TERMINOLOGY
Laws & Ordinances. 
Bills (proposed changes to the law) are introduced into the legislature in Sacramento. Once a bill has been approved by both houses of the legislature (the Assembly and Senate) and signed by the Governor, a bill becomes a statute or "statutory law." The Davis-Stirling Act (Civ. Code §§ 4000-6150) is an example of statutory law. Regulatory laws are adopted by executive agencies based on statutes. Ordinances are passed by counties and cities.
Enrolled. A bill that passes both houses is sent for proofreading for consistency before being sent to the Governor for approval.
Transmitted to Governor. The governor must sign or veto legislation within 10 days after transmittal, or it becomes law without his/her signature. For bills transmitted after session adjournment, the governor must act within 30 days after the end of the session, or the legislation becomes law without being signed.
Chaptered. A bill is "chaptered" once it is signed by the Governor. It becomes law January 1 of the following year unless it contains an urgency clause (takes effect immediately) or specifies an effective date.
2022 BILLS
AB 682. Density Bonuses. This bill would provide that a housing development eligible for a density bonus must include a shared housing building that contains either 10% of the units for lower income households or 5% of the units for very low income households. The bill would also prohibit a city or county from requiring any minimum unit size requirements or minimum bedroom requirements. This bill would not impact existing associations. [Chaptered]
AB 916. Bedroom Additions. This bill would streamline the process with a city or county for approval of the reconfiguration of an existing house to create more bedrooms. [Chaptered]
AB 1410. Social Media; Disciplinary Evidence. This bill has been significantly watered down. This bill would prohibit the governing documents from prohibiting a member or resident of a common interest development from using social media or other online resources to discuss specified issues even if the content is critical of the association or its governance, including, among other issues, development living and association elections. The bill would additionally prohibit an association from retaliating against a member or a resident for exercising certain rights, including the right to peacefully assemble or to use social media or other online resources to discuss certain issues. Under this bill, an owner of a separate interest in a common interest development would not be subject to a provision in a governing document that prohibits the rental or leasing of a portion of the homeowner occupied separate interest for more than 30 days, without regard to whether such restriction existed at the time the homeowner acquired title to the separate interest. This bill would prohibit an association from taking any enforcement actions for the violation of governing documents during a declared emergency, if the emergency makes it unsafe or impossible for the homeowner to either prevent or fix the violation. The bill was amended August 22nd to delete the requirement that an association that seeks to impose a monetary penalty for a violation of the governing documents to make any physical evidence used in determining the violation available to the member accused of violating the governing documents and the requirement that any photographs the association intends to rely on to determine a violation of the governing documents has occurred be made available, along with the photographs’ digital metadata to the member. CAI-CLAC opposed a prior version of this bill and was successful in causing some of its most onerous requirements to be deleted. [Chaptered]
AB 1674. ADUs; Photovoltaic Requirements. This bill would prohibit an accessory dwelling unit from being considered to be a newly constructed building for purposes of a specified provision of the California Energy Code, which is part of the California Building Standards Code, regarding the photovoltaic requirements for newly constructed buildings that are low-rise residential buildings. The bill would require the State Energy Resources Conservation and Development Commission, commonly known as the Energy Commission, to study exempting accessory dwelling units from specified photovoltaic requirements and make recommendations to the California Building Standards Commission in time for consideration and adoption in the next regularly occurring California Building Standards Code adoption cycle. [DEAD]
AB 1710. Outdoor LED Fixtures. This bill would state the intent of the Legislature to enact legislation relating to the regulation of residential and outdoor light-emitting diodes (LED) fixtures that create artificial light pollution at night, which causes harmful environmental and public health effects. [DEAD]
AB 1738. EV Charging Stations. This bill would, commencing with the next triennial edition of the California Building Standards Code, require the commission and the Department of Housing and Community Development to research, develop, and propose for adoption mandatory building standards for the installation of electric vehicle charging stations with low power level 2 or higher electric vehicle chargers, including direct current fast chargers, in existing multifamily dwellings, hotels, motels, and nonresidential development during certain retrofits, additions, and alterations to existing parking facilities that are issued permits on and after the effective date of those building standards, as specified. This bill would require the Department of Housing and Community Development and the commission to review those building standards every triennial code cycle and update those building standards until specified goals are met, as specified. The bill would sunset on January 1, 2033. The bill has been referred to the Suspense File, which means it will require an analysis of fiscal impacts. [Chaptered]
