[WSBARP] HOAs and Atty Fees

[Rob Wilson-Hoss]

Paul,

 

          I think this is going to depend on the language of the governing
documents. In order to get attorney fees, as you know, you need a basis in
contract or statute or equity or some other source. Association governing
documents can provide that basis, but some of them clearly say, upon
litigation, and some say, whenever a lawyer is asked to think about this at
all whether or not the matter proceeds to litigation. Mine say, 

 

If the Board of Directors is required to expend any funds, with or without
litigation, in pursuit of the collection of any assessments, as defined
herein, including the payment of any real property or other taxes associated
with the subject lot; the assertion of or defense to any claims regarding
the authority, jurisdiction or exercise of any of the powers of the
Association; the assertion of or defense to any claims regarding the
personal or real property of the Association; the correction of any
violation of Fabulous Acres Country Club covenants and/or rules; or with
regard to any other dispute concerning its actions and/or powers; all
expenses, including but not limited to attorney, accountant, other expert,
title report and surveyor fees; lot condition remediation costs; and all
other costs of litigation, including court and discovery expenses; and any
and all other amounts reasonably expended in the process of collection,
dispute resolution or correction; shall be paid by the member or person or
other entity responsible.

 

          Of course, whether your recorded running covenants allow that, or
allow you to amend to that, after Chiwawa, is another question entirely. 

 

          Arf (always the last word in any discussion that involves
Chiwawa).

 

          The second question is, what does 64.38.050 mean, exactly? I have
heard of judges saying, no, you can't get fees under the statute because the
dispute does not involve a "violation of the provisions of this chapter...."
But the provisions of the chapter include the very expansive language about
the rights of the association, at .020, including fines and so on; and
especially as the fining authority is spelled out, the underlying dispute
that resulted in the fines was really a dispute that the association had the
right to do what it did. Which is a dispute about the authority of the
association under the powers statute, so it really is about a violation of
the provisions of the chapter. And really, a strict reading of .050 pretty
much eliminates its use as a basis for attorney fees in most real life
situations. To me, that is the most telling way of looking at it. A strict
reading means, a general member is telling the Board, you have violated your
duties under this chapter," but there is no direct chapter provision that
says to general members, you all have to follow the rules. So does that mean
that in practical effect, the attorney fee provision is only available to
use against associations? What a disaster that would be - general members
playing gotcha with small rules and getting attorney fee awards, while
associations can't get attorney fees for exercising their statutory powers.


 

          But this is so far beyond what most Superior Court judges, let
alone District Court judges, ever see or get training about; and from what
we have seen lately, the appellate interpretations of the HOA Act have been,
at the very least, "interesting." You can expect to get a different response
from different judges. There is very little predictability in much of real
property law, and that is especially true for HOA decisions 

 

Rob

 

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999

www.hossandwilson-hoss.com
rob at hctc.com

 

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From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Thursday, April 21, 2016 11:34 AM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] HOAs and Atty Fees

 

HOA member engages in violation behavior.  HOA holds many meetings and
starts the fining process.  Both sides “lawyer up” and multiple letters are
exchanged.  Member backs down and fixes violation before any court action is
taken.  HOA spent about $5k in attorney fees getting to that point.  The
HOA’s CC&Rs state the “the party prevailing in any enforcement proceeding,
whether in law or equity, shall have from his opponent any attorney’s fees
that the court may deem reasonable.”  So, for grins and giggles, the HOA
took the member to small claims court to recoup its attorney fees.  Court
said “not so fast, there was no court action here so the CC&Rs atty fees
provision and RCW 64.38.050 don’t apply”.   (HOA has 30 days to appeal
decision.)  My research is reveals nothing regarding recouping attorney fees
when there is no court action under these circumstances.  All reported cases
citing  RCW 64.38.050 involve filed cases.  Any cases out there?   

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