SOUTH BEVERLY PARK HOMEOWNERS ASSOCIATION, INC. v. NORTH BEVERLY PARK HOMEOWNERS ASSOCIATION, INC. No. B221375.

SOUTH BEVERLY PARK HOMEOWNERS ASSOCIATION, INC., et al., Plaintiffs and Respondents, v. NORTH BEVERLY PARK HOMEOWNERS ASSOCIATION, INC., Defendant and Appellant.

Court of Appeals of California, Second District, Division Three.
Filed August 1, 2011.
Huron Law Group, Jeffrey G. Huron, Ann S. Lee, Phu Nguyen; Horvitz & Levy, Lisa Perrochet, Robert H. Wright; and Philip A. Metson for Defendant and Appellant.
Pine & Pine, Norman Pine, Beverly Tillett Pine and Janet R. Gusdorff for Plaintiffs and Respondents.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

KLEIN, P. J.

Defendant and appellant North Beverly Park Homeowners Association (the North) appeals a postjudgment order awarding attorney fees of $733,536.44 and costs of $93,389.69 to plaintiffs and respondents South Beverly Park Homeowners Association, Inc. (the South) and the individual South homeowners, David Sydorick, Virginia Sydorick, Allison Berg, Laurence Berg, Bob M. Cohen, Michele Cohen, Mo Gharavi, Jennifer Gharavi, Richard Zanuck, Lilly Zanuck, Irving Zuckerman, Peyman Daneshrad, Shadi Daneshrad, Louise Taper, Michael Solomon, Luciana Solomon, Daniel Blatteis, Angela Blatteis, Earvin Johnson, Cookie Johnson, Samuel Jackson and LaTanya Jackson (collectively, the South) following a court trial involving the interpretation of a written grant of an easement.

The threshold issue presented is whether the trial court lost jurisdiction to grant attorney fees to the South. Thereafter, in the event the trial court retained jurisdiction to make an award of attorney fees, the issues are whether the trial court properly found the South was the prevailing party, and whether the North's CC&Rs authorize the award of attorney fees to the South for having prevailed in this litigation involving the North's CC&Rs.

We conclude the trial court acted within its jurisdiction to make the subject order. After initially declining to rule on the attorney fees motion and taking it off calendar, the trial court duly granted reconsideration on its own motion and then awarded attorney fees to the South.

Further, the trial court acted within its discretion in finding the South was the prevailing party. The record fully supports the trial court's determination the South had achieved its litigation objective of access to the easement.

Finally, the trial court properly found the South was the intended third party beneficiary of the North's CC&Rs, specifically, section 24.08 thereof, which gives the South's members, guests and invitees an easement across the North. Because the South prevailed in litigation to enforce the CC&Rs, the South was entitled to recover attorney fees pursuant to the attorney fee provision found at section 17.02 of the North's CC&Rs.

Therefore, the December 21, 2009 order awarding costs and attorney fees to the South, as the prevailing party, is affirmed.1

FACTUAL AND PROCEDURAL BACKGROUND2

1. Facts.

The developments known as North Beverly Park and South Beverly Park were initially conceived as a single community to be built in two phases. The South was built first and consists of 16 homes. The North, which was built later, consists of 64 homes.

a. The easements in favor of the South across the North.

Pursuant to the North's CC&Rs, the South's members have an easement granting them access through two gates and over a roadway in the North. The focus of this controversy was section 24.08 of the North's CC&Rs, which states in relevant part: "Easements in Favor of Members of Beverly Park Homeowners Association [i.e., the South]. There is hereby reserved for the benefit of those Members of [the South] . . . an easement in, over and across the Private Street known as Beverly Park as shown on the Final Map for ingress, egress and access through the Project to Mulholland Drive, Summitridge Drive or Lot 71 of the Final Map. There is hereby reserved for the benefit of the [South] Members an easement in, over and across Lot 71 of the Final Map for ingress, egress, park use and recreational purposes subject to the provisions of this Declaration. The easements in this Section 24.08 shall be for the exclusive use of the [South] Members and shall be subject to the rules and regulations established by the Association and the provisions of this Declaration." (Italics added.)

