Ticor Title Ins. v. Rancho Santa Fe. Assn.
(1986) 177 Cal.App.3d 726
COUNSEL
John S. Huiskamp, L. Jean Shannon and Huiskamp & Black for Plaintiff and Appellant.
Michael B. Poynor, Eleanor L. Blais and Sternberg, Eggers, Kidder & Fox for Defendants and Respondents.
OPINION
STANIFORTH, Acting P. J.,
Ticor Title Insurance Company (Ticor) appeals a judgment affirming
Rancho Santa Fe Association's (Association) denial of a variance
application from setback regulations for a tennis court.
Facts
On December 2, 1981, Ticor purchased two acres in the residential
community of Rancho Santa Fe. Development of land in Rancho Santa Fe is
controlled by the Rancho Santa Fe Protective Covenant (Covenant). The
Covenant was adopted in 1927 and has been amended at various times over
the years by votes of the homeowners. The Covenant is administered by
the Association through its board of directors (Board) and the
Association Art Jury (Art Jury).
Under the Covenant, a homeowner must obtain the Association's approval
before constructing a tennis court. The Covenant restricts the location
of tennis courts by its setback regulations. A homeowner can obtain a
variance from the setback requirements based on hardship.
On October 19, 1982, Ticor submitted an application to build a tennis
court on its property. The tennis court was located 35 feet from the
sideyard lot line. The Association refused to process the application
because the [177 Cal.App.3d 729] location violated the 50-foot setback regulations adopted by the Board on October 16, 1980, and amended on October 7, 1982.
Ticor then applied to the Art Jury for a variance from the 50-foot
setback requirement. The Art Jury held a noticed hearing of the
application and on November 9, 1982, denied the variance based on "the
unfavorable impact to the neighborhood" and lack of hardship.
Upon denial of its application, Ticor relocated the proposed centerline
of the tennis court and submitted another application for a variance.
The tennis court encroached slightly on the sideyard 50-foot setback and
was within 27 feet of the back lot line. The Art Jury held a noticed
hearing and denied Ticor's application on January 11, 1983.
On January 18, Ticor filed an appeal of the Art Jury's decision to the
Board. A mediation conference was held on March 8, 1983. After the
mediation conference, the Association manager indicated no appeal
existed from the Art Jury's decision.
On March 24, 1983, Ticor filed a suit for declaratory relief, contending
the Board lacked authority to modify the Covenant's setback
requirements from 20 to 50 feet; that even if the Board had the
authority, the 50-foot setback regulations were unreasonable; that the
Art Jury arbitrarily and capriciously denied its variance applications
and that it was wrongfully denied an appeal of the Art Jury's decision.
The trial court agreed Ticor had a right of appeal to the Board but
otherwise found in favor of the Association.
I.
The trial court here found the Covenant as well as the Association's articles of incorporation and bylaws fn. 1 gave the Board broad powers to adopt regulations, that the Covenant's provisions were the minimum requirements [177 Cal.App.3d 730]
and the Board was authorized to enact regulations that were more than
the minimum requirements. Ticor argues that while the Board may have
power to enact regulations the Covenant requires a two-thirds vote of
the homeowners to modify or change the setback requirements contained in
the Covenant.
[1] The fundamental canon of interpreting written instruments is the
ascertainment of the intent of the parties. (Civ. Code, § 1636;
Universal Sales Corp. v. Cal. etc. Mfg. Co. (1942) 20 Cal.2d 751, 761 [128 P.2d 665]; Lincoln Sav. & Loan Assn. v. Riviera Estates Assn. (1970) 7 Cal.App.3d 449,
463 [87 Cal.Rptr. 150].) As a rule, the language of an instrument must
govern its interpretation if the language is clear and explicit. (Civ.
Code, § 1638; Salton Bay Marina, Inc. v. Imperial Irrigation Dist.
(1985) 172 Cal.App.3d 914,
931 [218 Cal.Rptr. 839].) A court must view the language in light of
the instrument as a whole and not use a "disjointed, single-paragraph,
strict construction approach" (Ezer v. Fuchsloch (1979) 99 Cal.App.3d 849,
861 [160 Cal.Rptr. 486, 13 A.L.R.4th 1333].) If possible, the court
should give effect to every provision. (Civ. Code, § 1641; White v.
Dorfman (1981) 116 Cal.App.3d 892,
897 [172 Cal.Rptr. 326].) An interpretation which renders part of the
instrument to be surplusage should be avoided. (See Estate of Newmark
(1977) 67 Cal.App.3d 350, 356 [136 Cal.Rptr. 628]; Thackaberry v. Pennington (1955) 131 Cal.App.2d 286, 297 [280 P.2d 165].)
[2] When an instrument is susceptible to two interpretations, the court
should give the construction that will make the instrument lawful,
operative, definite, reasonable and capable of being carried into effect
and avoid an interpretation which will make the instrument
extraordinary, harsh, unjust, inequitable or which would result in
absurdity. (Battram v. Emerald Bay Community Assn. (1984) 157 Cal.App.3d 1184,
1189 [204 Cal.Rptr. 107].) [3a] If a general and a specific provision
are inconsistent, the specific provision controls. (National Ins.
