial, the court issued its tentative decision. It concluded that the 30-

day minimum rental restriction imposed by section 4.09 of the CC&Rs presented an 

“obvious conflict” with section 4.01, which “expressly allow[ed] the Carsons to use their 

lots for commercial purposes (presumably including lodging, since the properties are, 

in fact, lodges).” Citing Nahrstedt v. Lakeside Village Condominium Assn. (1994) 

8 Cal.4th 361, 386 (Nahrstedt), the trial court determined that it would be unreasonable 

to strictly enforce the absolute use restrictions against the Carsons. It explained: “Given 

the conflict between Section 4.01 and 4.09, the general rule espoused in Nahrstedt, that a 

use restriction in an association’s recorded CC&Rs is presumed to be reasonable and 

‘will be enforced uniformly against all residents of the common interest development,’ 

should not apply.” The court noted, however, that it did “not [ ]accept the Carsons’ 

argument that the conflict completely eliminates Almanor’s ability to impose reasonable 

use restrictions on the Carsons’ lots, consistent with the Carsons’ right to use their lots for 

commercial lodging purposes.” 

Of the fines imposed in 2010, 2011, and 2012, the court concluded only the fines 

pertaining to the non-use of Almanor’s boat decals were reasonable. Those fines 

amounted to $6,620, including late charges and interest. The court did not find adequate 

support for Almanor’s claim that the Carsons continued to owe unpaid dues. As to the 

Carsons’ cross-complaint, the court found they had not proven by competent evidence 

that Almanor’s alleged breaches of the CC&Rs caused damages or resulted in discernible 

lost profits.

The Carsons requested a statement of decision, asking whether they had suffered 

damages based on a former renter’s decision not to return to the properties after alleged 

mistreatment by Almanor board members, and whether violations relating to boat slips 
6

and decals had been properly imposed. The court issued a proposed statement of 

decision, to which neither party responded, followed by a final statement of decision and 

judgment. The final statement of decision was consistent with the tentative decision and 

repeated the court’s findings regarding the applicability of reasonable use restrictions to 

the Carsons’ properties. On the cross-complaint, the court concluded that even assuming 

Almanor had breached the CC&Rs, the Carsons had not proven damages. The Carsons 

were ordered to pay $6,620.00 in damages to Almanor, and they received nothing on 

their cross-complaint. 

C. CROSS-MOTIONS FOR ATTORNEY’S FEES AND COSTS

The parties moved for attorney’s fees and costs pursuant to the fees provision of 

the Davis-Stirling Act, Civil Code section 5975 (formerly Civ. Code, § 1354). Civil 

Code section 5975 awards attorney’s fees and costs to the prevailing party in an action to 

enforce the CC&Rs of a common interest development. 

Each side argued it was the prevailing party under the statute. Because the 

statement of decision confirmed that the properties’ commercial zoning did not preclude 

reasonable use restrictions in the CC&Rs, Almanor argued that it had achieved one of its 

main litigation objectives. Almanor also argued that having prevailed on a portion of the 

fines claimed, an attorney’s fees award was mandatory under the Davis-Stirling Act.

The Carsons asserted that they had achieved their main objective, which was to 

deny Almanor the financial windfall it sought and to establish that the fines were 

unreasonable and imposed a severe and unfair burden on their lawful, commercial use of 

the properties. They also argued that monetarily, Almanor had prevailed as to only 

$6,620 out of $54,000. The Carsons asserted that this net monetary recovery was 

insufficient because they had largely prevailed on the pivotal issue at stake. Both sides 

challenged the other’s request for fees as unreasonable and excessive.

The trial court held a hearing and took the motions under submission. In a brief 

written order, it deemed Almanor the prevailing party. The court granted Almanor’s 
7

motion for $98,535.50 in attorney’s fees and $3,267.65 in costs and denied the Carsons’ 

motion. The court annotated the final judgment to reflect the $101,803.15 in attorney’s 

fees and costs, in addition to the $6,620 in damages.

II. DISCUSSION

The Carsons’ appeal presents three distinct issues. We first consider whether the 

trial court erred in disposing of the Carsons’ cause of action for breach of contract. We 

then consider the parties’ competing claims for attorney’s fees and whether the trial court 

erred in deeming Almanor the prevailing party. Last we consider whether the trial court 

abused its discretion in awarding Almanor its full attorney’s fees.

A. DISPOSITION OF THE CARSONS’ CAUSE OF ACTION FOR BREACH OF CONTACT

The Carsons challenge the trial court’s determination that they failed to prove 

damages for their breach of contract cause of action. Almanor argues that the Carsons 

waived any alleged error regarding contract damages by failing to raise the issue in 

response to the court’s tentative decision. 

