Homeowner Ketelhut planted grape vines on his property with the association’s permission. Neighboring homeowners complained when they learned that Ketelhut had been using the grapes to make wine offsite and sell that wine. The board decided that the vineyard operation did not violate the CC&R prohibition against commercial activity because it did not affect the residential character of the community.
For the association and Ketelhut. The prohibition on business or commercial activity does not encompass activity that does not affect the community’s residential character. Board members lived in the community and were in a better position than the courts to evaluate the vineyard’s effect on the community. The court deferred to the board’s decision that the vineyard did not affect the residential character of the community because the board’s decision was based on a reasonable investigation.
Court of Appeals of California, Second District, Division Six.
Filed December 17, 2018.
Appeal from the Superior Court of Ventura County, Super. Ct. No. 56-2011-00403140-CU-OR-VTA. Henry J. Walsh, John Nguyen, Judges.
Richland & Associates, Felipa R. Richland, in propria persona, for Plaintiffs and Appellants Felipa Richland Eith and Jeffrey Eith.
The Aftergood Law Firm, Aaron D. Aftergood for Plaintiffs and Appellants Thomasine Mitchell, John Mitchell, Philip Chang and Eileen Gabler; Freeman Freeman & Smiley, Steven E. Young for Plaintiffs and Appellants Stacy Wasserman and Morrey Wasserman.
Yoka & Smith, Christopher E. Faenza, Christine C. De Metruis for Defendants and Appellants Jeffrey Ketelhut and Marcella Ketelhut; Slaughter, Reagan & Cole, Barry J. Reagan, Gabriele M. Lashly, Michael Lebow for Defendants and Respondents Los Robles Hills Estates HOA, Michael Daily, Jeanne Yen and Frank Niesner.
GILBERT, P. J.
In Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249 (Lamden), our Supreme Court cautioned courts to give judicial deference to certain discretionary decisions of duly constituted homeowners association boards. The judicial deference rule does not encompass legal questions that may involve the interpretation of the covenants, conditions, and restrictions (CC&Rs) of a homeowners association. Courts decide legal questions.
Here, homeowners cultivated a vineyard for the purpose of making wine to be sold to the public. The CC&Rs did not prohibit the cultivation of a vineyard for this purpose, but they did prohibit “any business or commercial activity.” The operation of the vineyard may have constituted “business or commercial activity” in the literal sense of that term. But a literal interpretation in the present case would elevate form over substance and lead to absurd results. (See SDC/Pullman Partners v. Tolo Inc. (1997) 60 Cal.App.4th 37, 46 [“literal language of a contract does not control if it leads to absurdity”].) Because the wine was made, bottled, and sold commercially offsite, and the activity at the vineyard did not affect the residential character of the community, we conclude there was no business or commercial activity within the meaning of the CC&Rs. The homeowners association board acted within its discretion in allowing the continued operation of the vineyard, and its decision is entitled to judicial deference.
This appeal is from a judgment and a postjudgment award of attorney fees and costs in favor of Jeffrey Ketelhut and Marcella Ketelhut (the Ketelhuts) and other parties. The Ketelhuts cross-appeal from the award of attorney fees and costs. In the appeal from the judgment, the central issue is whether the Ketelhuts, homeowners in a residential common interest development, violated a restrictive covenant requiring that they not use their property for any business or commercial activity. The Ketelhuts operated a vineyard on their property. After harvesting the grapes, they sent them to a winery to be made into wine. They sold the wine over the Internet.
Other homeowners objected to the operation of what they considered to be a commercial vineyard in violation of the prohibition against any business or commercial activity. The Board of Directors (Board) of the homeowners association — Los Robles Hills Estates Homeowners Association (HOA) — decided that the vineyard was not being used for business or commercial activity.
Plaintiffs/homeowners Felipa Eith and Jeffrey Eith (the Eiths), Thomasine Mitchell and John Mitchell (the Mitchells), Stacy Wasserman, Philip Chang, Morrey Wasserman, and Eileen Gabler (hereafter collectively referred to as “plaintiffs”) brought an action against the Ketelhuts, HOA, and Board members Michael Daily, Jeanne Yen, and Frank Niesner (hereafter collectively referred to as “defendants”). The court conducted a lengthy bifurcated trial on the eighth and ninth causes of action. The eighth cause of action concerned whether the operation of the vineyard was a prohibited business or commercial activity. The ninth cause of action sought to quiet title to a common area.
The trial court did not decide whether the operation of the vineyard was a prohibited business or commercial activity. Instead, it invoked the judicial deference rule of Lamden, supra, 21 Cal.4th 249. Pursuant to this rule, the trial court deferred to the Board’s decision that the vineyard was not being used for business or commercial activity. The court entered judgment in favor of defendants on both the eighth and ninth causes of action. The resolution of these two causes of action rendered the remaining causes of action moot.
The trial court correctly applied the Lamden judicial deference rule to the Board’s decision that the Ketelhuts’ operation of the vineyard was not a prohibited business or commercial use. We further conclude that, as a matter of law, it is not a prohibited business or commercial use. We affirm the judgment as well as the postjudgment award of attorney fees and costs.
In 1966, the Janss Corporation (Janss) developed a 28-lot residential subdivision (Los Robles Hills Estates) in the City of Thousand Oaks. The subdivision is a common interest development subject to the Davis-Sterling Common Interest Development Act. (Civ. Code, § 4000 et seq.) “Common interest developments are required to be managed by a homeowners association [citation], defined as `a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development’ [citation], which homeowners are generally mandated to join [citation].” (Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 81.)
Janss created HOA to manage the development. It deeded to HOA an 18.56-acre parcel that the trial court and parties referred to as a “common area.” The deed provides, “This conveyance is made on condition that said property shall be used solely for purposes of recreation or decoration or both, and in the event that said property is otherwise used, it shall automatically revert to grantor herein.”
The development is subject to a recorded declaration of CC&Rs. Paragraph 1.01 of the CC&Rs provides, “No lot shall be used for any purpose (including any business or commercial activity) other than for the residence of one family and its domestic servants. . . .” Subparagraph 3 of paragraph 2.03 provides that “[f]or good cause shown . . . deviations from the applicable deed restrictions” may be allowed “to avoid unnecessary hardships or expense, but no deviation shall be allowed to authorize a business or commercial use.” Paragraph 5.07 provides, “Every person acquiring a lot . . . covenants to observe, perform and be bound by this Declaration of Restrictions.”
In June 2003, the Ketelhuts purchased in the development a 1.75-acre lot on Pinecrest Drive (the Property). In 2005, they planted a vineyard consisting of 600 plants. The plants extended “just under .4 acres” into the 18.56-acre common area. In their brief, defendants acknowledge, “Unbeknownst to the Ketelhuts and [HOA], some of the grape plants encroached on the [common area].” In 2011, when HOA learned of the encroachment, its counsel wrote a letter to the Ketelhuts’ counsel “demanding that [the Ketelhuts] immediately remove the vines from the common area, as well as any other items that may be located upon the Association’s common area.”
Before planting the grape vines, the Ketelhuts submitted a landscape plan (Exhibit 244) to the Board. It was approved by the Board’s Architectural Committee (the Committee). The plan divided the Property into three separate vineyards. One would grow grapes for Cabernet Sauvignon, the second for Sangiovese, and the third for Merlot. The plan did not indicate the number of grape vines that would be planted. The Ketelhuts did not inform the Board or the Committee that the grapes grown on the Property would be used to make wine that would be offered for sale to the public.
Pranas Raulinaitis, who served on the Committee in 2005, testified that the Committee members “viewed the [vineyard] as an amazing [aesthetic] enhancement to the neighborhood.” It “never entered into [his] mind” that “the vineyard was being planted for commercial sale of wine to the public.”
The first harvest was in 2008. At that time, Jeffrey Ketelhut “harvested the grapes . . . with the intention of bottling them for sale.” He “commenc[ed the] wine business in 2009.” Jeffrey Ketelhut admitted that “the sale of wine is a business” and that the vineyard “operates like a business.” But he characterized the vineyard “as a hobby where I do it in my spare time.” “[M]y purpose in getting involved wasn’t to generate a profit and this become a livelihood. This was a hobby. I enjoy gardening. . . . [T]hat was therapy for me.” The Ketelhuts never determined whether, excluding attorney fees, the vineyard generated a profit. Including attorney fees, it has not generated a profit in any year.
Although the Ketelhuts’ tax returns were not produced, Jeffrey Ketelhut testified that he had filed Internal Revenue Service Schedule C (Form 1040) for the vineyard. Pursuant to Evidence Code sections 459 and 452, subdivision (h), we take judicial notice that Schedule C is entitled “Profit or Loss from Business (Sole Proprietor).” We also take judicial notice that, since 2009, page 1 of the instructions for Schedule C has provided, “Use [Schedule C (Form 1040)] to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if: your primary purpose for engaging in the activity is for income or profit, and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business.” (Italics added.)
In 2009, the Ketelhuts filed in Ventura County a fictitious business name statement showing that they were doing business at the Property as “Los Robles Hills Winery” and “Puerta del Cielo Vineyards.” They applied and obtained a “Type 17 and Type 20 license [from the Department of Alcoholic Beverage Control], which [permits] retail and wholesale [sales] over the internet only.” They also obtained “a Thousand Oaks business license.” The licenses showed that the business was located at the Property. But in 2012, the location of the business was changed to a Camarillo address.
The Ketelhuts began selling wine in May 2010. With one exception, they have sold only wine made from grapes grown on the Property. The exception occurred in 2011, when they made wine from sauvignon blanc grapes that they had purchased. In 2015, the Ketelhuts harvested 2,000 pounds of grapes. They invited family, friends, and neighbors to participate in the harvesting. Jeffrey Ketelhut testified, “[I]t took us an hour-and-a-half to pull down all the grapes.”
After the grapes are harvested, they are transported to “Camarillo Custom Crush [in Camarillo], where all the winemaking takes place.” Camarillo Custom Crush puts the wine into bottles that bear the Ketelhuts’ personal label. The Ketelhuts do not store wine on the Property. They have a storage facility in Malibu. They do not ship bottles of wine from the Property.
“In a typical year,” the Ketelhuts are “fortunate” to produce two barrels of wine. “[A] single barrel can hold up to 30 cases.” Each case contains 12 bottles. Thus, the maximum typical annual production is 720 bottles of wine. But in 2009, the Ketelhuts “produced 132 cases,” which is 1,584 bottles of wine.
At the time of trial in November 2015, the wine production was “dwindling” because they had “los[t] vines [due] to drought.” The original 600 plants had been reduced to about 400. Jeffrey Ketelhut estimated that production for 2014 and 2015 would be 50 cases per year. The wine for these years was still being stored in barrels.
The Ketelhuts retain ownership of the bottled wine. They advertise on Facebook, Twitter, their personal web site, “and through [their] wholesale accounts.” The logo “Los Robles Hills Winery” and their website address are displayed on the exterior of their truck, which they park in the driveway of the Property. “[T]hey keep the truck covered” while it is on the Property.
The Ketelhuts “sold wine to a number of restaurants and hotels in the local area.” But because of plaintiffs’ lawsuit, they “let those [local sales] lapse.” At the time of trial, they were “still offer[ing] retail sales and wholesale sales,” but were probably giving “at least 60 percent” of their wine to “charity.” For the last two years, their retail sales have been “zero.” Their wines appear on the menu at “a few” restaurants.
Exhibit No. 35 contains copies of pages from the Ketelhuts’ web site. The pages are dated May 22, 2014. The wines for sale range in price from $27 to $42 per bottle.
In January 2011, the Ventura County Star published an article about the Ketelhuts'”winery.” The article said that they “were hosting wine tastings by appointment at [their] home tasting room.” In March 2011, the Department of Alcoholic Beverage Control informed the Ketelhuts that someone had complained about the wine tastings. The Ketelhuts denied hosting wine tastings on the Property.
In its statement of decision, the trial court found: “There was . . . no retail traffic to the premises or tasting room on the premises at [the Property]. What was accomplished [there] was cultivation of the grapes, picking of the grapes, and transportation of the grapes to Camarillo.”
Some homeowners complained about the vineyard. In August 2011 counsel for plaintiffs Felipa Eith and Stacy Wasserman wrote a letter to the Ketelhuts “indicating that the commercial vineyard was a violation of the CC&Rs and that [they] should stop that aspect of [their] business.” The letter did not demand that the Ketelhuts stop growing grapes on the Property. It demanded that they “[c]ease operating a commercial vineyard.” The letter also demanded that the Ketelhuts “[r]emove all encroaching plants, irrigation and any other vineyard materials . . . from the . . . common area.”
The Board, which consisted of five homeowners, investigated the Ketelhuts’ operation of the vineyard. It interviewed other homeowners. In June 2011, it conducted a meeting that was open to all of the homeowners. The Ketelhuts appeared and answered questions. After the meeting, three of the five board members — defendants Daily, Yen, and Niesner — concluded that the Ketelhuts were not using the Property for a nonresidential purpose in violation of paragraph 1.01 of the CC&Rs. They found that there was no prohibited business or commercial activity on the Property.
Board member Daily considered the vineyard to be “landscaping” rather than a business. He explained: “They were growing grape vines just like I grow fruit trees and Mr. Krupnick [a homeowner] grows avocado trees, and people grow grass in their yard. It was landscape.” “[T]herefore I wasn’t going to, as a board member, try to restrict them from growing grapes. Like I wouldn’t restrict anybody else from growing fruit or whatever.” “Their growing grapes was part of their landscape plan.”
On the other hand, Daily understood that “the growing phase of their winery was part of the business.” “You have to have grapes in order to make wine.” Daily continued: “I believe that aspect to their business [growing grapes] is acceptable because it’s their landscape.” “The growing of grapes is certainly not something prohibited by the CC&R’S and if somebody takes those grapes in a very limited way without impact on the community, then I don’t really care what they do with them. They can make jelly and sell it. That’s fine with me.” “I considered that [the Ketelhuts] were going to do something that was not going to have a negative impact on the community and therefore it was allowable.”
Daily did not “know how to define the difference between business and commercial” activity. He said: “[W]hen I think of commercial activity, I think of something, you know, in a building, you know, off site. That’s what I think of as commercial activity.”
Board member Yen testified that “commercial activity” within the meaning of the CC&Rs “is something that would cause a stress in the community, whether it be traffic, whether it be individuals, that it’s something that disrupts our quality in our community and impacts your neighbors. That’s commercial activity.” Yen did “not see picking grapes to go to Custom Crush [a]s impairing any activities in the community or in any way creating blockage to the community or a problem for the community.”
Plaintiffs filed a complaint consisting of nine causes of action. The trial court bifurcated the eighth and ninth causes of action and tried them first. The trial began in July 2015 and ended in November 2015.
The eighth cause of action is against HOA and the Ketelhuts. It seeks declaratory and injunctive relief. It requests “a judicial determination and decree that the CC&Rs and Grant Deed prohibit” the Ketelhuts from (1) operating their “Business” and “commercial enterprise,” including the vineyard, on the Property and the common area, and (2) encroaching on the common area. The eighth cause of action also requests the issuance of a permanent injunction prohibiting the Ketelhuts from operating their business on the Property and encroaching on the common area.
The ninth cause of action is against all defendants. It seeks to quiet title to the common area. It claims that each of the 28 lot owners has an undivided 1/28th ownership interest in the common area and is “entitled to the non-exclusive possession” of that area. The ninth cause of action sought a judicial declaration that HOA has “no estate, right, title or interest” in the common area.
The remaining seven causes of action are for nuisance; trespass; breach of the CC&Rs; breach of HOA’s fiduciary duty; breach of fiduciary duty by Board members; and “willful, wanton misfeasance and gross negligence.” In its statement of decision, the trial court said it had ordered that “[t]he remaining causes of action, for which a jury had been demanded, would be set for trial as may be necessary following determination of the Declaratory Relief and Quiet Title causes of actions.”
Prior to trial on the eighth and ninth causes of action, all plaintiffs except Felipa Eith dismissed the entire action against HOA and Board members.
On the eighth cause of action for declaratory and injunctive relief, in its statement of decision, the trial court said that it was “faced with . . . whether or not to exercise its independent analysis of whether or not what the Ketelhuts were doing is a business or commercial activity, or to determine if the HOA had the discretionary authority to allow the Ketelhuts to do what they did under what is commonly known as the business judgment rule.” The court applied the “deferential business judgment standard adopted by [Lamden, supra, 21 Cal.4th 249].”
The trial court ruled: “The Court finds here that the defendant HOA and its individual directors acted in good faith in addressing the activities of the defendants Ketelhut, and that this decision should not be re-examined within the context of this litigation. . . . As noted in Beehan v. Lido Isle (1977) 70 Cal.App.3d 858 @ 865, `The board of directors may make incorrect decisions, as well as correct ones, so long as it is faithful to the corporation and uses its best judgment.’ . . . The Court finds that this board of directors used it[s] best judgment and acted in a reasonable manner under the circumstances presented to it. As such, the Court does not grant the relief that plaintiffs seek, but finds in favor of the defendants on the cause of action for declaratory relief.” (Italics added.)
On the ninth cause of action to quiet title to the common area, the trial court found that the area was deeded to HOA in 1966. “[N]o fractional interest in the property was deeded to any homeowners. Since that time, there have been no other documents, recorded or otherwise, that purport to grant to the homeowners the 1/28 fractional interest that they are seeking in this action.” Therefore, “title to the 18.5 acre common area is confirmed and quieted to [HOA].”
On the eighth and ninth causes of action, the trial court entered judgment in favor of defendants. The judgment does not mention the remaining seven causes of action. In its statement of decision, the trial court said, “The rulings here made moot plaintiffs[‘] remaining causes of action. The case is therefore not set for further trial on those issues.”
Thus, the judgment disposed of all nine causes of action and is appealable under the one final judgment rule of Code of Civil Procedure section 904.1, subdivision (a). “Judgments that leave nothing to be decided between one or more parties and their adversaries . . . have the finality required by section 904.1, subdivision (a). A judgment that disposes of fewer than all of the causes of action framed by the pleadings, however, is necessarily `interlocutory’ (Code Civ. Proc., § 904.1, subd. (a)), and not yet final, as to any parties between whom another cause of action remains pending.” (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 741.)
The complaint was filed on August 31, 2011. The case was assigned to Judge Henry J. Walsh.
After a contested judicial election, Judge Walsh was reelected in 2012. On February 10, 2016, the Commission on Judicial Performance admonished Judge Walsh for failing to disclose contributions made to his 2012 campaign by attorneys who had appeared before him after the election. The Commission noted, “In 2010, effective January 1, 2011, subdivision (a)(9)(C) was added to Code of Civil Procedure section 170.1 to require judges to disclose campaign contributions of $100 or more.”
On the same day that Judge Walsh was admonished, he signed the judgment in the instant case. The next day, plaintiff Felipa Eith filed a request for a stay of all further action by Judge Walsh pending a hearing on a not yet filed motion to disqualify him.
On March 2, 2016, Felipa Eith filed a motion to disqualify Judge Walsh for cause pursuant to Code of Civil Procedure section 170.1. The ground for the motion was that he had received campaign contributions from defendants’ counsel and had not disclosed them to plaintiffs. A minute order entered nine days later on March 11, 2016, states: “Without conceding the merit of allegations of prejudice made by Ms. Eith, the court recuses itself from the case, and refers it to the supervising civil judge for re-assignment.”
Plaintiffs filed a motion for a new trial. They argued that Judge Walsh’s failure to disclose the campaign contributions denied them their right to a fair trial. Plaintiffs claimed that, if Judge Walsh had made a timely disclosure, they “would certainly have sought his disqualification in 2012 to preclude the possibility that he would preside at trial.”
Judge John Nho Trong Nguyen denied the motion for a new trial. He ruled, “When the facts are viewed as a whole they show that no person aware of them might reasonably entertain a doubt that Judge Walsh would be able to be impartial.”
Plaintiffs argue that the judgment is void because Judge Walsh was disqualified years before the trial when he failed to disclose contributions made by defendants’ counsel. In Christie v. City of El Centro (2006) 135 Cal.App.4th 767, 776, the court “conclude[d] that because [the trial judge] was disqualified at the time he granted the City’s motion for nonsuit, that ruling was null and void and must be vacated regardless of a showing of prejudice.” The court rejected the City’s claim “that the grant of nonsuit need not be overturned because [the judge] was not disqualified until later” when a motion to disqualify him was granted: “[D]isqualification occurs when the facts creating disqualification arise, not when disqualification is established. [Citations.] The acts of a judge subject to disqualification are void or, according to some authorities, voidable. [Citations.] Relief is available to a party who, with due diligence, discovers the grounds for disqualification only after judgment is entered or appeal filed. [Citations.] Although a party has an obligation to act diligently, he or she is not required to launch a search to discover information that a judicial officer should have disclosed. [Citations.]” (Id. at pp. 776-777.)
The relevant statute is Code of Civil Procedure section 170.1, subdivision (a)(9), which provides: “A judge shall be disqualified” if: “(A) The judge has received a contribution in excess of one thousand five hundred dollars ($1500) from a party or lawyer in the proceeding, and either of the following applies: [¶] (i) The contribution was received in support of the judge’s last election, if the last election was within the last six years. [¶] (ii) The contribution was received in anticipation of an upcoming election. [¶] (B) Notwithstanding subparagraph (A), the judge shall be disqualified based on a contribution of a lesser amount if subparagraph (A) of paragraph (6) applies.” (Italics added.) Subparagraph (A) of paragraph (6) provides that a judge shall be disqualified if “[f]or any reason: [¶] (i) The judge believes his or her recusal would further the interests of justice. [¶] (ii) The judge believes there is a substantial doubt as to his or her capacity to be impartial. [¶] (iii) A person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial.”
The California Supreme Court Committee on Judicial Ethics Opinions (CJEO) issued an opinion on mandatory disqualification based on a contribution of more than $1,500: CJEO Formal Opinion 2013-003 (http://www.judicialethicsopinions.ca.gov/wp-content/uploads/cjeo_ formal_opinion_2013-003.pdf). CJEO concluded, and we agree, that the $1,500 disqualification threshhold “applies to the individual lawyer appearing in the matter.” (Id. at p. 11.) “[T]he Legislature did not intend the $1,500 threshold for disqualification to apply to aggregated contributions from multiple individuals from the same law firm, nor to all individuals practicing law in a contributing law firm. A judge receiving such contributions however, is also required to make a determination as to whether disqualification is called for under section 170.1, subdivision (a)(6)[A](iii) and [(a)](9)(B).” (Ibid.) “[M]andatory disqualification for individual attorney contributions over the $1,500 threshold, together with discretionary disqualification for aggregated and law firm contributions, sufficiently ensures the public trust in an impartial and honorable judiciary.” (Ibid.)
In their opening briefs, plaintiffs list the contributions of all of the lawyers who allegedly represented defendants during the five years of litigation. No lawyer contributed more than $1,500 to Judge Walsh’s campaign. Thus, the mandatory disqualification provision is inapplicable. (Code Civ. Proc., § 170.1, subd. (a)(9)(A).)