AB 1755. Insurance/Fire Hardening. This bill would require an admitted insurer licensed to issue homeowners’ insurance policies to issue a policy to a homeowner who has hardened their home against fire, as specified, regardless of the home’s location, on and after January 1, 2025, and would require an insurer to make conforming changes to its internet website and print materials on or before July 1, 2025. The bill would create the Wildfire Protection Grant Program, under which the department would be required to award grants of up to $10,000 each to help homeowners pay for costs associated with wildfire mitigation improvements. The bill would require the department to promulgate regulations to administer the Wildfire Protection Grant Program. This bill is supported by CAI-CLAC even though it won't directly help associations. [DEAD]
AB 2450. Wildfire Insurance Deductibles. This bill would require the commissioner of the Department of Insurance to convene a working group, on or before July 1, 2023, to study the feasibility, potential implications, and advisability of allowing admitted insurers to offer homeowners’ and commercial property insurance policies that include a deductible for covered losses resulting from wildfires. The bill would require the commissioner to identify industries, including, but not limited to, farming, that have struggled to obtain affordable commercial property coverage due to increased wildfire risk and require the working group to study the utility and risks a commercial policy containing a deductible for wildfire losses could have for these industries. This bill would require the working group to include, among other things, representatives from the insurance industry. The bill would require the commissioner to prepare a report, on or before July 1, 2024, summarizing the working group’s findings and recommendations, and to post that report on its internet website. CAI-CLAC supported this bill. It was vetoed by the governor. The Governor's veto message stated, "While I support the author's intent to reduce insurance costs for Californians living in high wildfire risk areas, I do not believe a statutory mandate requiring the Insurance Commissioner to evaluate proposed solutions is necessary." [Vetoed 9/27/22]
SB 897. Accessory Dwelling Units. This bill would eliminate numerous restrictions on ADUs, including some which would make it easier to demolish a garage and replace it with an ADU. The bill would eliminate any decisions by a public official which aren't determined on an "objective standard." [Chaptered]
SB 908 Update. Debt Collection Licensing. After over a year of confusion created by Senate Bill 908, which seemed to require that HOAs be licensed to collect assessments, California's Department of Financial Protection and Innovation (DFPI) decided that routine HOA assessment activities do not require a license. The DFPI's website posted FAQs that:
- Routine HOA assessments do not constitute a consumer credit transaction under the Debt Collection Licensing Act (DCLA).
- Routine HOA assessments are not considered consumer debt.
- Collection of assessments does not turn an HOA into an entity engaged in the business of debt collection.
The DFPI decision aligns with recent case law:
The Association is not a debt collector for the purpose of the Rosenthal Act, because the definition of debt collector is premised upon the act of collecting consumer debt. In other words, because the Court finds that homeowner’s assessments are not a consumer credit transaction for the purpose of the Rosenthal Act, it necessarily follows that the Association cannot be a debt collector under that statute (i.e., the Association does not in the ordinary course of business, regularly, on behalf of that person or others, engage in the collection of consumer debt). (Dickson v. Century Park East; internal quotation marks removed.)
What does this mean for HOAs? No license is required for routine assessment collection activities. Even for delinquent collections, the root of the transaction is not an extension of credit. Therefore, no license is required.
The reference to routine includes, "A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney's fees, if any, and interest, if any, as determined in accordance withsubdivision (b), shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied.” (Civ. Code § 5650(a).)
In summary, a debt collection license is not required for routine assessment collection activities. Boards should consult legal counsel with any questions about their collection policies and practices.
Insurance Crisis. In 2020, the insurance market suffered catastrophic losses of $210 billion from worldwide natural disasters. The top five costliest ones were in the United States. Last year was also the most expensive year on record for destructive fires in California. The State suffered 69 major fires that consumed 4.4 million acres, damaging or destroying 10,500 structures, and killing 33 people. 2021 was much of the same. As a result, premiums have been skyrocketing. The Community Associations Institute's California Legislative Action Committee (CAI-CLAC) has created an insurance task force to address the rising cost of insurance due to wildfires. The task force is working with the California Department of Insurance. Insurance Commissioner Ricardo Lara convened an investigatory hearing pursuant to California Insurance Code section 12924 to gather evidence and ascertain the facts regarding operations, policies and procedures of the California FAIR Plan Association (FAIR Plan) to inform actions needed for it to evolve and meet the changing needs of California consumers.
