Tract 19051 HOA v. Kemp

























Filed 5/15/13 Tract 19051 HOA v. Kemp CA2/4















NOT TO BE PUBLISHED IN THE
OFFICIAL REPORTS





California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.









IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND APPELLATE DISTRICT



DIVISION FOUR












>

TRACT 19051 HOMEOWNERS ASSOCIATION et al., Plaintiffs and Appellants, v. MAURICE KEMP et al., Defendants and Respondents.

B235015 (Los Angeles County Super. Ct. No. BC398978)

APPEAL
from an order of the Superior
Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Richard L. Fruin, Judge. Affirmed in part; reversed in part.

Law
Office of Mifflin & Associates and Ken Mifflin for Plaintiffs and
Appellants.

Robert
L. Jones, in pro. per., for Plaintiff and Appellant.

No
response for Defendant and Respondent Maurice Kemp.

Turner
Law Firm and Keith J. Turner for Defendant and Respondent Eric Yeldell.

>

A homeowners association and
numerous homeowners (plaintiffs) sued to halt defendant homeowners’ remodeling
construction for alleged violations of the subdivision’s declaration of
restrictions (declaration or DOR’s).
During a court trial, the main issue was whether the declaration, which
had a January 1, 2000 expiration date, was
properly renewed by a majority of homeowners in 1999. The answer turned on whether the subdivision
is a “common interest development” under the Davis-Stirling Common Interest
Development Act (Civ. Code, § 1350 et seq.) (Act), such that the majority’s
renewal of the declaration was permitted by Civil Code section 1357.href="#_ftn1" name="_ftnref1" title="">^[1] The trial court found that because the
subdivision is not a common interest development, section 1357 did not apply
and the majority’s renewal of the declaration was ineffectual. Because the declaration had expired, the
court entered judgment for defendant homeowners, who recovered costs and
attorney fees under section 1354.

In
this appeal by plaintiffs,href="#_ftn2"
name="_ftnref2" title="">^[2] we affirm the judgment for defendants, but
reverse the award of attorney fees under section 1354. (Mount
Olympus Property Owners Assn. v. Shpirt (1997) 59 Cal.App.4th 885, 895-896
(Mount Olympus) [because the Act did
not apply, the trial court erred in awarding attorney fees under § 1354].)



>PREFACE

>

In
order to place the facts in their proper context, we begin by noting that a
declaration of restrictions may be extended (1) by the unanimous vote of 100
percent of the property owners; (2) by the vote of a lesser number of owners as
provided in the declaration; or (3) in common interest developments only, by
compliance with specified statutory procedures.
(See 8 Miller & Starr, Cal. Real Estate (3d ed. 2009)
§ 24:41, p. 24‑136.) It
is undisputed that the first two methods of extending a declaration are
inapplicable to this case. As to the
third method, the parties agree that the sole statutory procedure that applies,
if at all, is found in section 1357.

Plaintiffs’
case hinges on section 1357, which applies only to common interest
developments. Section 1357 states that
if a declaration for a common interest development does “not provide a means
for the property owners to extend the term of the declaration,” the term can be
extended “if owners having more than 50 percent of the votes in the association
choose to do so.” (§ 1357, subd. (a).)

In
order for section 1357’s voting procedure to apply, plaintiffs must prove that
their subdivision, Tract 19051, is a common interest development. According to section 1352, “a common interest
development is created whenever a separate interest coupled with an interest in
the common area or membership in the association is, or has been, conveyed,
provided, all of the following are recorded:
[¶] (a) A declaration. [¶]
(b) A condominium plan, if any exists.
[¶] (c) A final map or parcel
map, if Division 2 (commencing with Section 66410) of Title 7 of the Government
Code requires the recording of either a final map or parcel map for the common
interest development.”

