Opinion
G057653
12-09-2020
BROADMOOR SEA VIEW COMMUNITYASSOCIATION Plaintiff, Cross-defendant and Respondent, v. HUGH L. LOGAN et al., Defendants, Cross-complainants, and Appellants.
Nelson Mullins Riley & Scarborough, Lauren A. Deeb; Finlayson Toffer Roosevelt & Lilly and Matthew E. Lilly for Defendants, Cross-complainants and Appellants. Delphi Law Group, Zachary R. Smith; Gordon Rees Scully Mansukhani, Craig J. Mariam, John B. Fraher and Scott W. McCaskill for Plaintiff, Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2017-00918370) OPINION Appeal from a judgment of the Superior Court of Orange County, Thomas A. Delaney, Judge. Reversed. Nelson Mullins Riley & Scarborough, Lauren A. Deeb; Finlayson Toffer Roosevelt & Lilly and Matthew E. Lilly for Defendants, Cross-complainants and Appellants. Delphi Law Group, Zachary R. Smith; Gordon Rees Scully Mansukhani, Craig J. Mariam, John B. Fraher and Scott W. McCaskill for Plaintiff, Cross-defendant and Respondent.
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INTRODUCTION
This appeal is taken from a summary judgment the trial court granted in favor of plaintiff, cross-defendant and respondent Broadmoor Sea View Community Association (the Association), and against defendants, cross-complainants and appellants Hugh Logan (Hugh) and Caroline Logan (Caroline; collectively the Logans).
Broadmoor Sea View (Sea View) is a community of single family homes in Newport Beach. Sea View is governed by a set of recorded covenants, conditions and restrictions (CC&R's). Under the CC&R's, the Association is obligated to maintain the "Slope Control Area" on each individual homeowner's property within Sea View.
The Logans own a property (the Property) in Sea View. The Property has a flat back yard that extends from the rear of their house to the top of the Slope Control Area which descends to the street below. This dispute concerns walls located at or near the boundary between the flat part of the backyard and the adjacent Slope Control Area.
The Logans: (1) demolished the original walls (the Original Walls) on the Property, without obtaining prior approval from the Association; and (2) then sought approval from the Association for plans to replace them with new walls (the New Walls). The Association denied approval for the New Walls and litigation ensued.
The trial court focused on the undisputed fact the Logans demolished the Original Walls, without approval, and concluded the Logans had thereby forfeited any claim the Association acted unreasonably in withholding approval for the New Walls.
On appeal, the Logans primarily contend the trial court erred because there is a triable issue of fact as to whether the Association acted reasonably in withholding approval for the New Walls. The Association contends summary judgment was proper.
On de novo review, we conclude the trial court erred and reverse, because there are at least two triable issues of material fact. First, exactly where is the boundary line demarking the Slope Control Area? Second, did the Association act reasonably?
FACTS AND PROCEDURAL HISTORY
On summary judgment, courts must strictly construe the evidence of the moving party and liberally construe the evidence of the opposing party; and courts must also resolve all evidentiary doubts or conflicts and indulge all reasonable inferences in favor of the opposing party. (See Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) Our statement of the facts will reflect these principles which favor the Logans. 1. The Demolition Phase
Sea View was developed in 1976. Article IX, section 1, of the CC&R's commits control of the Slope Control Area on each individual homeowner's property to the Association. In order to define the boundaries of the Slope Control Area, a map is attached as exhibit C to the CC&R's and incorporated by reference.
The Property, on Yacht Enchantress, is shown at the bottom of exhibit C. There is a Slope Control Area on the Property that descends from the flat backyard to Yacht Truant below. But the precise boundary between the flat backyard on the Property and the adjacent Slope Control Area cannot be ascertained from exhibit C.
Hugh testified in deposition the boundary is obvious because of the relatively steep drop off where the Slope Control Area begins: "Well, the house pad is basically flat. When it gets to the slope, it goes down very sharply. And so you're looking at something which is flat and then suddenly goes off at a sharp angle." There is also a one-foot gardener's maintenance path on the flat part of the Property at or near the top of the Slope Control Area.
The Logans purchased the Property about 2000. At that time it had the Original Walls which were built by the developer. The parties do not agree on how to describe the Original Walls. The Logans refer to them in their briefs as "interior garden walls," indicating there was plenty of space between the Original Walls and the edge of the flat area in the backyard of the Property.
The Association refers to the Original Walls as just "walls," but in one passage asserts they were "walls abutting" the Slope Control Area. That is, the Association's position (as characterized in its brief) is the Original Walls were already at the very edge of where the flat backyard ends and the Slope Control Area begins.
