Litigation Archives - Epsten, APC

Solving Problems Early: Preventing Lawsuits While Building Community – Handling Homeowner Conflicts Without Lawsuits

Joseph A. Sammartino, Esq.

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858.527.0111
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Practices: Community Association Counsel | Construction Defect Litigation | Civil Litigation | Appellate Litigation

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Community associations often deal with upset homeowners. Sometimes the issues are small, like a neighbor’s barking dog. Other times, the problems are bigger, like unpaid assessments or rule violations. No matter the situation, if it is not handled well, it can quickly escalate and get worse—and even lead to a lawsuit, which will likely be expensive, as well as unnecessary, for everyone involved.

The good news is that there are tools that help calm people down and solve problems before they go too far. Bill Eddy, co-founder of the High Conflict Institute, has developed two simple methods that can help tremendously: BIFF and EAR. These tools are easy to learn and use, and they work well for both board members and managers who want to handle conflicts with homeowners in a respectful and effective way. This article explains how to reduce anger and de-escalate conflicts with homeowners with the ultimate goal of avoiding a lawsuit.

Clear and Respectful Communications to Calm Conflicts – BIFF and EAR

BIFF stands for Brief, Informative, Friendly, and Firm. It is a method for responding to upset or angry (i.e., high conflict) emails, letters, or conversations that keeps the conflict from growing. When someone is angry, it is very easy to get pulled into an argument. But a BIFF response avoids that.

A brief response gets straight to the point. Long replies often include unnecessary details that can trigger more arguments. A BIFF response keeps things short and simple, which helps calm the situation. Informative means sharing useful facts, not opinions or emotions. Instead of defending yourself or the association or blaming the other person, try explaining the relevant rules or what the association is doing about the issue. This approach should help the homeowner focus on the facts instead of their frustration. Friendly means using a respectful and kind tone, even if the other person is upset. A calm, polite tone shows that you are not there to fight; it builds trust and makes it easier to work to solve the problem. Firm means setting clear boundaries. You don’t need to argue or give in—you just need to clearly state the decision or next steps, without sounding angry. Firm doesn’t mean harsh. It means confident and steady.

EAR stands for Empathy, Attention, and Respect. It is a way to talk to people when they are upset – about anything. People in conflict often want most to feel heard and understood. EAR helps you do that without agreeing with everything they say.

Empathy means showing that you understand the person’s feelings. You do not have to agree with their complaint to show empathy. Simply saying, “I hear what you’re saying” and “I can see why you’re upset,” or “That does sound frustrating,” is a great start to the conversation. Attention means giving the person your full focus—listening without interrupting or getting defensive. Just listening calmly often helps people calm down on their own. When someone feels as if no one is listening, they often get louder and more upset. Respect means treating the other person with dignity, even if/when they are being rude. General rules of manners and politeness can go a long way. Saying “Thank you for sharing your concerns” or “I respect your point of view,” can show you care about the person, even when you disagree with what they are saying.

Using EAR often makes people feel safe enough to talk instead of argue and fight. It builds trust and shows that the association wants to solve problems, not just enforce rules.

Solving Problems Early: Preventing Lawsuits and Building Community

The earlier a problem is addressed, the easier it will be to solve. Small issues that are ignored can grow into big problems. When people feel ignored or disrespected, they are more likely to take legal action. That is why using BIFF and EAR early on can be important.

Another key tip is to keep good communication going, even when there are no problems. Send regular updates, newsletters, or friendly messages that show the board is active and cares about the community. When people feel informed and respected, they are more likely to come to the HOA with their concerns before they explode.

Associations can also stay ahead of conflict by teaching board members and managers these tools in training sessions. The more people who use BIFF and EAR, the stronger and calmer the whole community becomes. And that means fewer angry emails, fewer meetings that turn into arguments, and ultimately, fewer lawsuits.

