Opinion
B308382
03-01-2024
Richard C. COLYEAR, Petitioner and Respondent. v. ROLLING HILLS COMMUNITY ASSOCIATION OF RANCHO PALOS VERDES et al, Plaintiffs and Appellants.
Horvitz & Levy, David M. Axelrad, John A. Taylor, Jr., Burbank; Kaufman, Dolowich & Voluck, Richard C. Greenberg, Samantha F. Lamberg, and Michael J. Weinberger, Torrance, for Plaintiffs and Appellants. Greenberg Glusker Fields Claman & Machtinger, Ricardo P. Cestero, Los Angeles; Chuck & Tsoong, Stephen C. Chuck, Glendale; Greines, Martin, Stein & Richland, Kent L. Richland, David E. Hackett, Los Angeles and Stefan C. Love, for Petitioner and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County, Christopher K. Lui, Judge. Affirmed in part and reversed in part. (Los Angeles County Super. Ct. No. BS150539)
Horvitz & Levy, David M. Axelrad, John A. Taylor, Jr., Burbank; Kaufman, Dolowich & Voluck, Richard C. Greenberg, Samantha F. Lamberg, and Michael J. Weinberger, Torrance, for Plaintiffs and Appellants.
Greenberg Glusker Fields Claman & Machtinger, Ricardo P. Cestero, Los Angeles; Chuck & Tsoong, Stephen C. Chuck, Glendale; Greines, Martin, Stein & Richland, Kent L. Richland, David E. Hackett, Los Angeles and Stefan C. Love, for Petitioner and Respondent.
MORI, J.
The Rolling Hills Community Association of Rancho Palos Verdes (the Association) appeals the judgment in favor of Richard C. Colyear on his claim for declaratory relief, an injunction, and damages for breach of fiduciary duty arising out of the Association’s tree-trimming covenant. Colyear cross-appeals the denial of his claim for quiet title. In the published portion of this opinion, we affirm the judgment as to the claim for declaratory relief. In the unpublished portion of the opinion, we affirm the judgment as to Colyear’s claim of quiet title and reverse with respect to the claims for injunctive relief, breach of fiduciary duty against the Association, and the attorney fees award against the Association’s individual directors.
FACTUAL BACKGROUND
In the mid-1980s, the Palos Verdes Corporation (PVC) acquired a large portion of the Palos Verdes Peninsula and began subdividing Rolling Hills. The community was envisioned as a place where residents could enjoy country living and was extolled for its views. Beginning in 1936, PVC carved out its first tract and recorded a declaration of covenants and restrictions regarding that section. Over the years, PVC annexed more tracts, each with its own declaration. Although the original tract and many subsequent tracts contained covenants permitting the Association to trim trees on properties to preserve views, some did not.
As the years passed, trees grew, and view preservation became an issue in the community. Richard C. Colyear owned two parcels outside the original tract with a large garden containing many mature trees. Because the annexation declaration covering his property contained no tree-trimming covenant, Colyear preemptively initiated this action to obtain, among other things, a declaration and injunction that the trees on his property could not be cut.
The trial court agreed with Colyear, relying on Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 47 Cal. Rptr.2d 898, 906 P.2d 1314 (Citizens). In Citizens, our Supreme Court held a covenant in a declaration establishing a general plan for a subdivision is binding on property within the subdivision if it is recorded before the execution of the contract of sale, describes the property, and states that it is to bind purchasers, even if the covenant is not in the deed. Citizens makes clear, how- ever, that its ruling applies to properties described in the declaration at the time of sale because the owners, by their purchase, impliedly assent to the covenant’s terms. Because the tree-trimming covenant was not recorded against Colyear’s property when he purchased it, the court found he did not impliedly agree to the covenant’s terms.
A. Background of Rolling Hills Development
PVC acquired Lot "H," part of the old Rancho Palos Verdes, in 1926. Most of the Palos Verdes Peninsula was contained within Lot "H," including what is now the City of Rolling Hills.
Rolling Hills is a planned community. At the time of its inception, there were no trees in Rolling Hills, with every lot enjoying a panoramic view of Santa Monica Bay and the local mountains. Rolling Hills had large lots which offered the "ideal outdoor life, seclusion, privacy, recreation, horseback riding, cultivation of fruits and vegetables[,] and the enjoyment of a country atmosphere, all protected by good restrictions." (Hanson, Rolling Hills, The Early Years (1978) p. 24.) As further described by the Association’s attorney in the 1940s, "[PVC’s] project in these hills contemplate[d] a community development of refinement, contentment, rural composure, security, privacy and isolation …. "
In 1936, the Association was incorporated with five volunteer directors.
B. Recordation of Declaration 150
The first phase of the development was initiated with the recordation of Declaration 150 on May 14, 1936. Declaration 150 stated that PVC "certifies and declares that it has established and does hereby establish the General Plan for the protection, maintenance, improvement[,] and development" of the land described in it. The General Plan set forth "the general basic and local restrictions, conditions, covenants, reservations, liens and charges upon and subject to which all lots, parcels and portions of said property shall be held, leased or sold and/or conveyed." Declaration 150 contained a metes and bounds description of its boundaries, and it only covered a portion of Rolling Hills.