Thus, section 24.08 of the North's CC&Rs granted the following easements for the benefit and exclusive use of South Members: a grant of a right of way on Beverly Park Drive (a private street in the North) for access to and from Mulholland Drive, Summitridge Drive, and Lot 71 (a private four-acre park in the North); and an easement for recreational use of said park.

b. Historical use; the North's change of position in 2007.

Until 2007, the South's owners, as well as their guests and invitees, were able to make the five-minute journey between the South and Mulholland via the easement across the North. An alternative route, in light traffic, would have taken at least 25 minutes.

In mid-2007, the North contended for the first time that only the South's owners could traverse the easement to the South — the South owners' nonresident children, guests, invitees, and construction workers were barred. The North demanded the South pay $125,000, and then a higher amount, for continued access.

The South declined and filed suit.

2. Earlier proceedings, leading up to the prior appeal.

a. Pleadings.

The South's operative fourth amended complaint pled causes of action for declaratory and injunctive relief, private nuisance, reformation and quiet title. The South sought, inter alia, a judicial determination the South's members "are entitled to designate guests and invitees to use their easement rights through [the North]."

b. Trial.

In September 2008, the matter came on for a court trial. The witnesses included Brian Adler, a real estate broker and developer who was principally responsible for developing both the North and the South subdivisions. Adler testified he originally planned to develop Beverly Park as one community, and to grant the South members and their guests and invitees in perpetuity the same access through the North as the North guests and invitees enjoyed. "The intent was perfectly clear. It was a no-brainer." It was merely due to an oversight that the words "guests and invitees" appeared only in section 24.06 of the North's CC&Rs, pertaining to the internal easement within the North for the benefit of North members, and were omitted from section 24.08, pertaining to the easement in favor of the South members.

c. Trial court's ruling with respect to scope of the easement.

The trial court found the language of section 24.08 was ambiguous as to whether use of the easement was strictly limited to the individuals who were South members/owners, or whether use of the easement extended to their guests and invitees. The trial court ruled, "Having provisionally admitted extrinsic evidence of intent, this court finds that the easement language is fairly susceptible to more than one interpretation, and therefore, evidence of the actual intent of the primary grantor, Brian Adler, and the understanding of the North's and South's homeowners through their words and actions determines the extent of the easement in section 24.08." The trial court concluded "[t]he testimony of Brian Adler, as well as the circumstantial evidence . . ., is sufficient to establish plaintiffs' claim in the cause of action for declaratory relief. The court finds that the easement described in Section 24.08 of the North Beverly Park CC&Rs recorded in 1989, includes Beverly Park Homeowner Members as well as their guests and invitees." (Italics added.)

On May 21, 2009, the trial court entered judgment reforming section 24.08 of the North's CC&Rs to add the words "and their guests and invitees" to the persons benefited by the South's easements.

The North appealed the judgment.

d. The previous appeal.

In Beverly Park I, filed August 19, 2010, we concluded the trial court properly found the grant of easement was ambiguous, the trial court properly received extrinsic evidence to determine the proper interpretation of the grant, and that the trial court's resolution of the ambiguity was supported by substantial evidence. Therefore, we affirmed the judgment.

On November 10, 2010, the Supreme Court denied a petition for review.

3. Post-trial proceedings relating to attorney fees and costs.

a. The South seeks costs and attorney fees as the prevailing party.

On June 12, 2009, during the pendency of the prior appeal, the South filed a memorandum of costs in the superior court, seeking $113,018. The North filed a motion to tax costs, on the ground the South was not the prevailing party because the South had voluntarily dismissed its causes of action for quiet title and nuisance against the North and all of its causes of action against the individual North homeowners, and the South did not obtain any monetary relief. Given those circumstances, the North contended there was no prevailing party.

Thereafter, the South filed a motion for leave to file an amended memorandum of costs, seeking additional costs. The North opposed that motion as well, contending the South waived any costs it failed to include in its original cost bill.

In addition to seeking costs, the South filed a motion for attorney fees, seeking an award of $2,200,875 pursuant to the attorney fees provision found at section 17.02 of the North's CC&Rs.3 The South contended it was the prevailing party in the action and was entitled to recover its attorney fees and costs under the following bases: the North's CC&R provisions; statutory authority including Civil Code section 1717 (action on a contract) and Civil Code section 1354 (prevailing party in dispute over CC&Rs); judicial admissions by the North; and the North's failure to respond to/deny the South's request for admissions.

b. The North's opposition to the South's request for attorney fees.

