Salehi v. Surfside III Condominium Owners Ass'n
200 Cal. App. 4th 1146
| Cal. Ct. App. | 2011Background
- Salehi, a licensed attorney and condo owner, filed suit in propria persona against the Association in May 2008 alleging 10 causes of action under CC&Rs regarding maintenance and reserve funding.
- Association incurred approximately $252,767 in attorney fees defending the eight causes voluntarily dismissed by Salehi before trial.
- Salehi dismissed eight causes on January 8, 2010, arguing the expert was unavailable; two claims for negligent misrepresentation and fraud remained.
- The trial court denied Association’s motion for attorney fees under Civ. Code § 1354, citing Heather Farms, and the Association appealed for fee recovery.
- The appellate court held the trial court abused its discretion and that Association was the prevailing party on a practical level, entitled to attorney fees on remand, while Salehi’s cross-appeal lacked merit.
- Separately, Salehi’s prior 2004 action had been settled by a broad release in 2005, which the court held barred the 2008 claims for negligent misrepresentation and fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prevailing party under §1354 | Salehi: no practical victory; dismissed actions non-meritorious. | Association: dismissed actions equate to real litigation objectives met. | Association is prevailing party; entitled to fees on remand. |
| Correct measure of prevailing party (practical level) and abuse of discretion | Salehi contends trial court correctly assessed lack of practical victory. | Association: practical objectives were realized despite dismissals. | Trial court abused discretion; Association prevailed on a practical level. |
| Effect of the 2005 Release on the 2008 claims | Salehi argues release did not bar pre-release unknown claims. | Association: release, aided by 1542 waiver, bars 2008 claims. | 2005 release bars negligent misrepresentation and fraud claims in 2008 action. |
| Costs versus attorney fees and remand posture | Salehi challenges fee award and argues costs should reflect only remaining claims. | Association seeks attorney fees under §1354 and costs under §1032 for dismissed actions. | Costs and fee posture affirmed to be addressed on remand; final award to be determined. |
Key Cases Cited
- Heather Farms Homeowners Ass'n v. Robinson, 21 Cal.App.4th 1568 (Cal. Ct. App. 1993) (prevailing party inquiry under §1354 requires practical victory analysis)
- Santisas v. Goodin, 17 Cal.4th 599 (Cal. 1998) (limits automatic fee recovery on dismissals; considers litigation objectives)
- Hsu v. Abbara, 9 Cal.4th 863 (Cal. 1995) (substance over form in determining prevailing party and equitable considerations)
- Winet v. Price, 4 Cal.App.4th 1159 (Cal. Ct. App. 1992) (release scope and 1542 waiver; interpretation of releases encompassing known/unknown claims)
- City of Hope National Medical Center v. Genentech, Inc., 43 Cal.4th 375 (Cal. 2008) (contractual interpretation of releases and when questions are law versus fact)
- Castro v. Superior Court, 116 Cal.App.4th 1010 (Cal. Ct. App. 2004) (equitable considerations guiding litigation outcome)