280 P.3d 1133
Wash. Ct. App.2012Background
- Bunneys built a home in Holmes Harbor Estates exceeding the 15-foot height covenant; HOA board reviewed plans for compliance.
- July 2007: associations rejected Bunneys’ plans by at least 6 feet in height.
- November 19, 2007: letter warned of suit if construction proceeded; Bunneys continued and completed the house in November 2008.
- May 14, 2008: associations sued for covenant violation; bench trial held in October 2010.
- Trial court found bad faith and ordered modification; covenant lacked a prevailing party attorney‑fee provision; fees awarded to associations.
- On appeal, court affirms modification but reverses attorney‑fee award, holding prelitigation bad faith not a proper equitable basis here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the suit qualifies as a “suit to enjoin the construction.” | Bunneys argue no injunctive language; not a suit to enjoin. | Associations contend relief sought functionally equivalent to injunction (modification). | Yes; the suit qualified as a suit to enjoin the construction. |
| Whether prelitigation bad faith supports attorney fees absent contract or statute. | Associations rely on inherent equitable powers for bad‑faith prelitigation. | Bunneys contend no authority to award fees prelitigation. | No; prelitigation bad faith not a proper basis for fees here. |
| Whether inherent powers permit fees for prelitigation misconduct when it does not threaten court authority. | Inherent powers allow sanctions for bad faith to protect court integrity. | No direct attack on judicial authority; not sanctionable under inherent power. | Not permissible; no proper use of inherent power to award fees. |
| Whether modification of the Bunneys’ home to comply should be affirmed. | Modification is required to enforce covenant. | Affirmed the modification order. |
Key Cases Cited
- Pearsall‑Stipek, 136 Wn.2d 255 (Wash. 1998) (abuse of discretion standard for attorney fees; inherent equitable powers)
- Hsu Ying Li v. Tang, 87 Wn.2d 796 (Wash. 1976) (limited equitable basis for fee recovery in certain contexts)
- Rogerson Hiller Corp. v. Port of Port Angeles, 96 Wn. App. 918 (Wash. App. 1999) (inherent powers; prelitigation bad faith discussed)
- Shimman v. Int’l Union of Operating Eng’rs, Local 18, 744 F.2d 1226 (6th Cir. 1984) (American Rule; limits on awarding fees for bad faith in underlying merits)
- Bell v. School Board, 321 F.2d 494 (4th Cir. 1963) (prelitigation misconduct as equitable sanction to protect rights)