California Court of Appeal Jun 16, 2015 No. D065888Unpublished
Filed 6/16/15 Hooker v. Rodgers CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
PATRICK HOOKER, as Trustee, etc., D065888
Plaintiff and Respondent,
DONNA RODGERS et al., (Super. Ct. No. 37-2012-00093065- CU-OR-CTL) Cross-defendants and Respondents,
v.
TIMOTHY VARLEY et al.,
Defendants, Cross-complainants and Appellants.
APPEAL from a judgment and postjudgment orders of the Superior Court of
San Diego County, Jeffrey B. Barton, Judge. The judgment and postjudgment orders are
affirmed; motions to dismiss the appeal are denied; motion for sanctions is denied.
Wingert Grebing Brubaker & Juskie, Stephen C. Grebing and Dwayne H. Stein for
Defendants, Cross-complainants and Appellants.
Law Offices of Rodney L. Donohoo and Rodney L. Donohoo for Plaintiff and
Respondent Patrick Hooker, and for Respondents and Cross-defendants Lance Rodgers
and Anthea Rodgers.
Fidelity National Law Group and Paul J. Meshek for Cross-defendant and
Respondent Donna Rodgers.
This dispute arose over the parties' respective easement rights to the use of a
common dock and gangway (the "dock") built for the use of waterfront residential
properties in the Coronado Cays community development (the development), and
located along a property line. Plaintiff and respondent, Patrick Hooker as trustee, etc.
(of the Ellis Family Trust, dated April 9, 1993) (Hooker), the owner of one property
along the dock, sued several neighbors, including defendants and appellants Timothy
and Holly Varley (the Varleys) for declaratory relief, quiet title, conversion and other
theories, stemming from the Varleys' replacement dock construction. The Varleys
cross-complained for declaratory relief, quiet title, et cetera, against Hooker and his
successor homeowners, respondents and cross-defendants Lance Rodgers and Anthea
Rodgers, as well as Donna Rodgers, the former option holder (together, "the Rodgers
parties"). Both sets of properties have rights through wharfage easements and deeds
over an "underwater lot" owned by the City of Coronado (the City). (Coronado Cays
Homeowners Assn. v. City of Coronado (2011) 193 Cal.App.4th 602, 605-608
[Homeowners Association sought determination of easement rights across underwater
lots owned by the City.].)
2
After a bench trial on the complaint and cross-complaint, Hooker largely prevailed
against the Varleys on his requests for declaratory and injunctive relief regarding the
status of the easement rights, as well as his conversion and negligence theories.1 The
trial court's judgment, based on the statement of decision, was issued November 25,
2013, ruling on the various causes of action to establish the wharfage easement rights at
25 percent each, and awarding Hooker conditional injunctive relief if he reimbursed the
Varleys for one-half their construction expenses, or $18,459.81 ("$18,459"), due to the
breach of duties by Hooker's predecessor to maintain the dock. The Varleys were also
found to have exceeded their rights and interfered unreasonably with Hooker's use of the
wharfage easement. The trial court awarded compensatory damages of $1,000 to Hooker
from the Varleys for conversion and negligence. The statement of decision and judgment
expressly provide: "The issues of determining the prevailing party and award of
attorney's fees shall be decided by post judgment motion." Notice of entry of judgment
was served and filed January 10, 2014.
On March 21, 2014, the parties brought cross-motions for attorney fees and costs
awards. Hooker sought to be declared the prevailing party through his claims he had
enforced the covenants, conditions and restrictions (CC&R's) of the Coronado Cays
1 The Varleys dismissed the three Rodgers parties before trial. Hooker had also sued the builder of the new dock, Swift, and obtained $1,000 compensatory damages from him. There is no appearance or issue regarding Swift on appeal. Although Hooker originally sued the owners of the two other properties that adjoined this underwater lot (Lots 211 & 212), they are no longer involved in this action or appeal. Those two properties also had undivided 25 percent leasehold interests in the easements to the dock, making up 100 percent, but this appeal only involves the 50 percent portions between Hooker and the Varleys. (Lots 210 and 209.)
3
Homeowners' Association (CCHOA), and he was thus entitled to statutory costs under
2 All further statutory references are to the Civil Code unless noted. Former section 1354, a part of the Davis-Stirling Common Interest Development Act (the Act), is now section 5975, but we continue to refer to it by the number used in the record, section 1354, not using any "former" designation. After amendments that became effective in 2014, the Act (currently § 4000 et seq.) remains applicable to common interest developments in California. (Stats. 2012, ch. 180 (A.B. 805).)
4
fees awards authorized where the "essence" or "gist" of the claims properly falls
within the category of enforcement of governing documents, such as CC&R's].)
To the contrary, Hooker and the Rodgers parties argue as respondents and as
moving parties (dismissal) that the record discloses that legal and factual issues about
the CC&R's were brought before the court throughout trial, in pleadings, exhibits,
testimony and argument, and these cross-actions were properly identified throughout
the proceedings as being in the nature of enforcement actions concerning the
respective duties of the Varleys and Hooker as homeowners in the development.
Hooker and the Rodgers therefore argue the trial court was justified in later making
the awards of statutory and/or contractual fees and costs, to be entered on the existing
judgment. (§§ 1354, subd. (c); 1717.)
As the merits panel, we also consider two motions by Hooker and the Rodgers
parties, to dismiss or partially dismiss the appeal as untimely or excessive, insofar as the
judgment terms are being challenged. Both the appeal and the dismissal motions address
the interrelationship, or lack thereof, between the theories on which the judgment was
issued, and the rationale for the subsequent attorney fees and costs awards. (Torres v.