1. Standard of Review 

On appeal from a determination of failure of proof at trial, the question for the 

reviewing court is “whether the evidence compels a finding in favor of the appellant as a 

matter of law.” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 

196 Cal.App.4th 456, 466 (Sonic).) Specifically, we must determine “whether the 

appellant's evidence was (1) ‘uncontradicted and unimpeached’ and (2) ‘of such a 

character and weight as to leave no room for a judicial determination that it was 

insufficient to support a finding.’ ” (Id.at p. 466 [quoting In re I.W. (2009)

180 Cal.App.4th 1517, 1527–1528].) We are also guided by the principle that the trial 

court’s judgment is presumed to be correct on appeal, and we indulge all intendments and 

presumptions in favor of its correctness. (In re Marriage of Arceneaux (1990) 

51 Cal.3d 1130, 1133 (Arceneaux).) 
8

2. Waiver 

Almanor contends the Carsons failed to preserve for appeal the issue of damages 

from fines paid, which according to Almanor is actually a claim for offset.2 Almanor 

points to Arceneaux, in which the California Supreme Court clarified the procedural basis 

for the presumption on appeal that a judgment or order of a lower court is correct. 

(Arceneaux, at p. 1133.) The Court in Arceneaux held that pursuant to Code of Civil 

Procedure section 634,

3

a litigant who fails to point the trial court to alleged deficiencies 

in the court’s statement of decision waives the right to assert those deficiencies as errors 

on appeal.4(Arceneaux, at p. 1132.) Because the Carsons failed to raise the alleged error 

regarding damages when the court issued its proposed statement of decision, Almanor 

argues that any assertion of error is waived. The Carsons respond that Arceneaux and 

section 634 are inapposite because their appeal is not based on an issue that was omitted 

or treated ambiguously in the statement of decision.

We agree that Arceneaux is of limited application because the Carsons’ appeal as 

to this issue is premised on an unambiguous factual finding in the statement of decision. 

A trial court’s statement of decision need not address all the legal and factual issues 

raised by the parties; it is sufficient that it set forth its ultimate findings, such as on an 

 

2 We need not resolve Almanor’s suggestion that the alleged damages be viewed 

as an offset because, as we will explain, we do not find support in the record for the 

Carsons’ claim that uncontroverted evidence established that fines paid were damages 

resulting from Almanor’s alleged breach of the CC&Rs.

3 Undesignated statutory references are to the Code of Civil Procedure.

4 A litigant who wishes to preserve a claim of error and avoid the application of 

inferences in favor of the judgment must follow the two-step process set by sections 632 

and 634. First, when the court announces a tentative decision, “a party must request a 

statement of decision as to specific issues to obtain an explanation of the trial court’s 

tentative decision.” (Arceneaux, at p. 1134; § 632.) Second, when the trial court issues 

its statement of decision, a party claiming deficiencies must raise any objection “to avoid 

implied findings on appeal favorable to the judgment.” (Arceneaux, at p. 1134; § 634.)
9

element of a claim or defense. (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 

154 Cal.App.4th 547, 559.) Here the court’s statement of decision did not specifically 

reference the $1,160 damages claim now asserted by the Carsons, but the court did 

address the element of damages, finding that it had not been proven by competent 

evidence.5Inasmuch as the trial court stated its finding on damages and did not omit the 

issue or treat it ambiguously, the Carsons’ failure to identify deficiencies in that aspect of 

the proposed statement of decision did not result in waiver of the type discussed in 

Arceneaux, supra, at pp. 1132–1133.

Because the Carsons never asked the trial court to make specific findings on the 

theory of damages they now appeal, the doctrine of implied findings remains applicable. 

That is, we presume that the trial court made the necessary factual findings in support of 

its ultimate finding on damages. (§ 634; Fladeboe v. American Isuzu Motors Inc. (2007) 

150 Cal.App.4th 42, 61–62 [appellate court infers all necessary factual findings in

support of prevailing party on issue to support judgment, then reviews the implied 

findings under substantial evidence standard].) We turn to a review of those findings.

3. The Carsons’ Proof of Damages 

To support their contention that the trial court erred in finding insufficient proof of 

damages on their breach of contract cause of action, the Carsons draw on the court’s 

findings that most of the fines imposed by Almanor were unreasonable. The Carsons 

 

5

The Carsons had offered trial testimony of a longtime renter who chose not to 

return after 2012 because she and her group felt uncomfortable and scrutinized by certain 

Almanor homeowners and board members during their stay. The court found the 

testimony insufficient to establish a breach of the CC&Rs. On the subject of damages the 

Carsons asked the court to explain its decision on the evidence related to the renter who 

had decided not to return. The trial court’s proposed statement of decision addressed that 

evidence but did not address the $1,160 on which basis the Carsons now appeal. The 

Carsons did not object to the proposed statement of decision. (Cal. Rules of Court, 

rule 3.1590(g) [parties have 15 days from service of proposed statement of decision to 

serve and file any objections].) 
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assert that because Almanor imposed fines ultimately disallowed by the court, they must 

have proven a breach of the CC&Rs. They further assert that evidence of their payment 

of a portion of those fines was uncontroverted. The Carsons point to their June 2012 

payment of $14,752.35 to bring the dues current on their properties and argue that 

Almanor applied $1,160 to fines the court determined were not owed. They argue that 

their payment constituted cognizable, measurable damage equivalent to the amount paid, 

plus interest. (Civ. Code, § 3302.) The Carsons argue that instead of considering this 

proof, the court focused solely on the Carsons’ evidence pertaining to loss of business 

income, which the court ultimately concluded was too speculative. 