Keep the Peace and Protect Your Community

Dealing with conflict is part of life in any community, but it does not have to lead to courtrooms and chaos. By using the BIFF and EAR methods, associations, board members, and community managers can calm angry homeowners, solve problems early, and build stronger relationships.

These tools are not hard to learn. They just take practice and a commitment to respectful communication. When you respond in a way that is Brief, Informative, Friendly, and Firm—and show Empathy, Attention, and Respect—you create a space where people feel heard and respected. That is how good communities stay strong.

For more information about BIFF, EAR, or the High Conflict Institute please visit the High Conflict Institute’s website at www.HighConflictInstitute.com.

Who Pays the Bill? When you can Recover Attorneys’ Fees and Costs in Enforcement Actions

Hannah I. Hughes, Esq.

Attorney

858.527.0111
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Practice: Civil Litigation

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Although there are numerous factors a board of directors of a community association should consider before filing a lawsuit, one of the biggest factors is whether or not the association can recover its attorneys’ fees and costs. The standard rule is that absent a statutory or contractual provision providing for otherwise, the “American Rule” is that each side covers its own fees and costs.

Participating in a lawsuit, regardless of whether you are the plaintiff or defendant, can quickly become costly. Court motions, hearings, and discovery, can be very time intensive and your attorneys’ fees bill may quickly add up. Can a community association ever recover the attorneys’ fees and costs incurred in filing or defending a lawsuit to enforce its governing documents?

The short answer is: yes, a community association can recover attorneys’ fees and costs when enforcing its governing documents or the Davis-Stirling Common Interest Development Act (the “Davis-Stirling Act”). When a party enforces the governing documents or the Davis-Stirling Act against a member, the prevailing party is statutorily entitled to an award of attorneys’ fees and costs. (See California Civil Code section 5975(c)).

In addition to certain statutory rights for a prevailing party to recover attorneys’ fees and costs, most governing documents will include language stating that a prevailing party in a lawsuit to enforce the governing documents is entitled to recover the attorneys’ fees and costs incurred in doing so. However, be aware that both statutory and contracted recovery of attorneys’ fees and costs are reciprocal—meaning if the other party is determined by the court to be the prevailing party, the community association will have to pay the other side’s attorneys’ fees and costs.

In California, a “prevailing party” is defined as “the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court…” (California Code of Civil Procedure section 1032). Importantly, the prevailing party is entitled to reasonable attorneys’ fees and costs calculated from the prelitigation Alternative Dispute Resolution. (Grossman v. Park Fort Washington Assn. (2012) 212 Cal.App.4th 1128). Ultimately, while a “prevailing party” is entitled to its reasonable attorneys’ fees and costs, the Court retains the ultimate discretion in the amount to award the prevailing party.

Although a community association’s right to recover attorneys’ fees and costs as a prevailing party in an enforcement action may be statutorily or contractually protected, there are several other actions a community association can take to ensure it is protected in recovering attorneys’ fees and costs. For example, if your governing documents have not been restated in several years and do not include an attorneys’ fees provision, we recommend you consult with an attorney at Epsten, APC who can assist you in restating your governing documents. Additionally, having your attorney draft an attorneys’ fees provision in any contracts you may use.

Understanding the Fees and Costs of Superior Court Litigation

Joseph A. Sammartino, Esq.

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858.527.0111
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Practices: Community Association Counsel | Construction Defect Litigation | Civil Litigation | Appellate Litigation

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When a community association ends up in court, it can be a costly process. Sometimes community associations go to court to protect their rights and the rights of the community. Examples of these lawsuits are typically to enforce the governing documents or to enforce other contractual rights. Other times, community associations are brought into court because they have been sued. Regardless of the merits of the case and regardless of which side of a case the community association is on (plaintiff or defendant), fees and costs can add up very quickly.