City of San Diego (2007) 154 Cal.App.4th 214, 221-224 (Torres) [where a nonfinal
judgment is substantially modified or amended, a new appeal period starts to run].)
Further, Hooker and the Rodgers parties seek to have this court award monetary sanctions
for a frivolous appeal. (Code Civ. Proc., § 907.)
As we explain in part III, post, we shall deny the motions to dismiss, and we
construe the only notice of appeal as properly relating only to the postjudgment attorney
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fees and costs orders, identified by their dates, which were several months after the
judgment was entered to fix the rights of the parties. We have jurisdiction to address the
merits of the Varleys' appeal of the postjudgment orders, and do so in part IV, post. We
interpret the judgment and its underlying statement of decision as a means of determining
the propriety of the trial court's legal conclusions and discretionary decisions that were
made in support of its fees and costs awards. (Chapala Management Corp. v. Stanton
(2010) 186 Cal.App.4th 1532, 1535 (Chapala Management) [on review where a trial
court's statement of decision sets forth the factual and legal basis for the decision, the
appellate court resolves any conflict in the evidence or reasonable inferences to be drawn
from the facts in support of the trial court's determinations].)
Thus, on the merits of the prevailing party and attorney fees issues, the record does
not support any conclusion that the trial court misconstrued the legal issues or evidence
as presented at trial. The trial court had an adequate basis in the record and did not abuse
its discretion in ruling upon the motions for prevailing party determinations, fees and
1379-1381 (Chee) [relevant question on entitlement to fees under section 1354 is whether
the action enforced rights and obligations of parties under development's governing
documents].)
In part V, post, we discuss the request for monetary sanctions on appeal,
concluding that they are not justified and will be denied.
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II
FACTUAL AND PROCEDURAL BACKGROUND
A. Background of Dispute; Complaint and Cross-complaint Filed
We take the factual background from the record and the trial court's statement of
decision, to give context to the attorney fees and costs issues that are argued on appeal.
Pursuant to a complicated series of grant deeds and easements begun in the 1970's by the
assignee of the developer, the properties of Hooker (later bought by the Rodgers) and the
Varleys originally had undivided 25 percent leasehold interests in the easement over the
water of Lot 209-A. Eventually, a merger of the adjoining lots, sets of leases and
property interests was established. The development has two sets of CC&R's, one for
the structures and one for the wharfage rights. The CCHOA issued a member
handbook and created permitting procedures, pertaining to the maintenance and
upkeep of the homes and also the common and dock areas.
When the Varleys moved in sometime after 2004, the dock over the easement area
was deteriorating and they repeatedly asked Hooker's predecessor, Ellis, to contribute to
repairing it. A lot of conflict ensued and Ellis repeatedly rudely refused, and he
eventually moved out. The Varleys made temporary repairs. They obtained legal advice
that led them to believe they had exclusive ownership of portions of the underwater Lot
209-A (the dock and gangway), and could prohibit Hooker as the current owner from
using the dock, partly because he had waived any claim to it.
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In 2010, the Varleys applied to the CCHOA and the City for permits to replace the
dock in a "like for like" manner. They obtained approval of their plans from the
CCHOA, and construction began. They instructed Swift, their builder, to destroy the
original structures and rebuild them solely on the Varleys' property. As of January
2011, Hooker's property did not have any access to the water from the dock.
Hooker brought this complaint for quiet title, declaratory and injunctive relief and
tort damages, as amended in the first amended complaint (the FAC), alleging that Hooker
was entitled to relief, including moving the dock back to the property line, because his
property owned an undivided 25 percent interest "in an easement to all of Lot 209-A,
which includes the Dock, Ramp, and underlying waterway." He claimed that the Varleys
committed conversion when they denied him access to the dock. In the FAC, Hooker
requested attorney fees allowed by "law, statute, or this Court."
The FAC contains numerous attachments and exhibits, including leases and
assignments of the "dock and wharf reservations" (wharfage easements) over Lot 209-A.
The 1972 leases state, "Lessor has heretofore recorded a Declaration of Covenants,
Conditions and Restrictions. . . . . This Lease is subject and subordinated to the terms of
that Declaration." The grant deed of the residential property also transfers a membership
in the CCHOA, subject to the CC&R's. The ultimate property owners, as lessees, were
required to seek approval of the plans and specifications for construction in the marina
area from the CCHOA's architectural control committee established by the CC&R's.
In the Varleys' amended cross-complaint (FACC), they attached some of the same
copies of the leases and easements but interpreted them differently. The FACC sought
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declaratory relief to the effect that the property descriptions in the leases and assignments
of the easements allowed the Varleys the exclusive use of the dock. The FACC includes
allegations that the properties are located in a common interest development, and its
CCHOA is governed by the CC&R's. The Varleys had obtained permits and approval for
their construction plans from the CCHOA prior to beginning construction on the dock.
The FACC claimed that Hooker was liable for waste due to the failure of the property
owner to maintain the dock, as required by the lease agreements and easement interests
over Lot 209-A, and by the CC&R's. The FACC also included causes of action for quiet
title by prescription, quiet title, injunction, and nuisance. The Varleys' FACC sought an
award of attorney fees to the prevailing party in the action.
