[Maintenance; Board Deference] No independent tort liability for failing to maintain common areas; Rule of Judicial Deference does not protect failure to perform inspections or preventative maintenance.
Law Office of Jeff A. Lesser and Jeff A. Lesser for Plaintiffs and Appellants.
Slaughter, Reagan & Cole, Barry J. Reagan and Gabriele M. Lashly for Defendant and Respondent.
[175]
OPINION
WILEY, J.—
This case is about whether condominium owners can make their homeowners association pay for a water leak. Monique Sands and her parents sued and went to trial against the Walnut Gardens Condominium Association Inc. and its property manager for breach of contract and negligence. The trial court granted a nonsuit. The Sandses settled with the property manager but have appealed against the association. The Sandses argue the trial court erred by granting the nonsuit, by excluding certain evidence, and by denying their motion for a new trial. We reverse and remand the contract nonsuit and affirm the tort nonsuit. We do not reach other issues.
[176] I
We summarize the facts. When reviewing a nonsuit, we view facts in the plaintiff’s favor and disregard conflicting evidence. (O’Neil v. Crane Co. (2012) 53 Cal.4th 335, 347 [135 Cal.Rptr.3d 288, 266 P.3d 987].)
The Sandses owned a unit in the Walnut Gardens development. A pipe on the roof broke and water entered the Sandses’ bedroom. The association’s agent hired people to repair the pipe and roof. The association had responsibility to maintain its common areas, including this piping and roof. The Sandses sued the association for breach of contract and negligence. The trial court selected a jury, heard the Sandses’ two witnesses in their case-in-chief, and granted a nonsuit.
II
We reverse the nonsuit on the breach of contract claim.
(1) Our review of nonsuit judgments is limited. To allow the opposing party to cure defects in proof, we may affirm only on logic stated in the motion for nonsuit, unless the defect would have been impossible to cure. (Lawless v. Calaway (1944) 24 Cal.2d 81, 94 [147 P.2d 604] (Lawless).)
(2) The Sandses claimed a breach of contract. The contract, they say, was the association’s covenants, conditions, and restrictions, one part of which required the association to keep the project in “a first class condition.” The Sandses’ first witness, however, testified the association was performing no preventive maintenance at all, even though preventive maintenance was desirable. The roof and pipes over the Sandses’ unit had not been inspected or maintained in years.
The association’s oral motion for nonsuit was concise to a fault. It first argued there was “a complete absence of evidence” to show a breach of contract. This first argument was incorrect. Reasonable jurors could have concluded a total failure to maintain common areas breached a promise to keep these areas in first class condition.
The association next argued no evidence showed the association was “on notice that it needed to make repairs or do something to the roof or the pipes.” This argument too was incorrect. The property manager testified “[m]aintenance wasn’t happening. It was a very sad situation for the homeowners.” A jury could find buildings need maintenance to remain in first class condition. The association knew “[m]aintenance wasn’t happening.” As a prima facie matter, no more was needed.
[177] In the course of granting the motion, the trial court added oral reasoning beyond the contents of the nonsuit motion. The court said the Sandses’ lack of expert testimony would force the jury to “speculate” about how a pipe broke and the roof leaked. By suggesting expert testimony was essential, this contract analysis erred. A complete lack of preventive maintenance is evidence the association did not keep the roof or pipes in first class condition. The jury would not need experts to grasp this.
(3) Neither the motion nor the court’s rationale challenged the idea that covenants, conditions, and restrictions comprise a contract between the association and individual owners. (See Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 240 [145 Cal.Rptr.3d 514, 282 P.3d 1217].) Nor did the motion or rationale hint at the rule of deference governing owner suits against homeowner associations. (See Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, 253 [87 Cal.Rptr.2d 237, 980 P.2d 940].) The nonsuit argument did not consider these points. Therefore neither do we. Defects unspecified in a nonsuit motion will be considered on appeal only if the plaintiff could not have cured the defects at trial. (See Lawless, supra, 24 Cal.2d at p. 94.)
We reverse and remand the nonsuit judgment about the contract.
III
We affirm the nonsuit tort judgment.
The association argued there was no evidence “as far as negligence [was] concerned” showing the association “was on notice of any condition that required repair.” The trial court rightly decried this effort to “tortify” a creature of private ordering. (See Erlich v. Menezes (1999) 21 Cal.4th 543, 554 [87 Cal.Rptr.2d 886, 981 P.2d 978] [“If every negligent breach of a contract gives rise to tort damages the limitation [that `breach of contract is tortious only when some independent duty arising from tort law is violated’] would be meaningless, as would the statutory distinction between tort and contract remedies.”].)
Outside the covenants, conditions, and restrictions, the association had no independent duty as to the pipes and roof arising from tort law. The Sandses’ trial counsel conceded the evidence for their negligence claim was “pretty much the same, under the same thing as a contract….” The Sandses give us no authority for a cause of action in tort. They state: “As with the Cause of Action for Contract, the duties and obligations for which the HOA, Walnut Gardens, was responsible, are found in the [covenants, conditions, and restrictions]….”
[178] Even had the association omitted this issue in its nonsuit motion, nothing the Sandses could have done at trial would have summoned into existence a tort claim barred by law. (See Lawless, supra, 24 Cal.2d at p. 94.)
DISPOSITION
We affirm the nonsuit of the tort claim and reverse and remand the nonsuit on the contract claim. The parties will bear their own costs.
Bigelow, P. J., and Stratton, J., concurred.
Related Links
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Alpert v. Villa Romano Homeowners Association
[Maintenance; Duty of Care] HOA’s responsibility with respect to maintenance and repair of sidewalks adjacent to HOA’s property.
Law Offices of Steven M. Klugman and Steven M. Klugman, Los Angeles, for Plaintiff and Appellant.
Early, Maslach, Price & Baukol and James Grafton Randall, Los Angeles, for Defendant and Respondent,
GOODMAN, J.[FN.*]
Ann Alpert (Alpert) appeals from the judgment of nonsuit entered in favor of respondent Villa Romano Homeowners Association (VRHA) at the close of Alpert’s case-in-chief. Alpert’s complaint alleged that she suffered severe injuries when she tripped and fell on the upturned and broken sidewalk adjacent to the condominium complex managed by VRHA.[FN.1] In this appeal [368] Alpert asks that we determine if the owner and possessor of property owes a duty to warn or protect pedestrians from allegedly dangerous conditions known to be present. We conclude that there is such a duty and that the trial court erred in granting the defense motion for nonsuit made at the close of Alpert’s case-in-chief.
FACTUAL AND PROCEDURAL HISTORY
In the late morning of July 27, 1992, Alpert, then 69 and in good health, took her four-year-old dog, BJ, a poodle weighing approximately eight pounds, for a walk near her home in Marina del Rey. She had BJ on a leash. Alpert walked her dog several times a day, but had never fallen before while walking him. This day, on the way home, she passed in front of the VRHA condominium property (the property), which is near the condominium complex in which she resided. The weather was dry and clear; the summer sun was overhead. Alpert’s walk ended when one of her feet came in contact with an upturned, jagged piece of sidewalk, causing her to lose her balance and fall, face first, to the sidewalk. After her fall, she noticed that there was grass growing in this break in the sidewalk.
The fall knocked the wind out of her. In the fall, Alpert fractured her right wrist, fractured and lacerated her left knee, broke her fourth and fifth ribs, and sustained a large hematoma in the area of her right breast. She sought medical attention for her injuries, eventually having surgery to repair her left knee. During her recovery from the fall, she contracted pneumonia. At the time of trial, she was unable to walk more than a block without pain, and was using a wheelchair to go longer distances.
Luz Enriquez (Enriquez) had been the gardener for VRHA for 20 years. He worked at the property three times each week. In addition to performing gardening services in the area of the property between the condominium buildings and the sidewalk, including the lawn, which he routinely mowed, he did similar work in the area between the sidewalk and the curb. He routinely removed leaves and other debris from the sidewalk, including removing such material that accumulated from time to time in the crack at the location of the upturned sidewalk. He also watered the vegetation on both sides of the sidewalk, utilizing the sprinklers which VRHA had installed in both areas. Enriquez was aware of the break in the sidewalk and recalled that it had been there for a few years prior to the date of Alpert’s fall.
Bernardo Segala had been hired by VRHA to trim trees on its property. During the year 1992 and prior to Alpert’s fall, at the request of VRHA he trimmed trees on the lawn between the sidewalk and the condominium property and on the portion of the lawn between the sidewalk and the street.
John Pettijohn, who had expertise in concrete repairs, measured the difference in elevation caused by the break in the sidewalk at the scene of the fall at between three-fourths of an inch and one inch.
Elihu Crane, a resident of VRHA, was a member of its board of directors from 1990 through April 1992, and president of its board of directors for part of that time. During that two-year period there was no [369] person or committee of the board which had responsibility for inspecting the sidewalk in front of the property. VRHA’s view was that the City of Los Angeles (the city) controlled the sidewalks and all VRHA needed to do was to keep the sidewalk clean.
Judith Crane was in charge of the gardening committee of the VRHA. She inspected the property shortly after becoming chairman of that committee in the summer of 1992. She had been aware for some time of the existence of cracks in the sidewalk in the area in which Alpert fell and of other cracks in the sidewalk which ran along the property.
Dr. Stephen Wexler, a licensed civil engineer and licensed general contractor, testified as an expert witness at Alpert’s request. Dr. Wexler had experience in building concrete structures, including sidewalks, and in landscaping for the projects he built. Dr. Wexler also had expertise in determining the cause of sidewalk damage from root structures and root growth and expertise regarding human factors in relation to premises liability. Dr. Wexler inspected the scene of the fall on several occasions. He observed that there was mature vegetation on the property, including pine trees (some of which were 100 feet tall) between the sidewalk and buildings on the property, and bottlebrush trees in the area between the sidewalk and the street curb. In his opinion, the root of a pine tree had caused the sidewalk to be uplifted and to break. This opinion was confirmed by his observation of 15 to 20 sidewalk cracks in the area, of which seven or eight had caused serious distortions in the sidewalk in the form of uplifted panels of concrete or of cracks in panels which had been uplifted. There was a second such root-caused cracking and tilting within 15 feet of the scene of Alpert’s fall. He had observed that roots of pine trees can grow in length to be as much as four times the height of the tree itself. He explained that tree roots seek out the area under the sidewalk because water tends to collect there. He noted that the sprinklers at the property water the sidewalk as well as the lawn and other vegetation.
In Dr. Wexler’s opinion, the sidewalk defect at the location of Alpert’s fall had existed for years prior to the fall and had been caused by the progressive growth of a subterranean tree root under the sidewalk. He noted that the area of greatest angular uplift in the sidewalk was adjacent to the lawn, indicating in his opinion that the root that caused the uplift had come from a tree growing on the lawn as the root sought moisture. He explained that roots taper down in size the farther from the tree they grow. It was also his opinion that the growth of the trees and their root systems had been enhanced by the fertilizing, watering, and trimming of the trees, which VRHA had done on its property. Further, the roots remained near the surface due to the very hard-packed soil in the area, thus increasing the likelihood of cracking the sidewalk.
On cross-examination, Dr. Wexler testified that it was unlikely that the root that had caused the sidewalk at the point of Alpert’s fall to be upturned and to break had come from a tree in the area between the sidewalk and the street as roots of the bottlebrush trees planted in that area were smaller than those of the pine trees. Rather, it was his opinion that the root which had caused the sidewalk defect had come from a tree growing on the main lawn.
At the conclusion of Alpert’s case-in-chief, VRHA made a written motion for nonsuit. During argument on that motion, [370] Alpert’s motion for leave to reopen was denied. The court granted the motion for nonsuit, after which Alpert filed a timely appeal.[FN.2]
CONTENTIONS ON APPEAL
Alpert contends the trial court erred (1) in concluding that VRHA, as owner of the property, owed Alpert no duty of care, (2) in refusing to permit Alpert to reopen to cure any defect that resulted in the nonsuit, (3) in refusing to permit Alpert to make offers of proof of certain evidentiary matters, and (4) by excluding evidence of knowledge of the condition of the sidewalk prior to the fall on the part of the board of directors of VRHA.[FN.3]
DISCUSSION
- Standard of review.
In reviewing a judgment entered upon a grant of a motion for nonsuit after the close of the plaintiffs case-in-chief (Code Civ. Proc, § 581c),[FN.4] the appellate court reviews the entire record of the trial court (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1581, 47 Cal. Rptr.2d 752) and views the evidence in the light most favorable to appellant. (Freeman v. Lind (1986) 181 Cal.App.3d 791, 799, 226 Cal.Rptr. 515.) We do not weigh the evidence or consider the credibility of the witnesses who have testified; rather we are required to accept as true the evidence most favorable to the plaintiff, disregarding conflicting evidence. (La-Monte v. Sanwa Bank California (1996) 45 Cal.App.4th 509, 517.) “`”The judgment of the trial court cannot be sustained unless interpreting the evidence most favorably to plaintiffs case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law.”‘”[FN.5] (Freeman v. Lind, supra, 181 Cal.App.3d at p. 799, 226 Cal.Rptr. 515.)
This healthy skepticism of removing factual questions from juries is inextricably bound to the California Constitution, which preserves “inviolate” the right to trial by jury.[FN.6]
[371] 2. The trial court’s ruling.
At the conclusion of Alpert’s case-in-chief, VRHA presented a written motion for nonsuit to the court and counsel.[FN.7] Such a motion has the effect of a demurrer to the evidence: It concedes the truth of the facts proved and contends that those facts are not sufficient as a matter of law to sustain the plaintiffs case. (See Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 98, 253 Cal.Rptr. 470.) A judgment of nonsuit is an involuntary dismissal (Costa v. Regents of University of Cal. (1951) 103 Cal.App.2d 491, 494, 103 Cal.App.2d 491) on a motion by a defendant who contends the plaintiff is unable to prove its case at trial (Doria v. International Union (1961) 196 Cal. App.2d 22, 32, 16 Cal.Rptr. 429). In reviewing a judgment of nonsuit, we look at the entire record. (Kidron v. Movie Acquisition Corp., supra, 40 Cal.App.4th at p. 1581, 47 Cal.Rptr.2d 752.) We consider grounds which were both advanced by the moving party and ruled on by the trial court.[FN.8]
[372] The record in this case clearly shows that the trial court weighed the evidence and erred as to the applicable law. Thus, the trial court stated: “Dr. Wexler testified that he was not sure where the roots came from which caused the elevation…. [A]nd the law seems to indicate that the ambit of liability does not include the abutting land owners but includes the city for — the city owing the duty to the third person….”
This selection from the record by the trial court was inapposite. The record reveals substantial testimony by Alpert’s expert witness different from that relied on by the trial court and quoted above; testimony which, when viewed in accordance with principles applicable to motions for nonsuit, provides factual support for Alpert’s legal contentions substantial enough to withstand such a motion. Thus, Dr. Wexler testified that the cause of the uplifted and cracked sidewalk was the root of a tree growing on VRHA’s property. While he would not rule out the possibility that the particular root came from another location as he had not dug up the lawn all the way to the particular suspected, “mature” pine tree, it was his expert opinion that a tree growing on VRHA’s lawn was the source of the destructive root. He also testified that the trees planted in the area between the sidewalk and the street were of a different type and had characteristically smaller roots. Other witnesses testified to the size of the hazard caused by the uplifted piece of sidewalk which the tree root had created and to VRHA’s prior notice of the hazardous condition of the sidewalk. The trial court did not view the evidence adduced by plaintiff in the manner required when analyzing evidence in ruling on a motion for nonsuit made at the conclusion of a plaintiffs case-in-chief. (Freeman v. Lind, supra, 181 Cal.App.3d at p. 799, 226 Cal.Rptr. 515.)
The other aspect of the trial court’s ruling was its conclusion that VRHA did not owe a duty of care to Alpert. As we next discuss, this ruling was also error.
- Whether VRHA owed a duty to pedestrians.
The fundamental legal issue raised by the judgment of nonsuit is whether VRHA as landowner and party in possession and control owed a duty to pedestrians such as Alpert to either warn them of a dangerous condition of the premises or repair it. We will conclude that such a duty was owed under the circumstances present in this case.[FN.9]
a. Authorities prior to Alcaraz v. Vece.
The Legislature and the courts have addressed the responsibilities, if any, of possessors of land abutting sidewalks. We begin our analysis with Civil Code section 1714, subdivision (a), which makes a possessor of land subject to the general negligence standard of that section.
Civil Code section 1714, subdivision (a) provides:
“Every one is responsible, not only for the result of his willful acts, but also for an [373] injury occasioned to another by his want of ordinary care or skill in the management of his property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury on himself.”
It is appropriate to depart from this standard only when there are clear public policy reasons for doing so. In making that determination, a court must weigh the following factors: (1) the foreseeability of harm to the plaintiff, (2) the degree of certainty that the plaintiff suffered injury, (3) the proximity of the connection between the defendant’s conduct and the injury sustained, (4) the moral blame attached to the defendant’s conduct, (5) the policy of preventing future harm, (6) the extent of the burden to the defendant and consequences to the community from imposing a duty to exercise care with resulting liability for breach, and (7) the availability, cost, and prevalence of insurance for the risk involved. (Rowland v. Christian, supra, 69 Cal.2d at pp. 112 — 113, 70 Cal.Rptr. 97, 443 P.2d 561.)
The proper test to be applied to the liability of the possessor of land in accordance with section 1714 of the Civil Code is whether in the management of his property he has acted as a reasonable man in view of the probability of injury to others….” (Rowland v. Christian, supra, 69 Cal.2d at p. 119, 70 Cal.Rptr. 97, 443 P.2d 561.)
In addition to Civil Code section 1714, subdivision (a), the Legislature has enacted Streets and Highways Code section 5610, which provides:
“The owners of lots or portions of lots fronting on any portion of a public street or place when that street or place is improved or if and when the area between the property line of the adjacent property and the street line is maintained as a park or parking strip, shall maintain any sidewalk in such condition that the sidewalk will not endanger persons or property and maintain it in a condition which will not interfere with the public convenience in the use of those works or areas save and except as to those conditions created or maintained in, upon, along, or in connection with such sidewalk by any person other than the owner, under and by virtue of any permit or right granted to him by law or by the city authorities in charge thereof, and such persons shall be under a like duty in relation thereto.”
This statute places on the abutting property owner the duty to maintain the sidewalk.[FN.10] This statutory duty has been held not to impose, by itself, a duty of care upon the abutting landowner for the safety of persons using the sidewalk, but rather a duty owed to the city.
Division Seven of this court discussed the relationship of Streets and Highway Code section 5610 to ordinary negligence principles in the course of its opinion in Jones v. Deeter (1984) 152 Cal. App.3d 798, 199 Cal.Rptr. 825 (Jones). There, plaintiff Jones tripped on a break in a sidewalk, allegedly caused by the roots [374] of a tree growing in a parkway maintained by the owner of the adjacent property. The court affirmed the trial court’s grant of summary judgment to the property owner, holding that Streets and Highways Code section 5610 was not the basis of a duty of care to pedestrians unless the sidewalk defect was the result of the owner’s negligence. (Jones, supra, at p. 803, 199 Cal.Rptr. 825.)[FN.11] Under the facts of Jones, any dangerous condition resulting from the trees was attributable to the city as the city had planted and maintained the trees, and the parkway had been formally dedicated to the city by its owner. The court pointed out that the “Sidewalk Accident Decision” doctrine had been developed to distinguish those cases in which the owner of the adjacent property is not to be held liable in tort to users of the sidewalk unless the owner creates the condition that is a cause of the injury. (Ibid.) In Jones, the owner was not held to have a duty to the pedestrian because the city performed the maintenance of the area of the plaintiffs fall.
The Jones court was careful to distinguish the factual situation there presented — in which the offending trees were owned and maintained by the City on a dedicated parkway — from the facts of Moeller v. Fleming (1982) 136 Cal.App.3d 241, 186 Cal.Rptr. 24 (Moeller), in which that court, in reversing a grant of summary judgment, held that an abutting property owner could be held liable if the dangerous condition in a sidewalk had been caused by the roots of a tree owned by that landowner with his knowledge of that condition. (Id. at p. 245, 186 Cal. Rptr. 24.) In Moeller, the offending roots came from a tree on the defendant’s property. In distinguishing Moeller in Jones, Division Seven of this court stated: “This case turns on this distinction.” (Jones, supra, 152 Cal.App.3d at p. 804, 199 Cal. Rptr. 825.)
In Williams v. Foster (1989) 216 Cal. App.3d 510, 265 Cal.Rptr. 15 (Williams), the Court of Appeal reversed a jury verdict in favor of a pedestrian who had been injured when he fell on a public sidewalk which had an uneven surface caused by the roots of a tree planted in a parkway in front of the property owner’s residence. The defendants had moved for nonsuit, which motion the trial court had denied. In reversing the subsequent verdict and ordering that the trial court enter a judgment of nonsuit, the Williams court held that Streets & Highways Code section 5610 was controlling, viz., that the statutory duty placed on adjacent landowners to maintain and repair sidewalks was owed solely to the city and that that statute does not impose liability for injuries incurred by reason of a defect in the sidewalk. (216 Cal.App.3d at p. 521, 265 Cal. Rptr. 15.)
The Williams court did recognize the holding of Sprecher v. Adamson Companies(1981) 30 Cal.3d 358, 178 Cal.Rptr. 783, 636 P.2d 1121 (Sprecher), that a landowner may be held liable for negligent [375] failure to correct or control a defect[FN.12] which results in injury to neighboring property. In so holding, our Supreme Court repudiated the common law rule of nonliability for natural conditions of land and held that a possessor’s liability would be determined under ordinary negligence principles. (Williams, supra, 216 Cal. App.3d at p. 519, 265 Cal.Rptr. 15.) In the Williams court’s view, the general negligence liability analysis of Sprecher was not appropriate in the circumstances there presented because the abutting owner in Williams did not own or possess an easement over the area in which the offending roots grew (or other cause arose). (Id. at pp. 520, 521, 265 Cal.Rptr. 15.)
Williams sought to distinguish Jones, criticizing it in the following language: “We fail to see any legal foundation for [the approach that a particular abutting owner could be held liable for failing to maintain the public sidewalk or parkway where abutting owners as a class rather than a city historically had performed sidewalk maintenance] if it is applied to an abutting owner who has not undertaken such maintenance in the absence of a statute or ordinance.” (Williams, supra, 216 Cal.App.3d at p. 521, 265 Cal.Rptr. 15.)
The Williams court did recognize, however, that “[a] possessor or owner of premises is under a duty to others by virtue of that possession or ownership to act reasonably to keep the premises safe and prevent persons from being injured thereby. (See Rowland v. Christian (1968) 69 Cal.2d 108, 111-119, 70 Cal.Rptr. 97, 443 P.2d 561.) Thus, where a particular abutter does not possess or own the street easement, and does not undertake maintenance of it, we see no legal basis for imposing liability for failure to properly maintain the sidewalk or planting strip in the absence of statute or ordinance.” (Williams, supra, 216 Cal.App.3d at p. 521, 265 Cal.Rptr. 15.)[FN.13]
Of particular importance to the Williams court was the absence of any evidence that Foster or his predecessor in interest had planted the trees, or that those trees had caused the sidewalk defect (Williams, supra, 216 Cal.App.3d at pp. 522-523, 265 Cal.Rptr. 15.) Thus, there was no factual basis in Williams to consider or apply the duty analysis and the principles of Rowland v. Christian, supra, 69 Cal.2d. at p. 119, 70 Cal.Rptr. 97, 443 P.2d 56
b. Impact of Alcaraz v. Vece.