It is uncontroverted that the Carsons paid Almanor a lump sum of $14,752.35 

intended to bring current the dues on the properties. However, whether this amount in 

fact paid the dues in full, or whether some went toward fines that ultimately were 

disallowed, is difficult to discern from the record. The trial court concluded as much 

when it reviewed the same evidence in connection with Almanor’s open book stated 

cause of action. Almanor used the same accounting and billing statements to try to prove 

its position on unpaid dues as the Carsons have cited on appeal as evidence that Almanor 

applied $1,160 toward disallowed fines. The court’s statement of decision demonstrated 

a careful review of this evidence and concluded: “The Court cannot, with any 

confidence, discern the amount of dues owed by the Carsons at any given time. Although 

it is undisputed that the Carsons fell behind at some point on their association dues, and 

that they made several large payments to Almanor to pay off some component of what 

they owed, the Court finds that Almanor has failed to carry its burden of proving the 

‘amount owed’ on dues, which is a necessary element of their open book cause of action 

with respect to the dues component of any damage award.”

Moreover, the trial record does not reveal that the Carsons articulated this theory 

of contract damages. For example, in the cross-examination of Almanor’s accountant, 

who was responsible for Almanor’s billing during the relevant period in 2012, counsel 
11

did not raise the issue of $1,160 being improperly applied to fines. At closing argument 

on the cross-complaint, the record reflects no mention of this payment as a basis for 

contract damages. The damages case instead centered on the Carsons’ attempt to show 

lost profits and loss of business goodwill. At one point the trial court asked, “Where are 

the damages, the monetary damages associated with that alleged breach of contract?” 

The Carsons’ response referenced attorney’s fees to “enforce the CC&Rs,” interference 

with quiet enjoyment, and lost customers. 

The only mention of the $1,160 payment appeared in the Carsons’ supplemental 

written closing argument, in which they argued that Almanor “intentionally, or 

recklessly” mislabeled “rental violations” as “[s]pecial [a]ssessments,” resulting in 

Almanor paying rental violations instead of the dues as requested and required. That

argument is not evidence sufficient to compel a finding that the Carsons suffered 

financial loss as a result of Almanor’s alleged breach of the CC&Rs. (Bookout v. State of 

California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486 [where the 

judgment is against the party with the burden of proof, it is “almost impossible” to prevail 

on appeal by arguing the evidence compels a judgment in that party’s favor].) The 

documentary evidence, which lacks any corroborating testimony to establish that 

Almanor shifted $1,160 of dues payment toward disallowed fines, does not satisfy the 

test for “ ‘uncontradicted and unimpeached’ ” evidence that leaves “ ‘no room for a 

judicial determination that it was insufficient to support’ ” the finding that the Carsons 

seek. (Sonic, supra, 196 Cal.App.4th at p. 466.)

On this record, the trial court’s finding that the Carsons failed to establish damages 

by competent evidence was sound, and the Carsons have not shown that evidence 

presented to the trial court should have compelled a contrary outcome.
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B. DETERMINATION OF THE PREVAILING PARTY AND AWARD OF ATTORNEY’S 

FEES 

The Carsons and Almanor both claim to be the prevailing party, triggering an

attendant award of fees and costs. The Carsons also contend that public policy and 

fairness require a reversal of the attorney’s fees award. 

1. Statutory Scheme

The Davis-Stirling Act governs an action to enforce the recorded covenants and 

restrictions of a common interest development. Civil Code section 5975 provides that the 

CC&Rs may be enforced as “equitable servitudes” and that “[i]n an action to enforce the 

governing documents, the prevailing party shall be awarded reasonable attorney’s fees 

and costs.” (Civ. Code, § 5975, subds. (a), (c).) Reviewing courts have found that this 

provision of the Davis-Stirling Act “reflect[s] a legislative intent that [the prevailing 

party] receive attorney fees as a matter of right (and that the trial court is therefore 

obligated to award attorney fees) whenever the statutory conditions have been satisfied.” 

(Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1152

(Salehi) [emphasis in original] [citing Hsu v. Abbara (1995) 9 Cal.4th 863, 872 (Hsu)].)

The Davis-Stirling Act does not define “prevailing party” or provide a rubric for 

that determination. In the absence of statutory guidance, California courts have analyzed 

analogous fee provisions and concluded that the test for prevailing party is a pragmatic 

one, namely whether a party prevailed on a practical level by achieving its main litigation 

objectives. (Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 

1574 (Heather Farms); Salehi, supra, at pp. 1153–1154.) 