The parties answered each other's pleadings. As relevant here, Hooker alleged as
an affirmative defense to the FACC that the Varleys did not comply with the CC&R's,
and he also sought attorney fees. In July 2013, Hooker made an offer for judgment under
Code of Civil Procedure section 998 (not accepted), that he and the Rodgers parties
would be deemed the prevailing parties on both the FAC and the FACC, and the issue of
costs and attorney's fees would be left to the trial court.3
3 Ultimately, Hooker's recovery from the Varleys was less favorable than the Code of Civil Procedure section 998 offer. However, the court declined to base the attorney fees and costs rulings on that factor because the Code of Civil Procedure section 998 offer was unclear about potential attorney fee liability, and thus it was not a realistic offer. No issues about Code of Civil Procedure section 998 costs are raised on appeal.
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B. Issuance of Statement of Decision and Judgment
The statement of decision was attached and incorporated by reference into the
judgment filed November 25, 2013. The trial court made extensive factual and legal
findings in reaching the following conclusions. It ordered that the two property
owners each have a 25 percent undivided interest in the easement over Lot 209-A for
building and using the dock. The court found "the use of the easement over Lot 209-
A reflects the intent of the original parties to create the easement, [it] has been used
the same way for forty years, and that it was appropriate for Respondents to raise the
issue." The Varleys had "exceeded their rights and unreasonably interfered with"
Hooker's use of the easement, when they destroyed the original structures and rebuilt
them to deny Hooker any access. The court ruled that the new location of the dock
interfered with Hooker's use of the easement, but that his predecessor's failure to
contribute to the repair of the dock was a partial cause of the dispute.
Accordingly, the court concluded that Hooker was entitled to conditional
mandatory and prohibitory injunctive relief, and must pay half of the construction
costs of the dock to the Varleys ($18,459). Hooker could arrange to have the dock
relocated and was responsible for obtaining all plans and approvals. The Varleys
were ordered not to impede the process of relocating the dock and to "cooperate to the
extent necessary" to allow the process to happen. They were also enjoined from
interfering or preventing Hooker or successor owners from using and enjoying the
easement.
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Hooker was awarded $1,000 in compensatory damages from the Varleys and
from Swift (their agent), on the conversion and negligence theories. No punitive
damages were awarded. The Varleys did not recover anything on the FACC, other
than the reimbursement of one-half of their building costs ($18,459) awarded to them
in equity, from Hooker.
The judgment concluded, "The issues of determining prevailing party and
award of attorney's fees shall be decided by post judgment motion." Hooker filed and
served a notice of entry of judgment on January 10, 2014.
C. Postjudgment Motions and Orders "Entered"
The posttrial motions included Hooker's motion to be declared the prevailing party
for purposes of statutory fee entitlements, and the Varleys' motions to tax costs. (There
were also cross-motions by Swift and the Rodgers parties, but they are not argued on this
appeal.) At argument, the parties did not dispute that the CCHOA did not want to get
involved in their dispute and told them to resolve it themselves. After the March 21,
2014 hearing on the posttrial motions, the trial court issued four separate minute orders.
On the prevailing party motion, the court determined that Hooker et al. "did, in
fact, prevail on their litigation objectives." The "major points of contention in the
litigation" had been the quiet title claim and the request for declaratory and injunctive
relief, as well as conversion, and Hooker had prevailed on each of those claims.
Specifically, Hooker obtained "a complete victory on the Causes of Action seeking to
enforce the provisions of the deeds, easements and CC&Rs to establish [Hooker's] right
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to access the jointly owned dock between the properties. . . . Finally, [Hooker] prevailed
on the [Varleys'] cross-complaint which sought attorney's fees under the CC&R's."
In awarding attorney fees, the trial court acknowledged that the FAC did not label
any of its causes of action in terms of violations of specific provisions of the CC&R's.
However, the FAC did allege that the Varleys had violated the CC&R's by constructing
the dock in a manner which denied access to Hooker, and by exceeding the scope of the
plans submitted to and approved by the CCHOA. (Art. II, para. 10 of the CC&R's.) The
ruling states that both the pleading and proof at trial showed that the Varleys had sought
permission from the CCHOA to replace the dock in a "like for like" manner, but they did
not perform the construction according to their plans or the permission as granted to them
by the CCHOA. The construction was in violation of "two sets of applicable CC&R's,"
when it "cut off the access and denied the rights of ownership to [Hooker]."
The issue of the Varleys' failure to obtain the required permission from the
CCHOA to relocate the dock "was central to the litigation." That issue "was pleaded in
the FAC and incorporated into the Causes of Action upon which [Respondent]
prevailed." The court reasoned that the references at trial to the easements and
documents of title were important and complementary to establishing Hooker's rights to
and ownership of an undivided percentage of the dock. "The violation of the CC&R's
were the actions that cut off the access and denied the rights of ownership to Hooker."
With respect to the statutory basis for an award of attorney fees, the trial court
analyzed the authority of Chee, supra, 143 Cal.App.4th at pp. 1379-1380, on the concept
of whether the action had been brought to enforce the rights and obligations of the parties
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under the governing documents, and it thus justified a fees request. (§ 1354.) The ruling
continued, "The court finds there is a right to recover attorney's fees pursuant to the
Coronado Cays CC&R's, the Wharfage CC&R's as well as Civil Code Section 1354(c)
and its successor Civil Code section 5975. Moreover the Coronado Cays CC&R's had a
prevailing party attorney's fees provision." Both the FAC and FACC had requested an
attorney fees award.