Prior to trial in the instant case our Supreme Court had occasion to apply the principles of Rowland v. Christian, supra, 69 Cal.2d 108, 70 Cal.Rptr. 97, 443 P.2d 561, in a situation analogous in many respects to the instant case. In Alcaraz v. Vece (1997) 14 Cal.4th 1149, 60 Cal.Rptr.2d 448, 929 P.2d 1239 (Alcaraz), Alcaraz sued his landlord, the owner of the apartment building in which he resided, for injuries sustained when Alcaraz stepped into an open utility meter box located in the city-owned lawn next to the sidewalk in front of that residence. In affirming the Court of Appeal’s reversal of the grant of summary judgment to the property owner, our Supreme Court held that there was a triable [376] issue of fact as to whether the property owner had exercised control over the area in which the utility box was located even though that area was owned by the city. In our Supreme Court’s view, if the property owner did exercise such control, then it had a duty to warn Alcaraz[FN.14] of the danger, or protect him from that danger.
Citing its decision in Rowland v. Christian, the Supreme Court stated: “`The proper test to be applied to the liability of the possessor of land … is whether in the management of his property [the possessor] has acted as a reasonable man in view of the probability of injury to others….’ (Rowland v. Christian (1968) 69 Cal.2d 108, 119 [70 Cal.Rptr. 97, 443 P.2d 561].)” (Alcaraz, supra, 14 Cal.4th at p. 1156, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
The court further explained: “This duty to maintain land in one’s possession in a reasonably safe condition exists even where the dangerous condition on the land is caused by an instrumentality that the landowner does not own or control.” (Alcaraz, supra, 14 Cal.4th at p. 1156, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
We distill from our Supreme Court’s holding in Alcaraz supra, that a landowner or possessor of land has a duty to take reasonable measures to protect persons from dangerous conditions on adjoining land when the landowner or possessor exercises possession or control over that adjacent land. The scope of this duty is to be determined under principles enunciated in Rowland v. Christian, supra. “The proper test to be applied to the liability of the possessor of land … is whether in the management of his property he has acted as a reasonable man in view of the probability of injury to others….” (69 Cal.2d at p. 119, 70 Cal.Rptr. 97, 443 P.2d 561.)
c. Indicia of control over the land.
The facts of this case reveal that VRHA had planted and maintained all of the trees and vegetation in the area, on both sides of the sidewalk, had installed sprinklers on both sides of that walkway, and watered and trimmed the trees which grew the roots which caused the sidewalk to be uplifted and crack, presenting the danger which befell Alpert.[FN.15] Further, VRHA had known for approximately two years prior to Alpert’s fall of the condition of the sidewalk at the location of the fall and elsewhere along that path.
Because the area of the injury in Alcaraz was owned by the city and not by the defendant, our Supreme Court was required to consider whether a possessor of land could be held liable under tort principles. Concluding in the affirmative, the court relied on principles enunciated in Rowland v. Christian, supra, 69 Cal.2d at p. 119, 70 Cal.Rptr. 97, 443 P.2d 561: The relevant question is not “mere ownership,” but whether the possessor has maintained the property in a reasonably safe condition. (Accord, Alcaraz, supra, 14 Cal.4th at p. 1156, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
[377] In the instant case, the party which had done the things just enumerated and which had prior knowledge of the resulting dangerous condition was in possessor and control of the premises, including but not limited to the sidewalk on which Alpert fell.
d. Application of Alcaraz and other cases.
VRHA contends that Jones does not allow for a duty to be placed on an adjacent landowner to repair or warn under the circumstances presented in this case. VRHA’s reliance on Jones is misplaced. As stated in Jones: “In settings where the abutting owners have planted the trees or have habitually trimmed or cared for them, these abutting owners have the duty to maintain the trees in a safe condition toward pedestrians.” (Jones, supra, 152 Cal.App.3d at p. 805, 199 Cal.Rptr. 825.) The facts of the instant case, unlike those of Jones, show the substantial activities — and responsibility — of the abutting landowner.
Similarly, VRHA’s reliance on Contreras v. Anderson (1997) 59 Cal.App.4th 188, 69 Cal.Rptr.2d 69 (Contreras), is misplaced. In Contreras, the plaintiff slipped on an improperly sloped brick path which led from the street curb to the sidewalk in the front of the defendant homeowners’ residence. The area of the fall was owned by the city and separated from the sidewalk by a five-foot high wooden fence. (Id at p. 192,69 Cal.Rptr.2d 69.) In the course of its de novo review of the summary judgment granted to defendants, the court analyzed Alcaraz, noting that while the defendant inAlcaraz exercised control over the parkway in which the fall had occurred, by contrast, the defendants in Contreras did not own, or have legal possession of the area of the fall (Contreras, supra, at p. 197, 69 Cal.Rptr.2d 69). The Contreras court described the difference: “The city-owned strip [in Alcaraz ] … was contiguous with and indistinguishable from the rest of the defendant’s lawn…. [T]he evidence showed the defendants maintained the entire lawn from the defendants’ property line to the sidewalk, including that portion of the lawn located within the city-owned strip of land, and that, subsequent to the plaintiffs alleged injury, defendants constructed a fence that bordered the sidewalk and enclosed the entire lawn in front of their property, including the two-foot-wide strip owned by the city.” In addition, the Alcaraz court found that the defendants had actual notice of the defect. (Contreras, supra, at p. 197, 69 Cal.Rptr.2d 69.)
The Contreras court characterized the holding in Alcaraz as follows: “The Alcarazcourt concluded that such evidence was ‘sufficient to raise a triable issue of fact as to whether defendants exercised control over the strip of land … and thus owed a duty of care to protect or warn plaintiff….’ [¶] Nevertheless, it is clear from Alcarazthat simple maintenance of an adjoining strip of land owned by another does not constitute an exercise of control over that property.” (Contreras, supra, 59 Cal.App.4th at p. 198, 69 Cal.Rptr.2d 69.) The Contreras court focused also on the fact that the defendants in Alcaraz had constructed a fence around the area. This act “went beyond simple neighborly maintenance and, thus, was sufficient to raise a triable issue of fact as to control. [Citation.]” (Id at p. 199, 69 Cal.Rptr.2d 69.)
By contrast, in Contreras, there “is no such `dramatic assertion of a right normally associated with ownership or … possession’ of the land….” (Id at p. 200, 69 Cal.Rptr.2d 69.) Finally, the Contreras [378] court focused on the fact that the fence in that case had been constructed by the city and that there was no evidence the defendants had knowledge of the hazard. (Id. at p. 201, 69 Cal.Rptr.2d 69.)
The facts of the instant case are substantially different from those presented inContreras. In Contreras, the court found that the adjacent owner had neither possession of, nor control over, the land on which the dangerous condition existed. In the instant case, the adjoining land was owned by VRHA which exercised control over the sidewalk and the area between the sidewalk and the curb. VRHA installed sprinklers, and planted and maintained the trees which Alpert’s expert testified caused the dangerous condition in the sidewalk. Further, VRHA had been aware of the condition of the sidewalk for a substantial period of time prior to the fall (and was in the process of discussing repairs when Alpert fell). In short, there was enough evidence to overcome the motion for nonsuit.[FN.16]
- Denial of the request to reopen.
When the trial court indicated it was going to grant the nonsuit, counsel for plaintiff sought leave to reopen. The trial court denied that request.
Alpert’s motion to reopen was timely under the circumstances. Although it was not made the instant the motion for nonsuit was served, it was made in the course of the discussion with the court and the argument of counsel that followed the filing of that motion. In addition, Alpert had previously asked for opportunities to make offers of proof on matters which were relevant to the issues presented in the motion for nonsuit and had been told by the court time would be made available later for such offers. Those requests related to evidence of knowledge by VRHA of the existence of the sidewalk defects at least a month prior to Alpert’s fall. That time never came.
The denial of a request to reopen which is accompanied by an offer of proof of the evidence that will cure the deficiency is reversible error. (Consolidated World Investments, Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 382, 11 Cal. Rptr.2d 524; Eatwell v. Beck, supra, 41 Cal.2d at pp. 133-134, 257 P.2d 643[plaintiffs, who had mistakenly relied on former law regarding damages, were improperly denied leave to introduce evidence to satisfy the current rule].)
The right to present further evidence is waived unless the plaintiff both requests leave to reopen and makes an offer of proof, describing the evidence and explaining how it would cure the deficiencies. (Consolidated World Investments, Inc., v. Lido Preferred Ltd., supra, 9 Cal. App.4th at p. 382, 11 Cal.Rptr.2d 524.) In the instant case, Alpert complied with the rule to the extent possible.
It is important to recognize, however, that even if Alpert had been granted [379] leave to reopen and introduce all of the evidence we have discussed, the trial court would likely still have granted the nonsuit as its legal analysis would have remained unchanged. There does not appear to have been anything in the evidence referenced in the offers of proof which would have changed the legal theory upon which the trial court granted the judgment of nonsuit. On retrial, it appears that the previously excluded evidence may be probative and relevant to the issues in the case.
- The trivial defect ruling.
One of the bases of VRHA’s written motion for nonsuit was that the defect in the sidewalk was trivial and thus it was not foreseeable that harm would come to anyone. In its reply brief, VRHA asserts that the trial court in fact rejected VRHA’s argument that the defect was trivial. Because VRHA, in effect, has conceded that the trial court rejected this argument, we need not consider it.[FN.17]
- Causation
The final ground for the motion for nonsuit was that Alpert had not established that any defect was caused by a root from VRHA’s property. As we have discussed at length, ante, in reviewing a judgment of nonsuit we view the evidence in the light most favorable to the plaintiff and accept as credible the testimony of the plaintiffs witnesses. (Kidron v. Movie Acquisition Corp., supra, 40 Cal.App.4th at p. 1581, 47 Cal.Rptr.2d 752; LaMonte v. Sanwa Bank California, supra, 45 Cal.App.4th at p. 517, 52 Cal.Rptr.2d 861.) Alpert’s expert clearly stated his opinion that the break in the sidewalk was the result of the growth under the sidewalk of a root of one of the pine trees planted on VRHA’s lawn and nurtured by VRHA. For purpose of ruling on a judgment of nonsuit, there was substantial evidence of causation. VRHA’s causation argument is without merit.
- Exclusion of evidence of prior knowledge of the condition of the sidewalk contained in the minutes of meetings of VRHA’s board of directors.
There is an evidentiary contention of Alpert which is appropriately resolved on this appeal. Alpert contends the trial court erred in refusing to permit questioning of VRHA board of director and committee members about a discussion at VRHA’s November 1997 board of directors’ meeting. The trial court sustained [380] VRHA’s objections to such questions and to Alpert’s attempt to gain admission of the minutes of that meeting of VRHA’s board of directors. The basis for the objection was that admission of such evidence would violate the subsequent act proscription codified in Evidence Code section 1151. We will determine that the evidence should have been admitted.
Alpert sought admission of the November minutes while questioning the former president of VRHA’s board of directors, Ehihu Crane, about that meeting. During that questioning, Alpert sought to inquire concerning a discussion of bids to repair sidewalk “bumps.” Alpert was specifically interested in references in that discussion and in the minutes of that meeting to the fact that there had been a discussion of the condition of the sidewalk and the need to repair it at a board of directors’ meeting in June of the same year, prior to Alpert’s fall.[FN.18] The trial court sustained objections to introduction of this evidence.
Alpert seeks to overturn those rulings, arguing the evidence is probative of the facts that the sidewalk defect was known to VRHA prior to the fall, the defect was not trivial, its repair was feasible, the defect was caused by tree roots, and VRHA was in control of the cause of the defect as well as of its repair. In arguing that the trial court’s ruling was correct, VRHA contended that the evidence would relate to remedial steps taken after the fall, and is not probative on the points argued by Alpert.
In Alcaraz, supra, 14 Cal.4th 1149, 60 Cal.Rptr.2d 448, 929 P.2d 1239, the defendants had objected in the trial court to admission of evidence that they had maintained the area of that fall and that they had built a fence around the parkway where the fall had occurred subsequent to that incident. In making this objection, theAlcaraz defendants argued that the evidence must be excluded under the authority of Evidence Code section 1151 which precludes introduction of evidence of subsequent remedial conduct.[FN.19] In its ruling granting summary judgment to the defense, that trial court had sustained defendants’ objections in this regard.
[381] The Supreme Court expressly rejected these evidentiary rulings, stating, “This evidence [relating to maintenance of the lawn on city-owned property and subsequent construction of a fence in that area] was highly relevant regarding whether defendants exercised control over the strip of land owned by the city.” (Alcaraz, supra, 14 Cal.4th at p. 1166, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
“[W]hether defendants exercised control over the strip of land owned by the city on which the meter box was located is a `disputed fact that is of consequence to the determination of the action.’ [Citation.] Indeed, if defendants exercised control over this strip of land, it appears clear they owed a duty to protect or warn plaintiff.” (Alcaraz, supra, 14 Cal.4th at p. 1167, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
In rejecting the argument that admission of evidence that the defendants later constructed a fence around the area of the fall violated Evidence Code section 1151, the court stated: “This statute does not apply, however, because evidence regarding construction of the fence was admitted, not to prove negligence, but to demonstrate that defendants exercised control over the strip of land owned by the city. As we stated in Ault v. International Harvester Co. (1974) 13 Cal.3d 113, 118, 117 Cal.Rptr. 812, 528 P.2d 1148, `Section 1151 by its own terms excludes evidence of subsequent remedial or precautionary measures only when such evidence is offered to prove negligence or culpable conduct’ (Italics added; see also Fed. Rules Evid., rule 407, 28 U.S.C., which employs language nearly identical to Evidence Code section 1151 and then explains: `This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.’)” (Alcaraz, supra, 14 Cal.4th at p. 1169, 60 Cal.Rptr.2d 448, 929 P.2d 1239.)
The VRHA minutes were admissible for the purposes sought by Alpert. The proper means to address the concern expressed by VRHA would have been a limiting instruction, advising the jury of the purposes for which they could, and could not, consider the minutes. (See Morehouse v. Taubman Co. (1970) 5 Cal.App.3d 548, 555, 85 Cal.Rptr. 308 [evidence that the defendant contractor’s carpenters installed handrails at the point where the plaintiff had fallen after his injury was not admissible to prove negligence of the defendant under Evid.Code, § 1151, but was properly limited and received by the court, on the issues of control of the premises, and of whose duty it was under the contract to take such safety measures].) Similarly, in Baldwin Contracting Co. v. Winston Steel Works, Inc. (1965) 236 Cal.App.2d 565, 46 Cal. Rptr. 421, the court held that subsequent remedial conduct cannot be considered on the issue of liability, but “is relevant and admissible [on the issues of scope of duty] [citation] and also on the possibility or feasibility of eliminating the cause of the accident. [Citations.]”[FN.20] (Baldwin Contracting, at p. 573, 46 Cal.Rptr. 421.)
In the present case, the minutes of the November board meeting confirm VRHA’s knowledge of the sidewalk defect prior to Alpert’s fall, VRHA’s discussions regarding [382] repair, its control over the area at issue, as well as other facts that were in dispute in the litigation. The trial court erred in refusing to admit the minutes and in sustaining objections to questions of witnesses in the same areas.[FN.21] As our Supreme Court stated in Alcaraz, such evidence “would be admissible to demonstrate that defendants exercised control over the premises. Accordingly, we may consider such evidence in determining whether a triable issue of material fact existed concerning whether defendants exercised control over the strip of land and thus owed a duty of care to plaintiff.” (Alcaraz, supra, 14 Cal.4th at p. 1170, 60 Cal. Rptr.2d 448, 929 P.2d 1239.)
DISPOSITION
The judgment of nonsuit is reversed. The matter is remanded to the trial court for further proceedings consistent with this opinion. Appellant shall recover her costs on appeal.
BOREN, P.J., and NOTT, J., concur.
[FN.*] Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
[FN.1] Alpert had alleged causes of action against the City of Los Angeles and County of Los Angeles as well as VRHA. The claims against the governmental entity defendants were resolved prior to trial. The County of Los Angeles was dismissed; a good faith settlement was entered with the City of Los Angeles.
[FN.2] We construe the dismissal of the jury upon the granting of the motion for nonsuit as a termination of the action as to all defendants. It is proper, therefore, to treat the appeal as an appeal from the judgment which necessarily followed. (See Mikialian v. City of Los Angeles (1978) 79 Cal.App.3d 150, 153, 144 Cal.Rptr. 794; Graski v. Clothier (1969) 273 Cal.App.2d 605, 607, 78 Cal.Rptr. 447.)
[FN.3] Alpert also sought review of the trial court’s refusal to permit a representative of the City of Los Angeles to testify. Resolution of that evidentiary matter is not necessary on this appeal. We make further reference to this matter in footnote 10, post.
[FN.4] At the time of trial in this matter, Code of Civil Procedure section 581c, subdivision (a) provided:
“After the plaintiff has completed his or her opening statement, or the presentation of his or her evidence in a trial by jury, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a judgment of nonsuit.”
The section was amended in 1998 (Stats. 1998, ch. 200, § 1) in a technical manner not relevant to the instant case.
[FN.5] VRHA correctly points out that the doctrine that a scintilla of evidence creates a sufficient evidentiary basis to reverse a judgment of nonsuit has been rejected. (7 Witkin, Cal. Procedure (4th ed. 1997) Trial, § 420, p. 481.) While that is a correct statement of the law, factually Alpert overcame that threshold for reasons we discuss in the text.
[FN.6] California Constitution, article I, section 16 provides, in part:
“Trial by jury is an inviolate right and shall be secured to all….”
This right extends to factual questions only; issues of law are triable by the court. (Evid. Code, § 310, subd. (a); Code Civ. Proc., §§ 589, 591, 592.) The right to trial by jury guarantees that right in actions triable by jury at common law, including claims for damages for injuries to persons. (See generally 7 Witkin, Cal. Procedure (4th ed. 1997) Trial, § 89 et seq.)
[FN.7] In its written motion for judgment of nonsuit, VRHA contended that (1) the defect in the sidewalk was trivial as a matter of law, (2) Alpert had failed to establish that the cause of the sidewalk defect was a root growing from VRHA’s property, and (3) VRHA owed no duty to pedestrians such as Alpert, but only to the City of Los Angeles, under Streets and Highways Code section 5610.
[FN.8] There is a split of authority over whether we may consider grounds argued by the defendant, but not relied upon by the trial court, in granting the motion. Some Courts of Appeal, including this division, have held that appellate review is limited to those grounds relied upon by the trial court, the theory being that we only need examine those grounds which a plaintiff may have been able to correct had they been called to its attention (e.g., DeVaughn Peace, M.D., Inc. v. St. Francis Medical Center (1994) 28 Cal.App.4th> 454, 459, 33 Cal.Rptr.2d 459; Walker v. Porter (1974) 44 Cal.App.3d 174, 177, 118 Cal.Rptr. 468). Other courts have taken the view that a judgment of nonsuit can be sustained on any ground specified in the motion, even if not relied upon by the trial court (e.g.,Saunders v. Taylor (1996) 42 Cal.App.4th 1538, 1542, fn. 2, 50 Cal.Rptr.2d 395, and cases there discussed). See also Adkins v. State of California (1996) 50 Cal.App.4th 1802, 1809, fn. 7, 59 Cal.Rptr.2d 59.
The source of this debate is the following language from Lawless v. Calaway (1944) 24 Cal.2d 81, 147 P.2d 604 (Lawless): “The correct rule is that grounds not specified in a motion for nonsuit will be considered by an appellate court only if it is clear that the defect is one which could not have been remedied had it been called to the attention of plaintiff by the motion. This rule is complementary to the requirement that a party specify the grounds upon which his motion for nonsuit is based.” (Id. at p. 94, 147 P.2d 604; accord, Timmsen v. Forest E. Olson, Inc. (1970) 6 Cal.App.3d 860, 868, 86 Cal.Rptr. 359.) The rationale for Lawless is that, on a motion for nonsuit, the plaintiff is to be given the opportunity to cure the defect in its case. To this end, the court is required to hear offers of proof and grant a motion to reopen if timely made. (Eatwell v. Beck (1953) 41 Cal.2d 128, 133, 257 P.2d 643[one of the chief objects of a nonsuit motion is to point out to plaintiff the defects in its case so that they may be remedied and the case decided on its merits].)
The articulation of the Lawless rule has not prevented the split of authorities as discussed above: whether, on review of a judgment of nonsuit, the appellate court looks only at the reason or reasons stated by the trial judge in granting the motion, or at any reason advanced by the moving party in the trial court. In either situation, the appellate court looks also at the problem of legal preclusion — whether, as a matter of law, there is no basis for the plaintiff’s claim. In such a circumstance, affirmance of the judgment of nonsuit is appropriate even if that ground was not advanced below. It is the issue of legal preclusion that was the principal focus of the trial court in reaching its ruling below.
[FN.9] As indicated in this opinion, the existence of a duty of care is a matter of law. (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 678, 25 Cal.Rptr.2d 137, 863 P.2d 207; Isaacs v. Huntington Memorial Hospital (1985) 38 Cal.3d 112, 125, 211 Cal.Rptr. 356, 695 P.2d 653.) The foreseeability of a particular plaintiff’s injury is a question of fact. (Isaacs, at p. 126, 211 Cal.Rptr. 356, 695 P.2d 653.) The standard to be applied to determine if the duty has been met is whether the property owner has acted in management of the property as a reasonable person in view of the probability of injury to others. (Rowland v. Christian (1968) 69 Cal.2d 108, 118-119, 70 Cal.Rptr. 97, 443 P.2d 561.) The answer to that question will be determined on retrial.
[FN.10] Streets and Highways Code section 5610 is one of several statutes codifying responsibilities with respect to maintenance and repair of sidewalks. Section 5611 gives to the superintendent of streets the authority to notify the abutting owner of the need to repair the sidewalk. Section 5615 provides that the superintendent of streets may repair the sidewalk if the abutting owner does not and assess that cost to the abutting owner. That amount may result in a lien against the property. (Sts. & Hy.Code, § 5625 et seq.)
In this case, Alpert’s attempt to introduce evidence regarding the absence of notice to the city concerning defects in the sidewalk was rejected. Alpert did give timely notice of intention to call the witness through whose testimony this and other matters were to be established. Whether the witness was competent to testify to all of the subjects which Alpert indicated in her offer of proof is a matter for consideration by the trial court in the course of proceedings on the retrial.
[FN.11] As we discuss in the text, Streets and Highway Code section 5610 establishes the rule that the owner of the property adjoining the sidewalk has a duty to maintain it. This is a statutory exception to the general rule that the owner of the easement (typically, the local municipality) has the duty to maintain the easement.
