Storke Ranch Master Association v. Janice Bilotti

Case Number

22CV02623

Case Type

Hearing Date / Time

Mon, 06/03/2024 - 10:00

Nature of Proceedings

Motion For Attorneys’ Fees And Costs Pursuant To Civil Code Section 5975

Tentative Ruling

Storke Ranch Master Association v. Janice Bilotti 

Case No. 22CV02623     

Hearing Date: June 3, 2024                                                    

HEARING:              Motion For Attorneys’ Fees And Costs Pursuant To Civil Code Section 5975

ATTORNEYS:        For Plaintiff Storke Ranch Master Association: Christopher E. Haskell, Shannon Denatale Boyd, Price, Postel & Parma LLP

                                    For Defendant Janice Bilotti: Self-represented 

TENTATIVE RULING:

The motion of plaintiff for attorneys’ fees and costs is granted in part as to the request for an award of attorney fees only. The Court awards attorney’s fees in the amount of $97,372 in favor of plaintiff Storke Ranch Master Association and against defendant Janice Bilotti, individually and as Trustee of the Janice Bilotti Revocable Trust Dated May 19, 2005. Except as otherwise herein granted, the motion is denied as to plaintiff’s request for an award of costs.

Background:

On July 11, 2022, plaintiff Storke Ranch Master Association (the Association) filed its complaint against defendant Janice Bilotti, individually and as trustee of the Janice Bilotti Revocable Trust dated May 19, 2005 (Bilotti) asserting five causes of action arising out of allegations that Bilotti has failed to comply with requirements of the Association’s conditions, covenants, and restrictions (CC&Rs): (1) breach of contract (CC&Rs); (2) negligence; (3) declaratory relief; (4) breach of implied covenant of good faith and fair dealing; and (5) preliminary and permanent injunctive relief. As alleged in the complaint:

The Association is a homeowner’s association whose purpose is to operate, maintain, and manage, as described in the CC&Rs, a common interest development known as the Stork Ranch Properties (SR Properties). (Compl., ¶¶ 1-2 & Exh. 1.) The CC&Rs of the Association were recorded on June 7, 1999, and are binding on all homeowners within the Association who are members of the Association. (Id. at ¶¶ 2, 12-13.)

Bilotti owns real property located at 6838 Silkberry Lane, in Goleta, California (the property), which is within the SR Properties. (Id. at ¶ 5.) The property is part of the Association and subject to the CC&Rs. (Id. at ¶¶ 4-5.) Bilotti violated the CC&Rs by: (1) constructing an unauthorized fence extension exceeding five feet in height in breach of Article V, sections 5.02 and 5.03, of the CC&Rs; (2) using or leasing the property as a rental or student dormitory and making interior modifications to divide interior space without permits, inspections, or notice to the Association in breach of Article V, sections 5.02 and 5.03, of the CC&Rs); and converting garage space and a backyard shed at the property into bedroom, kitchen, and living spaces without permits, inspections, or notice to the Association and installing backyard sheds and a pergola without approval from the Association and which do not meet setback standards of the City of Goleta in breach of Article IX, sections 9.01, 9.02, and 9.05, of the CC&Rs. (Id. at ¶¶ 14-32.)

Based on Bilotti’s failure to comply with the CC&Rs, the Association requested the termination and copies of all current leases for the property, access to the property to conduct a full interior and exterior inspection, and the removal of unapproved or unpermitted construction at the property. (Compl., ¶¶ 34-36.) On May 2, 2022, the Association and Bilotti attended a mediation. (Id. at ¶ 38.) Bilotti continues to engage in conduct prohibited by, and refuses to comply with, the CC&Rs. (Id. at ¶ 39.)

On October 12, 2022, Bilotti filed her answer to the complaint generally denying its allegations and asserting multiple affirmative defenses.

On March 4, 2024, the Association filed a request for dismissal of the complaint, without prejudice.

On March 7, 2024, the Association filed a motion for an award of attorneys’ fees and costs under Civil Code section 5975 on the grounds that the Association is the prevailing party in this action. The Association seeks attorneys’ fees in the amount of $97,372 and costs in the amount of $2,582.05, for a total award of $99,954.05.