Declaration 150 authorized the Association to interpret and enforce its provisions and the provisions of "any subsequent declaration." (See Declaration 150 Art. I, § 4, Art. II, § 2, subd. (p), Art. IV, § 11.) Any landowner likewise could enforce the General Plan against other owners. Declaration 150 stated, "[A]ny lot owner subject to the jurisdiction of the Association" may seek an abatement of a violation of any other lot owner of any restrictions, condition, or covenant in this declaration. (Art. IV, § 12.)
Article IV, section 5 of Declaration 150 provided for the annexation of future tracts. Such annexed tracts would be "subject to restrictions, conditions, covenants, reservations, liens, or charges set forth in a Declaration of Restrictions." Upon the recording of such declarations, "the Association shall then and thereafter have power to do and perform any and all of the acts, to fix, impose and collect charges, assessments and dues from the owners of said property as therein provided[,] and to grant said owners membership in the Association as therein agreed to and provided."
Article II, section 2 of Declaration 150 provided that the Association’s powers extended to any property and owner in its jurisdiction and, according to appellants, reflects PVC’s intent to extend the General Plan to the entire Rolling Hills community.
The Tree-Cutting Covenant (Tree CO is contained in Article I, section 11 of Decla- ration 150, which provided in relevant part: "The Association shall have the right at any time to enter on or upon any part of said property for the purpose of cutting back trees or other plantings which, in the opinion of the Association, is warranted to maintain and improve the view of, and protect, adjoining property."
A.E. Hanson, the first general manager of PVC, recalled in his memoir Rolling Hills, The Early Years, supra at page five, that at the time of development, all of Rolling Hills was put "under general basic restriction" when Declaration 150 was signed.
C. Annexation of Additional Tracts Under Separate Declarations
Over the years, additional tracts were annexed. Today, Rolling Hills consists of 57 tracts, each added by its own numbered declaration and agreement with PVC. In 1937, PVC annexed the first additional tract with Declaration 150-A. Declaration 150-A expressly stated it was subject to the same restrictions and conditions as Declaration 150. Another area, referred to as the "Flying Triangle," was added in 1939 with Declaration 160. From 1941 to 1944, additional tracts were added, governed by Declarations 150-B through 150-F. These declarations contained the same Tree CC as Declaration 150.
In January 1944, the Board of the Association adopted a Resolution allowing it to record agreements for the declaration of covenants in conformity with Declaration 150. The Resolution provided that the Association could, "from time to time, [ ] execute and deliver, and cause to be recorded in the office of the County Recorder of the County of Los Angeles, an agreement between this [Association and [PVC] for the declaration of establishment of basic restrictions, conditions, covenants, reservations[,] liens, charges and certain local restrictions in conformity with said Declaration No. 150, …."
A similar resolution was adopted in 1949.
Declaration 150-M, applicable to Colyear’s property, was recorded on May 29, 1944, and does not contain the Tree CC. In 1967 and 1970, Colyear purchased his parcels at 35 and 37 Crest Drive. This land is not within the boundaries described in Declaration 150. Neither Colyer’s title insurance policies nor his deeds contain a reference to Declaration 150; rather, the title insurance reports reference Declaration 150-M. Currently, Colyear’s property has many mature trees and a large garden.
D. Inconsistencies Result in the 1947 Swaffield Study
Roland Swaffield, an attorney and Rolling Hills resident, prepared a study in 1947 regarding inconsistencies between Declaration 150 and the annexation declarations. Swaffield observed that there were questions concerning the scope and applicability of the various declarations, and there was a "wide divergence of these restrictions in many instances."
In conjunction with this report, Swaffield produced an analysis of the differences in the restrictions, with particular emphasis on Declaration 150-AF. Declaration 150-AF is identical to Declaration 150-M in its preamble and in its omission of the Tree CC. Swaffield’s analysis observed that in the tract governed by Declaration 150-AF, "the Association would not have the same power concerning these subjects" discussed in the omitted sections "as it possesses in relation to the original Rolling Hills area under Declaration 150." In November 1947, Swaffield asked Kelvin Vanderlip, PVC president, why the Tree CC (codified in section 11), among other sec- tions, had been omitted from Declaration 150-AF.
Vanderlip responded that PVC intentionally removed those provisions: "[P]ractically all of the provisions which were contained in Declaration No. 150, … were removed by our attorneys as far back as the Flying Triangle Declaration [(Declaration 160)] for the purpose of simplification." Vanderlip stated that PVC would not "object to the modification of [Declaration 150-AF]" to conform it to Declaration 150.
In 1948, after evaluating possible modifications to the declarations, a draft modification was prepared, adding the Tree CC to Declaration 150-AF. The parties intended to use this modification as a model for other declarations in order to bring various parcels into conformity with Declaration 150. A Master Agreement was prepared in 1950 to update the annexation template. However, the parties realized that modifying the declarations would require 70 percent concurrence of Association members. The modifications never took place, and no modified declarations were ever recorded.
Later declarations, those recorded from 1949 through 1969, included the Tree CC.
E. Russell v. Palos Verdes Properties (1963) 218 Cal.App.2d 754, 32 Cal. Rptr. 488 ( Russell )
There are a number of cases involving covenants, some concerning covenants in Rolling Hills specifically. Russell, a case predating Citizens, involved Rolling Hills subdivision restrictions requiring neighborhood association permission before sub-dividing any parcel. (Russell, supra, 218 Cal.App.2d. at p. 757, 32 Cal.Rptr. 488.) Russell held that personal covenants, which do not run with the land, may be enforced against transferees acquiring the property with actual or constructive notice of the restrictions when the property was conveyed to them, when failure to enforce the restrictions would produce an inequitable result. (Id. at pp. 762-764, 32 Cal.Rptr. 488.)
