BEAR CREEK PLANNING COMMITTEE v. FERWERDA
(2011) 193 Cal.App.4th 1178
[Opinion certified for partial publication. fn. *]
Thomas & Associates and Michael W. Thomas, for Appellant Robert Ferwerda.
Law Offices of Samuel G. Grader and Christian B. Green; Porter &
Simon and James E. Simon; Lewis Brisbois Bisgaard & Smith, Jeffry A.
Miller, Judith M. Tishkoff, and Matthew B. Stucky for Respondent Bear
Creek Planning Committee.
Porter Scott, Timothy M. Blaine and John F. Doyle for Respondents David
Bordon, Richard E. Irving, Peter M. Turner, Irene Wertheim, Ronald
Scoglio, Carole Lynn Keller, and Bear Creek Valley Board.
Louis A. Basile for Respondents James Ware and Cindy Ware. [193 Cal.App.4th 1180]
This appeal follows a trial by reference fn. 1
of three consolidated cases. The trial court entered judgment against
plaintiff Robert Ferwerda, who had been trying to build a home on his
vacant lot. He had sued the Bear Creek Planning Committee (the
committee) and the individuals who comprised the Bear Creek Valley Board
(the board) who he contended inappropriately blocked construction on
his lot. He had also sued his next-door neighbors, James and Cindy Ware
(the Wares), contending they had violated the covenants, conditions, and
restrictions (CC&R's) in building and remodeling their house.
Ferwerda appeals from a judgment entered in favor of the committee, the
board, and the Wares, which included awards of attorney fees to the
committee and the Wares. We affirm the judgment as to the committee and
the Wares, except as it relates to the attorney fees. As to those
orders, we reverse. Finally, as to the board, we dismiss as moot the
appeal relating to it. [193 Cal.App.4th 1181]
FACTUAL AND PROCEDURAL BACKGROUND
Robert Ferwerda owns lot No. 134 in Alpine Meadows Estates Subdivision
Unit No. 4 (subdivision No. 4). Since 2001, he has been trying to obtain
approval to build a house on his lot. This litigation surrounds events
related to securing that approval, interpretation of the CC&R's and
related restrictions on the lots in subdivision No. 4, and the
resolution of the three cases consolidated in the trial court.
B. The CC&R's, The Green Book,
And The 2002 Architectural Review Manual
The CC&R's that govern subdivision No. 4 were recorded in 1964 and
establish "a general plan for the improvement and development" of the
property. The guiding principle is "that it is to the best interest of
the area that it be developed into an attractive ski area, alpine in
character and appearance, with as little damage to the natural beauty of
the land and trees as is possible." To that end, the CC&R's contain
several restrictions on the subdivision. Among other things, owners are
not permitted to cut down trees over five inches in diameter on their
lot without approval from the committee. More generally, owners are
required to receive approval from the committee before constructing or
excavating on their lot. The owners' plans and specifications and the
committee's approval must be "in accordance with the procedures and
standards set forth in the Bear Creek Planning Committee Restrictions."
The "Bear Creek Planning Committee Restrictions" were incorporated into
the CC&R's as exhibit A in 1964.
The committee incorporated in 1978. The articles of incorporation
describe the committee's primary purpose as "promoting the social
welfare of the community of Alpine Meadows, California and for the
mutual benefit of all property owners in that community through
supervision and enforcement of the [CC&R's]." Among its powers and
duties as articulated in its bylaws is "[t]o review and approve or
disapprove plans and specifications for improvements in the Bear Creek
Valley pursuant to the CC&R's," "conduct, manage and control the
affairs of the corporation and to make such rules and regulations
thereof as they may deem appropriate," and "maintain, issue, and revise
at its discretion" a procedures, regulations, and standards manual. [193 Cal.App.4th 1182]
In 1990, the committee published the so-called green book that contains
procedures, regulations, and standards. The green book notes the
observance of objective criteria for plan approval and of subjective
criteria guided by a proposed plan's "harmony with the environment in
which the structure is placed and harmony with its surroundings." The
restriction on tree removal is continued. It recommends use of
fire-retardant composition shingles. Finally, it includes the following
attorney fees provision: "In the event that it is necessary for the
Committee to initiate litigation to enforce the provisions of these
Provisions, Regulations, and Standards, then the Committee shall be
entitled to recover its reasonable attorneys' fees and costs."