In support of the present motion, the Association submits the declaration of its counsel, Christopher E. Haskell (Haskell), who declares that the property consists of a 3-bedroom unit. (Haskell Decl., ¶ 2.) On December 8, 2021, the City of Goleta (the City) issued a Notice of Violation regarding the property. (Id. at ¶ 5 & Exh. 1.) On December 13 and 14, 2021, the Association invited Bilotti to attend a dispute resolution meeting scheduled on January 11, 2022. (Id. at ¶¶ 6-7 & Exhs. 2, 3.) Bilotti denied any wrongdoing and did not attend the dispute resolution meeting. (Id. at ¶ 7.)

On May 2, 2022, the Association and Bilotti attended a one-day mediation session which was unsuccessful and which was followed by additional attempts to settle this matter. (Haskell Decl., ¶ 8.) Thereafter, the Association filed the present complaint. (Id. at ¶ 9.)

On January 4, 2023, the City issued a second Notice of Violation regarding the property, and on February 7, 2023, issued a final Notice of Violation. (Haskell Decl., ¶¶ 10-11 & Exhs. 4, 5.) On May 5, 2023, Haskell received an email from Bilotti stating that she had submitted an “ADU” application regarding the garage and providing a copy of the site plans. (Id. at ¶ 12 & Exh. 6.) On June 7, 2023, the City issued a building permit for the conversion of the garage to a junior accessory dwelling unit. (Id. at ¶ 13 & Exh. 7.)

Since 2021, the Association has made repeated requests for a site inspection as permitted under the CC&Rs which Bilotti has refused to allow. (Haskell Decl., ¶ 14.) On November 8, 2022, the Association served a formal demand for a site inspection under Code of Civil Procedure section 2031, requesting an inspection on December 15, 2022. (Ibid.) After the Association accommodated Bilotti’s requests to continue the inspection, Bilotti denied the Association an opportunity to visit the site. (Ibid.) The Association thereafter filed a motion to compel a site inspection which was granted by the Court on July 10, 2023. (Id. at ¶ 14 & Exh. 8 [Notice of July 10, 2023, Ruling].) Bilotti allowed the Association to access the property for the site inspection on August 17, 2023. (Id. at ¶ 14.)

During the August 17, 2023, site inspection, Haskell observed that Bilotti had removed the fence extension and restored the fence height to the five feet height limitation approved by the CC&Rs, had removed one of the two unapproved backyard sheds, was using the remaining shed to store personal items and not for habitation, and had removed the unapproved pergola. (Haskell Decl., ¶ 16.) Haskell observed one bed in each of the bedrooms, did not observe other beds on the first floor of the house, and observed that no areas downstairs appeared to be inhabited. (Id. at ¶ 17.) In addition, the garage was in the process of being permitted as an “ADU”. (Ibid.)

Bilotti sold the property on October 24, 2023, but continued to resolve building code issues. (Haskell Decl., ¶ 18.) On January 31, 2024, the City’s code compliance officer advised Haskell that the accessory dwelling unit project at the property had passed final inspection and confirmed that two accessory structures (i.e., sheds) had been removed. (Id. at ¶ 19.) A notice from the City indicated that all violations at the property were resolved. (Id. at ¶ 19 & Exh. 9 [Jan. 31, 2024, email from Code Compliance Officer Albert Torres].)

The Association also submits the declaration of Hendrik Stotz who declares that he rented a space in the living room at the property from September 30, 2021, through November 4, 2021. (Stotz Decl., ¶ 4.) In his declaration, Stotz describes living conditions he observed at the property during his tenancy. (Id. at ¶¶ 5-7.)

The motion of the Association is opposed by Bilotti. In her declaration submitted in support of the opposition, Bilotti asserts that the attorneys’ fees sought by the Association are excessive, unreasonable, inaccurate, and fraudulent because they include improper items such as transportation to and from the courthouse and fees that were incurred in communicating with the new owners after Bilotti sold the property. (Bilotti Decl., ¶¶ 3-8, 18-19, 29.) Bilotti also contends that the Association has changed or updated the CC&Rs to allow the issues it claimed were violations of the CC&Rs and that the claims asserted by the Association in this matter were brought after applicable statutes of limitations had run. (Id. at ¶¶ 9-10 & 12-14.) Further, Bilotti asserts that the expert hired by the Association is not qualified to serve as an expert witness in this matter. (Id. at ¶ 22.)