In opposition, the North contended the South was not the prevailing party because the South did not obtain any monetary relief, did not prevail against the North's individual homeowners, and did not prevail on the entirety of its claims against the North. The North further argued the South could not recover attorney fees pursuant to the attorney fee provision in the North's CC&Rs because the South was not a party to the North's CC&Rs, nor was the South an intended third party beneficiary of the attorney fee provision in the North's CC&Rs.

With respect to Civil Code section 1354, the North argued that statute did not authorize attorney fees to the South because it applies only to owners within a development or association, not to a neighboring association. The North also denied the South was entitled to recover attorney fees by virtue of any judicial admission by the North or as a result of the North's denial of requests for admissions.

c. At the hearing on the motion to tax costs, the trial court determined there was no prevailing party and took the attorney fee motion off calendar as moot.

On August 24, 2009, the motion to tax costs came on for hearing. The trial court indicated "I don't even have a tentative," heard the arguments of counsel and took the matter under submission.

On August 26, 2009, the trial court issued a minute order, finding "there was no prevailing party within the meaning of Code of Civil Procedure § 1032(a)(4) and exercise[d] its discretion to deny costs to all involved."4 The trial court reasoned neither the North nor the South had a net monetary recovery, the South only obtained relief in terms of reformation of section 24.08 of the North's CC&Rs to permit the South's guests and invitees to use the easement, and the North's individual homeowners "obtained voluntary dismissals as to each cause of action, and all defendants obtained voluntary dismissals on the quiet title and nuisance claims."

Based on the trial court's determination there was no prevailing party and therefore no entitlement to costs, the August 26, 2009 minute order stated that both the South's motion to amend its memorandum of costs, and the South's attorney fee motion, scheduled to be heard August 28, 2009, were "moot and placed off calendar."

d. The South seeks clarification of the August 26, 2009 order.

As noted, the trial court ruled the South's motion for attorney fees was "moot and placed off calendar." Given the disposition of the attorney fee motion, the South was concerned that if it appealed the August 26, 2009 order, it would be left open to the argument that the attorney fee motion had not been ruled on "and is thus not ripe for appeal." Therefore, on September 8, 2009, the South filed a motion for a formal ruling on the attorney fee motion, prior to October 15, 2009, "so that any notice of appeal of the Court's August 26, 2009 order may be timely filed." The South asserted its request for a clarification was "ministerial in nature," and although a hearing date had been reserved, a hearing was not required.

In opposition, the North argued the South had not shown any authority for the requested relief and had not established any need for the requested relief.

e. On October 9, 2009, the trial court grants reconsideration of the August 26, 2009 order on its own motion.

On October 9, 2009, the South's motion for clarification of the August 26, 2009 order came on for hearing. The transcript of the October 9, 2009 reflects at that juncture, the trial court granted reconsideration of the August 26, 2009 order on its own motion.

At the outset, the trial court stated to the South's counsel: "The only way that you can get before this court at this point is if the court exercises its discretion, because [section] 1008 no longer applies. . . . [¶] . . . [¶] . . . I've been unhappy with this particular issue of prevailing party. I find it more difficult than the issues in the case itself. I've reconsidered this since the motion was first brought. In fact, I was considering it even after — before the motion was brought, because I anticipated this. I've gone back and forth on this. And I was hoping this would be done before the clarification request. [¶] You know — and this morning, when I was coming in, I was simply — regardless of whether anybody was here, I was thinking of simply taking this under submission again to reconsider the issues." (Italics added.)

With respect to the merits of the prevailing party issue, the trial court then stated: "I'm going to ask the defense to comment on it. That is the whole point of the fight in this case . . . was to gain entry for the guests, invitees. And, if you look at it that way, does it really matter how many [individual] defendants were filed on and then dismissed, how many [causes of action] there were that didn't go forward? The whole issue was a tactical dance to gain entry for a particular group of people. [¶] And, if you analyze it that way, if you look at it that way, didn't the plaintiff really win practically — I wouldn't say everything, but they won their objective in this[.]" (Italics added.)

Jeffrey Huron (Huron), the North's counsel then stated, "I feel like we're re-arguing the [previous] motion."