The California Supreme Court implicitly has confirmed this test. In Villa De Las 

Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94, the court affirmed the 

award of attorney’s fees in an action to enforce a restrictive covenant under the DavisStirling Act, stating: “We conclude the trial court did not abuse its discretion in 

determining that the Association was the prevailing party ... . On a ‘practical level’ 
13

[citation], the Association ‘achieved its main litigation objective.’ ” (Ibid. [quoting 

Heather Farms, at p. 1574 and Rancho Santa Fe Assn. v. Dolan-King (2004) 

115 Cal.App.4th 28, 46].)

2. Determination of The Prevailing Party

We review the trial court’s determination of the prevailing party for abuse of 

discretion. (Villa De Las Palmas Homeowners Assn. v. Terifaj, supra, at p. 94; Heather 

Farms, at p. 1574.) “ ‘ “The appropriate test for abuse of discretion is whether the trial 

court exceeded the bounds of reason. When two or more inferences can reasonably be 

deduced from the facts, the reviewing court has no authority to substitute its decision for 

that of the trial court.” ’ ” (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1339.) As the 

California Supreme Court has explained in the related context of determining the 

prevailing party on a contract under Civil Code section 1717, the trial court should 

“compare the relief awarded on the contract claim or claims with the parties’ demands on 

those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, 

opening statements, and similar sources. The prevailing party determination is to be 

made ... by ‘a comparison of the extent to which each party ha[s] succeeded and failed to 

succeed in its contentions.’ ” (Hsu, supra,at p. 876.)

The Carsons urge that they, not Almanor, attained their litigation objectives. They 

argue that but for their success in defeating most of the fines imposed by Almanor, they 

would have continued to face additional fines, making it impossible to continue to 

operate their business. They also argue that the trial court erred by focusing on net 

monetary recovery in determining who was the prevailing party. 

In support of their position, the Carsons cite Sears v. Baccaglio (1998) 

60 Cal.App.4th 1136 (Sears), in which the guarantor of a lease sued to recover $112,000 

on a payment that he had made on the guaranty, which he contended was invalidated by a 

revocation. The defendant cross-complained for additional money under the guaranty. 

(Id. at p. 1140.) The trial court found that the guaranty was valid but that the plaintiff 
14

was entitled to recover some $67,000 plus interest because of payments the defendant had 

received in relation to the lease. (Id. at pp. 1140–1141.) Notwithstanding the plaintiff’s

monetary recovery, the trial court deemed the defendant the prevailing party under the 

applicable fee provision and awarded attorney’s fees and costs. (Ibid.) The court of 

appeal affirmed the award, explaining: “The complaint and record demonstrate 

enforcement of the guaranty was the pivotal issue. [Plaintiff] received money not

because the court found [defendant] liable for breach of contract. Instead, the court 

ordered [defendant] to return a portion of [plaintiff’s] payment because of the fortuitous 

circumstances [surrounding defendant’s receipt of other payments related to the lease].”

(Sears, at p. 1159.)

Whereas the pivotal issue in Sears was enforcement of the guaranty, the pivotal 

issue here was whether Almanor’s fines were enforceable under the CC&Rs and 

governing body of California law. It is true that the Carsons prevailed to the extent of the 

fines that the court disallowed.6That partial success substantially lowered the Carsons’ 

liability for damages and supported their position that the CC&Rs and associated rules 

could not impose an unreasonable burden on the properties. Yet by upholding a subset of 

the fines, the court ruled more broadly that Almanor could impose reasonable use 

restrictions on the Carsons’ properties, despite their authorized commercial use. That 

ruling echoed Almanor’s stated objective at trial that the association sought to counter the 

Carsons’ position that “because their lot is zoned ‘Commercial,’ they are not bound by 

the CC&R’s or the Rules.” 

 

6 Out of 88 fines that Almanor sought to enforce at trial, the trial court upheld only 

eight. Almanor admits that it did not attain all of its litigation objectives and that a total 

victory would have resulted in a higher monetary recovery had the court found that all of 

the fines imposed were reasonable and enforceable.
15

The mixed results here are distinguishable from those in Sears, in which there was 

a clear win by the defendant on the pivotal issue of the guaranty, and the monetary award 

was fortuitous and unrelated to the determination of liability. (Sears, supra, at p. 1159.)

Where both sides achieved some positive net effect as a result of the court’s rulings, we 

compare the practical effect of the relief attained by each. (Hsu, supra, at p. 876.) Here, 

the trial court’s findings eliminated many of the alleged rule violations that depended on 

the Carsons being in arrears on dues and rejected those fines by which Almanor tried to 

strictly enforce the absolute use restrictions on the Carsons’ lots. Insofar as the court 

found that some of the fines were enforceable, Almanor met its objective and satisfied the 

first part of the statutory criteria under the Davis-Stirling Act “to enforce the governing 

documents.” (Civ. Code, § 5975, subd. (c).) The fractional damages award does not 

negate the broader, practical effect of the court’s ruling, which on the one hand narrowed 

the universe of restrictions that Almanor could impose on the properties, but on the other 

hand cemented Almanor’s authority to promulgate and enforce rules pursuant to the 

CC&Rs so long as not unreasonable under Nahrstedt. Thus the trial court rejected the 

Carsons’ position that the ambiguity in the CC&Rs “completely eliminate[d] Almanor’s 

ability to impose reasonable use restrictions on the Carsons’ lots, consistent with the 

Carsons’ right to use their lots for commercial lodging purposes.” The court also ruled 

entirely in favor of Almanor on the Carsons’ cross-complaint by finding that the Carsons’ 

alleged damages were unsupported by competent evidence and too speculative.