Bilotti declares that she collects disability due to mental health issues and has no income. (Bilotti Decl., ¶¶ 19, 24, 44.) Bilotti also submits evidence to show that the Association offered to settle this matter in November 2023 for the sum of $35,000. (Id. at ¶¶ 30-33 & Exhs. 17-19.)

Analysis:

The Association’s request for an award of attorneys’ fees:

Civil Code section 4000 et seq. (the Davis-Stirling Common Interest Development Act or the Act) “governs an action to enforce the recorded CC&Rs of a common interest development. “ (Champir, LLC v. Fairbanks Ranch Assn. (2021) 66 Cal.App.5th 583, 590 (Champir).) (Note: Undesignated code references shall be to the Civil Code unless otherwise indicated.) Under section 5975 of the Act, “[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney's fees and costs.” (Civ. Code, § 5975, subd. (c); see also Salehi v. Surfside III Condominium Owners' Assn. (2011) 200 Cal.App.4th 1146, 1152 (Salehi) [the court must award fees under the Act as a matter of right if statutory conditions are satisfied].)

Though the Act does not define the term “prevailing party”, “the test for prevailing party is a pragmatic one, namely whether a party prevailed on a practical level by achieving its main litigation objectives.” (Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 773.) “In determining the prevailing party under the … Act, ‘the trial court should “compare the relief awarded on the ... claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made ... by ‘a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.’ ” ’ [Citations.]” (Champir, supra, 66 Cal.App.5th at p. 592; see also Salehi, supra, 200 Cal.App.4th at p. 1156 [the court is guided by equitable considerations when assessing the litigation success of a party under the Act].)

Broadly speaking, the primary cause of action alleged in the complaint of the Association relates to whether Bilotti breached the CC&Rs by engaging in the conduct described in the complaint and above. In the complaint, the Association seeks to enforce the CC&Rs against Bilotti by requiring Bilotti to bring the property into compliance and by prohibiting Bilotti from engaging in the construction and other activities described in the complaint which the Association contends are a breach of the CC&Rs. The Association also seeks a declaration of the parties’ respective rights and responsibilities under the CC&Rs with respect to the property.

Available information indicates, and Bilotti does not dispute that, the modifications, alterations, and corrective actions described in the Haskell declaration and above were undertaken by Bilotti after the Association initiated dispute resolution efforts described above and filed the present complaint. The corrective actions described in the Haskell declaration, in significant part, directly address the breaches expressly alleged in the complaint. For example, and as further discussed above, available information and evidence demonstrates or indicates that Bilotti removed the unauthorized fence extension and a backyard shed alleged to be in violation of the CC&Rs, has ceased leasing the property also alleged to be a violation of the CC&Rs, and corrected permitting issues relating to an “ADU” at the property.

Based on the information and evidence offered in the supporting Haskell declaration, the Association has shown that it met its objectives in filing the present complaint and was successful in its efforts to achieve Bilotti’s compliance with the CC&Rs. Because available information and evidence demonstrates that the Association achieved its primary litigation objective to enforce and bring the property into compliance with the CC&Rs, the Court finds that the Association is the prevailing party in this action and is entitled to an award of reasonable attorney fees. (See Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 263 (Rancho Mirage) [trial court had no discretion to deny attorneys’ fees once it determined the homeowner’s association plaintiff to be the prevailing party in the action].)
 

Bilotti contends that the attorneys’ fees claimed in the motion are not reasonable for reasons further discussed above. “The magnitude of what constitutes a reasonable award of attorney fees is … a matter committed to the discretion of the trial court.” (Rancho Mirage, supra, 2 Cal.App.5th at p. 263.)

To determine a reasonable award of attorney fees under the circumstances present here, the court “ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. ‘California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.’ [Citation.] The reasonable hourly rate is that prevailing in the community for similar work. [Citations.] The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. [Citation.] Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary. [Citation.]” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095; see also Rancho Mirage, supra, 2 Cal.App.5th at p. 263 [discussion of lodestar method to determine a reasonable fee under section 5975].)

The lodestar analysis generally begins by the court’s review of the attorney’s time records which, if verified, are “entitled to credence in the absence of a clear indication the records are erroneous[.]” (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 396 (Horsford); see also Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 562-563 (Premier) [if fee request is supported by sufficient declarations and documentation, a challenge to the fee request requires similar proof].) The court must exercise its discretion in a manner that results in full compensation for the attorney services provided to the client, which may also include fees incurred to pursue a claim for attorney’s fees. (Horsford, supra, 132 Cal.App.4th at pp. 395-396; Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 580.) Further, “[t]he court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009.)

