Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Appeal from a judgment of the Superior Court of Orange County No. 06CC02010, Andrew P. Banks, Judge.
Law Office of Tracy Ettinghoff and Tracy Ettinghoff for Defendants and Appellants.
Nueland, Nordberg, Andrews & Whitney and Steven Rader for Plaintiffs and Respondents.
OPINION
SILLS, P. J.
I Overview
Construction began on the great cathedral of Florence, Italy, in September 1296 and wasn’t completed until 1469 -- and that after a famous competition begun in 1419 between architects over who could best finish the dome. (Brunelleschi won -- something about being able to make an egg stand upright by itself.) Even then, the elaborate facade was not finished until 1887. Thus, completion of the cathedral project took, depending on whether you count the facade, somewhere between 173 years and 591 years.
The Nellie Gail Ranch Owners Association is just a little less patient with unfinished construction work than the authorities of medieval and Renaissance Florence. The CC&Rs require that work on any construction projects must be completed within a year of approval. In 2001 Ralph and Ida Colombo submitted plans to the association for a custom home, retaining walls and a barn on a vacant lot within Nellie Gail Ranch. All plans were approved by July of 2001.
As of the writing of this opinion in the first part of 2008, the retaining wall and barn have not been completed, and the house has never been started. And that presumably includes a more-than-one-year de facto extension provided by this court’s stay of the trial court’s permanent injunction, made in February 2007, but filed March 2, 2007. (That stay may have created some problems of its own, which we will attempt to remedy in the disposition of this opinion.)
It is that permanent injunction which is the subject of this appeal. The injunction allows representatives of the association to come onto the Colombo’s property to demolish the partially-constructed walls and construction debris presently on the property.
Importantly, though, the February 2007 injunction has a built-in, albeit now obsolete, safety valve: If the Colombos had submitted plans for the construction of a single-family house 30 days within of February 5, 2007, and a good faith review by the architectural review committee had resulted in approval of those plans, and if construction had commenced within 120 days of February 5, 2007, and if the Colombos had, thereafter, “diligently undertake[n]” that construction, and the construction was entirely completed within one year from February 5, 2007, then the injunction would have been stayed, by its own terms.
In short, it was like a second chance to do in 2007 what the Colombos started in 2001. For some reason, though, the safety valve was not used, and, judging from oral argument in this court, nothing has happened “on the ground” after the February 2007 injunction.
There is no argument that the provision in the CC&Rs requiring all construction to be completed within one year of commencement is unreasonable, or for some reason otherwise unenforceable as such. If homeowners’ associations can prohibit house cats (see generally Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361), even against perhaps the most eloquent defense of feline companionship one is likely to encounter in legal literature (see id. at pp. 390-397 (dis. opn. of Arabian, J.)), they can certainly prohibit a property from being left in a semi-permanent state of open trenches, exposed rebar, piles of piping and half-finished walls.
We therefore affirm the trial court’s judgment granting the injunction, but, as we explain in the disposition, owing to the delay of the appeal itself, modify the judgment to move the safety valve into the future rather than leave it a dead letter in the past.
II History
Ralph and Ida Colombo own vacant land in the expensive Nellie Gail Ranch area of southern Orange County. We may dispense with the backstory from the 1990’s concerning the Colombos unsuccessful efforts to improve the property and start with their application, in the spring of 2001, to build three structures on the property: a retaining wall, a barn, and a single family home. As noted above, plans for all three structures were approved by the association architectural review committee by July 2001, and there is nothing in the record to indicate that construction on the single family home has ever started. That point is significant because there is no dispute over the proposition that the CC&Rs do not allow construction on the lot without a single family residence.