Fannie Mae and Freddie Mac Temporary Guidelines. The Federal National Mortgage Association (“Fannie Mae”) and the Federal Home LoanMortgage Corporation (“Freddie Mac”) have instituted new Temporary Guidelines which include modifications to Fannie Mae Form 1076 / Freddie Mac Form 476, entitled “Condominium Project Questionnaire”. Pages 6 – 8 of the Questionnaire contain an addendum with 12 new questions regarding building inspections, deferred maintenance, structural and safety issues, and related matters. These questions are difficult to answer, even with professional assistance. Managers and directors are neither licensed nor qualified to provide most opinions regarding the condition of the property or an analysis of inspection reports by licensed professionals. Many are therefore reluctant to take on the perceived risk resulting from completing and submitting the Addendum. However, lenders are requesting that the Questionnaire and Addendum be completed as part of the underwriting process when condominium or stock cooperative unit owners refinance their mortgage loan or when a unit is being sold and the buyer is taking out a new mortgage to finance the purchase. You can watch our Webinar on this issue here and the follow up questions here.
2022 CASE LAW
Case Law Defined. Case law is created by judicial decisions in California's appellate courts and supreme court. Statutory law demands or prohibits certain acts. Case law interprets statutory law. The cases also explain how the justices arrived at their particular conclusions. If published, their rulings serve as precedence for cases that follow.
Artus v. Gramercy Towers Condominium Association. Kazuko Artus filed a lawsuit against the HOA for injunctive and declaratory relief as to election and voting rules and the adoption of sale and lease guidelines. The HOA was successful in challenging a portion of the lawsuit through a demurrer and anti-SLAPP motion, which left three remaining claims. While the lawsuit was pending, the HOA unilaterally decided to adopt new election rules and sale and leasing guidelines, rendering the remaining moot. Both parties moved for attorney’s fees, claiming to be the prevailing party. The Court determined Artus was not the prevailing party as she achieved only one of her four main litigation objectives and the one objective was not a substantial win. Further, her lawsuit did not result in significant benefit to the general public or a large class of persons. The Court also determined the HOA was not a prevailing party because it could have adopted the rules and guidelines at any point and did not need a court order to do so. The Court further determined the HOA did not achieve their litigation objectives or reduce or eliminate governance disputes between the HOA and Artus. The Court stated: “A defendant cannot take unilateral action without court order or court approval, to end a lawsuit, and then declare itself the victor and demand fees.”
Houston Community College System v. Wilson. David Wilson was on the board of directors of the Houston Community College System (CSS). Wilson had a history of criticizing fellow directors and filing lawsuits against CSS that cost the organization more than $270,000 in legal fees. The board had enough and publicly censured Wilson in an open meeting for his behavior. Wilson sued CSS and fellow directors for mental anguish and punitive damages, claiming the censure was an unconstitutional retaliation for his free speech criticism of the board. In a unanimous decision, the U.S. Supreme Court ruled that Wilson did not have a valid claim. The Court reasoned that the censure was itself a form of speech by elected representatives concerning the public conduct of another elected representative. The censure did not prevent Wilson from doing his job, nor deny him any privilege of office.
Olson v. Doe. The case involves the interpretation of a nondisparagement clause in a settlement agreement at a mediation for a civil harassment restraining order proceeding. The civil harassment restraining order case was brought by one owner in a condominium development against another owner. The alleged harassment is based on interesting facts. Subsequent to the settlement agreement, “Doe” filed an administrative action with HUD which was referred to DFEH claiming discrimination based on sex and gender. Doe then filed a civil complaint against Olson seeking damages. In turn, Olson filed a cross-complaint for breach of contract, alleging that the administrative action filed by Doe breached the nondisparagement clause. Doe filed an Anti-SLAPP motion challenging the cross-complaint. The Supreme Court analyzed the context in which the nondisparagement clause was made and held that it did not prevent Doe from filing the administrative action. The court also upheld granting of the Anti-SLAPP motion. The Supreme Court’s analysis of the nondisparagement clause is limited to the context of a settlement agreement arising from a civil harassment complaint under CCP 527.6,
UNPUBLISHED OPINIONS
The following cases are unpublished opinions and are not binding precedent. However, they give insight on how future courts might deal with similar issues.