Caroline testified in deposition the Original Walls were white, topped by red brick. According to Hugh, by 2013 the Original Walls were "in disrepair." He thought they "needed to be repaired or removed." That year the Logans applied to tear down the Original Walls and replace them with the New Walls, which would (according to them) be closer to the rear of the flat part of the Property and the top of the Slope Control Area. Their 2013 application was rejected by the Association, according to its property manager, because the New Walls would "extend into the Landscape Control Area."
In early March 2014, the Logans demolished the Original Walls, without first obtaining the Association's approval, intending to replace them with the New Walls closer to the rear of the flat part of the Property and the top of the Slope Control Area.
On March 14, 2014, the Logans received a cease and desist letter from a law firm representing the Association. The Logans did cease and desist, leaving open trenches where the New Walls were to be built. They also repaired all damage to the slope itself and restored the slope to its "original condition."
Consistent with the position it takes in this appeal, a March 17, 2014 e-mail from the Association president claimed the Original Walls constituted the outermost possible walls the Property could have. His e-mail asserted: "The ONLY construction you are allowed to do is to replace your ORIGINAL perimeter wall and repair the slope bringing it back to the condition it was before you started your construction." But his use of the phrase "perimeter wall" confused Caroline, because she knew the Original Walls were definitely not on the "perimeter" of the slope.
The parties do not agree on why the Logans proceeded without the Association's prior approval. The Association has taken the position it was a rebellious act of defiance. The Association's memorandum of points and authorities supporting its motion for summary judgment later put it: "No one in the community has ever been allowed to do what the Logans have done, and they have done it with total disregard to the Association, its members, and the community's Governing Documents."
The Logans have taken a different position. Acting as his own attorney, Hugh had read the section of the CC&R's concerning walls and he did not believe it applied to the "removal" of walls, only their "modification." He testified in deposition he believed there was no prohibition against the "removal" of walls in the CC&R's. "I don't think we had a prohibition against taking down a wall that was in disrepair and was interior to our house pad."
Hugh also understood a homeowner on Yacht Maria had been allowed to build a wall that extended onto the Slope Control Area. That wall, according to Hugh Logan, was "strongly supported" by the Association's architectural review committee (ARC). The Yacht Maria project had "convinced" the Logans their replacement of the Original Walls "would ultimately be approved."
And finally, Hugh Logan thought the Association had an "unwritten rule" that even if a project had been "started without approval," if it would have been approved anyway, it would eventually be approved. But no such rule was applied in this case. For the rest of 2014, the "Logan-Association" dispute became a story of the Logans' futile attempts to obtain the Association's approval to build the New Walls. 2. The Pre-Litigation Phase
There was also personal reason Hugh may have proceeded without permission: He had been diagnosed with lung cancer and given a 10 percent chance of surviving. As we will explain, that fact is not as irrelevant as one might think. Whether the Association stalled the Logans with a multitude of bureaucratic obstacles is relevant to the Logans' core claim that the Association acted unreasonably.
Just as they disagree about how to describe the Original Walls, the parties disagree about how to describe the New Walls proposed by the Logans. On the one hand, the Logans call the proposed New Walls "perimeter" walls. On the other hand, the Association prefers to call them "retaining" walls.
The Logans' made an "application" for the Association's approval to build the New Walls in April 2014. But it does not appear to have been a proper "application" at all. The Logans just showed up at the April 2014 board of directors meeting with plans drawn up by a professional designer, Leo Liwag of Liwag Design.
The Association claims in its brief it has no record of it.
The Logans April 2014 nonapplication was met with a nonrejection from the Association. At the April 2014 board meeting, board members told the Logans they would not consider the plans until a soil compaction study was done to make sure the slope had been properly compacted when the Logans restored it.
That appears to be the first and only expression of concern about compaction.
The Logans then presented a proper application to the ARC in May 2014. Hugh had "walked the property" with Liwag and "showed him where things were to go," and Liwag "understood the concept" of keeping the New Walls on the flat pad in the backyard. Logan later testified, "with the maintenance path clearly defined, it was very obvious where the top of the slope was."
The Logans May 2014 application proposed New Walls on the flat pad, no higher than three feet, and with "view obstructions out no further than the adjoining neighbor's wall," plus continuation of a "generous flat outer path" for the Association gardeners to tend the slope. The May 2014 application also included a neighborhood awareness form showing the neighbors were okay with the proposal.
According to Hugh, the May 2014 plans were "off the slope, completely on the flat house pad." Regarding aesthetics, the New Walls were to be "decorative in a manner that fit in with the community."
Caroline testified in deposition the New Walls proposed in March 2014 did "actually cut into the slope."