The Process of Litigation

Litigation refers to the process of taking legal action in court. When a community association files a lawsuit, it is essentially asking the court to enforce a rule or decision a homeowner has violated. This can include things like unpaid dues, violations of the CC&Rs (such as illegal modifications to property or nuisances), or failure to follow community guidelines.

Litigation typically starts when the community association files a complaint in Superior Court, the court that handles major civil cases in California. Before going to court, the community association usually sends notices or warnings to the homeowner, letting them know that they are violating the rules. If a community association (or member) intends to file a lawsuit solely for declaratory or injunctive relief (asking the court to decide the rights and duties of the parties and/or seeking an injunction to compel the defendant to do, or refrain from doing, something) the potential plaintiff must first offer formal Alternative Dispute Resolution (“ADR”) which typically takes the form of mediation. If the homeowner doesn’t comply (or refuses to participate in ADR), the community association may move forward with a lawsuit.

Costs Involved in Litigation

There are several categories of costs involved when an association decides to pursue litigation. These can include:

Court Fees: To start a lawsuit in Superior Court, the plaintiff must pay a filing fee. This fee varies depending on the type of case and the amount of money involved, but Superior Court cases are typically around $500 or a little more. Each defendant in the case will owe a similar amount of money to the court as a first appearance fee. After the first appearance, each filing with the court – briefs, case management statements, ex parte applications, by way of a few of the more common examples – will have a filing fee, ranging from $20 to $100 or more.

Attorneys’ Fees: Probably the single biggest cost for a community association involved in litigation will be attorneys’ fees. Whether or the plaintiff or defense side of a case, a community association will probably need to retain a lawyer to represent it in court; the exceptions are small claims cases (attorneys are not allowed) and cases in which the community association is being sued and insurance defense counsel is provided by its insurance company. The lawyers’ job includes preparing documents, attending court hearings, propounding and responding to written discovery, taking depositions, attending mediation, negotiating settlements, and making legal arguments on behalf of the community association. Attorneys typically charge by the hour, and hourly rates depend on the lawyer’s experience, the complexity of the case, and the location where the association is located. In California, attorneys typically charge between $400 and $500 per hour or more.

While litigation can be expensive, under the Davis-Stirling Common Interest Development Act, in lawsuits involving the enforcement of governing documents, the winning party may recover its attorneys’ fees. If the community association wins a case against an owner to force compliance with a rule, the community association can ask the court for its legal fees. On the flip side, if the owner wins, they may be able to recover their legal fees from the community association. Attorney’s fees incurred in Alternative Dispute Resolution (“ADR”) can be included in the fees awarded even though it is typically before a lawsuit is formally filed.

In lawsuits that do not involve the enforcement of the governing documents, the general rule is that each side pays its own attorneys’ fees. There are a few exceptions to this rule, including breach of contract lawsuits in which the contract has an attorneys’ fees provision. Another exception are causes of action that have a specific right to attorneys’ fees under California law, such as some employment claims and bad faith lawsuits against insurance companies. The possibility of recovering – or not recovering – attorneys’ fees under is an important factor for parties to consider. It provides an incentive for owners to follow the rules, as they could end up paying the community association’s legal fees, as well as their own. It also gives community associations the ability to recover some of their costs if they need to go to court to enforce the rules. Owners should be aware that they could be held responsible for paying legal fees if they are found to be in the wrong. This can be a very significant financial burden, so it is important all parties understand their rights and responsibilities under the law.

Discovery Costs: Discovery is the process whereby both parties investigate the case as completely as possible on their own, and also request and exchange information from each other before trial. This is done by asking written questions that are answered under penalty of perjury, requesting documents, taking depositions (questions asked orally that are answered under oath), and investigating and gathering evidence. Discovery can be a time-consuming and expensive part of litigation, especially if there are a lot of documents to review or witnesses to interview. The community association may also need to hire experts or investigators to assist with the case, adding to the overall cost.