While section 5610 places the duty to maintain and repair defects in the sidewalk on the abutting landowner, the “Sidewalk Accident Decision” doctrine provides that that duty is not owed to persons who use the sidewalk unless the abutting landowner somehow causes the dangerous condition of the sidewalk. (Schaefer v. Lenahan (1944) 63 Cal. App.2d 324, 326, 146 P.2d 929; Jones, supra, 152 Cal.App.3d at p. 803, 199 Cal.Rptr. 825.) Our holding today is consistent with this long-established doctrine.
[FN.12] In Sprecher, supra, 30 Cal.3d at p. 358, 178 Cal.Rptr. 783, 636 P.2d 1121, the defect was a landslide.
[FN.13] The Williams court ultimately reversed the judgment and directed the trial court to enter a judgment of nonsuit for the reason that the evidence was insufficient as a matter of law to sustain a verdict for the plaintiff. (Williams, supra, 216 Cal.App.3d at pp. 522-523, 265 Cal.Rptr. 15.) We reach a different conclusion based both on the facts of this case, which the Williams court suggested might be the basis for such a result, and due to the development in the law subsequent to the decision in Williams.
[FN.14] This duty is owed to Alcaraz and to others, viz., to persons who foreseeably may be in the area, not to Alcaraz due to his status as a tenant of the landowner. (Rowland v. Christian, supra, 69 Cal.2d at p. 119, 70 Cal.Rptr. 97, 443 P.2d 561; Alcaraz, supra, 14 Cal.4th at pp. 1162-1163, 60 Cal.Rptr.2d 448, 929 P.2d 1239 [duty is not dependent on commercial benefit to landowner].)
[FN.15] As indicated in the text, ante, Alpert’s expert witness was of the opinion that the offending root came from a pine tree growing between the sidewalk and the buildings.
[FN.16] No evidence was presented below of any applicable local ordinances. Whether that will be a factor on retrial in unknown. We note that in Selger v. Steven Brothers, Inc. (1990) 222 Cal.App.3d 1585, 272 Cal.Rptr. 544, the court construed statutes applicable in the jurisdiction in which the property at issue in this appeal is located. The issue was framed differently, however, as that defendant had no role in creating the hazard which befell that plaintiff. (Id. at p. 1592, 272 Cal. Rptr. 544.) Nor was any evidence presented regarding the statutory presumptions of Civil Code sections 831 and 1112. (See Jones, supra, 152 Cal.App.3d at pp. 801-802, 199 Cal.Rptr. 825.)
[FN17] This court has had previous opportunities to consider the trivial defect defense. In Ursino v. Big Boy Restaurants of America (1987) 192 Cal.App.3d 394, 237 Cal.Rptr. 413, we sustained a summary judgment in which the trial court had determined that the trivial defect defense was established as a matter of law based on the facts there presented. (Id. at pp. 397-398, 237 Cal.Rptr. 413). In Davis v. City of Pasadena (1996) 42 Cal.App.4th 701, 50 Cal.Rptr.2d 8, we upheld a summary judgment in which the trial court had reasoned that “`”reasonable minds [could] come to but one conclusion,”‘” that the design of a staircase at a city convention center posed a minor or trivial risk at most. (Id. at p. 704, 50 Cal.Rptr.2d 8.)
We note that the trial court in the instant case had rejected VRHA’s argument that the trivial risk doctrine applied on the facts presented and that VRHA has conceded this issue in its brief on appeal. Nevertheless, as that defense is fact-specific and there will be a full trial, our opinion should not be construed as other than an indication that the trial court may consider this issue based on the evidence adduced in the new trial of this case. Nor do we infer that the trivial defect defense need not be closely scrutinized in view of the “marked changes in the law” made by Rowland v. Christian, supra, 69 Cal.2d 108, 70 Cal.Rptr. 97, 443 P.2d 561. (Ursino v. Big Boy Restaurants of America, supra, 192 Cal. App.3d at p. 398, 237 Cal.Rptr. 413.)
[FN.18] When Alpert sought to have the minutes in question marked as trial exhibit 29, VRHA’s counsel asked to approach. After the reported sidebar conference, the minutes were never marked. They should have been marked for identification. The parties to this appeal each make reference to those minutes, even though they are not a part of the record on appeal. By their briefs on this appeal, we are advised that the minutes of the VRHA board of directors state in part:
“The meeting was called for the purpose of discussing the bids for cement work to repair the … sidewalk `bumps.’
“Before discussing the bids the question was raised as to whether or not this work is considered an `emergency’ and therefore did not need approval of homeowners (over $5,000). The Board voted 2 to 1 (1 abstention) that is as [sic] not an emergency, since the matter has been pending since last June….
“… In several places the cement levels have change [sic] due to tree root, etc.
Alpert sought introduction of these minutes to establish knowledge of the problem by VRHA at least a month prior to her fall. VRHA objected, contending the evidence was of subsequent repair and inadmissible by statute and common law policy.
Two other attempts were made to introduce the minutes, with the same result, the court sustaining the objection that the minutes were inadmissible as evidence of subsequent repair and citing Evidence Code section 352, which gives the trial court the discretion to exclude evidence on the basis that its probative value is outweighed by its prejudicial impact. Each ruling was incorrect.
[FN.19] Evidence Code section 1151 provides:
“When, after the occurrence of an event, remedial or precautionary measures are taken, which, if taken previously, would have tended to make the event less likely to occur, evidence of such subsequent measures is inadmissible to prove negligence or culpable conduct in connection with the event.”
[FN.20] Pursuant to Evidence Code section 355, the opponent of the evidence (or its propoadvising the jury that the evidence is being admitted for a limited purpose, explaining that purpose. This instruction may be given at the time the evidence is admitted, in closing instructions, or both. (See Evid.Code, § 355; Dincau v. Tamayose (1982) 131 Cal.App.3d 780, 791, 182 Cal.Rptr. 855.)
[FN.21] Because of the manner in which the issue arose, we do not know if other evidentiary objections (e.g., relating to authenticity of the minutes) could be surmounted by Alpert. These are issues to be resolved by the trial judge on retrial.
Ritter & Ritter v. Churchill Condominium Association
[Maintenance; Board Deference] The deference afforded to HOA boards covers only “ordinary” maintenance; the “Lamden Rule” only insulates directors from liability, not the HOA.
Minton Ritter; Feldsott & Lee, Stanley Feldsott and Martin L. Lee for Plaintiffs and Respondents.
Hillel Chodos; Michael A. Chodos and Rehema Rhodes Defendants and Appellants.
OPINION
COOPER, P. J.-
INTRODUCTORY INFORMATION
BACKGROUND INFORMATION
The Parties
The Churchill is a 110-unit, 13-story condominium building in the “Wilshire Corridor” in the Westwood area of Los Angeles California. Defendant and appellant (The Churchill) is a California Non-Profit Mutual Benefit Corporation. The individual defendant and appellant directors of The Churchill are Tibor Breier, Martha Brown, Theodore Nittler, Ruth Hochberg and Basil Anderman [109] (“the Board”). [FN. 1] Each of the individual directors is also an owner in the building and receives no compensation for their services as director. Minton and Roberta Ritter, are brother and sister. The Ritter & Ritter, Inc., Pension and Profit Plan, and Ritter and Ritter Family Investment Trust, purchased adjoining units [3H in 1995 and 3J in 1998] in The Churchill. Roberta Ritter is the trustee of both trust entities and a plaintiff in this litigation. [FN. 2]
The Churchill Condominium
The Churchill was built in 1960; with construction completion in 1962. Built originally as an apartment complex, it was converted into a condominium association in 1976, at which time its Declaration of Establishment of Covenants, etc. (hereinafter “CC&R’s”) was recorded. The CC&R’S were followed with House Rules documents. Together these documents form the governing documents for the organization.
The Churchill is constructed of a series of horizontal concrete slabs attached to and supported by a rectangular structure of steel girders and beams. The ceiling of each unit is actually a “drop ceiling” below the next concrete slab. Above the “drop ceiling” and between it and the concrete slab above is an area referred to as the “plenum.”
The various pipes, conduits and ducts needed to serve each unit run up and down central shafts in the building, then branch out sideways through this “plenum” area, and then go up into each unit through slab penetrations (i.e. hole) made in the concrete slab during the building’s original construction.
The slab penetrations are holes in the concrete that range in size from six inches in diameter to twelve by twelve inch holes. These “slab penetrations” were created at the time of the initial construction of the building. The purpose of the slab penetrations was to allow space for passage by the vertical plumbing and piping which runs throughout the structure. The original architectural construction plans and the city permit requirement at the time called for these slab penetrations to be “fire proofed.” However, this did not occur and the Churchill’s original construction (including these slab penetrations) passed all applicable building inspections and The Churchill duly received its Certificate of Occupancy in 1962. The Churchill has never received any order to change or upgrade these slab penetrations. Existing Los Angeles building codes allow unfilled floor penetrations to remain as an existing, non-conforming condition. [110]
The dispute in this case arose over the existence of these slab penetrations and the duty, if any, of The Churchill to repair the condition that the penetrations were not properly finished during the initial construction of the building.
STATEMENT OF THE CASE
In 1998, the Ritters complained to appellants about smoke odors in Unit 3H; a unit which the Ritters never remodeled. In 1999, the Ritters purchased a second unit, 3J and discovered that this unit had similar odor problems. After bringing this issue to the attention of The Churchill both before and after unit 3J was remodeled, the manager, Bill Brick, told the Ritters that the odor problems originated in their air conditioning unit and that their air conditioning unit had to be replaced. The Ritters replaced the air conditioning unit, but the new unit provided no relief from the odors. The Churchill’s management responded to the Ritters’ continued complaints by stating that there was no more that could be done and that no other homeowners complained of similar problems. [FN. 3]
In late 2003, a new tenant in the Ritter’s unit 3J complained about cigarette odors in the unit. The Ritters demanded that The Churchill identify the source of the odors and abate it. This demand triggered a series of investigations by the parties and the Board decision which is the subject of this lawsuit. Extensive investigation and communication between the parties ensued.
The Ritters hired their own expert engineer who conducted his own investigation. He reported that the source of the odors was the slab penetrations and offered his opinion that these holes constituted a fire hazard and should be filled or fire stopped.
The Board hired a professional engineer and a ventilation system expert to investigate the source of the problem. Their expert reported that the problem was caused, in part, by the slab penetrations in the Ritter’s unit 3J’s floor. According to the expert, these holes allowed odors to travel between the 2J unit below, and the Ritter’s unit 3J. The Churchill’s engineer also indicated slab penetrations posed a significant fire safety risk. [FN. 4]
After receiving its expert’s report and conducting its investigation and communication with the Ritters, the Board concluded based on the 1999 Building Code the Ritters should have filled any floor penetrations exposed [111] during their remodel, and that doing so now would abate the odor problem. The Board believed that the Ritters were responsible for making the holes in the slabs and therefore they were also responsible for fixing them and would be expected to enter the 2J unit below, pay for the homeowner to stay in a hotel during the repairs and make all necessary repairs within 30 days.
The Ritters demanded a hearing before the Board. They also demanded that Board and Association do the work to fill the slab penetrations adjacent to their own unit and additionally repair all penetrations throughout the entire building.
The Board agreed to the Ritters’ request and on March 9, 2004 held a formal adjudicative hearing of the Ritters’ protest and demands. At the hearing, the Ritters were represented by counsel and submitted evidence and witness testimony. After considering all such materials as well as the report of their own expert and the advice of their counsel, the Board concluded: 1) that the Ritters’ remodel in 1999 “triggered” the obligation to fill the floor penetrations adjacent to their units, which obligation came to light only when their tenant complained of odors in 2003; 2) The Churchill did not have a legal obligation to fill such holes because they were “existing, non-conforming” conditions; 3) The Churchill would not at this time choose to undertake the expense of making the corrections; and 4) the Ritters were required by law and by the CC&R’s to fill the penetrations adjacent to their own units and would be ordered to do so. [FN. 5]
The Board also imposed daily fines of $200 per day on the Ritters for failure to fill the holes adjacent to their own units, but expressly indicated that all such fines would be waived if the Ritters filled the holes within 30 days after the order. The Churchill’s Board notified the Ritters of their decision in writing. It attached a bid from a contractor offering to complete the work adjacent to their units for approximately $2,700 per unit. The Ritters declined the Board’s offer.
The Current Litigation
On May 17, 2004, the Ritters sued the Churchill and each of its then-Directors individually. The Ritters’ First Amended Complaint set forth causes of [112] action for Nuisance, Negligence, Breach of Fiduciary Duty, Breach of the CC&R’s, Breach of the Covenant of Good Faith and Fair Dealing, Permanent Injunctions and Declaratory Relief. They sought financial damages due to odor intrusion into their unit. They also sought an injunction requiring the Churchill to fill all slab penetrations throughout the building, at association expense. They sought damages of at least $200,000 for diminution in value to their units as a result of the unfilled slab penetrations.
The Churchill cross-complained to require the Ritters to fill the penetrations adjacent to their units and for recovery of the $200 daily fines imposed for their failure to do so. By the time of trial, these daily fines had amounted to $77,000.
The matter went to trial on May 2, 2005 and concluded on May 19, 2005. [FN. 6] The legal causes of action were presented to a jury and the equitable causes of action were presented to the trial judge. The legal causes of action presented to the jury included: claims that the Churchill has breached the CC&R’s, acted negligently and breached their fiduciary duty against the Ritters. General Verdicts and Special Interrogatories were submitted to the jury. The jury was instructed and began their deliberations. The jury returned their verdict on May 20, 2005.
The jury returned a General Verdict that stated:
“On the Ritter plaintiffs’ claim for breach of the CC&Rs
“We find in favor of the Ritter plaintiffs and against The Churchill defendants . . .
“On the Ritter plaintiffs’ claim for breach of fiduciary duty
“We find in favor of the Ritter plaintiffs and against The Churchill defendants . . .
“On the Ritter plaintiffs’ claim for negligence
“We find in favor of the Ritter plaintiffs and against The Churchill defendants.
“On The Churchill Cross-Complaint . . .[113]
“We find in favor of cross-defendants the Ritters and against cross-complainant The Churchill.”
Special Interrogatories were submitted to the jury and the jury returned the forms with the following responses: [FN. 7]
“We answer the questions submitted to us as follows:
“1. Did The Churchill defendants breach any provisions of the CC&R’s?
“The Churchill Yes
“Basil Anderman No
“Tibor Breier No
“Martha Brown No
“Ruth Hochberg No
“Edwin Nittler No
“2. If so, what provisions?
“5.1(3) – 5 and 5.1(6)
“3. If the answer to Number l is “Yes,” were the Ritter plaintiffs harmed by the Churchill defendants?
“Yes
“4. What are the Ritter plaintiffs’ damages?
“Economic loss:$4,620
“5. Were The Churchill defendants negligent?
“The Churchill Yes
“Basil Anderman No
“Tibor Breier No
“Martha Brown No
“Ruth Hochberg No
“6. If the answer to Number 5 is yes, was The Churchill defendant’s negligence a substantial factor in causing harm to plaintiffs? [114]
“Yes
“7. Were the Ritter plaintiffs negligent?
“Yes
“8. Was the Ritter plaintiffs’ negligence a substantial factor in causing “harm?
“Yes
“9. What percentage of responsibility for the Ritter plaintiffs’ harm do “you assign to the following?
“The Ritter Plaintiffs 25%
“The Churchill 75%
[¶] . . . [¶]
“Total 100%
“10. What amount of fines do you award against the Ritter cross-defendants, if any?
“$0.”
The court tried the equitable causes of action and on October 3, 2005, the court issued its final judgment. The verdict form stated:
“VERDICT FORM”
“1. Plaintiffs Ritter & Ritter, Inc. Pension and Profit Plan, Roberta Ritter Trustee, Roberta Ritter Trustee of the Ritter Family Investment Trust dated January 13, 1986, and cross-complainants/cross-defendants Ritter & Ritter, Inc. Pension and Profit Plan, Roberta Ritter Trustee, Roberta Ritter Trustee of the Ritter Family Investment Trust dated January 13, 1986, and Roberta Ritter, individually, shall recover from the defendants the sum of $____ as and for their attorney fees, and the sum of $____ as and for their costs.
“2. The individually named directors did not breach their fiduciary duty.
“3. Pursuant to Code of Civil Procedure § 1060, the court will and does retain ongoing jurisdiction to enforce the above recited equitable and/or injunctive decrees (to wit, Paragraph 2 above).” [115]
Post Trial Proceedings
After trial, but prior to the court’s issuance of the judgment herein, the following motions were heard by the trial court: l) The Churchill Defendants Motion for a Minute Order Entering Dismissal of Ritters’ First, Second and Sixth Causes of Action; 2) Churchill Defendant’s Motion for Judgment Notwithstanding the Verdicts; 3) Ritter’s Motion for Reconsideration and Revocation of order made July 15, 2005 that Ritters are to Pay for Firestopping on Common Area Adjacent to Units 3H and 3J and/or Request for Court on its Own Motion to Reconsider Same. On August 24, 2005 the court granted Ritter’s motion for reconsideration and clarified it order to provide that defendant, The Churchill, is to pay at its sole cost and expense for the cost of fire stopping the slab penetrations adjacent to the Ritter plaintiff’s units 3H and 3J.
On July 15, 2005, the court issued an order following arguments on Churchill defendants’ Motion For Judgment Notwithstanding the Verdicts, as follows: “The motion — so to the extent that you’re requesting judgment notwithstanding the verdict, that’s denied as to the general verdict. [¶] I will, however, grant your motion to the extent that it finds each one of the individual named persons, directors, that — the judgment will be they did not breach a fiduciary duty.”
The trial court filed its written judgment on October 3, 2005, which stated:
“On July 13, 2005, the Court ruled thereon in favor of the plaintiffs and against defendants, and each of them as follows: [¶] 1) Within thirty days after entry of the judgment, The Churchill Condominium Association and its Board of Directors shall give written notice to all of the members of the Churchill Condominium Association . . . . [¶] 2) The Association is ordered to fire stop and seal all of the slab open penetrations adjacent to plaintiffs’ units, to wit: 3H and 3J, and the Association’s sole cost and expense, within sixty days of entry of the judgment. [¶] 3) All fire stopping is to be done with appropriate fire stopping material with a two hour fire rating. [¶] 4) The Board of Directors is ordered to call a special meeting of the members with suitable experts in attendance to explain to the membership the nature and extent of these slab penetrations, the fire and safety hazard posed by lack of fire stopping, and the fact that the ceiling and fire stopping of the slab penetrations is an Association responsibility pursuant to the provisions of the Declarations of Covenants, Conditions and Restrictions.”
The trial court denied the Ritters’ request for a mandatory injunction requiring The Churchill and the Board to fill all the slab penetrations throughout the building; instead ordered them to fill the penetrations adjacent to the Ritters’ two units. The trial court ordered The Churchill and the Board give all the members [116] notice of the existence of the slab penetrations and of the fact that they represent a fire hazard; and call a General Meeting of the Homeowners Association, with experts in attendance, to explain the situation to the members and to obtain their input.
The Board promptly complied with the injunctive order. The penetrations next to the Ritters’ units were filled and a General Meeting was held. At the meeting, the members voted overwhelmingly not to incur the cost to fill the building’s slab penetrations. The vote was 78 against to 3 in favor. [FN. 8]
The Churchill and the Directors timely filed their Notice of Appeal and Notice of Election on November 29, 2005 and December 9, 2005, respectively.
CONTENTIONS ON APPEAL [FN. 9] and STANDARD OF REVIEW
We elect to restate appellant’s statement of contentions as presenting the following issues: 1) the general verdict and special findings are inconsistent and irreconcilable and the special findings control; 2) the CC&R’s alone determine the rights and obligations between the parties; 3) the trial court erred in the application of the rules set forth in Lamden v. LaJolla Shores Clubdominium Homeowner’s Assn. (1992) 21 Cal.4th 249; the trial court erred in instructions submitted to jury; 5) the trial court erred in ordering the injunction; and 6) the trial court erred in determining the Ritters were the prevailing parties. [FN. 10] [117]
In reviewing the evidence on appeal, all conflicts must be resolved in favor of the judgment, and all legitimate and reasonable inferences indulged in to uphold the judgment if possible. When a judgment is attacked as being unsupported, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the judgment. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571;Crawford v. Southern PacificCo. (1935) 3 Cal.2d 427, 429.)
To the extent that the contentions on appeal raise the need to review the sufficiency of the evidence to support a jury verdict and the associated judgment, the court of appeal is ordinarily limited to review of whether the judgment is supported by substantial evidence. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) “When considering a claim of insufficient evidence on appeal, we do not reweigh the evidence, but rather determine whether, after resolving all conflicts favorably to the prevailing party, and according the prevailing party the benefit of all reasonable inferences, there is substantial evidence to support the judgment.” (Scott v. Pacific Gas&Electric Co. (1995) 11 Cal.4th 454, 465, disapproved on another ground in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 352, [FN. 17].) We review all legal issues de novo. The existence of duty is a question of law to be decided by the court. (Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188.)
DISCUSSION
General Principals Relating to Condominium Associations [FN. 11]
To provide context for the following discussion, we begin with some basic legal principles. First among these is an understanding of the general nature [118] of a non-profit homeowners association; next is the nature of the liability of such an association and its directors.