The trial court responded, "You are, because I'm asking you to. And I'm telling you that I'm unhappy with my initial decision." (Italics added.)

Huron then stated: "If the court is going to reconsider the decision, I think, under the case law, it's one of the recent Supreme Court cases where we're entitled to notice and opportunity to re-brief this, if necessary."

The trial court then inquired: "Is there really something new to brief . . .?" (Italics added.)

Huron replied, "I don't think so. I think I can answer your question." (Italics added.) Huron then proceeded to argue the South was not the prevailing party, and that there was no basis under the CC&Rs or under law to award attorney fees to the South. Huron assserted the South had failed to meet its burden to show it was a third party beneficiary of the attorney fee provision in the North's CC&Rs.

The trial court concluded: "All right, I'll take it under submission. I'll work this over again, and then the parties can go to the Court of Appeal and harangue them."

f. Trial court formally vacates August 26, 2009 order.

On October 23, 2009, two weeks after the trial court granted reconsideration of the August 26, 2009 order on the court's own motion, the South applied ex parte for an order vacating the August 26, 2009 order, "in light of the Court's stated intent to reconsider that order. [¶] This application is based on the fact that although the Court stated on October 9, 2009 that it had second thoughts about and was reconsidering its August 26, 2009 order on [the North's] Motion to Tax Costs, the August Order might be deemed an appealable order. Plaintiffs therefore have no choice but to appeal that order within the mandatory 60 day period and that deadline to file a notice of appeal is Monday, October 26, 2009. . . . Plaintiffs therefore request that, to allow such reconsideration, the Court vacate its August 26, 2009 order."

The North filed opposition to the ex parte application, arguing, inter alia, "Plaintiffs can simply file an appeal from the Order to avoid any possible irreparable harm."

On October 23, 2009, the trial court granted the South's ex parte application and entered an order formally vacating its August 26, 2009 order on the North's motion to tax costs.

g. Trial court's final order determined the South was the prevailing party and awarded it costs and attorney fees.

On December 21, 2009, some two months after the trial court formally vacated its original order on the North's motion to tax costs, the trial court issued a 34-page minute order on the North's motion to tax costs, the South's motion to amend its memorandum of costs, and the South's motion for attorney fees.

The December 21, 2009 order stated in pertinent part: "The court reconsiders its ruling of October 9, 20095 and finds that there was a prevailing party, as explained below. Accordingly, it will rule on all three motions it believed to be obviated by the former finding that there was no prevailing party under Section 1032; specifically, [the South's] motion to file an amended [memorandum] of costs, [the North's] motion to tax costs, and [the South's] motion for attorney's fees."

The trial court found the South was the prevailing party in that it had prevailed on the reformation claim and "obtained at least some of what it was seeking via this action: further access to the easement at issue, and reformation of the North's CC&Rs."

The trial court ruled that as the prevailing party, the South was entitled to recover its costs. The trial court denied the South's motion to amend its memorandum of costs, and it partially granted the North's motion to tax costs. The trial court awarded costs to the South in the sum of $93,389.69.

As the prevailing party, the South also was entitled to recover attorney fees pursuant to section 17.02 of the North's CC&Rs. The trial court found the South was the intended third party beneficiary of the North's CC&Rs, specifically, section 24.08 thereof, which gave the South an easement across the North. Because the South had prevailed in litigation to enforce the North's CC&Rs, the South was entitled to recover attorney fees pursuant to the attorney fee provision found at section 17.02 of the North's CC&Rs. The trial court awarded reasonable attorney fees to the South in the amount of $733,536.44.

h. The instant appeal.

On December 24, 2009, the North filed a timely notice of appeal from the December 21, 2009 postjudgment order awarding attorney fees and costs to the South.

CONTENTIONS

The North contends: the December 21, 2009 order is void because it was entered after the trial court already had entered a postjudgment order denying the identical motion; even if the trial court had jurisdiction, the order should be reversed because neither party prevailed in the action, given the mixed results; and in any event, no contractual provision authorizes an attorney fee award in this case.

DISCUSSION

1. Trial court duly reconsidered the August 26, 2009 order on its own motion.

a. Trial court's inherent power to reconsider an interim order on its own motion.