Other Related Expenses: In addition to filing fees, there likely will be other costs, such as charges for having subpoenas served on third parties, copying costs for records that are produced, and documents served personally on other parties. There also will be court reporter fees both for court hearings and for depositions. These costs quickly add up, especially if the case is lengthy or complicated.

Appeals: If either party is unhappy with the court or jury’s decision, they may appeal. Appeals can be costly because they involve additional legal work, including preparing legal briefs and attending appellate court hearings.

Considerations Before Litigating

Because of the potential costs involved, community associations should carefully consider whether litigation is the best option. Pursuing a court action should typically be a last resort after most, if not all, other attempts to resolve the issue have failed, including sending letters, holding hearings, Internal Dispute Resolution (“IDR”) and ADR. If a dispute does go to court, even if the community association wins, the process can still be expensive and time-consuming, even if attorneys’ fees are recoverable. Lawsuits can be divisive within community associations because the parties live (owners) and work (management) near each other. Additionally, witnesses and others who may become tangentially involved may feel unintended awkwardness or pressures.

It is not feasible to predict with any certainty how much a lawsuit will cost because it depends largely on how the other side prosecutes (or defends) the lawsuit. Some litigants and their attorneys can be very aggressive and run up costs.

Conclusion

Litigating in Superior Court can be a costly process for community associations. Some of that cost may be offset through the possible recovery of attorneys’ fees. To minimize costs, both community associations and owners should carefully weigh the costs and benefits of pursuing litigation and explore all options for resolving disputes before going to court. By understanding the costs and fees as well as the process involved, everyone can make more-informed decisions about how to handle disputes in their communities.

You’ve Been Served – An Article to Supplement Epsten, APC’s Litigation Checklist

Hannah I. Hughes, Esq.

Attorney

858.527.0111
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Practice: Civil Litigation

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“You’ve been served” are three little words that no one wants to hear. But what exactly does that mean and what should you do when you are served with a lawsuit?

Our firm has created a checklist for when you have been served with a lawsuit, which can be located here: https://www.epsten.com/youve-been-served-lawsuits-checklist/. This article is intended to serve as a supplemental article to that checklist.

If you are served with a lawsuit, it is important to note the time, date, and method of how the lawsuit was served on you. It is important to immediately provide this information to your legal counsel, along with copies of all documents that were served on you, so that they can determine first whether service was proper and second when a response to the lawsuit is due. For example, documents served in-person have a thirty (30) day deadline to file a response while documents served via mail will provide you with an additional two (2) days to respond. If the Association does not respond by the deadline, they may not be able to protect their interests in the lawsuit.

Once you have provided your legal counsel with a copy of the documents and a detailed explanation of the date, time, and method of service, you should also provide the same to your insurance carrier. Your insurance carrier is the only one that can determine whether there is insurance coverage for the claim. Among the benefits of tendering the lawsuit to your insurance carrier is that they could accept the claim and provide defense counsel for the Association. This means that the association’s legal fees and costs would be covered by your insurance carrier.

After providing your legal counsel and your insurance carrier with a copy of the documents that you were served with, along with a detailed explanation of the date, time, and method of service, it is important that you preserve potential evidence related to the lawsuit. The Board of Directors, the Community Association Manager, and any and all employees have a duty to preserve related evidence once a lawsuit is filed. This means that you cannot delete, remove, or otherwise destroy related evidence including, but not limited to, emails, Board Meeting Minutes, Invoices, letters, photographs, video, etc. Your attorney likely will send a letter to notify affected parties of their duty to preserve evidence.

In addition to preserving potential evidence, you must also preserve the attorney-client privilege. The attorney-client privilege serves to protect client communication to or from their attorney. This includes oral or written communications whether in person, over the phone, or via email. However, the privilege only applies if it is a communication to or from your attorney. That means you should not forward any emails, documents, or other correspondence from your attorney to anyone who is not the Community Association Manager or a member of the Board of Directors. Additionally, you should not discuss the case with anyone who is not a member of the Board of Directors or your Community Association Manager. Remember, the client holds the privilege; this means the client can waive that privilege by sharing information with a third party. It is important that you do not waive this privilege by including a third party who is not subject to the privilege.