In April 2002 the Colombos obtained extensions to complete the retaining wall and house. The time on the wall was extended to July 2002 -- about three months away -- and the time on the house was extended to April 2003. The association sent the Colombos a letter noting there was “no end in sight” to the construction. The letter demanded that the Colombos submit a timeline with firm deadlines to the architectural review committee within 30 days. Ralph Colombo responded at the end of February with a letter noting that Ida was ill, but that he “estimated” that construction (the letter does not limit it to the retaining wall and barn) would be finished “six to nine months at the most.” In turn, that correspondence prompted a letter from the association in late March 2003, granting an extension “subject to establishment of firm dates for completion” of six specific items, including the foundation and completion of framing for the house. While the March 2003 letter did not itself give details about the nature of the extension, reading that letter in conjunction with the Colombos’ February letter suggests that the March letter meant a six-to-nine-month extension.
By September 2003, at least some construction had certainly begun on the property, since the construction was sufficiently unsightly to prompt a letter, dated September 12, 2003, from the association noting it was “unattractive to the eye.” The September 12 letter gave the Colombos 15 days to erect dark green construction screening material around the perimeter of the property, and if they didn’t, the association would erect it for them and assess the Colombos individually for the cost. While the letter did not mention anything about deadlines for the completion of construction, it did make a reference to the construction activity having “been going on for years and appears it will not be completed for many more.” That is the closest the letter came to waiving any existing deadlines.
Another letter, dated September 23, 2003 soon followed. The letter stated the board of the association was “offering” the Colombos “an extension to October 15, 2003 to effectively screen” off the property “from view” of their “neighbors and others.”
About a year later, in October of 2004, the association’s attorneys sent the Colombos a formal notice of violation for being in violation of the one-year deadline for completion of construction. The letter included a request for alternative dispute resolution. Another request to go to alternative dispute resolution was sent in early November 2004.
The first half of 2005 involved the parties going back and forth in an attempt to mediate the matter, which ultimately proved unsuccessful. That lack of success generated the filing of the complaint in this action in July of 2005. The Colombos did not file their answer until November of that year. In late 2005 and early 2006 -- that is, while the action was in litigation -- the Colombos attempted to gain approval of new plans for the barn. Those plans were disapproved, in February 2006, by the association’s architectural review committee, at least in part because they indicated that the barn would not be for equestrian use.
The case came to trial in early December 2006. In their trial brief the Colombos told the court that they had secured an $800,000 construction loan. Despite that, the trial court issued in injunction prohibiting further construction by the Colombos and prohibiting the Colombos from interfering with the demolition and clean up of existing work to be performed by representatives of the association. However, the injunction was stayed by its own terms to give the Colombos 30 days from February 5, 2007 to submit plans for a single family residence. If, after an expedited and good faith review of those plans they were accepted by the architectural review committee, the stay would be extended for a year from February 5, 2006 so as to give the Colombos time to complete construction. The Colombos timely appealed from the judgment granting the injunction.
Despite its outward form as a prohibitory injunction, this court stayed the injunction during the pendency of this appeal.
III Analysis
A. Estoppel, Really Waiver
The Colombos’ argument for an estoppel as a matter of law is based on the September 2003 letters telling them to erect green screening. They note that the author of those letters, Francois Langlois, testified that when he sent the September 12 letter, it was the association’s “intent” to allow them to finish their construction projects. The exact testimony was: “Well, it was our attempt [sic: probably should be “intent”], the association, to allow him to finish his construction, to develop the property, and --- we didn’t feel to compel him to stop the work would be necessarily in the best interest of Mr. Colombo, and the finishing of the structure itself would be better and the improvements and landscaping the property and ultimately building a residence on the property.” (Later on, he described his testimony as “it was the association’s intent to allow the Colombos to finish their construction project.”)
This argument obviously will not support an estoppel, because it relies on the subjective unexpressed intention of the association, hence it was not something the Colombos could rely on. It makes better sense to treat it as an assertion of grounds for a waiver.
But it also fails as an argument for waiver as a matter of law, because there is nothing that resembles a knowing waiver of rights. Neither the September 12 nor the September 23 letter use express language to give up any right otherwise possessed by the association.