Proper recordation of a real property instrument is necessary to impart constructive notice of its contents. (Civ. Code, §§ 1213, 1214.) If an instrument cannot be located by searching the "grantor" and "grantee" indices of the public records, the instrument does not constitute constructive notice and later bona fide purchasers or encumbrances are not charged with knowledge of its existence. (See Stafford v. Ballinger (1962) 199 Cal. App.2d 289, 297, 18 Cal.Rptr. 568.)
Although its holding is not on point here, Russell made various non-binding observations about the interplay between Declaration 150 and the subsequent annexation declarations. At issue in Russell was Declaration 150-W. (Russell, supra, 218 Cal.App.2d at p. 765, 32 Cal.Rptr. 488.) Russell observed that Declaration 150 created "a general plan of restrictions." When PVC sold subsequent parcels, "before conveying the same and for the future use of the land," PVC "imposed on each the above restrictions in the form of separate Agreements and Declarations between it and [the] Association." (Id. at p. 758, 32 Cal.Rptr. 488.) Russell further observed that the declarations applicable to the parcels that were sold (Declarations 150-A through 150-V) were intended to establish a general plan for the development, improvement, and protection of the subdivision. (Id. at p. 759, 32 Cal.Rptr. 488.) With Declaration 150-W’s reference to the General Plan in Declaration 150, Russell indicated the land it annexed into Rolling Hills became "subject to the same restrictions." (Id. at p. 765, 32 Cal.Rptr. 488.) William Kinley, the Association’s counsel at the time of the Russell decision, relied on the decision to assert that "all parcels in Rolling Hills are subject to [Declaration] 150 because of the reasoning in the Russell case" and "everybody was covered" by the General Plan. Kinley believed Russell established that "all of the Declarations of Restrictions were to be considered as a part of Declaration [] 150" and "not as separate and independent declarations of restrictions." Nonetheless, Kinley informed his successor, Sidney Croft, who became the Association’s attorney in 1988, that different restrictions had been placed on different tracts.
Declaration 150-W’s simplified restrictions list also omits the Tree CC.
F. Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 47 Cal.Rptr.2d 898, 906 P.2d 1314 ( Citizens )
In Citizens, our Supreme Court held that a declaration of restrictions for a subdivision need not be cited in a parcel’s deed to be effective if certain conditions were met. (Citizens, supra, 12 Cal.4th at p. 349, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) Citizens required that the declaration be recorded before the execution of the contract of sale, describe the property it is to govern, and state that it is to bind all purchasers and their successors. (Ibid., italics added.) Citizens denounced the "crazy-quilt pattern" of restrictions that resulted from a contrary rule, which occurred when "the developer of a subdivision records a uniform plan of restrictions intended to bind and benefit every parcel alike," but "implementation of the plan depends upon the vagaries of the actual deeds, and whether they contain at least a ritualistic reference to restrictions of record." (Id. at pp. 360–363, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) Citizens reasoned that "if the restrictions are recorded before the sale, the later purchaser is deemed to agree to them … even if there is no additional reference to them in the deed." (Id. at p. 363, 47 Cal.Rptr.2d 898, 906 P.2d 1314.)
G. Nunn v. Rolling Hills Community Association of Rancho Palos Verdes (Super. Ct. Los Angeles, 2004, No. BC314522) ( Nunn )
In Nunn, the superior court rejected the contention that a parcel subject to Declaration 150 could claim exemption from its Tree CC provisions because the party seeking to enforce those provisions against it was not so encumbered.
Nunn involved two adjacent homeowners who disputed whether the Tree CC applied to their property. The Lorigs, who were uphill to the Nunns, sought to have the Association trim the Nunns’ trees, but the Nunns sought an injunction to prevent the trimming. The Nunns’ property was within the original boundaries of Declaration 150, while the Lorigs’ property was outside the boundaries of Declaration 150 but within Declaration 150-AE. Declaration 150-AE did not contain the Tree CC.
The court observed that the General Plan provision authorizing the Tree CC was contained in a declaration by PVC (through Declaration 150) when it owned "what is now the Nunn property and the Lorig property. Said provision is contained in documents in the chain of title of the Nunn property but is not contained in a conveyance or document in the chain of title of the Lorig property."
The Nunns argued that while the Tree CC was in their chain of title, the Tree CC was not in the Lorigs’ chain of title such that the covenant lacked mutuality and could not be enforced against them. The court disagreed and found the Nunns were bound by the Tree CC because it was "contained in a declaration that describes the Nunn property, was recorded before the Nunn property was sold, states that it is to bind all purchasers and their successors and was recorded to give subsequent purchasers constructive notice of it …. The Nunns … had constructive notice that trees upon their property might be trimmed to maintain the view of, and protect, adjoining property." As a result, the court denied the Nunns’ request for preliminary injunction. The Nunns’ writ petition was summarily denied by this court.
H. Subsequent Resolutions Attempt to Correct View Impairment Provisions
Given the inconsistencies and uncertainties regarding the enforceability of view restrictions, beginning in the 1990s, as trees had matured, residents complained that Rolling Hill’s blank canvas had become an area of "obscene landscaping." Responding to community support for view protection, the Association attempted to create conformity among the divergent declarations.