Ambassador Real Estate Inc. v. Kashay. Ambassador is a property and homeowners association management service company owned by Fuselier. Kashay was a resident in an association managed by Ambassador. Kashay reported Fuselier and Ambassador for elder abuse to the Sheriff’s Department and filed a complaint with the Better Business Bureau against them. Fuselier and Ambassador filed a defamation lawsuit against Kashay for 1) communications to law enforcement reporting elder abuse, 2) communications with the BBB in connection with a consumer complaint and 3) communications criticizing their performance as HOA manager. Kashay filed an anti-SLAPP motion. Kashay’s motion was denied by the trial court. The appellate court reversed, concluding that Kashay’s communications to law enforcement for elder abuse was protected activity, posting to consumer-oriented websites such as Yelp or the BBB are generally considered to be protected activity, and Kashay’s allegations of criticisms regarding Fuselier and Ambassador’s performance are too vague to meet the probability of prevailing on that ground. The court determined Kashay met her burden of establishing the alleged communications arose from protected activity .
Cruz v. Valerio Townhomes Homeowners Association. A lender held a nonjudicial foreclosure sale on an owner’s townhouse. The sales proceeds were more than owed to the lender so the trustee gave notice of the surplus to all parties with a recorded interest in the townhouse. The association had recorded a lien on the townhouse for delinquent assessments and made a claim for its portion of the surplus funds. The homeowner disputed the amount owed to the association. The trustee filed a Petition and Declaration Regarding Unresolved Claims and Deposit of Undistributed Surplus Proceeds of Trustee's Sale under Civil Code section 2924j in the Superior Court. The owner asserted the lien was invalid because the association had violated the Davis-Stirling Act when it recorded the lien. The association claimed the owner’s failure to object to a proof of claim that the association filed in the owner’s prior Chapter 13 bankruptcy case prevented the owner from challenging the validity of the lien. The trial and appellate courts agreed, pointing out that a claim in bankruptcy is deemed allowed unless a party in interest objects. The allowance of the claim in bankruptcy is binding and conclusive on all parties and is a final judgment. Since the owner had not objected to the proof of claim, it was a final order of the bankruptcy court and could not be re-litigated in the petition proceeding. The association was awarded the monies owed out of the surplus funds of the nonjudicial foreclosure sale.
Doppes v. Norton. Owner sued Board for adopting fine schedule and fee related to new construction and entering into secret negotiations and agreements with owners. Trial court granted the Board’s Anti-Slapp Motion as to all causes of action after erroneously applying the “gravamen” analysis, i.e., discern the gravamen (or gist) of each cause of action, then determine whether the gravamen is protected activity. The Appellate Court explained that the “gravamen” analysis is not used since the Supreme Court’s instructions in Baral v Schnitt (2016) 1 Cal.5th 367 and Bonni v. St. Joseph (2021) 11 Cal.5th 995 in favor of the “claim-by-claim” analysis, i.e., analyze each alleged wrongful act to determine if it is protected and the basis for a claim for which relief is sought. The Appellate court held that the Board’s votes approving the fines and fees constituted acts in furtherance of right of petition or free speech, but the claim that the Board entered into secret negotiations and agreements with some owners is not protected and survives the motion to dismiss.