Plaintiffs have failed to show that Judge Walsh was disqualified because “[a] person aware of the facts might reasonably entertain a doubt that [he] would be able to be impartial.” (Code Civ. Proc., § 170.1, subd. (a)(6)(A)(iii).) Thus, we reject plaintiffs’ claim that Judge Nguyen abused his discretion in denying their motion for a new trial. (See Garcia v. Rehrig International, Inc. (2002) 99 Cal.App.4th 869, 874 [“`”`The determination of a motion for a new trial rests so completely within the court’s discretion that its action will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears'”‘”]; Boyle v. CertainTeed Corp.(2006) 137 Cal.App.4th 645, 649-650 [“an appealed judgment is presumed correct, and plaintiff bears the burden of overcoming the presumption of correctness”].)
Plaintiffs argue that the trial court’s bifurcation of the eighth cause of action denied them their right to a jury trial on the legal issue of whether the Ketelhuts were using the Property for a business or commercial purpose in violation of the CC&Rs. “The issue of whether [plaintiffs were] `constitutionally entitled to a jury trial . . . is a pure question of law that we review de novo.’ [Citations.]” (Entin v. Superior Court(2012) 208 Cal.App.4th 770, 776.)
“As a general proposition, `[T]he jury trial is a matter of right in a civil action at law, but not in equity.’ [Citations.] [¶]. . . `”If the action has to deal with ordinary common-law rights cognizable in courts of law, it is to that extent an action at law. In determining whether the action was one triable by a jury at common law, the court is not bound by the form of the action but rather by the nature of the rights involved and the facts of the particular case — the gist of the action. A jury trial must be granted where the gist of the action is legal, where the action is in reality cognizable at law.”‘ [Citation.] On the other hand, if the action is essentially one in equity and the relief sought `depends upon the application of equitable doctrines,’ the parties are not entitled to a jury trial. [Citations.]” (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 8-9.)
The gist of the eighth cause of action is the request for “a permanent injunction compelling [the Ketelhuts] . . . from encroaching on the Common Area . . . and from conducting the Subject Business [a commercial vineyard] on the Subject Lot in violation of the restrictions set forth in the [CC&Rs].” Such relief is available only in equity. “A permanent injunction is an equitable remedy for certain torts or wrongful acts of a defendant where a damage remedy is inadequate.” (Art Movers, Inc. v. Ni West, Inc. (1992) 3 Cal.App.4th 640, 646.)
Thus, the bifurcation of the eighth cause of action and the trial of that action by the court did not deny plaintiffs their right to a jury trial. “It is well established that, in a case involving both legal and equitable issues, the trial court may proceed to try the equitable issues first, without a jury . . ., and that if the court’s determination of those issues is also dispositive of the legal issues, nothing further remains to be tried by a jury. [Citations.]” (Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665, 671.)
Attorney Michael T. Stoller originally represented plaintiffs Felipa Eith, Stacy Wasserman, Philip Chang, and the Mitchells. After the trial had begun, Stoller moved to be relieved as counsel of record because of “a non-waivable conflict” of interest. Stoller declared: “Based on the actual conflict, there has been an irreparable breakdown of the working relationship between counsel and client.” “The specific facts which give rise to this [conflict] are . . . required to be kept confidential.” The trial court granted the motion.
The next day, plaintiffs were not ready to proceed with the trial. Felipa Eith had unsuccessfully tried to retain substitute counsel. The Mitchells had retained substitute counsel, but he was not ready to proceed. Wasserman had also retained substitute counsel, but he was neither ready nor present in court. Chang was unrepresented.
The trial court denied Felipa Eith’s and the Mitchells’ request for a continuance. The trial resumed with the cross-examination of Chang by counsel for the Ketelhuts and counsel for HOA. Felipa Eith, a licensed attorney, frequently objected to counsels’ questions. After the cross-examination of Chang, Eith called John Mitchell as a witness and examined him. On the next day of trial — August 18, 2015 — no testimony was taken. The court continued the matter to October 26, 2015.
The Eiths contend that the trial court erroneously granted Stoller’s request to be relieved as counsel. They claim that the court “failed to undertake its duty of inquiry” and “duty to explore the conflict.” The claim is forfeited because it is not supported by meaningful legal analysis with citations to the record and pertinent authority. (In re S.C. (2006) 138 Cal.App.4th 396, 408.) The only authority they cite — Aceves v. Superior Court (1996) 51 Cal.App.4th 584, 592-593 — is a criminal case. There, the court noted that “case law ties the duty of inquiry to the duty of the trial court to ensure the `”trial is conducted with solicitude for the rights of the accused”‘ and to `”protect the right of the accused to have the assistance of counsel.”‘ [Citation.]” (Id. at p. 593.) These rights are not implicated in the instant civil action.
In any event, even if the trial court had erred, the Eiths have not shown that they were prejudiced. (See Freeman v. Sullivant (2011) 192 Cal.App.4th 523, 527 [“A judgment is reversible only if any error or irregularity in the underlying proceeding was prejudicial”]; In re S.C., supra, 138 Cal.App.4th at p. 407 [“appellant cannot prevail without establishing that she was prejudiced by the alleged error”].)
The Eiths and other plaintiffs argue that the trial court abused its discretion in resuming Chang’s cross-examination without granting their request for a continuance. Plaintiffs have “not attempted to show [they were] prejudiced by the denial of a continuance. . . . Therefore, [they have] not met [their] burden on appeal, and any argument that the failure to grant the requested continuance constituted reversible error is deemed waived. [Citation.]” (Freeman v. Sullivant, supra, 192 Cal.App.4th at p. 528.)]]
In its statement of decision, the trial court applied the rule of judicial deference adopted by our Supreme Court in Lamden, supra, 21 Cal.4th 249. The plaintiff homeowner in Lamden complained that a condominium development’s community association had wrongly decided to treat a termite infestation “locally (`spot treat’).” (Id. at p. 252.) The plaintiff wanted the association to fumigate the building. The Supreme Court stated, “[W]e adopt today for California courts a rule of judicial deference to community association board decisionmaking that applies . . . when owners in common interest developments seek to litigate ordinary maintenance decisions entrusted to the discretion of their associations’ boards of directors. [Citation.]” (Id. at p. 253.) The rule is 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.” (Ibid.)
The Supreme Court explained: “The formulation we have articulated affords homeowners, community associations, courts and advocates a clear standard for judicial review of discretionary economic decisions by community association boards, mandating a degree of deference to the latter’s business judgments sufficient to discourage meritless litigation. . . . [¶] Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments to make the detailed and peculiar economic decisions necessary in the maintenance of those developments. A deferential standard will, by minimizing the likelihood of unproductive litigation over their governing associations’ discretionary economic decisions, foster stability, certainty and predictability in the governance and management of common interest developments.” (Lamden, supra, 21 Cal.4th at pp. 270-271.)
Some courts have narrowly construed the Lamden rule. In Affan v. Portofino Cove Homeowners Assn. (2010) 189 Cal.App.4th 930, 940, the court observed: “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. . . . 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. [Citations.]” (See also Ritter & Ritter, Inc. v. The Churchill Condominium Assn.(2008) 166 Cal.App.4th 103, 122.)
Most courts have broadly construed the Lamden rule. In Haley v. Casa Del Rey Homeowners Assn. (2007) 153 Cal.App.4th 863, 875 (Haley), the court concluded that Lamden “reasonably stands for the proposition that the Association had discretion to select among means for remedying violations of the CC&R’s without resorting to expensive and time-consuming litigation, and the courts should defer to that discretion.”
In Harvey v. The Landing Homeowners Assn. (2008) 162 Cal.App.4th 809, 820 (Harvey), the CC&Rs allowed the board “to designate storage areas in the common area.” They also gave the board “the exclusive right to manage, operate and control the common areas.” (Ibid.) The court held, “Under the `rule of judicial deference’ adopted by the court in Lamden, we defer to the Board’s authority and presumed expertise regarding its sole and exclusive right to maintain, control and manage the common areas when it granted the fourth floor homeowners the right, under certain conditions, to use up to 120 square feet of inaccessible attic space common area for rough storage.” (Id. at p. 821.)
In Watts v. Oak Shores Community Association (2015) 235 Cal.App.4th 466, 473 (Watts), this court rejected the plaintiffs’ claim “that the rule applying judicial deference to association decisions applies only to ordinary maintenance decisions.” We reasoned: “It is true the facts in Lamden involve the association board’s decision to treat termites locally rather than fumigate. But nothing in Lamden limits judicial deference to maintenance decisions.” (Ibid.) “[T]here is no reason to read Lamden so narrowly.” (Ibid.) “Common interest developments are best operated by the board of directors, not the courts.” (Ibid.) We applied the judicial deference rule to the board’s adoption of rules and imposition of fees relating to short-term rentals of condominium units. We noted that, in Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 979 (Dolan-King), “the court gave deference to an association board’s decision denying an owner’s application for a room addition on aesthetic grounds.” (Watts, supra, 235 Cal.App.4th at p. 473.)
Based on Lamden, Haley, Harvey, Watts, and Dolan-King, the judicial deference rule applies to an association board’s discretionary decisions concerning the operation of the common interest development, e.g., the board’s maintenance and repair decisions (Lamden), its selection of the appropriate means to remedy a violation of the CC&Rs (Haley), its designation of storage space in a common area (Harvey), its adoption of rules relating to short-term rentals (Watts), or its approval or rejection of a homeowner’s improvement plan (Dolan-King). As we observed in Watts, “Common interest developments are best operated by the board of directors, not the courts.” (Watts, supra, 235 Cal.App.4th at p. 473.)
Here, the Board made a decision concerning the operation of the common interest development. The Board decided whether the Ketelhuts violated the CC&Rs’ prohibition against the use of the Property for business or commercial activity. The Board reasoned that the CC&Rs’ prohibition did not encompass the operation of the vineyard because it did not affect the residential character of the community. Board member Daily testified, “I considered that [the Ketelhuts] were going to do something that was not going to have a negative impact on the community and therefore it was allowable.” Board member Yen did “not see picking grapes to go to Custom Crush [a]s impairing any activities in the community or in any way creating blockage to the community or a problem for the community.”
We do not defer to the Board’s interpretation of the CC&Rs. The interpretation of CC&R’s is a legal question to be decided by the courts, not the Board. “CC&R’s are interpreted according to the usual rules for the interpretation of contracts generally, with a view toward enforcing the reasonable intent of the parties. [Citations.]” (Harvey, supra, 162 Cal.App.4th at p. 817.) “`”[N]ormally the meaning of contract language . . . is a legal question.” [Citation.] “Where, as here, no conflicting parol evidence is introduced concerning the interpretation of the document, `construction of the instrument is a question of law, and the appellate court will independently construe the writing.'” [Citation.]'” (Cohen v. Five Brooks Stable (2008) 159 Cal.App.4th 1476, 1483; see also Legendary Investors Group No. 1, LLC v. Niemann (2014) 224 Cal.App.4th 1407, 1413 [“contract interpretation is a legal question for the court”].)
In our review of the CC&Rs, we conclude that the Board correctly interpreted the prohibition of business or commercial activity. The prohibition does not encompass activity that has no effect on the community’s residential character. The purpose of the prohibition is to preserve the community’s residential character.
The trial court properly deferred to the Board’s discretionary decision that the Ketelhuts’ operation of the vineyard did not violate the prohibition against business or commercial activity because it did not affect the community’s residential character. The Board made its decision “upon reasonable investigation, 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.). The Board interviewed homeowners and conducted a public hearing at which the Ketelhuts answered questions. Yen testified that the Board’s decision was “based on our looking at it from the scope of the community: Is it creating any stress for the community, is it impairing the community’s functioning, is it invasive to the community, and have we received any complaints regarding what is happening.” “Our decision and focus of discussion was on the impact o[n] the community.”
“Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments. . . .” (Lamden, supra, 21 Cal.4th at p. 270.) The Board members lived in the community and had discussed the Ketelhuts’ vineyard with other homeowners. They were in a much better position than the courts to evaluate the vineyard’s effect on the community. We “should defer to the [B]oard’s authority and presumed expertise.” (Id. at p. 265.)
As an alternative holding, we conclude that as a matter of law, the Ketelhuts’ operation of the vineyard is not prohibited business or commercial activity because it does not affect the community’s residential character.
No signs advertising wine sales are posted on the Property. Although the Ketelhuts’ logo “Los Robles Hills Winery” and their website address are displayed on the exterior of their truck, “they keep the truck covered” while it is on the Property. The wine is made and bottled in Camarillo. The bottled wine is stored in Malibu. It is not shipped from the Property. The trial court found that there is “no retail traffic” to the Property, which does not have a wine-tasting room. The court said, “What was accomplished [on the Property] was cultivation of the grapes, picking of the grapes, and transportation of the grapes to Camarillo.”
Had the Ketelhuts retained the wine for their personal use or given it away to friends or charity, there would have been no basis for finding business or commercial activity. All activities relating to the vineyard would have been permissible. That the Ketelhuts offered the wine for sale over the Internet did not transform their use of the Property into prohibited business or commercial activity. At all times the operation of the vineyard was fully consistent with residential use. No homeowner familiar with the vineyard’s operation would have had reason to suspect that the vineyard was being used to produce wine for sale to the public. The business or commercial activity of making and selling the wine did not occur on the Property. Board member Daily testified, “They were growing grape vines just like I grow fruit trees and Mr. Krupnick grows avocado trees, and people grow grass in their yard.” Moreover, instead of being a blight on the community, the vineyard was an aesthetic enhancement. Pranas Raulinaitis, who served on the Committee that approved the Ketelhut’s landscape plan in 2005, testified that the Committee members “viewed the [vineyard] as an amazing [aesthetic] enhancement to the neighborhood.”
We recognize that the growing of grapes on the Property is an integral part of the Ketelhuts’ winemaking business. As Daily testified, “You have to have grapes in order to make wine.” But absurd consequences would flow from construing the CC&Rs as prohibiting any business or commercial activity whatsoever irrespective of its effect on the residential character of the community.
For example, some appellate attorneys work at home, reading records, doing research, and writing briefs, but meet with clients elsewhere. Although these attorneys are engaged in the business of practicing appellate law at their home offices, their business activities do not affect the residential character of their communities.
It would be absurd to construe the CC&Rs as prohibiting such harmless conduct, just as it would be absurd to construe them as prohibiting the Ketelhuts from operating their vineyard. “`In construing a contract the court . . . should adopt that construction which will make the contract reasonable, fair and just [citation]; . . . [and] should avoid an interpretation which will make the contract . . . harsh, unjust or inequitable [citations], or which would result in an absurdity [citations]. . . .'” (Wright v. Coberly-West Co. (1967) 250 Cal.App.2d 31, 35-36.)
There will be instances, of course, where a homeowner’s activity constitutes prohibited business activity even though the business is primarily conducted off the residential premises. For example, if a homeowner conducted a trucking business off the premises except that the trucks were stored on the premises when not in use, the homeowner might be in violation of the business prohibition. The presence of the commercial trucks would detract from the community’s residential character. (See Smart v. Carpenter (N.M. Ct.App. 2006) 134 P.3d 811.)
The Eiths argue that the trial court’s judgment is not supported by the law or the facts. It is not clear whether this argument applies solely to the eighth cause of action for declaratory and injunctive relief, or whether it also applies to the ninth cause of action to quiet title to the common area. If the argument applies to the ninth cause of action, it is forfeited because it is not supported by meaningful legal analysis with citations to the record and pertinent authority. (In re S.C., supra, 138 Cal.App.4th at p. 408.)
The Eiths contend that, on the ninth cause of action, “the trial court did not articulate in its decision (a) what if any legal or equitable rights each of the lot owners had in the 18 acres, nor did the court decide (b) whether or not the 18 acres is `common area’ as argued by [plaintiffs].” We disagree. In its statement of decision the trial court declared: “The common area of 18.56 acres is Common Interest land as defined by CCR Title 10, Chapter 6, Article 1, paragraph 2705.” “[T]itle to the 18.5 acre common area is confirmed and quieted to the defendant Homeowners Association.” The court rejected the complaint’s contention that the common area is “owned collectively by the twenty-eight (28) lot owners of the subdivision, each lot owner owning a 1/28 undivided interest in said property.”
The Eiths assert that “the trial court [err]ed in refusing to decide street maintenance obligations in the [common interest development].” In its statement of decision the trial court said it had “ruled before the presentation of evidence that the issue of the streets was not tendered by the pleadings or discovery and therefore would not be a subject for resolution at trial.” The Eiths have forfeited the issue because they have not presented meaningful legal analysis with supporting citations to the record and pertinent authority. (In re S.C., supra, 138 Cal.App.4th at p. 408.)
The Eiths claim that the trial court erred in “refusing to decide if the Ketelhut vineyard encroached on . . . common area.” The court decided this issue. In its statement of decision the court found, “[S]tarting in January of 2005, [Jeffrey Ketelhut] planted 600 grape vines on his property and extending into the 18.5 acre common area at the rear of  his property by just under .4 acres.” In any event, it is undisputed that the Ketelhuts encroached on the common area. In their brief defendants acknowledge, “Unbeknownst to the Ketelhuts and [HOA], some of the [Ketelhuts’] grape plants encroached on the 18-acre parcel owned by the Association.”
The Eiths maintain that the trial court erroneously denied plaintiffs’ motion to disqualify HOA’s counsel. The issue is forfeited because the Eiths have failed to present meaningful legal analysis with supporting citations to the record and authority. (In re S.C., supra, 138 Cal.App.4th at p. 408.)
“In an action to enforce the governing documents [of a common interest development], the prevailing party shall be awarded reasonable attorney’s fees and costs.” (Civ. Code, § 5975, subd. (c).) Except for the Eiths, plaintiffs’ appeal from the award of attorney fees is based on their claim that the judgment in favor of defendants on the eighth cause of action must be reversed. Therefore, they assert that the award of attorney fees is “premature.” Because we are affirming the judgment, the award is not premature.
The Eiths present numerous grounds for reversing the award of attorney fees. They contend that defendants are not “true prevailing parties.” (Capitalization omitted.) The contention lacks merit because judgment was rendered in favor of defendants and against plaintiffs on both the eighth and ninth causes of action.
The Eiths argue that, because of Jeffrey Eith’s “bankruptcy filing” and the automatic stay triggered by that filing, it was “improper” to order him to pay attorney fees. “The automatic stay is self-executing, effective upon the filing of the bankruptcy petition. [Citations.] The automatic stay sweeps broadly, enjoining the commencement or continuation of any judicial . . . proceedings against the debtor. . . .” (In re Gruntz (9th Cir. 2000) 202 F.3d 1074, 1081.) The automatic stay argument is forfeited because it was not raised in the trial court. (In re Marriage of Moschetta (1994) 25 Cal.App.4th 1218, 1227 [“parties are not normally allowed to raise new issues on appeal [because] it is unfair to their opponents who did not have the opportunity to attack that theory factually or legally in the trial court”].)
The Eiths remaining grounds for contesting the award of attorney fees are rejected for lack of meaningful legal analysis with supporting citations to the record and pertinent authority. (In re S.C., supra, 138 Cal.App.4th at p. 408.)
The Ketelhuts claim that they were entitled to attorney fees of $351,432.55. In their cross-appeal, the Ketelhuts argue that the trial court abused its discretion in reducing the fees to $250,506.50, a shortfall of $100,926.05.
The $100,926.05 shortfall includes attorney fees of $75,930.05 paid by the Ketelhuts to their prior attorney, Myers, Widders, Gibson, Jones & Schneider, LLP (Myers, Widders). The fees are supported by Jeffrey Ketelhut’s declaration under penalty of perjury and Myers, Widders’ detailed billing statements (Exhibit B to the declaration). Each statement includes a description of the service performed, the date it was performed, the time expended, and the fee incurred for the service. There is no supporting declaration from Myers, Widders.
As to Jeffrey Ketelhut’s declaration, plaintiffs objected to the following statement: “My former attorneys of record submitted invoices to me for attorney fees incurred in the defense of myself and Marcella Ketelhut in the amount of $75,930.05. A true and correct copy of the original attorney bills is attached hereto as Exhibit `B.'” The ground for plaintiffs’ objection was that “Mr Ketelhut has no personal knowledge of the contents, authenticity, or originality of the billings he has attached as Exhibit B.”
As to the billing statements (Exhibit B), plaintiffs objected: “The contents of Exhibit B are unauthenticated hearsay, and lack any foundation for admissibility under any exception to the hearsay rule. Mr. Ketelhut . . . further [is] not a qualified witness with personal knowledge adequate to testify to the genuineness or authenticity or accuracy of any of the contents of Exhibit B, which are documents prepared by other persons and/or entities.”
The trial court sustained plaintiffs’ objections. It disallowed the fees in their entirety because they are “not properly established.” The court provided no further explanation for its ruling.
“`”`[A]n appellate court reviews any ruling by a trial court as to the admissibility of evidence for abuse of discretion.'” [Citation.]’ [Citation.] `The court’s “`discretion is only abused where there is a clear showing [it] exceeded the bounds of reason, all of the circumstances being considered.’ “[Citation.]’ [Citation.]” (Soto v. BorgWarner Morse TEC Inc. (2015) 239 Cal.App.4th 165, 199.) We also review for abuse of discretion a trial court’s decision to award or deny attorney fees. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)
The Ketelhuts contend that the billing statements were admissible pursuant to the following rule of Pacific Gas & Elec. Co. v. G. W. Thomas Drayage & Rigging Co.(1968) 69 Cal.2d 33, 42-43 (Pacific Gas): “Since invoices, bills, and receipts for [attorney fees] are hearsay, they are inadmissible independently to prove that liability for the [fees] was incurred, that payment was made, or that the charges were reasonable. [Citations.] If, however, a party testifies that he incurred or discharged a liability for [attorney fees], any of these documents may be admitted for the limited purpose of corroborating his testimony [citations], and if the charges were paid, the testimony and documents are evidence that the charges were reasonable. [Citations.]”
Because “there was testimony in the present case that the invoices had been paid,” the billing statements in Exhibit B were admissible to corroborate Jeffrey Ketelhut’s declaration that he had incurred liability for the attorney fees. (Pacific Gas, supra, 69 Cal.2d at p. 43.) They were also admissible to show that the fees were reasonable. (Ibid.)
But “[t]he individual items on the invoices . . . were [to be] read, not [only] to corroborate payment or the reasonableness of the charges, but to prove that [the claimed services] had actually been [performed]. No qualified witness was called to testify that the invoices accurately recorded the [services performed] by [Myers, Widders], and there was no other evidence as to what [services] were [performed]. This use of the invoices was [impermissible]. [Citations.] An invoice submitted by a third party is not admissible evidence on this issue [i.e., to prove that the services described in the invoice were actually performed] unless it can be admitted under some recognized exception to the hearsay rule.” (Pacific Gas, supra, 69 Cal.2d at p. 43.) “It might come in under the business records exception (Evid. Code, § 1271) if `. . . supported by the testimony of a witness qualified to testify as to its identity and the mode of its preparation.’ [Citation.]” (Id. at p. 43, fn. 10.)
In Pacific Gas the defendant damaged the plaintiff’s turbine. Plaintiff brought an action against defendant to recover its cost of repair. “To prove the amount of damages sustained, plaintiff presented invoices received from . . . [the] repairer of the turbine, the drafts by which plaintiff had remitted payment, and testimony that payment had been made.” (Pacific Gas, supra, 69 Cal.2d at p. 42.) Although the invoices were admissible to show the reasonableness of the charges for the repairs, they were not admissible “to prove that these specific repairs had actually been made.” (Id. at p. 43.)