The May 2014 application was rejected by the ARC in a letter June 12, 2014 which stated in relevant part: "Per Article 8 Section 16 of the Association's CC&R's not approved to extend patio wall on slope. Committee agrees with Boards request to return wall to previous condition by June 30, 2014." "Furthermore, the Committee agrees with the Board's request to have the wall put back in its previous condition no later than June 30, 2014."
Article VIII concerns "Architectural and Landscaping Control" and section 16 says: "No structure, planting or other material shall be placed or permitted to remain or other activities undertaken on any slope area or any other area within Broadmoor . . . which might damage or interfere with established slope ratios, create erosion or sliding problems, or interfere with established drainage systems or patterns."
The ARC's June 12 rejection letter did not assert, and the Association does not argue now, that the proposed New Walls, if completely within the flat pad area of the Property, would somehow "damage or interfere with established slope ratios, create erosion or sliding problems, or interfere with established drainage systems or patterns."
On August 3, 2014, two members of the Association's board of directors visited the Property and looked at the May 2014 plans. Referring to whether the New Walls would encroach on the slope, one board member encouraged the Logans to appeal the ARC's June 12 rejection, stating: "'This is ridiculous. These plans are only on the pad, they are not on the slope in any way whatsoever, and we suggest that you appeal to the board on August 5th.'" (Quoting from Caroline's deposition.)
Hugh testified they did "appeal" the ARC's June 12 denial to the Association board of directors. But someone—either a member of the ARC or a member of the board of directors, Hugh could not recall exactly who - talked them into dropping their appeal so the matter could be sent back to the ARC. The Logans then dropped their "appeal" from the ARC's denial of their May 2014 application and resubmitted it to the ARC, without changes.
The ARC responded in a letter that set out six requirements, including a survey to be performed by a surveyor licensed by the City of Newport Beach.
So the Logans retained a surveyor, Leonard Stiles. Stiles was on a list of five surveyors who "worked with" the city. Hugh told him the Logans "wanted a legitimate land survey of the top of the slope."
Stiles was initially reluctant to take on the job because the top edge of the slope was as obvious to him as it had been to the Logans and the Association board of director members who had looked at it on August 3. "You don't need a surveyor for this," he told Hugh. "You can walk the property, and it's clear where the top of the slope is, and you can stake it from there." Indeed, Stiles said a survey "wouldn't provide any useful information." All a survey would show was "whether the point over here is two inches higher than the point over there."
Nevertheless, the Logans engaged Stiles, and Hugh told him, since the ARC wanted the survey, "we're going to give it to them." The Logans then resubmitted their application to the Association's manager in September 2014. Stiles finished his survey October 29, 2014.
On November 15, 2014, the ARC, plus one of the two board members who had visited the Property on August 3, went to the Property. Stiles's survey stakes were in place. They examined the Property and discussed their findings, focusing on the corner of the Logans' backyard and a part near the neighbor's property.
The Association board member who accompanied the ARC that day wrote his fellow board members an e-mail the next day. He recounted the ARC had discussed "two possible scenarios." Either one of them was "very favorable" for the Logans, giving them "all or nearly all of what they are asking for."
The board member was thus optimistic. "Thankfully we appear near the end on this matter," with only "procedural matters" left such as submitting a plan. Of course, there remained the problem of how to address the Logans' earlier destruction of the Original Walls, a topic on which he did not elaborate.
We do not know exactly what happened next, because the record presented to us is incomplete. We do know there was a flurry of e-mails between board members (on November 4, 9, 11, & December 4). But we do not know the content of those e-mails because the Association later refused to produce them and claimed they were not discoverable by the Logans due to attorney-client privilege.
The issue of whether the e-mails actually are protected by the attorney-client privilege was never resolved by the trial court.
We can infer from what record we have, that the ARC presented a review and recommendation to the Association board of directors on December 2, 2014. The ARC wanted what appears to be an extra 18 inch setback from the Logans' proposed location for the New Walls, but otherwise the ARC approved the "proposed landscape plan and the new wall . . . provided the new wall that does not intrude into the slope area beyond the existing wall on the adjacent . . . property."
Conspicuously absent from our record are the Association board of directors' minutes for any December 2014 meeting at which the board discussed the "very favorable" ARC recommendation and then formally denied it. There are only three documents in our record which bear on the topic.
The first of those three documents—and the only record reference provided by the Association in its briefing as to what the board did in December 2014 in response to the ARC's approval recommendation—is a 2018 declaration from the vice-president of its property management company, Morgan Hardigree. Hardigree stated the Association denied every application submitted by the Logans because the proposed improvements would have "encroached into the Landscape Slope Maintenance Area, which the Association has never allowed in the past." She provided no backup showing how or where the New Walls would "encroach" on the Slope Control Area.