Emerson Maintenance Association v. Gorenberg. Dr. Alan Gorenberg and his wife Ladan Hariri are homeowners in Emerson Maintenance Association. The HOA’s CC&Rs require applications for certain proposed architectural improvements. For several years, the owners and HOA were in a dispute regarding several modifications to the owner’s property. While the dispute was ongoing, the owners applied for, and obtained, a building permit from the City of Tustin. The HOA filed a lawsuit against the owners for breach of CC&Rs, specific performance and injunctive relief for failing to submit an architectural application for the modifications. The HOA alleged the owners applied for and obtained a permit from the city in violation of the CC&Rs. The owners filed an anti-SLAPP motion against the HOA contending the lawsuit arose out of written statements made to the City of Tustin. The trial court denied the anti-SLAPP motion because the lawsuit was not grounded in a protected activity. The Appellate Court reversed, finding that the lawsuit was based on the filing of a building permit, which is protected activity and the HOA did not meet burden to show probability of prevailing on claims based on the building permit. The Court determined the HOA failed to follow its own procedures in enforcing the CC&R violation which affected the probability of prevailing on its claims.
Gerlach v. K. Hovnanian’s Four Seasons at Beaumont, LLC. Homeowners alleged that roof defects would eventually result in water instruction and falling material. The trial court found that this concern for future water intrusion and falling material was speculative and not sufficient to maintain a claim. The homeowners failed to meet their burden of proving any past or current damage caused by the roofs. Also, the trial court held that because "a roof in and of itself is not a manufactured product because it is made up of components, where you have tiles or fabric, which are put together at the home", homeowners could not pursue a claim for roof defects which requires the roof to be completely manufactured offsite to qualify as manufactured products for purposes of SB 800. Appellate court affirmed and the Supreme Court denied review.
Golden West Patio Homes v. Cortez. The Association decided tent and fumigate the buildings for termites. Cortez refused to cooperate with the planned fumigation because he believed there were viable treatment methods that did not require tenting. The Association filed an ex parte application for a summary removal order under Civil Code § 4785, seeking to take immediate possession of Cortez's unit for the limited purpose of conducting the tent fumigation. The court granted the application and issued a removal order. As prevailing party, the Association was awarded its attorney fees and costs pursuant to Civil Code § 5975 and the CC&Rs. Cortez appealed. The Court of Appeal noted that the prevailing party is the one who prevailed on a practical level by achieving its main litigation objectives. Here, the Association's application for a temporary removal order was an action on a contract as it related to the Association's duties under the CC&Rs to maintain the common area of the development. The Association was the prevailing party in the action as it achieved its litigation objective when the court granted the application for the removal order, enabling the Association to proceed with the fumigation of the development's structures. Accordingly, the Association was entitled to recover its attorney fees under the CC&Rs. The court upheld the award of attorneys' fees and costs.
Harris v. Dollar Point Ass'n. The HOA owns a plot of land abutting the Harris property. Since purchasing the property, the Harrises used a 30-foot-wide strip of common area that abuts their backyard. When a dispute arose, the Harrises sued the association alleging they adversely possessed the encroachment area and held a prescriptive easement over stone-lined steps and a path (stone steps) adjoining the encroachment area to a parking lot. The court found the Harrises failed to prove their claims of adverse possession and prescriptive easement, and enjoined the Harrises from wrongfully encroaching onto the association's lot. To establish ownership by adverse possession, the Harrises had to show: (1) they possessed the encroachment area under a claim of right; (2) they openly and notoriously occupied the encroachment area in a manner that gave reasonable notice to the association; (3) their possession was adverse and hostile to the association; (4) they continually occupied the encroachment area for five years; and (5) they paid all property taxes on the encroachment area during the five-year period.
Ladera Ranch Maint. Corp. v. Tinsley. Ladera Ranch Maintenance Corporation (an HOA) filed suit against member Tinsley to order him to remove unapproved Improvements on his property and to collect fines and reimbursement assessments, namely, (1) a large tarp, vertically installed to serve as a visual and sound barrier to his neighbors; and (2) a security sign strung on a chain across his entryway. Tinsely argued that the CC&Rs are silent as to tarps and signs on chains, so the Board lacks authority to order them removed. The court rejected this argument including those items as “Improvements” over which the HOA has authority to approve explaining that CC&Rs do not require “enumeration of all structures … which might constitute an improvement.” The court found his “security sign” mounted on a chain across his entryway did not comply with “any reasonable interpretation of the HOA’s signage requirements.” The court ordered it removed. The HOA also imposed a reimbursement assessment for the cost of replacing two street trees that Tinsley removed and refused to replace. The court did not accept Tinsley excuse of the drought for his failure to replace the trees since the government restrictions are limited to watering, not planting.