Haskell declares that he has been practicing law for over 37 years and that his partner, Shannon DeNatale Boyd, has been practicing law for more than 13 years. (Haskell Decl., ¶ 26.) Counsel’s standard hourly rate for homeowner association matters such as the present action is $415 per hour, which counsel asserts is consistent with or lower than the billing rates in the Santa Barbara area for attorneys with comparable experience. (Ibid.) Haskell also provides copies of counsel’s monthly statements and an itemized accounting of costs incurred by the Association in this matter. (See id. at ¶ 24 & Exh. 11.)

The monthly statements submitted in support of the motion reflect hours spent by counsel for the Association to review and analyze the CC&Rs and other documents relating to the present dispute, to communicate with Bilotti regarding the present dispute, to engage in efforts to resolve this matter through settlement, to review communications with building inspectors and other City personnel regarding pending code violations and the status of pending permits with respect, to review inspection reports from the City, to prepare for and attend a mediation with Bilotti, to prepare the complaint filed in this matter, to prepare discovery served on Bilotti in this action and to review responses to discovery served by Bilotti, to address discovery disputes including the preparation and filing of discovery motions in this matter, to attend Case Management Conferences and other hearings, and to schedule, prepare for, and attend the site inspection further described above. (Haskell Decl., Exh. 11.)

Based on the information contained in the Haskell declaration, the Court finds that the hours spent by counsel in this matter are reasonable for this type of litigation. In addition, the services for which compensation is sought appear to have been necessary and useful to pursuing the Association’s claims against Bilotti. Further, based on its own familiarity with the legal market and information provided by Haskell regarding counsel’s experience and relevant area of expertise, the Court finds the hourly rates charged by counsel to be reasonable for the Santa Barbara area. (In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 587-588 [the trial court may rely on its own experience and knowledge, when provided with pertinent facts, to determine reasonable value of an attorney’s services].)

Though Bilotti generally argues that the amount of fees sought in the motion is unreasonable for reasons further discussed above, Bilotti does not point to any specific items apart from the general arguments noted above which are insufficient to show that the time expended or the hourly rate billed is unreasonable. For these reasons, Bilotti has not sufficiently opposed the Association’s showing. (See Premier, supra, 163 Cal.App.4th at p. 564 [“it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice”].)

For all reasons discussed above, based on the information and evidence offered by the Association and under the totality of the circumstances present here, the Court finds that the hourly rate billed by counsel is reasonable, and that the fees incurred in pursuing the Association’s claims in this action are reasonable based on the hours spent by counsel on this matter, counsel’s hourly rates, the nature of this litigation, the success of the Association in achieving its litigation objectives, and counsel’s experience in the type of work demanded. Accordingly, the Court finds that an award of attorneys’ fees in the amount of $97,372, as requested by the Association, is appropriate and reasonable. Therefore, the Court will grant the motion, in part as to the Association’s request for an award of attorney fees.

Costs:

In the motion, the Association also requests an award of $2,582.05 for costs incurred in this matter. For purposes of a cost award under subdivision (c) of section 5975, the Association is the prevailing party for all reasons further discussed above. (Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1572-1574 [statute authorizing a prevailing party to recover costs does not necessarily define the term “prevailing party” under section 5975].)

Code of Civil Procedure section 1033.5, subdivision (a), sets forth items which are allowable as costs recoverable by a prevailing party under Code of Civil Procedure section 1032. “A prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first. The memorandum of costs must be verified by a statement of the party, attorney, or agent that to the best of his or her knowledge the items of cost are correct and were necessarily incurred in the case.” (Cal. Rules of Court, rule 3.1700(a)(1).)

Available information, including the Court’s own records, indicates that the Association has not filed a verified memorandum of costs as required by California Rules of Court, rule 3.1700(a)(1). Therefore, the Court will deny the present motion as to the request by the Association for an award of costs in the amount of $2,582.05. As the record before the Court also appears to indicate that the time within which the Association is required to file and serve a verified memorandum of costs has not run, the Court’s denial of the motion as to the request for a cost award is without prejudice to the future filing and service of an appropriate and verified memorandum of costs.