The second document is the December 9, 2014 ARC meeting minutes which show the Association was already preparing to litigate the "Logan-Association" dispute. Specifically, the December 9 ARC minutes recounted that "Management" (presumably the Association's property management company) had "advised this matter was now in the hands of the Association's legal counsel, and all further communications to [the Logans] would come directly from the Association's legal counsel."
The third document sheds the most light on the Association's board of directors' rejection of the ARC's approval recommendation: It is a December 5, 2014 e-mail from the one board member who actually looked at the Property. It was addressed to Hardigree, the president of the board, and two others. The tone of the e-mail was one of resignation touched with sarcasm that the matter was now headed to court. Here are the more salient parts of the e-mail:
"Well, as you all know, I have not agreed with very much that the BOD [board of directors] has done on this issue over the last 9 months, frankly it has been a poor display of problem solving. Also, very disappointing to me that we send ARC, our most experienced and learned people on the subject, up there to make an assessment and then we reject their assessment. . . . [¶] Given what has happened to this point, and what appears to me to be division on the BOD as to what we should do next, I am beginning to think that our salvation is for this to end up in court. That could be a win/win for the BOD. If the judge rules in our favor, I guess that we could celebrate that we defended our territory so to speak. If the Logans prevail we can at least say that we fought for what we believed but the judge saw it the other way. . . . Certainly it has political value. It is obvious to me that there is an element on the BOD that is worried about the political aspect of the BOD 'giving in' and certainly that would be eliminated by going to trial."
There is a fourth document that shed some light on what the board might have been thinking, although it is not in the record. That is the respondent's brief filed by the Association in this appeal, which basically says the Logans had to provide an overlay map superimposing their proposed New Walls on Stiles' survey before the board would approve the Logans' plans: "[T]he ARC's recommendation was based on [the ARC's] attempt to infer where the planned wall would be in relation to the top of the slope, as neither Appellants nor Stiles had actually integrated the plans and survey as requested." 3. The Litigation Phase
A. Before the Summary Judgment Motion
With the December 2014 decision to have everything go through legal counsel, the "Logan-Association dispute" entered the litigation phase. The Association filed a complaint against the Logans in May 2017, which included three causes of action:
(1) Breach of contract, in which the Association sought damages for the Logans' breach of the "Governing Documents" by tearing down the Original Walls and not returning them to their original condition.
The "Governing Documents" consist of the CC&Rs and the ARC guidelines.
(2) Injunctive relief, in which the Association sought a court order to stop the Logans from "making further improvements" without approval and mandating they return the Property and Landscape Control Area to "their original condition."
(3) Declaratory relief, in which the Association sought a declaration the Logan's "installation" of improvements and failure to remove them violated the Governing Documents, plus a declaration the Association could enforce its demand to return the Property and Landscape Control Area to their original condition.
The Logans filed a cross-complaint that also listed three causes of action:
(1) Breach of contract, in which the Logans sought damages for breach of the Governing Documents which required the Association to act reasonably in reviewing their proposed improvements.
(2) Violation of Civil Code section 4755, in which the Logans sought damages for the Association's failure to act reasonably in reviewing their improvements.
(3) Declaratory relief, in which the Logans sought (a) a declaration the Association's denial of their applications to build the New Walls were unreasonable and violated Civil Code section 4755, plus (b) a declaration that they should be permitted to proceed with their improvements as contained in the "Application" presented in the ADR process or otherwise "keep the property in its current condition."
The dispute almost got settled in the ADR process, but settlement negotiations are inadmissible to prove validity of claims. (Evid. Code, § 1154.)
B. The Summary Judgment Motion and the Request for a Continuance
The summer of 2018 was marked by legal battles on two fronts. One of those fronts was the Association's motion for summary judgment, filed about June 1, 2018, which was first set for hearing on August 17, 2018. At this point the trial was set for three and one-half months away, on September 17, 2018.
The other front was an ongoing discovery battle. The Logans had propounded discovery seeking the Association documents "related to landscape applications, Board and ARC meetings," and the "Association policies and procedures." They had later filed a motion to compel production.
On August 23, 2018, both motions were set to be heard by the trial court. (The hearing on the summary judgment motion had been continued for a week.)
From the trial court's tentative ruling, it appeared the Logans had won the discovery production battle—or at least had gained more time to obtain documents with which to oppose the Association's summary judgment motion. The tentative ruling was to require the Association to produce all requested documents or submit a verified privilege log. And rather than rejecting the Logans' need to obtain those documents as irrelevant to the summary judgment motion, the tentative ruling stated the Association had "failed to produce discovery concerning its internal communications among the Board, the Architectural Committee and the management company regarding the heart of the claims."
