Opinion
C088516
01-28-2020
TRENT JASON, Plaintiff and Appellant, v. MICHAEL D. READ et al., Defendants and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 186961)
Plaintiff Trent Jason purchased three lots in a subdivision subject to covenants, conditions, and restrictions recorded by the original subdividers, defendants Steven and Linda Schade (Schades). Several years after plaintiff purchased his lots, defendants Michael Read and Michelle Young-Read (Reads) purchased a lot in the subdivision. They subsequently constructed a home on their lot that allegedly violated multiple provisions of the recorded covenants, conditions, and restrictions.
Plaintiff filed a lawsuit alleging five causes of action against the Reads and two causes of action against the Schades. The complaint sought injunctive relief or, in the alternative, damages against the Reads for constructing a residence in violation of the applicable covenants, and damages for fraud and deceit, violation of an implied-in-fact contract, and equitable relief based on promissory estoppel. Plaintiff also sought damages against the Schades for fraud and deceit related to their obligations as members of the subdivision's architectural control committee.
The Reads moved for summary judgment as to each of plaintiff's causes of action against them, and the Schades moved for judgment on the pleadings as to plaintiff's allegations of fraud and deceit on their part. The trial court granted both defendants' motions, and plaintiff appeals both rulings. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Factual Background
In April 2007 the Schades completed a map of "Schade Acres," a nine-lot subdivision in Redding. In July the Schades recorded a Declaration of Covenants, Conditions and Restrictions (CC&Rs) of Schade Acres. The CC&Rs stated, "[the Schades] intend[ ] to sell the above described real property and to impose on it mutual and beneficial restrictions in accordance with a common plan designed to preserve the value and residential qualities of said land, for the benefit of all its future owners."
The CC&Rs required that all lots be used only for residential purposes. As relevant here, each single family dwelling was required to have at least 1,800 square feet of living area for a single-story dwelling, and ground floor living area of at least 1,400 square feet for a two-story dwelling. Dwellings were prohibited from exceeding two stories in height. All structures in the subdivision were required to have roofs with a pitch of 5/12 or greater.
The CC&Rs required that all plans and specifications for improvements to any lot within Schade Acres must be presented to the architectural control committee (Committee), which was charged with reviewing and approving the plans. The Schades were members of the Committee, and they were to serve renewable three-year terms. The Schades reserved the right to relieve themselves of the obligation of maintaining and appointing the Committee by recording in the Shasta County Recorder's Office a notice to that effect, at which time the powers and obligations of the Committee would vest in the owners of the building sites. No such notice was ever filed.
The CC&Rs provided: "Enforcement shall be by proceedings at law by the owner or owners of lots within the subdivision or in equity against any person or persons violating or attempting to violate any covenants either to restrain violations or to recover damages."
In June 2008 plaintiff purchased three lots in Schade Acres for $90,000 each. By the time of this lawsuit, plaintiff had neither developed his lots nor obtained building plans or permits to build on the lots.
In January 2013 the Reads purchased one lot in Schade Acres from Tri-Counties Bank in a foreclosure proceeding. The Reads obtained a building permit in October 2014. The Reads received a copy of the CC&Rs before taking title to the subject property and read the CC&Rs "at some point" before obtaining a building permit for the residence. The Reads completed construction on their residence in July 2015. The Reads concede the residence contains a garage on the first floor of the dwelling--meaning the ground floor contains zero square feet of living area--and the residence is three stories tall. Plaintiff had no communication of any kind with the Reads before they finished constructing the home.
The Complaint
In July 2017 plaintiff filed his first amended complaint. The complaint asserted seven causes of action. Plaintiff's first cause of action sought injunctive relief to require the Reads to bring their home into compliance with the applicable CC&Rs. He alleged the Reads failed to present their building plans to the Committee, the ground floor of the residence did not have more than 1,400 square feet of living area, and the residence exceeded two stories. Plaintiff alleged the Reads' residence "is not conforming with residential structures in the area, and it is intrusive and so abstract that it could only diminish the property values of the remaining eight lots in this subdivision." He continued, "Essentially, the value of the lots is not the primary issue but the value of the homes which are or would be constructed on them." He requested injunctive relief or, in the alternative, $100,000 in damages related to diminution of value of each lot, plus an additional $100,000 plaintiff spent in "the time, money, and effort" in search of the lots over a five-year period.
Plaintiff's second cause of action alleged the Reads "acted with fraud upon Plaintiff" pursuant to Civil Code section 1572 because they knew of the CC&Rs and intentionally violated them. He alleged he sustained $400,000 in actual monetary damages due to the Reads' conduct, and he requested an additional $50,000 in damages for emotional distress and $50,000 in punitive damages.