Loeffler v. Trabuco Highlands Community Association. Loeffler owed $17,000 in delinquent assessments. Consequently, the HOA recorded an assessment lien. Loeffler refused to pay and sued the HOA alleging it had failed to follow the proper election procedure to annex her property into the HOA. Her Complaint claimed breach of the CC&Rs, quiet title and slander of title. The HOA cross-claimed against her to collect the delinquent assessments. The HOA prevailed against Loeffler on both her Complaint and its Cross-Complaint and the HOA was awarded attorneys fees. Loeffler attempted to persuade the appellate court that the attorneys fee award was unreasonable because she was not attempting to enforce the CC&Rs (which triggers the attorneys fee award); rather, she challenged an election and sought to quiet title. The Court rejected this narrow interpretation reasoning that regardless of her causes of action and allegations, the "gist" of the lawsuit was enforcement of the CC&Rs; therefore, the statutory and contractual attorneys fees provisions were triggered and the award was reasonable. The appellate court also noted that the trial court reduced the hourly rate of the HOA's general counsel to that of its defense counsel and further reduced the HOA's attorney bills by 30%. The trial court was critical of the HOA retaining two different law firms, one to defend the Complaint and another to participate in IDR, ADR and prosecute the Cross-Complaint. The trial court reasoned that the same law firm could have and should have represented the HOA on both matters, and was critical of the HOA incurring over $1 million in attorney fees to collect $17,000 in assessments.
Mayfaire Homeowners Association v. Deol. In 2015, a home within the association owned by Mr. Deol burned down. It took over two years for Mr. Deol to submit plans and obtain approval from the association to rebuild his home. Due to Mr. Deol’s failure to rebuild his home in a timely manner, in 2017 the association filed a lawsuit and prevailed at the trial court compelling Mr. Deol to complete rebuilding his home within 90 days. The issue on appeal was whether the association’s failure to plead and prove that it had properly served Mr. Deol with a request to participate in alternative dispute resolution (ADR) before the lawsuit was filed as is required under Civil Code Sections 5925 et. seq. While the complaint had a Request for ADR attached, there was no evidence or documentation that the ADR request was properly served on Mr. Deol. The appellate court determined that the plaintiff association had the burden to prove it had complied with the ADR statutes. Since the association did not prove the ADR request had been properly served, the trial court’s judgment was reversed.
Miner v. Seven Hills Drive Homeowners Association. Defendant HOA agreed to pay Plaintiff Miner, a member, $12,500 to settle a suit alleging damages caused by the HOA replacing Miner’s turf with drought resistant landscaping. The court denied Plaintiff’s request for attorneys and costs for various procedural and substantive reasons, including that Plaintiff was not entitled to attorneys fees as a matter of right under the Davis-Stirling Act, Civil Code §5975, because Plaintiff did not prevail in enforcing the governing documents, but rather, received money damages for an alleged breach of the governing documents. The court explained that because Plaintiff’s “cause of action for breach of the governing documents did not seek enforcement of the CC&Rs, but, instead sought damages for an alleged breach it did not achieve the main litigation purposes of which the Davis-Stirling act was enacted.” The court also noted that the settlement was not reached during participating in ADR under the Davis-Stirling Act, but rather in a court ordered mandatory settlement conference; therefore, there was nothing to distinguish it “from any other settlement for damage to property.”
Mojtahedi v. Carpenter. Plaintiff Mojtahedi and Defendant Carpenter serve on their HOA’s board. Plaintiff alleges that the Defendant Carpenter wrongfully used HOA funds for his benefit and misrepresented a capital improvement (that benefited his Unit) as an Emergency Repair in order to avoid membership approval. Defendant Carpenter filed an anti-SLAPP motion arguing that (1) the claims arise out of his voting and deliberations as a board member which are protected activity; and (2) his decisions on the Board are protected under the Business Judgment Rule. The court denied the Anti-SLAPP motion, explaining that Plaintiff’s claims arose out of alleged misuse of HOA funds and misrepresentations, not voting or protected statements. The court reasoned that voting is “incidental to the alleged wrongdoing” since the allegations arise from self-dealing and withholding information about the nature of repairs, not voting. Also, the court found that discussions about the emergency repairs were noncontroversial; therefore, not “protected activity” that involved an “ongoing controversy, dispute or discussion.”