[1] Under California law, a “condominium project” is a form of common interest development. A “condominium” is “an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit . . . .” (§ 1351, subd. (f).) Unless the governing documents provide otherwise, the common area of a condominium project is owned by the owners of the separate interests as tenants in common. In addition to the combined ownership of the two estates enumerated above, the major characteristics of a condominium include an agreement among the unit owners regulating the administration and maintenance of the property. The agreement is reflected in the governing documents of the association; which includes the declaration and any other documents, such as bylaws, operating rules of the association, articles of incorporation which govern the operation of the common interest development. (§1351, subd. (j).) The development’s restrictions should be contained in its recorded declaration, but may also be contained in an association’s internal rules or bylaws. [FN. 12] (§§ 1353, 1354.) The CC&R’s bind all owners of separate interests in the development. [FN. 13]
[2] After its creation, a common interest development is managed by an association [aka homeowner’s association.] (Civ. Code § 1363.) Associations are responsible for the maintenance of the development’s common areas. An association can be unincorporated or incorporated. (Civ. Code § 1363, subd. (a).) Most associations are incorporated under the Nonprofit Mutual Benefit Corporation Law. (Corp. Code §§ 7110-8910.) Unless the governing documents provide otherwise, an incorporated or unincorporated association may exercise the powers granted to a nonprofit mutual benefit corporation. (Civ. Code § 1363, subd. (c).) The association is governed by a board of directors and the powers of the directors are enumerated in the development’s governing documents. State and federal statutes as well as common law impose obligations on the directors.[119]
The Association’s Duty of Care
[3] The existence of a duty “is not an immutable fact, but rather an expression of policy considerations leading to the legal conclusion that a plaintiff is entitled to a defendant’s protection.” (Ludwig v. City of San Diego (1998) 65 Cal.App.4th 1105, 1110.) Courts have repeatedly declared the existence of a duty by landowners to maintain property in their possession and control in a reasonably safe condition. (Rowland v. Christian 69 Cal.2d 108,119; Vasquez v. Residential Investments, Inc. (2004) 118 Cal.App.4th 269.) The duty is described as follows: “a landlord must act toward his tenant as a reasonable person under all of the circumstances, including the likelihood of injury, the probable seriousness of such injury, the burden of reducing or avoiding the risk, and his degree of control over the risk-creating defect,” (Brennan v. Cockrell Investments, Inc. (1973) 35 Cal.App.3d 796, 800-801; Golden v. Conway (1976) 55 Cal.App.3d 948, 955.)(1968)
In addition to this potential basis for liability, a homeowners association is also potentially liable for any violation of statute, administrative code regulation, or building code provision relating to the condition of the property. In such situations, failure to comply with the statutory standard may give rise to a presumption of negligence on his part. (Gallup v. Sparks-Mundo Engineering Co. (1954) 43 Cal.2d 1, 9; Tossman v. Newman 37 Cal.2d 522, 525; Williams v. Lambert (1962) 201 Cal.App.2d 115, 119; Alarid v. Vanier (1958) 50 Cal.2d 617, 621.) Such presumption of negligence may arise whether the law violated is a state statute, a safety order, an administrative regulation, or a local building code provision. [FN. 14] (1951)
[4] Traditional tort principles impose on landlords, including homeowner associations, that function as a landlord in maintaining the common areas of a large condominium complex, a duty to exercise due care for the residents’ safety in those areas under their control. (See, e.g., Kwaitkowski v. Superior Trading Co. (1981) 123 Cal.App.3d 324, 328; O’Hara v. Western Seven Trees Corp. (1977) [120] 75 Cal.App.3d 798, 802-803; Kline v. 1500 Massachusetts Avenue Apartment Corp. (D.C. Cir.1970) 439 F.2d 477, 480-481; Scott v. Watson (1976) 359 A.2d 548, 552; Sevigny v. Dibble Hollow Condominium Assn., Inc. (2003) 76 Conn.App. 306.) California cases hold that a homeowners association is liable to a member who suffers injury or damages as a result of alleged negligence of the association in failing to maintain a common area adequately. In the leading case of White v. Cox (1971) 17 Cal.App.3d 824, the court of appeal held that a condominium owner could sue the unincorporated association for negligently maintaining a sprinkler in a common area of the complex. In so holding, the court recognized that the plaintiff, a member of the unincorporated association, had no “effective control over the operation of the common areas . . . for in fact he had no more control over operations than he would have had as a stockholder in a corporation which owned and operated the project.” (Id. at p. 830.) Since the condominium association was a management body over which the individual owner had no effective control, the court held that the association could be sued for negligence by an individual member. An assessment of the individual arrangements for each condominium association would be required in order to asses the issue of liability. The Supreme Court concluded “that a condominium possesses sufficient aspects of an unincorporated association to make it liable in tort to its members.” (Ibid.) The Whit ecase was reaffirmed and cited with approval by the Supreme Court in Frances T. v. Village Green Owners Assn. (1986) 42 Cal 3d 490.)
[5] There may be other possible theories for liability in addition to the association’s negligence. One possibility is the association’s fraudulent misrepresentation with regard to the safety of its common areas. Another possibility is breach of contract when the plaintiff was a member of the association and the association failed to comply with maintenance of safety provision in the development’s declaration or bylaws. (See e.g., Murphy v. Yacht Cove Homeowners Ass’n (S.C. 1986) 345 S.E.2d 709.)
The Individual Director’s Duty of Care
[6] A corporate officer or director, like any other person, owes a duty to refrain from injuring others. (Frances T. v. Village Green Owners Assn., supra, 42 Cal.3d at p. 505;PMC, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368, 1381.) Consequently, directors are jointly liable with the corporation and may be joined as defendants if they personally directed or participated in the tortious conduct. (United States Liab. Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 595; [121] Dwyer v. Lanan & Snow Lbr. Co., (1956) 141 Cal.App.2d 838, 841.) [7] However, California has adopted the rule that while a condominium association may be liable for its negligence, a greater degree of fault is necessary to hold unpaid individual condominium board members liable for their actions on behalf of condominium associations.
The Lamden “Judicial Deference” Rule [FN. 15]
The California Supreme Court has adopted a “judicial deference rule” toward the decision making of directors which is expressed in Lamden v. LaJolla Shores Clubdominium Homeowner’s Assn., supra, 21 Cal.4th 249 (Lamden); one of the leading cases in this area. In Lamden, the plaintiff was a nonresident owner of a residential unit in a condominium project that suffered from termite infestation. After extensive investigation, including consultations with contractors and pest control experts, the association’s board of directors decided to respond to the termite problem with spot treatment of known infested areas, rather than tenting and fumigating the buildings, which would have required the temporary relocation of all residents. Plaintiff challenged the board’s decision, claiming that the termite eradication program adopted by the board diminished the value of her unit by failing to adequately repair the damage. The trial court determined that the directors of the defendant association had acted on reasonable investigation, in good faith, and in a manner the board believed to be in the best interests of the association and its members as a whole.
The Court of Appeal reversed and ruled that managerial decisions of association board were subject to judicial review to determine whether the board had satisfied an objective duty of reasonable care in repairing and maintaining the development’s common areas. The association appealed to the Supreme Court, arguing that the trial courts should be entitled to intervene only in matters involving the exercise of discretion by governing [122] boards when it can be demonstrated that the board has acted irrationally, in bad faith, or in an otherwise arbitrary or capricious manner.
[8] However, the Supreme Court adopted a ruled it termed as analogous to the business judgment rule: “where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise.” (Lamden, supra, 21 Cal.4th at p. 265.) The Supreme Court adopted the association’s position, at least as far as ordinary managerial decisions are concerned: “Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments to make the detailed and peculiar economic decisions necessary in the maintenance of those developments.” (Id., at pp. 270- 71.)
The Lamden decision was restricted to “ordinary” decisions involving repair and maintenance actions that were clearly “within the board’s discretion under the development’s governing instruments. The case gives no direction as to what standards courts should apply when faced with a challenge to a board action involving an extraordinary situation (e.g., major damage from an earthquake) or one not pertaining to repair and maintenance actions, e.g., a decision to deny approval to an improvement project desired by an owner.” (Sproul & Rosenberry, Advising California Condominium and Homeowners Associations (Cont.Ed.Bar May 2002 Update) §2:16, pg. 23.) The Lamden court also noted that the rule of judicial deference to board decision-making can be limited in certain circumstances; (e.g. by the association’s governing documents, when the association has failed to enforce the provisions of the CC&R’s.) (See also, Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361; Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965; DeBaun v. First W. Bank & Trust Co. (1975) 46 Cal.App.3d 686.)
California Statutory Business Judgment Rule
[9] California also has a statutory business judgment rule. Corporation Code Section 7231, subdivision (a) provides, in relevant part, ” [a] director shall perform the duties of a director . . . in good faith, in a manner such director believes to be in the best interests of the corporation and with such care . . . as an ordinarily, prudent person in a like position would use under [123] similar circumstances.” Subdivision (b) provides that the director is entitled to rely on information, opinions, and reports presented by certain specified persons. Finally, subdivision (c) provides, in relevant part, “[a] person who performs the duties of a director in accordance with subdivisions (a) and (b) shall have no liability based upon any alleged failure to discharge the person’s obligations as a director. . . .” (Italics added.) The rule provides further: “no cause of action for damages shall arise against, any volunteer director . . . based upon any alleged failure to discharge the person’s duties as a director” of a nonprofit organization if that person: (1) performs the duties of office in good faith; (2) performs the duties of office in a manner believed to be in the best interests of the corporation; and (3) performs the duties of office with such care, including reasonable inquiry, as an ordinary prudent person in a like position would use under similar circumstances.” (Corp. Code § 7231.5, subd. (a).) The business judgment rule “sets up a presumption that directors’ decisions are based on sound business judgment. This presumption can be rebutted only by a factual showing of fraud, bad faith or gross overreaching.” (Eldridge v. Tymshare, Inc. (1986) 186 Cal.App.3d 767, 776.) The business judgment rules does not create a presumption which applies when a court is evaluating the independence of the committee or whether the committee acted in good faith in the first instance. (Will v. Engebreton & Co. (1989) 213 Cal.App.3d 1033, 1043, citing Rosenthal v. Rosenthal (Me. 1988) 543 A.2d 348, 353.)
Application of Principles to Current Dispute
In this case, appellant’s contentions regarding liability arise principally from the fact that the jury in its responses to the special interrogatories found no liability on the part of the individual directors. However, as described above, the same jury also found the Churchill entity to be liable. Because of this alleged discrepancy, appellant posits, that the jury’s special findings are inconsistent and irreconcilable with the general verdict and as a result the trial court should have harmonized these results by directing a verdict for the Churchill. We disagree. Appellant’s initial proposition reflects a fundamental misunderstanding of the general principles presented above.
[10] We find no inconsistency between the special findings and the verdict. The liability of the Churchill is separate and distinct from the personal liability of the directors. It is legally possible to have one without the other. First, the association as an entity can be separately liable for its actions. As a separate entity, an unincorporated association owes a duty of care to its members as long as the membership itself is not responsible for the existence of the dangerous condition. Therefore, a member of the association can recover damages from the association which result from a dangerous [124] condition negligently maintained by the association in the common area. The fact that the actual management decisions are made and carried out by the board of directors does not alter this fact. In the same manner, the association may also be liable for property damages caused by its negligent maintenance of the common area. Further, under well accepted principles of condominium law, a homeowner can sue the association for damages and for an injunction to compel the association to enforce the provisions of the declaration and can sue directly to enforce the declaration.
Appellants contend that the trial court was required to defer to the Board’s good faith decision “whether to undertake building improvement projects.” We are unable to locate any authority to support this broad assertion and regard it as a suggested, but unwarranted expansion of appellant’s reliance on the “judicial deference” theory — designed to protect board directors from personal liability for their decisions, made in good faith, but ultimately incorrect.
[11] In a related contention, appellants assert that the trial court’s “injunctive order is manifestly erroneous and unsupported by any findings of wrongdoing.” This assertion compounds the misunderstanding reflected above. This argument is that the trial court, as finder of fact in the court trial on the injunction and declaratory relief counts, is somehow bound by the special findings of the jury as to the personal liability of the board of directors of the Churchill on the legal causes of action. This does not follow. Our inquiry on appeal regarding the injunctive relief is whether there was substantial evidence to support the implied findings made by the trial judge in his ruling on those issues. The evidence from the record is: the slab penetrations constitute a deviation from the original architectural plans for the construction of the building; the penetrations exist in violation of current building requirements; and, the presence of these slab penetrations constitutes a fire hazard — particularly in a high rise structure such as the Churchill. This provided substantial evidence for the trial court to consider and injunctive relief was appropriate. The fact that the directors were named individually in the judgment on the injunctive relief is not a reflection of their individual liability on the negligence or other counts; rather, it reflects the simple reality that an entity acts through its board and/or agents and in order to secure compliance with the judgment, those individuals are properly included within its scope and directions.
We do not agree with appellants’ assertion that the trial court’s actions interfere with the rights, duties and discretion of the Churchill Board. The trial court is simply performing its obligation to resolve legal disputes between parties with legitimate grievances over which the court has jurisdiction. If appellants’ position were correct, cases of this variety would end in [125] every instance prior to trial, because the court would be constrained from acting whenever the evidence indicated that the dispute arose in the context of a disagreement over the board’s proper fulfillment of its responsibilities. We also find the trial court did not misunderstand the situation and, as described above, did not submit conflicting legal theories to the jury or to properly instruct them on the rights and duties of the Churchill and its directors.
[12] The rule of judicial deference set forth in the Lamden case provides protection from personal liability for the individual directors of a non-profit homeowners association. It does not follow and is not true that the same rule of judicial deference will also automatically provide cover to the entity itself. There is a difference between the standard of care, which is a reflection of the duty expected of decision makers, and the judicial deference rule, which is a modified standard of review for determining whether the actual decisions-makers will be held liable for their poor decisions. Standards of care continue to have value in remedial context, such as injunction and rescission cases, as opposed to actions for monetary damages against directors as individuals. Consequently, we also hold that the trial court did not err in its instructions to the jury and the jury did not err in its results.
ATTORNEY FEES [FN. 16]
Prevailing Party Determination
Ruling on the post-trial attorney fee motions, the trial court found that the Ritters were the “prevailing parties” and awarded them $531,159, including essentially 100% of all the attorney fees, expert witness fees and costs of suit incurred by the Ritters throughout the proceedings. It denied and rejected the Churchill’s and the Directors’ request for their approximately $775,000 in defense fees and costs. It denied the individual Directors’ request for their fees and costs because, even though they had been found not personally liable by the jury, the trial court included them in its limited injunction. In their final contention, appellants argue that the trial court’s conclusion that the Ritters were the “prevailing parties” entitled to recover their entire $531,159 in attorney fees and costs was erroneous and must be reversed. Appellants contend that the Ritters were not the prevailing parties because they lost in their effort to force the Churchill to fill all the slab [126] penetrations throughout the building, which was the main reason the litigation become so intense and the Churchill’s main objective in defending it.
[13] The parties here apparently that agree that the Churchill CC&R’s allowed for attorney fees and costs in disputes brought to “enforce the terms, covenants, conditions and/or restrictions of the Declaration . . . .” A condominium owner who successfully sued homeowners association for breach of contract for failure to maintain common areas was the prevailing party entitled to recover attorney fees under attorney fee provision contained in the covenants, conditions and restrictions. (Arias v. Katella Townhouse Homeowners Assn. Inc. (2005) 127 Cal.App.4th 847.) “[I]n deciding whether there is a ‘party prevailing on the contract,’ the trial court is to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by ‘a comparison of the extent to which each party ha[s] succeeded or failed to succeed in its contentions.’ [Citation.] [¶]. . . [¶] We agree that in determining litigation success, courts should respect substance rather than form, and to this extent should be guided by ‘equitable considerations.’ For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective. [Citations.]” (Hsu v. Abbara (1995) 9 Cal.4th 863, 876-877, original italics.)
The trial court’s determination of the prevailing party for purposes of awarding attorney fees is an exercise of discretion which should not be disturbed on appeal absent a clear showing of abuse of discretion. (Jackson v. Homeowners Assn. (2001) 93 Cal.App.4th 773, quoting Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 1139,1153, disapproved of on another point in Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 775, fn. 6.) The trial court in this case made such a discretionary determination. We only disturb such a determination when there is a clear showing of abuse of discretion. (McLarand, Vasquez&Partners, Inc.v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456.)
Appellants contend the trial court abused its discretion finding the Ritters were the prevailing parties below because appellants “prevailed on the issues of greatest importance in the case.” The jury found the failure of the Churchill to fire stop the slab penetrations in the common areas adjacent to the Ritters’ units was a breach of the CC&Rs. The failure to take any [127] remedial action was negligence, a breach of the CC&R’s and a breach of fiduciary duty. Therefore, the Ritters prevailed on their legal causes of action and was awarded monetary damages by the jury. Although the monetary damages were not substantial, the win also avoided the cross-complaint’s $80,000 plus in accumulated fees the Board attempted to assess against the Ritters for failing to correct the slap protrusions in their units.
The Ritters also prevailed on their equitable counts. There was substantial evidence that the slab protrusions constituted a fire hazard and the Ritters were well within their rights to seek injunctive relief to correct the ongoing nature of the Churchill’s violation. The Ritters prevailed on their requested injunctive relief. The Churchill was ordered to bring the issue of the slab penetrations to the attention of the full membership and obtain their vote on the issues of a special assessment to fire stop all slab penetrations. This result accomplished a main litigation objective. Appellants contend that the Ritters did not accomplish their litigation objective because they lost their effort to force the Churchill to fill all the slab penetrations throughout the building. While correction of the entire structure might have been a litigation “dream,” it cannot be considered the main litigation objective. First and foremost, the building codes do not mandate that these defects be remediated immediately. If this was a code requirement, this lawsuit would have never occurred. Absent a code requirement, there is no mechanism to force the modifications to be carried out. The only available remedy was to take this extraordinary maintenance request to the full membership for their consideration. This happened. The fact that the membership did not vote to correct this defect in the building does not mean that the Ritters failed on their main litigation objective.
The Individual Directors
Appellants contend that “the Directors prevailed against the Ritters, period” and it was “error for the trial court to deny them their fees and costs which they duly and timely claimed in appropriate post-trial filings . . . .” We disagree with this contention. The jury found the Churchill liable on the negligence, breach of fiduciary duty and breach of the CC&R’s. The Churchill is an entity which can only act through the efforts of its Directors and agents. As a result of the “business judgment rule” and Corporations Code section 7231, the Directors were shielded from personal liability for the consequences of their decision making; but the Churchill was not. As between the Ritters and the individual Directors, the trial court did not abuse its discretion finding that the Directors were not the prevailing parties. The Ritters prevailed below, the Directors merely avoided liability. [128]
Section 998 — Post Offer Costs.
[14] Under Code of Civil Procedure section 998, a defendant whose pretrial offer is greater than the judgment received by the plaintiff is treated for purposes of post-offer costs as if it were the prevailing party. Appellant contends that the trial court erred in awarding costs to the Ritters in this case because four Code of Civil Procedure section 998 offers were made and the trial court did not analyze or address any of the issues or make any findings as required by section 998. [FN. 17] The Ritters state they submitted a “detailed analyses” to assist the court in assessing the appropriateness of an award of Code of Civil Procedure section 998 costs.
We find no error. “Whether a [Code of Civil Procedure] section 998 offer was reasonable and made in good faith is left to the sound discretion of the trial court.” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 134.) “In reviewing an award of costs and fees under Code of Civil Procedure section 998, the appellate court will examine the circumstances of the case to determine if the trial court abused its discretion in evaluating the reasonableness of the offer or its refusal.” (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 152.) “‘The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.” [Citations.]’ [Citation.] ‘”A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. . . .” [Citations.]’ [Citation.]” (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 136, see also (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
Allocation of Fee Award
In appellants’ reply brief, they make the statement that “[i]n view of the actual outcome at trial, the trial court’s fee award cannot be upheld as it failed to include any effort to distinguish the ‘wins’ and ‘losses’ on the Ritters’ various claims and to make a reasoned allocation among them. See also Hilltop [Investment Associates]v. Leon(1994) [129] 28 Cal.App.4th 462, 466 . . . .” The fact that a trial judge deciding attorney fees may appropriately “allocate” or “apportion” fees is well known. The issue of allocation of fees was not raised in appellant’s opening brief. To the extent that this statement is an effort to interject the failure to allocate as an additional reason to object to the award of attorney fees, we decline to reach the point. We do not consider matters raised by appellants for the first time in their reply briefs. Because appellants did not address this factor in their opening brief, they have waived the right to assert this issue on appeal. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, fn. 4; Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc.78 Cal.App.4th 847, 894, fn. 10.)(2000)
DISPOSITION
The judgment of the trial court is affirmed.
Flier, J., concurred.
RUBIN, J., Concurring and Dissenting:
I concur in the portions of the majority’s decision affirming both the liability of The Churchill and the order for injunctive relief, but I dissent from those portions of the decision: (1) denying the Churchill directors their reasonable attorney’s fees; and (2) awarding the Ritters virtually the full amount of their requested attorney’s fees.
1. The Directors Were the Prevailing Parties
As the directors of a nonprofit mutual benefit corporation, the five Churchill directors had no liability to the Ritters if they acted in good faith in what they reasonably believed were the best interests of the corporation. (Corp. Code, § 7231, subds. (a)-(c) (section 7231);Finley v. Superior Court(2000) 80 Cal.App.4th 1152, 1157.) The jury in this case apparently made such a finding by exonerating the Churchill directors from liability on each cause of action. The majority believes a fee award was proper against these individuals because The Churchill could act through only its directors, and the directors “merely avoided liability” by virtue of section 7231. Implicit in this is the notion that section 7231 is a mere technicality that allows corporate directors to avoid personal liability for their wrongful acts. I disagree.[FN. 1] [130]
Section 7231 establishes a statutory standard of care for the directors of nonprofit mutual benefit corporations. (See Lamden v. La Jolla Shores Clubdominium Homeowners Assn.(1999) 21 Cal.4th 249, 258;Frances T. v. Village Green Owners Assn.(1986) 42 Cal.3d 490, 506, fn. 13, 513-514.) The standard of care is an essential element of any plaintiff’s cause of action. (Miller v. Los Angeles County Flood Control Dist.(1973) 8 Cal.3d 689, 703; accord Stonegate Homeowners Assn. v. Staben (2006) 144 Cal.App.4th 740, 748-749 [excluding plaintiff’s evidence on standard of care was error because such evidence would have allowed plaintiff to overcome nonsuit motion].) In short, if the directors did not violate the applicable standard of care, they did not commit a wrongful act. Because the Churchill directors were found not liable on every cause of action, they were the prevailing parties. (Hsu v. Abarra (1995) 9 Cal.4th 863, 876-877 [where party obtains a simple, unqualified victory on contract claims, they are prevailing party as matter of law].) A plaintiff who sues individual members of a governing board when its claim is legally against only the board itself should not be rewarded by denying the successful members the attorney’s fees to which they are otherwise entitled.
The only other possible basis for denying the Churchill directors their attorney’s fees is the injunction that ordered them and The Churchill to hold an informational meeting for the homeowners and then have the owners vote whether to have The Churchill pay to repair the slab penetrations in each unit. Although an injunction against the directors might have been proper, because an injunction against a corporation is sufficient by itself to bind the directors (Signal Oil & Gas Co. v. Ashland Oil & Refining Co.(1958) 49 Cal.2d 764, 779-780), it was unnecessary. As the majority itself notes when concluding that injunctive relief was proper despite the jury’s exoneration of the directors, “[t]he fact that the directors were named individually in the judgment on the injunctive relief is not a reflection of their individual liability on the negligence or other counts; rather, it reflects the simple reality that an entity acts through its board and/or agents . . . .” (Maj. opn., ante, at p. 124.) To hold that innocent corporate directors are liable for attorney’s fees (or are to be denied otherwise authorized attorney’s fees) whenever they and their corporate entity are both enjoined to remedy some corporate breach of contract undermines both the spirit and the intent of section 7231. [131]
Therefore, I would reverse the order denying the Churchill directors their attorney’s fees and remand the matter to the trial court with directions to determine the directors’ reasonable attorney’s fees for establishing their section 7231 defense.