The green book was revised in 2002 and that revision became known as the
2002 architectural review manual. The manual states, among other
things, "[t]he design of each structure must bear a harmonious
relationship to the land and its neighbor" and live trees cannot be
removed without board approval. Similar to the green book, it contains
the following attorney fees provision: "In the event that it is
necessary for the [committee] to enforce the provisions of the [2002
architectural review manual] by obtaining legal advice to clarify
issues, initiate litigation, filing and/or preparing legal documents or
filing and preparing a Cease and Desist Order, then [the committee]
shall be entitled to recover its reasonable attorney fees and costs from
the Performance Deposit or other means as may be deemed necessary.
Legal expenses above the performance deposit may be recovered by fines
C fn. * Ferwerda's Activities And Resulting Litigation
The Committee Has The Power To Adopt Standards
Beyond Those Set Forth In The CC&R's
Section 6 of the CC&R's states the committee may act on
applications, "all in accordance with the procedures and standards set
forth in the Bear Creek Planning Committee Restrictions, a copy of which
is attached hereto as [193 Cal.App.4th 1183] Exhibit A and by this reference is made a part hereof. Except as to set -backs (Paragraph 13 hereof), in
the event of a conflict between the standards required by said
Committee and those contained herein, the standards of said Committee
shall govern." (Italics added.)
The trial court found this italicized language "empowers the [committee]
to adopt new conditions on an ongoing basis." As we explain below on
our de novo review (Ekstrom v. Marquesa at Monarch Beach Homeowners Assn. (2008) 168 Cal.App.4th 1111,
1121), the trial court was correct to the extent this language allows
the committee to adopt new design standards related to the improvement
or development of lots in subdivision No. 4.
 The interpretation of CC&R's is governed by the rules for interpreting contracts. (Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563,
575.)  It is a long-standing rule that "[a]ll parts of a [contract]
must be applied so as to give effect and meaning to every part, if
possible . . . . (Burnett v. Piercy (1906) 149 Cal. 178, 189; see
Civ. Code, § 1641 ["[t]he whole of a contract is to be taken together,
so as to give effect to every part, if reasonably practicable, each
clause helping to interpret the other"].)
 The plain language of section 6 of the CC&R's contemplates the
committee may adopt standards beyond those contained in exhibit A as it
existed when the CC&R's were adopted. This is evidenced by the
acknowledgment in section 6 that if there is a conflict between the
standards set forth in that section and the "standards required by [the]
[c]ommittee," the standards of the committee govern. If the committee
had no power to adopt standards beyond those in the CC&R's, there
would be no need for this language. We must read the CC&R's as a
whole and adopt the construction that gives effect to every part of the
CC&R's. (Ezer v. Fuchsloch (1979) 99 Cal.App.3d 849,
861 ["[a] cardinal principle of document construction is that document
must be 'construed as a whole' so as 'to give effect to every part
thereof . . . .'"].)
The question then becomes what is meant by "standards" as that term is
used in the CC&R's. That term is used in section 6 in reference to
the "procedures and standards set forth in the Bear Creek Planning
Committee Restrictions" that are attached to the CC&R's. In those
restrictions, there is a "standards" section. The first paragraph
entitled, "GENERAL" explains in part that "[t]he design of each
structure must bear a harmonious relationship to the land and its
neighbors, in terms of lot coverage, mass and degree of individual
expression." The remaining 13 paragraphs (with the exception of the last
one, which addresses variances) detail architectural design standards, [193 Cal.App.4th 1184]
i.e., standards for such things as floor space, decks, roofs, exterior
walls, windows, colors and finishes, and parking places. In the context
of the CC&R's, then, the term "standards" refers to architectural
Ferwerda offers no interpretation of this language in section 6 of the
CC&R's. Instead, he points to case law and testimony from the
committee's expert witness, which he claims negate our interpretation of
the CC&R's. Neither help him.
The cases relied on by Ferwerda, Werner v. Graham (1919) 181 Cal. 174 and Riley v. Bear Creek Planning Committee (1976) 17 Cal.3d 500, are distinguishable.