Plaintiff's third cause of action alleged the Schades, as members of the Committee, perpetrated fraud upon plaintiff by failing to file notice that they terminated their membership on the Committee and failing to ensure that the Reads complied with the CC&Rs. He alleged the Schades "were liable to [him] in ensuring that the [CC&Rs] were complied with" because they failed to terminate their responsibilities as members of the Committee. Plaintiff contended the Schades had an ongoing duty to determine whether any of the remaining lots had been sold and failed to determine the Reads' building plans violated the CC&Rs. Plaintiff alleged the Schades "acted with fraud," and he asserted the Schades' conduct caused him $450,000 in damages.
Plaintiff's fourth cause of action alleged the Reads' conduct constituted "deceit" pursuant to Civil Code section 1572 and demanded $400,000 in damages. Plaintiff's fifth cause of action alleged "deceit" by the Schades, again demanding $400,000 in damages.
Plaintiff's sixth cause of action alleged the Reads breached an implied-in-fact contract by violating the CC&Rs. He alleged the CC&Rs in this case were equitable servitudes and asserted he was entitled to equitable relief or, in the alternative, damages for breach of implied-in-fact contract. He alleged he and the Reads entered into an implied-in-fact contract inferred from the parties' conduct. Plaintiff asserted the measure of recovery for an implied-in-fact contract is reliance damages, which he contended were $400,000.
Finally, plaintiff's seventh cause of action alleged the Reads should be estopped from raising any defense to their violations of the CC&Rs under the doctrine of "collateral estoppel," although he later clarified he intended to plead a cause of action for "promissory estoppel." He alleged that the Reads were "collaterally estopped from violating any of the recorded building restrictions, and in their violations of the recorded [CC&Rs], which included these building restrictions, Plaintiff has a cause of action against them for Collateral Estoppel."
The Reads' Motion for Summary Judgment
The Reads filed a motion for summary judgment, or, in the alternative, for summary adjudication of each of plaintiff's causes of action asserted against them. The Reads contended generally that height restrictions in CC&Rs protect viewsheds, which does not apply to plaintiff's parcels. They also asserted that plaintiff could not show any reduction in value to his parcels or to homes on the parcels that he has not yet built.
The Reads contended plaintiff failed to plead the fraud and deceit claims with particularity by failing to allege the required misrepresentations, knowledge of falsity, intent to induce reliance, justifiable reliance, or resulting damages. They argued plaintiff failed to show the Reads had any communication with plaintiff that could support a claim for fraud, or any connection between a representation and plaintiff's alleged damages.
Next, the Reads asserted plaintiff's claim for breach of implied-in-fact contract failed because plaintiff did not prove the essential elements of a contract. They argued plaintiff failed to show any evidence of mutual assent, consideration, or any kind of agreement supporting the existence of a contract. They contended that plaintiff's claims for damages were entirely speculative and that plaintiff could not prove any damages were caused by the Reads.
In support of their motion for summary judgment as to plaintiff's claims for damages, the Reads offered a declaration of Ken Murray, a real estate broker. He reviewed the allegations in the complaint, the CC&Rs, photographs and maps of the parcels, and discovery responses, and he visited the neighborhood at issue. Murray then stated his conclusion that any reduction in the value of the properties owned by plaintiff could not be attributed to the construction of the Reads' home. He concluded, "[P]laintiff has not been damaged financially or to his property by the construction of the [Reads'] home even if the construction were shown to have violated relevant provisions of the [CC&Rs]; this is also to say that plaintiff cannot establish a causal link between the violations of the [CC&Rs] that he has alleged the Reads committed and any reduction in the value of his parcels. The size of the [Reads'] ground floor, the pitch of their roof and the addition of a third story on the Reads' home neither individually nor collectively negatively impact the value of plaintiff's three parcels at all."
Finally, the Reads asserted that plaintiff could not establish a claim for injunctive relief in the absence of "great and/or irreparable harm." (See Alvarez v. Eden Township Hospital District (1961) 191 Cal.App.2d 309 [applying that standard to a mandatory preliminary injunction].) They also argued plaintiff's claims regarding height restrictions in CC&Rs are to protect a lot owner's view, even where the instrument does not expressly declare that intent. (See King v. Kugler (1961) 197 Cal.App.2d 651, 654-655.) The parties agreed the estimated cost of removing the top story of the Reads' home exceeded $125,000.
The Reads asserted various principles of equitable relief, including that equitable relief will not be granted where plaintiff has a plain, complete, speedy, and adequate remedy at law (Andal v. City of Stockton (2006) 137 Cal.App.4th 86, 91), and one seeking equity must be willing to do equity. Plaintiff also asserted the affirmative defenses of laches and unclean hands.
Read also argued that collateral estoppel is inapplicable to this case. Plaintiff's opposition argued he intended to plead a cause of action for promissory estoppel.