Taken together and viewed in relation to the parties’ objectives as reflected in the 

pleadings and trial record, we conclude that these outcomes were adequate to support the 

trial court’s ruling.7(Goodman v. Lozano, supra, 47 Cal.4th at p. 1339.) In reviewing a 

 

7 We do not find support in the record for the Carsons’ contention that until the 

motion for attorney’s fees, Almanor’s sole litigation objective had been to collect a 

monetary award. From the inception of the litigation, Almanor’s ability to collect a 

(Continued)
16

decision for abuse of discretion, we do not substitute our judgment for that of the trial 

court when more than one inference can be reasonably deduced from the facts. (Ibid.)

The trial court did not abuse its discretion in determining Almanor to be the prevailing 

party. 

3. Public policy 

The Carsons argue that the fee award flouts public policy because it: (1) creates 

disincentive for homeowners to defend against unlawful fines levied by the association, 

and (2) rewards the association for acting in an egregious manner by imposing fines that 

were, for the most part, unlawful. The Carsons suggest that by granting attorney’s fees to 

Almanor, “the Court is stating that the Carsons should have paid the $54,000.00 that 

Respondent claimed was owed ..., even though only $6,620.00 was actually owed, 

because they would be penalized for defending themselves and, in the end, owe an 

additional $101,803.15 in attorney’s fees for defending themselves.” The Carsons offer 

no direct authority to support their position but contend that this outcome contradicts 

California public policy which seeks to ensure that creditors do not overcharge debtors 

for amounts not owed.8

This argument runs contrary to the statutory scheme governing the fee award in 

this case. As the trial court correctly noted at the hearing on the competing motions for 

attorney’s fees, the Davis-Stirling Act mandates the award of attorney’s fees to the 

prevailing party. (Civ. Code, § 5975; Salehi, supra, 200 Cal.App.4th at p. 1152 

 

monetary award depended on the court finding that it was authorized to impose those 

rules and to fine for violations. Throughout the trial record, including in Almanor’s trial 

brief, opening and closing remarks, and supplemental closing argument, Almanor 

emphasized that it sought to enforce the CC&Rs and disabuse the Carsons of their belief 

that the commercial zoning of their property immunized them from the use restrictions.

8

In support of this point, the Carsons cite to the Rosenthal Fair Debt Collection 

Practices Act (Civ. Code, § 1788 et seq.), which holds a debt collector liable to a debtor 

for violating the debt collection practices act. (Civ. Code, § 1788.30.)
17

[language of Civ. Code, § 5975 reflects legislative intent to award attorney’s fees as a 

matter or right when statutory criteria are satisfied].) After resolving the threshold issue 

of the prevailing party, the trial court had no discretion to deny attorney’s fees. (Salehi, 

at p. 1152.) Any argument concerning the magnitude of the fees award, especially in 

comparison to the damages awarded or originally sought, is better directed at challenging 

the reasonableness of the award amount. The amount to be awarded is distinct from 

whether an award is justified, and “ ‘the factors relating to each must not be intertwined 

or merged.’ ” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 153 

[quoting Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 647].)

C. REASONABLENESS OF THE FEE AWARD

The remaining question is whether the attorney’s fees award of $98,535.50 was 

reasonable. What constitutes reasonable attorney’s fees is committed to the discretion of 

the trial court. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095–1096

(PLCM Group).) “An appellate court will interfere with the trial court's determination of 

the amount of reasonable attorney fees only where there has been a manifest abuse of 

discretion.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 

1004 (Monroy).) 

The Carsons argue that the trial court abused its discretion by awarding fees which 

are “grossly disproportionate” to the monetary award and scale of success on the claims 

litigated.9The Carsons point to section 1033, subdivision (a) for the proposition that the 

court, in its discretion, can disallow attorney’s fees and costs if a party obtains less than 

the statutory minimum to be classified as an unlimited civil matter. Yet their briefs on 

appeal offer no case or other authority to support the proposed application of 

section 1033, subdivision (a) to a mandatory fees award under Civil Code section 5975. 

 

9

The Carsons do not raise on appeal the trial court’s methodology or computation 

of time spent on the case. 
18

The Carsons also argue that the trial court should have apportioned the award to 

reflect the court’s rejection of all but a single category of fines imposed, representing 

eight out of eighty-eight fines. Again, the Carsons fail to cite any authority to support a 

reduction based on the degree of success in a Davis-Stirling Act case. We observe that 

“it is counsel's duty by argument and citation of authority to show in what respects 

rulings complained of are erroneous.” (Wint v. Fidelity & Casualty Co. (1973) 

9 Cal.3d 257, 265.) Although we will not treat the Carsons’ arguments as waived, we 

caution that “an appellate brief ‘should contain a legal argument with citation of 

authorities on the points made. If none is furnished on a particular point, the court may 

treat it as waived, and pass it without consideration.’ ” (Mansell v. Board of 

Administration (1994) 30 Cal.App.4th 539, 545–546 [quoting In re Marriage of 

Schroeder (1987) 192 Cal.App.3d 1154, 1164].)