The Association adopted several resolutions as follows:
Resolution 166. This resolution, adopted in 1997 and drafted by Croft, permitted any Rolling Hills resident to apply for the Association to exercise its tree-trimming authority to correct view impairments. Resolution 166 does not distinguish between parcels that have a Tree CC and those that do not.
Resolution 181. In 2002, the Association limited view impairment correction to cases involving mutuality of deed restrictions. The resolution adopted a policy accepting applications only when "the applicant and the affected parcel are subject to the same Deed Restrictions."
The Association opted to require mutuality of deed restrictions to reduce litigation with those who, like Colyear, objected to having the Tree CC applied to their property. Colyear wrote to the Association in July 2002, informing the Association that his property was covered by Declaration 150-M. He asked whether the Association asserted the Tree CC was enforceable against his property, and the Association responded, "No. You are one of the few ‘miscellaneous’ parcels who are not protected."
Resolution 193. In response to the Nunn litigation, Croft advised that the Tree CC need not be in the chain of title to be binding. Croft asserted that Declaration 150's Tree CC applied to all properties in the Association’s boundaries.
In 2006, Resolution 193 was issued. It stated that Declaration 150 applied to "some, if not all" properties in Rolling Hills. Resolution 193 required that the object of the view complaint be subject to the Tree CC. But, as amended in 2009, this resolution permitted any owner to file an application.
Resolution 220. This June 2012 resolution replaced Resolutions 166, 181, and 193. Recognizing the Tree CC applied to "some, if not all, properties in the City of Rolling Hills," it stated it was the Association’s "policy to encourage resolution of view impairment issues between the parties who are directly involved." The resolution permitted any property owner to file a view application, regardless of the owner’s governing declaration.
PROCEDURAL BACKGROUND
A. Petition and Complaint
This action originated in 2015, when a neighbor of Colyear filed a view application under Resolution 220 against another neighbor. However, two of Colyear’s trees appeared in a photograph of the view application, so Colyear preemptively sued the neighbor as well as the Association and several of its board members to enjoin them from cutting his trees, for declaratory relief that the Tree CC did not apply to his property, and for quiet title and breach of fiduciary duty against the board and Association. The neighbor successfully challenged Colyear’s lawsuit as a SLAPP action, but the action proceeded against the remaining defendants. (Colyear v. Rolling Hills Community Association of Rancho Palos Verdes (2017) 9 Cal.App.5th 119, 128, 187, 214 Cal.Rptr.3d 767.)
After several intermediate proceedings, Colyear filed his operative Third Amended Petition and Second Amended Complaint in June 2018, stating claims for declaratory relief, injunctive relief, quiet title, slander of title, and breach of fiduciary duty against the Association and the director defendants. Colyear sought to enjoin the Association from relying on Resolution 220 and Declaration 150 to trim trees on his property and a declaration that Declaration 150 did not apply to his property.
In addition to the Association, the operative petition named the Board of Directors of the Association; Board members David McKinnie, Joseph Heitzler, Gian Starinieri, Marcia Gold, Tom Heinsheimer, and Fred Lorig; and non-board member Yu Ping Liu.
B. Trial and Statement of Decision
After the trial court granted defendants’ motion for summary adjudication on the slander of title claim, the matter proceeded to a 10-day bench trial held in September 2019.
Before trial, on July 23, 2019, Colyear dismissed without prejudice individual director defendants Gold and Heinsheimer, and on August 15, 2019, dismissed Starinieri.
Colyear principally argued that restrictions can only burden the property legally described in the restricting document, and because Declaration 150 only described one tract, under Citizens, it did not burden his property. The Association argued that Citizens supported its position because Declaration 150 was in Colyear’s chain of title through Declaration 150-M, and reasonable inquiry would have put Colyear on notice that Declaration 150’s general restrictions, including the view covenant, applied to his property. The Association also argued it had treated Declaration 150 as the General Plan from the beginning and its interpretation of the General Plan was conclusive.
The trial court issued its Corrected Statement of Decision and entered judgment on September 4, 2020.
In its statement of decision, the court identified the issue as whether Declaration 150 was binding on properties other than those identified therein. The court rejected the Association’s contention that Russell established the governing effect of Declaration 150 over the entire community. The court distinguished Russell on the basis it did not address the Tree CC, did not address inconsistent provisions among the various recorded declarations, and assumed for purposes of the case before it the declarations were the same. As a result, the court found Russell provided no support for the Association’s argument that Declaration 150 was binding across the entire community.
The trial court also conducted a linguistic analysis of Declaration 150-M. The court concluded Declaration 150-M did not incorporate Declaration 150’s terms sufficiently to impart notice that Declaration 150 applied to properties governed by Declaration 150-M. Further, extrinsic evidence, including the 1944 resolution, the Swaffield study, as well as the Hanson book, confirmed that Declaration 150 was not drafted to apply clearly and unambiguously outside its boundaries. Further, the abortive attempts of the Association over the years to modify or amend the annexation declarations showed that the Association was aware of the inconsistencies.
Lastly, the trial court concluded Citizens did not compel a different result. Citizens held that where a common plan for a sub-division is recorded before the properties in a subdivision are sold, all properties in the subdivision are bound, even where the deed or other documents pertaining to the sale do not mention the restrictions. However, Declaration 150 was not a standalone plan that expressly applied to all of Rolling Hills at the time Colyear purchased his home. Additionally, the CC&Rs in Citizens were recorded on the subject property, while Declaration 150 was not recorded on Colyear’s property. Thus, no "uniform plan of CC&Rs was ever imposed during the expansion of the community, as the Swaffield analysis showed years before [Colyear] purchased [his property]." The trial court observed, "To the extent a crazy quilt exists, it is a byproduct of the method by which PVC and [the Association] expanded the community."