Plaintiff's Opposition to the Motion for Summary Judgment
Plaintiff opposed Reads' motion for summary judgment. Plaintiff reiterated his claim for injunctive relief was not based on height restrictions, which do not appear in the CC&Rs, but rather on the Reads' intentional violations of the CC&Rs. He asserted that proof of actual or substantial injury is not an essential prerequisite for equitable relief resulting from a violation of CC&Rs; all that is required to entitle a complaining owner to relief is a violation of uniform building restrictions. (See Walker v. Haslett (1919) 44 Cal.App. 394, 398.) Plaintiff also argued for application of the "hardship doctrine." The doctrine is typically applied in cases of structures encroaching on property lines, but it was recently applied in a case involving a lot owner's construction of a residence violating applicable height restrictions. (See Clear Lake Riviera Community Assn. v. Cramer (2010) 182 Cal.App.4th 459, 472-473 (Clear Lake).)
Plaintiff reiterated his claim for fraud and deceit by arguing, "[the Reads] acted with intentional fraud in the violation of the [CC&Rs] based on the applicable sixteen sections of California Civil Code, section 1066, 1213, 1460, 1461, 1462, 1468, 1572, 1636, 1638, 1639, 1644, 1667, 1708, 3281, 3282, 3283, and the forty-one published opinions of the California [sic]."
Plaintiff supported his cause of action for implied-in-fact contract by arguing that CC&Rs were a contract and should be interpreted as such.
Regarding his claim for promissory estoppel, plaintiff argued CC&Rs are promises. He did not explain how he relied on the Reads' promise, to the extent the CC&Rs constituted a promise.
Finally, plaintiff argued Murray's declaration was insufficient to support the Reads' motion.
In support of his opposition to summary judgment, plaintiff offered two "counter-affidavits." Plaintiff's affidavit stated his "inten[t] to introduce California certified real estate appraisers at [his] trial, and they will dispute Kenneth Duane Murray's representation as to my having sustained no damages in this matter. Kenneth Duane Murray's Declaration seems to be an outright fraud. It is an intent to deceive the court of his skills, knowledge, experience, education, training, and the capacity to make an appraisal of real estate." Plaintiff's declaration also stated his intent to introduce the testimony of his neighbor, who he claimed would testify that he incurred "significant monetary damages" due to construction of the Reads' home. The trial court sustained the Reads' motion to strike the above-quoted and other sections of plaintiff's "counter-declarations." Plaintiff did not offer an affidavit from his neighbor or any other potential witness to support for his claim for economic damages.
The Schades' Motion for Judgment on the Pleadings
The Schades moved for judgment on the pleadings as to plaintiff's causes of action for fraud and deceit. The Schades argued plaintiff failed to assert that they had made "any misrepresentation of a material fact, that the Plaintiff relied upon any alleged misrepresentation to his detriment, or that the Schades intended for the Plaintiff to rely upon any alleged misrepresentation. Furthermore, the Schades' alleged liability is based upon their role as the Architectural Control Committee and neither the [CC&Rs] nor California law provides a duty on the part of the Schades to conduct a continuing investigation to determine if a violation has occurred or to enforce the [CC&Rs] as against a violating homeowner." They argued the CC&Rs could not form the basis of a misrepresentation because it was simply an operative document setting forth covenants governing the subdivision. They also argued there was no evidence that the Schades recorded the CC&Rs with knowledge of its falsity, and plaintiff failed to present any evidence that the Schades intended to rely or caused plaintiff to rely on any representation in the CC&Rs.
Finally, the Schades argued the CC&Rs did not impose a duty on the Committee to enforce the CC&Rs and did not establish the members' liability in the event an owner violated the CC&Rs.
Plaintiff's Opposition to the Schades' Motion for Judgment on the Pleadings
Plaintiff opposed the Schades' motion. Plaintiff stated, "Plaintiff's complaint is based on 'constructive fraud' pursuant to California Civil Code, section 1572, instead of constructive fraud pursuant to section 1573." He later clarified, "this matter entails 'constructive fraud', pursuant to California Civil Code, section 1573." Plaintiff contended the Schades breached their duty to file notice that they were no longer members of the Committee. He argued he relied on the Schades to not breach their duty. He asserted he was injured because, had he known the Schades were no longer members of the Committee, he would have requested that the County notify him of any pending construction on the other lots in the subdivision.
Civil Code section 1572 applies to "actual fraud" and section 1573 applies to "constructive fraud," contrary to plaintiff's original representation. Civil Code section 1573 states, "Constructive fraud consists: [¶] 1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him; or, [¶] 2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud."
Plaintiff further asserted that the Schades "acted with fraudulent concealment" by breaching their duty to disclose their termination of their membership on the Committee. Finally, he asserted he would not have purchased the lots if he knew the Schades were not going to fulfill their duties as members of the Committee.
Trial Court Orders
The trial court granted the Reads' motion for summary judgment. Regarding plaintiff's causes of action for fraud and deceit, the trial court concluded the Reads showed, and plaintiff failed to rebut, that the Reads made no representations (false or otherwise) to plaintiff.
Regarding plaintiff's cause of action for implied-in-fact contract, the court observed that the Reads' "own facts" establish (1) the CC&Rs applied to both parties as owners of lots within the subdivision; (2) the CC&Rs imposed restrictions on property construction in the subdivision; and (3) the Reads' home was in violation of the CC&Rs. But the court granted the Reads' motion because Murray's declaration demonstrated plaintiff suffered no damages resulting from the Reads' breach of the CC&Rs, and plaintiff failed to rebut that evidence.