Almanor does not respond to these arguments on appeal, though it argued in its 

attorney’s fees motion that when an owner’s association seeks to enforce CC&Rs and 

attains its litigation objective, based on the mandatory nature of the fee award, “it is 

irrelevant that the verdict/judgment amount is below $25,000.”

1. Discretion to Reduce or Eliminate Fees Under Section 1033

Under section 1033, subdivision (a), if a plaintiff brings an unlimited civil action 

and recovers a judgment within the $25,000 jurisdictional limit for a limited civil action, 

the trial court has the discretion to deny, in whole or in part, costs to the plaintiff.10

(Carter v. Cohen (2010) 188 Cal.App.4th 1038, 1052; Chavez v. City of Los Angeles

(2010) 47 Cal.4th 970, 982–983 (Chavez).) Section 1033 relates to the general cost 

 

10 Section 1033, subdivision (a) states that “[c]osts or any portion of claimed costs 

shall be as determined by the court in its discretion in a case other than a limited civil 

case in accordance with Section 1034 where the prevailing party recovers a judgment that 

could have been rendered in a limited civil case.” (§ 1033, subd. (a).)
19

recovery provisions set forth in the Code of Civil Procedure. We briefly consider its 

applicability to the recovery of attorney’s fees under the Davis-Stirling Act.

In Chavez, the California Supreme Court examined the application of 

section 1033, subdivision (a) to an action brought under the California Fair Employment 

and Housing Act (FEHA), which grants the trial court discretion to award attorney’s fees 

to a prevailing party. (Chavez, at pp. 975–976.) The court in Chavez held that by its 

plain meaning, section 1033, subdivision (a) applies in the FEHA context and gives the 

trial court discretion to deny attorney’s fees to a plaintiff who prevails under FEHA but 

recovers an amount that could have been recovered in a limited civil case. (Chavez, at 

p. 976.) The court explained: “[W]e perceive no irreconcilable conflict between 

section 1033(a) and the FEHA's attorney fee provision. In exercising its discretion under 

section 1033(a) to grant or deny litigation costs, including attorney fees, to a plaintiff who 

has recovered FEHA damages in an amount that could have been recovered in a limited 

civil case, the trial court must give due consideration to the policies and objectives of the 

FEHA and determine whether denying attorney fees, in whole or in part, is consistent 

with those policies and objectives.” (Chavez, at p. 986.)

The reasoning of Chavez is of limited applicability here. Unlike the fee provision 

under FEHA, which is discretionary and thereby not irreconcilable with section 1033, 

subdivision (a), the fee-shifting provision of the Davis-Stirling Act is mandatory. 

(Civ. Code, § 5975; Salehi, supra, 200 Cal.App.4th at p. 1152.) The circumstances in 

which a court might deny or reduce a fee award under a permissive statutory provision, 

like FEHA, such as because special circumstances “would render an award unjust,” do 

not apply equally where a statute mandates attorney’s fees to the prevailing party. 

(Graciano v. Robinson Ford Sales, Inc., supra, 144 Cal.App.4th at p. 160 [principles 

applicable to permissive attorney’s fee statutory provisions do not apply to mandatory 

fee-shifting statutory provisions].) Given its uncertain applicability to the recovery of 
20

attorneys’ fees under Civil Code section 5975 and counsel’s failure to suggest specific 

authority for its application, we decline to find an abuse of discretion in this context. 

2. Discretion to Reduce Fee Award Based on Degree of Success

The Carsons also contend that the trial court could have and should have 

apportioned the award to those attorney’s fees that Almanor incurred in proving the eight 

fines on which it succeeded. It is well settled that the trial court has broad authority in 

determining the reasonableness of an attorney’s fee award. (PLCM Group, supra, 

22 Cal.4th at p. 1095.) This determination may, at times, include a reduction or 

apportionment11 of fees in order to arrive at a reasonable result. “After the trial court has 

performed the calculations [of the lodestar], it shall consider whether the total award so 

calculated under all of the circumstances of the case is more than a reasonable amount 

and, if so, shall reduce the [] award so that it is a reasonable figure.” (Id. at pp. 1095–

1096.)

We look to a few cases that address the justifications for reducing a fee award. In 

a case involving a mandatory fee-shifting statute similar to that under the Davis-Stirling 

Act, the appellate court upheld an attorney’s fees award of $89,489.60 for the defendant 

borrower and cross-complainant even though she recovered only a nominal $1.00 in 

 

11 The Carsons’ use of the term “apportion” is not entirely accurate. In the context 

of attorney’s fee awards, apportionment generally refers to divvying fees as between 

meritorious or paying parties in a multi-party case (see, e.g., Sokolow v. County of San 

Mateo (1989) 213 Cal.App.3d 231, 250 (Sokolow ) [fees statute did not address 

apportioning attorney’s fees between defendants, but court opined it would be

“appropriate for the trial court to assess a greater percentage of the attorney fees award 

against the County rather than making an equal assessment between the County and the 

Patrol”]), or as between causes of action wherein a party has alleged multiple causes of 

action, only some of which are eligible for a statutory fee award (see, e.g., Chee v. 

Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1367–1368 [court 

granted in part defendants’ motions for attorney’s fees and apportioned the amount of 

fees requested to only those causes of action that “fell within the purview of Civil Code 

section 1354”].).
21

statutory damages on her consumer debt-collection based claims. (Monroy, supra, 

215 Cal.App.4th at p. 986) The court deemed the borrower the prevailing party and 

found she was entitled to her full attorney’s fees relating to her successful crosscomplaint based on the Fair Debt Collection Practices Act (FDCPA),12 as well as to her 

defense of the plaintiff’s complaint. (Id. at p. 987.) The Monroy court rejected the 

financial institution’s argument that the award should have been reduced to reflect the 

borrower’s limited degree of success. (Id. at pp. 1004–1105.) 

Citing U.S. Supreme Court13 and California precedent in various statutory feeshifting contexts for the proposition that “the degree or extent of the plaintiff’s success 

must be considered when determining reasonable attorney fees,” the Monroy court 

concluded that the circumstances of the case did not warrant a reversal of the fee award 

for abuse of discretion. (Monroy, supra, at pp. 1005–1006.) The court based its decision 

on factors including the borrower’s position as defendant and cross-complainant, her 

choice not to allege actual damages but to request only statutory damages under the 

FDCPA, the fact that the nominal award still represented a complete success and could 

 

12 As with an attorney’s fee award under section 5975 of the Davis-Stirling Act, 

the federal FDCPA provides for mandatory attorney fees to be awarded to the prevailing 

party, although courts have discretion in calculating the reasonable amount. (Monroy, 

supra, 215 Cal.App.4th at p. 1003.)

13 In Hensley v. Eckerhart (1983) 461 U.S. 424, 434–435, the Supreme Court 

addressed application of a fee shifting statute in civil rights litigation (42 U.S.C. § 1988) 

when the plaintiffs had achieved only partial success. The fee provision in Hensley was 

permissive and provided that the court “may” in its discretion award the prevailing party 

a reasonable attorney’s fee. (Hensley, at p. 426.) Noting that when “a plaintiff has 

achieved only partial or limited success, the product of hours reasonably expended on the 

litigation as a whole times a reasonable hourly rate may be an excessive amount,” the 

Court held that the district court “may attempt to identify specific hours that should be 

eliminated, or it may simply reduce the award to account for the limited success.” (Id. at 

pp. 436–437.)
22

prompt the financial institution “to cease unlawful conduct against other consumers.” 

(Id. at p. 1007) 

Reductions to the award of attorney’s fees also arise in cases applying California’s 

private attorney general statute.14 One such case, Sokolow, supra, 213 Cal.App.3d 231, 

involved alleged sex discrimination by a county sheriff’s department and a closelyaffiliated, private mounted patrol that maintained a male-only policy. On cross-motions 

for summary judgment, the court ruled for the plaintiffs as to certain equal protection 

violations and imposed permanent injunctions on the patrol and the sheriff’s department 

directed at terminating their working relationship and any appearance of partnership. 

(Id. at pp. 241–242.) Yet the court denied the plaintiffs’ request for attorney’s fees under 

the applicable federal and state statutory fee provisions. (Id. at p. 242.) 

The court of appeal reversed the attorney’s fees decision because the plaintiffs 

were the prevailing parties, but remanded to the trial court for a determination of the 

amount of reasonable fees. (Sokolow, at pp. 244, 251.) With respect to the fees under 

section 1021.5, the court noted that “a reduced fee award is appropriate when a claimant 

achieves only limited success.” (Sokolow, at p. 249.) The court offered specific 

examples of results that the plaintiffs had sought and failed to obtain through the 

injunction, such as “obtaining admission for women into the Patrol” or “entirely 

eliminating the County's training and use of the Patrol for search and rescue missions.” 

(Id. at p. 250.) The court indicated that these “were important goals of appellants’

lawsuit which they failed to obtain.” (Ibid.) Thus, in arriving at an award of reasonable 

attorney’s fees, the court directed the trial court to “take into consideration the limited 

success achieved by appellants.” (Ibid.)

 

14 The fee recovery provision under this statute provides that a court “may award 

attorney’s fees to a successful party ... in any action which has resulted in the 

enforcement of an important right affecting the public interest.” (§ 1021.5.)
23

Similarly, in Environmental Protection Information Center v. Department of 

Forestry and Fire Protection (2010) 190 Cal.App.4th 217, 222–224 (EPIC III), the court 

addressed attorney’s fees after the plaintiff environmental and labor groups had 

succeeded in part in challenging the validity of regulatory approvals related to a logging 

plan affecting California old growth forest. With regard to the defendants’ arguments 

that any fee award should be reduced based on the plaintiffs’ limited success on the 

merits, the appellate court conducted a two-part inquiry.15 (Id. at. p. 239.) It first 

determined that the environmental group plaintiffs’ unsuccessful claims were related to 

the successful claims, such that attorney’s work spent on both sets of claims were not 

practicably divisible. (Id. at p. 238.) The court explained that because the successful and 

unsuccessful claims were related, the trial court on remand would need to assess the level 

of success or “ ‘ “significance of the overall relief obtained by the plaintiff[s] in relation 

to the hours reasonably expended on the litigation.” ’ ” (Id. at p. 239 [quoting Harman v. 

