Court Opinion

ID: 3195662
Source: CourtListenerOpinion
Date Created: 2016-04-19 21:03:00.634501+00
Date Added: 2024-06-11T07:39:10.289862
License: Public Domain

Filed 4/19/16
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             SIXTH APPELLATE DISTRICT

ALMANOR LAKESIDE VILLAS                            H041030
OWNERS ASSOCIATION,                               (Santa Clara County
                                                   Super. Ct. No. 1-12-CV230676)
        Plaintiff and Respondent,

        v.

JAMES CARSON et al.,

        Defendants and Appellants.

        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 cross-
complaint but also rejected as unreasonable many of the fines that Almanor had sought to
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.

                                                2
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

                                             3
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 long-
established 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
                                              4
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
                                              5
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
                                              6
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).)

                                              7
           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.)

                                                8
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.5 Inasmuch 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].)

                                              9
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
                                            10
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.

                                             11
   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 Davis-
Stirling 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’

                                              12
[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
                                             13
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.6 That 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.

                                             14
       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)

                                             15
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.)

                                              16
[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.9 The 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.

                                              17
       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).)

                                               18
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

                                             19
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”].).

                                              20
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 cross-
complaint 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 fee-
shifting 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.)

                                             21
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 closely-
affiliated, 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.)

                                              22
       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.

                                              23
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.

                                             24
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.

                                             25
                                      ____________________________________
                                      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    Richard C. Raines
Almanor Lakeside Villas Owners      Gagen, McCoy, McMahon, Koss, et al.
Association

Counsel for Defendants/Appellants   Matthew David Mellen
James Carson, et al.                Sarah Adelaars
                                    Mellen Law Firm