In determining the amount of attorney fees to be awarded, the trial court observed
that this "trial and discovery dealt with complex title, easement and CC&R issues," and
considerable factual and legal disputes on other issues. The court observed that the
attorney fees billings as submitted by Hooker did not support any clear allocation
between work performed for the causes of action that were successful, or the tort claims
on which he did not prevail. The court accordingly reduced the requested fees by 40
percent, "reflecting the amount of the billings that either were spent on Causes of Action
upon which the plaintiff did not prevail . . . . The court endeavored to exercise
appropriate discretion under the totality of the circumstances presented." (Italics added.)
The trial court's four minute orders determined that Hooker was the prevailing
party, although the court acknowledged in one of the orders that it was a somewhat close
case for the determination of the prevailing party. Hooker had been required to pay the
Varleys reimbursement for their construction costs, and he obtained only a small amount
of compensatory damages. Nevertheless, Hooker was entitled as the prevailing party to
an award of $104,718.90 attorney fees against the Varleys. Costs awards were made in
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his favor against the Varleys and Swift ($4,732.50). Additionally, the Rodgers parties
were awarded costs against the Varleys (in amounts of $11,446.21 and $1,425).
Hooker as the prevailing party sent notice of the rulings on March 25, 2014, and
the formal "ORDER ENTERING FEES AND COSTS ON JUDGMENT" was signed by
the trial court on April 14, 2014. The judgment entered on November 25, 2013 was not
altered and was evidently deemed by the trial court to reflect the postjudgment orders,
including the prevailing party determination and the awards of attorney fees and costs.
The Varleys' attorney filed a notice of appeal on April 18, 2014, checking the
boxes on the form for both a judgment after court trial, and an order after judgment. The
notice states that the order or judgment appealed from was issued March 25, 2014 and
had been "amended April 14, 2014".
III
MOTIONS TO DISMISS
A. Issues Presented
Before the respondents' briefs were filed, Hooker and the Rodgers parties brought
a motion to dismiss, on the grounds that the appeal had not been timely filed with respect
to the underlying judgment, and that the orders that "entered" attorney fees and costs on
the judgment previously entered had not "amended" that judgment in any substantial or
material way, so as to extend the time for appealing any of the judgment's provisions.
(Torres, supra, 154 Cal.App.4th at pp. 221-224.) They argued that the Varleys' appeal
could only address issues related to costs and fees.
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After the Varleys filed their appellants' opening brief, Hooker and the Rodgers
parties (except Donna Rodgers) brought another motion to (partially) dismiss the appeal,
on the grounds that any challenges to the judgment itself had been abandoned. They
argued the merits of the judgment underlying the postjudgments fees orders were not
specifically addressed or discussed in the opening brief.
In their opposition to each of the dismissal motions, the Varleys contend that the
trial court did not determine until the attorney fees proceedings that the action was one to
enforce the CC&R's, and that this determination "substantially modified the original
judgment." They also argue that the trial court made findings it had not made in the
original judgment, such as which wrongs were "central to the litigation." They therefore
claim that the judgment was amended or substantially modified, materially affecting their
rights and making the appeal timely as to both judgment and orders. (Stone v. Regents of
University of California (1999) 77 Cal.App.4th 736, 743.) The motions have been
deferred to this merits panel (along with the sanctions motion; pt. V, post).
B. Background Regarding Enforcement Efforts of Judgment
As shown in exhibits presented with the appellate motions for dismissal,
opposition, and the sanctions motion (to be addressed separately in pt. V, post), in May
2014, the Varleys sought an order staying execution of the judgment pending appeal,
including the attorney fees award. The Varleys took the position in court that only the
fees and costs portion of the judgment was being appealed and therefore no bond was
required to stay execution. (Code Civ. Proc., § 917.1, subd. (d).) The trial court granted
the relief requested on May 15, 2014, staying execution of the portion of the judgment
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relating to fees and costs. The court noted that the Varleys had represented to it, through
their attorney as an officer of the court, that the only ruling being appealed was the award
of attorney fees (not the $1,000 compensatory damages). The Varleys told the trial court
their notice of appeal had, in an abundance of caution, included designation of the entire
judgment on the form, because the fees were included in the judgment, which the court
thought was understandable.
Later in May 2014, the Varleys asked the trial court to set the amount of an
undertaking to be required on appeal, on the ground that their attorney had consulted with
the title insurance carrier and had decided "to increase the scope of the appeal to include
the underlying judgment and findings related to the easement between the Ellis [Hooker]
and Varley properties." (Italics added.) The Varleys' counsel noted that they had
received a check for the $18,459 reimbursement owed to them from Hooker, but had
returned it, explaining that they were "increas[ing] the scope of the[ir] appeal." The trial
court declined to rule, other than referring counsel to statutory provisions for the right to
set a bond or the amount of the bond on appeal. The Varleys then posted a bond in the
amount of $200,000.
Also as shown in the sanctions motion, Hooker requested that the trial court begin
contempt proceedings against the Varleys for noncompliance with the judgment, when
they allegedly interfered with the repositioning of the dock. The court set an order to
show cause regarding contempt in September 2014. It is not clear what happened next,
but we need not address such issues not properly raised on appeal or in the subject
motions. (See pt. V, post.)
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C. Analysis of Dismissal Motions
We first observe that a timely appeal is essential to appellate jurisdiction. (Griset
v. Fair Political Practices Commission (2001) 25 Cal.4th 688, 696-698 [judgment final
where it resolves all issues except for any compliance with its terms]; Jennings v.