Here, as in Pacific Gas, the billing statements from Myers, Widders were not admissible to show that the services described in the statements had actually been performed. No qualified witness testified as to the “identity and . . . mode of . . . preparation” of the statements. (Evid. Code, § 1271, subd. (c).) Accordingly, the trial court did not abuse its discretion in sustaining plaintiffs’ objections and concluding that the Ketelhuts’ claim for attorney fees billed by Myers, Widders had not been “properly established.”
McAllister v. George (1977) 73 Cal.App.3d 258, is distinguishable. There, the defendant argued that a bill for dental services had been properly excluded from evidence because it was hearsay. The appellate court rejected the defendant’s argument: “Plaintiff testified that the dental services were performed, that he received a bill for them, and that he paid the bill. It has been held that under such circumstances the bill, which ordinarily would constitute inadmissible hearsay, is nevertheless admissible for the limited purpose of corroborating plaintiff’s testimony and showing that the charges were reasonable. [Citations.]” (Id. at p. 263, italics added.) Here, in contrast, Jeffrey Ketelhut did not declare, and lacked the personal knowledge necessary to declare, that the numerous services described in the billing statements had actually been performed. For example, a statement dated August 31, 2011, billed the Ketelhuts for attorney conferences in which they had not participated. The Ketelhuts lacked personal knowledge whether these conferences had occurred. In his declaration Jeffrey Ketelhut said that Myers, Widders had “submitted invoices to [him] for attorneys fees incurred in the defense of [himself] and Marcella Ketelhut.” He did not say that Myers, Widders had actually performed the services described in the invoices. The Ketelhuts could have rectified the situation by submitting a supporting declaration from Myers, Widders.
In March 2014, plaintiffs Morrey Wasserman and Eileen Gabler voluntarily dismissed themselves as parties to the action against the Ketelhuts. The Ketelhuts moved for an award of attorney fees against Wasserman and Gabler. In June 2014, the trial court granted the motion and awarded attorney fees of $156,614.47. Wasserman and Gabler appealed. In an unpublished opinion, we concluded that the award was premature. We reversed and “remanded with directions to defer ruling on [the Ketelhuts’] motion for attorney fees until after the litigation among the various parties has been resolved.” (Wasserman et al. v. Ketelhut et al. (Dec. 1, 2015, B258642) [nonpub. opn.].)
After judgment was rendered in favor of the Ketelhuts as to all of the parties, the Ketelhuts sought an award of attorney fees incurred in bringing their unsuccessful 2014 motion to recover attorney fees from Wasserman and Gabler. The trial court denied the request, characterizing the 2014 motion as a “failed motion.” The Ketelhuts claim that the trial court abused its discretion because they were the prevailing party. We disagree. The Ketelhuts were not the prevailing party as to the 2014 motion because the order granting the motion was reversed on appeal.
Kelly Park was one of the original plaintiffs in the action against the Ketelhuts. In August 2013 she voluntarily dismissed herself as a party to the action against the Ketelhuts. In November 2013 the trial court denied the Ketelhuts’ motion for an award of attorney fees against Park.
The Ketelhuts assert: “[They] are not appealing the trial court’s 2013 denial of their attorneys fee motion against Kelly Park. [They] are appealing the July 28, 2016 Order reducing [their] fee award by amounts incurred in preparing that 2013 motion.” The trial court said that it had reduced the Ketelhuts’ attorney fees for “the time spent on the failed motion for attorney’s fees against Kelly Park.” The trial court did not abuse its discretion because the Ketelhuts were not the prevailing party on the 2013 motion.]]
The judgment and postjudgment award of attorney fees and costs are affirmed. The parties shall bear their own costs on appeal.
PERREN, J., concur.
PERREN, J., concur.
In a vain effort to “define what may be indefinable,” Justice Potter Stewart opined, “I know it when I see it.” In like manner, the dissent “knows unfairness when [it] sees it” — when it sees how the Ketelhuts harvest their grapes and make and sell their wine. The majority sees it otherwise. In my opinion this is not a matter for such subjectivity. Rather, we should defer to the good faith exercise of discretion and “the board’s authority and presumed expertise.” (Maj. opn. ante, at pp. 22-23, citing Lamden v. La Jolla Shores Clubdominum Homeowners Assn. (1999) 21 Cal.4th 249, 265.)
Both the majority and the dissent appeal to “Common sense.” (Maj. opn. ante, at p. 22; dis. opn. post, at p. 3.) In doing so they quote from Lamden: I join with them and set forth the full closing of that opinion:
“Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments to make the detailed and peculiar economic decisions necessary in the maintenance of those developments. A deferential standard will, by minimizing the likelihood of unproductive litigation over their governing associations’ discretionary economic decisions, foster stability, certainty and predictability in the governance and management of common interest developments. Beneficial corollaries include enhancement of the incentives for essential voluntary owner participation in common interest development governance and conservation of scarce judicial resources.” (Lamden v. La Jolla Shores Clubdominum Homeowners Assn., supra, 21 Cal.4th at pp. 270-271,italics added.)
This dispute and the resulting expense and acrimony are strong testament to the wisdom of such deference.
YEGAN, J., Dissenting.
I know unfairness when I see it. The judgment should be reversed because plaintiffs are entitled to a ruling from the trial court that the Ketelhuts were conducting a business in violation of the Covenants, Conditions, and Restrictions running with the land. (CC&Rs.) It does not matter whether the Ketelhuts could win an award for having the most beautiful vineyard in the world. It does not matter whether the wine from the grapes rivals the finest wines of the Napa Viticulture. As I shall explain, the facts unerringly point to the conclusion that the Ketelhuts were conducting a vineyard business on their property (the Property).
There will, of course, be situations in which the conducting of a business at a residence in violation of the CC&Rs will be so trivial to the neighborhood that it will be deemed not to be in violation of the CC&Rs. There is no reason to list them and one is only limited by imagination. As Colonel Stonehill said, “I do not entertain hypotheticals. The world, as it is, is vexing enough.” (True Grit (2010 film).) So here, we need only decide whether the maintenance of the vineyard as a business is in violation of the CC&Rs.
The judicial deference rule applies where an association board “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.” (Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21 Cal.4th 249, 265 (Lamden).) In Lamden our Supreme Court concluded that the courts should defer to the board’s treatment of a termite problem because it was “a matter entrusted to [the board’s] discretion under the [CC&Rs] and [now repealed] Civil Code section 1364.” (Id. at pp. 264-265.) Here, there is no statute or provision in the CC&Rs entrusting to the discretion of the Los Robles Hills Estates Board of Directors (Board) whether a homeowner is engaging in prohibited business or commercial activity within the meaning of the CC&Rs. This is a straightforward legal question to be decided by the courts, not members of the Board who lack legal expertise. (See Smart v. Carpenter (N.M.Ct.App. 2006) 134 P.3d 811, 814 [it “is a question of law” whether homeowner violated covenant prohibiting “`commercial activity or business’ on any tract in the Subdivision”].)
The inapplicability of the judicial deference rule is supported by Dover Village Assn. v. Jennison (2010) 191 Cal.App.4th 123 (Dover Village). There, the issue was whether a sewer pipe was ordinary “common area to be maintained and repaired by the Association” or “`[an] exclusive use common area'” designed to serve a particular homeowner who would be responsible for its maintenance. (Id.at pp. 126-127.) The Association decided that the sewer pipe was the defendant homeowner’s responsibility because it exclusively serviced his condominium. The appellate court concluded that the sewer pipe was not an exclusive use common area. It rejected the Association’s argument that, under Lamden, it should defer to the Association’s decision: “The argument fails because it confuses a legal issue governed by statutory and contract text with matters that genuinely do lend themselves to board discretion. [¶] [¶] There is an obvious difference between a legal issue over who precisely has the responsibility for a sewer line [or whether a homeowner is engaged in prohibited business or commercial activity within the meaning of the CC&Rs] and how a board should go about making a repair that is clearly within its responsibility. . . . [W]e know of no provision in the Davis-St[e]rling Act or the CC&R’s that makes the Association or its board the ultimate judge of legal issues affecting the development.” (Id. at p. 130)
The court considered Lamden to be “a nice illustration of matters genuinely within a board’s discretion.” (Dover Village, supra, 191 Cal.App.4th at p. 130.) Unlike Lamden, the legal issue here is not genuinely within the Board’s discretion. In Lamden the Supreme Court noted, “Common sense suggests that judicial deference in such cases as this is appropriate, in view of the relative competence, over that of courts, possessed by owners and directors of common interest developments to make the detailed and peculiar economic decisions necessary in the maintenance of those developments.” (Lamden, supra, 21 Cal.4th at pp. 270-271.) In contrast to Lamden, the Board is not equipped to determine whether the Ketelhuts were engaged in business or commercial activity in violation of the CC&Rs.
If the judicial deference rule applied here, there would be few board decisions to which it did not apply. The judicial deference rule “does not create a blanket immunity for all the decisions and actions of a homeowners association.” (Affan v. Portofino Cove Homeowners Assn. (2010) 189 Cal.App.4th 930, 940.)
The majority opinion concludes that, as a matter of law, the Ketelhuts’ operation of the vineyard is not a prohibited business or commercial activity because it does not affect the residential character of the community. But paragraph 1.01 of the CC&Rs does not say, “No lot shall be used for any purpose (including any business or commercial activity [that does not affect the residential character of the community]) other than for the residence of one family and its domestic servants.” (Italicized language added.) “`”In construing a contract which purports on its face to be a complete expression of the entire agreement, courts will not add thereto another term, about which the agreement is silent. [Citation.]”‘ [Citation.]” (The Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88 Cal.App.4th 595, 602.) On its face paragraph 1.01 prohibits any business or commercial activity without qualification or exception. Subparagraph 3 of paragraph 2.03 of the CC&Rs provides that “[f]or good cause shown . . . deviations from the applicable deed restrictions” may be allowed “to avoid unnecessary hardships or expense, but no deviation shall be allowed to authorize a business or commercial use.” (Italics added.) How can the operation of a commercial vineyard not qualify as commercial use?
There may be cases where business or commercial activity is so de minimis or concealed that it does not violate the CC&Rs, such as the example given in the majority opinion of an appellate attorney with a home office who sees no clients on the premises. But the Ketelhuts’ operation of their commercial vineyard was neither de minimis nor concealed. They filed a fictitious business name statement and were issued both a business license and an alcoholic beverage sales license. The licenses originally indicated that the business was located at the Property. Board member Yen testified: “[A] notice of intent to sell [alcoholic beverages] . . . was posted on their front where their mailbox was, and it needed to be posted elsewhere because you’re not supposed to be advertising a business in the community. So they were advised not to post it there.” The Ketelhuts advertised on Facebook, Twitter, their personal web site, “and through [their] wholesale accounts.” They filed an Internal Revenue Service Schedule C (Form 1040) to report their business income or loss. The logo “Los Robles Hills Winery” and their website address were displayed on the exterior of their truck. Although the Ketelhuts covered the truck while it was parked on the Property, the logo and website address were openly displayed when they drove the truck to and from the Property.
The Ketelhuts sought and obtained publicity for their winery by giving an interview to the local newspaper, the Ventura County Star. In January 2011 the newspaper published an article about the winery. Until he read the article, plaintiff John Mitchell was not aware that the Ketelhuts were growing grapes for a commercial purpose. Mitchell “knew that they weren’t supposed to be doing an activity like that because of the CC&Rs,” which “exclude any business activity.”
A copy of the newspaper article was marked as Exhibit 54, but it was neither offered nor received into evidence. I quote from the article because it was before the trial court, witnesses testified as to its content, Felipa Eith quoted from the article during her examination of Jeffrey Ketelhut, and the article arguably is judicially noticeable not to prove the truth of the facts reported, but to prove the extent to which the commercial nature of the vineyard was publicized. (Evid. Code, §§ 452, subd. (h), 459.)
The article takes up the entire front page of the newspaper’s Sunday “Business” section (“Section E”). It is entitled, “GRAPE expectations[:] T.O. [Thousand Oaks] couple’s home vineyard about to pay off.” The article includes photographs of the vineyard, the Ketelhuts, and bottles of wine produced from grapes grown at the vineyard. The bottles are labeled, “Los Robles Hills.” One of the photographs of the Ketelhuts is captioned, “Jeff and Marcella Ketelhut, owners of the commercialvineyard in the Conejo Valley, enjoy discussing the challenges of wine production.” (Italics added.) The article includes the website address of the Ketelhuts’ winery.
The article states in part: “For Jeff and Marcella Ketelhut, the dream of owning a winery has come to fruition on the slopes near their Thousand Oaks home.” “The Ketelhuts are not yet making a profit but said they are selling their wine, at $35 a bottle, through their website, by word of mouth and by hosting wine tastings by appointment at their home tasting room. [¶] . . . The couple also has planted a selection of olive trees on the property and hopes to begin producing cured olives and olive oil for sale in the near future. [¶] They said they are exploring ways to expand their commercial enterprise, given the potential they believe exists in the Conejo Valley. [¶] `We wanted to try it for a few years, and initially it was more of a fun thing, but now we’re barely doing any marketing and the stuff is flying off the shelves,’ said Marcella.” The article observes that “the Ketelhuts’ Los Robles Hills Winery [is] on the list of 15 [wineries] that make up the Ventura County Wine Trail.” Jeffrey Ketelhut testified that in 2010 the Ketelhuts had become “members of the Ventura County Wine Trail.”
Through the newspaper article, the Ketelhuts proclaimed to Ventura County residents that they were operating a commercial vineyard on the Property. It is understandable that homeowners, such as John Mitchell, would be alarmed by this development, which appeared to be a blatant violation of the CC&Rs’ prohibition against “any business or commercial activity.” Homeowners could view the article as a public flaunting by the Ketelhuts of their violation.
The majority opinion states, “No homeowner familiar with the vineyard’s operation would have had reason to suspect that the vineyard was being used to produce wine for sale to the public.” (Maj. opn., ante at p. 27.) But the newspaper article put the entire community on notice that the Ketelhuts were operating a commercial vineyard.
Moreover, the vineyard was in plain view of the homeowners. Richard Monson testified that, “[w]hen [he] drove past the Ketelhuts’ home,” he “noticed the grapevines on the hillside.” Because the grapevines were visible to everyone, they would be a continual source of aggravation to homeowners who objected to a commercial agricultural operation in their community. The majority opinion says that the vineyard was an “aesthetic enhancement.” (Maj. opn., ante at p. 27.) But to the homeowners who objected to its presence, it was an eyesore.
The Ketelhuts’ commercial vineyard was not permissible because, as Board member Daily testified, “Their growing grapes was part of their landscape plan.” The landscape plan, which was approved in 2005 by the Board’s Architectural Committee (the Committee), did not indicate that the vineyard would be used to grow grapes to make wine that would be offered for sale to the public. In 2005 the Ketelhuts did not inform the Committee of this future commercial use. Had it been so informed, the Committee probably would not have approved the landscape plan.
Difficulties may arise in applying the majority opinion’s standard of whether business or commercial activity affects the residential character of the community. With such a vague standard, where does one draw the line between activity that affects and activity that does not affect residential character? This is a purely subjective determination.
Traditionally, CC&Rs are restrictions and limitations on land use. Now at the whim of the Board, CC&Rs mean “choices, creativity, and recommendations.” A homeowner has a choice and may be creative in the use of property. The traditional CC&Rs have been transformed into recommendations that the Board may elect not to enforce. Rather than having the force of law, the CC&Rs have the backbone of a chocolate éclair. And, of course, the Board’s composition may change and there will be inconsistency in just how much business or commercial activity will be allowed.
CC&Rs play a vital role in protecting the reasonable expectations of parties when they purchase land. This concept is lost in the majority opinion. Future buyers in the development should be expressly advised that business or commercial activity is allowed at the discretion of the Board. This may actually devalue the land.
Finally, to monetarily punish plaintiffs with attorneys’ fees is not only unfair, it is unconscionable. The Ketelhuts were the “first movers.” They created the entire problem by operating a commercial vineyard and publicizing it in the local newspaper.
They are at fault and they should pay for it.
[*] Pursuant to California Rules of Court, rules 8.1100 and 8.1110, this opinion is certified for partial publication. The portions of this opinion to be deleted from publication are identified as those portions between double brackets, e.g., [[/]].
 The Eiths “posit that the 2/10/16 handwritten date appearing adjacent [to] the signature line [on the judgment] is suspect” and “therefore unreliable.” The Eiths contend that the handwritten date “was likely backdated.” (Capitalization and bold omitted.) We reject the contention because it is based on speculation. There is a “presumption that judicial duty is properly performed.” (People v. Coddington(2000) 23 Cal.4th 529, 644, overruled on another ground in Price v. Superior Court (2001) 25 Cal.4th 1046, 1069, fn. 13.) The Eiths have not overcome this presumption.
 In his reply brief, Chang argues for the first time that he was denied his “constitutionally protected due process rights to be represented by counsel while actually on the stand under cross-examination.” The point is forfeited because it was not raised in his opening brief. (Benach v. County of Los Angeles(2007) 149 Cal.App.4th 836, 852 & fn. 10; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 685.)
 Defendants raised the forfeiture issue in their respondent’s brief. The Eiths did not file a reply brief.
 See California Attorney Fee Awards (Cont.Ed.Bar 3d ed., 2018 update) Contents of Comprehensive Fee Motion, § 11.53 [“A comprehensive fee motion should include the following: . . . Declarations from the attorneys claiming fees, stating their background and training, their role in the litigation, a description of their services (often with time records attached as an exhibit to the declaration), an explanation of why the hours are reasonable (e.g., hours generated by the losing party’s tactics), a description of any billing judgment exercised, a statement of the hourly rates and their basis, and any other facts the court needs for its determination.”
Keywords: Business Judgment Rule, Judicial Deference (“Lamden”) Rule, Governing Documents, Enforcement, Interpretation
*All new statutes and amendments are shown in bold, underline italics. [ ] indicates an amendment of deleted text only.
Unless the governing documents require greater coverage amounts, the association shall maintain fidelity bond coverage for its directors, officers, and employees in an amount that is equal to or more than the combined amount of the reserves of the association and total assessments for three months. The association’s fidelity bond shall also include computer fraud and funds transfer fraud. If the association uses a managing agent or management company, the association’s fidelity bond coverage shall additionally include dishonest acts by that person or entity and its employees. 
*All new statutes and amendments are shown in bold, underline italics. [ ] indicates an amendment of deleted text only.
Notwithstanding any other law, transfers of greater than ten thousand dollars ($10,000) or 5 percent of an association’s total combine reserve and operating account deposits, whichever is lower, shall not be authorized from the association’s reserve or operating accounts without prior written board approval. This section shall apply in addition to any other applicable requirements of this part. 
*All new statutes and amendments are shown in bold, underline italics. [ ] indicates an amendment of deleted text only.
The review requirements of Section 5500 may be met when every individual member of the board, or a subcommittee of the board consisting of the treasurer and at least one other board member, reviews the documents and statements described in Section 5500 independent of a board meeting, so long as the review is ratified at the board meeting subsequent to the review and that ratification is reflected in the minutes of that meeting. 
(a) Any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of any interest in a common interest development, and any provision of a governing document, as defined in Section 4150, that either effectively prohibits or unreasonably restricts the installation or use of an EV-dedicated TOU meter or is in conflict with this section is void and unenforceable.
(b) (1) This section does not apply to provisions that impose reasonable restrictions on the installation of an EV-dedicated TOU meter. However, it is the policy of the state to promote, encourage, and remove obstacles to the effective installation of EV-dedicated TOU meters.
(2) For purposes of this section, “reasonable restrictions” are restrictions based upon space, aesthetics, structural integrity, and equal access to these services for all homeowners, but an association shall attempt to find a reasonable way to accommodate the installation request, unless the association would need to incur an expense.
(c) An EV-dedicated TOU meter shall meet applicable health and safety standards and requirements imposed by state and local authorities, and all other applicable zoning, land use, or other ordinances, or land use permits.
(d) For purposes of this section, an “EV-dedicated TOU meter” means an electric meter supplied and installed by an electric utility, that is separate from, and in addition to, any other electric meter and is devoted exclusively to the charging of electric vehicles, and that tracks the time of use (TOU) when charging occurs. An “EV-dedicated TOU meter” includes any wiring or conduit necessary to connect the electric meter to an electric vehicle charging station, as defined in Section 4745, regardless of whether it is supplied or installed by an electric utility.
(e) If approval is required for the installation or use of an EV-dedicated TOU meter, the application for approval shall be processed and approved by the association in the same manner as an application for approval of an architectural modification to the property, and shall not be willfully avoided or delayed. The approval or denial of an application shall be in writing. If an application is not denied in writing within 60 days from the date of receipt of the application, the application shall be deemed approved, unless that delay is the result of a reasonable request for additional information.
(f) If the EV-dedicated TOU meter is to be placed in a common area or an exclusive use common area, as designated in the common interest development’s declaration, the following provisions apply:
(1) The owner first shall obtain approval from the association to install the EV-dedicated TOU meter and the association shall approve the installation if the owner agrees in writing to do both of the following:
(A) Comply with the association’s architectural standards for the installation of the EV-dedicated TOU meter.
(B) Engage the relevant electric utility to install the EV-dedicated TOU meter and, if necessary, a licensed contractor to install wiring or conduit necessary to connect the electric meter to an EV charging station.
(2) The owner and each successive owner of an EV-dedicated TOU meter shall be responsible for all of the following:
(A) Costs for damage to the EV-dedicated TOU meter, common area, exclusive use common area, or separate interests resulting from the installation, maintenance, repair, removal, or replacement of the EV-dedicated TOU meter.
(B) Costs for the maintenance, repair, and replacement of the EV-dedicated TOU meter until it has been removed and for the restoration of the common area after removal.
(C) Disclosing to prospective buyers the existence of any EV-dedicated TOU meter of the owner and the related responsibilities of the owner under this section.
(h) An association that willfully violates this section shall be liable to the applicant or other party for actual damages, and shall pay a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1,000).
(i) In any action by a homeowner requesting to have an EV-dedicated TOU meter installed and seeking to enforce compliance with this section, the prevailing plaintiff shall be awarded reasonable attorney’s fees. 
Assessments that become due after a homeowner debtor has filed Chapter 13 bankruptcy will be discharged upon confirmation of the bankruptcy plan by the bankruptcy court because such assessments are unmatured contingent debts under 11 U.S.C. §1328(a).
895 F.3d 633
United States Court of Appeals, Ninth Circuit.
Argued and Submitted February 6, 2018 — Seattle, Washington.
Filed July 10, 2018.
Appeal from the United States District Court for the Western District of Washington; Marsha J. Pechman, Senior District Judge, Presiding, D.C. No. 2:15-cv-01413-MJP.
Amanda K. Rice (argued), Jones Day, Detroit, Michigan; Nathaniel P. Garrett, Jones Day, San Francisco, California; Christina L. Henry, Henry DeGraaff & McCormick P.S., Seattle, Washington; for Appellant.
Stephen M. Smith (argued), Sound Legal Partners PLLC, Kenmore, Washington, for Appellee.