The trial court granted Colyear’s request for declaratory relief and an injunction, declaring that Declaration 150 was not binding on Colyear’s property except to the extent any restrictions were restated in Declaration 150-M. The court enjoined the Association from enforcing or attempting to enforce the Tree CC against Colyear’s property and from "publishing or disseminating in any statements or documents, including internet website content, indicating that the [Tree CC] applies to or may be enforced against the [s]ubject [p]roperty." The court found the Association breached its fiduciary duty to Colyear, but denied Colyear’s quiet title claim, finding it unwarranted and "redundant" given the injunction and declaratory relief. The court also entered judgment in favor of the individual defendants on the fiduciary duty claim.
In so ruling, the trial court found the petition for writ of mandate superfluous. The court reasoned that, although there was no basis for the Association to enforce the Tree CC, issuance of writ relief was unnecessary because the claims for declaratory and injunctive relief accomplished this purpose.
On February 25, 2021, the court awarded $1,328 million in attorney fees to Colyear under Civil Code section 5975.
DISCUSSION
A. Applicability of the Tree CC to Colyear’s Property
1. Standard of Review
[1–3] We analyze deeds under the same rules applicable to contracts. (Canyon Vineyard, Estates I, LLC v. DeJoria (2022) 78 Cal.App.5th 995, 1003, 294 Cal. Rptr.3d 198.) "Contract interpretation is a question of law." (Ibid.) " ‘The fundamental goal of contract interpretation is to give effect to the mutual intention of the parties.’ " (Ibid; see Civ. Code, § 1636; Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264, 10 Cal.Rptr.2d 538, 833 P.2d 545.) When a contract is reduced to writing, the parties’ intention is determined from the writing alone, if possible. (Civ. Code, § 1639.) "The words of a contract are to be understood in their ordinary and popular sense." (Civ. Code, § 1644; see Lloyd’s Underwriters v. Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194, 1197–1198, 32 Cal.Rptr.2d 144 ["We interpret the intent and scope of the agreement by focusing on the usual and ordinary meaning of the language used and the circumstances under which the agreement was made"].) The whole of the contract is " ‘to be taken together, so as to give effect to every part, if reasonably practicable,’ " and to avoid a construction "that would render other provisions surplusage." (Boghos v. Certain Underwriters at Lloyd’s of Landon (2005) 36 Cal.4th 495, 503, 30 Cal. Rptr.3d 787, 115 P.3d 68 (Boghos); see R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal.App.5th 1019, 1026, 226 Cal. Rptr.3d 677 (R.W.L. Enterprises) [an interpretation giving " ‘effect to all provisions of the contract is preferred to one which renders part of the writing superfluous, useless or inexplicable’ "].)
[4–6] Extrinsic evidence is admissible to prove a meaning to which the contract is reasonably susceptible. (Powers v. Dickson, Carlson & Campillo (1997) 54 Cal. App.4th 1102, 1111, 63 Cal.Rptr.2d 261.) If the trial court decides, after receiving the extrinsic evidence, the language of the contract is reasonably susceptible to the interpretation urged, the evidence is admitted to aid the interpretation. (Ibid.) Thus, "[t]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37, 69 Cal.Rptr. 561, 442 P.2d 641.)
[7] The threshold issue of whether to admit the extrinsic evidence—that is, whether the contract is reasonably susceptible to the interpretation urged—is a question of law subject to de novo review. (Appleton v. Waessil (1994) 27 Cal.App.4th 551, 554-555, 32 Cal.Rptr.2d 676.) Here, because the material facts are undisputed, the legal significance of those facts presents a question of law which we review de novo. (Hill v. San Jose Family Housing Partners, LLC (2011) 198 Cal.App.4th 764, 774, 130 Cal.Rptr.3d 454.)
2. Declaration 150 Does Not Apply to Colyear’s Property
a. Under Citizens, Declaration 150 Does Not Burden Colyear’s Property Because His Property is Not Described in It
[8, 9] "A covenant running with the land is created by language in a deed or other document showing an agreement to do or refrain from doing something with respect to use of the land." (Committee to Save The Beverly Highlands Homes Assn. v. Beverly Highlands Homes Assn. (2001) 92 Cal.App.4th 1247, 1269, 112 Cal.Rptr.2d 732.) The only covenants that run with the land are those specified by statute "and those which are incidental thereto." (Civ. Code, § 1461.) The primary characteristic of a covenant running with the land is that its benefits and burdens pass with the transfer of the estate. (Self v. Sharafi (2013) 220 Cal.App.4th 483, 488, 163 Cal. Rptr.3d 71.)