Marralle (1994) 8 Cal.4th 121, 126; Code of Civ. Proc., § 904.1, subds. (a)(1), (2).) If
the appeal is untimely, this court has no jurisdiction to consider it, and it must be
dismissed. (Cal. Rules of Court, rule 8.104(b).) A notice of appeal must be filed on or
before the earliest of (1) 60 days after the superior court clerk serves the notice of entry
of judgment or a file-stamped copy of the judgment, showing the date either was served,
(2) 60 days after the date of service of the notice of entry of judgment or a file-stamped
copy of the judgment, or (3) 180 days after the date of entry of the judgment. (Cal. Rules
of Court, rule 8.104(a).)
Normally, when a party seeks to challenge both a final judgment and a
postjudgment costs/attorney fee order, the procedure is to file two separate appeals: one
from the final judgment, and a second from the postjudgment order. (Torres, supra, 154
Cal.App.4th at p. 222.) Here, the Varleys argue that effectively or impliedly, the
judgment was substantively "amended" by the terms of the postjudgment rulings, and that
the single notice of appeal gave us jurisdiction to address all their claims about the lack of
foundation in the judgment for the rulings. This timeliness issue depends on whether the
postjudgment orders amounted " 'to a substantial modification of the judgment,' " so that
a new time period for appeal of the original judgment began. (Ibid.; where judgment was
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modified merely to add costs, attorney fees and interest, it is not " 'substantially changed
and the time to appeal it is therefore not affected' ".)
In this case, 60 days passed after the January 10, 2014 notice of entry of judgment,
without any appeal being filed. There is only one notice of appeal, listing two dates, the
March 25 notice of rulings on the postjudgment motions, and the April 14, 2014 order
(entering fees and costs on judgment). No motion for reconsideration or new trial or to
vacate the judgment was made. (See Nestlé Ice Cream Co., LLC v. WCAB (2007) 146
Cal.App.4th 1104, 1109-1110 [amendment of nonfinal judgment by new trial order or
order to vacate, in exercise of judicial function or discretion, can amend the judgment and
start a new appeal period running].) No document entitled an amended or modified
judgment has been prepared or entered, and the judgment of November 25, 2013 has not
been expressly altered or superseded.
Several tests have been developed for analyzing whether a later order effectively
amends the substance of an earlier judgment. In Stone v. Regents of University of
California, supra, 77 Cal.App.4th at pp. 743-744, the court looked to whether the change
was a clerical one, as opposed to change that "was material and substantial. '[I]f a party
can obtain the desired relief from a judgment before it is amended, he must act — appeal
therefrom — within the time allowed after its entry. If the amendment materially and in
a substantial respect affects the judgment and the rights of a party against whom it is
rendered, and a party desires relief therefrom, he must appeal from the corrected
judgment.' [Citation.] Changes which correct errors, mistakes and omissions made
through inadvertence, but do not involve the exercise of the judicial function, are
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considered corrections of clerical errors that leave the original judgment intact." (Ibid.)
In Stone, the court concluded that an appeal of the underlying judgment was timely,
where an amendment or modification order had required the defendants to pay an
additional nine months' worth of defense costs, and it thus materially affected their rights.
(Id. at pp. 743-744.)
Other cases have rejected a test that uses the distinction between clerical or
judicial error, for defining "substantial modification" or amendment, and its effect upon
the time limits for filing a notice of appeal. In Sanchez v. Strickland (2011) 200
Cal.App.4th 758, 764-766 (Sanchez) and Dakota Payphone, LLC v. Alcaraz (2011) 192
Cal.App.4th 493, 506-507 (Dakota Payphone), the courts concluded that merely
distinguishing between clerical error and judicial error does not resolve the issue of
whether a "substantial modification" occurred through a postjudgment order.
"Furthermore, we reject the proposition that all changes correcting clerical errors in
judgments are insubstantial or immaterial." (Sanchez, at p. 766; see CC-California Plaza
discretion, see also PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) The
amount of fees awarded, or allocation of them, is also subject to abuse of discretion
analysis. (Ibid.; Chee, supra, 143 Cal.App.4th at pp. 1380-1381.) Abuse of discretion
occurs if the trial court exceeded the bounds of reason, or failed to apply correct legal
standards and thereby took action outside the confines of the applicable principles of law
or without substantial support in the evidence. (Gonzalez v. Munoz (2007) 156
Cal.App.4th 413, 420.)
Generally, when we review a judgment based on a statement of decision, we
resolve any conflicts in the evidence or in the inferences to be drawn from the facts, in
4 "Governing documents" was defined in section 1351, subdivision (j) (now § 4150) as meaning "the declaration and any other documents, such as bylaws, operating rules, articles of incorporation, or articles of association, which govern the operation of the common interest development or association." (Added by Stats. 2012, ch. 180 (A.B. 805), § 2, operative Jan. 1, 2014; nonsubstantive change only.)
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support of the trial court's determinations about the factual and legal issues presented to
it. (Chapala Management Corp., supra, 186 Cal.App.4th at p. 1535.) "If the statement
of decision is ambiguous or omits material factual findings, we will infer any factual
findings necessary to support the judgment." (Ibid.) As another general rule, all
intendments and presumptions are made to support the judgment on matters as to which
the record is silent. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564; Ballard v.
Uribe (1986) 41 Cal.3d 564, 574.)
B. Terms of Judgment and Statement of Decision
The Varleys seek to show that the CC&R's and the governing documents did not
play an important role in the trial, which they claim dealt chiefly with the wharfage
easements and documents of title. The gravamen of the action is determined from the
pleadings that allege violation of duties, such as those imposed by the CC&R's.
