| [1] |
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE |
| [2] |
No. G041379 |
| [3] |
2010.CA.0008119 |
| [4] |
October 29, 2010 |
| [5] |
AKIL AFFAN ET AL., PLAINTIFFS AND
APPELLANTS,
v.
PORTOFINO COVE HOMEOWNERS ASSOCIATION, DEFENDANT AND APPELLANT;
HUNTINGTON WEST PROPERTIES, INC., DEFENDANT AND RESPONDENT. |
| [6] |
Appeal from a judgment of the Superior
Court of Orange County, Robert D. Monarch, Judge. (Retired judge of the
Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, §
6 of the Cal. Const.) Reversed in part, affirmed in part, and remanded.
(Super. Ct. No. 05CC11160). |
| [7] |
Allen B. Weiss & Associates, Allen B.
Weiss, Allen L. Thomas, and Sivi G. Pederson for Plaintiffs and
Appellants. |
| [8] |
Jerome M. Jackson and Doran B. Richart for
Defendant and Appellant Portofino Cove Homeowners Association. |
| [9] |
Jay D. Fullman for Defendant and
Respondent Huntington West Properties, Inc. |
| [10] |
The opinion of the court was delivered by:
Aronson, J. |
| [11] |
CERTIFIED FOR PARTIAL PUBLICATION XXX1 |
| [12] |
OPINION |
| [13] |
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. |
| [14] |
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 homeowners association liable for breaching
an equitable servitude to indemnify the Affans for their casualty loss,
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. |
| [15] |
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. |
| [16] |
I. BACKGROUND FACTS AND PROCEDURE |
| [17] |
Recurrent Plumbing Problems |
| [18] |
In 1986, Akil and Cenan Affan bought unit
107 in the Portofino Cove Condominiums as a vacation home. XXX2
They live in Arizona and usually spend 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 for a visit, 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. |
| [19] |
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. |
| [20] |
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 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. |
| [21] |
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. |
| [22] |
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. |
| [23] |
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 ponder 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." |
| [24] |
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. |
| [25] |
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. |
| [26] |
The May 14, 2005 Plumbing Disaster |
| [27] |
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. |
| [28] |
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. |
| [29] |
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. |
| [30] |
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. |
| [31] |
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, XXX3 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 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. |
| [32] |
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. |
| [33] |
The Plumbing Expert's Opinion |
| [34] |
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 for plaintiffs at trial. XXX4 |
| [35] |
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. XXX5 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. |
| [36] |
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. |
| [37] |
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 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." |
| [38] |
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. |
| [39] |
The Trial and Judgment |
| [40] |
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." |
| [41] |
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. |
| [42] |
In its statement of decision, the trial
court explained it reached its decision by applying 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." |
| [43] |
While the statement of decision rejected
any negligence liability on the defendants' part for failing to maintain
the common areas, the trial court did 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." XXX6 |
| [44] |
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]section 10.01, to its
'former condition[.]'" |
| [45] |
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. |
| [46] |
Both the Affans and the Association
appealed from the judgment XXX7 and from an
order after judgment denying their attorney fees requests. |
| [47] |
II. DISCUSSION |
| [48] |
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. |
| [49] |
A. The Rule of Judicial Deference |
| [50] |
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, 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. |
| [51] |
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.) |
| [52] |
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.) |
| [53] |
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.) |
| [54] |
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'"].) |
| [55] |
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.) |
| [56] |
B. The Trial Court Erred in Applying the
Judicial Deference Rule |
| [57] |
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 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].) XXX8 |
| [58] |
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).) |
| [59] |
1. Huntington West Has No Claim to
Judicial Deference Under Lamden |
| [60] |
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. |
| [61] |
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, |
| [62] |
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. |
| [63] |
2. The Association Failed to Establish the
Factual Prerequisites for Applying the Judicial Deference Rule |
| [64] |
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, 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. |
| [65] |
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. |
| [66] |
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.) |
| [67] |
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. |
| [68] |
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 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. XXX9 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. |
| [69] |
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. |
| [70] |
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. |
| [71] |
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
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. |
| [72] |
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. |
| [73] |
C. Applying the Judicial Deference Rule
Constituted Prejudicial Error |
| [74] |
The trial court's erroneous application of
the judicial deference rule had dire consequences for plaintiffs' case.