2. The Fee Award Against the Churchill Should Be Reversed
The Ritters asked for much at trial, but obtained little. They sued both The Churchill and the directors, alleging damages of $200,000 for the diminished value of their units while seeking an injunction requiring the defendants to spend potentially hundreds of thousands more to repair the slab penetrations in not just their unit but in every condominium in the complex. All they got was their own unit repaired at a cost of a few thousand dollars, a vote of the other unit owners refusing to fund the repairs of the other units, and relief from the fines imposed by the Churchill for failing to make their own repairs. All five directors were exonerated of liability while the Ritters were found to be 25 percent at fault for the events leading to this action. Despite this, the Ritters were found to be the prevailing parties and were awarded virtually all of their requested attorney’s fees, totaling more than $531,000. [FN. 2]
Given these obviously mixed results, I believe the trial court abused its discretion and should have determined there were no prevailing parties on the Ritters’ complaint. (See Deane Gardenhome Assn. v. Denktas (1993) 13 Cal.App.4th 1394, 1398 [determination of no prevailing party typically results when the ostensibly prevailing party receives only part of the relief sought].) Alternatively, I would reverse the fee award because the Ritters’ limited victory made an award of the full [132] amount unreasonably high. (PLCM Group, Inc. v. Drexler(2000) 22 Cal.4th 1084, 1095-1096 [lodestar determination of attorney’s fees may be reduced for several factors, including the success or failure of the prevailing party’s case];In re Gorina (Bankr. C.D.Cal. 2002) 296 B.R. 23, 32-33 [awarding prevailing party full amount unreasonable under California law when losing party defeated six of seven causes of action].) The amount of attorney’s fees spent on this matter was appalling. Awarding the full amount of attorney’s fees rewards the recklessness of the attorneys’ unbridled advocacy. What should have been a manageable dispute to be resolved, perhaps, by a one or two day arbitration without significant discovery turned into a brakeless locomotive that crashed and destroyed most, if not all, the benefits achieved in this unfortunate litigation.
FN 1. The individual directors comprised the Churchill’s entire five-member board of directors throughout all the events in question and through the trial. The several of the directors have since retired and have been replaced on the board.
FN 2. Plaintiffs and respondents will be referred to collectively as “the Ritters.”
FN 3. The Ritters’ investigation of previous board hearing minutes demonstrated numerous incidents where other homeowners complained of odor problems.
FN 4. Ron Mark’ s January 6, 2004 report was discussed extensively at trial and admitted at trial as Exhibit 158.
FN 5. The Board also adopted a new policy that in all subsequent remodels at The Churchill, one of the requirements for approval would be that the owner fills the slab penetrations adjacent to his or her unit. This was based on its advice that current codes require these penetrations to be filled when a remodel is done; so this policy was simply part of The Churchill’s general requirement in the House Rules that all remodels must comply with all applicable Building Codes. The Churchill has since implemented that policy on several occasions without controversy.
FN 6. The Ritters settled their cross-complaint against cross-defendants HarBro, Inc. and L.K. Plumbing & Heating, Inc. at trial and dismissed same with prejudice. The cross-complaining actions against cross-defendant The Churchill Condominium Association became moot based on the jury’s verdict.
FN 7. We reproduce only those portions of the General Verdict reflecting the jurors entries. All italicized information shown above was added to form by the jury.
FN 8. Two of the “yes” votes were from the Ritters.
FN 9. Appellants’ Opening Brief lists the following as their contentions on appeal.
1. The jury’s special findings are inconsistent and irreconcilable with the general verdicts.
2. The jury’s special findings exonerating the individual directors cannot be harmonized with the general verdicts, so the special findings must control and judgment directed for appellants.
3. The trial court failed to give effect to the governance, approval and cost allocation provisions of the Churchill’s CC&R’s or to accord the required deference to the good faith and fully informed decisions of the Churchill’s board.
a) The Churchill CC&R’s and House Rules govern the rights, duties and discretion of the Churchill’s Board, and consign to the Board the decision whether to undertake building improvement projects.
b) The trial court was required to defer to the Board’s good faith decision on a fundamental cost-benefit issue consigned to the CC&R’s to the Board’s discretion.
4. The trial court submitted conflicting legal theories to the jury and failed to properly instruct them on the rights and duties of the Churchill and its directors.
5. The trial court’s injunctive order is manifestly erroneous and unsupported by any findings of wrongdoing.
6. The trial court’s conclusion that the Ritters were the “prevailing parties” entitled to recover their entire $531,150.00 in attorneys’ fees and costs was erroneous and must be revised.
FN 10. There are contentions of error scattered throughout appellant’s briefs. Not all of these contentions are mentioned in appellants’ summary of contentions. (Seeante, fn. 9.) For example, appellants argue that the trial court erred by granting the Ritters’ “Motion for Reconsideration and Revocation of order made July 15, 2005 that Ritters are to Pay for Firestopping on Common Area Adjacent to Units 3H and 3J and/or Request for Court on its Own Motion to Reconsider Same.” The trial court granted the motion and corrected its prior order that the Ritters pay for the firestopping of the slab protrusions adjacent to their units and instead ordered the Churchill to pay this cost. We find no error in the trial court’s order. The order for the Ritters to pay for the repair was itself inconsistent with both the jury verdict and the trial judge’s own rulings.
FN 11. Since 1986, much of the statutory law governing the formation, operation and management of common interest developments has been consolidated and is contained in the Davis-Sterling Common Interest Development Act. (Civ. Code §§1350 et. seq.) All further undesignated statutory references are to the Civil Code.
FN 12. The enforceable provisions of an association’s governing documents are often referred to as “covenants,” “servitudes” or “CC&Rs.”
FN 13. Section 1354 provides: “(a) The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both. [¶] (b) A governing document other than the declaration may be enforced by the association against an owner of a separate interest or by an owner of a separate interest against the association. [¶] (c) In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”
FN 14. (Safety orders and administrative regulations: Wiese v. Rainville173 Cal.App.2d 496, 510; Longway v. McCall (1960) 181 Cal.App.2d 723, 727; Hyde v. Russell & Russell Inc. (1959) 176 Cal.App.2d 578, 583;BiMuro v. Masterson Tru Safe Steel Scaffold Co. (1961) 193 Cal.App.2d 784, 791; city and county building codes: Finnegan v. Royal Realty(1950) 35 Cal.2d 409, 416;Merion v. Schnitzlein (1933) 129 Cal.App. 721, 723; Block v. Snyder(1951) 105 Cal.App.2d 783, 786-789.)(1950)
FN 15. The legislative comments indicate that Corporations Code section 7231, the standard of fiduciary responsibility for nonprofit directors, incorporates the standard of care defined in Corporations Code section 309. (See legis. Committee com., Deering’s Ann. Corp. Code (1994) § 7231, p. 245.) Corporations Code section 309 defines the standard for determining the personal liability of a director for breach of his fiduciary duty to a profit corporation. (Frances T. v. Village Green Owners Assn., supra, 42 Cal.3d at p. 506.)
Corporations Code section sections 7231 and 309 provide, in relevant part: “A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may serve, in good faith, in a manner such director believes to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.” (Corp. Code § 7231, subd. (a).) In addition, a director is entitled to rely on information, opinions and reports provided by the persons specified in the statute. (Corp. Code § 7231, subd. (b); § 309, subd. (b).)
FN 16. The Churchill CC&R’s provide:
“XXII ATTORNEY FEES
In the event the Association, the Board or any owner(s) shall bring legal action against any owner to enforce the terms, covenants, conditions and/or restrictions of this Declaration, and they shall be the prevailing party in said lawsuit, the court shall award reasonable attorney’s fees and court costs.”
FN 17. Appellants cite Biren v. Equality Emergency Medical Group, Inc.102 Cal.App.4th 125 and Scott Co. v. Blount, Inc.(1999) 20 Cal.4th 1103, as authority for the proposition that the trial court was required to make certain findings prior to awarding section 998 fees. We are unable to locate in the express language of these cases, or any inferences to be drawn there from, any requirement for a detailed analysis on the record.(2002)
_________
FN 1. Attorney’s fees have been awarded to parties whose litigation victories were far more “technical” than what transpired here. For example in Elms v. Builders Disbursements, Inc.(1991) 232 Cal.App.3d 671, 673, 675, the trial court dismissed a breach of contract complaint for failure to prosecute but denied the successful defendant its attorney’s fees. The Court of Appeal reversed the attorney’s fees denial, concluding defendant was the prevailing party. (See also M & R Properties v. Thompson(1992) 11 Cal.App.4th 899, 901.)
FN 2. According to the Ritters’ appellate brief, they have agreed not to enforce their fee award against the directors. I find the directors’ liability for contractual attorney’s fees puzzling because, absent allegations that the directors entered a contract with the Ritters on their own behalf or purported to bind themselves personally for breach of the CC&Rs, the directors cannot be held liable for breach of contract. (Frances T. v. Village Green Owners Assn., supra,42 Cal.3d at p. 512, fn. 20.) However, that issue does not appear to have been raised either below or on appeal.
Affan v. Portofino Cove Homeowners Association
[Maintenance; Board Deference] The deference afforded to HOA Boards may not extend to situations where the Board fails to act or to investigate the scope of required maintenance or repairs.
[Opinion certified for partial publication. FN. * ]
Allen B. Weiss & Associates, Allen B. Weiss, Allen L. Thomas, and Sivi G. Pederson for Plaintiffs and Appellants.
Jerome M. Jackson and Doran B. Richart for Defendant and Appellant.
Jay D. Fullman for Defendant and Respondent.
OPINION
ARONSON, J.-
Plaintiffs Akil and Cenan Affan, husband and wife homeowners in a condominium complex, sued their homeowners association and its managing agent for damages after their unit was flooded with sewage. The Affans’ complaint alleged that defendants breached their duty to maintain and repair the common area plumbing, which resulted in a sewage blockage that caused the flooding. According to the complaint, not only did defendants fail to prevent the sewage eruption through proper maintenance of the common area plumbing, but they also failed to repair and remediate the resulting damage and contamination within the Affans’ unit.
Based on the “judicial deference” standard applicable to the ordinary maintenance decisions of homeowners associations (Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249 (Lamden)), the trial court entered judgment against the plaintiffs on all but one cause of action. The court found the [933] homeowners association liable for breaching an equitable servitude and awarded the Affans their remediation costs of $33,800 as damages. The court denied all parties’ requests for attorney fees and costs. Both the Affans and the homeowners association appealed.
We conclude the trial court erred in applying the Lamden rule of deference. The homeowners association failed to establish the factual prerequisites for applying the judicial deference rule. Additionally, the managing agent of the homeowners association has no claim to judicial deference under Lamden. Consequently, we reverse the judgment in part and remand for further proceedings in accord with the views expressed in this opinion. In the unpublished portion of this opinion, we affirm the damage award for plaintiffs on the equitable servitude claim.
I. BACKGROUND FACTS AND PROCEDURE
Recurrent Plumbing Problems
In 1986, Akil and Cenan Affan bought unit 107 in the Portofino Cove Condominiums as a vacation home. [FN. 1] They usually spent a few weeks a year vacationing in their condo. Since 1999, the Affans experienced a series of plumbing backups in their unit. From 1999 to 2005, every time they arrived at their condo, they found sewage residue in their kitchen sink or in the sink and tub in their master bathroom. This happened nine times in that six-year span.
Upon discovering each sewage backup, the Affans reported the problem to the property manager for the complex. They also consistently reported each plumbing incident to at least one member of the board of directors of defendant Portofino Cove Condominium Association (the Association), the common interest association for the complex. After each reported backup, the Association manager hired a plumber to snake the Affans’ drain line.
The Affans’ unit is on the first floor of a three-story building with an underground parking garage. Each ground floor unit shares vertical drain pipes with the units stacked above. The vertical drain pipes run through the shared common area walls and connect to lateral drain pipes running below the units [189 934] and along the ceiling of the underground garage. Two of the Affans’ first floor neighbors are members of the board of directors and also experienced similar sewage problems.
After finding a sewage backup in April 2003, Cenan wrote a letter to the Association’s board of directors. In the letter, she complained of the persistent problem and reported that the plumber who responded to the latest call had recommended annual maintenance of the drain lines serving the building.
When the kitchen sink backed up on April 21, 2005, Akil telephoned the onsite property manager, Kevin Brown, to report the problem. Akil told Brown, an employee of defendant Huntington West Properties (Huntington West), that sewage backup into his unit was “a very chronic situation,” and that he and his wife had complained in a letter to the Association, but had received “no answer.” He requested that management send a “master plumber” to investigate the cause of the backups.
Huntington West had become the Association’s managing agent in early 2004. Brown testified that in January or February of 2005, the Association began to consider whether it might save money by hiring a plumber to regularly maintain the main drain lines, rather than continually responding in a “piecemeal” fashion to backup problems. The board directed Brown to develop a “scope of work” for a regular maintenance contract for the complex, and to collect bids. The board asked him “to figure out what direction they should go in.”
There is some documentary evidence suggesting the Association earlier considered arranging for maintenance of a main plumbing line. Minutes from an Association board meeting in 2001 stated, “The board would like to see a bid on a year contract” to “hydro[-]jet” a main line, which meant blasting the lines with a high-pressure stream of water. But no evidence showed the board ever contracted for that maintenance work, or took any action to maintain the drain lines before May 2005.
When Akil reported the April 21, 2005, sewage backup to Brown, the property manager suggested that Akil attend the Association board meeting the next day to discuss the issue, which he did. After listening to Akil’s complaint, the board told him it had “signed off on a maintenance agreement” for the main plumbing lines at the complex. According to trial testimony, the Association entered into a five-year contract with Rescue Rooter, a plumbing contractor, to perform annual, “routine” maintenance on the main plumbing lines. [935]
The May 14, 2005 Sewage Damage
On May 3, 2005, Rescue Rooter conducted a hydro-jet cleaning of the main lines. Less than two weeks later, on May 14, a major sewage backup damaged the Affans’ condo. Kitchen sink debris and grease from the upstairs units erupted in the Affans’ master bathroom sink, tub, and vanity closet. The sewage also overflowed onto the floors of the master bathroom and adjoining bedroom.
In response, Huntington West hired Rescue Rooter to snake the bathroom drain and retained Emergency Service Restoration, Inc., to clean up the spill. The emergency clean up company extracted waste water, removed and disposed of the carpet, carpet pad, damaged baseboard and drywall, and steam cleaned and sanitized surfaces, and placed air scrubbers, dryers, and dehumidifiers throughout the unit.
In the immediate aftermath of the damage to the Affans’ condominium, Association board members assured them the Association would “take care” of the situation. Brown met with the Association’s casualty insurance adjuster to find out “what needed to be done,” but apparently the Association encountered a “snag” with its insurer over coverage issues. Specifically, because the Affans had begun experiencing plumbing backup problems in 1999, and the Association switched to a new insurer in 2000, a dispute arose concerning which of the two insurers would cover the damage resulting from the 2005 eruption.
When the Affans filed their complaint against the Association and Huntington West on October 12, 2005, the defendants had not done any additional repair or remediation work beyond the emergency clean up of the unit. The parties agree the unit was uninhabitable.
The Affans’ complaint stated five causes of action against the Association: breach of the CC&R’s (the covenants, conditions, and restrictions governing the Association and its members), enforcement of equitable servitude, negligence per se, negligence, and private nuisance. The essence of their claims was that the Association had a duty under the CC&R’s, the common law, and the Civil Code, [FN. 2] to maintain and repair the condominiums’ common areas, including the sewer pipes, and the Association’s failure to do this resulted in the sewage eruption that damaged the Affans’ unit. The plaintiffs further claimed the Association breached its duty to promptly repair and remediate that [936] damage. Finally, they alleged the sewage eruption created a private nuisance that the Association failed to abate. The Affans sued Huntington West only for negligence and private nuisance based on its failure both to prevent and to clean up the sewage eruption.
Over the next few months, the Affans received various bids for the remediation and restoration work needed in the unit. But they did not hire anyone to make the necessary repairs because the Association had not yet investigated the cause of the repeated backups nor taken any steps to prevent a recurrence.
The Plumbing Expert’s Opinion
In April 2007, there was another sewage backup into the Affans’ sink. At that point, the Association hired Thomas Hoffman, a forensic plumber, to investigate the cause of the numerous drain backups into the Affans’ unit. Hoffman testified as a plumbing expert at trial. [FN. 3]
Hoffman testified a blockage of one of the main sewer lines serving the Affans’ unit and the two units stacked above it caused the repeated sewage backups. The blockage occurred in a lateral drain line running through the parking garage beneath the stacked units. This was a common area that the CC&R’s obligated the Association to maintain. [FN. 4] Hoffman diagnosed this blockage by using a camera to conduct a “video inspection” of the main lines; he also cut a cross section of one of the pipes.
Hoffman determined that debris, accumulated over a 10-year period, blocked the main lines. He concluded that Rescue Rooter did not clean the pipes properly on May 3, 2005, and that these pipes never had been cleaned properly. In Hoffman’s opinion, Rescue Rooter used the wrong equipment to clear the main lines: Rescue Rooter should have used a “scour jet” with a motorized spinning head for mechanical boring, rather than simply trying to hydro-jet the lines. According to Hoffman, had Rescue Rooter properly cleaned the pipes on May 3, 2005, the May 14 sewage backup into the Affans’ unit would not have occurred.
Hoffman testified about what should have been done at the condo complex to address the repeated first floor backups. He explained that “if there was [937] more than one backup [into a ground floor unit in a stacked-unit complex] in a year, there was some kind of problem in the pipes.” He testified that the “accepted general practice” for assuring that pipes are “operating and functioning safely” after repeated backups into a ground floor unit from a shared sewer line is to “get a video inspection or . . . do a regular maintenance on the lines.”
The Association eventually hired Hoffman to clean the main lines in May 2008. He cleared the lines using a motorized, spinning scour jet. At that point, the Affans hired a remediation company to repair and restore their condo at a cost of approximately $34,000.
The Trial and Judgment
The parties agreed to a bench trial. During the trial, the Association stipulated that Rescue Rooter negligently performed the maintenance on the main lines. At the conclusion of the Affans’ case, the Association moved for judgment in its favor. The trial court made tentative findings in favor of both defendants on four of the five causes of action. The court announced it found for plaintiffs on only their nuisance claim and proceeded to hear argument on damages. The court then invited the parties into chambers for an off the record discussion. Upon returning to the courtroom, the court announced: “The record will reflect the defense rests. [¶] Both defendants rest . . . subject to a briefing schedule with respect to closing arguments relative to damages resulting from nuisance.”
With the presentation of evidence concluded, the parties submitted briefs arguing both liability and damage issues. The court subsequently entered judgment against the Affans on all causes of action save one: The trial court held the Association liable to the Affans for breach of an equitable servitude, and awarded the Affans $33,800 in damages. The court further determined that all parties should bear their own attorney fees.
In its statement of decision, the trial court explained it applied the rule of judicial deference to the maintenance decisions of homeowner associations recognized in Lamden, supra, 21 Cal.4th 249. The court stated, “Based upon Lamden, defendants were not negligent nor have they breached the CC&R[‘]s in connection with their duty to maintain the common areas of the project.” Further, the court ruled the nuisance claim was untenable because it “depends upon the establishment of negligence or a breach of the CC&R[‘]s with respect to the contractual obligation to maintain the premises.”
While the statement of decision rejected any negligence liability on the defendants’ part for failing to maintain the common areas, the trial court did [938] find the Association contractually liable for breaching an equitable servitude, created by the CC&R’s, “to promptly indemnify plaintiffs as a result of a casualty loss originating in a common area.”[FN. 5]
As damages for this breach, the trial court awarded the Affans only the cost of remediation and restoration of the unit — $33,800. The court denied their claim for loss of use and emotional distress because the CC&R’s limited the Association’s liability to “restor[ing] the premises per [s]ection 10.01, to its ‘former condition[.]'”
The trial court denied the Affans’ and the Association’s requests for attorney fees, available to the prevailing party under the CC&R’s and § 1354, subd. (c), finding “neither party has prevailed in this matter.” The court explained that although the Affans prevailed on the equitable servitude cause of action, they received far less in damages than they sought.
Both the Affans and the Association appealed from the judgment [FN. 6] and from an order after judgment denying their attorney fees requests.
II. DISCUSSION
The primary issue in this appeal is whether the trial court erred in applying the judicial deference rule to shield both the Association and Huntington West from liability for the Affans’ damages. Because this issue effectively dictates the handling of most other issues, we begin with an examination of the judicial deference rule established in Lamden, supra, 21 Cal.4th 249.
A. The Rule of Judicial Deference
In Lamden, a condominium development experienced a persistent problem with termites. At various points, the homeowners association consulted with contractors and pest control experts and “[o]ver some years . . . elected to spot treat . . . rather than fumigate . . . for termites[.]” (Lamden, supra, [939] 21 Cal.4th at p. 253.) The plaintiff, an owner of a condominium in the development, disagreed with that choice and sued for damages, an injunction, and declaratory relief. She alleged that in opting only to spot treat the infestation, the Association failed to maintain and repair the development’s common areas as required by the CC&R’s and the Civil Code. (Id. at pp. 254-255.) At trial, she waived damages and sought only an injunction and declaratory relief.
The trial court applied a “‘business judgment test'” in evaluating the Association’s decision to spot treat rather than fumigate. (Lamden, supra, 21 Cal.4th at p. 256.) The trial court found the Association, after ordering extensive remedial and investigative work, weighed the costs and benefits of both treatment methods, including the “possible problems entailed by fumigation,” such as “relocation costs, lost rent, concerns about pets and plants, human health issues and eventual termite reinfestation.” (Lamden, supra, at p. 255.) The trial court concluded the board’s deliberative process provided it with “‘a rational basis for their decision to reject fumigation and do . . . what they did,'” and entered judgment for the Association. (Id. at p. 256.)
The Court of Appeal reversed, holding that the trial court should have analyzed the Association’s actions using “an objective standard of reasonableness” rather than the more easily-met business judgment test. (Lamden, supra, 21 Cal.4th at p. 256.) The California Supreme Court granted review to answer the following question: “In adjudicating [the homeowner’s] claims, under what standard should a court evaluate the board’s decision?” (Id. at p. 253.)
[1] In answering that question, the Supreme Court rejected the approaches of both lower courts and announced a new rule of “judicial deference” to the ordinary maintenance decisions of homeowners associations. The Lamden opinion made clear, however, that the rule applies only in limited circumstances. The court described those specific circumstances as follows: “Where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise.” (Lamden, supra, 21 Cal.4th at p. 253.) As justification for this deference, the court noted “the relative competence, over that of courts, possessed by owners and directors of common interest developments to make the detailed and peculiar economic decisions necessary in the maintenance of those developments.” (Lamden, supra, 21 Cal.4th at pp. 270-271.)[940]
It is important to note the narrow scope of the Lamden rule. It is a rule of deference to the reasoned decisionmaking of homeowners association boards concerning ordinary maintenance. It does not create a blanket immunity for all the decisions and actions of a homeowners association. The Supreme Court’s precise articulation of the rule makes clear that the rule of deference applies only when a homeowner sues an association over a maintenance decision that meets the enumerated criteria. (See Lamden, supra, 21 Cal.4th at p. 269 [rejecting assertion that judicial deference rule will “insulate . . . boards’ decisions from judicial review,” citing Fountain Valley Chateau Blanc Homeowner’s Assn. v. Department of Veterans Affairs(1998) 67 Cal.App.4th 743, 754-755, as example of where association’s decision is not entitled to judicial deference because association acted in the “absence of . . . good faith”]; see also Ekstrom v. Marquesa at Monarch Beach Homeowners Assn. (2008) 168 Cal.App.4th 1111, 1123 (Ekstrom) [judicial deference rule does not apply where board decision was inconsistent with CC&R’s and thus beyond board’s authority]; see also Ritter & Ritter, Inc. Pension & Profit Plan v. The Churchill Condominium Assn.(2008) 166 Cal.App.4th 103, 122 [Lamden applies only “to ‘ordinary’ decisions involving repair and maintenance actions”; Lamden “‘gives no direction'” where lawsuit challenges “‘a board action involving an extraordinary situation (e.g., major damage from an earthquake) or one not pertaining to repair and maintenance actions'”].)
