Arbitration/Fees/: HOA’s Dismissal of Arbitration Against Management Company Results In Award of Attorney’s Fees Against HOA

HOA Was Not Spared Fees Because It Initiated Arbitration, And Fees Clause Was Broad Enough To Cover Situation

     Plaintiff homeowners association, Lakeside Club Villas, Inc., settled with developer defendants, and therefore voluntarily dismissed an arbitration against defendant property management company.  The management company brought a successful motion to obtain attorney fees.  The HOA appealed, arguing that, because it voluntarily dismissed the arbitration, the management company was not the prevailing party.  Lakeside Club Villas, Inc. v. LB Property Management, Inc., Case No. B236001 (2nd Dist. Div. 5 October 16, 2012) (Armstrong, J.) (unpublished).

     Under Civil Code section 1717, a voluntary dismissal may save a losing party from having to pay attorney’s fees on a contract claim.  But that didn’t work here, because the fees clause was “sufficiently broad to allow such fees on the noncontract claim, but are limited to those associated with the arbitration of the dispute.”

     The HOA’s contention depended “upon the premise that there was no arbitration.”  No go.  “A JAMS arbitration is commenced by filing the Demand for Arbitration, a copy of the agreement containing the arbitration provision, and the filing fee.”  And the HOA did that.