The leading California Supreme Court case on the issue of a trial court's authority to reconsider an order on its own motion is Le Francois v. Goel (2005) 35 Cal.4th 1094 (Le Francois). In Le Francois, the defendants' motion for summary judgment was denied. More than a year later, some of the same defendants again moved for summary judgment on the same grounds, and this time a different judge granted the motion. The Supreme Court concluded that section 1008, as well as a similar provision in the summary judgment statute (§ 437c, subd. (f)(2)) (the reconsideration statutes), "prohibit a party from making renewed motions not based on new facts or law, but do not limit a court's ability to reconsider its previous interim orders on its own motion, as long as it gives the parties notice that it may do so and a reasonable opportunity to litigate the question." (Le Francois, supra, 35 Cal.4th at pp. 1096-1097.)

In Le Francois, the Supreme Court reversed, because in the case before it, the record reflected that the second judge had not acted on his own motion, but rather, had granted the defendants' renewed summary judgment motion even though that motion did not comply with the reconsideration statutes. (Le Francois, supra, 35 Cal.4th at p. 1109.) In reaching this result, Le Francois explained that "[w]e cannot prevent a party from communicating the view to a court that it should reconsider a prior ruling . . .," and that "it should not matter whether the `judge has an unprovoked flash of understanding in the middle of the night' [citation] or acts in response to a party's suggestion. If a court believes one of its prior interim orders was erroneous, it should be able to correct that error no matter how it came to acquire that belief." (Id. at p. 1108, italics added.)

In a footnote, Le Francois cautioned: "What we say about the court's ability to reconsider interim orders does not necessarily apply to final orders, which present quite different concerns." (Le Francois, supra, 35 Cal.4th at p. 1105, fn. 4.)

b. On October 9, 2009, trial court duly granted reconsideration of the August 26, 2009 order on its own motion; the August 26, 2009 order taking the attorney fee motion off calendar was merely an interim order and therefore the trial court retained jurisdiction to reconsider the matter.

On August 26, 2009, the trial court issued the following order on the motion to tax costs: It found "there was no prevailing party within the meaning of [section] 1032(a)(4) and exercise[d] its discretion to deny costs to all involved."

Based on the trial court's determination there was no prevailing party and therefore no entitlement to costs, the August 26, 2009 minute order stated the two other pending motions, namely, the South's motion to amend its memorandum of costs and the South's attorney fee motion (scheduled to be heard August 28, 2009), were "moot and placed off calendar."

Because the August 26, 2009 order simply took the South's attorney fee motion "off calendar," the August 26, 2009 order merely was an interim ruling with respect to the South's motion for attorney fees, and therefore subject to later reconsideration on the court's own motion.

The North takes the position the August 26, 2009 order was a final order, not an interim order, and thus not subject to reconsideration, because it fully and finally resolved the attorney fee issue. The North's attempt to characterize the "off calendar" ruling as a final determination of the fee issue is erroneous.

Generally, "`where no issue is left for future consideration except the fact of compliance or noncompliance with the terms of the first decree, that decree is final, but where anything further in the nature of judicial action on the part of the court is essential to a final determination of the rights of the parties, the decree is interlocutory.' [Citation.]" (Olson v. Cory (1983) 35 Cal.3d 390, 399, italics added; accord Montegani v. Johnson (2008) 162 Cal.App.4th 1231, 1237.)

The August 26, 2009 ruling, which simply took the South's attorney fee motion "off calendar," did require further proceedings. In taking the attorney fee motion "off calendar," the trial court left the South in a quandary as to whether its attorney fee motion actually had been denied, or merely had been taken off calendar. As a consequence, the South duly brought a motion for clarification of the August 26, 2009 order, so as to be able to perfect an appeal from an order denying its motion for attorney fees — if indeed the trial court had intended its "off calendar" ruling to be a denial of the South's attorney fee motion. Under these circumstances, the August 26, 2009 "off calendar" ruling fell short of fully and finally resolving the South's motion for attorney fees. As such, the August 26, 2009 "off calendar" ruling was merely an interim order and therefore was subject to later reconsideration on the trial court's own motion.