But the final ruling was altogether different. Rather than granting the Logans' motion to compel, the trial court ordered the parties to meet and confer regarding the ongoing discovery dispute, and to produce a joint statement status report on the results of their meet and confer.
A joint status report filed in early September 2018 declared the parties had reached an "impasse" on discovery. Both sides jointly requested direction as to how to proceed. The trial court never responded to that request and never ruled on the Logans' motion to compel.
And the hearing on the summary judgment motion was continued to October 19, 2018. On or before October 19 the Logans sought another continuance of the summary judgment motion so they could obtain "additional discovery."
The record provided to us does not contain a reporter's transcript of the October 19 hearing on the summary judgment motion. The omission would be fatal to the Logans if this were an appeal after a full trial. However, this is an appeal from a summary judgment, and the trial court's errors are apparent on the face of the record we have.
At the conclusion of the October 19 hearing, the trial court took both the motion for summary judgment and the request for a continuance under submission.
On November 30, 2018, the trial court denied the Logans' request for a continuance of the summary judgment motion, without explanation.
And as to the motion for summary judgment, it was a clean sweep for the Association. On the Association's complaint, the trial court ruled:
(1) The Logans breached the Governing Documents because "[t]here was no dispute that the Logans failed to obtain approval of their construction project."
(2) The Association was entitled to injunctive relief so no further construction could occur without the Association approval.
(3) The Association was entitled to a declaration the Logans violated the Governing Documents by their "installation of architectural improvements and failure to remove."
On the Logans' cross-complaint the trial court ruled:
(1) The Logans' claim for breach of the Governing Documents failed, "[s]ince the Logans failed to perform as required by the Governing Documents, they did not meet the conditions necessary to assert a breach of contract.
(2) The Logans' claim for violation of Civil Code section 4765 failed because, the "Logans failed to show that the Assocation violated Civ. Code § 4765(2)."
(3) The Logans' request for declaratory relief was denied in light of the court's other rulings.
Judgment was entered in February 2019 and the Logans timely appealed. The Logans never got the discovery they requested.
DISCUSSION
1. General Principles and Standards of Review
Summary judgment "provide[s] courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844 (Aguilar).) The trial court properly grants the motion if all the papers submitted establish there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Id. at p. 843; Code Civ. Proc., § 437c, subd. (b).)
The moving party bears the initial burden to make a prima facie showing that no triable issue of material fact exists. (Aguilar, supra, 25 Cal.4th at p. 843.) If this burden is met, the party opposing the motion bears the burden of showing the existence of disputed facts. (Ibid.) Courts "'construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it.'" (Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202.) We review summary judgment rulings de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68, 99.) 2. Summary of Claims, Rulings and Arguments on Appeal
The Association's complaint includes two major claims: (1) The Logans violated the Governing Documents by tearing down the Original Walls in March 2014 without obtaining prior approval from the Association; and (2) the Logans should be forced to comply with the Association's demand that they put up restored walls in exactly the same place where the Original Walls stood.
By contrast, the Logans' cross-complaint presents essentially only one claim: The Association acted unreasonably in denying the Logans' applications to build the New Walls proposed in the period April 2014 to December 2014, and in denying its settlement offer/application in 2016.
The complaint and cross-complaint thus overlap on the central question of what was to be done after the Logans' demolished the Original Walls.
It appears from the minute order the trial judge focused on one undisputed fact—the Logans had torn down the Original Walls. This lone fact provided the basis for two conclusions of law: (1) the Logans had violated the Governing Documents in tearing down the Original Walls, and (2) the Logans had thereby forfeited any claim that the Association had acted unreasonably in rejecting their applications for the New Walls.
On appeal, the Logans contend, among other things: a triable issue of fact exists as to whether the Association acted reasonably, so the Associations is not entitled to summary judgment; the trial court erred in denying their request for a continuance under Code of Civil Procedure, section 437c, subdivision (h).
In response, the Association contends, inter alia: summary judgment was proper on the complaint and the cross-complaint, because the Logans breached the Governing Documents; injunctive and declaratory relief was appropriate; the Association acted reasonably; and the trial court properly denied the Logans continuance request.