J. Erik Heath, San Francisco, California, as and for Amicus Curiae National Association of Consumer Bankruptcy Attorneys.
Before: Milan D. Smith, Jr. and Mary H. Murguia, Circuit Judges, and Eduardo C. Robreno,[*] District Judge.
Opinion by Judge Robreno
The panel reversed the district court’s decision affirming the bankruptcy court’s summary judgment in favor of a condominium association, which sought in an adversary proceeding to determine the dischargeability of a debtor’s personal obligation to pay condominium association assessments that accrued between the date the debtor filed her Chapter 13 bankruptcy petition and the date the condominium unit was foreclosed upon.
Agreeing with the reasoning of the Seventh Circuit in a Chapter 7 case, the panel held that condominium association assessments that become due after a debtor has filed for bankruptcy under Chapter 13 are dischargeable under 11 U.S.C. § 1328(a). The panel concluded that the debt arose prepetition and was not among exceptions listed in § 1328(a). The panel held that the Takings Clause was not implicated because the condominium association retained its in rem interest. The panel also concluded that equitable arguments did not override the express provisions of the Bankruptcy Code.
ROBRENO, District Judge.
Appellant Penny Goudelock appeals the district court’s affirmance of the bankruptcy court’s grant of summary judgment in favor of appellee, Sixty-01 Association of Apartment Owners (“Sixty-01”). The issue is whether condominium association (“CA”) assessments that become due after a debtor has filed for bankruptcy under Chapter 13 of the Bankruptcy Code are discharged upon confirmation of the plan. We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1). We conclude that such assessments are dischargeable under 11 U.S.C. § 1328(a) and, accordingly, reverse and remand.
The facts are not in dispute. Goudelock purchased a condominium unit in Redmond, Washington in 2001. Her deed was subject to a declaration of covenants and restrictions (the “Declaration”) that was recorded against the property in 1978. The Declaration provides that Sixty-01, a CA, may charge property owners assessments for monthly fees and for maintenance, repairs, and capital improvements.
The Declaration grants Sixty-01 two methods for collecting unpaid assessments. It provides that all unpaid assessments: (1) constitute a lien on the condominium unit, enforceable through foreclosure; and (2) create a personal obligation through which Sixty-01 can bring suit for damages against the owner of the condominium unit.
Goudelock stopped paying the CA assessments in 2009 and Sixty-01 sought to enforce its lien by initiating foreclosure proceedings in state court. Goudelock moved out of her condominium unit and, in March of 2011, filed for bankruptcy under Chapter 13. As part of her Chapter 13 plan, Goudelock surrendered the condominium unit. Sixty-01 filed a proof of claim attesting to $18,780.39 in unpaid CA assessments and noted that they continued to accrue at a monthly rate of $388.46. Before the plan was confirmed by the bankruptcy court, Sixty-01 canceled the foreclosure sale because the mortgage lender paid the outstanding assessments. The condominium unit sat unoccupied until February 26, 2015, when the mortgage lender foreclosed on it. On July 24, 2015, Goudelock completed her plan obligations and received a discharge pursuant to 11 U.S.C. § 1328(a).
Meanwhile, in April of 2015, Sixty-01 had brought suit in the United States Bankruptcy Court for the Western District of Washington to determine the dischargeability of Goudelock’s personal obligation to pay the post-petition CA assessments that had accrued between March 2011 (when Goudelock filed her Chapter 13 petition) and February 2015 (when the condominium unit was foreclosed upon). The bankruptcy court granted summary judgment in Sixty-01’s favor, concluding that the post-petition CA assessments “were not dischargeable because they arose at the time of their assessment and were an incidence of legal ownership of the burdened property.” Goudelock v. Sixty-01 Ass’n of Apartment Owners, No. C15-1413-MJP, 2016 WL 1365942, at *1 (W.D. Wash. Apr. 6, 2016) (summarizing the bankruptcy court’s holding). The court rejected Goudelock’s argument that the personal obligation to pay CA assessments was a pre-petition debt under 11 U.S.C. § 1328(a) that arose when she initially purchased the condominium unit. Id.
Goudelock appealed, and the district court affirmed the bankruptcy court’s grant of summary judgment. Id. at 2. Goudelock then filed a timely appeal in this court.
“This court reviews de novo a district court’s decision on appeal from a bankruptcy court” as well as “[t]he bankruptcy court’s conclusions of law and interpretation of the Bankruptcy Code.” In re Greene, 583 F.3d 614, 618 (9th Cir. 2009).
No circuit court of appeals has addressed the dischargeability of CA assessments that have become due after the filing of a Chapter 13 petition. There are, however, two appellate decisions addressing the dischargeability of similar post-petition assessments under Chapter 7. Moreover, a number of lower courts have imported the teachings of these two appellate decisions under Chapter 7 to the dischargeability of post-petition association assessments under Chapter 13. The two appellate decisions (and their progeny) represent polar opposite positions and their applicability to Chapter 13 cases is the starting point of our analysis.
First, in Matter of Rosteck, 899 F.2d 694 (7th Cir. 1990), the Seventh Circuit Court of Appeals found that the obligation to pay CA assessments was an unmatured contingent debt under the Bankruptcy Code that arose prepetition (when the debtors purchased the property) and that merely became mature when the assessments became due post-petition. Id. at 696-97. As a result, the debt for future assessments was dischargeable, which the court held was “consistent with the Bankruptcy Code’s goal of providing debtors a fresh start.” Id. at 697.
A contrasting view was articulated in In re Rosenfeld, 23 F.3d 833 (4th Cir. 1994), wherein the Fourth Circuit Court of Appeals held that the obligation to pay cooperative association assessments ran with the land and arose each month from the debtor’s continued post-petition ownership of the property. Id. at 837. Thus, the court concluded that any assessments due and payable after the filing of the Chapter 7 petition were not dischargeable as they were not prepetition debts. Id. at 838.
Both lines of reasoning have been relied upon by lower courts in this circuit when considering the dischargeability of post-petition association assessments under Chapter 13, ultimately reaching competing results. Compare In re Coonfield, 517 B.R. 239, 243 (Bankr. E.D. Wash. 2014) (following Rosteck’s reasoning and concluding “that the claim against [the debtors] for association assessments arose pre-petition and includes obligations for ongoing assessments”), with In re Foster, 435 B.R. 650, 660-61 (B.A.P. 9th Cir. 2010) (applying Rosenfeld), and In re Batali, No. WW-14-1557-KiFJu, 2015 WL 7758330, at *8-9 (B.A.P. 9th Cir. 2015) (applying Rosenfeld and Foster).
We agree with the reasoning of Rosteck and conclude that its teachings in the Chapter 7 context are applicable to Chapter 13 cases. Sixty-01 obtained two state law remedies under the Declaration to address the failure to pay CA assessments: an in rem remedy of a lien and right of foreclosure; and an in personam remedy allowing it to bring suit against the property owner. While the in rem lien is not dischargeable under Chapter 13, the pre-petition in personam obligation is. It is Goudelock’s in personam obligation that ultimately is at issue in this case.
A Chapter 13 discharge is intended to be a “discharge of all debts,” barring a few enumerated exceptions. 11 U.S.C. § 1328(a). Bankruptcy proceedings are intended to grant debtors a “fresh start,” Grogan v. Garner, 498 U.S. 279, 286 (1991), and, as a result, the Bankruptcy Code “is to be construed liberally in favor of debtors,” In re Devers, 759 F.2d 751, 754 (9th Cir. 1985). Moreover, in that Chapter 13 is the preferred route for personal bankruptcy, “[a] discharge under Chapter 13 `is broader than the discharge received in any other chapter.'” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 268 (2010) (quoting 8 Collier on Bankruptcy ¶ 1328.01, p. 1328-5 (rev. 15th ed. 2008)).
The Bankruptcy Code defines “debt” as a “liability on a claim.” 11 U.S.C § 101(12). In turn, 11 U.S.C. § 101(5)(A) defines a “claim,” (and thus, a debt) as a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” This definition of a claim is very broad, encompassing all of a debtor’s obligations “no matter how remote or contingent.” In re SNTL Corp., 571 F.3d 826, 838 (9th Cir. 2009) (quoting In re Jensen, 995 F.2d 925, 929 (9th Cir. 1993)); see also, e.g., Rosteck, 899 F.2d at 696; In re Christian Life Ctr., 821 F.2d 1370, 1375 (9th Cir. 1987) (stating that Congress intended to provide “`the broadest possible definition’ of claims so that `all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case.'” (quoting S. Rep. No. 95-989, at 22 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787, 5808)).
Thus, the obligation to pay CA assessments is a debt since it creates a right to payment. See 11 U.S.C. § 101(5)(A). The fact that the future assessments may be a contingent and unmatured form of the debt does not alter this analysis. See, e.g., id.; SNTL Corp., 571 F.3d at 838.
Neither party disputes that only debts arising pre-petition may be discharged. Federal law determines when a claim arises under the Bankruptcy Code. SNTL Corp., 571 F.3d at 839. In the Ninth Circuit, courts use the “fair contemplation” test to determine when a claim arises. Id. This test provides that “a claim arises when a claimant can fairly or reasonably contemplate the claim’s existence even if a cause of action has not yet accrued under nonbankruptcy law.” Id. Sixty-01 does not contest seriously that Goudelock’s in personam obligation meets the fair contemplation test. Here, at the time of the purchase of the condominium unit, Sixty-01 fairly could have contemplated that the monthly CA assessments would continue to accrue based upon Goudelock’s continued ownership of the condominium unit. Thus, Goudelock’s in personam obligation to pay CA assessments arose prepetition when she purchased the condominium unit. See Rosteck, 899 F.2d at 696 (concluding that the debtors “had a debt for future condominium assessments when they filed their bankruptcy petition” in light of the pre-petition obligation in the declaration).
Before becoming due each month, the assessments, which are part of the pre-petition debt, are unmatured and are also contingent upon continued ownership of the property. Unmatured contingent debts are, however, dischargeable under Section 1328(a). 11 U.S.C. § 101(5)(A); see Coonfield, 517 B.R. at 242 (providing that a homeowners association “possesses its claim by virtue of [the debtors] acquiring title to the condominium and subsequent assessments are a consequence of, and mature from, the act that gave rise to such claim. Thus, absent the debtors’ pre-petition act of taking title, the Homeowners Association would not have a claim”).
In this case, Goudelock’s personal obligation to pay CA assessments was not the result of a separate, post-petition transaction but was created when she took title to the condominium unit. As a result, the debt for the assessments arose pre-petition and is dischargeable under Section 1328(a), unless the Bankruptcy Code provides an exception to discharge.
Subsections 1328(a)(1)-(4) enumerate the only exceptions to the broad discharge of debts under Section 1328(a). In addition, under 11 U.S.C. § 523(a)(16), postpetition association assessments are excepted from discharge for petitions under Sections 727 (Chapter 7), 1141 (Chapter 11), 1228(a) and (b) (Chapter 12), and Section 1328(b) (Chapter 13 cases where the debtor is discharged without completing her payments). Notably absent from the list of discharge exceptions in Section 1328(a) is a reference to Section 523(a)(16), the only provision which excepts post-petition association assessments from discharge. See n.5 supra.
Thus, it appears that Congress’ decision not to add postpetition association assessments to the exceptions listed in Section 1328(a) was purposeful. See Boudette v. Barnette, 923 F.2d 754, 756-57 (9th Cir. 1991) (describing the rule of statutory interpretation of expressio unius est exclusio alterius as creating “a presumption that when a statute designates certain persons, things, or manners of operation, all omissions should be understood as exclusions”); see also Pa. Dep’t of Pub. Welfare v. Davenport, 495 U.S. 552, 563 (1990) (“Congress secured a broader discharge for debtors under Chapter 13 than Chapter 7 by extending to Chapter 13 proceedings some, but not all, of § 523(a)’s exceptions to discharge.”), superseded by statute, Criminal Victims Protection Act of 1990, PL 101-581, § 3, 104 Stat. 2865; In re Riso, 978 F.2d 1151, 1154 (9th Cir. 1992) (“In order to effectuate the fresh start policy [of bankruptcy], exceptions to discharge should be strictly construed against an objecting creditor and in favor of the debtor.”).
Sixty-01 cautions against giving undue weight to “Congress’ silence” regarding its failure to include postpetition CA assessments as an exception to discharge under Section 1328(a), citing Foster. The court in Foster wondered whether the failure to include this exception was simply the result of a “statutory misstep.” 435 B.R. at 659. We reject this conjecture. This is not a case implicating a drafting error or a Congressional oversight. Rather, it is an instance where Congress confronted an issue of policy, and spoke by creating explicit exceptions to discharge in Section 1328(a) but did not include (as it did for other chapters) post-petition CA assessments. See Boudette, 923 F.2d at 756-57.
This very dilemma (whether Congress’ exclusion of a discharge exception was an oversight or purposeful) was addressed by the Supreme Court in Davenport. In that case, the Court concluded that because Congress had not explicitly included the Chapter 7 discharge exception for fines, penalties and forfeitures (Section 523(a)(7)) in Chapter 13, and given Congress’ broad definition of the term “debt,” as well as the fact that Chapter 13 afforded a broader discharge than Chapter 7, criminal restitution orders were dischargeable under Chapter 13. Davenport, 495 U.S. at 562-64. Congress disagreed with the Court’s decision and later overruled it by amending Section 1328(a) to specifically exclude criminal restitution from discharge. See PL 101-581, § 3, 104 Stat. 2865; 11 U.S.C. § 1328(a)(3). Davenport illustrates the proper interaction between Congress and the courts. As applied here, the Bankruptcy Code does not provide an exception to discharge under Section 1328(a) for post-petition association assessments (including CA assessments). If Congress concludes that such an exception is sound public policy, it may amend the Bankruptcy Code to provide for it as it did in response to Davenport.
The parties raise two additional arguments that warrant brief discussion.
First, Sixty-01 contends that, because it asserts that the personal obligation to pay CA assessments is a real property interest stemming from the Declaration, the Fifth Amendment’s Takings Clause prohibits the government from discharging the obligation. The Takings Clause provides that “private property [shall not] be taken for public use, without just compensation.” U.S. Const. amend. V. Sixty-01 argues just that—that the discharge of the postpetition CA assessments would amount to a taking of a substantial property right without just compensation.
This argument fails. In the bankruptcy context, the Supreme Court has distinguished between secured in rem debts and unsecured in personam debts: in personam debts are dischargeable while the creditor retains its in rem property interests. See Johnson v. Home State Bank, 501 U.S. 78, 82-84 (1991) (concluding that the debtor’s in personam obligation under a mortgage, but not the in rem obligation, was discharged pursuant to a Chapter 7 petition and that, in addition, the remaining in rem property interest was a “claim” under the broad definition in the Bankruptcy Code subject to inclusion in a subsequent Chapter 13 reorganization plan); id. at 84 n.5 (“[A] discharge under the Code extinguishes the debtor’s personal liability on his creditor’s claims.”); see also In re Anderson, 378 B.R. 296, 298 (Bankr. W.D. Wash. 2007) (“A bankruptcy discharge extinguishes only in personam claims against the debtor(s), but generally has no effect on an in rem claim against the debtor’s property.” (quoting Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92 (4th Cir. 1995))). Because Sixty-01 retains its in rem interest (even after the discharge of Goudelock’s in personam debt), the Takings Cause is not implicated.
Second, both parties raise equitable arguments regarding why post-petition CA assessments should or should not be discharged under certain circumstances. Many of these arguments turn on whether the debtor relinquishes his or her property or remains in possession of it post-petition. However, there is no legal basis for distinguishing between whether Goudelock retained possession of her condominium unit post-petition and, thus, continued to enjoy the benefit of occupancy at no cost, or, instead, surrendered it at some point. Sixty-01 points out that bankruptcy courts are “essentially courts of equity,” Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 57 (1989) (quoting Katchen v. Landy, 382 U.S. 323, 327 (1966)), and argues that affording Goudelock what would essentially be “free rent” for four years is inequitable and unjust. However, notions of equity and fairness do not override the express provisions of the Bankruptcy Code. Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988) (“[W]hatever equitable powers remain in the bankruptcy courts must and can only be exercised within the confines of the Bankruptcy Code.”). The legislative branch, not the courts, is the appropriate place to balance conflicting policy interests and adjust the Bankruptcy Code accordingly if it is warranted. See Davenport, 495 U.S. at 562-63 (recognizing that Congress makes “policy choice[s] regarding the dischargeability” of debts).
For the foregoing reasons, we reverse the district court’s affirmance of the bankruptcy court’s grant of summary judgment in favor of Sixty-01 and remand for further proceedings consistent with this disposition.
[*] The Honorable Eduardo C. Robreno, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.
[**] This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
 This is consistent with the applicable Washington law. In Washington, condominiums formed before 1990 are subject to the Horizontal Property Regimes Act (“HPRA”), codified at RCW § 64.32. Condominiums formed after July 1, 1990, are subject to the Washington Condominium Act (“WCA”), codified at RCW § 64.34, which was modeled after the Uniform Condominium Act. However, certain provisions of the newer WCA apply to pre-1990 condominiums. As relevant here, the WCA specifies that its provision governing a lien for assessments, RCW § 64.34.364, applies to pre-1990 condominiums “with respect to events and circumstances occurring after July 1, 1990,” though it does not “invalidate or supersede existing, inconsistent provisions of the declaration.” RCW § 64.34.010. Because Goudelock acquired her condominium in 2001, all events relating thereto necessarily occurred after July 1, 1990. Thus, to the extent that it is consistent with the Declaration, RCW § 64.34 defines the contours of the lien arising from Goudelock’s unpaid assessments. Here, the Declaration and the WCA are consistent. Like the Declaration, the WCA establishes that an association “has a lien on a unit for any unpaid assessments levied against a unit from the time the assessment is due.” RCW § 64.34.364(1). The WCA also provides that “[i]n addition to constituting a lien on the unit, each assessment shall be the joint and several obligation of the owner or owners of the unit to which the same are assessed as of the time the assessment is due.” RCW § 64.34.364(12). An association may bring a “[s]uit to recover a personal judgment for any delinquent assessment. . . in any court of competent jurisdiction without foreclosing or waiving the lien securing such sums.” Id.
 As noted above, Rosteck and Rosenfeld were both Chapter 7 cases. In 1994 Congress embraced Rosenfeld and rejected Rosteck by providing that post-petition assessments are not dischargeable under Chapter 7 per 11 U.S.C. § 523(a)(16). While Congress applied this exception from discharge to Chapter 7, 11, and 12 petitions, as well as Chapter 13 petitions where a debtor is discharged without completing her payments (under 11 U.S.C. § 1328(b)), Congress notably omitted the exception for Chapter 13 petitions where a discharge follows full payment under the plan (under 11 U.S.C. § 1328(a))—which is the posture of this case.
 Section 101(5)(B) includes an additional definition of “claim” regarding the right to an equitable remedy. 11 U.S.C. §101(5)(B). However, that definition is not relevant here.
 The exceptions to Section 1328(a) discharge are debts regarding: (1) curing defaults on unsecured claims or secured claims which require payments due after the last payment under the plan is due (under 11 U.S.C. § 1322(b)(5)); (2) required taxes for which the debtor is liable (under 11 U.S.C. § 507(a)(8)(C)); (3) taxes owed under unfiled or late tax returns (under 11 U.S.C. § 523(a)(1)(B)); (4) taxes from fraudulent tax returns or tax evasion (under 11 U.S.C. § 523(a)(1)(C)); (5) valuables obtained by fraud or false pretenses (under 11 U.S.C. § 523(a)(2)); (6) unscheduled debts (under 11 U.S.C. § 523(a)(3)); (7) fraud or defalcation while acting as a fiduciary, embezzlement, or larceny (under 11 U.S.C. § 523(a)(4)); (8) domestic support obligations (under 11 U.S.C. § 523(a)(5)); (9) student loans (under 11 U.S.C. § 523(a)(8)); (10) obligations for personal injuries resulting from a DUI (under 11 U.S.C. § 523(a)(9)); (11) restitution and fines arising from a criminal conviction; and (12) damages awarded in personal injury actions resulting from willful or malicious injury. The parties agree that none of these exceptions are implicated here.
 As stated, Congress added this exception to resolve the split between the Fourth and Seventh Circuits in Rosenfeld, 23 F.3d 833, and Rosteck, 899 F.2d 694 regarding post-petition association assessments in Chapter 7 cases. Congress recognized in the legislative history of Section 523(a)(16) that “[e]xcept to the extent that the debt is nondischargeable under [Section 523(a)], obligations to pay such fees [(post-petition assessments)] would be dischargeable.” 140 Cong. Rec. H10752-01, H10770 § 309 (citing Rosteck, 899 F.2d 694).
Under Civil Code §5145, a homeowner may be awarded attorneys’ fees and costs if he or she is the prevailing party at the end of litigation; a homeowner will not be awarded interim attorneys’ fees and costs if he or she was successful in obtaining a preliminary injunction. Conversely, §5145 provides that a community association may be awarded its attorneys’ fees and costs at the end of the litigation if it was the prevailing party and only if the trial court finds the action to be frivolous or brought without any reasonable basis.
19 Cal.App.5th 923 (2018)
Court of Appeals of California, First District, Division One.
January 24, 2018.
Appeal from the San Francisco City and County, No. CGC-14-541320, Superior Court, Hon. Charles F. Haines.
Millstein & Associates, David J. Millstein, Gerald Richelson; Moskovitz Appellate Team, Myron Moskovitz, William D. Stein and Donald Horvath for Plaintiff and Appellant.
Wendel, Rosen, Black & Dean, Albert Flor, Jr., Charles A. Hansen and Jason M. Horst for Defendant and Respondent.
BANKE, J. —
After members of a condominium homeowners association (HOA) voted by a very substantial majority to eliminate the practice of cumulative voting, plaintiff Kazuko K. Artus, who owns three units in the Gramercy Towers condominium development, sued the HOA. Artus claimed, among other things, that aspects of the election violated provisions of the Davis-Stirling Common Interest Development Act (Davis-Stirling Act; Civ. Code, § 4000 et seq.). She obtained preliminary injunctive relief on the basis of two of her statutory claims, staving off a board election under the new, direct vote rule. After a three-day bench trial, however, the trial court ruled against her on the merits. In the meantime, the HOA held a second election on the issue of cumulative voting, the outcome of which was the same as the first — approval of direct, rather than cumulative, voting by a very substantial margin. Finding that the second election addressed “whatever valid objections [Artus] may have had to the first” and the HOA had made good faith efforts to comply with the law, the court denied permanent injunctive and declaratory relief on that basis, as well.
Artus challenges the trial court’s ultimate rejection of her two statutory claims on which she obtained preliminary injunctive relief and claims she is entitled, at the very least, to declaratory relief. However, we need not, and do not, reach the merits of her statutory claims, as we conclude the trial court did not, in any event, err in denying declaratory relief.
We additionally reject Artus’s claim that, regardless of the ultimate out-come, she is entitled to statutory fees and costs under the reasoning of Monterossa v. Superior Court (2015) 237 Cal.App.4th 747 [188 Cal.Rptr.3d 453] (Monterossa), because she obtained preliminary injunctive relief. As we explain, unlike the California Homeowner Bill of Rights statute at issue in Monterossa (§ 2924.12), neither the language of the Davis-Stirling Act, nor the legislative history of the fee provision Artus invokes, evidences any intent 927*927 on the part of the Legislature to depart from well-established principles that fees and costs are ordinarily not granted for interim success, and that the prevailing party is determined, and fees and costs awarded, at the conclusion of the litigation.