As for the facts in Lamden, the Supreme Court concluded “the trial court was correct to defer to the Board’s decision” to spot treat rather than fumigate because the prerequisites for judicial deference were met: “Here, the Board exercised discretion clearly within the scope of its authority,” and “[t]he trial court found that the Board acted upon reasonable investigation, in good faith, and in a manner the Board believed was in the best interests of the Association and its members. [Citations.]” (Lamden, supra, 21 Cal.4th at p. 265.)
B. The Trial Court Erred in Applying the Judicial Deference Rule
[2] Turning to whether the trial court properly applied the rule of judicial deference in the case before us, we begin by noting the judicial deference rule is an affirmative defense. (Ekstrom, supra, 168 Cal.App.4th at pp. 1122-1123 [“Just as the corporate business judgment rule” is a defense, “so to[o] is the rule of judicial deference to decisions of homeowner association boards articulated in Lamden“].) Thus, the defendant has the burden of establishing [941] the requisite elements for applying the rule. (Seltzer v. Barnes(2010) 182 Cal.App.4th 953, 969 [defendant bears burden of proof on affirmative defense].) [FN. 7]
Here, the trial court did not require any particular showing to invoke the judicial deference doctrine, either by way of pretrial motion or at trial. The statement of decision contains no explicit findings concerning the judicial deference rule and instead simply states, “Based upon Lamden, defendants were not negligent nor have they breached the CC&R[‘s.]” From this, we infer the trial court found the defendants met their burden of proving the Lamden judicial deference rule applies. We limit our review of that finding to the question of whether substantial evidence supports it. (Winograd v. American Broadcasting Co.(1998) 68 Cal.App.4th 624, 632 (Winograd).)
1. Huntington West Has No Claim to Judicial Deference Under Lamden
The trial court mistakenly assumed the Lamden rule of judicial deference applies equally to both defendants. It does not, because the two defendants are not similarly situated.
The Supreme Court’s careful articulation of the rule makes clear that judicial deference is due only to the ordinary maintenance decisions of homeowners associations. (See Lamden, supra, 21 Cal.4th at p. 253.) Huntington West is not a homeowners association. In a tacit admission that it has no claim to judicial deference, Huntington West does not mention Lamden in its brief, but instead relies solely on the substantial evidence rule to support the judgment. (See Winograd, supra, 68 Cal.App.4th at p. 632.) Because Huntington West is merely the managing agent of a homeowners association, the trial court erred in concluding the Lamden rule of deference applied to shield it from liability.
2. The Association Failed to Establish the Factual Prerequisites for Applying the Judicial Deference Rule
At trial, the Association failed to establish the factual prerequisites for applying the rule of judicial deference. In fact, the Association did not prove the most fundamental element of this defense: that the Affans’ lawsuit concerns a maintenance decision made by the Association. (See Lamden, [ 942] supra, 21 Cal.4th at p. 253 [rule of judicial deference applies “when owners in common interest developments seek to litigate ordinary maintenance decisions entrusted to the discretion of their associations’ boards”].) Where Lamden involved the propriety of an association board’s choice between alternative methods of dealing with a persistent termite infestation, the Affans sued the Association for its 10-year failure to undertake any maintenance of the condominium complex’s main plumbing lines, despite knowledge of a recurring plumbing problem in first-floor units.
Though the Association considered hydro-jetting a main line in 2001, and then four years later, in early 2005, discussed whether annual maintenance of the main lines might be a more cost-effective way to deal with the recurring first-floor sewage backups, the Association took no action to maintain the lines until April 2005. To put the Association’s inaction into perspective, it would be as if the association board in Lamden did nothing for years to address the condominium development’s termite infestation and simply allowed the pest problem to fester, heedless of the risk posed to individual units.
[3] The judicial deference doctrine does not shield an association from liability for ignoring problems; instead, it protects the Association’s good faith decisions to maintain and repair common areas. In Lamden, the Supreme Court recognized the essence of an association’s duty to maintain and repair is a duty to act based on reasoned decisionmaking The court observed, “[T]he Declaration [of CC&R’s] here, in assigning the Association a duty to maintain and repair the common areas, does not specify how the Association is to act, just that it should.” (Lamden, supra, 21 Cal.4th at p. 270, original italics.)
There may be some rare situations in which an association’s decision to do nothing to address a common area maintenance issue deserves judicial deference. For example, we can envision a scenario in which an association faces two extreme choices: doing nothing or adopting a prohibitively expensive course of action. A court may decide to extend judicial deference to an association’s choice of inaction in that narrow context, if the choice stemmed from deliberations that carefully weighed the alternatives and gave primacy to the best interests of the association and its members. The present case, however, does not present that scenario. As already noted, the Association’s inaction was not the result of any deliberative process.
A question arises concerning the significance of the Association’s April 2005 decision to begin annual maintenance. Does that decision trigger application of the judicial deference doctrine? It does not. As events unfolded, the Association’s decision to hire Rescue Rooter to clean the main [943] lines was inconsequential because Rescue Rooter’s ineffectual hydro-jetting on May 3, 2005, had no discernable effect on the main lines: The hydro-jetting left the main lines choked with the same debris that had been accumulating for a decade. [FN. 8] Plaintiffs’ lawsuit looked past that futile, last-minute cleaning effort and sought to hold the Association liable for its 10-year failure to address the maintenance needs of the common area plumbing lines. Put simply, the clogged drain lines and resulting sewage eruption do not implicate any decision by the Association, but rather reflect the Association’s abiding indecision and inattention to plumbing maintenance issues.
Even if we could view the Association’s failure to implement any maintenance of the drain lines as a “decision”, other key prerequisites for application of the Lamden rule of deference are unmet here. For example, there was no evidence the board engaged in “reasonable investigation” (Lamden, 21 Cal.4th at p. 253) before choosing to continue its “piecemeal” approach to sewage backups (i.e., sending plumbers to snake both drains in individual units), rather than servicing the main drain lines for the building. Instead, there was evidence the Association never sought to investigate the cause of the repeated backups until it hired Hoffman to do so in 2008.
Nor was there evidence the Association acted “in good faith and with regard for the best interests of the community association and its members” (Lamden, supra, 21 Cal.4th at p. 253), because no one testified about the board’s decisionmaking process. The Association failed to present evidence the board weighed the costs and benefits of a particular course of action, or considered any other factors in choosing to snake drains in individual units rather than clear main drain lines. Finally, the Association did not meet its burden of proving its “decision” not to engage in maintenance was an exercise of its “discretion . . . to select among means for discharging an obligation to maintain and repair” common areas. (Ibid.) The record contains no evidence the board selected “among means” when it responded to each of the Affans’ nine sewage eruptions by simply hiring a plumber to snake their drain.
This dearth of evidence on the nature of the Association’s decisionmaking stands in stark contrast to the evidence presented in Lamden. There, the homeowners association consulted with contractors and pest control experts for several years in attempting to control termites in the plaintiff’s building. (Lamden, supra, 21 Cal.4th at pp. 253-254.) The board ordered a significant [944] amount of “[r]emedial and investigative work,” and “‘seriously consider[ed]'” fumigation, a treatment method for which it obtained a bid. (Id. at p. 255.) The board ultimately chose spot treatment over fumigation because of concerns about “possible problems entailed by fumigation, including relocation costs, lost rent, concerns about pets and plants, human health issues and eventual termite reinfestation.” (Ibid.) Thus, in Lamden, ample evidence demonstrated the association board engaged in the sort of reasoned decisionmaking that merits judicial deference. There is no such showing in the case before us.
[4] In conclusion, the record contains no evidence showing the Association’s nonmaintenance of the main plumbing lines was the result of a good faith decision, based upon reasonable investigation. Accordingly, the trial court erred in allowing the Association to invoke Lamden’s judicial deference rule.
C. Applying the Judicial Deference Rule Constituted Prejudicial Error
The trial court’s erroneous application of the judicial deference rule had dire consequences for plaintiffs’ case. The trial court never decided, based on theevidence, whether the defendants’ failure to investigate the cause of the repeated first floor sewage eruptions, or to undertake any effective maintenance program for the main plumbing lines, constituted negligence or a breach of the CC&R’s. Instead, the court simply concluded as a matter of law, “[b]ased upon Lamden,” that defendants were not liable for negligence, negligence per se, breach of the CC&R’s, or a private nuisance. Consequently, plaintiffs suffered prejudice when the trial court erroneously applied the judicial deference rule. It follows that we must reverse that part of the judgment entered in favor of defendants. (Red Mountain, LLC. v. Fallbrook Public Utility Dis.(2006) 143 Cal.App.4th 333, 347-348 [prejudicial error requires reversal]; Cal. Const. art. VI, § 13; Code Civ. Proc., § 475.)
Ordinarily, when the trial court gives an incorrect legal reason for its ruling, we look for any correct legal basis on which to sustain the judgment. (Kemp Bros. Const., Inc. v. Titan Elec. Corp. (2007) 146 Cal.App.4th 1474, 1477 (Kemp).) To that end, Huntington West urges us to affirm the judgment because substantial evidence supports the trial court’s implied finding that it acted with reasonable care in responding as manager to the plumbing problems in the complex. The substantial evidence rule, however, is unavailing as an alternative ground for affirming the judgment for either defendant.
As the court explained in Kemp, supra, 146 Cal.App.4th 1474, “[W]here . . . a respondent argues for affirmance based on substantial [945] evidence, the record must show the court actually performed the factfinding function. Where the record demonstrates the trial judge did not weigh the evidence, the presumption of correctness is overcome. [Citation.] . . . ‘The [substantial evidence] rule thus operates only where it can be presumed that the court has performed its function of weighing the evidence. If analysis of the record suggests the contrary, the rule should not be invoked.'” (Id. at pp. 1477-1478, original italics.) Here, the trial court did not weigh the evidence, but instead ruled the defendants had no liability based on the rule of judicial deference. Because that conclusion was erroneous, we must reverse the judgment for defendants.
The Affans urge this court to order entry of judgment in their favor on the negligence cause of action because the Association had a nondelegable duty to maintain the common areas, making it vicariously liable for the stipulated negligence of Rescue Rooter. (See Srithong v. Total Investment Co. (1994) 23 Cal.App.4th 721, 726 [landlord held liable for injuries to tenant caused by contractor’s negligent roof repair]; Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 499 [condominium association held to landlord’s standard of care regarding common areas]; White v. Cox (1971) 17 Cal.App.3d 824, 830 [condominium owner may sue association for personal injuries caused by association’s negligent maintenance of common area].)
The doctrine of nondelegable duty does not support entry of judgment in Affans’ favor as a matter of law. Negligence liability depends on more than breach of duty. Causation and damages, for instance, are issues of fact that remain to be determined. On remand, the trial court must determine whether the plumber’s negligence on May 3 constituted a substantial factor in causing the sewage eruption on May 14. If so, then the Association will be liable for the ensuing damage under the doctrine of nondelegable duty, assuming that Rescue Rooter’s negligence is established by stipulation or competent evidence.
D. Substantial Evidence Supports the Judgment for Plaintiffs on the Breach of Equitable Servitude Claim [ FN. *]
…………………………………………………………………………………………………………………….
E. Denial of Attorney Fees
Both the appeal and cross-appeal challenge the trial court’s decision not to award attorney fees to either party. That part of the judgment is reversed. [946]
III. DISPOSITION
The judgment is reversed in all respects except as to the finding that the Association is liable to the Affans for damages of $33,800 for breach of an equitable servitude. The case is remanded for further proceedings in accord with the views expressed in this opinion. The Affans are entitled to costs on appeal.
Rylaarsdam, Acting P. J., and Fybel, J., concurred.
FN *. Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of part II.D.
FN †. Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.
FN 1. When referring to the spouses individually, we use their first names. We intend no disrespect but simply aim for clarity and convenience. (In re Marriage of Smith (1990) 225 Cal.App.3d 469, fn. 1.)
FN 2. Civil Code section 1364, subdivision (a), provides, in pertinent part: “Unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common areas . . . .” (All further statutory references are to the Civil Code unless otherwise noted.)
FN 3. In an unusual move, both sides designated Hoffman as an expert witness.
FN 4. Section 2.07 of the CC&R’s sets forth the Association’s duty as to “Repair and Maintenance” of the common areas: “[T]he Association shall . . . maintain, repair and replace the Common Property . . . to assure maintenance of the Common Property . . . in a clean, sanitary and attractive condition[.]” Section 1.13 defines the “Common Property” or common areas as including “all gas, water and waste pipes, all sewers, . . . of the Project Improvements wherever located[.]”
FN 5. The trial court’s equitable servitude analysis is explained in part II.D. of this opinion.
FN 6. The trial court entered judgment on October 22, 2008, but a week later entered an amended judgment to correct a clerical error: The original judgment was entered against both defendants on the equitable servitude cause of action though Huntington West was not named as a defendant on that claim. A month later, on November 24, the trial court entered a second amended judgment that corrected another clerical error. The second amended judgment clarified that Huntington West prevailed against the Affans not on all claims, but only on the negligence and nuisance causes of action — the only ones in which it was named. In an abundance of caution, the parties appealed from all three judgments.
FN 7. The Association unsuccessfully tries to turn this burden of proof on its head, arguing the Affans failed to prove the Association did not meet the prerequisites for judicial deference. The contention lacks merit. The Association cannot dodge its burden of proving the facts needed to support this affirmative defense.
FN 8. In this, the Association was unlucky. According to plumbing expert Hoffman, had Rescue Rooter used the proper “scour jet” method to clean the lines, the May 14 sewage eruption would not have occurred. But, of course, the Association’s failure to maintain and repair the drain lines for so many years courted just such a disaster.
FN *. See footnote, ante, page 930
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Dover Village Association v. Jennison
[Maintenance; Board Deference] The deference afforded to HOA Boards for maintenance decisions does not extend to the Board’s interpretation as to the scope of the HOA’s maintenance responsibilities under its CC&Rs.
Feldsott & Lee, Martin L. Lee and Erika M. Hsu for Plaintiff and Appellant.
Michael Maguire & Associates, Paul Kevin Wood and Brian Y. Fujita for Defendants and Respondents
OPINION
RYLAARSDAM, Acting P. J.-
Patrick Jennison had a leaky sewer pipe two feet beneath the concrete slab underlying his Newport Beach condo. The homeowner association said he was responsible for the repair bill on the theory that the sewer pipe was “exclusive use common area” for which he was responsible. On cross-motions for summary judgment, the trial court disagreed, and entered a judgment declaring that the association should bear the expense of the repair cost. The court later awarded Jennison about $17,000 in attorney fees and court costs. The association has appealed from the ensuing judgment.
We affirm. Under a natural reading of the CC&R’s, the sewer pipe was a genuine common area to be maintained and repaired by the association, as distinct from “an exclusive use common area appurtenant” to an individual owner’s separate interest.
FACTS
A. Brief Overview
The Dover Village Association (Association) is a 38-unit condominium complex in Newport Beach. For some time before the summer of 2007, a deteriorated four-inch cast iron sewage pipe beneath Patrick Jennison’s condo had been venting sewage. Finally, in late July 2007 the leak seeped up into [126] the floors and carpet of Jennison’s unit and the unit of another. Jennison’s tenant reported the leak to the Association’s president, who called property management, who then sent a plumber to make repairs.
The repairs were extensive, costing about $15,000. It was necessary to cut through Jennison’s floor, jack hammer the concrete slab underneath, and trench out and replace the 50 feet or so of sewer pipe that connected Jennison’s condo with the main service line. A dispute soon arose as to who was responsible. In October the Association sent Jennison a letter asserting that because the sewer pipe exclusively serviced Jennison’s condo, it was his responsibility “to maintain and repair” the sewer pipe. The letter directed Jennison to pay the $15,000 plus repair cost. Jennison did not send a check. The Association filed this action.
The parties agreed to have the issue decided on cross-motions for summary judgment. The trial court ruled that, as a matter of law under both the Davis-Stirling Common Interest Development Act (the Davis-Stirling Act), codified as sections 1350 et seq. of the Civil Code, and the CC&R’s, the sewer pipe is common area to be maintained and repaired by the Association. (All statutory references will be to the Civil Code.
B. Governing Texts
This case involves the interaction between the two sets of texts. First, the Davis-Stirling Act set forth in sections 1350 et seq. of the Civil Code provides general rules for the governance of condominium associations. Second, there are the particular rules set forth the Association’s own CC&R’s. We examine each in turn
1. The Act
[1]The way the Davis-Stirling Act is structured, a homeowner’s association is normally responsible for repairs to “common areas,” but the individual unit owner is responsible for repairs to “any exclusive use common area appurtenant to the separate interest.” Section 1364, subdivision (a) provides both the general rule and the exception for exclusive use common areas: “(a) Unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common areas, other than exclusive use common areas, and the [127] owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the separate interest.”
The definitions section of the Davis-Stirling Act is set out in section 1351. Subdivision (i) defines “exclusive use common area.” The definition is: “‘Exclusive use common area’ means a portion of the common areas designated by the declaration for the exclusive use of one or more, but fewer than all, of the owners of the separate interests and which is or will be appurtenant to the separate interest or interests. (1)Unless the declaration otherwise provides, any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patio, exterior doors, doorframes, and hardware incident thereto, screens and windows or other fixtures designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common areas allocated exclusively to that separate interest.” (Italics added.)
2. The CC&R’s
There is no question under the CC&R’s that sewer pipes are not within any individual owner’s separate interest. Article I, section 6 of the CC&Rs for Dover Village says: “The following are not a part of the Unit: roofs, foundations, below finished pad elevation, pipes, ducts, flues, chutes, conduits, wires and other utility installations wherever located, except the portions thereof located within the physical boundaries of the Unit.” (Italics added.)The question is whether a given pipe that can be said to exclusively service a unit is a “exclusive use common area appurtenant” for purposes of section 1364.
Two exclusive use common areas are expressly mentioned in the CC&R’s: Patio and garage areas. Article XIX expressly designates patio and garage areas for the exclusive use and enjoyment of a single unit: Unit owners “shall . . . be entitled to the exclusive use and possession of the patio area and garage area designated for the use of said unit. . . . It shall be the duty of the unit owner . . .to maintain the interior of said patio and garage.”
Finally, the CC&R’s give the Association power to make repairs and structural alterations to particular units, and then assess the costs to the individual owner. Article V is generally devoted to the Association board’s powers. Section 5 of Article V, subdivision (l), provides that the board shall [128] have power “To acquire and pay for any other materials, supplies, furniture, labor, services, maintenance, repairs, structural alterations, insurance, taxes or assessments which the Board is required to secure or pay for pursuant to the terms of these restrictions or by law, or which in its opinion shall be necessary or proper for the operation of the common area or for the enforcement of these restrictions, provided that if any such materials, supplies, furniture, labor, services, maintenance, repairs, structural alterations, insurance, taxes or assessments are provided for particular units, the costs thereof shall be specifically addressed to the owners of such units.” (Italics added.)
DISCUSSION
As shown above, under the Association’s by-laws, garage and patio areas are expressly classified as “exclusive use common areas appurtenant.” Such a conclusion, of course, makes sense: Ordinary condominium buyers might expect a secure place to park and exclusive use of the patio immediately adjacent to their units. The question is whether sewer lines also come within the same category.
[2]Under the rule of “expressio unius est exclusio alterius” — say one thing and impliedly exclude the other — the most natural reading of the CC&R’s is that sewer lines are not “exclusive use common areas appurtenant.” By expressly saying patio and garage areas come within the category, the CC&R’s impliedly say that sewer lines do not.(Cf. People v. Palacios(2007) 41 Cal.4th 720, 732 [as applied to statutory construction, expressio unius maxim means that “‘if exemptions are specified in a statute, we may not imply additional exemptions unless there is a clear legislative intent to the contrary'”].)
The Association asserts two counterarguments, one based on language in the CC&R’s and the other on language in the Davis-Stirling Act.
A. The Structural Alteration Clause
The argument from the CC&R’s is based on Article V’s structural alteration clause. The Association reasons that because unit owners can be individually charged for structural alterations, they can similarly be charged for sewer pipes outside their units.
The argument fails because it is circular; that is, it proves nothing. If one begins with the premise that sewer pipes servicing a particular unit already fall into the category of “exclusive use common area appurtenant,” then one can say that repairs to such pipes are indeed “for particular units.” But one [129] must first establish that a sewer pipe is such an “exclusive use common area appurtenant,” and, as we have seen, the only explicit mention of such exclusive use areas in the CC&R’s are the patio and garage areas.
B. The Fixture Statute
[3] The argument based on the Davis-Stirling Act is rooted in section 1351, subdivision (i)’s inclusion of fixtures as “exclusive use common areas.” This argument fails for two reasons. First and most fundamentally,interconnected sewer pipes cannot really be said to be the “fixtures” of any particular unit. A sewer system is a series of interconnected pipes which ultimately feed into one common line. Differentiating parts of that interconnected system is unreasonable. The portion of piping coming from one unit is no more affixed to that unit than it is to the sewer system and other pipes or piping within that system.
[4] In this regard, another fancy Latin phrase, ejusdem generis, operates. (See In re Tobacco Cases I (2010) 186 Cal.App.4th 42, 48 [“‘the general term or category is “restricted to those things that are similar to those which are enumerated specifically”‘”].) Under the canon of ejusdem generis, one determines whether a given thing comes within a more general category — here, “other fixtures designed to serve a single separate interest” — by comparing it to other things specifically mentioned in that category.
In section 1351, subdivision (i), here are the things specifically mentioned as being exclusive use common areas: “shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patio, exterior doors, doorframes, and hardware incident thereto, screens and windows.”
Some pipes — for example, drain pipes exclusively servicing one unit and not connected to any other system of piping — might indeed come within the category, because they can be said to be, like shutters and window boxes, “designed to serve a single separate interest.” But a piece of a system of interconnected sewer piping does not fit: It is, literally, physically connected to every other piece of the system. Every unit’s sewer pipes are a “fixture” of every other unit’s sewer pipes.
The second reason the argument fails is the clause in section 1351, subdivision (i) that allows for a different result if the CC&R’s so provide. As shown above, the most natural reading of these CC&R’s is that sewer pipes, as distinct from patio and garages, are not contemplated as exclusive use common areas. [130]
C. Confirmation in Other Sections of the CC&R’s
Our conclusion, that the portion of piping connecting Jennison’s condo with the sewer system is not an exclusive use common area, is confirmed by language in Article VIII of the CC&R’s that indicate that common areas — including exclusive use common areas — are areas to which owners generally have access. Section 2 of Article VIII precludes individual owners from any “obstruction of the common area without prior consent of the Board.” Section 6 of Article VIII precludes any “noxious or offensive activity” in any common area. And significantly, section 7 provides: “Nothing shall be altered or constructed in or removed from the common area, except upon the written consent of the Board.” Such language is perfectly consistent with normal patio and garage use. It is not consistent with the idea that individual unit owners somehow control the sewer lines beyond the boundaries of their unit.
D. The Argument from Deference
Finally, the Association makes what we might call a “deference argument,” i.e., it asserts that its determination of whether a portion of sewer line was exclusive use common area is a matter committed to its discretion, to which the courts should accord it deference. The argument fails because it confuses a legal issue governed by statutory and contract text with matters that genuinely do lend themselves to board discretion.