(Cutujian v. Benedict Hills Estates Assn. (1996) 41 Cal.App.4th 1379, 1388, fn. 2.) In
the judgment, the court resolved the equitable claims by quieting title and issuing
conditional mandatory and prohibitory injunctive relief, and awarded compensatory
damages, all based on its assessment of the respective rights of the parties as residents of
a common interest development. Some of those easement and title documents include
references to the common interest nature of the development and the effect of the
CC&R's. Hooker obtained monetary damages for the conversion and related theories, not
contract. (Cf. Chee, supra, 143 Cal.App.4th at pp. 1380-1381 [interpreted fee provisions
of section 1354, subdivisions (a) and (c) as applicable to cause of action for breach of
contract that sought damages for CC&R's violation].) The court in Chee also noted that
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equitable theories can support an award of attorney fees under section 1354, where their
effect was to enforce the CC&R's. (Chee, at p. 1380.)
In the factual findings in the statement of decision, the trial court referred to
testimony about the dealings of the CCHOA with the parties concerning the efforts to
repair and monitor access to the dock, and its review of the application by the Varleys to
replace the dock. In the discussion of the respective claims by the parties, the court found
that the Varleys altered the easement in a manner unreasonably interfering with Hooker's
rights to use it, and the court considered and referred to the approval requirements of both
CCHOA and the City.
The Varleys' claim for waste in their cross-complaint, invoking the CC&R's, was
rejected for failure to follow the required procedures for arbitration and timely filing.
However, the trial court in equity was requiring Hooker to compensate the Varleys for
one half the cost of the new dock, as a condition precedent to their right to use it. In
awarding damages against Swift, jointly and severally with the Varleys, the court noted
that when they moved the dock/gangway, they knew this deviated from the plans
submitted to the CCHOA and the City. Both parties obtained some degree of relief at
trial, and the prevailing party issue was deferred until the posttrial phase.
C. Entitlement to Statutory or Contractual Fees; Prevailing Party
With the above summary of the conclusions in the judgment and underlying
statement of decision, we next consider whether the postjudgment attorney fees rulings
broke new ground in deciding whether the cross actions had been brought in enforcement
of the CC&R's. In its rulings, the court referred to the pleading and proof at trial as
25
showing that the Varleys had sought permission from the CCHOA to replace the dock in
a "like for like" manner, but they wrongfully did not complete the construction according
to their plans or the permission as granted to them by the CCHOA. The construction was
found to be in violation of "two sets of applicable CC&R's," when it "cut off the access
and denied the rights of ownership to Hooker." The relevant lease documents invoked
the CC&R's as applicable to and controlling over them. The deeds to the properties also
transferred memberships in the CCHOA.
In its postjudgment orders, the trial court identified the issue of the Varleys' failure
to obtain the required permission from the CCHOA to relocate the dock as "central to the
litigation." That issue "was plead[ed] in the FAC and incorporated into the Causes of
Action upon which [Hooker] prevailed." The references at trial to the easements and
documents of title were identified by the court as important and complementary to
establishing Hooker's rights to and ownership of an undivided percentage of the dock.
"The violation of the CC and R's were the actions that cut off the access and denied the
rights of ownership to [Hooker]." Likewise, the court stated that CC&R's issues had been
dealt with at trial, along with the title and easement disputes. This is in contrast to the
situation in Salawy, supra, 121 Cal.App.4th at p. 671, where the allegations that
"invoked" the governing documents were in actuality based on an alleged promise by the
property owner that was "unrelated to the governing documents." Accordingly, the
action in Salawy did not rely sufficiently on the governing documents to justify a fees
award. (Id. at pp. 671-674.)
26
The trial court's rulings on the motions noted that the FAC did not label any of its
causes of action in terms of violations of specific provisions in the CC&R's. However,
the judgment made other findings about the regulations applicable to these properties,
with respect to whether either Hooker or the Varleys had breached their duties as
homeowners. They were members of the CCHOA and had notice of the CC&R's. It was
crucial to the trial court's determinations that the Varleys had violated the procedures
established by the CC&R's, when they replaced the dock in a manner which denied
access to Hooker, and which exceeded the scope of the plans submitted to and approved
by the CCHOA. (Art. II, para. 10 of the CC&R's.)5 Hooker was likewise bound by
those duties and had to reimburse the Varleys for half of the construction costs. Trial of
both the "action" and cross-action required reference to the governing documents and the
role of the CCHOA, as well as its architectural committee. (Windsor Pacific LLC v.
Samwood Co. (2013) 213 Cal.App.4th 263, 273-275 [the words "action or proceeding"
encompass the entire action or proceeding, including the complaint and responsive
pleadings].)
The trial court interpreted the subject leases and easements in a legal context that
included the equitable servitudes imposed by the recorded CC&R's. (See Citizens for
5 There is no contention here that the permitting procedures established for the CCHOA exceeded the scope of the CC&R's. (See Rancho Santa Fe Assn. v. Dolan-King (2004) 115 Cal.App.4th 28, 41 [HOA can enforce governing covenant and subsequently enacted restrictions if the provisions are reasonable " 'in light of "the restriction's effect on the project as a whole," not from the perspective of the individual homeowner' "]; Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 975; Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 383.)