We conclude the trial court erred, for reasons which we will now explain. 3. No Disposition as a Matter of Law
The part of the CC&R's that the trial court relied on to hold the Logans violated the Association's Governing Documents is Article VII, section 1. The section appears under the heading "Architectural Approval" and reads as follows:
"No fence, wall, building, sign or other structure (including basketball standards), or exterior addition to or change or alteration thereof (including painting) or landscaping, shall be commenced, constructed, erected, placed, altered maintained or permitted to remain on Broadmoor Sea View, or any portion thereof, until plans and specifications shall have been submitted to and approved in writing by an architectural committee. . . ." (Italics added.)
So, Hugh was right, insofar as he recognized neither "removal" or "demolition" are expressly mentioned in section 1. The trial judge too recognized that lack of expression when his minute order invoked the canon of ejusdem generis to conclude the prohibitions in section 1 applied to the "removal" of the Original Walls.
The Association correctly points out Hugh's interpretation is irrelevant.
The ARC guidelines contain similar language bearing on "improvements" in a section entitled "Homeowner Procedures." But again, "removal" and "demolition" do not appear in the text. Like the CC&R's, the focus is on building new structures, not tearing down old ones: "ARC Approval Required. Every improvement to a dwelling or Lot within Sea View must be approved in writing by the ARC before construction or other implementing action begins." (Italics added.)
But that does not mean the Logans did not need the Association's approval to tear down the Original Walls. Reading the Governing Documents as a whole, as we must (e.g., London Market Insurers v. Superior Court (2007) 146 Cal.App.4th 648, 655), it would be unreasonable to conclude they did not apply to removal or demolition.
Demolition, without new construction, leaves an eyesore. Also, in a planned community like Sea View, there is a need for architectural and landscape uniformity. Allowing one property in the development to sit without walls when all the others have them could be discordant and contrary to the ARC guidelines that state, "Sea View is a planned community of a definite theme and character which is obvious to all prospective owners before they commit to ownership in the community." (Italics added.)
Accordingly, any demolition in the context of a planned community like Sea View is necessarily intertwined with the prospect of some sort of replacement. And replacement is expressly conditioned upon ARC approval, by both the CC&R's and the ARC guidelines. Therefore, we agree the Logans violated the CC&R's and the ARC guidelines by tearing down the Original Walls without prior approval.
But the Association only wins on the tear-down issue because tear downs imply replacements. And since the complaint also seeks a declaration that there is no alternative to building replacement walls in the exact same location as the Original Walls, evaluation of the complaint requires us to consider whether the Association correctly rejected the Logans' applications for the proposed New Walls in a different location.
As a result, even considering the Association's complaint in isolation, the summary judgment cannot be affirmed as a matter of law based on the lone undisputed fact the Logans' tore down the Original Walls without prior approval. (Ironwood Owners Association v. Solomon (178 Cal.App.3d 766, 772 [despite association's "being correct" that owners had planted palm trees without approval, "more was required" from association to obtain mandatory injunction requiring removal of trees, including showing association's decision was "made in good faith"].)
The issue of whether the Association acted reasonably in rejecting the Logans' applications to replace the Original Walls with the New Walls remains.
The trial court concluded the Logans had forfeited any unreasonableness claim by violating the Governing Documents when they tore down the Original Walls without prior approval. We disagree.
Both article VII section 1 and the ARC guidelines expressly contemplate the possibility of new construction. They simply require the Association approval first.
The ARC guidelines even go so far as to expressly state, in a part devoted to the standards for ARC approval of any new construction, that "[T]he ARC shall act in a manner that is reasonable and not capricious or arbitrary." (Italics added.)
And it is important to recognize there are two distinct promises inherent in the Governing Documents as applied to this case. On the one hand, the Logans promised not to commence any new construction without ARC approval. On the other hand, the Association promised to be reasonable in processing applications for new construction.
We conclude both promises can be independently enforced. Stated differently, the violation of one covenant by one party does not necessarily relieve the other party of its obligation to perform the other covenant. (See generally Musto v. Grosjean (1929) 208 Cal. 453, 459.) The key to distinguishing independent from dependent covenants is whether the parties intended the performance of one to be a condition precedent to performance of the other. (Ibid.)
Here, there are three reasons why the covenants at issue are independent. First, the Governing Documents should not be construed to trigger a forfeiture. (Ballard v. MacCallum (1940) 15 Cal.2d 439, 444 ["the policy and rule are settled, both in the interpretation of ordinary contracts and instruments transferring property, that the construction which avoids forfeiture must be made if it is at all possible"].)
Second, when the Logans bought the Property, they acquired the right to have proposed new construction evaluated reasonably. And nothing in the Governing Documents makes performance of the covenant not to tear down walls without approval a condition precedent to the covenant to evaluate proposed new construction reasonably.