We therefore affirm the judgment and the order denying statutory fees and costs.
Gramercy Towers HOA manages and maintains a 260-unit condominium property in San Francisco and, as such, is subject to the provisions of the Davis-Stirling Act. Artus, who has both a Ph.D. in economics and a Juris Doctorate, owns three condominiums in the development.
The HOA is governed by a seven-member board. Prior to the instant litigation, the HOA’s bylaws and election rules provided for cumulative voting, whereby a member “would receive a number of votes equal to the total number of directors to be elected and a member could, for example, choose to cast all her ballots for one candidate.” While the practice of cumulative voting was in place, Artus was elected to the board three times, in 2007, 2008, and 2013.
The HOA first adopted election rules in 2007. “In general, there [are] two types of [HOA] elections: to choose directors or to decide issues. Where the election involved an issue to be decided[,] the Board always advised the membership of the Board’s position on the question. The election rules specify that any member may ask to submit a written statement setting forth his or her position on any election.” As a board member, Artus “personally participated in drafting these election rules … [and] therefore had intimate knowledge of both the rules and the custom and practice of the organization in how the rules were implemented for elections.” (Italics & boldface omitted.)
Eventually, a number of board members wanted to amend the HOA bylaws and election rules to eliminate cumulative voting. Accordingly, in May 2014, the board adopted a resolution proposing elimination of the practice by a six-to-one vote, Artus casting the lone dissenting vote. The board scheduled an election on the issue for July 25, 2014.
The board notified the HOA membership of the proposed change and the date of the election. It also sent the membership, in addition to a ballot, a 928*928 two-page, unsigned letter “`solicit[ing] [member’s] support for'” the proposed voting change and stating the board’s reasons for proposing it. The letter posited six questions: (1) What is cumulative voting? What is direct voting? (2) Why does Gramercy Towers have cumulative voting now? (3) Why should we eliminate cumulative voting? (4) What do other authorities say? (5) What are the disadvantages of cumulative voting? and (6) What are the most compelling reasons for straight voting? The answers were all supportive of direct, rather than cumulative, voting. Among the points made were that the cumulative voting rule originated with the developer and gave the developer a weighted advantage in elections, cumulative voting enables minority interests to obtain disproportionate power over HOA matters, the author of the Davis-Stirling Act was on record as saying cumulative voting provides no significant benefit other than to the developer, and direct voting is more democratic and is more easily administered. The letter closed by stating: “Remember: Vote `Yes’ on the upcoming special election. Amend our Bylaws and give Gramercy Towers the up-to-date election procedures it deserves.”
The board additionally posted notices in condominium elevators urging members to vote. These notices asked members to “Vote,” and stated: “We need quorum by July 25th.”
The only complaint Artus voiced at the time was in an e-mail to the board president calling attention to an issue of whether staff materials of the HOA were used in relation to the posted notice and that members who opposed the proposed change were not given an opportunity to post their own messages on the elevator boards.
The July election proceeded, and a large majority of voting HOA members approved the elimination of cumulative voting — 136 units in favor and 28 units opposed.
A month later, Artus filed the instant action. She made numerous allegations, including that the HOA had adopted a new rule without consideration of member comments and without giving all members an opportunity to be heard, appointed an interested election inspector, violated member inspection rights, increased assessments excessively and without the required reserve study and budgetary disclosures, and failed to provide accurate disclosure of material aspects of HOA finances. She also sought preliminary injunctive relief to prevent immediate implementation of the new direct voting rule so it would not apply to the upcoming board election.
The trial court granted preliminary relief, ruling Artus had made a sufficient showing that the HOA had violated the Davis-Stirling Act by (1) failing 929*929 to provide equal access to HOA communications for those with opposing views (§ 5105, subd. (a)(1)), and (2) using association funds for “campaign purposes” in enclosing the two-page letter with the ballot (§ 5135, subd. (a)), and that the balance of harm weighed in her favor given the upcoming board election.
Following the issuance of the preliminary injunction, the HOA held a second election on cumulative voting in February 2015. Artus raised no objections to this election. The result was the same as the first — approval of the change by a wide margin, 119 votes in favor and 15 against. The following month, the deferred HOA board elections took place. Artus was not reelected to the board.
In June, Artus proceeded to trial on her claims for permanent injunctive and declaratory relief. Following a three-day bench trial, the trial court issued an eight-page statement of decision. As to the two statutory claims on which preliminary injunctive relief had been granted, the court ruled as follows:
Violation of section 5105, subdivision (a)(1). The court found, in connection with the July 2014 election, that Artus never asked for equal access to “association media” to present an opposing view. She did, however, make such a request in connection with the February 2015 election, which the HOA accommodated. In short, even assuming the equal-access provisions of section 5105, subdivision (a)(1) applied, the court found Artus failed to prove that the HOA, in fact, violated that statute.
930*930 Violation of section 5135, subdivision (a). The court found that the board’s two-page letter merely explained its reasons for proposing the change in voting and, thus, the board had not violated the prohibition against the use of HOA funds for “campaign purposes.” The court, in other words, determined that the board’s letter did not come within the statutory meaning of “campaign purposes.”
The trial court went on to deny permanent injunctive and declaratory relief, recounting that the board had conducted a second election, the results of which were the same as the first. “The second election having addressed whatever valid objections Plaintiff may have had to the first there accordingly is no need for a permanent injunction…. If there was any violation of law in the conduct of the first election that has been completely remedied by the second election which was properly conducted and which invalidated the results of the first…. [¶] Declaratory relief acts prospectively. For the same reasons as stated above the petition for declaratory relief is denied.” The court further found the HOA had “made good faith efforts to comply with all procedures required by law to remedy any deficiencies in the first election” and there was “absolutely no need or basis for appointment of a receiver.”
The court additionally ruled the HOA was the “prevailing party” and denied Artus statutory fees and costs.
Artus has assumed that if she proved either of her claims under the Davis-Stirling Act, then she was entitled to declaratory relief. As we explain, that is not the case — declaratory relief is an equitable remedy and need not be awarded if the circumstances do not warrant.
(1) The propriety of a trial court’s denial of declaratory relief involves a two-prong inquiry. The first prong concerns whether “a probable future dispute over legal rights between parties is sufficiently ripe to represent an `actual controversy’ within the meaning of the statute authorizing declaratory relief (Code Civ. Proc., § 1060), as opposed to purely hypothetical concerns.” (Steinberg v. Chiang (2014) 223 Cal.App.4th 338, 343 [167 Cal.Rptr.3d 249].) This is a “question of law that we review de novo on appeal.” (Ibid.; see In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 804 [192 Cal.Rptr.3d 881].) The second prong concerns “[w]hether such [an] actual controversy merits declaratory relief as necessary and proper (Code Civ. Proc., § 1061).” 931*931 (Steinberg, at p. 343; see In re Tobacco Cases II, at p. 804.) This is a matter within the trial court’s sound discretion “except in the extreme circumstances where relief is `entirely appropriate’ such that a trial court would abuse its discretion in denying relief … or where relief would never be necessary or proper.” (Steinberg, at p. 343.)
In the proceedings below, neither the parties nor the trial court distinguished between these two prongs of the declaratory relief analysis. The HOA simply asserted the second election made any relief “moot” (although it correctly characterized the issue as one of mootness rather than ripeness, given that at the outset of the litigation, there was, indeed, an “actual controversy” that was ripe for judicial determination (see Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1572-1576 [120 Cal.Rptr.3d 665] (Wilson) [comparing ripeness and mootness])). The trial court, in turn, cited no legal authority supporting its denial of declaratory relief, stating only: “Declaratory relief acts prospectively. For the same reasons as stated above [in connection with denying injunctive relief] the petition for declaratory relief is denied.” In the referenced denial of injunctive relief, the trial court cited to Connerly v. Schwarzenegger (2007) 146 Cal.App.4th 739, 748-750 [53 Cal.Rptr.3d 203]. Connerly dealt with whether the plaintiff had adequately alleged a “case or controversy,” which included whether he had alleged a particularized injury supporting injunctive relief and whether he had alleged an “actual controversy” supporting declaratory relief. (See id. at pp. 746-750.) Thus, the trial court’s citation to Connerly in connection with its denial of injunctive relief, at least suggests the court based its denial of declaratory relief on a “prong one” determination.
On appeal, Artus presumes the trial court made a “prong one” determination that no “actual controversy” existed and, therefore, we are presented with “a legal issue which this Court reviews de novo.” The HOA, in turn, provides an unhelpful potpourri of standards of review at the outset of its legal argument in its respondent’s brief, while later in its brief contends the trial court did not “abuse its discretion” in “finding” Artus’s declaratory relief and injunction claims “moot.”
Even assuming, as Artus has, that the trial court based its denial of declaratory relief on a “prong one” determination that there was no longer an “actual controversy,” we see no legal error given the facts of this case. The cases she cites in support of her assertion that the trial court erred as a matter of law dealt with significantly different circumstances.
(2) In Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 881 [70 Cal.Rptr.3d 474] (Environmental Defense), an environmental group claimed the county’s “`streamlined zoning 932*932 process'” violated state planning and zoning laws. The county appealed from an adverse judgment that found the case “ripe” and granted declaratory relief. (Id. at pp. 883-884.) On appeal, the county urged there was no “`actual controversy'” and the trial court had “`abused its discretion'” in granting declaratory relief — in other words, the county conflated the two prongs of the declaratory relief analysis. (Id. at p. 884.) As the Court of Appeal explained, the initial inquiry as to whether there is an “`actual controversy'” is a species of “ripeness” inquiry, presenting a question of law the appellate court reviews de novo. (Id. at p. 885 [“For a probable future controversy to constitute an `actual controversy,’ … the probable future controversy must be ripe.”].) “Once an `actual controversy’ exists, it is within the trial court’s discretion to grant or deny declaratory relief, and a reviewing court will not disturb that exercise of discretion absent abuse.” (Ibid.) “Properly framed, then, the initial question” the Court of Appeal had to decide was “whether as a matter of law there was an `actual controversy’ allowing the trial court to exercise its discretion to grant declaratory relief.” (Ibid.)
The appellate court concluded the case was ripe given the county’s response to direct inquiry by the trial court as to whether it intended to continue with its streamlined zoning process, and the trial court’s finding that “the county’s response meant it would continue with streamlined zoning, as the county believed that such zoning was consistent with state law.” (Environmental Defense, supra, 158 Cal.App.4th at p. 886.) “Under these circumstances,” said the Court of Appeal, “`there [i]s a reasonable expectation that the wrong, if any, will be repeated …,’ and the controversy does not present only an `academic question.’ [Citation.] Declaratory relief was therefore appropriate.” (Id. at p. 887.)
Here, while the HOA has disputed Artus’s claims about the first election, it has not, in contrast with the county’s adoption of a streamlined zoning process in Environmental Defense, adopted any bylaws or rules that are allegedly unlawful. No current provision of the HOA’s bylaws or rules, for example, sets forth a procedure allegedly in violation of the Davis-Stirling Act. Nor did the HOA tell the trial court, in contrast to what the county told the trial court in Environmental Defense, that it was going to continue operating under any allegedly unlawful rule or practice. On the contrary, the trial court here found “[t]he evidence demonstrates [the HOA] has made good faith efforts to comply with all procedures required by law to remedy any deficiencies in the first election, and in fact, … conducted a lawful second election….” The trial court also found there was “absolutely no need or basis” for appointing a receiver to monitor the HOA’s future conduct.
In California Alliance for Utility etc. Education v. City of San Diego (1997) 56 Cal.App.4th 1024 [65 Cal.Rptr.2d 833] (California Alliance), a citizen 933*933 group alleged “four continuing violations” of the Ralph M. Brown Act (Brown Act; Gov. Code, § 54950 et seq.) by the city in connection with undergrounding power lines under a 50-year franchise agreement with a local power company. (California Alliance, at pp. 1026, 1028.) Specifically, the group alleged the city had “adopted a practice” of violating the act by holding closed meetings on the pretext of pending litigation, failing to give notice of or reasons for the closed sessions, holding improper discussions during closed sessions, and posting misleading agendas. (Id. at p. 1028.) The city successfully demurred on the ground any claims for future violations were not “ripe.” (Ibid.) The Court of Appeal reversed, pointing out that the citizens group alleged the city would continue its allegedly unlawful conduct and observing that the city’s insistence it had not violated the Brown Act confirmed there would continue to be a controversy. (California Alliance, at p. 1030.) “Thus there can be no serious dispute that a controversy between the parties exists over [the] city’s past compliance with the Brown Act and the [city’s] charter. On that basis alone plaintiffs are entitled to declaratory relief resolving the controversy.” (Ibid.; see id. at p. 1031 [“the allegations of the complaint also strongly suggest that in the absence of declaratory relief plaintiffs will have some difficulty in preventing future violations”].) While “not controlling,” the appellate court also pointed out the controversy was one of public importance. (Id. at p. 1030.) “In the most general sense the controversy is over a long-term contract with the provider of a vital public service and involves literally hundreds of millions of dollars in potential infrastructure improvements over the next 23 years.” (Ibid.) Resolution of the Brown Act issues “will protect not only the public’s ability to monitor the activities of its public officials but it will also clarify for city officials the manner in which they may proceed in protecting [the] city’s legitimate interests under the franchise agreement.” (California Alliance, at pp. 1030-1031.)
The circumstances of the instant case are not comparable. Artus did not even allege “continuing violations” of the Davis-Stirling Act, let alone prove any such conduct. On the contrary, she challenged a single HOA election. And while she may have had a variety of complaints about that one election, she never claimed the HOA habitually violated the Davis-Stirling Act, in contrast to the citizens group’s allegations in California Alliance that the city chronically violated the Brown Act. Further, after a three-day trial, the trial court here expressly found the HOA had acted in good faith to comply with the law and there was “absolutely no need or basis for appointment of a receiver” to monitor the HOA’s future conduct. California Alliance, in contrast, involved a dismissal following a demurrer. Accordingly, the appellate court in that case was required to credit the citizen group’s allegations 934*934 that the city would continue to violate the Brown Act, an allegation underscored by the city’s insistence it was not violating the act and would continue as it had. (California Alliance, supra, 56 Cal.App.4th at p. 1030.)
In short, given the record in this case, including the trial court’s express findings, Artus cannot rely on generic statements in California Alliance, for example, that ripeness does not require allegations and proof of a pattern or practice of past violations, or that a dispute over a public entity’s past compliance with a statutory scheme is sufficient to establish an actual controversy. (California Alliance, supra, 56 Cal.App.4th at p. 1029.) If either of those propositions, alone and in a vacuum, and without regard for the context of the case at hand, were enough to meet the “actual controversy” requirement, the courts would be saddled with the task of resolving historic disputes that have become matters of only academic interest. The courts, however, are not tasked with that obligation. (See, e.g., In re Tobacco Cases II, supra, 240 Cal.App.4th at p. 805 [the actual, present controversy requirement for declaratory relief “`would be illusory'” if a plaintiff could meet it “`simply by pointing to the very lawsuit in which he or she seeks [declaratory] relief'”; the requirement “`cannot be met in such a bootstrapping manner'”].)
(3) Artus’s assertion that she is entitled to declaratory relief to ensure there is no violation of the Davis-Stirling Act in connection with future HOA elections does not satisfy the “actual controversy” requirement. “`”`The fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject.'”‘” (Linda Vista Village San Diego Homeowners Assn., Inc. v. Tecolote Investors, LLC (2015) 234 Cal.App.4th 166, 181 [183 Cal.Rptr.3d 521], italics added; see Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 367 [119 Cal.Rptr.3d 346] [“`There is unanimity of authority to the effect that the declaratory procedure operates prospectively, and not merely for the redress of past wrongs.'”].) Other than pointing to the fact the HOA has defended itself in this one lawsuit, she has not pointed to any evidence that it is probable the HOA will violate the Davis-Stirling Act in conducting future elections. On the contrary, the trial court expressly found that in holding the second election, the HOA corrected any perceived deficiencies Artus observed in connection with the first, and that there was “absolutely no need or basis for appointment of a receiver” to ensure the HOA complied with the law. Accordingly, Artus’s suggestion future elections could violate the Davis-Stirling Act is pure speculation, which is insufficient to support declaratory relief. (See Wilson, supra, 191 Cal.App.4th at p. 1582 [“`The “actual controversy” language in Code of Civil Procedure section 1060 encompasses a probable future controversy…. [Citation.]’ [Citation.] It does not embrace controversies that are `conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.'”].)
935*935 In sum, even applying a de novo standard in reviewing the trial court’s denial of declaratory relief, we conclude the court did not err in determining there is no basis for such relief on this record.
Even if she does not succeed in obtaining a final judgment in her favor, Artus maintains she is entitled to interim attorney fees and costs under section 5145 because she obtained preliminary injunctive relief, relying on Monterossa, supra, 237 Cal.App.4th 747.
Monterossa involved the California Homeowner Bill of Rights, and specifically its prohibition against the practice of “`dual tracking,'” whereby a lender ostensibly works with a defaulting homeowner on a loan modification, but at the same time pursues the foreclosure process. (Monterossa, supra, 237 Cal.App.4th at pp. 749-750.) The plaintiffs, claiming their lender was involved in the practice, obtained preliminary injunctive relief halting the foreclosure process and immediately sought fees and costs under section 2924.12, subdivision (h) (former subd. (i)). (Monterossa, at p. 750.) The trial court denied their interim request. The Court of Appeal granted writ relief. (Id. at pp. 750-751.)
Section 2924.12 authorizes a borrower to “bring an action for injunctive relief to enjoin a material violation of” several statutory provisions, including those that prohibit dual tracking. (§ 2924.12, subd. (a)(1).) It further specifies that “[a]ny injunction shall remain in place and any trustee’s sale shall be enjoined until the court determines that the mortgage servicer, mortgagee … or authorized agent has corrected and remedied the violation … giving rise to the action for injunctive relief. An enjoined entity may move to dissolve an injunction based on a showing that the material violation has been corrected and remedied.” (§ 2924.12, subd. (a)(2).) If a violation remains unremedied 936*936 on the recording of a trustee’s deed upon sale, the lender or its agents are liable for damages and, if the violation is the result of intentional or reckless conduct, for civil penalties. (§ 2924.12, subd. (b).) However, the lender or its agent “shall not be liable for any violation that it has corrected and remedied” prior to the recording of the trustee’s deed upon sale. (§ 2924.12, subd. (c).) “A court may award a prevailing borrower reasonable attorney’s fees and costs in an action brought pursuant to this section. A borrower shall be deemed to have prevailed for purposes of this subdivision if the borrower obtained injunctive relief or was awarded damages pursuant to this section.” (§ 2924.12, subd. (h).)
As the Court of Appeal observed, this statute is focused on putting an immediate stop to specific unfair practices by lenders and plainly authorizes interim injunctive relief. (Monterossa, supra, 237 Cal.App.4th at pp. 753-754.) For example, the statute provides that an injunction “shall remain” in place “until” the court determines the lender has ceased violating the statute and that a lender “may move to dissolve” an injunction on showing the violation has ceased. (§ 2924.12, subd. (a)(2).) The statute further specifies that the lender is not liable for “any” violation that “it has corrected and remedied” prior to the recording of the trustee’s deed upon sale. (§ 2924.12, subd. (c).) In short, the Legislature has expressly authorized borrowers to seek preliminary injunctive relief, on the one hand, and strongly encouraged lenders to immediately comply with such relief, on the other. The prompt compliance the Legislature clearly desires will, of course, necessarily moot the need for permanent relief, so it is implicit, if not explicit, that the one-way fee provision designed to encourage borrowers to seek prompt relief, must pertain to preliminary, as well as to permanent, injunctive relief. (Monterossa, at pp. 753-755.)
Moreover, said the appellate court, what the plain language of section 2924.12, itself, reflects is consistent with the fundamental purpose of the statutory scheme, which is “`to ensure that, as part of the nonjudicial foreclosure process, borrowers … have a meaningful opportunity to obtain, available loss mitigation options, if any, … such as loan modifications or other alternatives to foreclosure.'” (Monterossa, supra, 237 Cal.App.4th at p. 755, quoting § 2923.4, subd. (a).) Keeping in mind that the nonjudicial foreclosure process is intended to be relatively expeditious (see Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1154 [121 Cal.Rptr.3d 819]), the importance of preliminary injunctive relief to ensure that a borrower is accorded the rights secured by the statute “as part of the nonjudicial foreclosure process” is self-evident (§ 2923.4, subd. (a), italics added; see Monterossa, at p. 755).
937*937 Finally, the appellate court concluded the legislative history of section 2924.12 “unequivocally” demonstrated that the Legislature intended to authorize interim fee and cost awards when a borrower obtains preliminary injunctive relief. (Monterossa, supra, 237 Cal.App.4th at p. 755.) For example, the history described exactly the considerations a trial court must weigh in deciding whether or not to issue a preliminary injunction, namely the likelihood of success of the merits and the evidence of harm if preliminary relief is not granted. (Id. at pp. 755-756.) “Thus,” said the court, “the Legislature understood that the intent of the statutory scheme was to permit a trial court to award attorney fees and costs to a borrower who prevails in obtaining a preliminary injunction.” (Id. at p. 756.)
(4) The Monterossa court acknowledged the general rule that fees and costs are not authorized for only interim success, but are awarded at the conclusion of the litigation, when the trial court can evaluate the parties’ relative degree of success and declare one or the other, or neither, as having prevailed in the lawsuit. (Monterossa, supra, 237 Cal.App.4th at p. 756; see, e.g., DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 977 [216 Cal.Rptr.3d 109, 391 P.3d 1181]; Bell v. Farmers Ins. Exchange (2001) 87 Cal.App.4th 805, 833 [105 Cal.Rptr.2d 59]; Liu v. Moore (1999) 69 Cal.App.4th 745, 754-755 [81 Cal.Rptr.2d 807].) However, said the court, the Legislature has the power to authorize interim fee and cost awards, and has clearly done so in section 2924.12. (Monterossa, at p. 756.)
Artus maintains the “same reasoning” employed in Monterossa should apply here because the Davis-Stirling Act, and specifically section 5145, expressly authorizes injunctive relief. As we explain, section 5145 is part of an entirely different statutory scheme, its language differs markedly from that of section 2924.12, and its legislative history does not suggest, let alone “unequivocally” demonstrate, that the Legislature intended to supplant the general rule that the prevailing party is to be determined, and fees and costs are to be awarded, at the conclusion of a case.