Citizens described the requirements for the formation of covenants and held that where CC&Rs are recorded before the sale of any property in a subdivision, describing the property they govern, subsequent purchasers who have constructive notice of the recorded CC&Rs are deemed to have agreed to be bound by such restrictions, even where such restrictions are not mentioned in any deed or other document. (Citizens, supra, 12 Cal.4th at p. 349, 47 Cal.Rptr.2d 898, 906 P.2d 1314, italics added.) Citizens found it was not merely the intent of the original grantor that established the covenant; there must be sufficient intent on the part of the purchaser to enter the covenants. "Although notice is relevant to our resolution of the issue, it is not the issue itself." (Id. at p. 356, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) Rather, there must be sufficient evidence of the grantee’s intent to accept the covenant. (Id. at pp. 356, 365-366, 47 Cal. Rptr.2d 898, 906 P.2d 1314.) [10, 11] As Citizens made clear, the covenant comes into existence upon sale or transfer of the property. "In essence, if the restrictions are recorded before the sale, the later purchaser is deemed to agree to them. The purchase of property [with] knowledge] of the restrictions evinces the buyer’s intent to accept their burdens and benefits. Thus, the mutual servitudes are created at the time of the conveyance even if there is no additional reference to them in the deed." (Citizens, supra, 12 Cal.4th at p. 363, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) Citizens concluded, "[T]he rule is consistent with the rationale that a covenant requires an agreement between buyer and seller, and not a unilateral action by the developer." (Id. at p. 367, 47 Cal. Rptr.2d 898, 906 P.2d 1314.) In other words, the parties’ intent is inferred from the recorded uniform plan: "It is express on the part of the seller, implied on the part of the purchaser …. " (Id. at p. 366, 47 Cal.Rptr.2d 898, 906 P.2d 1314.)
Citizens examined two eases for guidance: Werner v. Graham (1919) 181 Cal. 174, 183 P. 945 (Werner) and Riley v. Bear Creek Planning Committee (1976) 17 Cal.3d 500, 131 Cal.Rptr. 381, 551 P.2d 1213 (Riley). In both cases, covenants were recorded by developers seeking to impose a general plan, but the developers failed in their efforts for different reasons. In Werner, the developer subdivided a parcel and recorded a map but did not record any other documents indicating any restrictions. (Werner, supra, at p. 177, 183 P. 945.) The developer in Riley sold the property in dispute by deed that contained no restrictions, but nine months after the conveyance, the developer recorded a document purporting to impose uniform restrictions on a number of lots, including the one in dispute. (Riley, supra, at p. 504, 131 Cal.Rptr. 381, 551 P.2d 1213.) In both Werner and Riley, the Supreme Court held the properties were not bound by the restrictions. In Werner, there was no recorded document imposing uniform restrictions on the entire subdivision, only individual deeds imposing restrictions on specific parcels. In Riley, the restrictions were recorded after the conveyance at issue.
[12] Here, applying the rule recognized in Citizens and its rationale, we conclude the Tree CC of Declaration 150 does not apply to Colyear’s property. First, it is undisputed that Declaration 150 does not describe Colyear’s property, as required by Citizens. This requirement defines the scope of the buyer’s implied agreement to any covenant binding the described property. As originally set forth, Declaration 150 covered the narrow strip down the middle of Rolling Hills. In later years, as PVC expanded the Rolling Hills development, additional declarations were made, including Declaration 150-M governing Colyear’s property. Neither Colyear’s deeds nor his title reports reference Declaration 150, but they reference Declaration 150-M. As a result, under Citizens, Colyear did not impliedly agree to be bound by a covenant set forth in Declaration 150.
b. The Association’s Arguments
Acknowledging that Declaration 150 does not expressly apply to Colyear’s property, the Association advances several theories to extend the Tree CC to Colyear’s property: (1) Declaration 150-M’s references to Declaration 150 and the General Plan incorporate the basic restrictions of Declaration 150; (2) these references provide constructive or inquiry notice that the Tree CC in Declaration 150 applies to lands annexed under Declaration 150-M; (3) the extrinsic evidence at trial established that PVC intended to incorporate Declaration 150’s terms into Declaration 150-M; (4) under the Nunn and Russell cases, the Tree CC should apply; (5) Resolution 220 makes the Tree CC applicable; and (6) because Colyear benefits from using Association property, he bears the corresponding burden of complying the Tree CC in Declaration 150. These arguments are unpersuasive.
(1) Declaration 150-M Does Not Incorporate Declaration 150’s Terms
The Association argues that references to Declaration 150 in Declaration 150-M are sufficient to incorporate the Tree CC into Declaration 150-M. We disagree.
[13–17] We turn to contract principles for guidance. A contract may incorporate the terms of another contract. (Shaw v. Regents of the University of California (1997) 58 Cal.App.4th 44, 54, 67 Cal. Rptr.2d 850.) However, the reference to the other contract or its terms must be clear and unequivocal. " ‘ "[T]he reference must be called to the attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties." [Citation.]’ " (Ibid.) Further, the terms of the contract must be sufficiently certain in order to provide a basis for determining the existence of a breach and for giving an appropriate remedy. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811, 71 Cal.Rptr.2d 265.) As a corollary, we will not write the parties’ contract for them. (Industrial Indemnity v. Superior Court (1990) 224 Cal.App.3d 828, 832, 275 Cal. Rptr. 218.)
[18] In this case, Declaration 150-M does not sufficiently incorporate the Tree CC found in Declaration 150. First, unlike other declarations such as Declaration 150-A, Declaration 150-M does not expressly incorporate the restrictions found in Declaration 150; to the contrary, the General Basic Descriptions in Declaration 150-M duplicate some of Declaration 150’s General Basic Restrictions and omit others. Second, while Declaration 150-M acknowledges that Declaration 150 exists, nowhere is there clear and unequivocal incorporation of Declaration 150 or its Tree CC. For example, the first reference to Declaration 150 is to its separate location by Map and Book number. Declaration 150-M also refers to PVC’s "General Plan" and the Association’s power to interpret and enforce covenants imposed on tracts covered by Declaration 150, but this simply recites the Association’s powers as to tracts covered by Declaration 150. It does not state that Declaration 150’s covenants apply to tracts covered by Declaration 150-M. Finally, Declaration 150-M provides that under Article IV, section 5 of Declaration 150, PVC can annex more tracts to be governed by Declarations that are to be later recorded. That is what occurred here: Colyear’s property was annexed, and Declaration 150-M was recorded to govern it. These references are not sufficiently clear, unequivocal, or certain to incorporate Declaration 150’s Tree CC into Declaration 150-M.