Third, the very nature of the Logans' breach did nothing to physically preclude new construction. Tearing down the Original Walls created little collateral damage. The open trenches were filled in and the torn-up landscaping was replaced soon after the cease and desist letter. So, the demolition left an essentially blank slate, and there was no inherent reason why any New Walls had to be in the same place.
4. Two Triable Issues of Material Fact
A. The Boundary Dispute
The most obvious triable issue of material fact concerns the precise location of the boundary line between the flat pad on the Property and the adjacent Slope Maintenance Area. The Association's only disclosed reason for rejecting the Logans' proposed New Walls was that they would "encroach" on the Slope Maintenance Area.
On this issue, a close look at the evidence shows the Association has not even presented a prima facie case showing the Logans' proposed New Walls (excepting those proposed in April 2014) encroached on the Slope Control Area.
As noted, exhibit C to the CC&R's is neither plain on its face nor legible. The boundary line is shown as a thick black line drawn through parcel lots, and there is no discernable information regarding elevation levels. In fact, the Association admitted in the court below that one cannot ascertain the boundary line from looking at exhibit C. The Association's reply to the Logans' opposition to summary judgment stated in relevant part: "While it is not possible to determine by this Exhibit the exact limitation of the Slope Control Area, other provisions of the CC&R's provide definitive guidance."
The Association then cited two "other provisions" of the CC&R's for that supposed "definitive guidance." Close examination reveals neither provides it.
The first provision, article IX, section 1, subdivision (o), states: "The Association shall maintain, or cause to be maintained, substantially as originally constructed by Declarant, or as may be modified with the consent of the Architectural Committee and the Board, the brick and exterior portions of the concrete retaining walls, more particularly described in Section 2(f) below . . . ."
The second provision, article X, section 2(f), reads: "Each owner shall maintain, or cause to be maintained, substantially as originally constructed by Declarant or as thereafter modified with the consent of the Architectural Committee and the Board, all portions of any retaining wall within the Landscape Slope Control Areas on his Lot not maintained by the Association pursuant to Section 1(o)."
It is readily apparent neither provision supports the Association's assertions in the court below and on appeal, that (1) any walls constructed by the developer of Sea View, by definition, established the boundary of the landscaped Slope Control Area of the Property; and (2) the Original Walls by definition were the outermost walls possible.
Article IX section 1, subdivision (o) uses the words "retaining walls." According to the Logans—who certainly knew the Original Walls, having lived in the Property for more than a decade—the Original Walls retained nothing. They stood alone.
Plus, article X, section 2(f) uses the word "within," and that word renders any attempt to say the Original Walls were "within" the landscaped Slope Control Area a tautology. All section 2(f) says in this context is that walls within the landscaped Slope Control Area are walls within the landscaped Slope Control Area. It does not say walls on the flat part of an owner's property are necessarily within the Slope Control Area.
Plus, common sense reveals the Association's position to be unfounded. The Association seemingly assumes, as a matter of law, the Slope Control Area cannot be reasonably ascertained by simply going into one's own backyard and looking at it.
That assumption fails because of the word slope, as in Slope Control Area. Absent some special definition, words in contracts are construed according to their ordinary meaning. (See Civ. Code, §§ 1638, 1639, 1644.)
The Association argues one item of evidence establishes beyond any doubt the proposed New Walls encroached on the Slope Control Area. That item is the 2018 deposition of Stiles, and here is the Association's respondent's brief on this point: "Discovery in this matter revealed that in 2018 [the Logans'] own surveyor, . . . Stiles, determined that [the Logans'] plans indeed show the wall encroaching onto the Slope Control Area and the actual slope. (5 AA 2715-2741; 7 AA 3110-3111.)"
We are not persuaded. The first record reference—to pages 2715 to 2741 of the appellant's appendix—is to the entirety of the Stiles' deposition excerpts submitted in support of the summary judgment motion. This improper block record reference is so broad it waives the argument. (See Bernard v. Hartford Fire Ins. Co. (1991) 226 Cal.App.3d 1203, 1205; Spangle v. Farmers Ins. Exchange (2008) 166 Cal.App.4th 560, 564, fn. 3.)
The second record reference undercuts the Association's argument. Pages 3110 to 3111 of the appellant's appendix are the Logans' supplemental opposition to the summary judgment motion, which reveals "the version of the plot plan reviewed by . . . Stiles in April 2018 was the original plot plan prepared by . . . in March 2014." (Italics added.) Since we already know, from Caroline's deposition, that their proposed walls in March 2014 would have cut into the slope, Stiles' comment established nothing. We are only concerned with the Logans' May 2014 and later applications.