The case primarily relied on by the Association for its discretion argument is, in fact, a nice illustration of matters genuinely within a board’s discretion. In Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, a unit owner disputed the homeowner association’s preferred method of treating termite infestation. The owner, supported by inspection reports, wanted fumigation. The board decided on “spot-treatment.” (Id. at pp. 253-254.) The board’s decision was ultimately upheld by the Supreme Court because it was a matter “entrusted” to the board’s “discretion.” (Id. at p. 265.)
There is an obvious difference between a legal issue over who precisely has the responsibility for a sewer line and how a board should go about making a repair that is clearly within its responsibility. But we know of no provision in the Davis-Stirling Act or the CC&R’s that makes the Association or its board the ultimate judge of legal issues affecting the development.
CONCLUSION
Because our decision today is solely a matter of the applicable texts, we need not deal with issues raised by the Association as to issues of parol evidence or estoppel. By the same token, there are no issues involving the [131] reasonableness of the attorney fee and cost award assuming a judgment in Jennison’s favor. The judgment and fee and cost awards are affirmed. Respondent Jennison shall recover his appellate fees and costs.
Moore, J., and Fybel, J., concurred.
Lamden v. La Jolla Shores Clubdominium Homeowners Association
[Rule of Judicial Deference; Maintenance] Courts will defer to decisions made by a HOA Board of Directors regarding ordinary maintenance of a common interest development.
Robert H. Lynn for Plaintiff and Appellant.
Mayfield & Associates and Gayle J. Mayfield for Common Interest Consumer Project as Amicus Curiae on behalf of Plaintiff and Appellant.
Robie & Matthai, James R. Robie, Kyle Kveton, Pamela E. Dunn, Claudia M. Sokol and Daniel J. Koes for Defendant and Respondent.
Weintraub Genshlea & Sproul, Curtis C. Sproul; Farmer, Weber & Case, John T. Farmer, Kimberly F. Rich; Even, Crandall, Wade, Lowe & Gates, Edwin B. Brown; Peters & Freedman, Simon J. Freedman and James R. McCormick, Jr., as Amici Curiae on behalf of Defendant and Respondent.
Hazel & Thomas, Michael A. Banzhaf, Robert M. Diamond and Michael S. Dingman for Community Associations Institute as Amicus Curiae on behalf of Defendant and Respondent.
Early, Maslach, Price & Baukol and Priscilla F. Slocum for Truck Insurance Exchange as Amicus Curiae on behalf of Defendant and Respondent.
Martin, Wilson & MacDowell, Scott A. Martin, John R. MacDowell and Steven S. Wang for Desert Falls Homeowners Association and Upland Hills Country Club Condominium Association as Amici Curiae on behalf of Defendant and Respondent.
June Babiracki Barlow and Neil D. Kalin for California Association of Realtors as Amicus Curiae on behalf of Defendant and Respondent.
OPINION
WERDEGAR, J.-
A building in a condominium development suffered from termite infestation. The board of directors of the development’s community association [FN. 1] decided to treat the infestation locally (“spot-treat”), rather than fumigate. Alleging the board’s decision diminished the value of[253]her unit, the owner of a condominium in the development sued the community association. In adjudicating her claims, under what standard should a court evaluate the board’s decision?
As will appear, we conclude as follows: Where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise. Thus, we adopt today for California courts a rule of judicial deference to community association board decisionmaking that applies, regardless of an association’s corporate status, when owners in common interest developments seek to litigate ordinary maintenance decisions entrusted to the discretion of their associations’ boards of directors. (Cf. Levandusky v. One Fifth Ave. Apt. Corp.(1990) 75 N.Y.2d 530, 537-538 [554 N.Y.S.2d 807, 811, 557 N.E.2d 1317, 1321] [analogizing a similarly deferential rule to the common law “business judgment rule”].)
Accordingly, we reverse the judgment of the Court of Appeal.
Plaintiff Gertrude M. Lamden owns a condominium unit in one of three buildings comprising the La Jolla Shores Clubdominium condominium development (Development). [FN. 2] Over some years, the board of governors (Board) of defendant La Jolla Shores Clubdominium Homeowners Association (Association), an unincorporated community association, elected to spot-treat (secondary treatment), rather than fumigate (primary treatment), for termites the building in which Lamden’s unit is located (Building Three).
In the late 1980’s, attempting to remedy water intrusion and mildew damage, the Association hired a contractor to renovate exterior siding on all three buildings in the Development. The contractor replaced the siding on[254]the southern exposure of Building Three and removed damaged drywall and framing. Where the contractor encountered termites, a termite extermination company provided spot-treatment and replaced damaged material.
Lamden remodeled the interior of her condominium in 1990. At that time, the Association’s manager arranged for a termite extermination company to spot-treat areas where Lamden had encountered termites.
The following year, both Lamden and the Association obtained termite inspection reports recommending fumigation, but the Association’s Board decided against that approach. As the Court of Appeal explained, the Board based its decision not to fumigate on concerns about the cost of fumigation, logistical problems with temporarily relocating residents, concern that fumigation residue could affect residents’ health and safety, awareness that upcoming walkway renovations would include replacement of damaged areas, pet moving expenses, anticipated breakage by the termite company, lost rental income and the likelihood that termite infestation would recur even if primary treatment were utilized. The Board decided to continue to rely on secondary treatment until a more widespread problem was demonstrated.
In 1991 and 1992, the Association engaged a company to repair water intrusion damage to four units in Building Three. The company removed siding in the balcony area, repaired and waterproofed the decks, and repaired joints between the decks and the walls of the units. The siding of the unit below Lamden’s and one of its walls were repaired. Where termite infestation or damage became apparent during this project, spot-treatment was applied and damaged material removed.
In 1993 and 1994, the Association commissioned major renovation of the Development’s walkway system, the underpinnings of which had suffered water and termite damage. The $1.6 million walkway project was monitored by a structural engineer and an on-site architect.
In 1994, Lamden brought this action for damages, an injunction and declaratory relief. She purported to state numerous causes of action based on the Association’s refusal to fumigate for termites, naming as defendants certain individual members of the Board as well as the Association. Her amended complaint included claims sounding in breach of contract (viz., the governing declaration of restrictions [Declaration]), breach of fiduciary duty, and negligence. She alleged that the Association, in opting for secondary over primary treatment, had breached Civil Code section 1364, subdivision[255](b)(1) [FN. 3] and the Declaration [FN. 4] in failing adequately to repair, replace and maintain the common areas of the Development.
Lamden further alleged that, as a proximate result of the Association’s breaching its responsibilities, she had suffered diminution in the value of her condominium unit, repair expenses, and fees and costs in connection with this litigation. She also alleged that the Association’s continued breach had caused and would continue to cause her irreparable harm by damaging the structural integrity and soundness of her unit, and that she has no adequate remedy at law. At trial, Lamden waived any damages claims and dismissed with prejudice the individual defendants. Presently, she seeks only an injunction and declaratory relief.
After both sides had presented evidence and argument, the trial court rendered findings related to the termite infestation affecting plaintiff’s condominium unit, its causes, and the remedial steps taken by the Association. The trial court found there was “no question from all the evidence that Mrs. Lamden’s unit … has had a serious problem with termites.” In fact, the trial court found, “The evidence … was overwhelming that termites had been a problem over the past several years.” The court concluded, however, that while “there may be active infestation” that would require “steps [to be] taken within the future years,” there was no evidence that the condominium units were in imminent structural danger or “that these units are about to fall or something is about to happen.”
The trial court also found that, “starting in the late ’80’s,” the Association had arranged for “some work” addressing the termite problem to be done. Remedial and investigative work ordered by the Association included, according to the trial court, removal of siding to reveal the extent of damage, a “big project … in the early ’90’s,” and an architect’s report on building design factors. According to the court, the Board “did at one point seriously consider” primary treatment; “they got a bid for this fumigation, and there was discussion.” The court found that the Board also considered possible problems entailed by fumigation, including relocation costs, lost rent, concerns about pets and plants, human health issues and eventual termite reinfestation.[256]
As to the causes of the Development’s termite infestation, the trial court concluded that “the key problem came about from you might say a poor design” and resulting “water intrusion.” In short, the trial court stated, “the real culprit is not so much the Board, but it’s the poor design and the water damage that is conducive to bringing the termites in.”
As to the Association’s actions, the trial court stated, “the Board did take appropriate action.” The court noted the Board “did come up with a plan,” viz., to engage a pest control service to “come out and [spot] treat [termite infestation] when it was found.” The trial judge opined he might, “from a personal relations standpoint,” have acted sooner or differently under the circumstances than did the Association, but nevertheless concluded “the Board did have a rational basis for their decision to reject fumigation, and do … what they did.” Ultimately, the court gave judgment for the Association, applying what it called a “business judgment test.” Lamden appealed.
Citing Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490 [229 Cal.Rptr. 456, 723 P.2d 573, 59 A.L.R.4th 447] (Frances T.), the Court of Appeal agreed with Lamden that the trial court had applied the wrong standard of care in assessing the Association’s actions. In the Court of Appeal’s view, relevant statutes, the governing Declaration and principles of common law imposed on the Association an objective duty of reasonable care in repairing and maintaining the Development’s common areas near Lamden’s unit as occasioned by the presence of termites. The court also concluded that, had the trial court analyzed the Association’s actions under an objective standard of reasonableness, an outcome more favorable to Lamden likely would have resulted. Accordingly, the Court of Appeal reversed the judgment of the trial court.
We granted the Association’s petition for review.
Discussion
“In a community apartment project, condominium project, or stock cooperative … unless otherwise provided in the declaration, the association is responsible for the repair and maintenance of the common area occasioned by the presence of wood-destroying pests or organisms.” (Civ. Code, § 1364, subd. (b)(1).) The Declaration in this case charges the Association with “management, maintenance and preservation” of the Development’s common areas. Further, the Declaration confers upon the Board power and authority to maintain and repair the common areas. Finally, the Declaration provides that “limitations, restrictions, conditions and covenants set forth in this Declaration constitute a general scheme for (i) the maintenance, protection and enhancement of value of the Project and all Condominiums and (ii) the benefit of all Owners.”[257]
[1a] In light of the foregoing, the parties agree the Association is responsible for the repair and maintenance of the Development’s common areas occasioned by the presence of termites. They differ only as to the standard against which the Association’s performance in discharging this obligation properly should be assessed: a deferential “business judgment” standard or a more intrusive one of “objective reasonableness.”
The Association would have us decide this case through application of “the business judgment rule.” As we have observed, that rule of judicial deference to corporate decisionmaking “exists in one form or another in every American jurisdiction.” (Frances T., supra, 42 Cal.3d at p. 507, fn. 14.)
[2a] “The common law business judgment rule has two components-one which immunizes [corporate] directors from personal liability if they act in accordance with its requirements, and another which insulates from court intervention those management decisions which are made by directors in good faith in what the directors believe is the organization’s best interest.” (Lee v. Interinsurance Exchange (1996) 50 Cal.App.4th 694, 714 [57 Cal.Rptr.2d 798], citing 2 Marsh & Finkle, Marsh’s Cal. Corporation Law (3d ed., 1996 supp.) § 11.3, pp. 796-797.) A hallmark of the business judgment rule is that, when the rule’s requirements are met, a court will not substitute its judgment for that of the corporation’s board of directors. (See generally, Katz v. Chevron Corp.(1994) 22 Cal.App.4th 1352, 1366 [27 Cal.Rptr.2d 681].) As discussed more fully below, in California the component of the common law rule relating to directors’ personal liability is defined by statute. (See Corp. Code, §§ 309 [profit corporations], 7231 [nonprofit corporations].)
[1b] According to the Association, uniformly applying a business judgment standard in judicial review of community association board decisions would promote certainty, stability and predictability in common interest development governance. Plaintiff, on the other hand, contends general application of a business judgment standard to board decisions would undermine individual owners’ ability, under Civil Code section 1354, to enforce, as equitable servitudes, the CC&R’s in a common interest development’s declaration. [FN. 5] Stressing residents’ interest in a stable and predictable living environment, as embodied in a given development’s particular CC&R’s,[258]plaintiff encourages us to impose on community associations an objective standard of reasonableness in carrying out their duties under governing CC&R’s or public policy.
For at least two reasons, what we previously have identified as the “business judgment rule” (see Frances T., supra, 42 Cal.3d at p. 507 [discussing Corporations Code section 7231] and fn. 14 [general discussion of common law rule]; United States Liab. Ins. Co. v. Haidinger-Hayes, Inc.(1970) 1 Cal.3d 586, 594 [83 Cal.Rptr. 418, 463 P.2d 770] [reference to common law rule]) does not directly apply to this case. First, the statutory protections for individual directors (Corp. Code, §§ 309, subd. (c), 7231, subd. (c)) do not apply, as no individual directors are defendants here.
Corporations Code sections 309 and 7231 (section 7231) are found in the General Corporation Law (Corp. Code, § 100 et seq.) and the Nonprofit Corporation Law (id., § 5000 et seq.), respectively; the latter incorporates the standard of care defined in the former (Frances T.,supra, 42 Cal.3d at p. 506, fn. 13, citing legis. committee com., Deering’s Ann. Corp. Code (1979 ed.) foll. § 7231, p. 205; 1B Ballantine & Sterling, Cal. Corporation Laws (4th ed. 1984) § 406.01, p. 19-192). Section 7231 provides, in relevant part: “A director shall perform the duties of a director … in good faith, in a manner such director believes to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.” (§ 7231, subd. (a); cf. Corp. Code, § 309, subd. (a).) “A person who performs the duties of a director in accordance with [the stated standards] shall have no liability based upon any alleged failure to discharge the person’s obligations as a director ….” (§ 7231, subd. (c); cf. Corp. Code, § 309, subd. (c).)
Thus, by its terms, section 7231 protects only “[a] person who performs the duties of a director” (§ 7231, subd. (c), italics added); it contains no reference to the component of the common law business judgment rule that somewhat insulates ordinary corporate business decisions, per se, from judicial review. (See generally, Lee v. Interinsurance Exchange, supra, 50 Cal.App.4th at p. 714, citing 2 Marsh & Finkle, Marsh’s Cal. Corporation Law, supra, § 11.3, pp. 796-797.) Moreover, plaintiff here is seeking only injunctive and declaratory relief, and it is not clear that such a prayer implicates section 7231. The statute speaks only of protection against “liability based upon any alleged failure to discharge the person’s obligations ….” (§ 7231, subd. (c), italics added.)
As no compelling reason for departing therefrom appears, we must construe section 7231 in accordance with its plain language. (Rossi v. Brown[259] (1995) 9 Cal.4th 688, 694 [38 Cal.Rptr.2d 363, 889 P.2d 557]; Adoption of Kelsey S .(1992) 1 Cal.4th 816, 826 [4 Cal.Rptr.2d 615, 823 P.2d 1216]; Delaney v. Superior Court (1990) 50 Cal.3d 785, 798 [268 Cal.Rptr. 753, 789 P.2d 934].) It follows that section 7231 cannot govern for present purposes.
Second, neither the California statute nor the common law business judgment rule, strictly speaking, protects noncorporate entities, and the defendant in this case, the Association, is not incorporated. [FN. 6]
[2b] Traditionally, our courts have applied the common law “business judgment rule” to shield from scrutiny qualifying decisions made by a corporation’s board of directors. (See, e.g., Marsili v. Pacific Gas & Elec. Co.(1975) 51 Cal.App.3d 313, 324 [124 Cal.Rptr. 313, 79 A.L.R.3d 477]; Fairchild v. Bank of America(1961) 192 Cal.App.2d 252, 256-257 [13 Cal.Rptr. 491]; Findley v. Garrett(1952) 109 Cal.App.2d 166, 174-175 [240 P.2d 421]; Duffey v. Superior Court(1992) 3 Cal.App.4th 425, 429 [4 Cal.Rptr.2d 334] [rule applied to decision by board of incorporated community association]; Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 865 [137 Cal.Rptr. 528] [same].) The policies underlying judicial creation of the common law rule derive from the realities of business in the corporate context. As we previously have observed: “The business judgment rule has been justified primarily on two grounds. First, that directors should be given wide latitude in their handling of corporate affairs because the hindsight of the judicial process is an imperfect device for evaluating business decisions. Second, ‘[t]he rule recognizes that shareholders to a very real degree voluntarily undertake the risk of bad business judgment; investors need not buy stock, for investment markets offer an array of opportunities less vulnerable to mistakes in judgment by corporate officers.’ ” (Frances T., supra, 42 Cal.3d at p. 507, fn. 14, quoting 18B Am.Jur.2d (1985) Corporations, § 1704, pp. 556-557; see also Findley v. Garrett, supra, “109 Cal.App.2d at p. 174.)
[1c] California’s statutory business judgment rule contains no express language extending its protection to noncorporate entities or actors. Section[260]7231, as noted, is part of our Corporations Code and, by its terms, protects only “director[s].” In the Corporations Code, except where otherwise expressly provided, “directors” means “natural persons” designated, elected or appointed “to act as members of the governing body of the corporation.” (Corp. Code, § 5047.)
Despite this absence of textual support, the Association invites us for policy reasons to construe section 7231 as applying both to incorporated and unincorporated community associations. (See generally, Civ. Code, § 1363, subd. (a) [providing that a common interest development “shall be managed by an association which may be incorporated or unincorporated”];id., subd. (c) [“Unless the governing documents provide otherwise,” the association, whether incorporated or unincorporated, “may exercise the powers granted to a nonprofit mutual benefit corporation, as enumerated in Section 7140 of the Corporations Code.”];Oil Workers Intl. Union v. Superior Court(1951) 103 Cal.App.2d 512, 571 [230 P.2d 71], quoting Ottov.Tailors’ P. & B. Union (1888) 75 Cal. 308, 313 [17 P. 217] [when courts take jurisdiction over unincorporated associations for the purpose of protecting members’ property rights, they ” ‘will follow and enforce, so far as applicable, the rules applying to incorporated bodies of the same character’ “];White v. Cox(1971) 17 Cal.App.3d 824, 828 [95 Cal.Rptr. 259, 45 A.L.R.3d 1161] [noting that “unincorporated associations are now entitled to general recognition as separate legal entities”].) Since other aspects of this case-apart from the Association’s corporate status-render section 7231 inapplicable, anything we might say on the question of the statute’s broader application would, however, be dictum. Accordingly, we decline the Association’s invitation to address the issue.
For the foregoing reasons, the “business judgment rule” of deference to corporate decisionmaking, at least as we previously have understood it, has no direct application to the instant controversy. The precise question presented, then, is whether we should in this case adopt for California courts a rule-analogous perhaps to the business judgment rule-of judicial deference to community association board decisionmaking that would apply, regardless of an association’s corporate status, when owners in common interest developments seek to litigate ordinary maintenance decisions entrusted to the discretion of their associations’ boards of directors. (Cf. Levandusky v. One Fifth Ave. Apt. Corp., supra, 75 N.Y.2d at p. 538 [554 N.Y.S.2d at p. 811] [referring “for the purpose of analogy only” to the business judgment rule in adopting a rule of deference].)
Our existing jurisprudence specifically addressing the governance of common interest developments is not voluminous. While we have not previously[261]examined the question of what standard or test generally governs judicial review of decisions made by the board of directors of a community association, we have examined related questions.
Fifty years ago, in Hannula v. Hacienda Homes (1949) 34 Cal.2d 442 [211 P.2d 302, 19 A.L.R.2d 1268], we held that the decision by the board of directors of a real estate development company to deny, under a restrictive covenant in a deed, the owner of a fractional part of a lot permission to build a dwelling thereon “must be a reasonable determination made in good faith.” (Id. at p. 447, citing Parsons v. Duryea (1927) 261 Mass. 314, 316 [158 N.E. 761, 762]; Jones v. Northwest Real Estate Co.(1925) 149 Md. 271, 278 [131 A. 446, 449]; Harmon v. Burow (1919) 263 Pa. 188, 190 [106 A. 310, 311].) Sixteen years ago, we held that a condominium owners association is a “business establishment” within the meaning of the Unruh Civil Rights Act, section 51 of the Civil Code. (O’Connor v. Village Green Owners Assn.(1983) 33 Cal.3d 790, 796 [191 Cal.Rptr. 320, 662 P.2d 427]; but see Harris v. Capital Growth Investors XIV(1991) 52 Cal.3d 1142, 1175 [278 Cal.Rptr. 614, 805 P.2d 873] [declining to extend O’Connor]; Curran v. Mount Diablo Council of the Boy Scouts(1998) 17 Cal.4th 670, 697 [72 Cal.Rptr.2d 410, 952 P.2d 218] [same].) And 10 years ago, in Frances T., supra, 42 Cal.3d 490, we considered “whether a condominium owners association and the individual members of its board of directors may be held liable for injuries to a unit owner caused by third-party criminal conduct.” (Id. at p. 495.)
[3a] In Frances T., a condominium owner, who resided in her unit, brought an action against the community association, a nonprofit corporation, and the individual members of its board of directors after she was raped and robbed in her dwelling. She alleged negligence, breach of contract and breach of fiduciary duty, based on the association’s failure to install sufficient exterior lighting and its requiring her to remove additional lighting that she had installed herself. The trial court sustained the defendants’ general demurrers to all three causes of action. (Frances T., supra, 42 Cal.3d at p. 495.) We reversed. A community association, we concluded, may be held to a landlord’s standard of care as to residents’ safety in the common areas (id. at pp. 499-500), and the plaintiff had alleged particularized facts stating a cause of action against both the association and the individual members of the board (id. at p. 498). The plaintiff failed, however, to state a cause of action for breach of contract, as neither the development’s governing CC&R’s nor the association’s bylaws obligated the defendants to install additional lighting. The plaintiff failed likewise to state a cause of action for breach of fiduciary duties, as the defendants had fulfilled their duty to the plaintiff as a shareholder, and the plaintiff had alleged no facts to show that[262]the association’s board members had a fiduciary duty to serve as the condominium project’s landlord. (Id. at pp. 512-514.)
In discussing the scope of a condominium owners association’s common law duty to a unit owner, we observed in Frances T. that “the Association is, for all practical purposes, the Project’s ‘landlord.’ ” (Frances T., supra, 42 Cal.3d at p. 499, fn. omitted.) And, we noted, “traditional tort principles impose on landlords, no less than on homeowner associations that function as a landlord in maintaining the common areas of a large condominium complex, a duty to exercise due care for the residents’ safety in those areas under their control.” (Ibid., citing Kwaitkowski v. Superior Trading Co.(1981) 123 Cal.App.3d 324, 328 [176 Cal.Rptr. 494];O’Hara v. Western Seven Trees Corp.(1977) 75 Cal.App.3d 798, 802-803 [142 Cal.Rptr. 487];Kline v. 1500 Massachusetts Avenue Apartment Corp.(1970) 439 F.2d 477, 480-481 [141 App.D.C. 370, 43 A.L.R.3d 311];Scott v. Watson(1976) 278 Md. 160 [359 A.2d 548, 552].) We concluded that “under the circumstances of this case the Association should be held to the same standard of care as a landlord.” (Frances T., supra, 42 Cal.3d at p. 499; see also id. at pp. 499-501, relying on O’Connor v. Village Green Owners Assn., supra, 33 Cal.3d at p. 796 [“association performs all the customary business functions which in the traditional landlord-tenant relationship rest on the landlord’s shoulders”] and White v. Cox, supra, 17 Cal.App.3d at p. 830 [association, as management body over which individual owner has no effective control, may be sued for negligence in maintaining sprinkler].)