Mondragon v. Kelliher. Plaintiff Mondragon filed a lawsuit against several board members claiming they breached their fiduciary duty by failing to comply with governing documents and use and application of funds. Respondents filed a special motion to strike Plaintiff’s first amended complaint under CCP 425.16 (the anti-SLAPP statute). The motion argued that Plaintiff’s complaint dealt with the directors’ spending decisions and opinions regarding expenditures, which they believed to be protected speech-related activity concerning a matter of public interest. The court concluded that the challenged cause of action does not arise from protected activity. The elements of Plaintiff’s claim do not challenge the board member’s free speech rights or their right to petition.
Myers v. Highlands at VISTA Ridge Homeowners Association. This dispute began with reports of criminal activity and citing of a murder suspect at a 55+ common interest development. The criminal reports allegedly exacerbated plaintiff Teresa Myers’ anxiety. Ms. Myers’ husband requested that the same type of barbed wire fence that protected the HOA’s R.V. Parking Lots be installed along the boundary of HOA’s property in order to protect against criminal activity which is necessary as a reasonable accommodation for his wife’s disability. After much negotiation, the HOA ultimately refused to have barbed wire fencing installed along the development’s boundary. The Myers sued alleging that the security fence was necessary to relief Ms. Myers of her debilitating anxiety, and a claim for disparate treatment by the Board. Defendant HOA brought a summary judgment motion which was denied by the court finding that disputed material facts exist as to whether Teresa Myers had a qualifying disability, whether her request for the accommodation was necessary and whether it was reasonable. The court was not persuaded by the HOA’s argument that the barbed wire fence along the boundary would unreasonably alter the aesthetic of the property because barbed wire fences already existed on the property to protect the R.V. lot. The court also noted the FHA requires a housing provider to make any reasonably accommodation that “may be necessary”, not the “best or only way to solve a disability-related problem” and without the security fence Ms. Myers would “lose an equal opportunity to use and enjoy her dwelling.” As to the disparate treatment claim, even though there was approximately a one year gap between the HOA’s denial of the request for reasonable accommodation and the first alleged incident of disparate treatment, the court found enough evidence that the Plaintiffs were subjected to more scrutiny than other lots to deny summary adjudication. The court addressed whether the Mr. Myers, as the spouse to a disabled wife, had standing to sue on the reasonable accommodation claim and held that he did not. The court explained that a non-disabled plaintiff must articulate how they suffered a “distinct palpable injury” separate from the disabled plaintiff such as humiliation, embarrassment and emotional distress.
Orangecrest Country Community Assn v. Burns. Burns submitted an architectural application for various modifications to her front, back and side yards. The plans proposed installing stucco walls in the side and front yard. The architectural committee issued a partial approval of the application but denied the stucco walls in the front yard. Burns proceeded to install a large wall in the front yard that without stucco. When Burns began construction the wall, the HOA communicated immediately by email, phone and issued a cease and desist letter informing her the wall was not approved and to stop construction. Burns ignored the order and built the wall. Burns refused to participate in alternative dispute resolution. The HOA sued Burns seeking an injunction to to remove the wall. The trial court granted the injunction and the homeowner appealed. Burns argued she received partial approval that specified no stucco walls could be built in the front yard, so she built a wall without stuccoing it. The court rejected her argument, noting the HOA’s actions once construction began gave Burns plenty of notice the wall was not approved. In addition to sending a cease and desist letter, the HOA spoke with the construction workers, held a disciplinary hearing, and offered ADR before filing suit. Burns also claimed the HOA allowed other owners to construct walls in the front yards so they acted unfairly and unreasonably in denying her wall. The court rejected this argument because the other walls were significantly different from the one Burns built and the other walls conformed to the HOA’s guidelines. The Appellate Court upheld the trial court’s decision imposing a mandatory injunction on Burns requiring removal of the unauthorized wall.