Moreover, given Hugh's unequivocal testimony the slope was steep, and that the beginning of the slope was obvious, the most Stiles' deposition could do is to create a conflict in the evidence. This reinforces our conclusion—there is a triable issue as to where the flat part of the Property ends, and where the Slope Control Area begins. Therefore, on this point alone, summary judgment was improper.
B. The Association's Reasonableness and Good Faith
As discussed, the ARC guidelines require reasonableness in processing applications for improvements. In this respect, the ARC guidelines track Civil Code section 4765, which provides in part: "(a) This section applies if the governing documents require association approval before a member may make a physical change to the member's separate interest or to the common area. In reviewing and approving or disapproving a proposed change, the association shall satisfy the following requirements: [¶] (1) The association shall provide a fair, reasonable, and expeditious procedure for making its decision. The procedure shall be included in the association's governing documents. The procedure shall provide for prompt deadlines. The procedure shall state the maximum time for response to an application or a request for reconsideration by the board. [¶] (2) A decision on a proposed change shall be made in good faith and may not be unreasonable, arbitrary, or capricious." (Italics added.)
Regarding reasonableness, the trial court cited Pacific Hills Homeowners Assn. v. Prun (2008) 160 Cal.App.4th 1557, 1566-1567 for the proposition that "the framework of reference . . . is not the reasonableness specific to the objecting homeowner, but reasonableness as to the common interest development as a whole.'" But that unquestionable proposition of law is not relevant on these facts.
In this voluminous record, the Association has not once argued the Logans' proposed New Walls were aesthetically discordant with the rest of the community. Nor has it argued that merely placing the New Walls on the flat part of the Property would be discordant either. Rather, the Association has continually asserted the Logans' proposed New Walls always encroached on the Slope Control Area.
Nothing in the Association's complaint addresses the Logans' attempts to replace the Original Walls with the New Walls. Thus the word "encroach"—a word that appears over 25 times in the respondents' brief—appears nowhere in the complaint. --------
The reasonableness, then, of the Association's processing of the Logans' applications must first be tested on its assumption the proposed New Walls did encroach on the Slope Control Area. But one reasonable inference from the evidence is that every person, including the ARC and two board members, who actually looked at the Property, recognized the New Walls the Logans wanted to build were on the flat part, not the slope.
Plus, when all of the evidence on the summary judgment motion is considered, a reasonable trier of fact might infer the Association never had any intention of granting the Logans approval to build the New Walls, but instead wanted to punish them for demolishing the Original Walls without permission. This evidence includes:
(1) The May 2014 e-mail from the Association's president to the effect that the Original Walls were at the outermost location the Association would allow. If the Association really believed that, then arguably the ARC's processing of the Logans' applications was a pointless charade, one that included making them hire a surveyor.
(2) The dismissive tone of the ARC's terse June 12 rejection letter, and the gratuitous jump-through-our-hoops quality of the letter rejecting the next application. One inference is the Association wanted to suffocate the Logans' application with red tape. (Cf. Wilson v. City of Laguna Beach (1991) 6 Cal.App.4th 543, 556-557 & fn. 16 [noting classic bureaucratic tactics to delay approval of "granny flat" housing].)
(3) The Associations board's December 2014 rejection of the ARC recommendation after the ARC had examined the Property and inferentially found the proposed New Walls didn't encroach on the slope. A reasonable trier of fact might infer an ulterior motive to never "give in" to the Logans' proposals from that rejection alone.
(4) The December 5, 2014 e-mail from the board member who looked at the Property, which alluded to other members of the board refusing the Logans' application to avoid the appearance of "'giving in'" to the Logans. A reasonable trier of fact could infer from this that the board was more preoccupied with its own image than willing to evaluate the Logans' applications reasonably and in good faith.
In sum: strictly construing the Association's evidence; liberally construing the Logans' evidence; and resolving all evidentiary doubts or conflicts and indulging all reasonable inferences in favor of the Logans as we must; a picture of unreasonableness and obstinate bad faith appears. Of course, after a trial a different picture might emerge. The Association might be able to show it acted reasonably and in good faith. 5. The Logans' Motion to Compel Discovery
On remand the trial court will need to rule on the Logans' motion to compel. The documents sought by the Logans, if not privileged, may shed further light on two significant issues in this litigation: (1) the Association's reasonableness in rejecting the ARC's approval recommendation; and (2) the possibility that the Logans could reasonably rely on the Association's prior conduct in regard to other projects in tearing down the Original Walls without prior approval.
DISPOSITION
The judgment is reversed. The Logans shall recover costs on appeal.
THOMPSON, J. WE CONCUR: MOORE, ACTING P. J. IKOLA, J.