In Werner, a developer subdivided a tract and recorded a map of
the tract that "showed no building lines or anything else to indicate
any purpose of restricting in any way . . . ." (Werner v. Graham, supra, 181 Cal. at p. 177.) He then sold the lots. (Id.
at pp. 177-178.) The early deeds contained "restrictive provisions"
that were "so uniform and consistent in character as to indicate
unmistakably that [the developer] had in mind a general and common plan
which he was following." (Id. at p. 179.) The developer told the purchasers, "he was exacting the same restrictive provisions from all purchasers." (Id.
at pp. 178-179.) The developer later quitclaimed the property
eventually purchased by the plaintiff, but the deed to this property
contained no restrictions. (Id. at p. 179.) The court held restrictions placed in the earlier deeds to the other property were not binding on the plaintiff. (Id. at pp. 184-186.)
In Riley, the developer sold a property via a deed that contained no restrictions. (Riley v. Bear Creek Planning Committee, supra,
17 Cal.3d at pp. 503-504.) Nine months later, the developer recorded a
document purporting to impose uniform restrictions on a number of lots,
including the one in dispute. (Id. at p. 504.) The court held these restrictions did not apply to the lot sold earlier. (Id. at pp. 506-507.)
Both of these cases are distinguishable because the CC&R's here
specifically acknowledge the possibility of a conflict between the
standards set forth therein and the "standards required by [the]
[c]ommittee" and assert that if such a conflict arises, the standards
required by the committee govern. Ferwerda signed that he "read and
approved" the CC&R's.
The expert testimony to which Ferwerda points also does not help him.
That testimony consisted of the opinion of the committee's expert that
section 6 does not expressly authorize the committee to create new or
different standards than those attached in exhibit A (as other
CC&R's he had worked [193 Cal.App.4th 1185] on did) but that
by implication, the committee had such authority. This testimony
undercuts Ferwerda's position because it supports a reading of section 6
(if only by implication) that gives the committee such authority.
Based on the plain language of section 6 of the CC&R's, we hold the
committee had the power to adopt standards beyond those set forth in the
CC&R's, which are reflected in the green book and the 2002
architectural review manual.
The Trial Court Erred In Awarding Attorney Fees
To The Committee And To The Wares
Ferwerda contends the court erred in requiring him to pay the
committee's and the Wares' attorney fees. In his view, the green book
and 2002 architectural review manual cannot be the basis for authorizing
the attorney fees because they are unrecorded and were enacted by an
unelected committee without approval of the property owners.
The committee and the Wares take the position adopted by the trial
court, i.e., the attorney fees were permissible because the green book
and 2002 architectural review manual provide for the recovery of
attorney fees for a prevailing party such as themselves. And, in any
event, Ferwerda asked for attorney fees if he prevailed and since he
lost in the trial court, he was liable for the other sides' attorney
 A prevailing party is entitled to attorney fees when authorized by
statute or contract. (Code Civ. Proc., §§ 1032, 1033.5, subd. (a)(10).)
Here, the CC&R's contain no attorney fees provision. Rather, the
green book and the 2002 architectural review manual provide for recovery
of attorney fees by the committee. In reviewing these publications in
part I of the Discussion, we explained that the CC&R's give the
committee power to adopt new design standards relating to the
improvement or development of lots in subdivision No. 4. The question is
whether that power allows the committee to adopt attorney fees
provisions not contained in the CC&R's.
The committee contends it had such broad power because the CC&R's
and its own bylaws give it the authority to "expand upon and describe
the provisions of the CC&Rs" and "[s]o long as such rules and
guidelines are reasonable and do not conflict with the CC&R's, they
will be held to be enforceable." In support, they cite MaJor v. Miraverde Homeowners Assn. (1992) 7 Cal.App.4th 618 and Rancho Santa Fe Assn. v. Dolan-King [193 Cal.App.4th 1186] (2004) 115 Cal.App.4th 28 (Rancho Santa Fe). Neither case helps the committee.