The trial court never decided, based on the evidence, 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.) |
| [75] |
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. |
| [76] |
As the court explained in Kemp, supra, 146
Cal.App.4th 1474, "[W]here . . . a respondent argues for affirmance
based on substantial 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. |
| [77] |
The Affans urge this court to order entry
of judgment in their favor on the negligence cause of action because the
Association had a non-delegable 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].) |
| [78] |
The doctrine of non-delegable duty does
not support entry of judgment in plaintiffs' 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 non-delegable duty,
assuming that Rescue Rooter's negligence is established by stipulation
or competent evidence. |
| [79] |
D. Substantial Evidence Supports the
Judgment for Plaintiffs on the Breach of Equitable Servitude Claim |
| [80] |
The Association in its cross-appeal
asserts two arguments for reversing the judgment against it for breach
of an equitable servitude. First, the Association argues the trial court
erred in refusing to apply the judicial deference rule to this cause of
action. Given our holding that the prerequisites for applying the Lamden
rule are unmet here, we need not address this contention further. The
Association's other argument challenges the sufficiency of the evidence
to support the judgment. This argument also lacks merit. |
| [81] |
The trial court based its ruling that the
Association breached an equitable servitude on three related CC&R
provisions. The court initially found that because the Affans' damage
resulted from a blockage in the sewer conduit located in the common
area, it was the "type of risk" against which the Association
was obligated to obtain casualty insurance by section 9.01 of the
CC&R's. The court next reasoned that because the casualty was one
the Association should have insured against, section 10.03 of the
CC&R's required the Association to repair the damage to the interior
of the Affans' unit. XXX10 Finally, the
court cited the requirement in section 10.01 of the CC&R's that
where the Association is responsible to repair any destroyed property,
it must "restore and repair the same to its former condition, as
promptly as practical." (CC&R's, § 10.01) Based on these three
CC&R provisions, the court found the Association breached an
equitable servitude when it failed to indemnify the Affans promptly for
the casualty loss they incurred in the sewage overflow. XXX11 |
| [82] |
The Association's challenge to the
sufficiency of the evidence asserts the Affans failed to prove the
Association had insured against the damage the Affans incurred. The
Association contends evidence of insurance is essential to support the
judgment because if the Association did not insure against this loss,
section 10.03 of the CC&R's made the Affans solely responsible for
the cost of repairing the damage within their unit. If the Association
had no duty to pay, then its failure to do so did not breach an
equitable servitude. |
| [83] |
In reviewing the evidence on appeal, we
must resolve all conflicts in favor of the judgment, and draw all
legitimate and reasonable inferences to uphold the judgment if possible.
When a judgment is attacked as lacking sufficient evidence, the power of
the appellate court begins and ends by determining whether there is any
substantial evidence, contradicted or uncontradicted, which will support
the judgment. (Western States Petroleum Assn. v. Superior Court (1995) 9
Cal.4th 559, 571.) Substantial evidence is evidence "'of ponderable
legal significance, . . . reasonable in nature, credible, and of solid
value.' [Citations.]" (Bowers v. Bernards (1984) 150 Cal.App.3d
870, 873.) |
| [84] |
The testimony of Huntington West employee
Kevin Brown supplies evidentiary support for the trial court's implied
finding the Association had casualty insurance for the Affans' loss.
Brown testified he met with an adjuster from the Association's insurance
company in the Affans' unit after the incident. He explained the board
was confident the adjuster would "look at the unit, tell us what
needed to be done. And then the insurance would fix it[.]" Brown
further testified that a coverage dispute arose later because the
Association changed insurers after the Affans incurred their damage,
leading the two insurers to dispute which of them was liable for the
Affans' loss. Thus, the evidence showed the Association had casualty
insurance for the flood damage; only the dispute over which policy
applied caused the delay in repairing the Affans' unit. |
| [85] |
We conclude the trial court reasonably
inferred from this evidence that the damage to the Affans' unit was a
"casualty . . . insured against by the Association[.]"
(CC&R's, section 10.03.) Because substantial evidence supports this
finding, we affirm the judgment for breach of an equitable servitude. |
| [86] |
E. Denial of Attorney Fees |
| [87] |
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. |
| [88] |
III. DISPOSITION |
| [89] |
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. |
| [90] |
WE CONCUR: RYLAARSDAM, ACTING P. J., FYBEL,
J. |
| |
|
| |
Opinion Footnotes |
| |
|
| [91] |
XXX1
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. |
| [92] |
XXX2
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.) |
| [93] |
XXX3
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.) |
| [94] |
XXX4
In an unusual move, both sides designated Hoffman as an expert witness. |
| [95] |
XXX5
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[.]" |
| [96] |
XXX6
The trial court's equitable servitude analysis is explained in part II.D.
of this opinion. |
| [97] |
XXX7
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. |
| [98] |
XXX8
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. |
| [99] |
XXX9
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. |
| [100] |
XXX10
Section 10.03 of the CC&R's, "Interior Damage," provides,
in pertinent part, as follows: "With the exception of any casualty
or damage insured against by the Association pursuant to [s]section 9.01
. . . restoration and repair of any damage to the interior of any
individual Residence . . . shall be made by and at the individual
expense of the Owner of the Residence so damaged." (Italics added.) |
| [101] |
XXX11
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." |