Regarding plaintiff's cause of action for injunctive relief, the court applied the "hardship doctrine" as stated in Clear Lake, supra, 182 Cal.App.4th 459 at pages 471 to 472. The court concluded: (1) "there is no evidence that [the Reads were] anything but innocent"; (2) plaintiff will not suffer any injury--let alone irreparable injury--by the court's decision to not impose injunctive relief; and (3) the hardship to the Reads should the court impose a mandatory injunction would be greatly disproportionate to plaintiff's nonexistent injuries.
Finally, as to plaintiff's promissory estoppel claim, the trial court found that the Reads never made a promise to plaintiff, and thus plaintiff could not show that he detrimentally relied on any promise made by the Reads.
The trial court also granted the Schades' motion for judgment on the pleadings. The court concluded that plaintiff failed to sufficiently plead actual fraud because he failed to allege (1) a false representation; (2) the Schades' knowledge of the falsity of the representation; (3) intent to induce plaintiff to act; and (4) an act by plaintiff in justifiable reliance on the representation.
The trial court concluded plaintiff's complaint also failed to allege constructive fraud. The court concluded that although plaintiff alleged a duty to withdraw and a duty to check records, neither duty exists. Plaintiff also failed to allege any advantage gained by the Schades.
The trial court entered judgment in favor of the defendants.
DISCUSSION
I
Summary Judgment
Plaintiff's complaint pleaded five causes of action as against the Reads: (1) injunctive relief related to violation of the CC&Rs; (2) fraud; (3) deceit; (4) breach of implied-in-fact contract; and (5) promissory estoppel. The trial court granted the Reads' motion for summary judgment. Plaintiff contests the trial court's ruling. We disagree with each of plaintiff's contentions.
A. Standard of Review
" 'We review the trial court's grant of summary judgment de novo. [Citation.] We consider all the evidence offered in connection with the motion, except that which the trial court properly excluded. [Citation.] In conducting our de novo review, we must view the evidence in a light favorable to plaintiffs, liberally construing their evidentiary submission while strictly scrutinizing defendant's showing, and resolving any evidentiary doubts or ambiguities in plaintiffs' favor.' [Citation.]" (Leber v. DKD of Davis, Inc. (2015) 237 Cal.App.4th 402, 406; see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)
We employ the same three-step analysis as the trial court. " 'First, we identify the issues raised by the pleadings, since it is these allegations to which the motion must respond; secondly, we determine whether the moving party's showing has established facts which negate the opponent's claims and justify a judgment in movant's favor; when a summary judgment motion prima facie justifies a judgment, the third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue. [Citations.]' " (Waschek v. Department of Motor Vehicles (1997) 59 Cal.App.4th 640, 644.)
B. Injunctive Relief Based on Violation of CC&Rs
Plaintiff requested injunctive relief to require the Reads to bring their home into compliance with the applicable CC&Rs, which he contends the Reads knowingly and intentionally violated.
The Reads' motion argued they were entitled to summary judgment because plaintiff (1) did not suffer and would not suffer in the future great or irreparable harm or injury; (2) had an adequate remedy at law, and therefore is not entitled to equitable relief; (3) is not eligible for equitable relief because he observed the Reads constructing their home before it was completed and therefore had the opportunity to address any perceived violation of CC&Rs at that time; and (4) does not have an underlying cause of action, and therefore is not eligible for the remedy of injunctive relief.
1. Interpreting CC&Rs as Contract
"Modern subdivisions are often built according to a general plan containing restrictions that each owner must abide by for the benefit of all. 'Ordinarily, a general plan of restriction is recorded by the subdivider grantor for the purpose of insuring the uniform and orderly development and use of the entire tract by all of the original purchasers as well as their successors in interest. The restrictions are imposed upon each parcel within the tract. These subdivision restrictions are used to limit the type of buildings that can be constructed upon the property or the type of activity permitted on the property, prohibiting such things as commercial use or development within the tract, limiting the height of buildings, imposing setback restrictions, protecting views, or imposing similar restrictions.' [Citations.]" (Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 352 (Covenant Compliance).) "[I]f the restrictions are recorded before the sale [of property subject to the restrictions], the later purchaser is deemed to agree with them. The purchase of property knowing of the restrictions evinces the buyer's intent to accept their burdens and benefits." (Id. at p. 363.)
"California courts have '[t]raditionally' analyzed [CC&Rs] under the doctrine of equitable servitudes. [Citations.]" (Covenant Compliance, supra, 12 Cal.4th 345, 354.) Our Supreme Court has distilled three principles regarding the enforcement of equitable servitudes: "An equitable servitude will be enforced unless it violates public policy; it bears no rational relationship to the protection, preservation, operation or purpose of the affected land; or it otherwise imposes burdens on the affected land that are so disproportionate to the restriction's beneficial effects that the restriction should not be enforced." (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 382.)
