Arias v. Katella Townhouse Homeowners Assn., Inc

In Arias v. Katella Townhouse Homeowners Assn., Inc. (2005) 127 Cal.App.4th 847, an owner (Arias) sued the homeowners association for failing to maintain the common areas, causing toxic mold to develop around her unit. At trial, the parties stipulated to facts read to the jury, including that the association admitted it had breached its contractual, statutory and common law duties to maintain the common areas, and it agreed to pay for the resulting damages to her unit and other costs. (Id. at p. 850.) The association had made an offer to compromise Arias's claims under Code of Civil Procedure section 998 for $ 50,001, which she did not accept, and the question on appeal was whether the $ 88,939.75 in voluntary prejudgment payments the association made to her should be considered in determining whether she obtained a more favorable result. (Katella, supra, at p. 851.) If she did not obtain a more favorable judgment, she would not be entitled to recover her postoffer costs and would be required to pay the Association's postoffer costs. (Id. at p. 853.) The court answered the question in the affirmative, explaining that "to refuse to consider the Association's postoffer payments as part of Arias's total recovery would result in an inequity, because Arias could not have recovered the property damage payments as part of the jury's verdict." (Id. at p. 856.)