The most one might wring out of those letters is the reference in the September 12 letter to construction “going on for years” and not being completed “for many more.” However, since all factual conflicts and inferences must be drawn in favor of the trial court’s judgment, we cannot take the words “many more” as a waiver of the association’s one-year construction deadline. In context, the words just as easily suggest the association’s exasperation with the slow progress of the construction, and an implied request to hurry up.
Moreover, even if read for an implied extension, the words, in context, could not reasonably be taken to allow an indefinite extension. Read in light of the association’s one-year rule, at most the September 12 letter might have been read for the proposition that the Colombos had an extra year, perhaps a few months more even, to complete construction. But by the time of trial in late 2006, the Colombos already had three additional years to complete their construction and hadn’t done so, and the trial court was certainly reasonable to draw the line at three years, even assuming some sort of unspecified extension.
The Colombos also assert, in the estoppel-waiver portion of their brief, that the association never actually notified the Colombos that it considered their plans to be expired and no longer any good. This argument fails because even if the Colombos were right, and the 2001 plans were held to be still operative as a matter of law, there is no question that construction was not timely completed by any reasonable measure.
B. Laches
The Colombos also assert that the association was guilty of laches, but fail to note the October 2004 attempts to have the dispute arbitrated. Those efforts continued into early 2005 before the association, having reached the end of its patience, finally filed this action. Given that the September 2003 letters might have been reasonably taken for at least a one-year extension from October 2004 (see above), the association’s forbearance to take any sort of formal legal action until October 2004 is easily reasonable.
We should add here that the problem of increments is a universal problem in human experience: How long does one wait for someone to show up before one calls something off? Economists call this the problem of “sunk” goods, which is a term for the old dilemma of whether to throw good money after bad. Under the circumstances of this case, the combination of forbearance and extra time afforded the Colombos by the association only underscores the reasonableness of the association’s course of action. The association was trying to strike a balance between resolving the problem of unsightly unfinished construction on friendly terms and, on the other hand -- to paraphrase the line from Julius Caesar -- crying havoc and letting slip the dogs of litigation. We do not think the association should be penalized for, in essence, forbearing the extra year, in order to reach an accommodation that would have benefited all parties. (See Transwestern Pipeline Co. v. Monsanto Co. (1996) 46 Cal.App.4th 502, 519 [attempt to settle dispute obviates laches].)
C. Discriminatory Enforcement
The Colombos claim that because there is evidence that the association has approved other non-equestrian barn-like structures, they had the right to “re-submit” new plans for a barn, and it was discriminatory enforcement for the association to deny approval of plans for the new barn. That point is moot because the barn has not been completed to this day, old plans or new, and so the February 2007 injunction, as framed. cannot be attacked on that basis. (However, we shall have something to say on the subject of good faith in plan approvals later on.)
D. Lis Pendens
The question of whether the trial court should have expunged a notice of lis pendens filed by the association against the property should have been raised by writ of mandate (Code Civ. Proc., § 405.39 [“No order or other action of the court under this chapter shall be appealable.”]) and it wasn’t. (However, we shall also have something to say on the subject of the lis pendens later on, because it implicates the ability of the association to equitably enforce its injunction.)
E. Evidentiary Error
The trial court refused to allow into evidence two photos, exhibits 130 and 131, showing the state of the barn and retaining wall as of November 2006. It also did not allow into evidence a photo of a barn on the adjacent property.
The former exclusion was within the trial court’s discretion, since there was no argument that the construction actually had been completed as of the date of trial. (Which in any event could have been established from oral testimony.) And the latter exclusion is a moot point, since it went to the discriminatory treatment issue, which itself is moot. Neither the trial court nor this court is faced with a situation of a barn properly completed under the 2001 approvals which the association sought to modify or tear down because it was not in accord with new architectural guidelines made in 2005. Indeed, the record supports the inference that the association would have been delighted if the barn had been completed as late as 2005 under the old architectural guidelines. This is a failure-to-finish case, not a we-don’t-like-your-finished-structure case.