Section 5145 is one of a dozen statutory fee provisions sprinkled throughout the Davis-Stirling Act. (§§ 4225, subd. (d) [action under ch. 3, art. 1 to remove unlawful restrictive covenants], 4540 [action under ch. 4, art. 2 for violation of statutory provisions concerning transfer disclosures], 4605, subd. (b) [action under ch. 4, art. 4 for violation of restrictions on grants of exclusive use of common areas], 4705, subd. (c) [action under ch. 5, art. 1 for violation of right to display flag], 4725, subd. (d) [action under ch. 5, art. 1 for violation of restrictions on television antennas and satellite dishes], 4745, subd. (k) [action under ch. 5, art. 1 for violation of statutory provisions concerning electric vehicle charging stations], 4955, subd. (b) [action under ch. 6, art. 2, for violation of statutory provisions concerning board meetings 938*938 (HOA open meeting law)], 5145, subd. (b) [action under ch. 6, art. 4, for violation of statutory provisions concerning association elections], 5230, subd. (c) [action under ch. 6, art. 5, for violation of statutory provisions restricting member’s use of association records]; 5235, subd. (a) [action under ch. 6, art. 5, for violation of statutory provisions concerning members right to inspect association records], 5380, subd. (e) [action under ch. 6, art. 9, for violation of statutory provisions concerning trust fund account], 5975, subd. (c) [action under ch. 10, art. 4 to enforce governing documents].)
Some of these are traditional “prevailing party” fee statutes. Many are “one-sided” fee provisions or authorize fees to a prevailing defendant HOA only when the trial court finds the action was frivolous or brought without any reasonable basis. (E.g., §§ 4540 [“[i]n an action to enforce this liability, the prevailing party shall be awarded reasonable attorney’s fees”], 4605, subd. (b) [a “member who prevails in a civil action … shall be entitled to reasonable attorney’s fees and court costs”; a “prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation”], 4705, subd. (c) [“In any action to enforce this section, the prevailing party shall be awarded reasonable attorney’s fees and costs.”], 4725, subd. (d) [“In any action to enforce compliance with this section, the prevailing party shall be awarded reasonable attorney’s fees.”], 4745, subd. (k) [“In any action to enforce compliance with this section, the prevailing plaintiff shall be awarded reasonable attorney’s fees.”], 5235, subds. (a) & (c) [in action to enforce member’s right to inspect and copy association records, if court finds association unreasonably withheld records, the court “shall award the member reasonable costs and expenses, including reasonable attorney’s fees”; “prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation”], 5380, subd. (e) [“The prevailing party in an action to enforce this section shall be entitled to recover reasonable legal fees and court costs.”], 5975, subd. (c) [“In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”].)
Four of the Davis-Stirling Act fee statutes, in addition to section 5145, expressly authorize injunctive relief. Section 4225, subdivision (d), provides that “any person” can bring an action “for injunctive relief” to enforce the prohibition in subdivision (a) against unlawful restrictive covenants. In such action, “[t]he court may award attorney’s fees to the prevailing party.” (§ 4225, subd. (d).) Section 4605 mirrors much, but not all, of the language of section 5145 and provides that a “member of an association may bring a civil action” (for a violation of the provisions concerning the exclusive use of common areas (§ 4600)) “for declaratory or equitable relief … including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues.” (§ 4605, subd. (a).) It further provides that a “member who prevails in a civil action to enforce the 939*939 member’s rights pursuant to [s]ection 4600 shall be entitled to reasonable attorney’s fees and court costs.” (Id., subd. (b).) However, a “prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (Ibid.) Section 4955, subdivision (a), is virtually identical to section 4605 and, thus, also mirrors much of the language of section 5145. It provides that a “member of an association may bring a civil action” (for a violation of the provisions of the Davis-Stirling Act commonly known as the “Common Interest Development Open Meeting Act” (§ 4900)) “for declaratory or equitable relief … including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues.” (§ 4955, subd. (a).) It also further provides that a “member who prevails in a civil action to enforce the member’s rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs.” (Id., subd. (b).) However, a “prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (Ibid.) Finally, section 5230, one of the statutory provisions concerning the inspection of association records, provides that an HOA “may bring an action against any person who violates this article for injunctive relief and for actual damages to the association caused by the violation.” (§ 5230, subd. (a).) It further provides that an “association shall be entitled to recover reasonable costs and expenses, including reasonable attorney’s fees, in a successful action to enforce its rights under this article.” (Id., subd. (c).)
(5) What is immediately striking about all of the fee statutes in the Davis-Stirling Act, whether or not they expressly authorize injunctive relief, is that they implicitly, if not explicitly, permit such relief, as they provide for the enforcement of specific statutory provisions. Enforcement actions, almost by definition, can involve some form of injunctive relief. We cannot imagine that, in the absence of an explicit directive, the Legislature intended that the general rules governing the prevailing party determination and the timing of fee and cost awards, do not apply to this array of fee statutes merely because they allow for such equitable relief. In fact, for many years, the courts have utilized these general rules in reviewing statutory fee awards under the Davis-Stirling Act, without triggering any reaction by the Legislature. (E.g., Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 773-777 [201 Cal.Rptr.3d 268] [no abuse of discretion where trial court deemed plaintiff HOA the prevailing party under § 5975 in action to enforce governing documents]; Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1150, 1152-1156 [132 Cal.Rptr.3d 886] [trial court abused discretion in failing to award defendant HOA fees and costs under former § 1354 in action to enforce association documents where plaintiff member “prevailed on no level …, let alone on a `practical 940*940 level'”].) With these initial observations, we turn specifically to the language and history of section 5145.
As we have noted, the language of section 5145 is largely the same as that of two of the other Davis-Stirling Act fee statutes — sections 4605 (concerning the exclusive use of common areas) and 4955 (part of the HOA open meeting law). The California Law Revision Commission comments to all three sections state their language “continues” former section 1363.09, except for minor, nonsubstantive changes. (Cal. Law Revision Com. com., 12B pt. 2 West’s Ann. Civ. Code (2016 ed.) foll. §§ 4955, p. 69, 5145, p. 93; Cal. Law Revision Com. com., 12B pt. 1 West’s Ann. Civ. Code (2016 ed.) foll. § 4605, pp. 464-465.) We therefore turn our attention to former section 1363.09.
Former section 1363.09 was added to the Davis-Stirling Act in 2005 at the same time the election provisions were added. Entitled “Remedy,” former section 1363.09 did not apply just to the new election provisions, but to any “violation of this article,” namely then article 2 of chapter 4. (Italics added; see Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended June 28, 2005, § 5, p. 7.) At that time, former article 2 included not only the new election provisions (codified as former § 1363.03), but also the existing HOA open meeting provisions (codified as former § 1363.05), and another new statute added in 2005 concerning the exclusive use of common areas (codified as former § 1363.07). (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as introduced Jan. 14, 2005, § 1; Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended June 28, 2005, §§ 3, 4, pp. 5-6.) Thus, former section 1363.09 was, so to speak, an omnibus remedies provision for former chapter 4, article 2.
Former section 1363.09 provided in pertinent part that a “member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by an association …, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues.” (See Assem. Bill No. 1098 (2005-2006 Reg. Sess.) June 28, 2005, § 5, p. 7.) It further provided that a “member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs.” (Former § 1363.09, subd. (b).) A prevailing defendant association was not entitled to recover costs unless the court found the action “to be frivolous, unreasonable, or without foundation.” (Ibid.) The statute additionally specified that certain claims under the new election provisions, including those seeking access to association resources to express a point of view, could be brought in small claims court if the amount demanded did not exceed that court’s jurisdictional amount. (Id., subd. (c).)
941*941 Former section 1363.09 found its way into the Davis-Stirling Act through two complimentary pieces of legislation that moved in tandem through the Legislature — Senate Bill No. 61 (2005-2006 Reg. Sess.) and Assembly Bill No. 1098 (2005-2006 Reg. Sess.).
As introduced, Senate Bill No. 61 (2005-2006 Reg. Sess.) proposed adding a new statute, former section 1363.03, that would impose basic requirements for HOA elections. (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as introduced Jan. 14, 2005.) It additionally provided, in a proposed subdivision (f) of the new statute, that any member could bring “a civil action for declaratory relief, injunctive relief, restitution, or a combination thereof.” (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as introduced Jan. 14, 2005, § 1, p. 3.) The proposed new statute did not, however, include any provision for attorney fees. (Id. at pp. 2-3.)
Assembly Bill No. 1098 (2005-2006 Reg. Sess.), upon its first amendment, also proposed adding a new statute, former section 1363.07, that would impose HOA election requirements. (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Apr. 11, 2005, § 1, pp. 2-5.) These requirements were focused on certain kinds of elections and were more detailed than the requirements set forth in Senate Bill No. 61 (2005-2006 Reg. Sess.). The Assembly bill also authorized a member to “initiate a civil action to enforce his or her rights” and required a court to void an election that violated the proposed statutory requirements. (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Apr. 11, 2005, § 1, p. 5.) It additionally provided, in a proposed subdivision (f) of the new statute, for fees and costs to “[a]ny member who initiates a civil action.” (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Apr. 11, 2005, § 1, p. 5, italics added.) However, the author quickly proposed an amendment to correct “a drafting error” and replaced the word “initiates,” with “prevails.” (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Apr. 11, 2005, p. D.) Thereafter, the Assembly bill was amended to delete all election requirements, but was then amended again to reinclude the focused election provisions and the remedy and fee provisions. (Assem. Bill. No. 1098 (2005-2006 Reg. Sess.) as amended June 14, 2005, § 2, pp. 4-5.) At this point, the Assembly bill proposed removing the remedy and fee provisions from the proposed new section 1363.07, and placing them, instead, in another proposed new section 1363.09. (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended June 14, 2005, § 3, p. 5.) The fee provisions were also amended to specify that only a member “who prevails” in a civil action would be entitled to recover fees and costs. (Ibid.)
In the meantime, Senate Bill No. 61 (2005-2006 Reg. Sess.) was also amended several times, expanding election requirements and eventually 942*942 providing for both remedies and fees, again in a proposed new, separate statute — former section 1363.09. (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended June 23, 2005, § 3, p. 6.) Thus, at this juncture, both Senate Bill No. 61 and Assembly Bill No. 1098 (2005-2006 Reg. Sess.) contained the language that ultimately became former section 1363.09.
Senate Bill No. 61 (2005-2006 Reg. Sess.) was then amended to state that the author of Assembly Bill No. 1098 (2005-2006 Reg. Sess.) was the principal “co-author” of Senate Bill No. 61. (See Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended Aug. 31, 2005.) Assembly Bill No. 1098, in turn, was amended to delete all election requirements and the election remedies and fee provisions, and to, instead, impose requirements on the use of common areas in the proposed new former section 1363.07 and to add further requirements pertaining to the disclosure of HOA records to then existing former section 1365.2. (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Sept. 2, 2005.) Accordingly, as ultimately passed by the Legislature, Senate Bill No. 61 added the election provisions codified as former sections 1363.03 and 1363.04, and the remedies and fee provisions codified as former section 1363.09. (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended Sept. 2, 2005, §§ 3-5, pp. 3-8.)
The report of the Assembly Committee on Judiciary on Senate Bill No. 61 (2005-2006 Reg. Sess.) had this to say about the proposed new remedies statute: “In order to protect the vital rights established here, the bill also provides a remedy for any violation, including equitable relief and a discretionary civil penalty in an amount to be determined by the court up to a maximum of $1000 per violation. In order to make the remedy meaningful, the bill provides for recovery of reasonable attorney’s fees, as are currently allowed with respect to a prevailing member when an association violates its obligations regarding the disclosure of association records.[] Prevailing associations may also recover litigation costs if an action is frivolous, unreasonable or without foundation. Finally, in order to allow for an expeditious and economical method of enforcement, the bill allows specified actions to be brought in small claims court where the court may order compliance with the statute.” (Assem. Com. on Judiciary, Analysis of Sen. Bill. 61 (2005-2006 Reg. Sess.) as amended Apr. 12, 2005, pp. 5-6; see Assem. Com. 943*943 on Housing & Community Development, Analysis of Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended June 23, 2005, pp. 6-7 [referencing the record disclosure fee provisions and also stating “in order to allow for an expeditious and economical method of enforcement, the bill allows specified actions to be brought in small claims court”]; Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended Sept. 2, 2005, pp. 5-6 [also referencing the record disclosure fee provisions and noting specified actions can be brought in small claims court].)
In 2011, the California Law Revision Commission submitted its recommendations on the “Statutory Clarification and Simplification of CID Law.” (Recommendation: Statutory Clarification and Simplification of CID Law (Feb. 2011) 40 Cal. Law Revision Com. Rep. (2010) p. 235.) Observing that the Davis-Stirling Act was “not well organized or easy to use” and “[r]elated provisions are not always grouped together in a coherent order” (Recommendation: Statutory Clarification and Simplification of CID Law, supra, 40 Cal. Law Revision Com. Rep., p. 242), the commission proposed a total recodification of the Davis-Stirling Act, which the Legislature implemented in 2012. (§ 4000 et seq.; e.g., Assem. Com. on Judiciary, Analysis of Assem. Bill No. 805 (2011-2012 Reg. Sess.) as introduced Feb. 17, 2011, p. 1 [“bill reflects the fruit of four-year’s of public input and extensive study on the part of the [commission] to revise and recast the state’s cumbersome and often confusing statutory provisions relating to the regulation of a common interest development (CID) and the respective rights and duties of a home owner’s association (HOA) and its members” (italics omitted)].) This reorganization and recodification made only “minor substantive changes,” and these were to “achieve internal consistency.” (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 805 (2011-2012 Reg. Sess.) as introduced Feb. 17, 2011, p. 1.)
As a result of this recodification, former section 1363.09 was eliminated and its remedial provisions were thrice replicated and recodified as three new statutes. Since the substantive statutory provisions concerning the exclusive use of common areas (codified as former § 1363.07) were recodified as section 4600 and placed in a new chapter 4, the correlating remedial provisions in former section 1363.09 were recodified as section 4605. Since the substantive open meeting provisions (codified as former § 1363.05) were recodified as section 4900 et seq. and placed in a new chapter 6, the correlating remedial provisions in former section 1363.09 were recodified as section 4955. And since the substantive election provisions (codified as former § 1363.03) were recodified as section 5000 et seq. and also placed in new chapter 6, the correlating remedial provisions in former section 1363.09 were recodified as section 5145. (See Cal. Law Revision Com. com., 12B pt. 1 West’s Ann. Civ. 944*944 Code, supra, foll. § 4605, pp. 464-465; Cal. Law Revision Com. com., 12B pt. 2 West’s Ann. Civ. Code, supra, foll. §§ 4955, p. 69, 5145, p. 93.)
(6) This excursion through the history of section 5145 demonstrates that this statute differs markedly from the fee provision in the California Homeowner Bill of Rights (§ 2924.12, former subd. (i)) at issue in Monterossa. Section 5145 is not tied to any substantive provisions like those in section 2924.12, which expressly set forth a process whereby the borrower is incentivized to seek preliminary injunctive relief, the lender is incentivized to promptly comply, and upon compliance, the lender can move to dissolve the injunction and is protected from further liability under the statute. (§ 2924.12, subds. (a)-(f).) The Monterossa court quite rightly described section 2924.12 as a “unique statutory scheme” and one that clearly envisions preliminary injunctive relief as a principal tool for compliance and the reward of fees and costs for achieving compliance in such manner. (Monterossa, supra, 237 Cal.App.4th at pp. 754-755.) The same cannot be said about either the substantive election provisions now set forth in section 5100 et seq. or the remedy and fee provisions now set forth in section 5145.
Furthermore, when we consider the language of section 5145, we are not considering only this statute. Rather, we are actually considering the language of former section 1363.09, since section 5145 merely “continue[d]” the former statute’s remedial provisions. (Cal. Law Revision Com. com., 12B pt. 2 West’s Ann. Civ. Code, supra, foll. § 5145, p. 93.) As we have discussed, former section 1363.09 set forth the remedy and fee provisions for three different substantive provisions of the Davis-Stirling Act — those pertaining to HOA elections (codified as former § 1363.03, now codified as § 5100 et seq.), those setting forth the HOA open meeting laws (codified as former § 1363.05, now codified as § 4900 et seq.), and those pertaining to the exclusive use of common areas (codified as former § 1363.07, now codified as § 4600). Accordingly, were we to conclude, as Artus urges, that the Legislature intended that the general rules governing the prevailing party determination and the timing of an award of fees and costs do not apply to section 5145, we would have to conclude the same as to sections 4605 (pertaining to the exclusive use of common areas) and 4955 (pertaining to the HOA open meeting law), as well. Had the Legislature intended this when it enacted the remedy and fee provisions in former section 1363.09 and now replicated and recodified in these three statutes, it could have, and undoubtedly would have, made that clear. As it is, there is no suggestion in either the language of these statutes or the legislative history of former section 1363.03 or section 1363.09 that the Legislature intended that the courts abandon the general rules pertaining to attorney fee and cost awards and treat these provisions as uniquely authorizing fees and costs for only interim success.
945*945 (7) Finally, as to section 5145, in particular, the Legislature has expressly authorized a means to seek expedited relief, with a minimal expenditure of party resources. As we have observed, subdivision (c) of former section 1363.09 provided that “[a] cause of action under Section 1363.03 with respect to access to association resources by candidates and advocates, the receipt of a ballot by a member, or the counting, tabulation, or reporting of, or access to, ballots for inspection and review after tabulation may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court.” (Sen. Bill No. 61 (2005-2006 Reg. Sess.) as amended June 23, 2005, § 3, pp. 6-7.) Subdivision (c) of section 5145 continues this express authorization of small claims court jurisdiction. (Cal. Law Revision Com. com., 12B pt. 2 West’s Ann. Civ. Code, supra, foll. § 5145, p. 93.) Thus, while the Legislature could have enacted a substantive and procedural scheme like the one it set forth in section 2924.12 of the California Homeowner Bill of Rights act, it chose to provide a different, albeit more limited, procedural device to facilitate a relatively expeditious and less costly means to resolve certain violations of the election provisions of the Davis-Stirling Act. It is not the role of the courts to add statutory provisions the Legislature could have included, but did not. (See City of Scotts Valley v. County of Santa Cruz (2011) 201 Cal.App.4th 1, 32-36 [133 Cal.Rptr.3d 235]; County of San Diego v. State of California (2008) 164 Cal.App.4th 580, 594 [79 Cal.Rptr.3d 489].)
(8) We therefore conclude, for all the reasons we have set forth, that the reasoning of Monterossa does not apply to section 5145. As Artus advances no other theory in support of her claim for statutory fees and costs, we affirm the trial court’s order denying such fees and costs.
The judgment and order denying statutory attorney fees and costs is affirmed. The parties are to bear their own costs on appeal.
Humes, P. J., and Margulies, J., concurred.
 All further statutory references are to the Civil Code unless otherwise indicated.
 Quoted material is from the trial court’s statement of decision. Artus does not challenge the court’s findings as to the operative facts.
 Section 5105, subdivision (a)(1), provides in relevant part: “An association shall adopt rules … that do all of the following: [¶] (1) Ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or Internet Web sites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election.”
 Section 5135, subdivision (a), provides: “Association funds shall not be used for campaign purposes in connection with any association board election. Funds of the association shall not be used for campaign purposes in connection with any other association election except to the extent necessary to comply with duties of the association imposed by law.”
 In accordance with the mandate of section 5105, subdivision (a)(1) the HOA’s bylaws state: “If any candidate or Owner advocating a point of view is provided access to Association media, newsletters, or Internet Web sites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and Owners advocating a point of view, including those not endorsed by the Board, for purposes that are reasonably related to the election.” The HOA’s election rules set forth the procedure for effectuating this right and provide: “Each candidate or Member advocating a point of view may prepare and deliver to a person specified in the election notice, care of the Association’s office, a statement not exceeding 500 words to be enclosed with the election notice. The Association shall not edit or redact any content from campaign communications. The candidate or Member who issues the communication shall be solely responsible for its content.” Artus did not, in connection with the first election, ask to present an opposing view or submit an opposing statement. She did in connection with the second election, and the HOA circulated her opposition statement.
 Artus does not challenge the trial court’s denial of permanent injunctive relief.
 Although we need not, and do not, reach the merits of Artus’s two statutory claims, it appears likely the two-page letter the HOA enclosed with the ballot for the first election had a “campaign purpose” within the meaning of section 5135, subdivision (a). On its face, this statute is not confined to “board” elections (§ 5135, subd. (a)), and the letter did more than merely explain the proposed bylaw change and expressly exhorted members to vote “yes.” (See Vargas v. City of Salinas (2009) 46 Cal.4th 1, 34-37 [92 Cal.Rptr.3d 286, 205 P.3d 207]; Stanson v. Mott (1976) 17 Cal.3d 206, 221-223 [130 Cal.Rptr. 697, 551 P.2d 1]; see also Wittenburg v. Beachwalk Homeowners Assn. (2013) 217 Cal.App.4th 654, 666, fn. 5 [158 Cal.Rptr.3d 508].) We make no comment on whether Artus proved, as also required by the statute, that HOA funds were used specifically to prepare and disseminate the letter.
 Until January 1, 2018, this statute applied “only to certain entities that foreclosed on more than 175 real properties during their immediately preceding annual reporting period.” (Monterossa, supra, 237 Cal.App.4th at p. 753, fn. 5; see § 2924.12, former subd. (j); see also former § 2924.18, subd. (b).)
 The provisions concerning inspection and copying of association records were enacted two years earlier and codified as former section 1365.2. Then subdivision (e) provided in pertinent part: “A member of an association may bring an action to enforce the member’s right to inspect and copy [specified association records]. If a court finds that the association unreasonably withheld access to [these] records …, the court shall award the member reasonable costs and expenses, including reasonable attorney’s fees, and may assess a civil penalty….” (Former § 1365.2, subd. (e).) As we have discussed, these record disclosure provisions were expanded in 2005 through Assembly Bill No. 1098 (2005-2006 Reg. Sess.). (Assem. Bill No. 1098 (2005-2006 Reg. Sess.) as amended Apr. 11, 2005, § 2, p. 7.)
Keywords: Enforcement, Fees
The Right to Repair Act is a mandatory statutory scheme and is the exclusive remedy for all claims for property damage and/or economic loss due to construction defects. When a construction defect claim is pursued, the procedures and requirements of the Right to Repair Act must be followed regardless of the theory of liability asserted, including giving the developer notice of the defects and opportunity to repair before the lawsuit is filed.
239 Cal.App.4th 1132 (2015)
191 Cal.Rptr.3d 53
Court of Appeals of California, Fifth District.
August 26, 2015.
1135*1135 Borton Petrini, Calvin R. Stead and Andrew M. Morgan for Petitioners.
Donahue Fitzgerald, Kathleen F. Carpenter; Ware Law, Amy R. Gowan and Dee A. Ware for California Building Industry Association as Amicus Curiae on behalf of Petitioners.
Newmeyer & Dillon, Alan H. Packer, J. Nathan Owens, Paul L. Tetzloff and Jeffrey R. Brower for Leading Builders of America as Amicus Curiae on behalf of Petitioners.
1136*1136 No appearance for Respondent.
Milstein Adelman, Fred M. Adelman and Mayo L. Makarcyzk for Real Parties in Interest.
Real Parties in Interest, Carl Van Tassell et al. (real parties in interest), filed an action against the builders of their homes for recovery of damages allegedly resulting from defects in the construction of the homes. Petitioners, McMillin Albany LLC et al. (McMillin), moved to stay the litigation until real parties in interest complied with the statutory nonadversarial prelitigation procedures of the “Right to Repair Act,” which applies to construction defect litigation involving certain residential construction. Real parties in interest opposed the motion, contending the statutory prelitigation procedures did not apply because they had dismissed the only cause of action in their complaint that alleged a violation of the Right to Repair Act. The trial court denied the stay, and McMillin petitioned this court for a writ of mandate compelling the trial court to vacate its order denying the motion and enter a new order granting the stay as requested. We grant the writ.