The
parties agree that of the several types of common interest developments that
exist, the planned development is the only type that arguably applies to Tract
19051. (§ 1351, subd. (c).) A planned development is “a development
(other than a community apartment project, a condominium project, or a stock
cooperative) having either or both of the following features: [¶]
(1) The common area is owned
either by an association or in common by the owners of the separate interests
who possess appurtenant rights to the beneficial use and enjoyment of the
common area. [¶] (2) A
power exists in the association to enforce an obligation of an owner of a
separate interest with respect to the beneficial use and enjoyment of the
common area by means of an assessment which may become a lien upon the separate
interests in accordance with Section 1367 or 1367.1.” (§ 1351, subd. (k).) A separate interest in a planned development
“means a separately owned lot, parcel, area, or space.” (§ 1351, subd. (l)(3).)

In
order for plaintiffs to demonstrate that Tract 19051 is a planned development,
they must establish the existence of a common area. If there is no common area, Tract 19051 is
not a common interest development and none of the Act’s provisions, including
section 1357’s statutory voting procedure, applies. Section 1374 provides: “Nothing in this title may be construed to
apply to a development wherein there does not exist a common area as defined in
subdivision (b) of Section 1351.”

As
will be discussed, the primary difficulty faced by plaintiffs at trial was that
Tract 19051 has no obvious common areas.
There are no commonly owned or maintained roads, trails, bike lanes,
landscaping, fencing, lighting, pools, tennis courts, clubhouses, or other
amenities. In light of this difficulty,
plaintiffs sought to establish the existence of a common area based on the
statutory definition that “the common area for a planned development specified
in paragraph (2) of subdivision (k) may consist of mutual or reciprocal
easement rights appurtenant to the separate interests.” (§ 1351, subd. (b).)



>FACTS AND PROCEDURAL BACKGROUND

>

Tract
19051 is a subdivision of 94 single family homes in the Baldwin Vista area of
Los Angeles. It has a voluntary
homeowners association—“Tract 19051 Homeowners Association a.k.a. Cloverdale,
Terraza, Stillwater, Weatherford Homeowners Association” (Association)—that is
open to homeowners in and around Tract 19051 (according to the respondent’s
brief, “Stillwater and Weatherford Streets are not in Tract 19051”).

When
Tract 19051 was subdivided in 1958, the developer recorded the declaration of
restrictions that is the subject of this litigation. Although the declaration allowed any
homeowner to sue to enforce its restrictions, the declaration expired by its
own terms on January 1, 2000, and contained no provision for extending that
date.href="#_ftn3" name="_ftnref3"
title="">^[3]

In
2006, defendant Maurice Kemp acquired lot 22 of Tract 19051, which has a street
address of 4085 Cloverdale. Lot 22
contained a single story residence that Kemp essentially demolished in order to
build a much larger 7,000 square foot two-story home. After construction began, the attorney for a
fellow homeowner informed Kemp that the remodeling project was in violation of
the height and setback restrictions contained in the DOR’s.

In
September 2008, Kemp was sued by the Association and the owners of 32 lots
(plaintiffs) for breach of the DOR’s, nuisance, injunctive relief, and
declaratory relief. Plaintiffs sought a
temporary restraining order (TRO) to halt the remodeling project. In opposition, defense attorney Keith Turner
argued the DOR’s had expired by its own terms on January 1, 2000. Plaintiffs countered that a majority of
homeowners had voted in December 1999 to extend the DOR’s to December 31, 2010.href="#_ftn4" name="_ftnref4" title="">^[4] The trial court (Judge David P. Yaffe) denied
the TRO after noting that only 32 of the 94 homeowners were seeking relief as
plaintiffs.