In MaJor, the court addressed whether the homeowners' association
was authorized to discriminate between resident members and nonresident
members in the use and enjoyment of common areas. (MaJor v. Miraverde Homeowners Assn., supra,
7 Cal.App.4th at p. 625.) The CC&R's granted every member a right
and easement of enjoyment in and to the common areas within the
property, subject only to the right of the association to establish
uniform rules and regulations pertaining to a member's use of the common
areas and recreational facilities. (Ibid.) Nonresident members
asserted the association acted without authority in restricting the use
of common areas by nonresident members. (Ibid.) The court agreed,
explaining as follows: "an association may not exceed the authority
granted to it by the CC&R's. Where the association exceeds its scope
of authority, any rule or decision resulting from such an ultra vires
act is invalid whether or not it is a 'reasonable' response to a
particular circumstance. Where a circumstance arises which is not
adequately covered by the CC&R's, the remedy is to amend the
CC&R's. The courts have held homeowners are subject to any
reasonable amendment of the CC&R's properly adopted." (Id. at p. 628.)
In Rancho Santa Fe, the court addressed whether a homeowners'
association could apply a regulation adopted subsequent to the enactment
of land use covenants that clarified the terms of one of those
covenants permitting a homeowner to undertake "minor" (as opposed to
"major") construction without the art jury's approval. (Rancho Santa Fe, supra,
115 Cal.App.4th at p. 40.) In holding the association could, the court
explained the governing documents granted to the association power to
adopt regulations and further explained an association operating under a
land use covenant had the "well-accepted power" to clarify and define
the covenant's terms, so long as it did so reasonably. (Id. at p. 41.)
These cases do not support the authority of the committee to enact the attorney fees provisions here. In MaJor,
the court limited the association's authority to that granted to it in
the CC&R's. It is not enough, as the committee argues, that the
attorney fee provisions are reasonable. MaJor rejected this
argument, noting that if a circumstance arises that is not adequately
covered by the CC&R's, the remedy is to amend the CC&R's,
regardless of whether the association's actions are reasonable. (MaJor v. Miraverde Homeowners Assn., supra,
7 Cal.App.4th at p. 628.) Here, the CC&R's are silent on attorney
fees. It is a situation, therefore, "not adequately covered by the
CC&R's," requiring amendment of the CC&R's to insert such a
provision. (Ibid.) Similarly, in Rancho Santa Fe, the court's holding that the regulation was enforceable turned on the fact the governing [193 Cal.App.4th 1187]
documents granted the association power to adopt regulations and the
fact the at-issue regulation served only to reasonably clarify terms
already in the land use covenant. (Rancho Santa Fe, supra,
115 Cal.App.4th at p. 41.) Here, the attorney fees provisions do not
seek to clarify existing language in the CC&R's. Rather, they are an
attempt by the committee to insert a new provision that binds
homeowners without their approval.
Undaunted, the committee continues to argue that the CC&R's, the
green book, and the 2002 architectural review manual "must be construed
together as one contract, as the rules and standards in the Greenbook
and [2002 architectural review manual] give effect to the CC&Rs." In
support, it cites Huntington Landmark Adult Community Assn. v. Ross (1989) 213 Cal.App.3d 1012.)
There, the defendants challenged an attorney fee award, contending
there was no provision for attorney fees in the CC&R's. (Id.
at p. 1023.) The court held the defendants were "mistaken" because the
supplemental declaration of easements, covenants, conditions and
restrictions contained an attorney fees provision. (Ibid.) Huntington
is unhelpful here. To the extent the green book and 2002 architectural
review manual deal with topics already covered by the CC&R's and
simply serve to reasonably clarify their meaning (see Rancho Santa Fe, supra,
115 Cal.App.4th at p. 41) or to the extent they adopt new or different
standards (which as we have explained in part I of the Discussion the
CC&R's give the committee the power to do), those documents are a
legitimate exercise of the committee's power granted to it under the
CC&R's. They therefore bind the homeowners whether we view them as
separate or supplemental to the CC&R's. The same reasoning does not
apply to the attorney fee provisions. Nothing in the CC&R's gives
the committee the power to insert into the green book and the 2002
architectural review manual an attorney fee provision that was never in
the CC&R's or contemplated therein. Huntington simply does not cover this situation.
We turn then to the other basis on which the committee and the Wares
seek to uphold the attorney fee awards: Ferwerda asked for attorney fees
if he prevailed and since he lost in the trial court, he was liable for
the other sides' attorney fees. The problem with this argument is that
it relies on an incomplete statement of the law.
