In 2015, Friends of Spring Street (Friends) filed a petition for writ of mandate and complaint against Nevada City challenging the city’s determination that Mollie Poe and Declan Hickey (Real Parties) had the right to reopen a bed and breakfast (B&B) in a residential area. After the court ruled against the City on one of five issues raised, this case, Friends of Spring Street v. Nevada City, 33 Cal.App.5th 1092, followed.

The Original Lawsuit

In 1991 Juneus and Jan Kendall obtained a conditional use permit to operate a B&B in a residential neighborhood. Three years later, the city’s voters passed an initiative, Measure G, which repealed the zoning code provision that allowed for B&Bs in residential zones. The Kendalls continued operation of their B&B until 2002 and sold the property in 2004. From 2002 until 2013, the property was used as a private residence, but the business license was renewed and paid every year.

The Real Parties purchased the property in 2013 and in 2014 applied to resume the conditional use permit to operate the property as a B&B. The city’s planning commission denied the request, concluding that the grandfathered rights to operate a B&B terminated when the use was discontinued. Real Parties appealed to the city council, arguing for the first time that the operation of a B&B was never a nonconforming use, and therefore the conditional use permit was still valid. The city council granted the appeal and vacated the planning commission’s decision.

In granting the appeal, the city council found that Measure G was intended to limit new B&Bs in residential zones, but did not address termination of existing inns. Following the council’s decision, Friends of Spring Street filed a lawsuit challenging the city’s determination, arguing that Measure G had rendered pre-existing B&Bs in residential areas nonconforming.

Ultimately, the Court of Appeal held that the city was incorrect, and the passage of Measure G had in fact rendered the B&B nonconforming. The Real Parties, therefore, were not entitled to resume the use as a matter of right. The Court of Appeal directed the trial court to vacate its denial of the petition for writ of mandate, enter an order granting the writ mandate, and order the city to set aside its granting of the appeal of the planning commission’s denial of the Real Parties’ request (“Friends I”).

Following the decision in Friends I, Friends of Spring Street filed a memorandum of cost and a motion for attorney fees. In response, the City and Real Parties filed motions to strike and oppose the memorandum of costs and motion for attorney fees. This decision is the outcome of those requests.

Friends’ Request for Costs

Under Code of Civil Procedure section 1032, where, like here, a party recovers non-monetary relief, the trial court has the discretion to identify the “prevailing party.” The question for the court is whether the party succeeded at a practical level by realizing its litigation objectives, and whether the action yielded the primary relief sought. In this case, the trial court denied the request for costs, reasoning that: (i) there was no prevailing party, and (ii) Friends did not obtain any practical result that justified the entitlement to costs. The trial court also noted that Friends only obtained relief on one of five causes of action.

The Court of Appeal disagreed. The court noted that the failure to succeed on all but one cause of action is not sufficient reason to deny a party fees and costs. The court also explained that Friends had realized its primary litigation objective when the court ordered the city to set aside its granting of the appeal of the planning commission decision. Contrary to the city’s argument, the court said it had not decided a “jurisdictional issue,” but rather had made a substantive decision on the merits when it determined the meaning and application of Measure G. As a result of its decision, the planning commission’s denial of the Real Parties’ application to re-commence B&B operations remained intact. The court concluded that Friends, therefore, achieved the practical result sought and was thus entitled to collect costs.

Friends’ Motion for Attorney Fees

Code of Civil Procedure section 1021.5, the “private attorney general doctrine,” provides an exception to the general rule that parties in litigation pay their own attorney’s fees. Under section 1021.5, a court may award fees to a successful party where a significant benefit has been conferred on the general public, and the necessity and financial burden of private enforcement makes the award appropriate. The trial court concluded that Friends’ action did not enforce an important right and public interest.

Again, the Court of Appeal disagreed. The court pointed to La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1159-1160, noting that zoning laws are a “vital public interest” and are important to preserve the integrity of a general plan. Here, the court concluded, Friends’ action preserved the integrity of the city’s zoning regulations imposed by Measure G. And, the court noted, the public interest in this case was even greater than in La Mirada because the city’s residents voted to implement Measure G.