Underwriters v. Carter (1976) 17 Cal.3d 380,
384 [131 Cal.Rptr. 42, 551 P.2d 362].) In sections where general words
follow the enumeration of particular classes of things, a court will
construe the general words as applicable only to the things of the same
nature as the class enumerated. (Sears, Roebuck & Co. v. San Diego
County Dist. Council of Carpenters (1979) 25 Cal.3d 317, 330 [158 Cal.Rptr. 370, 599 P.2d 676]; White v. Dorfman, supra, 116 Cal.App.3d 892, 897.)
II.
The articles of incorporation and the Covenant provide the Association
with authority to interpret and enforce the restrictions contained in
the Covenant. The Covenant also provides: "In interpreting and applying
the provisions [177 Cal.App.3d 731] of this covenant they shall
be held to be the minimum requirements adopted for the promotion of the
health, safety, comfort, convenience and general welfare of the owners
and occupants of said property." (Italics added.)
The bylaws of the Association provide the Board with the power: "To make
regulations, resolutions and rulings as authorized by the laws of the
State, the Rancho Santa Fe Protective Covenant, the Articles of
Incorporation, and these Bylaws."
The first declaration of the Covenant which covers Ticor's property is divided into six articles. fn. 2
The first article contains the "General Basic Restrictions." It states
in paragraph 14 that the Association "shall adopt such rules and
regulations" as it deems advisable and necessary "[t]o maintain the
health, safety and general welfare of people residing on said property,
and to prevent danger from fires, street traffic, camping and picnicking
or other hazards to life and limb or property."
Article I further provides the property owners covenant that: "Par. 36.
... [T]he Association shall have the right and power to do and/or
perform any of the following things, for the benefit, maintenance and
improvement of said property:
"Par. 37. (1) Generally, to do any and all lawful things which may be
advisable, proper, authorized and/or permitted to be done by the
Association under or by virtue of this covenant or of any restrictions,
conditions, and/or covenants or laws any time affecting said property or
any portion thereof ... and to do and perform any and all acts which
may be either necessary for, or incidental to the exercise of any of the
powers and duties herein authorized and established or as provided in
the Articles of Incorporation .... The regulations of said Association
shall have full force and effect from and after the time of their
adoption as provided in the By-Laws of the Association and shall
thereafter be as binding upon the owners of said property and each of
them their successors and assigns as if set out in full herein."
The trial court here concluded when paragraphs 14, 37 and 149 were read
together, they provided the Board with broad authority to enact
regulations, including setback regulations which were more stringent
than the "minimum requirements" of the Covenant's provision. However,
the Covenant [177 Cal.App.3d 732] also contains an article
entitled "Duration, Enforcement, Amendment." (Art. V.) Paragraph 165 in
this article specifically addresses modification of the Covenant's
provisions contained in article VI. The setback requirements involved
here are contained in article VI. Paragraph 165 provides: "Any of the
conditions, restrictions, covenants, reservations, liens or charges set
forth in Article VI hereof, or hereafter established in any declaration,
acceptance or covenant of additional restrictions or deed, contract of
sale, or lease, approved by the Association as herein provided, and
filed for record with said County Recorder, applicable to any part of
said property, unless otherwise provided therein, may be changed or
modified by written instrument duly executed and placed of record, with
the written approval of the Association and the owner or owners of
record of two-thirds in area of the property directly subject to said
change or modification; provided, however, that no such change or
modification shall be made without the written consent duly executed and
recorded of the owners of record of not less than two-thirds in area of
all said property held in private ownership within five hundred (500)
feet in any direction from the property concerning which a change or
modification is sought to be made, and provided further that this shall
not be construed as requiring the consent of the owners of any property
not under jurisdiction of the Association; and also provided that any
approval given thereto by the Association shall not be valid unless and
until the Board of Directors shall first have had a public hearing
thereon. The phrase 'property directly subject to said change or
modification,' as used in this paragraph, shall be taken to mean only
the parcel or parcels of said property described in the application for
amendment presented to the Association for approval." (Italics added.)
III.
The Association argues paragraph 165 applies only to attempts to reduce
the Covenant's requirements, e.g., to reduce the setback requirements
below the seven-foot to twenty-foot specifications of paragraph 207 and
does not prohibit the Board from increasing the requirements. The
Association's argument is belied by the language of paragraph 165 which
states it applies when the Covenant's provisions in article VI are to be
"changed or modified." (Italics added.)
[4] Words in a written instrument are to be understood in their ordinary
and popular sense. (Civ. Code, § 1644.) As used in their ordinary
sense, the words "changed" and "modified" include any alteration whether
involving an increase or decrease. Had the covenanting parties intended
the result urged by the Association, they easily could have said so by
stating the two-thirds vote of homeowner procedure applied only when the
covenant's provisions were to be "limited," "minimized," "decreased,"
etc. [177 Cal.App.3d 733] Since they did not use such restrictive
language, we must presume they intended the procedures of paragraph 165
to apply to any change or modification in the setback regulations.