Covenants are said to run with the land when they bind not only the person who enters into them, but also later owners and assigns who did not personally enter into them. (Covenant Compliance, supra, 12 Cal.4th at p. 353.) The doctrine of equitable servitudes first arose where courts of equity enforced covenants that, for one reason or another, did not run with the land in law. (Ibid.) "Commentators have argued that covenants that run with the land and equitable servitudes should be, or possibly have been, merged into a single doctrine. [Citation.]" (Id. at p. 354.) Because the issue before us does not concern whether the CC&Rs run with the land, we need not and do not consider that distinction here.
"The same rules that apply to interpretation of contracts apply to the interpretation of CC&Rs. ' "[W]e must independently interpret the provisions of the document. . . . It is a general rule that restrictive covenants are construed strictly against the person seeking to enforce them, and any doubt will be resolved in favor of the free use of land. But it is also true that the ' "intent of the parties and the object of the deed or restriction should govern, giving the instrument a just and fair interpretation." ' " ' " (Chee v. Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1377, quoting Zabrucky v. McAdams (2005) 129 Cal.App.4th 618, 622.) Thus, "[r]estrictions on the use of land will not be read into a restrictive covenant by implication, but if the parties have expressed their intention to limit the use, that intention should be carried out, for the primary object in construing restrictive covenants, as in construing all contracts, should be to effectuate the legitimate desires of the covenanting parties." (Hannula v. Hacienda Homes (1949) 34 Cal.2d 442, 444-445.)
2. Adequate Remedy at Law and Irreparable Injury
Generally, equitable relief will not be granted where there is a plain, complete, speedy, and adequate remedy at law. (Andal v. City of Stockton, supra, 137 Cal.App.4th at p. 91; see also Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1354 [assertion of adequate remedy at law].) " 'A permanent injunction is an equitable remedy for certain torts or wrongful acts of a defendant where a damage remedy is inadequate. A permanent injunction is a determination on the merits that a plaintiff has prevailed on a cause of action for tort or other wrongful act against a defendant and that equitable relief is appropriate. A permanent injunction is not issued to maintain the status quo but is a final judgment on the merits. [Citation.]' " (Benasra v. Mitchell Silberberg & Knupp (2002) 96 Cal.App.4th 96, 110.) A permanent injunction is not a cause of action. (County of Del Norte v. City of Crescent City (1999) 71 Cal.App.4th 965, 973.)
In the context of real property, plaintiff typically lacks an adequate remedy at law, and a showing of irreparable injury is not required. "Injunctive relief is normally available to redress violations of . . . restrictive covenants [affecting real property] without proof of irreparable injury or a showing that a judgment for damages would be inadequate. The value of a restrictive covenant . . . is often difficult to quantify and may be impossible to replace. When it is enjoyed as an appurtenance to ownership of land, its value to the land owner may not be adequately reflected by market values. An award of damages instead of injunctive relief that would allow the other party to buy out of the servitude obligation will seldom be appropriate so long as the servitude continues to serve the purpose contemplated at its creation. This consideration is even more important for conservation and preservation servitudes than for other types of servitudes." (Rest.3d Property, Servitudes, § 8.3, com. b., pp. 495-496.)
Division Two of the Second Appellate District explained long ago why a plaintiff need not show damage or injury to enforce servitudes or covenants such as the CC&Rs. "When clearly expressed, covenants of this description will be strictly enforced, and a court of equity will decree an injunction, and this without any showing of actual damage or substantial injury. The reason why no actual damage or substantial injury need be shown is that the owner of the land, when selling it to another, may insist on just such covenants as he pleases touching its use or mode of enjoyment. He has the right to define the injury for himself, and also for his grantees of the remaining lots in his tract, where he is subdividing a whole tract into lots and selling them pursuant to a general plan of improvement or development, and the purchaser of any lot contracting with him must abide by his definition of what shall be deemed to be an injury to the balance of the land. He, or any subsequent owner of any part of the remaining land for the benefit of which the restrictive covenant is made, may enforce the covenant when it is broken, and is not to be defeated by the opinion of any number of persons that the breach occasions no substantial injury. [Citations.]" (Walker v. Haslett, supra, 44 Cal.App. at p. 398; see also Joyce v. Krupp (1927) 83 Cal.App. 391, 398-399 ["proof of actual or substantial injury is not essential, the establishment of a violation of a uniform building restriction being all that is necessary to entitle a complaining over to relief"].)
Despite this broad statement of the availability of equitable relief where a party violates applicable CC&Rs, courts recently have applied a more balance-oriented approach to awarding injunctive relief. In Clear Lake, supra, 182 Cal.App.4th 459, a lot owner subject to building height restrictions knowingly exceeded the restrictions when constructing his home. As a result, the lot owner's home substantially obstructed the views of at least two other homeowners also subject to the height restrictions. The trial court granted injunctive relief, concluding in part that plaintiff suffered irreparable harm, and ordered the lot owner to bring his home into compliance with the restrictions.
