Arizona Court of Appeals, Division Two, holds that attorneys’ fees in nuisance action are not recoverable even when nuisance is prohibited by terms of CC&Rs.

A homeowner, frustrated by the noise her neighbors’ air conditioner made, sued her neighbors, alleging that the air conditioner created a nuisance. At the same time, she sued her HOA to enforce the applicable CC&Rs, which prohibited residents from creating a nuisance.

Both lawsuits failed. The neighbors sought attorneys’ fees based on a provision of the CC&Rs awarding fees for proceedings related to their enforcement, but the trial court denied their request. The neighbors appealed.

On appeal, the Arizona Court of Appeals affirmed the trial court. The Court began its analysis by setting out the background principles regarding the award of attorneys’ fees: each party bears their own fees unless a contractual provision or state statute applies. The only statute the Court identified that could serve as a basis for fees was A.R.S. § 12-341.01, which allows a party to recover fees in actions “arising out of contract.” But, the Court explained, even that statute recognized a distinction between tort and contract claims; fees were only available under that statute if the legal relationship between the parties would not exist but for the contract. Here, the claim at issue—nuisance—involved a duty that arises by operation of law, not of contract. As such, fees would not be available under § 12-341.01.

The Court then applied these background principles to the CC&R provision regarding fees because, as is standard practice, the Court interpreted the CC&Rs to incorporate common law principles. For that reason, the Court concluded that the neighbors were not entitled to recover attorneys’ fees. Again, the claim at issue was a nuisance claim, which involved a duty that arose by operation of law, not because of the CC&Rs. Similarly, that the CC&Rs separately prohibited nuisances was a distinction without a difference because a contract cannot impose duties that already exist as a matter of law. Fundamentally, then, this was an action to enforce tort duties, which meant that attorneys’ fees were not recoverable.

Judge Sklar authored the opinion, joined by Judges Eckerstrom and Vsquez.

Posted by: Joshua J. Messer