 Pursuant to Civil Code section 1717, "a prevailing party is entitled
to attorney fees only if it can prove it would have been liable for
attorney fees had the opponent prevailed." (M. Perez Co., Inc. v. Base Camp Condominiums Assn. No. One (2003) 111 Cal.App.4th 456, 467.) In Perez, we disapproved dictum in our earlier opinion in International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175, which said, "Where a party claims a contract allows fees and prevails, it gets [193 Cal.App.4th 1188] fees. Where it claims a contract allows fees and loses, it must pay fees." (International Billing Services, at p. 1190.) We explained in Perez: "The fallacy of the rule stated in International Billing Services
is the assumption that if the party who claims that a contract allows
fees prevails in the underlying litigation, it gets attorney fees. In
truth, the party must still prove that the contract allows attorney
fees. The mere allegation is not enough." (M. Perez, at p. 468.)
The same applies for a losing plaintiff. For a losing plaintiff to be
required to pay attorney fees, the plaintiff's "bare allegation
that he is entitled to receive attorney's fees [is] not . . .
sufficient"; he also had to have established the attorney fees clauses
"actually entitled" him to recover fees. (Leach v. Home Savings & Loan Assn. (1986) 185 Cal.App.3d 1295,
1307.) Here, Ferwerda never so established, and as we have explained,
he could not so establish because the attorney fees provisions in the
green book and the 2002 architectural manual did not legitimately serve
to add an attorney fees provision to the CC&R's. fn. 2
Therefore, the committee and the Wares could not claim the right to
attorney fees simply because Ferwerda had asked for those fees in his
complaint. fn. 3
 In sum, there was no basis, either contractual or statutory on which to award attorney fees to the committee or the Wares. fn. 4 The fee awards must be reversed.
III-VI fn. *
[193 Cal.App.4th 1189]
The orders for attorney fees are reversed. In all other respects, the
judgment as to the committee and Wares is affirmed. The appeal as to the
board is dismissed. The board is entitled to its costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(1), (2).) Ferwerda, the committee, and
the Wares shall bear their own costs on appeal. (Cal. Rules of Court,
The stay issued by this court on December 29, 2010, is vacated upon finality of this opinion.
Nicholson, Acting P. J., and Butz, J., concurred.
Pursuant to California Rules of Court, rule 8.1110, this opinion is
certified for publication with the exception of part C of the Factual
and Procedural Background and parts III, IV, V, and VI of the
FN *. Pursuant to Cal. Const., art. VI, § 21.
A trial by reference is a proceeding under Code of Civil Procedure
section 638, subdivision (a), which provides that a referee may be
appointed by agreement of the parties to "hear and determine any or all
of the issues in an action or proceeding, whether of fact or of law, and
to report a statement of decision." That "statement of decision . . .
is the equivalent of a statement of decision rendered by a superior
court under Code of Civil Procedure section 632." (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501,
513.) As such, a referee's statement of decision is subject to
appellate review using the same rules that apply to a trial court's
statement of decision. (Ibid.) For simplicity, here we refer to the referee as the trial court.
FN *. See footnote, ante, page 1178.
Ferwerda also claimed attorney fees under the private attorney general
fee statute (Code Civ. Proc., § 1021.5) in his first amended
cross-complaint. The provisions of Civil Code section 1717 are distinct
from and have no application to the private attorney general fee
statute. Section 1717's right to attorney fees is based on the notion of
reciprocal contractual attorney fees.
We note also the attorney fees provisions in the green book and 2002
architectural review manual were unilateral, in favor of the committee.
"Section 1717 of the Civil Code, however, which governs enforcement of
contractual attorney fees provisions, provides that any contractual
attorney fees provision must be applied mutually and equally to all parties to the contract, even if it is written otherwise." (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1106.)
The above analysis applies to the Wares' claims of attorney fees as
well. The Wares' argument that they are entitled to attorney fees is
based on the attorney fee provision in the green book, which they claim
Ferwerda relied upon throughout the litigation here. Whether that is
true is irrelevant. Because we hold the committee had no power to insert
the attorney fee provision into the green book, the Wares cannot rely
on that provision to claim they are entitled to attorney fees.
FN *. See footnote, ante
, page 1178.