After
48 of the 94 homeowners filed an amended complaint, which was later increased
to 52 of 94 homeowners, plaintiffs requested a preliminary injunction to halt
the remodeling project.href="#_ftn5"
name="_ftnref5" title="">^[5] The trial court (Judge Yaffe) denied the
preliminary injunction on January 6, 2009.
The court stated in relevant part:
“An amendment to the declaration of restrictions was made on December
29, 1999, that purports to extend the force and effect of the declaration of
restrictions to December 31, 2010. The
amendment recites that it is agreed to by, ‘at least 50 percent, plus one, of
the total voting power of the members. . . .’ [¶]
Plaintiffs contend that the amendment is sufficient to extend the term
of the declaration of restrictions under section 1355 of the Civil Code, a
portion of the Davis-Stirling Common Interest Development Act. The contention is without merit because Tract
19051 is not a common interest development, and therefore the Davis-Stirling
Act has nothing to do with it. Tract
19051 is a tract of individually owned single family residences that border
upon streets that are dedicated to the public and are not owned in common by
the homeowners or by the homeowners’ association.” As to the statutory requirements of a common
interest development, the trial court found no evidence that the tract had any
common areas, that membership in the Association had been conveyed to the
homeowners, or that the Association was authorized to collect assessments and
impose liens.

Before
the case was tried, Kemp defaulted on his construction loan and the lender
recorded a notice of default on February 3, 2009. In light of the impending foreclosure sale,
Kemp ceased defending this action and his attorney was allowed to withdraw from
the case on August 12, 2009.

The
court (Judge Richard L. Fruin) conducted a bench trial on January 25 and 28,
2010. Kemp, who was on the verge of
losing his property, did not appear at trial.
Plaintiffs, who appeared through their attorneys Marcia J. Brewer and
Ken Mifflin (who are plaintiffs but not appellants in this action), provided
documentary evidence and testimony in support of their claim that Kemp’s home
was being enlarged in violation of the height and setback restrictions in the
declaration, which a majority of homeowners had extended to December 31,
2010.

At
the conclusion of trial, the court entered an href="http://www.mcmillanlaw.com/">interlocutory judgment for plaintiffs,
who were granted $112,000 in attorney fees and costs under section 1354.href="#_ftn6" name="_ftnref6" title="">^[6] Because the DOR’s were scheduled to expire on
December 31, 2010, the trial court continued the matter in order for plaintiffs
to show that the DOR’s would be extended beyond that date.

In
March 2010, defendant Eric Yeldell purchased Kemp’s home at a trustee’s
foreclosure sale. In August 2010, a
majority of homeowners voted to extend the DOR’s to December 31, 2030.

In
October 2010, Yeldell moved to intervene as a defendant and vacate the
interlocutory judgment on the ground that the DOR’s had expired in January 2000
and were therefore unenforceable. The trial court granted
Yeldell’s motion to intervene on December 3, 2010. It issued an order to show cause and requested
further briefing on whether “to: (1)
vacate the Interlocutory Judgment; (2) whether to enter judgment against
plaintiffs on the evidence already presented; and (3) whether to hold a
further evidentiary hearing to receive new evidence that may be offered in
support of Plaintiffs’ claims.”

At a
February 10, 2011 evidentiary hearing, Yeldell was represented by Kemp’s former
attorney Turner. Yeldell argued that
because the development did not qualify as a common interest development
under the Act, section 1357 did not apply and the vote by a majority of
homeowners to extend the DOR’s to December 31, 2010, was ineffectual. The parties litigated the following
issues:

The
1946 Grant Deed. Plaintiffs argued
that a newly discovered 1946 grant deed had created a common area by providing
an “express permanent easement over Parcel No. 1 of the development that is
appurtenant to the separate interests of the owners therein for use as a means
of ingress and egress to and from the neighboring park.”href="#_ftn7" name="_ftnref7" title="">^[7] However, Yeldell’s evidence showed that
Parcel No. 1 is not in Tract 19051, but in the state park that abuts Tract
19051. Plaintiffs did not refute
Yeldell’s evidence. Accordingly, plaintiffs
conceded that they were attempting to show the existence of a common area based
on an easement that runs from the edge of Tract 19051 through the Kenneth Hahn
State Park and does not burden any property within the tract.