27
Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 349 [recorded CC&R's are
enforceable against purchasers of property].) We acknowledge that the Varleys have
some basis to dispute whether the individualized easement and title deeds themselves
should amount to community "governing documents," within the plain language
definitions of section 1351, subdivision (j). However, that argument overlooks the basic
factual and legal context of the trial. At all the relevant times, the trial court was advised
by the pleadings and exhibits that the properties in dispute and their easement interests
over Lot 209-A, including the dock area, were "governed" by the CC&Rs, and were thus
subject to the permitting and approving requirements of the CCHOA. The exhibits
attached to the pleadings and presented at trial mention the CCHOA and the CC&R's,
such as the Leases and related agreements, and this property were developed as a
common interest development. The issue of enforcement of the CC&R's was specifically
alleged in the FACC's claim of relief for Hooker's waste of the property. Those
documents included the Coronado Cays CC&R's (including a prevailing party attorney's
fees provision) and the Wharfage CC&R's.
There is no mystery as to what was before the trial court at either phase of the
proceedings, which were not confined to easement and title, to the exclusion of issues
about the governing documents (e.g., the references to the CC&R's and request for
attorney fees in the FACC). To the extent the statement of decision is ambiguous, we
should infer those factual findings necessary to support the judgment. (Chapala
Management Corp., supra, 186 Cal.App.4th at p. 1535.) As already discussed, the record
shows these postjudgment rulings did not represent a new exercise of a judicial function
28
or discretion, or a new legal ground for the ruling that would be sufficient to "amend" the
judgment or to start a new appeal period running for the underlying judgment. (Nestlé
Ice Cream Co., LLC v. WCAB, supra, 146 Cal.App.4th at pp. 1109-1110; Sanchez, supra,
200 Cal.App.4th at p. 767.)
With respect to the prevailing party issue, one of the postjudgment minute orders
makes note that the case was a close one as to who had gained the most relief. Such a
prevailing party determination is within the trial court's discretion. (Heather Farms,
supra, 21 Cal.App.4th at p. 1574) The determination was adequately based upon the
court's legal conclusions formed at trial and reported in the judgment. For purposes of
applying section 1354, subdivision (c), the record adequately shows Hooker "prevailed
on a practical level," on the claims invoking the CC&R's and resolved at trial. (Heather
Farms, at p. 1574.) Under our reading of the allegations of the FAC and the FACC, the
"gist" and the essence of these cross-actions were to enforce provisions in the governing
documents, on equitable theories. Thus, sufficient connections between the substantive
theories presented at trial and the requirements of the governing documents were shown
to bring this action within the scope of section 1354, subdivision (c). The declaratory and
injunctive relief issued about the dock dispute, on the issues framed by the pleadings,
served to enforce the "rights and obligations of the parties under the governing
documents." (Chee, supra, 143 Cal.App.4th at p. 1380.) The trial court correctly applied
the statutory provisions of section 1354, subdivision (c) to the facts and legal conclusions
already established at trial, in making its postjudgment rulings on prevailing party
attorney fees.
29
D. Amounts of Fees and Costs Awards
"The amount of an attorney fee to be awarded is a matter within the sound
discretion of the trial court. [Citation.] The trial court is the best judge of the value of
professional services rendered in its court, and while its judgment is subject to our
review, we will not disturb that determination unless we are convinced that it is clearly
The trial court is given discretion to allocate fees where there is entitlement to
recover them on some grounds, but not on other theories. (Chee, supra, 143 Cal.App.4th
at p. 1381 [Association's fees for defending an owner's claims for breach of contract and
request for declaratory relief were recoverable as governed by the CC&R's; however,
negligence claims were not within the scope of the fees provision].) Apportionment of
attorney fees between those incurred on causes of action for which fees are properly
awarded, and those incurred on other claims, will not be required "when the claims for
relief are so intertwined that it would be impracticable, if not impossible, to separate the
attorney's time into compensable and noncompensable units." (Bell v. Vista Unified
School Dist. (2000) 82 Cal.App.4th 672, 687.)
In this case, the trial court's rulings on the amounts of fees requested demonstrated
a full understanding of the complicated nature of the litigation. The court distinguished
between the causes of action related to the respective duties imposed under the CC&R's
(the equitable ones on which Hooker was the prevailing party), and the claims on which
Hooker did not prevail. The court deducted amounts that Hooker's attorney had charged
30
for interoffice activities and similar billing matters, in an effort to ensure that no
excessive fees were awarded upon the successful claims. This was a proper discretionary
resolution of the issues presented on the motions for costs and fees awards, and the court
acted within legal bounds in judging the value of professional services rendered. (PLCM
Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1095; Akins, supra, 79 Cal.App.4th at
p. 1134 [reversal required only if the amount awarded in attorney fees "is so large or
small that it shocks the conscience and suggests that passion and prejudice influenced the
determination"].) We affirm the postjudgment fees and costs orders.
V
MOTION FOR SANCTIONS ON APPEAL
A. Applicable Standards
Although we have determined the Varleys' appeal is without merit, it is a separate
issue whether it is "indisputably" meritless, i.e., whether "any reasonable attorney would
agree that the appeal is totally and completely without merit." (In re Marriage of
Flaherty (1982) 31 Cal.3d 637, 650 (Flaherty).) A related question raised in the
sanctions motion is whether the Varleys' and their counsel's posttrial and posthearing
actions, in seeking to avoid a bond requirement, then attempting to change the scope of
the appeal, then apparently resisting or failing to cooperate with the reconstruction
efforts, are sanctionable in view of the arguable "abandonment" of any substantive
challenge to the judgment itself in their opening brief (as opposed to attacking the
postjudgment motion orders).