We are also guided by the Supreme Court's analysis in People v. DeLouize (2004) 32 Cal.4th 1223: "Generally speaking, courts may correct judicial error in the making of interim orders . . . . [Citations.] On the other hand, judicial error in the making of a final order or judgment `may not be corrected except pursuant to statutory procedures' or on the limited grounds available for a collateral attack. [Citations.] . . . [¶] . . . [¶] Although courts have sometimes used appealability as a test for distinguishing final orders from interim orders [citations], a better approach here, we think, is to analyze the issue in terms of the policies underlying the general concept of finality. . . . The concept of finality `rests upon the sound policy of limiting litigation by preventing a party who has had one fair adversary hearing on an issue from again drawing it into controversy and subjecting the other party to further expense in its reexamination.'" (Id. at pp. 1231-1232, italics added.)

Here, as of August 26, 2009, the trial court had not held an adversary hearing on the South's attorney fee motion — it merely had taken the attorney fee motion "off calendar." As a consequence, the August 26, 2009 ruling cannot be deemed a final order with respect to the South's motion for attorney fees. Accordingly, the trial court retained jurisdiction to reconsider the matter on its own motion at a later date.

c. No violation of due process.

The North contends that even if the August 26, 2009 order were subject to reconsideration on the court's own motion, the trial court failed to provide the North with due process. The North complains that at the October 9, 2009 hearing, the trial court indicated it was "thinking" of reconsidering the August 26, 2009 order, but it did not solicit additional briefing or hold a further hearing on the matter.

The North's claim of a due process violation is belied by the record. As set forth ante, at the October 9, 2009 hearing, the following colloquy occurred between the trial court and Huron, the North's attorney:

Huron stated, "I feel like we're re-arguing the [previous] motion."

The trial court responded, "You are, because I'm asking you to. And I'm telling you that I'm unhappy with my initial decision." (Italics added.)

Huron then stated: "If the court is going to reconsider the decision, I think, under the case law, it's one of the recent Supreme Court cases where we're entitled to notice and opportunity to re-brief this, if necessary."

The trial court then inquired: "Is there really something new to brief . . .?" (Italics added.)

Huron replied, "I don't think so. I think I can answer your question." (Italics added.) Huron then proceeded to argue that the South was not the prevailing party, and that there was no basis under the CC&Rs or under law to award attorney fees to the South. Huron argued the South had failed to meet its burden to show it was a third party beneficiary of the attorney fee provision in the North's CC&Rs.

The trial court concluded: "All right, I'll take it under submission. I'll work this over again, and then the parties can go to the Court of Appeal and harangue them."

Thus, the record reflects the trial court gave notice to the parties that it intended to reconsider the matter on its own motion, the trial court gave the North's counsel the opportunity to make his arguments, and the North's counsel declined to submit any additional briefing. On this record, there was no due process violation.

2. Trial court acted within its discretion in finding the South was the prevailing party.

As indicated, upon reconsideration, in the December 21, 2009 order, the trial court ruled the South was the prevailing party in that it had prevailed on the reformation claim and "obtained at least some of what it was seeking via this action: further access to the easement at issue, and reformation of the North's CC&Rs."

The North contends the trial court erred in its ultimate determination that the South was the prevailing party. The North contends that because it prevailed on two of the South's causes of action (quiet title and nuisance), because the South did not obtain any monetary recovery, and because the South dismissed its claims against the individual North homeowners, the final outcome was mixed for both sides. The North asserts the trial court made the correct ruling in its initial order on August 26, 2009 order, when it found there was no prevailing party in the action.

a. Standard of review.

A trial court's determination that a litigant is a prevailing party is reviewed for an abuse of discretion. (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332.) The appropriate test for an abuse of discretion is whether the trial court exceeded the bounds of reason, and when two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court. (Id. at p. 1339.)

b. Trial court acted within its discretion in finding the South was the prevailing party.

In "determining litigation success, courts should respect substance rather than form, and to this extent should be guided by `equitable considerations.' For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective." (Hsu v. Abbara (1995) 9 Cal.4th 863, 877, italics ours, original italics omitted.)

Here, the South plainly achieved its main litigation objective. The gravamen of the action was the South's claim its easement across the North was not limited to the South's owners, but also extended to the South's guests and invitees. The South fully prevailed in that regard.

On this record, the trial court clearly acted within the bounds of its discretion in determining the South was the prevailing party in the action.