The First Appellate District, Division One applied the "hardship doctrine" typically used in cases where a structure encroaches on a property line. (Clear Lake, supra, 182 Cal.App.4th at p. 471.) The court described the doctrine: " 'To deny an injunction [requiring removal of an encroaching structure], three factors must be present. First, the defendant must be innocent. That is, his or her encroachment must not be willful or negligent. The court should consider the parties' conduct to determine who is responsible for the dispute. Second, unless the rights of the public would be harmed, the court should grant the injunction if the plaintiff "will suffer irreparable injury . . . regardless of the injury to defendant." Third, the hardship to the defendant from granting the injunction "must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant. . . ." ' " (Id. at pp. 471-472, quoting Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 758-759.) "Defendant's action can be intentional and yet be innocent if he acted in good faith." (Brown Derby Hollywood Corp. v. Hatton (1964) 61 Cal.2d 855, 859.)
The appellate court in Clear Lake rejected the lot owner's claim that the trial court should have awarded damages rather than injunctive relief. (Clear Lake, supra, 182 Cal.App.4th at p. 471.) The court observed the trial court found that the lot owner's conduct was knowing, rather than innocent, or at least negligent. (Id. at p. 472.) The court agreed the lot owner's neighbors suffered irreparable harm because their views of a nearby lake were obstructed by the lot owner's construction. (Id. at p. 473.) Finally, the court concluded the cost to the lot owner to bring the home into compliance was not grossly disproportionate to the hardship caused to the plaintiff in diminution of value to the other homeowners' lots. (Ibid.)
In Cabrini Villas Homeowners Association v. Haghverdian (2003) 111 Cal.App.4th 683 (Cabrini Villas), the appellate court concluded that monetary damages were not an adequate remedy of law for the plaintiff homeowner association seeking to enjoin the defendant's use of an air conditioner in his unit in contravention of the applicable CC&Rs. (Id. at pp. 695-696.) The court observed that an expert for the association testified maintaining the aesthetic value of the buildings was essential for protecting the financial future of the community and the air conditioning unit would not bolster the structural integrity of the building or the degree to which it is watertight. (Id. at p. 696.)
3. Analysis
Applying these principles here, we conclude summary judgment is appropriate to dispose of plaintiff's claim for injunctive relief because plaintiff has an adequate remedy at law. While we recognize that property disputes do not typically require a showing that the plaintiff lacks an adequate remedy at law, this is not the typical property dispute. Here, plaintiff's pleadings repeatedly reiterate the harm he suffered was solely the $100,000 in diminution of value as to each of the three lots, $100,000 in time, money, and energy spent locating and purchasing the lots, and $50,000 in emotional distress damages. The Reads satisfied their burden to show they are entitled to summary judgment based on plaintiff's own assertion that his claims are based entirely on diminution of value of his three lots and money expended in his search for the lots. Because the Reads have shown that plaintiff's claims are all compensable via monetary damages, the burden shifted to plaintiff to demonstrate that he did not have an adequate remedy at law. He failed to do so.
Plaintiff stated his intent to introduce at trial the testimony of his neighbor regarding the affect of the Reads' non-compliance with the CC&Rs when building their home on the value of his neighbor's property. In responding to the Reads' separate statement of undisputed facts, plaintiff disputed the Reads' factual assertion, "It cannot be shown the Reads' home detracts from the aesthetic in the neighborhood." But such a brief and passing suggestion that this case involves more than diminution of value does not convince us that plaintiff lacks an adequate remedy at law. Indeed, plaintiff's complaint alleged the Reads' residence "is not conforming with residential structures in the area, and it is intrusive and so abstract that it could only diminish the property values of the remaining eight lots in this subdivision." He continued, "Essentially, the value of the lots is not the primary issue but the value of the homes which are or would be constructed on them." Therefore, even where plaintiff seemingly contends this case is about more than diminution of value, such contentions are ultimately connected back to the value of his lots. If indeed there were a dispute of material facts in this case, that dispute would be all about money. And disputes over money have an adequate remedy at law.
In opposition to the Reads' summary judgment motion, plaintiff relied on the "hardship doctrine" as discussed in Clear Lake, supra, 182 Cal.App.4th at pages 471-472. But the homeowners seeking to enjoin the defendant's conduct in that case lacked an adequate remedy at law. The court observed that the lot owners' views of nearby lakes were obstructed by the lot owners' construction, a factual circumstance entirely absent here. (Id. at p. 473.) Similarly, in Cabrini Villas, supra, 111 Cal.App.4th 683, the court concluded that monetary damages were inadequate due to ongoing concerns that the air conditioning unit would have on the watertight nature and structural integrity of the building. (Id. at p. 696.) Similar concerns are entirely absent here.
We affirm the trial court's decision granting the Reads' motion for summary judgment as to plaintiff's request for injunctive relief.
B. Fraud and Deceit Claims
Plaintiff next contends the trial court erred in granting the Reads' summary judgment motion with respect to his second cause of action alleging fraud and fourth cause of action alleging deceit.