Finally, some owners within the association may request notice or information regarding the lawsuit so that they can determine whether they need to inform or notify any potential buyers or other third parties. Although the association is not required to provide this information, your attorneys can prepare a letter to the membership regarding the litigation that is informative but does not waive the attorney-client privilege.

While the three little words “you’ve been served” may not be as sweet as “I love you”, they should be taken just as seriously. Be sure to utilize the checklist we have provided to assist you if you ever hear those three little words.

Navigating a Small Claims Lawsuit: A Guide to Defending the Case

Hannah I. Hughes, Esq.

Attorney

858.527.0111
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Practice: Civil Litigation

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Any board member or manager within a community association can tell you about their experience with an unhappy association member. But what happens when that member takes legal action against the association in Small Claims Court?

The first thing a community association needs to know is the differences between a Small Claims Court claim and a civil action in Superior Court. It is often said that the advantages of Small Claims Court are that it is cheaper and faster than a limited or unlimited action in Superior Court. Here are some ways in which Small Claims Court differs from Superior Court:

- - Litigants must represent themselves, and they cannot be represented by an attorney (subject to specific exceptions);
  - As of January 1, 2024, the jurisdictional limit for cases brought by an individual is $12,500, while corporations can only seek up to $6,250;
  - The filing fee for a San Diego Small Claims complaint is generally $30-$100 as opposed to $435 in Superior Court;
  - If the plaintiff loses, they cannot appeal the case (unless the defendant counterclaims and wins), but a defendant who loses can appeal the case;
  - Generally, litigants may receive a Small Claims hearing date sooner than in Superior Court.

When a community association is served with a Small Claims complaint, the association may need to act quickly. Below is a helpful checklist of steps to consider taking when a community association is served with a Small Claims complaint:

- - Contact the association’s legal counsel and provide them with a copy of the Small Claims complaint;
  - Submit a copy of the complaint to the community association’s insurance carrier(s);
  - Review the complaint and all attachments carefully;
  - Schedule and notice a special board meeting to discuss the complaint and the association’s response, or, depending on the Small Claims hearing date, add the complaint to the agenda for the next meeting. Depending on the timing and circumstances, holding an emergency board meeting may be necessary;
  - Calendar all applicable deadlines and due dates, including the date of the hearing, as failing to comply with applicable deadlines can result in an adverse judgment against the association;
  - Look at the date, time, and location of the hearing. If no association representatives are available to attend the hearing, the association may need to request to postpone the hearing;
  - Review what the aggrieved member, referred to as the “plaintiff,” is asking the Court for and consider whether to offer a settlement to the member in exchange for a dismissal of the complaint;
  - Prepare the community association’s response, including substantive arguments to respond to the Small Claims complaint. Be sure to submit all exhibits that support the association’s defense in advance of any applicable deadlines. While the Association’s legal counsel cannot appear at the hearing, counsel can help review and prepare the Association representatives to defend the Association in Small Claims Court.

Additionally, because the community association is not a person, it is important for the community association to complete and file an “Authorization to Appear on Behalf of Party” form, commonly known as an SC-109 form, with the Small Claims Court. This form must be completed by the board member or manager who intends to represent the association at the hearing.

Finally, it is important to remember that although a community association may have a good defense strategy, Small Claims Court sometimes favors member plaintiffs (the underdogs). Therefore, it is important to ensure that the community association is prepared and has a well-crafted response to a member’s Small Claims complaint. Helpful resources and more information can be found on the Judicial Branch of California’s website or by contacting a Small Claims advisor at (858) 634-1777 for San Diego County, (951) 274-4499 for Riverside County, or (213) 974-9759 for Los Angeles County. And remember that your friendly community association counsel is only a call away.

