[WSBARP] HOAs and Atty Fees

Mon Apr 25 09:55:47 PDT 2016

Plaintiffs in small claim court do not have a right to appeal the results of a dispute over a $5000 dispute .  Only defendants do.  HOA is out of luck.

Josh
Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734

From: Doug Schafer 
Sent: Friday, April 22, 2016 11:59 AM
To: WSBA Real Property Listserv 
Subject: Re: [WSBARP] HOAs and Atty Fees

Woops! Both references in my message to 1991 should have been to 2001.  Doug.

On 4/22/2016 10:18 AM, Paul Neumiller wrote:

  Doug, this certainly falls under the “I didn’t know that” category.  I usually keep my nose out of the SCC arena and took the client’s word for it that they had 30 days to appeal the SCC decision.

  From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Doug Schafer
  Sent: Thursday, April 21, 2016 4:35 PM
  To: WSBA Real Property Listserv mailto:wsbarp at lists.wsbarppt.com
  Subject: Re: [WSBARP] HOAs and Atty Fees

  Paul, you wrote that the HOA was considering an appeal of the small claims court (SCC) case, and inquired about relevant cases. I believe that it is not widely known among lawyers that an appeal of a SCC case in not a RALJ appeal -- additional argument and briefing are not allowed in the appeal of a SCC case (unlike a RALJ appeal).  The superior court judge or commissioner simply listens, in chambers (or wherever), to an audio recording of the SCC hearing, reviews the written record, and makes a ruling.  So even if there are relevant cases that were not presented to the SCC judge, the HOA should not on appeal be allowed to brief and argue those relevant cases to the reviewing superior court judge.

  The 2013 SCC booklet by the NW Justice Project states:

  "If you appeal, the superior court (not small claims court) will consider your appeal. The superior court will only look at the written record and evidence from your original small claims court trial.8 That means, unless the superior court says so, you may not bring new evidence or speak to support your claim again. There will be no jury, no lawyers, or new claims, unless the superior court allows them."
  http://www.washingtonlawhelp.org/issues/consumer-debt/small-claims-court

  I disagree with that passage's inclusion of "unless the superior court says so" because the 2001 legislation that changed the appellate review from a "trial de novo" to a "de novo review of the record" amended RCW 12.36.055 and struck the previous language that allowed parties equal argument time and the previous language stating that the reviewing judge might grant permission for additional evidence and testimony.  The House Bill Report for the 1991 bill summarized testimony in support of it:  "Both the superior and district courts feel this bill would be helpful by speeding up reviews of small claims appeals. Superior court judges can conduct them during the down time, and they will not be required to schedule time for witnesses to appear."  So appellate review of a SCC ruling is an unscheduled "down time review."

  I attach the 1991 legislation to which I have appended its Senate and House bill reports.

  Doug Schafer, in Tacoma.

  On 4/21/2016 2:03 PM, Paul Neumiller wrote:

    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] On Behalf Of Rob Wilson-Hoss
    Sent: Thursday, April 21, 2016 1:11 PM
    To: 'WSBA Real Property Listserv' 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 
    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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