Plaintiff's cause of action for fraud alleged the Reads knew of the CC&Rs and "intentionally and/or recklessly violated these recorded restrictions in the construction of the residence." The complaint contended that the Reads' conduct constitutes fraud under Civil Code section 1572, which defines "actual fraud" as consisting of "any of the following acts committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract: [¶] 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶] 2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; [¶] 3. The suppression of that which is true, by one having knowledge or belief of the fact; [¶] 4. A promise made without any intention of performing it; or, [¶] 5. Any other act fitted to deceive." Plaintiff's cause of action for "deceit" alleged that the Reads' conduct constituted "any other act fitted to deceive" pursuant to Civil Code section 1572. Plaintiff alleged the Reads' conduct damaged him in the amount of $400,000 in actual monetary damages and $50,000 in emotional distress; he also demanded $50,000 in punitive damages.
The elements for a cause of action for fraud and/or deceit are: " '(1) representation; (2) falsity; (3) knowledge of falsity; (4) intent to deceive; and (5) reliance and resulting damage (causation).' (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 668, p. 123.) Active concealment or suppression of facts by a nonfiduciary 'is the equivalent of a false representation, i.e., actual fraud.' (Id., § 678, p. 136, italics omitted.)" (Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, 291.)
The parties do not dispute that the Reads did not communicate in any way with the plaintiff. Plaintiff's cause of action is based on the Reads' violation of the CC&Rs, but he does not explain how the Reads' failure to comply with the CC&Rs constitutes a representation, false or otherwise, to plaintiff. We fail to see how disregarding the CC&Rs constitutes an affirmative misrepresentation.
Additionally, in opposition to summary judgment plaintiff failed to present any evidence suggesting that he relied on any representation by the Reads or that he suffered any damages as a result of his reliance. Plaintiff purchased his lots several years before the Reads purchased their lot, and there is no evidence he acted in reliance on the Reads' acceptance of the CC&Rs, even assuming that reliance could be construed as a representation. Plaintiff also failed to present any evidence that he has suffered any damages.
The trial court properly granted summary judgment as to plaintiff's claims of fraud and deceit.
C. Implied-in-Fact Contract Claim
Plaintiff next claims the trial court erred in granting the Reads' motion for summary judgment as to his sixth claim for relief, breach of an implied-in-fact contract. As part of his claim, plaintiff alleged he suffered damages of $400,000: $100,000 in diminution of value to each of his three lots and $100,000 in time and effort searching for the lots before he purchased them.
Confusingly, plaintiff's cause of action for breach of an implied-in-fact contract alleged that the Reads violated the CC&Rs, a written document, on the basis that the parties' acceptance of the contract was based on their actions, and not their express offer and acceptance. Nevertheless, the trial court granted the Reads' motion for summary judgment on the basis that plaintiff failed to present any evidence whatsoever of economic damages in opposition to the Reads' motion.
In Joyce v. Krupp, supra, 83 Cal.App. at page 399, the appellate court stated that the measure of damages to enforce a violation of a servitude, like the one alleged here, is the amount of the depreciated value the benefited parcel sustains as a result of the breach.
The Reads supported their motion for summary judgment by including a declaration by Ken Murray. Murray opined that plaintiff's lots have sustained no loss in value as a result of the Reads' home.
Plaintiff contends the Murray declaration was insufficient to support summary judgment because it did not attach the documents on which Murray relied. We disagree. The law requires that declarations set forth admissible evidence, not that they must attach admissible evidence. (Code Civ. Proc., § 437c, subd. (d).) Plaintiff also argues Murray's declaration is "composed of generalities and conclusions." But generally, "[a]n expert declaration is admissible to support or defeat summary judgment if the expert's testimony would be admissible at trial in accordance with Evidence Code section 720." (Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761.) Murray stated in his declaration that he reviewed plaintiff's first amended complaint, the CC&Rs, photos of the affected parcels, a parcel map of the subdivision, and the parties' discovery responses, all of which was attached to the Reads' motion for summary judgment. We conclude Murray's declaration was properly admitted and considered in support of the Reads' motion.
Plaintiff also contends the declarations of Michael Read, Michelle Young-Read, and their attorney do not support the Reads' motion for summary judgment. Plaintiff neither cites to the affidavits in the record nor argues how the declarations fail to satisfy the required standard. Rather, he simply states without argument that they fail to satisfy the statutory requirements. Consequently, he has forfeited this argument. (See City of Lincoln v. Barrginer (2002) 102 Cal.App.4th 1211, 1239 [appellant who fails to cite accurately to the record forfeits the issue or argument presented without record reference].) --------
The burden of proof shifted to plaintiff to demonstrate a triable issue of fact that he sustained damages. (See Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 854-855 [burden shifts to plaintiff when defendant shows plaintiff cannot establish an element of his cause of action].) Plaintiff failed to present any evidence whatsoever to support his claim for damages. He asserted that he would present evidence at trial proving damages, but that assertion is speculative and is insufficient to defeat summary judgment. (See Buehler v. Alpha Beta Co. (1990) 224 Cal.App.3d 729, 733 [opposition to summary judgment insufficient where based on conjecture or speculation].) He referred to his own interrogatory responses, which cannot be relied on in a motion for summary judgment. (Great American Ins. v. Gordon Trucking, Inc. (2008) 165 Cal.App.4th 445, 450-451.) He also submitted his own counter-affidavits, which indicated his intent to introduce expert witnesses at trial to support his claim for damages, but such speculation and vague statements of intent are not evidence sufficient to defeat summary judgment. Because plaintiff failed to present any evidence to establish a triable issue of fact as to his damages, the trial court properly granted defendant's motion for summary judgment as to plaintiff's breach of contract claim.
