On Monday, February 22, 2021 at 11:32:00 AM UTC-6, Elle N wrote:

Thank you, Barry. As you indicated, California is one of at least seven states with a statute that prohibits unilateral attorney fees clauses in contracts. The interested reader may, see California Civil Code 1717. Specifically, it converts all

unilateral contractual clauses to reciprocal attorney fees clauses.

Understood, StillR and Mike. I am not getting my hopes up for my friend. Though I am going to recommend other arguments he can use, like duplicative attorneys fees as the H.O.A. (the plaintiff) battled my friend's (the defendant's) defense and

counterclaim at the same time. Also I may try procedural unconscionability and substantive unconscionability. To me, the covenants are clearly an adhesion, "take it or leave it" (in the words of the courts) contract. When my friend bought the home in the
H.O.A., my friend of course had no bargaining power, when it comes to striking the terms of the HOA-Member contract (the covenants).

Other statutes in my state do what California did but for specific types of contracts. E.g. tenant-landlord contracts (so unilateral attorney fees clauses are stricken) in leases and contracts for the sale of goods (likewise).

I looked at the annotations for the H.O.A. statute section in question. The "commissioners" do clarify the point is to continue to allow judges discretion in the award of attorney's fees. For whatever the commissioners' comments are worth. There's no

case law where I am for unilateral attorney's fees clauses, in an adhesion contract. Of course there is other case law in my state for certain other contractual clauses, in an adhesion contract, being unconscionable.

I will try to remember to update the thread.

The question is: Did the initial property owner that purchased the property have any bargaining power? If so, you are effectively an assignee of that prior owner so it would not be procedural unconscionability or else assignments could never exist. As to
substantive unconscionability, that would not apply as the HOA only has to show a "legitimate interest" in imposing such a term and deterring claims and non-compliance with HOA rules is a legitimate aim in every U.S. state. As to your adhesion claim, it
does not matter if your friend in particular had no bargaining power. Does the instrument say it can be amended by a certain number of HOA members? If so, the bargaining power is manifested through the collective rather than the individual which would be
allowed.

Have you seen the bills? If the attorney bills identify work specific to the counterclaim, you might have an argument. However, if the attorney's bills are sloppy and indistinguishable, then you have an argument subject to the possibility that a court
may exercise discretion and allow the attorney to cure defects in the bills.

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Elle N <[email protected]> wrote:

Thank you, Barry. As you indicated, California is one of at least
seven states with a statute that prohibits unilateral attorney
fees clauses in contracts. The interested reader may, see
California Civil Code 1717. Specifically, it converts all
unilateral contractual clauses to reciprocal attorney fees
clauses.

What I find most memorable about Section 1717 is the California
Supreme Court ruling that the statute is retroactive. The court
noted the provision of the law that says this:

"Attorney�s fees provided for by this section shall not be subject to
waiver by the parties to any contract which is entered into after the
effective date of this section."

The Court said that if the provisions can't be waived in a contract
entered into AFTER the effective date of the statute, it could be
waived in a contract entered into BEFORE its effective date. And no
one would have a waiver in a contract entered into before the
effective date if it weren't retroactive.

--
Stu
http://DownToEarthLawyer.com

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On Friday, May 21, 2021 at 10:28:07 AM UTC-6, Katie Fogarty wrote:

The question is: Did the initial property owner that purchased the
property have any bargaining power? If so, you are effectively an
assignee of that prior owner so it would not be procedural
unconscionability or else assignments could never exist.

First, from what I see in the case law, the question is whether one party has significantly more power than the other when creating the contract.

Second, I see discussion in the case law that supports the view that a condominium/HOA declaration is a contract of adhesion. See:

-- this 2012 California Supreme Court decision: https://law.justia.com/cases/california/supreme-court/2012/s186149.html, resolving dispute between an HOA and a developer . From a concurring opinion in the latter decision: "Considered as contracts, the
recorded declaration and the arbitration clause are adhesive vis-à-vis individual homeowners... " The commentary in the concurring opinion is more like dicta -- it's not binding on a lower court.

-- this 2000 California Court of Appeals decision: https://law.justia.com/cases/california/court-of-appeal/4th/84/819.html . Again, the decision's commentary about declarations being contracts of dicta appear to be largely dicta.

On the other hand, this 2011 Montana Supreme Court decision ruled that certain CC&Rs were not a contract of adhesion (while also stating that other CC&Rs might be contracts of adhesion): https://law.justia.com/cases/montana/supreme-court/2011/04bca6d4-
1c7e-4b19-9640-605e10402d9c.html

As to substantive unconscionability, that would not apply as the HOA
only has to show a "legitimate interest" in imposing such a term and deterring claims and non-compliance with HOA rules is a legitimate
aim in every U.S. state.

I do not see the case law declaring that "legitimate interest" is the be-all and end-all (or any -all)to identify whether a contractual term is substantively unconscionable. I did pull up chatter like this:
"Arthur Corbin's test for substantive unconscionability—which asks whether the terms at issue are “so extreme as to appear unconscionable according to the mores and business practices of the time and place”—has been widely influential with courts.
"

You're welcome to cite case law to back up your position that the "only" thing the HOA has to show is a "legitimate interest" in imposing such a term.

As to your adhesion claim, it does not matter if your friend
in particular had no bargaining power. Does the instrument
say it can be amended by a certain number of HOA members?

Yes, it does.

If so, the bargaining power is manifested through the collective rather than the individual which would be allowed.

The Montana Supreme Court said simply that there was an amendment provision in the Declaration, hence an individual could seek such an amendment.

Regardless, I there is little-to-no-other case law on the point.

Have you seen the bills? If the attorney bills identify work specific
to the counterclaim, you might have an argument.

The HOA member now has the attorney's bills. Very little (under $2000) was billed by the attorneys towards the counterclaim. The HOA member is in good shape, in my opinion, with regard to losing the counterclaim.

However, if the attorney's bills are sloppy and indistinguishable,
then you have an argument subject to the possibility that a court
may exercise discretion and allow the attorney to cure defects in the bills.

Or where I am, an appeals court said that, in an attorney's billing practices, if addressing the counterclaim could not be separated out from addressing the main issue (brought by the plaintiff) for a particular line item in a billing statement, then the
plaintiff could not seek the attorney fees the plaintiff incurred for addressing the counterclaim.

Stuart, I am still processing your assertion. I will have to review all.

A few months have passed since the trial. The judge has not ruled. HUD is now in the picture (knock on wood). Also the HOA member has an attorney from a civil rights law firm with a national presence representing him on certain aspects of the dispute pro
bono (knock on wood).

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