[WSBARP] HOAs and Atty Fees

[Darrin Class]

How about the Individual/Special Assessment sections of the CCR's? Some are fairly broad and could be a vehicle for recovery.

I'm looking at one now that reads "The Board of Directors shall have the power to levy special assessments against an Owner ... to collect amounts due to the Association from an Owner for breach of the Owner's obligations under the Declaration, the Bylaws, or the Rules and Regulations...."

You could also look to the HOA's Rules & Regulations and its fine schedule.



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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 2:03 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] HOAs and Atty Fees

Arf, indeed!  I knew this was a shot in the dark.

Thanks, Rob.  You have confirmed my understanding that this is a muddled area.  The HOA's language refers to an: 1) "enforcement proceeding," 2) "whether in law or equity", 3) and awarded by the "court."  I think this all points up to the conclusion that the drafters intended for the prevailing party to receive atty fees only in the context of litigation.    But you never know that the courts will say so that's why I asked the question.

BTW, this is a huge development and highly unlikely to ever revised their CC&Rs.



From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rob Wilson-Hoss
Sent: Thursday, April 21, 2016 1:11 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] HOAs and Atty Fees

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
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From: wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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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