(2) Declaration 150-M’s References to Declaration 150 Did Not Otherwise Make the Tree CC Applicable to Colyear’s Property
The terms of Declaration 150, including the Tree CC, were not recorded against Colyear’s property. Nevertheless, the Association asserts that the references to Declaration 150 in Declaration 150-M were sufficient to put Colyear on constructive or inquiry notice that the Tree CC applied to his property. According to the Association, Colyear should have inquired as to what Declaration 150 said, analyzed the competing declarations, and reached the conclusion that the Tree CC applied to his property. The Association asserts, under Citizens, this is sufficient to enforce the Tree CC against his property, even though the covenant is not in the chain of title. We disagree.
[19, 20] As a preliminary matter, the references to Declaration 150 in 150-M did not put Colyear sufficiently on constructive or inquiry notice of the applicability of the Tree CC. Constructive notice of a lien, covenant, or other interest in property arises from the proper recording of that interest. (Civ. Code, § 1213; Vasquez v. LBS Financial Credit Union (2020) 52 Cal.App.5th 97, 108, 265 Cal.Rptr.3d 78.) Civil Code section 1213 provides that "every conveyance of real property … recorded as prescribed by law [provides] constructive notice of its contents [ ] to subsequent purchasers." (See Civ. Code, § 1215.) A purchaser has inquiry notice where the purchaser " ‘has knowledge of circumstances which, upon reasonable inquiry, would lead to that particular fact.’ " (In re Marriage of Cloney (2001) 91 Cal. App.4th 429, 437, 110 Cal.Rptr.2d 615; see Civ. Code, § 19.) As we have discussed, Declaration 150-M did not incorporate Declaration 150 by reference and Declaration 150 was not otherwise recorded against Colyear’s property. Even if Colyear had reviewed Declaration 150, given the property description therein, he could have concluded it applied to a different section of Rolling Hills. This conclusion would have been confirmed by the Association in 2002 when it stated the Tree CC was not enforceable against his property.
[21] Moreover, Citizens does not stand for the proposition that a purported covenant outside the chain of title can be enforced whenever there is a development with a common grantor. Although PVC is the common grantor of the Rolling Hills parcels, it conveyed different parcels under different declarations. As Citizens makes clear, a covenant is created by implied agreement, which occurs with the recordation of the original declaration on property and its acceptance through conveyance to a subsequent purchaser. " ‘The burden should be upon the developer to insert the covenant into the record in a way that it can be easily found’ and ‘[a]ll buyers could easily know exactly what they were purchasing.’ " (Citizens, supra, 12 Cal.4th at p. 365, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) The recordation should be such that a title search reflects the operative declaration. (Ibid.) Then, when a conveyance is made subject to that declaration, the buyer can be deemed to have consented to it. Here, it is undisputed that the original declaration recorded on Colyear’s property, 150-M, did not contain the Tree CC. Thus, under Citizens, Colyear cannot be deemed to have accepted the Tree CC.
(3) Extrinsic Evidence of PVC’s Intent
[22] The Association argues the trial court erred in ignoring its extrinsic evidence of PVC’s intent to have a uniform General Plan that would include tree-trimming covenants for every property in the development. We disagree that such evidence must be considered in defining the scope of the covenant. Citizens demonstrates the intent that matters is what is expressed in writing in the recorded predecessor documents describing the property to be bound. (Citizens, supra, 12 Cal.4th at p. 366, 47 Cal.Rptr.2d 898, 906 P.2d 1314.) PVC did not bring its intended General Plan to fruition by recording the necessary documents in conformity with Citizens on Colyear’s property. As explained in Werner and Citizens, the sole intent of the common grantor, the original owner, is insufficient. There must be joint intent between the grantor and the grantees. Further, Riley rejected parol evidence to show that the parties in fact intended the property to be subject to restrictions like those later recorded, finding that the covenants must be in writing to be effective. (Riley, supra, 17 Cal.3d at p. 509, 131 Cal.Rptr. 381, 551 P.2d 1213.) A contrary rule "would make important questions of the title to real estate largely dependent upon the uncertain recollection and testimony of interested witnesses." (Id. at p. 510, 131 Cal.Rptr. 381, 551 P.2d 1213.)
(4) Nunn and Russell
To the extent the Association attempts to rely on Nunn and Russell to contend the Tree CC applies to Colyear’s property, both cases are distinguishable. Nunn addressed two properties, one with the Tree CC and the other without it, and did not decide the issue whether the Tree CC applied to the entire community regardless of the language in the individual declarations. Russell did not decide the applicability of the Tree CC. As our analysis based on Citizens makes clear, Russell’s commentary on the scope of the General Plan and Declaration 150 is only dicta. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1158, 163 Cal.Rptr.3d 269, 311 P.3d 184 [an appellate decision is not authority for everything said in the court’s opinion but only for the points involved and actually decided].)