3. Trial court properly awarded attorney fees to the South pursuant to section 17.02 of the North's CC&Rs.

The remaining issue is the authority for the award of attorney fees to the South as the prevailing party in the action. As explained, we agree with the trial court that the South is the intended beneficiary of the easement specified in section 24.08 of the North's CC&Rs, and therefore the South was entitled to recover attorney fees pursuant to the North's CC&Rs as the prevailing party in the action to enforce said easement.

a. General principles.

Civil Code section 1559, which authorizes enforcement of a contract by an intended third party beneficiary, states: "A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it." The promise in such a situation "is treated as having been made directly to the third party." (Johnson v. Superior Court (2000) 80 Cal.App.4th 1050, 1064.)

"`Generally, it is a question of fact whether a particular third person is an intended beneficiary of a contract,' which we review under the substantial evidence standard." (Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891; accord Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1025.)

b. Trial court properly found the South is the intended beneficiary of section 24.08 of the North's CC&Rs.

Section 24.08 of the North's CC&Rs grants the South's members an easement granting them access through two gates and over a roadway in the North.6 The trial court properly found this easement across the North, in favor of the South, was intended to benefit the South.

As the trial court observed in its December 21, 2009 order: "And it almost goes without saying that no North . . . homeowner or the North . . . Association would file suit against himself/itself to enforce the easement at issue, intended solely to benefit South Beverly Park homeowners." (Italics added.)

The South, by virtue of its status as the intended beneficiary of the easement rights conferred by section 24.08 of the North's CC&Rs, was entitled to enforce section 24.08 by way of the instant lawsuit for reformation and declaratory relief. The South was the prevailing party in said lawsuit, as discussed ante.

The North's CC&Rs entitle the prevailing party, in an action to enforce the CC&Rs, to recover attorney fees. Section 17.02 of the North's CC&Rs states: "Costs and Attorneys' Fees. In the event of any litigation or arbitration resulting from a breach or violation or alleged breach or alleged violation of the provisions of this Declaration [i.e., the Declaration of CC&Rs for the North], the prevailing party shall be entitled to recover costs and expenses, including reasonable attorneys' fees, incurred in connection therewith."

Here, there was litigation by the South against the North arising out of the North's violation of the South's easement rights under section 24.08 of the North's CC&Rs. The South, having prevailed in its action to enforce section 24.08 of the North's CC&Rs, was entitled to an award of reasonable attorneys fees incurred in that action, pursuant to section 17.02 of the North's CC&Rs.

DISPOSITION

The December 21, 2009 order is affirmed in full. Respondents shall recover their costs on appeal.

We concur:

CROSKEY, J.

KITCHING, J.

FootNotes


1. On appeal, the North does not contend the amount of the attorney fee award is excessive. Rather, the North takes the position the South is not entitled to recover attorney fees in any amount.
2. This summary is drawn in part from our prior nonpublished opinion in this matter, (Aug. 19, 2010, B216652) ().
3. Section 17.02 of the North's CC&Rs states: ". In the event of any litigation or arbitration resulting from a breach or violation or alleged breach or alleged violation of the provisions of this Declaration, the prevailing party shall be entitled to recover costs and expenses, including reasonable attorneys' fees, incurred in connection therewith."
4. All further statutory references are to the Code of Civil Procedure, unless otherwise specified.
5. Actually, the trial court was reconsidering its ruling of August 26, 2009 that there was no prevailing party, not the October 9, 2009 ruling. The October 9, 2009 ruling was the ruling granting reconsideration on the court's own motion.
6. Section 24.08 of the North's CC&Rs stated in relevant part: " [i.e., the South]. There is hereby reserved . . . an easement in, over and across the Private Street known as Beverly Park as shown on the Final Map for ingress, egress and access through the Project to Mulholland Drive, Summitridge Drive or Lot 71 of the Final Map. There is hereby reserved an easement in, over and across Lot 71 of the Final Map for ingress, egress, park use and recreational purposes subject to the provisions of this Declaration. The easements in this Section 24.08 shall be and shall be subject to the rules and regulations established by the Association and the provisions of this Declaration." (Italics added.)

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Listed below are the cases that are cited in the Featured Case. Click the citation to see the full text of the cited case. Citations are also linked in the body of the Featured Case.

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Listed below are those cases in which the Featured Case is cited. Click on the case name to see the full text of the citing case.

Citing Cases