D. Promissory Estoppel
The elements of promissory estoppel are: (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; (4) the party asserting the estoppel must be injured by his reliance. (Advanced Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1672.) "Promissory estoppel . . . is based upon the equitable doctrine that a promisor is bound when he should reasonably expect a substantial change of position (act or forbearance) in reliance on his promise if injustice can be avoided only by the enforcement of the promise [citations]." (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 275.)
Plaintiff claims error but does not explain how the Reads' conduct must be estopped under the doctrine. Assuming arguendo that the CC&Rs constituted a promise, plaintiff presented no evidence that he reasonably relied on any promise or that he was injured as a result of that reliance. The Reads purchased their lot years after plaintiff purchased his lots, and plaintiff has made no effort to develop his lots since the Reads built their residence. Plaintiff's claim lacks merit.
III
Judgment on the Pleadings
Plaintiff contests the trial court's decision to grant the Schades' motion for judgment on the pleadings as to his third cause of action for fraud and fifth cause of action for deceit.
A. Standard of Review
We apply the following standard of review to an order granting a judgment on the pleadings motion: "Because a motion for judgment on the pleadings is similar to a general demurrer, the standard of review is the same. (Ramirez v. USAA Casualty Ins. Co. (1991) 234 Cal.App.3d 391, 397.) We treat the pleadings as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law." "We consider evidence outside the pleadings which the trial court considered without objection. (O'Neil v. General Security Corp. (1992) 4 Cal.App.4th 587, 594, fn. 1.)" (Baughman v. State of California (1995) 38 Cal.App.4th 182, 187.)
B. Analysis
Plaintiff's third cause of action alleged that the Schades failed to notify plaintiff they had terminated their membership on the Committee and were therefore liable to plaintiff when the Reads violated the CC&Rs. Plaintiff also alleged the Schades failed to diligently monitor whether new construction in the subdivision was being approved. Based on those allegations, plaintiff alleged the Schades "acted with fraud," causing $400,000 in damages to plaintiff. Plaintiff's fifth cause of action alleged he incurred $400,000 in damages due to the Schades' deceit; plaintiff does not explain how those causes of action are distinct from one another.
The Schades' motion for judgment on the pleadings argued that plaintiff failed to allege the Schades made any misrepresentation of a material fact because the recording the CC&Rs merely set forth the covenants controlling the subdivision and were not representations, factual assertions, or concealments of material facts. The Schades also argued there is no evidence that any alleged representation was made with knowledge of its falsity or with any intent to induce plaintiff to rely on such representation.
In his opposition to the Schades' motion for judgment on the pleadings, plaintiff stated his cause of action was based in "constructive fraud," although his complaint did not state the specific type of fraud alleged. He asserted the factual basis for his cause of action was the Schades' failure to provide notice they were no longer members of the Committee. He argued the Schades' failure to notify plaintiff caused him to not request notification by the County of any intended construction in the other lots in the subdivision.
Civil Code section 1573 defines constructive fraud:
"Constructive fraud consists: [¶] 1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or, [¶] 2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud."
Plaintiff does not explain how the Schades' failure to notify plaintiff of their termination as members of the Committee constitutes "such act or omission as the law specifically declares to be fraudulent," and he does not explain how Schades gained any advantage by their failure to notify plaintiff of their termination of their duties on the Committee. Therefore, plaintiff's complaint failed to state a cause of action for constructive fraud or deceit based on the Schades' failure to notify.
Despite his clarification that his claim was based entirely on constructive fraud, plaintiff seemed to argue the Schades committed actual fraud by representing they were members of the Committee and inducing plaintiff to purchase three lots owned by the Schades. But at the time the Schades recorded the CC&Rs, they were members of the Committee, and the Schades made no misrepresentation. Therefore, plaintiff failed to state a cause of action for actual fraud.
Because plaintiff failed to establish that the Schades committed constructive or actual fraud, the trial court properly granted the Schades' motion for judgment on the pleadings.
DISPOSITION
The judgment is affirmed. Costs are awarded to the defendants. (Cal. Rules of Court, rule 8.278.)
/s/_________
Duarte, J. We concur: /s/_________
Blease, Acting P. J. /s/_________
Hoch, J.