(5) Resolution 220
[23] The Association argues Resolution 220 provides an independent basis to enforce the Tree CC. Resolution 220 permitted any property owner to file a view application, regardless of the owner’s governing declaration. Resolution 220 only provides a mechanism for filing a view application to resolve tree-trimming disputes. It is not a covenant.
(6) Colyear’s Use of Association Common Areas is Not Inconsistent with Our Conclusion
[24] Finally, the Association asserts that because Colyear enjoys the benefits of Rolling Hills’ roads, gates, and other facilities, he should be subject to all intended restrictions, including the Tree CC. The Association generally argues that it would be unfair to allow him to enjoy the benefits of common areas without subjecting him to the burden of the Tree CC. To the extent this argument posits that only properties subject to the original Declaration 150 may use the common areas, it is mistaken. The Association’s Articles of Incorporation establish that the common areas are governed by the Association "for the benefit of residents of any tract" and as may be set forth in any subsequent declaration for such tract. As we have discussed, there is no declaration applicable to Colyear’s property that includes the Tree CC.
c. Declaration 150-M’s Tree-Trimming Provisions Do Not Provide an Independent Basis to Trim Colyear’s Trees
The Association asserts certain provisions of Declaration 150-M (Art. II, § 2, subds. (u), (j), and (v))—independent of Declaration 150’s General Plan—provide the authority for it to enter Colyear’s property and trim trees for any purpose, including view protection. Colyear asserts the Association did not raise the issue at trial, and in any event, the Association’s tree-trimming power is limited to streets, parks, playgrounds, school grounds, and adjacent land.
Declaration 150-M, Article II, section 2, subdivision (u) permits the Association to trim trees under certain circumstances: The Association has the power "[t]o care for, trim, protect, plant and replant trees, shrubs, or other planting on streets, parks, playgrounds, school grounds, or upon any property over which it may have and/or assume control or jurisdiction and/or on any property adjoining the same." Article II, section 2, subdivision (j) grants the Association the authority to "provide for light [and] air … for the occupants of existing and/or hereafter erected buildings by establishing such regulations as are usually included in city housing codes or zoning regulations." Finally, Article II, section 2, subdivision (v) authorizes the Association to "care for, trim, protect and plant or replant any vacant or private property it may assume charge of and to make a reasonable charge therefor."
[25] We need not determine whether the Association sufficiently raised the issue at trial because these provisions do not give the Association power to trim trees on any and all private property within the Association’s boundaries. By its plain language, subdivision (u) governs plants in public places: streets, parks, playgrounds, and school grounds. To the extent subdivision (u) also refers to "any property over which [the Association] may have and/or assume control and jurisdiction and/or on any property adjoining the same," this language must be read in context. It refers to the Association’s ability to attend to plantings found on the types of property the Association may control that are similar to the public property specifically identified. In some instances, the Association’s plantings could naturally encroach on adjoining properties, in which case, subdivision (u) would arguably allow the Association to cut them back. But subdivision (u) cannot be construed beyond the terms it encompasses. (See Eisen v. Tavangarian (2019) 36 Cal.App.5th 626, 644, 248 Cal.Rptr.3d 744 [ejusdem generis limits general word following specific word to those of like kind].)
To interpret subdivision (u) as the Association proposes would render the Tree CC mere surplusage, as the Association could use subdivision (u) to trim trees found anywhere on any private property. PVC would not have relied upon vague language at the end of a provision governing public spaces to establish a significant right to enter an individual homeowner’s property and cut their trees. (See Boghos, supra, 36 Cal.4th at p. 503, 30 Cal.Rptr.3d 787, 115 P.3d 68; R.W.L. Enterprises, supra, 17 Cal.App.5th at p. 1026, 226 Cal.Rptr.3d 677.)
[26, 27] The Association’s arguments regarding subdivisions (j) and (v) are also unavailing. The language in these provisions is also too general to encompass the Association’s specific right to enter private property and trim trees. Subdivision (j) deals with the Association’s ability to make light and air regulations "as are usually included in city housing codes or zoning regulations" and contemplates view preservation regulations regarding future construction. This language cannot reasonably be construed to give the Association the authority to enforce the Tree CC on property not otherwise encumbered by it. (Epic Communications, Inc. v. Richwave Technology, Inc. (2015) 237 Cal.App.4th 1342, 1348-1349, 188 Cal.Rptr.3d 844 [language must be reasonably susceptible to interpretation "urged by the party"].) For the same reason, subdivision (v) cannot be extended in the manner the Association argues. Subdivision (v) concerns the care of vacant or private property of which the Association takes charge, not private property generally, including property actively managed by its owner. Finally, as with subdivision (u), if subdivisions (j) and (v) are interpreted as the Association proposes, they render the Tree CC mere surplusage. (See Boghos, supra, 36 Cal.4th at p. 503, 30 Cal.Rptr.3d 787, 115 P.3d 68; R.W.L. Enterprises, supra, 17 Cal.App.5th at p. 1026, 226 Cal.Rptr.3d 677.)
See footnote, ante. p. 806.
DISPOSITION
The judgment of the superior court is affirmed with respect to declaratory relief and quiet title claims. The judgment is reversed with respect to the injunctive relief and breach of fiduciary duty claims. The attorney fees award is vacated, and the court is directed to enter a new order awarding attorney fees to Colyear against the Association. The parties are to bear their own costs on appeal.
We concur:
COLLINS, Acting P.J.
ZUKIN, J.