We need only note that (1) given the Colombos apparent abandonment of any attempt to complete a house on the property for the entire duration of this case until now, and (2) the undisputed fact that the CC&Rs require a completed residence if there is going to be a barn on the property, that the “barn issues” of discriminatory treatment and evidentiary error are red herrings. Without a house on the property, it really makes no difference what kind of barn is there.
IV Disposition
The balancing of interests inherent in the structure of the injunction is masterful. Indeed, we are hard pressed to imagine what more the trial judge could have done to allow both sides to obtain their legitimate objectives (with perhaps one exception, that we will address below). Had the Colombos been more serious about their project, there might be a newly constructed house, barn and retaining wall by now.
The pendency of this appeal, has itself, however, had an unforeseen effect on the trial court’s well-crafted injunction, not the least of which was this court’s own, perhaps improvident, stay of trial proceedings during the pendency of this appeal. The appellate stay may have created some confusion as to the operation of the safety valve provided for in the injunction and may have cast doubt on the ability of either party to do anything during the pendency of the appeal. We thus find ourselves in a situation of reviewing an injunction which contained an important safety valve which this court itself may have inadvertently turned off.
Having jurisdiction over that injunction now, we will therefore use our authority under sections 43 and 187 of the Code of Civil Procedure to modify the judgment to closely approximate in the post-remittitur time frame what the trial court did in the pre-appeal time frame. (See also Eisenberg, et al., Cal. Practice Guide: Appeals and Writs (The Rutter Group 2007) ¶ 11:53, p. 11-17 [“CCP § 43 and CRC 8.264(c)(1) give the appellate court broad authority to correct error by ordering a modification of the appealed judgment or order (rather than reversing or remanding for further proceedings), thereby permitting disposition of the case in a single appeal and sparing the parties further delay and expense.”].)
Accordingly the injunction is hereby modified so that the time-frames and deadlines set forth in the original February 2007 injunction will begin again with the filing of the remittitur from this court, albeit subject to the one difference noted in (3) and (4) below. Specifically, this means:
(1) The Colombos will have 30 days from the date of the remittitur to submit plans for the construction of a single family house.
(2) The architectural review committee will perform a good faith review of those plans. We will also add this: Since the injunction reviewed arises out of a failure to implement plans approved in 2001, the Colombos may simply re-submit the plans already approved in 2001 by the association. If they do, the association is estopped to not approve those already approved plans. If the Colombos submit new plans, those plans may not be disapproved on the basis of more stringent or costly architectural standards adopted after 2001.
(3) The Colombos will have 120 days after approval by the architectural review committee to commence construction. This is the one flaw in the trial court’s safety valve -- requiring the Colombos to start construction 120 days after a date certain, but not giving the architectural committee a deadline by which to approve the plans. (As originally structured, the injunction permitted the architectural review committee to eat up the Colombos’ allowed time.)
(4) The construction must all be completed within this time frame: One year from the date of the remittitur plus the time from the date the Colombos submit plans to the date those plans are approved by the architectural committee and approved by the relevant municipal authorities. To use the taxi metaphor, the meter on the one year will not run during any period of plan approval over which the Colombos have no control.
(5) If the construction is not completed within the time frame specified above, the February 2007 injunction will allow the Association to do what the injunction here otherwise allows it to do.
However, we must add these elementary cautions. “Those who seek equity, must do equity and have ‘clean hands.’” (In re Marriage of Calcaterra and Badakhsh (2005) 132 Cal.App.4th 28, 38.) “Equitable estoppel also may be asserted when equitable relief is sought” (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 180.)
It therefore follows that if the Colombos can show that the Association’s failure to voluntarily subordinate its lis pendens is a substantial factor in the Colombos’ failure to obtain reasonable financing for reasonably anticipated construction, that failure may be a yet future defense to the association’s enforcement of the injunction.
With those modifications, the judgment providing for the injunction is affirmed. In the interest of justice each side will bear its own costs on appeal.
WE CONCUR: RYLAARSDAM, J., MOORE, J.