Ranch at the Falls LLC v. Indian Springs Homeowners Association. Indian Springs HOA recorded easement agreements in favor of adjacent landowners Ranch at the Falls and another adjacent HOA. The maintenance agreement contained a clause entitling the prevailing party to attorneys’ fees. Ranch prevailed in an action for enforcement of an easement over certain private streets in Indian Springs. The Court awarded attorney’s fees to the Ranch based on their argument that they were entitled to fees as third party beneficiaries of the easement and maintenance agreements between defendant and other HOA. Defendant unsuccessfully opposed the motion for attorneys’ fees under the maintenance agreement. The judgment was later reversed (which included the award of fees) and defendant then filed its own motion for attorney fees under the maintenance agreement. Plaintiff opposed the motion arguing judicial estoppel. Court found judicial estoppel did not apply because defendant was not successful in arguing their position regarding attorneys’ fees the first time.
Salehi v. Lakeview Terrace Homeowners Association. Plaintiff Salehi, an HOA Member and resident, sought a preliminary injunction against the HOA under the Fair Housing Amendments Act of 1988 and California’s Unruh Act after it failed to provide a handicap parking space close to his Unit without the Plaintiff first restriping and modifying the space at the Plaintiff Member’s expense and obtaining membership approval. The District Court Judge denied the HOA’s Motion to Dismiss finding that the conditions of approval the HOA imposed on the handicapped member was a failure to reasonably accommodate his disability in violation of the Fair Housing Amendments Act of 1988 and California’s Unruh Act. The HOA also argued that granting exclusive use of the parking space required membership approval per the CC&RS, but the Judge disregarded that provision of the CC&Rs and ordered the HOA to provide Plaintiff a space without any restriping, physical modifications or a membership vote.
Schwindt v. Omar. Both parties were owners in an HOA. Omar submitted plans for a room addition which the HOA approved, however Schwindt opposed the addition claiming it violated the CC&Rs as its built in a prohibited patio area and unreasonably interfered with her view. The CC&Rs state that a proposed improvement shall not unreasonably obstruct the view from any other residence. The trial court issued a mandatory injunction ordering Omars to tear down the room addition. The Omars appealed. The Appellate Court reversed, concluding that that even though room was built on a prohibited patio, the Board’s decision was not arbitrary or capricious when it found the room did not unreasonably interfere with Schwindt’s view. Further, the Court determined the hardship of removing the room outweighed the hardship of living with a slightly reduced view.
Simon v. Buttercreek II Homeowners Association Inc. Simon was a homeowner in the Buttercreek Association. Simon was delinquent in assessments. The HOA recorded a notice of default against the property for unpaid assessments and interest, recorded a notice of trustee sale and a trustee’s deed upon sale. At the foreclosure sale, First American obtained title and subsequently evicted Simon. Simon sued the HOA and First American alleging violations of the Federal Fair Debt Collections Practices Act (FDCPA). Simon stated that when the HOA contacted Simon to collect the unpaid assessments, it threatened to take Simon’s home if she did not pay the assessments and failed to disclose that it was a debt collector attempting to collect a debt. First American filed a motion to dismiss the FDCPA, declaratory judgment, quiet title and retaliatory eviction claims for lack of subject matter jurisdiction and failure to state a claim. The Federal District Court concluded that Simon’s FDCPA claim alleged the most basic facts, which was enough to meet the low standard required to not be dismissed on jurisdictional grounds. However, the Court further concluded that FDCPA Simon’s claim was barred by the one-year statute of limitations date.
Vorobiev v. Wolf. Wolf is homeowner and Board member of Bell Canyon HOA. Vorobiev is the father of a homeowner in Bell Canyon who had a history of a contentious relationship with Wolf. Vorobiev’s daughter believes Wolf engaged in misconduct as a Board member and unfairly interfered with their efforts to develop their property and she used her father’s email address to communicate with Wolf. Wolf sued Vorobiev and his daughter for defamation. Vorobiev filed a summary judgment motion, he was dismissed from the lawsuit prior to the hearing on the motion. After being dismissed, Vorobiev sued Wolf and his attorney for malicious prosecution. Wolf and his attorney filed anti-SLAPP motion claiming the lawsuit constituted protected activity. Vorobiev agreed the malicious prosecution claim was protected activity however he established a probability of prevailing on the merits thereby beating the anti-SLAPP motion. Wolf appealed, the appellate court reaffirmed.
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