Real parties in interest, the owners of 37 homes constructed by McMillin, filed a first amended complaint alleging eight causes of action, including strict products liability, negligence, and breach of express and implied warranty. They alleged the homes were in a defective condition at the time they purchased them, and the defects had resulted in damage to their homes and their component parts. The third cause of action of the first amended complaint alleged violation of the building standards set forth in Civil Code section 896. Section 896 is part of a statutory scheme commonly referred to as the Right to Repair Act (§ 895 et seq.; the Act). Under the Act, before a homeowner who claims defective residential construction can file an action against the builder in court, the homeowner must give notice of the claimed defects to the builder and engage in a nonadversarial prelitigation procedure, which affords the builder an opportunity to attempt to repair the defects. 1137*1137 (§ 910.) If the homeowner files suit without giving the required notice, the builder may obtain a stay of the litigation, pending completion of the prelitigation process. (§ 930, subd. (b).)
Real parties in interest did not give McMillin notice of the alleged defects before filing suit. The parties attempted to negotiate a stay of the judicial proceedings to complete the prelitigation process, but real parties in interest’s attorney withdrew from the negotiations, dismissed the third cause of action of the first amended complaint, and contended real parties in interest were no longer required to comply with the statutory prelitigation process because they had dismissed the cause of action alleging violation of the Act. McMillin filed a motion for a stay, which real parties in interest opposed. The trial court denied the motion, concluding real parties in interest were entitled to plead common law causes of action in lieu of a cause of action for violation of the building standards set out in section 896, and they were not required to submit to the prelitigation process of the Act when their complaint did not allege any cause of action for violation of the Act. McMillin filed this petition for a writ of mandate, seeking a writ directing the trial court to vacate its order denying McMillin’s motion for a stay and to enter a new order granting a stay pending completion of the prelitigation process.
A writ of mandate “must be issued in all cases where there is not a plain, speedy, and adequate remedy, in the ordinary course of law.” (Code Civ. Proc., § 1086.) Writ review is deemed extraordinary and appellate courts are normally reluctant to grant it. (Science Applications Internat. Corp. v. Superior Court (1995) 39 Cal.App.4th 1095, 1100 [46 Cal.Rptr.2d 332]; City of Half Moon Bay v. Superior Court (2003) 106 Cal.App.4th 795, 803 [131 Cal.Rptr.2d 213].) Where an order is not appealable, but is reviewable only upon appeal from a later judgment, writ relief may be appropriate if appeal after judgment would be an ineffective remedy. (Baeza v. Superior Court, supra, 201 Cal.App.4th at p. 1221.) McMillin claims they are entitled to the benefits of the nonadversarial prelitigation procedure that permits them to attempt to repair the claimed defects in the homes before real parties in interest may bring an action against them in court, but the trial court’s order denies them that opportunity. If they may not appeal that ruling until after judgment, the benefits of the statutory prelitigation procedure will be lost, even if they prevail on appeal. We conclude McMillin does not have “a plain, speedy, and adequate remedy, in the ordinary course of law.” (Code Civ. Proc., § 1086.)
1138*1138 Additionally, a writ may be granted when the petition presents an issue of first impression that is of general interest to the bench and bar. (Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 655 [125 Cal.Rptr. 553, 542 P.2d 977].) McMillin’s writ petition presents an issue of first impression, which is of interest to builders, home buyers, their attorneys, and others. The issue may escape review unless it is addressed in a writ proceeding. Accordingly, we conclude review by extraordinary writ is appropriate in this case.
Real parties in interest assert the issue presented by the writ petition is moot because they have offered to stipulate to a stay of the action pending completion of the statutory prelitigation procedure, if McMillin will dismiss its petition. They contend that, in light of this offer, there is no actual controversy for this court to adjudicate and McMillin will not be subject to irreparable injury. “However, when a pending case involves a question of public interest that is likely to recur between the parties or others, `the court may exercise an inherent discretion to resolve that issue even though an event occurring during its pendency would normally render the matter moot.'” (Shapell Industries, Inc. v. Superior Court (2005) 132 Cal.App.4th 1101, 1106-1107, fn. 4 [34 Cal.Rptr.3d 149].) In light of McMillin’s showing that at least one court in this district reached the opposite result in a situation similar to that before the trial court here, and the presentations of amici curiae indicating the issues are of widespread interest in the building industry, we conclude this is an appropriate case in which to consider the issues presented despite real parties in interest’s assertion that they are moot.
In 2002, the Legislature enacted the Act “to `specify the rights and requirements of a homeowner to bring an action for construction defects, including applicable standards for home construction, the statute of limitations, the burden of proof, the damages recoverable, a detailed prelitigation procedure, and the obligations of the homeowner.'” (Anders v. Superior Court (2011) 192 Cal.App.4th 579, 585 [121 Cal.Rptr.3d 465].) Chapter 2 of the Act (Chapter 2) sets out building standards, a violation of which constitutes a deficiency in construction for which the builder may be held liable to the homeowner. (§§ 896, 897.) Chapter 3 imposes obligations on the builder. (§§ 900-907.) Chapter 5 sets out the applicable statute of limitations, the burden of proof, the damages that may be recovered, and the affirmative defenses that may be asserted; it also makes the Act binding on successors in interest of the original home purchaser. (§§ 941-945.5.)
1139*1139 Chapter 4 of the Act (Chapter 4) prescribes nonadversarial prelitigation procedures a homeowner must initiate prior to bringing a civil action against the builder seeking recovery for alleged construction deficiencies. (§§ 910-938.) These are the procedures McMillin contends real parties in interest were required to follow prior to filing suit against them. The procedures require the homeowner to give the builder written notice of the claim that the builder violated any of the standards of Chapter 2; they set time limits for the builder to inspect the alleged defects and make an offer to repair them or compensate the homeowner in lieu of repair. (§§ 910, 916, 917, 929.) If the builder declines to attempt repairs or fails to meet any of the deadlines, the homeowner is released from the requirements of Chapter 4 and may file an action against the builder in court. (§§ 915, 916, subd. (d), 920, 925, 930, subd. (a).) The homeowner may also file an action against the builder if he is dissatisfied with the repairs. (§ 926.)
In Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 [163 Cal.Rptr.3d 600] (Liberty Mutual), Hart purchased a new home built by Brookfield. (Id. at p. 101.) A few years later, a pipe in the sprinkler system burst, flooding the home and causing damage. Brookfield acknowledged its liability and repaired the damage. (Ibid.) Hart lived in a hotel during the repairs; his homeowner’s insurer, Liberty Mutual, paid for Hart’s hotel and relocation expenses. Liberty Mutual then filed a subrogation action against Brookfield to recover the expenses it paid; the first amended complaint alleged causes of action for strict liability, negligence, breach of contract, breach of warranty, equitable estoppel, and declaratory relief. (Id. at pp. 101, 102.) Brookfield’s demurrer to the first amended complaint was sustained on the ground Liberty Mutual’s complaint was time-barred under the Act. The appellate court reversed.
The court defined the issue before it as: “whether Liberty Mutual’s complaint in subrogation falls exclusively within the Right to Repair Act, and therefore is time-barred.” (Liberty Mutual, supra, 219 Cal.App.4th at p. 102, fn. omitted.) The court stated a key goal of the Act was to abrogate the holding in Aas v. Superior Court (2000) 24 Cal.4th 627, 632 [101 Cal.Rptr.2d 718, 12 P.3d 1125] (Aas). In Aas, “the California Supreme Court held that construction defects in residential properties, in the absence of actual property damage, were not actionable in tort.” (Liberty Mutual, supra, 219 Cal.App.4th at p. 103.) Thus, homeowners could not recover in tort for costs of repair or the diminution in value of the homes arising from construction defects that had not caused property damage. (Ibid.) The Liberty Mutual court cited the legislative history of the Act, which stated: “`[E]xcept where explicitly specified otherwise, liability would accrue under the standards regardless of 1140*1140 whether the violation of the standard had resulted in actual damage or injury. As a result, the standards would essentially overrule the Aas decision and, for most defects, eliminate that decision’s holding that construction defects must cause actual damage or injury prior to being actionable.'” (Liberty Mutual, at p. 103.)
After considering a number of the provisions of the Act, the Liberty Mutual court concluded “the Act covers instances where construction defects were discovered before any actual damage had occurred,” but does not provide the exclusive remedy when the defects have caused damage. (Liberty Mutual, supra, 219 Cal.App.4th at pp. 105, 108-109.) Therefore, the time limitations of the Act did not bar Liberty Mutual’s subrogation claims. (219 Cal.App.4th at p. 109.)
In the trial court, real parties in interest’s opposition to the motion for a stay relied on Liberty Mutual. Real parties in interest asserted: “This is a matter of law, cemented in the recent decision of Liberty Mutual …, which McMillin incorrectly claims is inapplicable to this case…. In fact, Liberty Mutual applies squarely and inescapably to the dispute before this Court…. It holds unequivocally that a plaintiff can bring non-SB800 causes of action for damages that result from violation of the SB800 building standards.” Real parties in interest argued that they were permitted to pursue common law causes of action for construction deficiencies that caused damage, and, once they dismissed their third cause of action for violation of the Act, they were pursuing only common law causes of action and were therefore not required to comply with the requirements of the Act, including the prelitigation procedure.
The trial court denied McMillin’s motion for a stay, stating: “Pursuant to Liberty Mutual …, the Plaintiffs are entitled to plead common law causes of action in lieu of a cause of action for violation of building standards set forth in Civil Code § 896 et seq. (`SB 800′). Plaintiffs need not submit to the SB 800 prelitigation process when their Complaint does not assert claims for violations of SB 800 standards. [¶] The Court also acknowledges that its ruling here involves a controlling question of law as to which there are 1141*1141 substantial grounds for difference of opinion, appellate resolution of which may materially advance the conclusion of this litigation. (See Code Civ. Proc., § 166.1.)”
We agree with real parties in interest that the only issue before this court is whether McMillin’s motion for a stay pending completion of the prelitigation procedures of Chapter 4 of the Act was properly denied. In order to make that determination, however, we must consider the scope of the Act and to what claims the requirements of the Act, in particular the prelitigation procedures of Chapter 4, apply. Liberty Mutual held the requirements of the Act apply only when a plaintiff expressly alleges a cause of action for violation of the Act; it held that, if the plaintiff alleges a common law cause of action to recover for damages caused by a construction defect in residential housing, the Act does not apply and the builder is not entitled to the benefits of the Act. Because it is relevant to the issue before us, we have considered the Liberty Mutual decision. We ultimately reject its reasoning and outcome, however, which we conclude are not consistent with the express language of the Act.
The basic scope of the claims to which the Act applies is set out in section 896. It provides: “In any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction …, a builder … shall, except as specifically set forth in this title, be liable for, and the claimant’s claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in this title.”
Section 896 then goes on to set out various construction standards. Thus, the Act applies broadly to “any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction.” (§ 896, italics added.) In such an action, “the claimant’s claims or causes of action shall be limited to violation of” the standards set out in section 896. (§ 896.) Section 896 does not limit application of the Act to actions seeking recovery for deficiencies that have not yet caused property damage. The language limiting a claimant’s claims or causes of action does not make an exception for common law tort causes of action where the defect has caused property damage. By its plain language, the Act applies to any action for damages related to construction deficiencies, and limits a claimant’s claims or causes of action to claims of violation of the statutory standards.
Section 897 provides: “The standards set forth in this chapter are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it shall be actionable if it causes damage.” Thus, the Legislature intended to create a comprehensive set of construction standards and to make 1142*1142 the violation of any of those standards actionable under the Act. To the extent it omitted some function or component, however, a deficiency in that function or component would not be actionable in itself, but would be actionable if it caused property damage.
Consistent with section 896, section 943 provides: “Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.” (§ 943, subd. (a).) A claim covered by the Act is a claim as defined in sections 896 and 897. Thus, the first portion of section 943 precludes any cause of action for damages related to or arising out of a deficiency in residential construction, other than one brought pursuant to section 896 for violation of any of the standards set out in Chapter 2, or one brought pursuant to section 897, where the alleged deficiency involves a function or component not covered in the standards set out in section 896.
The second portion of section 943 precludes a cause of action, other than one under sections 896 and 897, for “damages recoverable under Section 944.” (§ 943, subd. (a).) Section 944 authorizes recovery of “damages for the reasonable value of repairing any violation of the standards set forth in this title, the reasonable cost of repairing any damages caused by the repair efforts, the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards, the reasonable cost of removing and replacing any improper repair by the builder, reasonable relocation and storage expenses, lost business income if the home was used as a principal place of a business licensed to be operated from the home, reasonable investigative costs for each established violation, and all other costs or fees recoverable by contract or statute.”
Accordingly, the second portion of section 943 also precludes any cause of action, other than a cause of action under sections 896 and 897, for “the reasonable value of repairing any” violation of the standards or “the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards” set out in the Act. (§§ 943, subd. (b), 944.) In other words, no other cause of action is allowed to recover for repair of the defect itself or for repair of any damage caused by the defect.
Section 896 makes an exception for condominium conversions: “As to condominium conversions, this title does not apply to or does not supersede any other statutory or common law.” Section 943 also contains an exception: “In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute.” (§ 943, 1143*1143 subd. (a).) Section 931 clarifies: “If a claim combines causes of action or damages not covered by this part, including, without limitation, personal injuries, class actions, other statutory remedies, or fraud-based claims, the claimed unmet standards shall be administered according to this part. . . .”
Liberty Mutual interpreted the scope of the Act much differently, by focusing on other provisions and not fully analyzing the language of sections 896, 897, and 943. It invoked the general principle that statutes should not be construed to alter or abrogate the common law, unless a legislative purpose to do so clearly and unequivocally appears from the language or evident purpose of the statute. (Liberty Mutual, supra, 219 Cal.App.4th at p. 105; Fahlen v. Sutter Central Valley Hospitals (2014) 58 Cal.4th 655, 669 [168 Cal.Rptr.3d 165, 318 P.3d 833]; California Assn. of Health Facilities v. Department of Health Services (1997) 16 Cal.4th 284, 297 [65 Cal.Rptr.2d 872, 940 P.2d 323].) It discussed various sections of the Act and concluded the Act did not establish an exclusive remedy for claims of residential construction defects where the defect allegedly resulted in actual property damage. (Liberty Mutual, supra, 219 Cal.App.4th at pp. 105, 108-109.)
The court in Liberty Mutual first considered sections within Chapter 4. These sections, however, set out the prelitigation procedures for inspection and attempted repair of construction defects; they do not define the scope of the Act. (Liberty Mutual, supra, 219 Cal.App.4th at pp. 105-106, discussing §§ 910, 913, 916, 917 & 921.) The court then discussed section 942, which provides: “In order to make a claim for violation of the standards set forth in Chapter 2 (commencing with Section 896), a homeowner need only demonstrate, in accordance with the applicable evidentiary standard, that the home does not meet the applicable standard, subject to the affirmative defenses set forth in Section 945.5. No further showing of causation or damages is required to meet the burden of proof regarding a violation of a standard set forth in Chapter 2 (commencing with Section 896), provided that the violation arises out of, pertains to, or is related to, the original construction.” (§ 942.)
The court concluded the Legislature did not intend to eliminate the need to prove causation and damages where construction defects resulted in actual property damage, but “[t]he elimination of such basic elements of proof … makes perfect sense when the claim is for construction defects that have not yet caused any actual damage.” (Liberty Mutual, supra, 219 Cal.App.4th at pp. 106-107.)
Section 942, however, pertains only to proof of “violation of a standard set forth in Chapter 2.” Section 896, which is part of Chapter 2, sets out standards residential construction is required to meet. A violation of any 1144*1144 of those standards equates to a residential construction deficiency or defect. A homeowner may recover for the existence of the defect itself (the violation of the standard) or for damage it caused, or both. (§ 944.) Section 942 merely provides that the violation of the standard may be proved by evidence that the applicable standard has not been met; no further proof of causation or damages is needed to recover for the violation of the standard itself. Section 942 does not eliminate the need to prove causation and damages where the homeowner alleges, and seeks recovery for, other damage or costs allegedly caused by the violation of the standard.
Liberty Mutual addressed sections 943, subdivision (a), and 931, which provide:
“Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed. In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute. Damages awarded for the items set forth in Section 944 in such other cause of action shall be reduced by the amounts recovered pursuant to Section 944 for violation of the standards set forth in this title.” (§ 943, subd. (a).)
“If a claim combines causes of action or damages not covered by this part, including, without limitation, personal injuries, class actions, other statutory remedies, or fraud-based claims, the claimed unmet standards shall be administered according to this part….” (§ 931.)
The court’s entire analysis of these provisions consisted of one sentence: “These code sections establish the Act itself acknowledges that other laws may apply to, and other remedies may be available for, construction defect claims, and, therefore, that the Act is not the exclusive means for seeking redress when construction defects cause actual property damage.” (Liberty Mutual, supra, 219 Cal.App.4th at p. 107.) The court did not discuss the effect of the first sentence of section 943, that “no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.” (§ 943, subd. (a).) It also did not discuss the specific list of exceptions set out immediately following that provision. Neither list of exceptions, in section 943 or in section 931, includes common law causes of action, such as negligence or strict liability. If the Legislature had intended to make such a wide-ranging exception to the restrictive language of the first sentence of section 943, we would have expected it to do so expressly. It did 1145*1145 so in the exception of condominium conversions from the scope of the Act: “As to condominium conversions, this title does not apply to or does not supersede any other statutory or common law.” (§ 896.)
The court noted that the Act contains its own statute of limitations, but the Legislature did not repeal the preexisting statutes of limitations, Code of Civil Procedure sections 337.1 and 337.15. (Liberty Mutual, supra, 219 Cal.App.4th at p. 108.) It concluded: “Those statutes remain and evidence a legislative intent and understanding that the limitations periods they contain could and would be used in litigation other than cases under the Act.” (Ibid.) We do not interpret the failure to repeal Code of Civil Procedure sections 337.1 and 337.15 as evidence the Legislature retained them because it intended residential construction defect actions where the defects resulted in actual property damage to be actionable outside the Act. Those statutes of limitations continue to govern actions expressly excluded from the Act, such as actions for personal injuries arising out of construction defects and actions involving nonresidential construction.
Finally, the court discussed section 896. (Liberty Mutual, supra, 219 Cal.App.4th at p. 108.) Instead of analyzing the language of the section itself, however, the court analyzed the builder’s argument, which it dubbed “circular.” (Ibid.) “Brookfield argues the language `any action’ means that the present case must fall within the Right to Repair Act. Brookfield’s argument, however, is circular; Brookfield’s argument is essentially that any action arising out of the Act is an action under the Act. Section 896 refers to any action that is covered by the Right to Repair Act; as explained ante, we conclude the Act was never intended to, and does not, establish exclusive remedies for claims for actual damages for construction defects such as those suffered by Hart.” (Ibid.)
(8) Section 896 does not provide that “any action arising out of the Act is an action under the Act.” (Liberty Mutual, supra, 219 Cal.App.4th at p. 108.) As previously discussed, it provides that “[i]n any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction,… the claimant’s claims or causes of action shall be limited to violation of” the standards set out in Chapter 2. (§ 896.) The language of the statute clearly and unequivocally expresses the legislative intent to limit the causes of action available to a homeowner claiming damages arising out of, or related to deficiencies in, the construction of the homeowner’s residence.
In Verdugo v. Target Corp. (2014) 59 Cal.4th 312, 326-327 [173 Cal.Rptr.3d 662, 327 P.3d 774], the California Supreme Court listed the following as examples of statutes in which the Legislature clearly expressed its intent to abrogate liability under common law principles for acting or failing to act in a particular manner:
1146*1146 “[N]o social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person, or for injury to the person or property of, or death of, any third person, resulting from the consumption of those beverages.” (§ 1714, subd. (c).)
“No person who in good faith, and not for compensation, renders emergency medical or nonmedical care at the scene of an emergency shall be liable for any civil damages resulting from any act or omission.” (Health & Saf. Code, § 1799.102, subd. (a).)
“An owner of any estate or any other interest in real property … owes no duty of care to keep the premises safe for entry or use by others for any recreational purpose or to give any warning of hazardous conditions, uses of, structures, or activities on those premises to persons entering for a recreational purpose, except as provided in this section.” (§ 846.)
The language of the Act is equally clear in barring any cause of action for damages related to residential construction defects other than a cause of action brought in compliance with the Act:
“In any action seeking recovery of damages arising out of, or related to deficiencies in, the residential construction,… the claimant’s claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in this title.” (§ 896.)
“Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed.” (§ 943, subd. (a).)
Consequently, we conclude the Legislature intended that all claims arising out of defects in residential construction, involving new residences sold on or after January 1, 2003 (§ 938), be subject to the standards and the requirements of the Act; the homeowner bringing such a claim must give notice to the builder and engage in the prelitigation procedures in accordance with the provisions of Chapter 4 of the Act prior to filing suit in court. Where the complaint alleges deficiencies in construction that constitute violations of the standards set out in Chapter 2 of the Act, the claims are subject to the Act, and the homeowner must comply with the prelitigation procedures, regardless of whether the complaint expressly alleges a cause of action under the Act.
1147*1147 The legislative history of the Act supports our interpretation of the scope of the Act. The analysis by the Senate Judiciary Committee states: “This bill would make major changes to the substance and process of the law governing construction defects. It is the product of extended negotiations between various interested parties. Among other things, the bill seeks to respond to concerns expressed by builders and insurers over the costs associated with construction defect litigation, as well as concerns expressed by homeowners and their advocates over the effects of a recent Supreme Court decision that held that defects must cause actual damage prior to being actionable in tort [Aas, supra, 24 Cal.4th 627].” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 1, italics added.)
Additionally, “This bill would provide that any action against a builder … seeking recovery of damages arising out of, or related to deficiencies in, residential construction … shall be governed by detailed standards set forth in the bill relating to the various functions and components of the building.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 2, italics added.)
The Assembly Committee on Judiciary described the bill as follows: “This bill, the consensus product resulting from nearly a year of intense negotiations among the interested parties, proposes two significant reforms in the area of construction defect litigation. First, the bill would establish definitions of construction defects for the first time, in order to provide a measure of certainty and protection for homeowners, builders, subcontractors, design professionals and insurers. Secondly, the bill requires that claimants alleging a defect give builders notice of the claim, following which the builder would have an absolute right to repair before the homeowner could sue for violation of these standards.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, p. 1.)
“According to the author, this bill represents groundbreaking reform for construction defect litigation. As many prior bill analyses on this subject have noted, the problem[s] of construction defects and associated litigation have vexed the Legislature for a number of years, with substantial consequences for the development of safe and affordable housing. This bill reflects extensive and serious negotiations between builder groups, insurers and the Consumer Attorneys of California, with the substantial assistance of key legislative leaders over the past year, leading to consensus on ways to resolve these issues.