The Association alternatively argues paragraph 165 does not represent
the exclusive means of altering the Covenant's provisions. It points to
paragraph 165's use of the permissive word "may" and the broad powers to
enact general welfare regulations in paragraph 14 to support its
argument. We are not persuaded.
Initially, we note paragraph 165 is permissive only in that it permits
change or modification of the Covenant's restrictions. Nothing in
paragraph 165 implies the procedure it delineates is not the exclusive
procedure. Had the covenanting parties intended the result now urged by
the Association, they easily could have said so. They could have
included additional language in paragraph 165 or an additional paragraph
in article V, "Duration, Enforcement, Amendment," stating the
Covenant's provisions could be changed or modified by the Board acting
alone.
Nor does paragraph 14's broad grant of authority to the Association to
adopt regulations for the "general welfare" compel a different result.
By its express terms, paragraph 14 addresses the Association's power to
"adopt" regulations. The action involved here was a change or
modification of existing provisions in the Covenant, an action
specifically addressed in paragraph 165. Moreover, even if we construed
paragraph 14's authorization to include authorization to adopt
regulations altering the Covenant's article VI restrictions, we still
would not find paragraph 14 authorized the change by the Board.
Paragraph 14 states the Association has the power to adopt rules and
regulations for the general welfare. It does not state the Board has the
power. It does not state the procedure for adopting the rules and
regulations. While it may be the Board has power to enact some rules and
regulations under paragraph 14 and that setback regulations may fall
within the broad perimeters of the general welfare, in the case of these
setback regulations in this covenant, the procedure for adopting rules
and regulations is set forth in paragraph 165 and that paragraph does
not authorize the Board to act alone.
The Association argues that since it is granted the power to interpret
the Covenant, it acted properly in interpreting paragraphs 14, 37 and
149 to grant the Board power to enact more stringent setback regulations
than those contained in the Covenant. The power to interpret, however,
is not unlimited. The Board's construction of its interpretation powers
leads to an extraordinary [177 Cal.App.3d 734] and unjust result.
Under this construction, the Board is unlimited in its power to
interpret the Covenant as it sees fit even if, as in the instant case,
it involves ignoring express language in the Covenant and denigrating
the voting rights of the property owners. We do not believe the
covenanting parties intended the Board to have such unfettered powers by
the process of "interpretation."
IV.
Finally, we note a construction enforcing the procedure outlined in
paragraph 165 comports with usual procedures for amending covenants,
conditions, and restrictions. (See 2 Ogden's Revised Cal. Real Property
Law (Ticor 1975) § 23.27, p. 1156; Advanced Real Property Series,
Homeowners Associations Program Material (Cont.Ed.Bar 1984) pp. 65, 99;
Condominiums and Planned Developments: Representing Owners, Developers
and Lenders (Cont.Ed.Bar Program Material 1978) pp. C-78.21, C-127,
C-554.) Further, one of the usual requirements for covenants to run with
the land and to bind subsequent owners is recordation. (SeeRiley v.
Bear Creek Planning Committee (1976) 17 Cal.3d 500,
511 [131 Cal.Rptr. 381, 551 P.2d 1213].) Paragraph 165 ensures changes
to the Covenant's provisions will run with the land; a goal presumably
intended by the covenanting parties. fn. 3
[3b] We conclude the Board was not authorized to enact setback
regulations different from those contained in the Covenant; therefore we
do not address Ticor's remaining contentions as to the reasonableness
of the Board's setback requirements and the Art Jury's denial of its
variance application.
The judgment is reversed.
Butler, J., and Mitchell, J., concurred.
FN 1.
Ticor contends the trial court improperly considered the articles of
incorporation and bylaws since neither were admitted into evidence at
trial but were attached to a declaration submitted on a motion for
summary judgment. Ticor argues this court, also, may not consider the
articles and bylaws, citing as support for this propositionDoers v.
Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184 [151 Cal.Rptr. 837, 588 P.2d 1261], and Oldenkott v. American Electric, Inc. (1971) 14 Cal.App.3d 198,
207 [92 Cal.Rptr. 127], cert. den.402 U.S. 975 [29 L.Ed.2d 140, 91
S.Ct. 1668]. Neither case supports his proposition. These cases concern
the appellate court's refusal to consider documents which were not part
of the record below. The documents here are part of the record.
Moreover, Ticor does not dispute the accuracy of the articles of
incorporation or bylaws considered nor did it object below. In this
light, we can find no prejudice and error, if any, was waived.
FN 2.
The Covenant contains three declarations. The first declaration
contains restrictions covering all property in Rancho Santa Fe. The
second two declarations contain additional restrictions on certain land
within Rancho Santa Fe. When we refer to the Covenant, we mean the first
declaration.
FN 3.
We do not address the issue whether the Board can enact unrecorded
regulations that bind subsequent property owners; we merely note that
the procedure outlined in paragraph 165 is designed to insure subsequent
property owners are bound.