Homeowners Successfully Void HOA Election of Directors and Are Awarded $147,595 in Attorney Fees

UNPUBLISHED California Appellate Court decision (January 14, 2016).

In this case, a homeowners association held an election to seat four new directors on its seven person board of directors. Following the election, a controversy developed over the propriety of the election. The main issue raised by two homeowners was whether or not there was a proper quorum of the delegates who represented various districts in the large common interest community and who were the persons who elected the new directors. The owners, who were the plaintiffs in the litigation, contended that a number of the voting delegates had not been properly elected and were not qualified to vote for the association directors, thereby resulting in less than the required quorum of delegates that was needed to validly elect the new directors. The trial court agreed with the plaintiffs and voided the election. Thereafter, the court awarded the plaintiffs’ attorney fees in the amount of $147,595.00. The association appealed the trial court decision.

In its appeal, the association contended that the attorney fee award was an abuse of the trial court’s discretion and an error of law because the plaintiffs did not pursue alternative dispute resolution before filing their action. On review, the appellate court found that the trial court’s judgment for the attorney fees was not an abuse of discretion and the fact that the plaintiffs did not pursue alternative dispute resolution efforts prior to filing their lawsuit did not preclude them from recovering their attorney fees as the prevailing party in a dispute over the enforcement of the association’s governing documents. As to the amount of the award, the court stated that: (i) the action was vigorously litigated by both sides and, given the nature of the litigation, the amount awarded by the trial court was not “so facially absurd that the award must be reversed on appeal;” and (ii) “The experienced trial judge is the best judge of the value of professional services rendered in his court…”

See case decision: Murphy_v._Anaheim_Hills_Plan