City and County of San Francisco (2007) 158 Cal.App.4th 407, 414].) 

We draw a few general conclusions from these cases. As we noted earlier, it is 

within the province and expertise of the trial court to assess reasonableness of attorney’s 

fees. Especially in certain contexts, such as in litigation seeking to enforce “an important 

right affecting the public interest,” there is no question that degree of success is a “crucial 

factor” for that determination. (EPIC III, supra, at pp. 225, fn. 2, 238.) Indeed, we find 

no indication that “degree of success” may not be considered, alongside other appropriate 

factors, in determining reasonable attorney’s fees in other contexts, including under 

Civil Code section 5975. “To the extent a trial court is concerned that a particular award 

 

15 The test articulated in EPIC III comes from a line of state court cases that refer 

to the approach set by the United States Supreme Court in Hensley, supra, 461 U.S. at 

p. 434.
24

is excessive, it has broad discretion to adjust the fee downward.” (Ketchum v. Moses

(2001) 24 Cal.4th 1122, 1138.)

It does not follow from these generalizations, or from the record the Carsons have 

provided, that the trial court committed a manifest abuse of discretion by awarding the 

full attorney’s fees sought. Though the order granting Almanor’s motion for attorney’s 

fees is silent as to the court’s reasoning, the moving papers and declarations of each side, 

as well as the hearing transcript, reflect that the court thoroughly considered the briefing 

and argument of the parties.16 Also, the Carsons did not request a statement of decision 

with regard to the fee award. Under this circumstance, “ ‘ “[a]ll intendments and 

presumptions are indulged to support [the judgment] on matters as to which the record is 

silent, and error must be affirmatively shown.” ’ ” (Ketchum, supra, at p. 1140 [quoting 

Denham v. Superior Court (1970) 2 Cal.3d 557, 564].)

Although the court in its discretion could have reduced the amount of the award to 

reflect the incomplete success of Almanor’s action, as in Monroy, supra, 215 Cal.App.4th 

at pp. 1005–1006, there are ample factors to support the trial court’s decision. Almanor 

prevailed on only a minor subset of the fines that formed the basis for the monetary 

award requested, but that subset was sufficient to satisfy the statutory criteria of an action 

to enforce the governing documents. (Civ. Code, § 5975(c).) In practical effect, 

 

16 The court’s comments during the hearing on the motions for attorney’s fees at 

one point seem to indicate that the court did not believe that it could take into account the 

degree of success at trial. In a colloquy with counsel for Almanor, the court asked: 

“[O]nce the Court makes a determination of prevailing party, the only discretion the 

Court has with respect to the fee award is reasonableness of them, and that is not a 

function of how well they did at trial. There’s a threshold question, who’s the prevailing 

party, and then the next question, which is, are the fees reasonable?” We do not find this 

comment determinative because it reflects only part of an extended discussion at hearing, 

not the court’s final reasoning, after it heard from counsel for the Carsons and took the 

motions under submission. Even if the court had ascertained that it could consider degree 

of success, there were enough factors, as we have discussed, to support a full fees award. 
25

Almanor’s limited success established a baseline from which it can continue to adopt and 

enforce reasonable use restrictions under the CC&Rs. Unlike the important goals of the 

sex discrimination civil rights lawsuit that the appellants failed to obtain in Sokolow the 

objectives that Almanor failed to attain were primarily monetary. With respect to the 

time spent on the successful and unsuccessful aspects of Almanor’s suit (EPIC III, supra, 

190 Cal.App.4th at p. 239), we note that the various fines do not represent different 

causes of action or legal theories dependent on different facts, but different instances of 

attempted enforcement based on the CC&Rs and a shared set of facts. Almanor’s fees, as 

established in their moving papers and supporting declarations, also accounted for its 

defense against the Carsons’ cross-complaint, which included the Carsons’ use of 

testifying expert witnesses. For these reasons, we do not find that the award of attorney’s 

fees, compared to the “overall relief obtained” by Almanor, was so disproportionate as to 

constitute an abuse of discretion. (Ibid.) 

III. DISPOSITION

The judgment on the Carsons’ cross-complaint, and the award of attorney’s fees 

and costs to Almanor, are affirmed. Respondent is entitled to its costs on appeal. 
____________________________________

Grover, J.

WE CONCUR:

____________________________

Rushing, P.J. 

____________________________

Márquez, J. 

Almanor Lakeside Villas Owners Association v James Carson et al.

H041030
Trial Court: Santa Clara County Superior Court

Superior Court No. 1~()~12-CV-230676

Trial Judge: Hon. Aaron Persky 

Counsel for Plaintiff/Respondent 

Almanor Lakeside Villas Owners 

Association 

Richard C. Raines

Gagen, McCoy, McMahon, Koss, et al. 

Counsel for Defendants/Appellants 

James Carson, et al. 

Matthew David Mellen

Sarah Adelaars

Mellen Law Firm