The Importance of Having All the Facts at the Outset of Representing a Client in Litigation

Joseph A. Sammartino, Esq.

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858.527.0111
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Practices: Community Association Counsel | Construction Defect Litigation | Civil Litigation | Appellate Litigation

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In the intricate and high-stakes world of litigation, thorough preparation is a cornerstone of effective legal representation. Central to this preparation is the necessity of gathering absolutely all the facts about a situation at the outset. This comprehensive understanding is crucial for several reasons: it informs the development of a robust legal strategy, ensures ethical conduct, enhances the credibility of the attorney, and ultimately increases the likelihood of a successful outcome for the client.

Developing a Robust Legal Strategy

A well-informed legal strategy is built on a foundation of complete and accurate facts. At the outset of representing a client, obtaining all necessary information allows an attorney to assess the strengths and weaknesses of the case comprehensively. To initiate the fact-finding process in a new case, the client must promptly share with the attorney all of the facts about the dispute, regardless of how old, indirectly related, or seemingly insignificant those facts may be. When in doubt err on the side of overinclusion, and let your attorney determine whether a fact is or is not relevant.

This initial fact-finding phase is essential for identifying the key legal issues, potential defenses, and the most compelling arguments to present. It enables the attorney to foresee possible challenges or weaknesses of the case and to plan accordingly, avoiding certain pitfalls that could arise from unforeseen evidence or aspects of the case.

Moreover, a detailed understanding of the facts aids in the effective allocation of resources to litigate the case. It helps the legal team decide where to focus investigative efforts, which expert witnesses to consult, and what evidence needs to be meticulously scrutinized or gathered. By having a clear picture from the beginning, an attorney can work more efficiently and strategically, ensuring that no critical detail is overlooked.

Ensuring Ethical Conduct

Ethical considerations are paramount in legal practice. An attorney is ethically bound to represent their client zealously while also maintaining integrity and honesty. Having all the facts of the case at the outset ensures that the attorney can provide candid advice to the client, outlining both the strengths and weaknesses of the case. This transparency is vital for managing the client’s expectations and for making informed decisions about whether to pursue litigation, negotiate a settlement, or explore alternative dispute resolution methods.

Additionally, complete knowledge of the facts prevents ethical breaches such as the inadvertent presentation of false or misleading information to the court. It also safeguards the attorney against potential conflicts of interest and ensures the attorney’s compliance with the duty of candor towards the tribunal.

Enhancing Credibility

An attorney’s credibility is a critical asset in litigation. Judges and juries are more likely to be persuaded by an attorney who demonstrates thorough knowledge of the case and presents well-substantiated arguments. Complete mastery of the facts at the outset allows the attorney to argue more confidently and persuasively. It also minimizes the risk of being caught off-guard by opposing counsel, which could undermine the attorney’s credibility and, by extension, the client’s position.

When an attorney is well-prepared and knowledgeable, it fosters trust not only with the court but with the client as well. Clients are more likely to have confidence in their legal representation when they see that their attorney has a deep understanding of their case and is prepared to advocate effectively on their behalf.

Increasing Likelihood of a Successful Outcome

Ultimately, the goal of litigation is to achieve a favorable outcome for the client. Having all the facts at the outset significantly enhances the chances of success. It allows the attorney to craft a coherent and compelling narrative, anticipate and counter opposing arguments, and present evidence in the most favorable light. Comprehensive preparation reduces the likelihood of surprises during the litigation process, such as unexpected testimony or newly discovered evidence that could adversely affect the case.

Conclusion

The importance of having all the facts at the outset of representing a client in litigation cannot be overstated. It is fundamental to developing a sound legal strategy, ensuring ethical conduct, enhancing the attorney’s credibility, and increasing the likelihood of a successful outcome. Thorough fact-finding at the beginning of a case sets the stage for effective advocacy and is a hallmark of professional and competent legal representation.