The
Subdivision Map. Plaintiffs argued
that the subdivision map for Tract 19051
had created a common area by depicting public streets and utility
easements, which they claimed were mutual or reciprocal easements that are
appurtenant to the separate interests and necessary to the use and enjoyment of
each lot. Yeldell disagreed. Yeldell argued that public streets and
utility easements do not create mutual or reciprocal easements that are
appurtenant to the separate interests of the property owners.

The
Association’s Powers to Assess and Levy.
Under section 1351, subdivision (k)(2), one indication of a planned
development is the Association’s power “to enforce an obligation of an owner of
a separate interest with respect to the beneficial use and enjoyment of the
common area by means of an assessment which may become a lien upon the separate
interests in accordance with Section 1367 or 1367.1.” In support of their contention that Tract
19051 is a planned development, plaintiffs pointed out that the Association was
authorized by its bylaws to assess and collect dues and levy special
assessments to meet any unanticipated needs.
Yeldell argued that this was insufficient to show that Tract 19051 is a
planned development. Yeldell asserted
that in a planned development, any conveyance of the owner’s entire estate also
includes the owner’s membership interest in the association. (§§ 1352, 1358, subd. (c).) In this case, however, there was no evidence
that membership in the Association, which was purely voluntary, was transferred
with the sale of any of the lots in the tract.

At
the conclusion of trial, the court found that plaintiffs had failed to show that Tract 19051 is a
planned development. Accordingly, the
court held that the majority homeowners’ attempts to extend the DOR’s under
section 1357 were ineffectual. Because
the DOR’s had expired and were unenforceable, the trial court vacated the
interlocutory judgment for plaintiffs and entered judgment for defendants. The trial court awarded defendants costs
under Code of Civil Procedure sections 1032 and 1033.5, plus attorney fees
under section 1354. We consolidated
plaintiffs’ separate appeals from the judgment (B235015) and attorney fee award
(B239588).



>DISCUSSION



Plaintiffs
contend: (1) “Tract 19051 is a common
interest development under the Davis-Sterling Act because the owners in the
development possess appurtenant easement rights to a portion of the development
and an association with authority to enforce the DORS”; and (2) “Even if the
court affirms the judgment that the Davis-Sterling Act does not apply, the
award of attorneys’ fees should be reversed because there is no basis for
recovery of attorney’s fees.”



I. Tract 19051 Is Not a Common Interest
Development

Plaintiffs
contend the undisputed evidence shows that, as a href="http://www.fearnotlaw.com/">matter of law, Tract 19051 is a planned
development. We conclude the contention
lacks merit.

In >Mount Olympus, supra, 59 Cal.App.4th 885, we stated that in order for “a development to fall within the governance of the Act,
the statutory requirements are clear:
(1) there must exist a common area owned either by the association or
‘by the owners of the separate interests who possess appurtenant rights to the
beneficial use and enjoyment of the common area’ (Civ. Code, §§ 1351, subd.
(k)(1), 1374); (2) there must have been recorded ‘[a] declaration,’ ‘[a]
condominium plan, if any exists,’ and ‘[a] final map or parcel map’ (>id., § 1352); and (3) there must have
been conveyed ‘a separate interest coupled with an interest in the common area
or membership in the association’ (ibid.).” (Id. at
pp. 895-896.)

As
previously mentioned, plaintiffs sought to establish the existence of a common
area based on the statutory definition that “the common area for a planned
development specified in paragraph (2) of subdivision (k) may consist of mutual
or reciprocal easement rights appurtenant to the separate interests.” (§ 1351, subd. (b).) In order to show the existence of “mutual or
reciprocal easement rights appurtenant to the separate interests” (>ibid.), plaintiffs relied on (1) a
roadway easement outside Tract 19051, and (2) public roads and utility
easements within Tract 19051.