31
In determining whether an appeal is sanctionable, case law applies both subjective
and objective standards. The subjective standard looks to the motives of the appealing
party and his or her attorney, while the objective standard looks at the merits of the
appeal from a reasonable person's perspective. (See Flaherty, supra, 31 Cal.3d at
pp. 649-650.) Whether the party or attorney acted in an honest belief there were grounds
for appeal makes no difference if any reasonable person would agree the grounds for
appeal were totally and completely devoid of merit. (Estate of Walters (1950) 99
Cal.App.2d 552, 558.)
The objective and subjective standards "are often used together, with one
providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as
evidence that appellant must have intended it only for delay." (Flaherty, supra, 31
Cal.3d at pp. 649-650.) An unsuccessful appeal, however, " 'should not be penalized as
frivolous if it presents a unique issue which is not indisputably without merit, or involves
facts which are not amenable to easy analysis in terms of existing law, or makes a
reasoned argument for the extension, modification, or reversal of existing law.' " (Dodge,
Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.)
B. Grounds for Motion; Analysis
Hooker, joined by the Rodgers, argues that the Varleys employed purely dilatory
tactics by "purportedly appealing the underlying substantive judgment," and by opposing
Hooker's initial motion to dismiss the appeal. Hooker claims that the Varleys' efforts to
stay execution of the underlying judgment were based on claims that the judgment itself
was being challenged, but they have failed to brief in any significant way any challenges
32
to the judgment, as opposed to the orders, and they cannot have it both ways. Hooker et
al. supply an attorney declaration that they incurred at least $10,950 in attorney fees and
costs related to this appeal.
In connection with the motions to dismiss (pt. III.B., ante) and the factual
background set forth above, we have already outlined the sorry saga in which the Varleys
first sought relief from execution of the judgment, then asked the trial court to set the
amount of an undertaking to be required on appeal, on the ground that their attorney had
consulted with the title insurance carrier and had unilaterally decided "to increase the
scope of the appeal to include the underlying judgment and findings related to the
easement between the Ellis and Varley properties." (Italics added.) The Varleys rejected
Hooker's and the Rodgers' check for the $18,459 owed to them under the judgment, by
claiming that they were "increasing the scope of their appeal" and the entire matter was
being stayed. The trial court declined to rule on their request to set a bond on appeal,
other than to refer counsel to statutory provisions on undertakings. The Varleys then
posted a bond in the amount of $200,000. Next, Hooker requested that the trial court
begin contempt proceedings against the Varleys for noncompliance with the judgment,
when they allegedly interfered with the repositioning of the dock. The record does not
disclose any results of any such contempt proceedings.
It was the Varleys' counsel who unsuccessfully attempted to redefine the scope of
the notice of appeal in connection with the request to stay execution of the judgment,
whether this was done as a strategic matter or as a mistake of law. (See Kim v.
Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 292 ["It is critical to both the
33
bench and the bar that we be able to rely on the honesty of counsel. The term 'officer of
the court,' with all the assumptions of honor and integrity that append to it, must not be
allowed to lose its significance."].) The face of the notice of appeal and the timing of its
filing, in view of the structure of the judgment and the postjudgment orders, do not
support any claim that the judgment terms themselves were timely challenged. Now the
Varleys' opposition to the sanctions motion blames the trial court for causing or
contributing to the "confusion." We are not sympathetic with the Varleys' attitude toward
the trial court. The court was forced to deal with the case in the manner that the parties'
changing theories of trial and procedure required, and it reached the merits of each
question presented by exercising its discretion to make rulings that were based on a
rational interpretation of the proceedings on record.
As explained above, construing the statement of decision, judgment, and
postjudgment orders together, while admittedly a fairly complicated process, has left us
no doubt that both sides presented issues to the trial court concerning enforcement of the
CC&R's and governing documents, within the meaning of section 1354. The rule is that
sanctions should be used sparingly to deter only the most egregious conduct. (Flaherty,
supra, 31 Cal.3d at pp. 649-650) This record does not contain clear and convincing
evidence that would cause any reasonable attorney to agree that each of the grounds
advanced by the Varleys, at the various times involved, completely lacked any merit. We
will not conclude that they subjectively and objectively pursued this appeal in bad faith.
(San Bernardino Community Hospital v. Meeks (1986) 187 Cal.App.3d 457, 470;
Flaherty, supra, at pp. 649-650.)
34
DISPOSITION
The judgment and postjudgment orders are affirmed. The motions to dismiss the
appeal and for sanctions are denied. Hooker and the Rodgers parties are awarded their
ordinary costs in connection with the appeal.
HUFFMAN, Acting P. J.
WE CONCUR:
McDONALD, J.
IRION, J.
35
AI Brief
AI-generated · verify before citing
Holding. The court affirmed the trial court's judgment and postjudgment orders, holding that the trial court did not abuse its discretion in determining the prevailing party and awarding attorney fees under the development's governing documents and Civil Code section 5975. The court found that the litigation, which involved easement and title disputes, was fundamentally an action to enforce the rights and obligations of the parties under the development's CC&Rs.
Issues
Whether the trial court erred in awarding postjudgment attorney fees and costs under the CC&Rs and Civil Code section 5975.
Whether the trial court properly determined the prevailing party in the litigation.
Whether the appeal was timely filed as to the underlying judgment and postjudgment orders.
Disposition. affirmed
Quotations verified verbatim against the opinion
“The trial court had an adequate basis in the record and did not abuse its discretion in ruling upon the motions for prevailing party determinations, fees and costs.”
“The court finds there is a right to recover attorney's fees pursuant to the Coronado Cays CC&R's, the Wharfage CC&R's as well as Civil Code Section 1354(c) and its successor Civil Code section 5975.”