More recently, in Nahrstedt v. Lakeside Village Condominium Assn.(1994) 8 Cal.4th 361, 375 [33 Cal.Rptr.2d 63, 878 P.2d 1275] (Nahrstedt), we confronted the question, “When restrictions limiting the use of property within a common interest development satisfy the requirements of covenants running with the land or of equitable servitudes, what standard or test governs their enforceability?” [FN. 7]
[4] In Nahrstedt, an owner of a condominium unit who had three cats sued the community association, its officers and two of its employees for declaratory relief, seeking to prevent the defendants from enforcing against[263]her a prohibition on keeping pets that was contained in the community association’s recorded CC&R’s. In resolving the dispute, we distilled from numerous authorities the principle that “[a]n 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, supra, 8 Cal.4th at p. 382.) Applying this principle, and noting that a common interest development’s recorded use restrictions are “enforceable equitable servitudes, unless unreasonable” (Civ. Code, § 1354, subd. (a)), we held that “such restrictions should be enforced unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit” (Nahrstedt, supra, at p. 382). (See also Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 349 [47 Cal.Rptr.2d 898, 906 P.2d 1314] [previously recorded restriction on property use in common plan for ownership of subdivision property enforceable even if not cited in deed at time of sale].)
In deciding Nahrstedt, we noted that ownership of a unit in a common interest development ordinarily “entails mandatory membership in an owners association, which, through an elected board of directors, is empowered to enforce any use restrictions contained in the project’s declaration or master deed and to enact new rules governing the use and occupancy of property within the project.” (Nahrstedt, supra, 8 Cal.4th at p. 373, citing Cal. Condominium and Planned Development Practice (Cont.Ed.Bar 1984) § 1.7, p. 13; Note, Community Association Use Restrictions: Applying the Business Judgment Doctrine (1988) 64 Chi.-Kent L.Rev. 653; Natelson, Law of Property Owners Associations (1989) § 3.2.2, p. 71 et seq.) “Because of its considerable power in managing and regulating a common interest development,” we observed, “the governing board of an owners association must guard against the potential for the abuse of that power.” (Nahrstedt, supra, at pp. 373-374, fn. omitted.) We also noted that a community association’s governing board’s power to regulate “pertains to a ‘wide spectrum of activities,’ such as the volume of playing music, hours of social gatherings, use of patio furniture and barbecues, and rental of units.” (Id.at p. 374, [FN. 6])
We declared in Nahrstedt that, “when an association determines that a unit owner has violated a use restriction, the association must do so in good faith, not in an arbitrary or capricious manner, and its enforcement procedures must be fair and applied uniformly.” (Nahrstedt, supra, 8 Cal.4th at p. 383,[264]citing Ironwood Owners Assn. IX v. Solomon(1986) 178 Cal.App.3d 766, 772 [224 Cal.Rptr. 18]; Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 650 [191 Cal.Rptr. 209].) Nevertheless, we stated, “Generally, courts will uphold decisions made by the governing board of an owners association so long as they represent good faith efforts to further the purposes of the common interest development, are consistent with the development’s governing documents, and comply with public policy.” (Nahrstedt, supra, at p. 374, citing Natelson, Consent, Coercion, and “Reasonableness” in Private Law: The Special Case of the Property Owners Association(1990) 51 Ohio State L.J. 41, 43.)
The plaintiff in this case, like the plaintiff in Nahrstedt, owns a unit in a common interest development and disagrees with a particular aspect of the development’s overall governance as it has impacted her. Whereas the restriction at issue in Nahrstedt (a ban on pets), however, was promulgated at the development’s inception and enshrined in its founding CC&R’s, the decision plaintiff challenges in this case (the choice of secondary over primary termite treatment) was promulgated by the Association’s Board long after the Development’s inception and after plaintiff had acquired her unit. Our holding in Nahrstedt, which established the standard for judicial review of recorded use restrictions that satisfy the requirements of covenants running with the land or equitable servitudes (see Nahrstedt, supra, 8 Cal.4th at p. 375), therefore, does not directly govern this case, which concerns the standard for judicial review of discretionary economic decisions made by the governing boards of community associations.
In Nahrstedt, moreover, some of our reasoning arguably suggested a distinction between originating CC&R’s and subsequently promulgated use restrictions. Specifically, we reasoned in Nahrstedt that giving deference to a development’s originating CC&R’s “protects the general expectations of condominium owners ‘that restrictions in place at the time they purchase their units will be enforceable.’ ” (Nahrstedt, supra, 8 Cal.4th at p. 377, quoting Note, Judicial Review of Condominium Rulemaking (1981) 94 Harv. L.Rev. 647, 653.) Thus, our conclusion that judicial review of a common interest development’s founding CC&R’s should proceed under a deferential standard was, as plaintiff points out, at least partly derived from our understanding (invoked there by way of contrast) that the factors justifying such deference will not necessarily be present when a court considers subsequent, unrecorded community association board decisions. (See Nahrstedt, supra, at pp. 376-377, discussing Hidden Harbour Estates v. Basso (Fla.Dist.Ct.App. 1981) 393 So.2d 637, 639-640.)
[1d] Nevertheless, having reviewed the record in this case, and in light of the foregoing authorities, we conclude that the Board’s decision here to[265]use secondary, rather than primary, treatment in addressing the Development’s termite problem, a matter entrusted to its discretion under the Declaration and Civil Code section 1364, falls within Nahrstedt‘s pronouncement that “Generally, courts will uphold decisions made by the governing board of an owners association so long as they represent good faith efforts to further the purposes of the common interest development, are consistent with the development’s governing documents, and comply with public policy.” (Nahrstedt, supra, 8 Cal.4th at p. 374.) Moreover, our deferring to the Board’s discretion in this matter, which, as previously noted, is broadly conferred in the Development’s CC&R’s, is consistent with Nahrstedt‘s holding that CC&R’s “should be enforced unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit.” (Id. at p. 382.)
Here, the Board exercised discretion clearly within the scope of its authority under the Declaration and governing statutes to select among means for discharging its obligation to maintain and repair the Development’s common areas occasioned by the presence of wood-destroying pests or organisms. The trial court found that the Board acted upon reasonable investigation, in good faith, and in a manner the Board believed was in the best interests of the Association and its members. (See generally, Nahrstedt, supra, 8 Cal.4th at p. 374; Frances T., supra, 42 Cal.3d at pp. 512-514 [association’s refusal to install lighting breached no contractual or fiduciary duties]; Hannula v. Hacienda Homes, supra, 34 Cal.2d at p. 447 [“refusal to approve plans must be a reasonable determination made in good faith”].)
Contrary to the Court of Appeal, we conclude the trial court was correct to defer to the Board’s decision. We hold that, where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development’s common areas, courts should defer to the board’s authority and presumed expertise.
The foregoing conclusion is consistent with our previous pronouncements, as reviewed above, and also with those of California courts, generally, respecting various aspects of association decisionmaking. (See Pinsker v. Pacific Coast Society of Orthodontists(1974) 12 Cal.3d 541, 550 [116 Cal.Rptr. 245, 526 P.2d 253] [holding “whenever a private association is legally required to refrain from arbitrary action, the association’s action must be substantively rational and procedurally fair”]; Ironwood Owners Assn. IX[266]v. Solomon, supra, 178 Cal.App.3d at p. 772 [holding homeowners association seeking to enforce CC&R’s and compel act by member owner must “show that it has followed its own standards and procedures prior to pursuing such a remedy, that those procedures were fair and reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious”]; Cohen v. Kite Hill Community Assn., supra, 142 Cal.App.3d at p. 650 [noting “a settled rule of law that homeowners associations must exercise their authority to approve or disapprove an individual homeowner’s construction or improvement plans in conformity with the declaration of covenants and restrictions, and in good faith”]; Laguna Royale Owners Assn. v. Darger (1981) 119 Cal.App.3d 670, 683-684 [174 Cal.Rptr. 136] [in purporting to test “reasonableness” of owners association’s refusal to permit transfer of interest, court considered “whether the reason for withholding approval is rationally related to the protection, preservation or proper operation of the property and the purposes of the Association as set forth in its governing instruments” and “whether the power was exercised in a fair and nondiscriminatory manner”].) [FN. 8]
Our conclusion also accords with our recognition in Frances T. that the relationship between the individual owners and the managing association of a common interest development is complex. (Frances T., supra, 42 Cal.3d at pp. 507-509; see also Duffey v. Superior Court, supra, 3 Cal.App.4th at pp. 428-429 [noting courts “analyze homeowner associations in different ways, depending on the function the association is fulfilling under the facts of each case” and citing examples];Laguna Publishing Co. v. Golden Rain Foundation(1982) 131 Cal.App.3d 816, 844 [182 Cal.Rptr. 813]; O’Connor v. Village Green Owners Assn., supra, 33 Cal.3d at p. 796; Beehan v. Lido Isle Community Assn., supra, 70 Cal.App.3d at pp. 865-867.) On the one hand, each individual owner has an economic interest in the proper business management of the development as a whole for the sake of maximizing the value of his or her investment. In this aspect, the relationship between homeowner and association is somewhat analogous to that between shareholder and corporation. On the other hand, each individual owner, at least while residing in the development, has a personal, not strictly economic,[267]interest in the appropriate management of the development for the sake of maintaining its security against criminal conduct and other foreseeable risks of physical injury. In this aspect, the relationship between owner and association is somewhat analogous to that between tenant and landlord. (See generally, Frances T., supra, 42 Cal.3d at p. 507 [business judgment rule “applies to parties (particularly shareholders and creditors) to whom the directors owe a fiduciary obligation,” but “does not abrogate the common law duty which every person owes to others-that is, a duty to refrain from conduct that imposes an unreasonable risk of injury on third parties”].)
Relying on Frances T., the Court of Appeal held that a landlord-like common law duty required the Association, in discharging its responsibility to maintain and repair the common areas occasioned by the presence of termites, to exercise reasonable care in order to protect plaintiff’s unit from undue damage. [3b] As noted, “It is now well established that California law requires landowners to maintain land in their possession and control in a reasonably safe condition. [Citations.] In the case of a landlord, this general duty of maintenance, which is owed to tenants and patrons, has been held to include the duty to take reasonable steps to secure common areas against foreseeable criminal acts of third parties that are likely to occur in the absence of such precautionary measures.” (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 674 [25 Cal.Rptr.2d 137, 863 P.2d 207], citing, inter alia, Frances T.,supra, 42 Cal.3d at pp. 499-501.) [1e] Contrary to the Court of Appeal, however, we do not believe this case implicates such duties. Frances T. involved a common interest development resident who suffered ” ‘physical injury, not pecuniary harm ….’ ” (Frances T., supra, 42 Cal.3d at p. 505, quoting United States Liab. Ins. Co. v. Haidinger-Hayes, Inc., supra, 1 Cal.3d at p. 595; see also id. at p. 507, fn. 14.) Plaintiff here, by contrast, has not resided in the Development since the time that significant termite infestation was discovered, and she alleges neither a failure by the Association to maintain the common areas in a reasonably safe condition, nor knowledge on the Board’s part of any unreasonable risk of physical injury stemming from its failure to do so. Plaintiff alleges simply that the Association failed to effect necessary pest control and repairs, thereby causing her pecuniary damages, including diminution in the value of her unit. Accordingly, Frances T. is inapplicable.
Plaintiff warns that judicial deference to the Board’s decision in this case would not be appropriate, lest every community association be free to do as little or as much as it pleases in satisfying its obligations to its members. We do not agree. Our respecting the Association’s discretion, under this Declaration, to choose among modes of termite treatment does not foreclose the[268]possibility that more restrictive provisions relating to the same or other topics might be “otherwise provided in the declaration[s]” (Civ. Code, § 1364, subd. (b)(1)) of other common interest developments. As discussed, we have before us today a declaration constituting a general scheme for maintenance, protection and enhancement of value of the Development, one that entrusts to the Association the management, maintenance and preservation of the Development’s common areas and confers on the Board the power and authority to maintain and repair those areas.
Thus, the Association’s obligation at issue in this case is broadly cast, plainly conferring on the Association the discretion to select, as it did, among available means for addressing the Development’s termite infestation. Under the circumstances, our respecting that discretion obviously does not foreclose community association governance provisions that, within the bounds of the law, might more narrowly circumscribe association or board discretion.
Citing Restatement Third of Property, Servitudes, Tentative Draft No. 7, fn. 9 plaintiff suggests that deference to community association discretion will undermine individual owners’ previously discussed right, under Civil Code section 1354 and Nahrstedt, supra, 8 Cal.4th at page 382, to enforce recorded CC&R’s as equitable servitudes, but we think not. [5] “Under well-accepted principles of condominium law, a homeowner can sue the association for damages and an injunction to compel the association to enforce the provisions of the declaration. [Citation.] More importantly here, the homeowner can sue directly to enforce the declaration.” (Posey v. Leavitt (1991) 229 Cal.App.3d 1236, 1246-1247 [280 Cal.Rptr. 568], citing Cohen[269]v.Kite Hill Community Assn., supra, 142 Cal.App.3d 642.) Nothing we say here departs from those principles.
[1f] Finally, plaintiff contends a rule of judicial deference will insulate community association boards’ decisions from judicial review. We disagree. As illustrated by Fountain Valley Chateau Blanc Homeowner’s Assn. v. Department of Veterans Affairs(1998) 67 Cal.App.4th 743, 754-755 [79 Cal.Rptr.2d 248] (Fountain Valley), judicial oversight affords significant protection against overreaching by such boards.
In Fountain Valley, a homeowners association, threatening litigation against an elderly homeowner with Hodgkin’s disease, gained access to the interior of his residence and demanded he remove a number of personal items, including books and papers not constituting “standard reading material,” claiming the items posed a fire hazard. (Fountain Valley, supra, 67 Cal.App.4th at p. 748.) The homeowner settled the original complaint (id. at p. 746), but cross-complained for violation of privacy, trespass, negligence and breach of contract (id. at p. 748). The jury returned a verdict in his favor, finding specifically that the association had acted unreasonably. (Id. at p. 749.)
Putting aside the question whether the jury, rather than the court, should have determined the ultimate question of the reasonableness vel non of the association’s actions, the Court of Appeal held that, in light of the operative facts found by the jury, it was “virtually impossible” to say the association had acted reasonably. (Fountain Valley, supra, 67 Cal.App.4th at p. 754.) The city fire department had found no fire hazard, and the association “did not have a good faith, albeit mistaken, belief in that danger.” (Ibid.) In the absence of such good faith belief, the court determined the jury’s verdict must stand (id. at p. 756), thus impliedly finding no basis for judicial deference to the association’s decision.
Plaintiff suggests that our previous pronouncements establish that when, as here, a community association is charged generally with maintaining the common areas, any member of the association may obtain judicial review of the reasonableness of its choice of means for doing so. To the contrary, in Nahrstedt we emphasized that “anyone who buys a unit in a common interest development with knowledge of its owners association’s discretionary power accepts ‘the risk that the power may be used in a way that benefits the commonality but harms the individual.’”(Nahrstedt, supra, 8 Cal.4th at p. 374, quoting Natelson, Consent, Coercion, and “Reasonableness” in Private[270]Law: The Special Case of the Property Owners Association, supra, 51 Ohio State L.J. at p. 67.) [FN. 10]
Nor did we in Nahrstedt impose on community associations strict liability for the consequences of their ordinary discretionary economic decisions. As the Association points out, unlike the categorical ban on pets at issue in Nahrstedt-which arguably is either valid or not-the Declaration here, in assigning the Association a duty to maintain and repair the common areas, does not specify how the Association is to act, just that it should. Neither the Declaration nor Civil Code section 1364 reasonably can be construed to mandate any particular mode of termite treatment.
Still less do the governing provisions require that the Association render the Development constantly or absolutely termite-free. Plainly, we must reject any per se rule “requiring a condominium association and its individual members to indemnify any individual homeowner for any reduction in value to an individual unit caused by damage…. Under this theory the association and individual members would not only have the duty to repair as required by the CC&Rs, but the responsibility to reimburse an individual homeowner for the diminution in value of such unit regardless if the repairs had been made or the success of such repairs.” (Kaye v. Mount La Jolla Homeowners Assn.(1988) 204 Cal.App.3d 1476, 1487 [252 Cal.Rptr. 67] [disapproving cause of action for lateral and subjacent support based on association’s failure, despite efforts, to remedy subsidence problem].)
The formulation we have articulated affords homeowners, community associations, courts and advocates a clear standard for judicial review of discretionary economic decisions by community association boards, mandating a degree of deference to the latter’s business judgments sufficient to discourage meritless litigation, yet at the same time without either eviscerating the long-established duty to guard against unreasonable risks to residents’ personal safety owed by associations that “function as a landlord in maintaining the common areas” (Frances T., supra, 42 Cal.3d at p. 499) or modifying the enforceability of a common interest development’s CC&R’s (Civ. Code, § 1354, subd. (a); Nahrstedt, supra, 8 Cal.4th at p. 374).
Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments to make[271]the detailed and peculiar economic decisions necessary in the maintenance of those developments. A deferential standard will, by minimizing the likelihood of unproductive litigation over their governing associations’ discretionary economic decisions, foster stability, certainty and predictability in the governance and management of common interest developments. Beneficial corollaries include enhancement of the incentives for essential voluntary owner participation in common interest development governance and conservation of scarce judicial resources.
Disposition
For the foregoing reasons, the judgment of the Court of Appeal is reversed.
George, C. J., Mosk, J., Kennard, J., Baxter, J., Chin, J., and Brown, J., concurred.
FN *. Retired judge of the San Diego Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
FN 1. In 1985, the Legislature enacted the Davis-Stirling Common Interest Development Act (Davis-Stirling Act) as division 2, part 4, title 6 of the Civil Code, “Common Interest Developments” (Civ. Code, §§ 1350-1376; Stats. 1985, ch. 874, § 14, pp. 2774-2787), which encompasses community apartment projects, condominium projects, planned developments and stock cooperatives (Civ. Code, § 1351, subd. (c)). “A common interest development shall be managed by an association which may be incorporated or unincorporated. The association may be referred to as a community association.” (Civ. Code, § 1363, subd. (a).)
FN 2. The Development was built, and its governing declaration of restrictions recorded, in 1971. In 1973 Lamden and her husband bought unit 375, one of 42 units in the complex’s largest building. Until 1977 the Lamdens used their unit only as a rental. From 1977 until 1988 they lived in the unit; since 1988 the unit has again been used only as a rental.
FN 3. As discussed more fully post, “In a community apartment project, condominium project, or stock cooperative … unless otherwise provided in the declaration, the association is responsible for the repair and maintenance of the common area occasioned by the presence of wood-destroying pests or organisms.” (Civ. Code, § 1364, subd. (b)(1).)
FN 4. The Declaration, which contains the Development’s governing covenants, conditions, and restrictions (CC&R’s), states that the Association was to provide for the management, maintenance, repair and preservation of the complex’s common areas for the enhancement of the value of the project and each unit and for the benefit of the owners.
FN 5. Civil Code section 1354, subdivision (a) provides: “The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both.”
FN 6. The parties do not dispute that the component of the common law business judgment rule calling for deference to corporate decisions survives the Legislature’s codification, in section 7231, of the component shielding individual directors from liability. (See also Lee v. Interinsurance Exchange, supra, 50 Cal.App.4th at p. 714; see generally, California Assn. of Health Facilities v. Department of Health Services(1997) 16 Cal.4th 284, 297 [65 Cal.Rptr.2d 872, 940 P.2d 323] [unless expressly provided, statutes should not be interpreted to alter the common law]; Rojo v. Kliger (1990) 52 Cal.3d 65, 80 [276 Cal.Rptr. 130, 801 P.2d 373] [“statutes do not supplant the common law unless it appears that the Legislature intended to cover the entire subject”].)
FN 7. Our opinion in Nahrstedt also contains extensive background discussion, which need not be reproduced here. Nahrstedt‘s background materials discuss the origin and development of condominiums, cooperatives and planned unit developments as widely accepted forms of real property ownership (Nahrstedt, supra, 8 Cal.4th at pp. 370-375, citing numerous authorities); California’s statutory scheme governing condominiums and other common interest developments (id. at pp. 377-379 [describing the Davis-Stirling Act]); and general property law principles respecting equitable servitudes and their enforcement (Nahrstedt, supra, at pp. 380-382).
FN 8. Courts in other jurisdictions have adopted similarly deferential rules. (See, e.g., Levandusky v. One Fifth Ave. Apt. Corp., supra, 75 N.Y.2d at p. 538 [554 N.Y.S.2d at p. 812, 553 N.E.2d at pp. 1321-1322] [comparing benefits of a “reasonableness” standard with those of a “business judgment rule” and holding that, when “the board acts for the purposes of the cooperative, within the scope of its authority and in good faith, courts will not substitute their judgment for the board’s”]; see also authorities cited there and id. at p. 545 [554 N.Y.S.2d at p. 816, 553 N.E.2d at p. 1326] (conc. opn. of Titone, J.) [standard analogous to business judgment rule is appropriate where “the challenged action was, in essence, a business judgment, i.e., a choice between competing and equally valid economic options” (italics omitted)].)
FN 9. The Restatement tentative draft proposes that “In addition to duties imposed by statute and the governing documents, the association has the following duties to the members of the common interest community: [] (a) to use ordinary care and prudence in managing the property and financial affairs of the community that are subject to its control.” (Rest.3d Property, Servitudes (Tent. Draft No. 7, Apr. 15, 1998) ch. 6, § 6.13, p. 325.) “The business judgment rule is not adopted, because the fit between community associations and other types of corporations is not very close, and it provides too little protection against careless or risky management of community property and financial affairs.” (Id., com. b at p. 330.) It is not clear to what extent the Restatement tentative draft supports plaintiff’s position. As the Association points out, a “member challenging an action of the association under this section has the burden of proving a breach of duty by the association” and, when the action is one within association discretion, “the additional burden of proving that the breach has caused, or threatens to cause, injury to the member individually or to the interests of the common interest community.” (Rest.3d Property (Tent. Draft No. 7),supra, § 6.13, p. 325.) Depending upon how it is interpreted, such a standard might be inconsistent with the standard we announced in Nahrstedt, viz., that a use restriction is enforceable “not by reference to facts that are specific to the objecting homeowner, but by reference to the common interest development as a whole.” (Nahrstedt, supra, 8 Cal.4th at p. 386, italics in original.)
FN 10. In this connection we note that, insofar as the record discloses, plaintiff is the only condominium owner who has challenged the Association’s decision not to fumigate her building. To permit one owner to impose her will on all others and in contravention of the governing board’s good faith decision would turn the principle of benefit to ” ‘the commonality but harm [to] the individual’ ” (Nahrstedt, supra, 8 Cal.4th at p. 374) on its head.
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