We
conclude that the roadway easement outside Tract 19051 fails to establish the
existence of a common area. As stated in
Comm. to Save the Beverly Highlands Homes
Ass’n v. Beverly Highlands Homes Ass’n (2001) 92 Cal.App.4th 1247, “there
must be, at a minimum, appurtenant easement rights to a portion of the
development.” (Id. at p. 1271.)
Because the roadway easement lies outside the development, it does not
create any “appurtenant easement rights to a portion of the development.” (Ibid.)

Plaintiffs
have cited no authority for the proposition that public streets create “mutual
or reciprocal easement rights appurtenant to the separate interests.” (§ 1351, subd. (b).) The fact that property owners have a right of
ingress and egress over the city streets abutting their lots does not transform
the municipality’s roads into a common area for purposes of the Act. There was no evidence that any of the
plaintiffs treated the public streets as a common area that was to be
maintained by the Association. Although
there are no cases that have decided this question, we agree with the view
expressed by one commentator: “The often
subtle but important distinction between a common interest development and a
standard subdivision involves the manner in which common roads, recreational
lots and other facilities are held by the owners of interests in a
subdivision. If a subdivision includes only
public streets and no common areas, it is a standard subdivision.” (9 Miller & Starr, Cal. Real Estate (3d
ed. 2007) § 25C:8, p. 25C‑30.)


We
similarly conclude that the homeowners in Tract 19051 have no appurtenant
easement rights to the utility easements, which are for the benefit of the
utility. (See, e.g., >Uniwill v. City of Los Angeles (2004)
124 Cal.App.4th 537, 544 [easement granted the utility the exclusive right to
occupy the property].) Even though the
utilities provide water, gas, and electrical services that are necessary for
the use and enjoyment of the homes in the subdivision, the homeowners do not
have appurtenant easement rights to the utility easements.

Given
the lack of any evidence of a common area, the Association’s authority to
assess and collect dues and levy special assessments to meet any unanticipated
needs is insufficient to show that Tract 19051 is a planned development. A similar situation existed in >Mount Olympus, supra, 59 Cal.App.4th at page 895, where, as here, there was no
evidence that membership in the homeowners association was transferred with the
sale of any of the lots in the tract.
(§§ 1352, 1358, subd. (c).) In
that case, the homeowners association (MOPOA) owned and maintained two small
plots of land on which a sign was displayed.
In rejecting MOPOA’s argument that the two small plots constituted a
common area within the meaning of the Act, we stated that the association “did
not establish that a ‘separate interest coupled with an interest in the common
area or membership in the association’ had been conveyed. Indeed, it is clear from testimony at trial
that there was no mandatory membership in MOPOA, and that it was a purely
voluntary association of homeowners with no power to charge or collect assessments.” (Ibid.) The same reasoning is equally applicable to
this case.href="#_ftn8" name="_ftnref8"
title="">^[8]



II. Defendants Are Not Entitled to Attorney
Fees Under Section 1354

Plaintiffs
contend that if we determine that Tract 19051 is not a common interest
development, the award of attorney fees under section 1354 must be reversed
because the Act does not apply. The
contention is well taken. In >Mount Olympus, supra, 59 Cal.App.4th at pages 895-896, we found that because the
Act did not apply, the trial court had erred in awarding attorney fees under
section 1354. (See 12 Miller &
Starr, Cal. Real Estate (3d ed. 2008) § 34:66, p. 34-229 [“If the property
described in the restrictions is not a ‘common interest development,’ this
provision for the award of fees does not apply.”].) Because the same rationale applies to this
case, the attorney fee award under section 1354 must be reversed.

>

>DISPOSITION

>

The order awarding plaintiffs’ attorney fees under
section 1354 is reversed. In all other
respects, the judgment is affirmed. The
parties are to bear their own costs on appeal.



NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS







SUZUKAWA,
J.



We concur:







WILLHITE,
Acting P. J.







MANELLA, J.