(originally published in Spring 2004) The California Court of Appeals recently held in Parrott v. The Mooring Townhomes Association, that trial courts can determine who the “prevailing party” is for the purpose of awarding attorney fees after a case has already been dismissed. The defendant Association in this case asked homeowners to approve a special assessment to replace the exterior siding of the homes. Counsel for the Association informed homeowners that they would need a vote of 51% of a quorum to approve the assessment. The plaintiff homeowners objected to this, claiming that the Association’s Covenants, Conditions and Restrictions (CC&Rs) required a 75% supermajority vote or at least a 66 2/3 percent vote to approve such an assessment. At the meeting, the assessment was passed by a simple majority of homeowners. The plaintiffs subsequently filed suit against the Association to invalidate the vote. Approximately one month later the plaintiffs voluntarily filed a request for dismissal of their complaint without prejudice. The Association then moved to recover attorney fees as the prevailing party pursuant to Civil Code section 1354(f). The trial court found that the Association was the prevailing party and awarded it attorney fees. The plaintiffs appealed this decision. Relying on Harris v. Billings, the plaintiffs claimed that once a lawsuit is dismissed, the trial court loses the ability to take any further action in the case. Based upon this rule, the plaintiffs argued that the trial court in their case could not determine who the prevailing party was or award attorney fees because the complaint had already been dismissed. The Court of Appeals rejected the plaintiffs’ argument, stating that they had relied on an incomplete statement of the rule. The court indicated that the rule is that “[f]ollowing entry of a dismissal of an action by a plaintiff…., a trial court is without jurisdiction to act further in a dismissed action, except for the limited purpose of awarding costs and statutory attorney’s fees.” The plaintiffs then asserted that the Associated Convalescent Enterprises v. Carl Marks & Co., Inc. case held that a trial court cannot make a substantive prevailing party determination once the clerk enters a voluntary dismissal of the action. The court rejected this argument as well, stating that the plaintiffs had misstated the holding of the case. The case did not state that the trial court was without authority to make this determination after the dismissal had been filed, but only that the court had not made such a determination. Ultimately, the court held that a “trial court has the authority to determine the identity of the ‘prevailing party’ in litigation, within the meaning of Civil Code section 1354, for purposes of awarding attorney fees.” Taking a different approach, the plaintiffs then claimed that the award of attorney fees was barred by Civil Code section 1717, which states that attorney fees shall be awarded to the prevailing party in an action based upon a contract unless the action has been voluntarily dismissed. Asserting that because they were attempting to enforce the CC&Rs, which have been deemed ‘contracts’ by the court, Civil Code section 1717 barred the Association’s claim for attorney fees. In support of their position, the plaintiffs relied on Santisas v. Goodin, which involved a real estate purchase agreement. The court there held that the defendant sellers were barred from recovering attorney fees by Civil Code section 1717 because the buyer plaintiffs had dismissed the action before trial. The Court of Appeals distinguished the Santisas case, stating that unlike the Association, which was seeking to recover attorney fees pursuant to Civil Code section 1354, the defendants there were seeking to recover attorney fees pursuant to a contract. The court subsequently held that because the Association sought to recover its attorney fees pursuant to a fee-shifting statute and not a contract, Civil Code section 1717 did not bar such an award. This case is important because it allows the prevailing party, whether the Association or the homeowner, to still recover attorney fees even after a case has been voluntarily dismissed. Thus the attorney fee provisions of Civil Code section 1354 survive even dismissal. It is also important because it stops parties from using voluntary dismissal as a tactic to avoid paying the opposing party’s attorney fees.