1148*1148 “… A principal feature of the bill is the codification of construction defects. For the first time, California law would provide a uniform set of standards for the performance of residential building components and systems. Rather than requiring resort to contentions about the significance of technical deviations from building codes, the bill specifies the standards that building systems and components must meet. Significantly, these standards effectively end the debate over the controversial decision in the Aas case to the effect that homeowners may not recover for construction defects unless and until those defects have caused death, bodily injury, or property damage, no matter how imminent those threats may be.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, pp. 2-3, italics added.)
Describing the prelitigation procedure and the builder’s right to repair, the Senate Judiciary Committee stated: “The bill establishes a mandatory process prior to the filing of a construction defect action. The major component of this process is the builder’s absolute right to attempt a repair prior to a homeowner filing an action in court. Builders, insurers, and other business groups are hopeful that this right to repair will reduce litigation.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 5.)
The Act is referred to as “groundbreaking reform for construction defect litigation” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, p. 2) that “would make major changes to the substance and process of the law governing construction defects.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 1.) One of the primary purposes of its enactment was to codify a uniform set of construction standards by which to determine whether actionable construction defects exist in a particular residence. (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, p. 2.) Another purpose was the imposition of a “mandatory” prelitigation procedure giving the builder an “absolute right” to attempt to repair the claimed construction defects before the homeowner could sue in court. (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 5; see Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, p. 1.) A recurring theme throughout the legislative history is the hope and expectation that the Act would reduce construction defect litigation, thereby decreasing the cost of insurance and litigation to entities involved in the construction industry, reducing the cost of construction, encouraging insurers and builders to return to the market, and making housing more affordable. (See, e.g., Assem. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 26, 2002, p. 2; Enrolled Bill Rep. on Sen. Bill No. 800 1149*1149 (2001-2002 Reg. Sess.) prepared for Gov. Gray Davis (Sept. 19, 2002); Cal. Housing Finance Agency, Enrolled Bill Rep. on Sen. Bill No. 800 (2001-2002 Reg. Sess.) Sept. 7, 2002; Cal. Dept. of Housing and Community Development, Enrolled Bill Rep. on Sen. Bill No. 800 (2001-2002 Reg. Sess.) Aug. 28, 2002; Home Ownership Advancement Foundation, Floor Alert re Sen. Bill No. 800 (2001-2002 Reg. Sess.) Aug. 30, 2002; Cal. Building Industry Assn., Floor Alert re Sen. Bill No. 800 (2001-2002 Reg. Sess.); Cal. Chamber of Commerce, letter to Governor Davis, Sen. Bill No. 800 (2001-2002 Reg. Sess.) Sept. 10, 2002.)
We doubt the Legislature would have viewed the legislation as “groundbreaking reform” or a “major change” in the law of construction defects if its provisions were mandatory only when the defect had not yet caused damage, and the homeowner could still sue for damages under any common law theory once property damage occurred, without being subject to the statutory prelitigation procedure. Further, the codified construction standards could not constitute a uniform set of standards to comprehensively define construction defects if a homeowner could avoid their use simply by suing on common law causes of action after the construction defect has caused actual damage. Like the statutory provisions themselves, the legislative history does not contain any indication the Act was intended to exclude construction defect claims whenever the defect has caused actual property damage. In fact, by including “the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards” (§ 944) in the list of damages recoverable in an action under the Act, the Legislature expressed its intent that deficiencies that have resulted in actual property damage are to be covered by the Act. Additionally, it is unlikely the Legislature or the bill supporters would have expected that creating a new statutory cause of action for defects that have not yet caused damage, and leaving intact the common law causes of action available once property damage has occurred, would significantly reduce the cost of construction defect litigation and make housing more affordable.
Real parties in interest’s complaint alleged residential construction defects in components or functions for which standards have been established in section 896 of the Act. Thus, their claims fall within the scope of the Act. Section 910 provides that, before a homeowner files “an action against any party alleged to have contributed to a violation of the standards set forth in Chapter 2,” the homeowner must give written notice to the builder of the claim that the construction of the residence violates any of the standards in that chapter. (§ 910.) That notice sets in motion the nonadversarial prelitigation procedure of Chapter 4, which affords the builder an opportunity to 1150*1150 attempt to repair the claimed deficiencies before the homeowner initiates expensive and time-consuming litigation. If the homeowner does not comply with the Chapter 4 procedure, “the builder may bring a motion to stay any subsequent court action … until the requirements of this chapter have been satisfied.” (§ 930, subd. (b).)
(11) Because real parties in interest did not comply with the requirements of Chapter 4 and accommodate McMillin’s absolute right to attempt repairs, McMillin is entitled to a stay of the action until the statutory prelitigation process has been completed. Accordingly, we will grant McMillin the relief sought in the writ petition.
Let a peremptory writ of mandate issue directing the respondent court to vacate its order of February 27, 2014, denying McMillin’s motion to stay the litigation, and enter a new order granting the motion and staying the litigation until the parties have satisfied the requirements of the statutory prelitigation procedures found in Civil Code sections 910 through 938. The parties are to bear their own costs on appeal.
Gomes, J., and Kane, J., concurred.
 We grant real parties in interest’s unopposed requests for judicial notice, filed November 10 and 12, 2014.
 All further statutory references are to the Civil Code unless otherwise indicated.
 See, e.g., Belasco v. Wells (2015) 234 Cal.App.4th 409, 413 [183 Cal.Rptr.3d 840]; The McCaffrey Group, Inc. v. Superior Court (2014) 224 Cal.App.4th 1330, 1334 [169 Cal.Rptr.3d 766]; Baeza v. Superior Court (2011) 201 Cal.App.4th 1214, 1222, footnote 5 [135 Cal.Rptr.3d 557]. The Act is also referred to as “SB 800” (Sen. Bill No. 800 (2001-2002 Reg. Sess.)).
 On June 11, 2015, we granted the applications of Leading Builders of America and California Building Industry Association to appear as amici curiae.
 Real parties in interest relied on both Liberty Mutual and Burch v. Superior Court (2014) 223 Cal.App.4th 1411 [168 Cal.Rptr.3d 81] as establishing that the Act does not provide the exclusive remedy for damages for construction defects that have resulted in property damage. Because the Burch court based its decision on that issue on the holding in Liberty Mutual and a cursory description of some of the provisions of the Act, without detailed analysis, we do not separately address the Burch decision.
 The quotation of section 931 in Liberty Mutual, supra, 219 Cal.App.4th at page 107, omitted the language “including, without limitation, personal injuries, class actions, other statutory remedies, or fraud-based claims.” (§ 931.)
 On September 9, 2014, we granted McMillin’s motion for judicial notice of the legislative history of the Act.
This is a decision following an arbitration in which the Court of Appeal upheld an arbitration award. Before pursuing a construction defect action, a community association must review its CC&Rs to confirm whether the CC&Rs contain any additional requirements that must be fulfilled before that action is pursued. Should the CC&Rs contain any additional requirements, the community association should seek to fulfill those requirements. Note: This case is subject to a pending Petition for Review before the California Supreme Court.
Court of Appeals of California, Fourth District, Division Three.
Filed August 10, 2018.
Appeal from a judgment of the Superior Court of Orange County, Super. Ct. No. 30-2017-00913469, Glenda Sanders, Judge. Affirmed.
Fenton Grant Mayfield Kaneda & Litt, Gregory S. Lew and Daniel H. Glifford for Plaintiff and Appellant.
Plante Lebovic, Brian C. Plante and Gregory M. Golino for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Plaintiff Branches Neighborhood Corporation (Branches or the association), a community association incorporated pursuant to the Davis-Stirling Common Interest Development Act (Civ. Code, § 4000, et seq.) (the Act), filed an arbitration claim against the association’s developer, defendant CalAtlantic Group, Inc., formerly known as Standard Pacific Corp. (Standard), for construction defects. The arbitrator granted summary judgment in Standard’s favor, concluding the association did not receive the consent of its members to file the claim until after the claim was filed, in violation of its declaration of Covenants, Conditions and Restrictions (CC&Rs). The trial court subsequently denied the association’s motion to vacate the award, concluding the court had no power to review the arbitrator’s decision.
Branches argues on appeal that the trial court incorrectly denied its motion to vacate because the arbitrator exceeded its powers by abridging an unwaivable statutory right or public policy. We find no such right or policy, and accordingly, the plain language of the CC&Rs controls. We therefore affirm the judgment.
Branches is located in Ladera Ranch and consists of residential condominium units. Its operation is subject to both the provisions of the Act and its own CC&Rs. Standard was the builder, as defined by the Act. (§ 911.)
In October 2014, Branches gave notice to Standard under section 910, stating that it intended to make a claim for construction and design defects. Branches requested that Standard provide relevant plans and specifications within 30 days, and provided a preliminary list of defects. The listed defects were wide-ranging, including problems impacting both individual units and the common area.
In March 2015, the parties entered into a stipulation to engage in the prelitigation procedures set forth in the Act. (§ 6000.) Jim Roberts, an attorney, was designated as mediator and dispute resolution facilitator. The parties agreed to a list of steps, including joint site inspections and testing, production of documents by each side, preparation of expert reports, creation of a more detailed defect list, and ultimately, mediation and a settlement meeting. The parties were ultimately unsuccessful, and the prelitigation procedures ended in November 2015.
On January 12, 2016, Branches filed a demand for arbitration with Judicial Arbitration and Mediation Services. The claim alleged various construction defects and sought in excess of $5 million in damages, alleging strict liability, breach of warranties, negligence, statutory liability, and various other theories. The Honorable James Smith, a retired judge, was appointed to serve as arbitrator.
At an initial conference, the arbitrator ordered Branches to file a short statement of the factual basis for each claim being asserted, and directed the parties to meet and confer about a case management order. On May 31, Branches served a revised demand for arbitration that included the short statement the arbitrator had ordered. Standard subsequently served an answer. Among many other defenses, Standard asserted Branches had failed to comply with the CC&Rs: “Respondent is informed and believes based thereon alleges that Claimant failed to comply with numerous provisions in the CC&Rs, including but not limited to, section 12.4.2 (obtaining the vote or written consent of 51 % [of] Claimant’s members prior to initiating a construction defect claim). . . .”
In late June, the arbitrator filed a case management order, governing discovery and prehearing motions, and set a tentative timeline for the arbitration for “sometime after May 8, 2017.”
Standard propounded interrogatories to Branches, which provided responses on August 22. Question No. 1 asked if Branches had obtained the written vote or written consent of no less than 51 percent of the members before serving Standard with notice in October 2014. Branches provided rather boilerplate objections, but ultimately answered: “No.” It provided the same answer to the next question, which asked whether it had received a vote or consent of at least 51 percent of the members prior to commencing arbitration. Branches again answered “[n]o,” after stating its objections to the question.
On October 20, Branches held a membership meeting. According to the declaration of the property manager, 93 of 173 members appeared in person or by proxy, constituting a quorum under the association’s bylaws. The membership was asked to either “1) Approve and ratify the prosecution of the construction defect claim against . . . [Standard]; or 2) Disapprove the prosecution of the construction defect claim against . . . [Standard].” Of the 93 members present in person or by proxy, 92 voted to ratify.
On November 1, Standard filed a motion for summary judgment based on the association’s “failure to obtain the requisite vote or written consent of the Owners who represent not less than fifty-one percent (51%) of the [association’s] voting power, which is a condition precedent to bringing this action.” Standard argued that section 12.4.2 of the CC&Rs requires a vote prior to filing the claim. That section states: “Required Vote to Make Claim. Prior to filing a claim pursuant to the ADR Provisions, the Neighborhood Corporation must obtain the vote or written consent of Owners other than Neighborhood Builder who represent not less than fifty-one percent (51%) of the Neighborhood Corporation’s voting power (excluding the voting power of Neighborhood Builder.” Branches filed an opposition, to which Standard replied.
The arbitrator heard argument on the matter, and on January 12, 2017 issued a case management order granting Standard’s motion. It was undisputed, the order stated, that the requisite consent of the membership had not been obtained prior to starting arbitration proceedings, as was the relevant language in the CC&Rs. The arbitrator concluded that the October ratification vote was insufficient. “The effect of the ratification Vote is nothing more than an indication by the voting owners that on October 12, 2016 they approved the action of the Association in filing the Demand for Arbitration. This after the fact expression of consent cannot be transmuted into the prior consent required by the CC&Rs. This is particularly so when such a result would adversely impact the rights of a party to the agreement by which the CC&Rs were created. The Developer is such a party.” The arbitrator also rejected Branches’ contentions that the CC&R provision was unenforceable, that enforcing it in the present context would be unconscionable, or that Standard had no standing to enforce it. The arbitrator subsequently denied a motion for reconsideration or a new trial.
In April 2017, Standard filed a motion to confirm the arbitration award. Branches filed a combined response to Standard’s motion and a petition to vacate, arguing the arbitrator had exceeded his powers by depriving Branches of its statutory rights. The parties extensively briefed the issue and the trial court heard the parties’ arguments.
The trial court granted the motion to confirm and denied the motion to vacate, finding the arbitrator had not exceeded his powers.
“The California Arbitration Act (CAA; [Code Civ. Proc.,] § 1280 et seq.) `represents a comprehensive statutory scheme regulating private arbitration in this state.'” (Cooper v. Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 10; see Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (Moncharsh).) Under the CAA, “[t]he scope of judicial review of arbitration awards is extremely narrow because of the strong public policy in favor of arbitration and according finality to arbitration awards. [Citations.] An arbitrator’s decision generally is not reviewable for errors of fact or law.” (Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21, 33; see Moncharsh, supra, 3 Cal.4th at p. 11.) This is true even when the “error appears on the face of the award and causes substantial injustice to the parties.” (Id. at p. 6.)
Judicial review of an arbitration award is ordinarily limited to the statutory grounds for vacating an award under Code of Civil Procedure section 1286.2 or correcting an award under Code of Civil Procedure section 1286.6. (Moncharsh, supra, 3 Cal.4th at pp. 12-13; Sunline Transit Agency v. Amalgamated Transit Union, Local 1277 (2010) 189 Cal.App.4th 292, 302-303.)
There are, however, certain “narrow exceptions” to the general rule of arbitral finality. (Moncharsh, supra, 3 Cal.4th at p. 11.) Branches advances one of those exceptions here, specifically, that the arbitrator exceeded his powers. We discuss this in detail below.
As for the relevant standard of review, “[t]o the extent the trial court made findings of fact in confirming the award, we affirm the findings if they are supported by substantial evidence. [Citation.] To the extent the trial court resolved questions of law on undisputed facts, we review the trial court’s rulings de novo. [Citation.] [¶] We apply a highly deferential standard of review to the award itself, insofar as our inquiry encompasses the arbitrator’s resolution of questions of law or fact. Because the finality of arbitration awards is rooted in the parties’ agreement to bypass the judicial system, ordinarily `”[t]he merits of the controversy between the parties are not subject to judicial review.” [Citations.]’ [Citation.]” (Cooper v. Lavely & Singer Professional Corp., supra, 230 Cal.App.4th at pp. 11-12.) Because the issue of whether the arbitrator exceeded his powers is a legal question based on undisputed facts, our review on that point is de novo. (Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 918, fn.1 (Richey).)
Code of Civil Procedure section 1286.2, subdivision (a)(4), states that the trial court shall vacate an arbitration award if “[t]he arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.”
“Arbitrators may exceed their powers by issuing an award that violates a party’s unwaivable statutory rights or that contravenes an explicit legislative expression of public policy.” (Richey, supra, 60 Cal.4th at p. 916.) This departure from the general rule applies only in “limited and exceptional circumstances.” (Moncharsh, supra, 3 Cal.4th at p. 32.) “`Arbitrators do not ordinarily exceed their contractually created powers simply by reaching an erroneous conclusion on a contested issue of law or fact, and arbitral awards may not ordinarily be vacated because of such error. . . .'” (Cable Connection, Inc. v. DIRECTTV, Inc. (2008) 44 Cal.4th 1334, 1360.) “Without an explicit legislative expression of public policy, however, courts should be reluctant to invalidate an arbitrator’s award on this ground. The reason is clear: the Legislature has already expressed its strong support for private arbitration and the finality of arbitral awards. . . . Absent a clear expression of illegality or public policy undermining this strong presumption in favor of private arbitration, an arbitral award should ordinarily stand immune from judicial scrutiny.” (Moncharsh, supra, 3 Cal.4th at p. 32.)
“[E]valuating a challenge to an arbitration award is a two-step process — first the court must determine whether the award is reviewable, and only if review is appropriate does the court consider whether the award should be upheld.” (SingerLewak LLP v. Gantman (2015) 241 Cal.App.4th 610, 621-622 (SingerLewak).) “The threshold question here, then, is whether according the arbitration award finality would be inconsistent with protecting [respondent’s] statutory rights.” (Id. at p. 622.)
The right that Branches claims applies here is the “right” to ratify the association’s actions; it claims this is not conferred by a single statute, but by several statutes. Because the arbitrator misconstrued these statutes and denied the association this “right,” the association claims, the arbitrator exceeded the scope of his powers.
To shed some light on this subject, we examine cases where an arbitrator was found to have exceeded his or her powers on this basis. Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665 (Pearson Dental), involved an arbitration award rejecting an employee’s statutory employment claims as time-barred. The court held the arbitrator clearly erred in concluding the employee’s claims were time-barred, and that error was reviewable because the arbitration involved unwaivable statutory claims and the legal error deprived the employee of a hearing on the merits. (Id. at p. 675.) “We held that when `an employee subject to a mandatory employment arbitration agreement is unable to obtain a hearing on the merits of his FEHA claims, or claims based on other unwaivable statutory rights, because of an arbitration award based on legal error, the trial court does not err in vacating the award.’ [Citation.]” (Richey, supra, 60 Cal.4th at p. 918.)
In Richey, the California Supreme Court went on to recognize the limited application of the unwaivable right exception: “The arbitrator [in Pearson Dental] `misconstrued the procedural framework under which the parties agreed the arbitration was to be conducted, rather than misinterpreting the law governing the claim itself’ [citation], a distinction that explained the narrow application of our holding and one that also guides the scope of our review here. Pearson Dental emphasized that its legal error standard did not mean that all legal errors are reviewable. [Citation.] The arbitrator had committed clear legal error by (1) ignoring a statutory mandate, and (2) failing to explain in writing why the plaintiff would not benefit from the statutory tolling period.” (Richey, supra, 60 Cal.4th at p. 918.)
In SingerLewak, supra, 241 Cal.App.4th 610, the court rejected the claim that the unwaivable right exception applied. The case involved the enforcement of a noncompete clause in a partnership agreement. (Id. at p. 614.) The arbitrator concluded the defendant was a partner, thus defeating the defendant’s argument that Business and Professions Code section 16602, which prohibits noncompete clauses for most employees, did not apply to him. In the trial court, the defendant opposed a motion to confirm the award in the plaintiff’s favor, arguing the award was illegal and violated public policy. (Id. at p. 615.)
The Court of Appeal disagreed, finding that although the restraint on noncompete clauses constitutes an unwaivable statutory right, the statutory scheme in the Business and Professions Code itself created an exception to the policy. (SingerLewak, supra, 241 Cal.App.4th at p. 624.) “[T] he arbitration award, even if legally erroneous, did not contravene a public policy indicating that certain issues not be subject to resolution by the arbitrator. [Citation.]” (Ibid.) Further, “[i]n contrast to Pearson, any arbitrator error did not `[misconstrue] the procedural framework under which the parties agreed the arbitration was to be conducted, rather than misinterpreting the law governing the claim itself.’ [Citation.] Indeed, [the defendant’s] argument is precisely that the arbitrator misinterpreted the law governing the claim itself.” (Ibid.)
Recent case law, therefore, stands “for the proposition that where an arbitrator’s decision has the effect of violating a party’s statutory rights or well-defined public policies — particularly those rights and policies governing the conduct of the arbitration itself — that decision is subject to being vacated or corrected.” (Sargon Enterprises, Inc. v. Browne George Ross LLP (2017) 15 Cal.App.5th 749, 765.) The question, then, is whether that principle applies to the instant case.
Branches first asserts, without supporting authority, that section 12.4.2 of the CC&Rs “conflicts with governing statutes, and is, for that reason, unenforceable.” The CC&Rs language is clear: “Required Vote to Make Claim. Prior to filing a claim pursuant to the ADR Provisions, the Neighborhood Corporation must obtain the vote or written consent of Owners other than Neighborhood Builder who represent not less than fifty-one percent (51%) of the Neighborhood Corporation’s voting power (excluding the voting power of Neighborhood Builder.” Unless Branches can provide legal authority why that clause should not be given effect, the plain language of the CC&Rs controls. (Franklin v. Marie Antoinette Condominium Owners Assn. (1993) 19 Cal.App.4th 824, 829.)
Branches turns to a number of statutes which it claims give it the “statutory right” to use ratification as an alternate method to obtaining the prior consent the CC&Rs command. First, Branches turns to section 4065, which states: “If a provision of this act requires that an action be approved by a majority of all members, the action shall be approved or ratified by an affirmative vote of a majority of the votes entitled to be cast.” (Italics added.) The Law Revision Commission Comments on section 4065, however, state: “Section 4065 is new. It is added for drafting convenience. This section only governs an election conducted pursuant to a provision of this act (i.e., the Davis-Stirling Common Interest Development Act). An election that is not required by this act would be governed by the association’s governing documents.”
Branches similarly relies on section 4070, which states: “If a provision of this act requires that an action be approved by a majority of a quorum of the members, the action shall be approved or ratified by an affirmative vote of a majority of the votes represented and voting in a duly held election in which a quorum is represented, which affirmative votes also constitute a majority of the required quorum.” (Italics added.) Section 4070 includes a Law Revision Commission Comment identical to the substance of the one quoted above with regard to section 4065.
Next, Branches cites section 6150, which requires an association to hold a meeting “[n]ot later than 30 days prior to the filing of any civil action by the association against the declarant or other developer of a common interest development for alleged damage to the common areas, alleged damage to the separate interests that the association is obligated to maintain or repair, or alleged damage to the separate interests that arises out of, or is integrally related to, damage to the common areas or separate interests that the association is obligated to maintain or repair. . . .” The notice has several requirements, but states nothing about a vote of the members.
Branches argues that CC&R section 12.4.2 “incorporates the requirements of Civil Code section 6150. It is, consequently, a requirement of the Act itself.” It argues the arbitrator misconstrued the trial court to limit the word “election” to “a vote for the purpose of appointing someone to a position,” rather than “anything requiring owner approval,” and therefore, a vote on whether to proceed with a claim against the developer was within “a provision of” the Act. But the cases Branches cites do not stand for this proposition. None of them address sections 4065, 4070, or 6150 at all, and certainly none of them state that an election required by the association’s documents, but not by a statute, falls within those provisions.
Indeed, Branches next points out that some provisions of the Act do require votes of the membership: “The Davis-Stirling Act, for example, explicitly requires section 4065 elections to extend the term of the declaration (Civ. Code, § 4265, subd. (a)), to amend the declaration (Civ. Code, § 4270, subd. (b)), and to make the association responsible for repairing damage to units from wood-destroying pests or organisms (Civ. Code, § 4780, subd. (b)).” The fact that certain provisions explicitly require such votes does not help Branches; it only supports the contention that absent a specific requirement in the Act to hold an election, the association’s governing documents control. (§§ 4065, 4070.) Branches points to no provision of the Act requiring a vote before filing a claim against a developer; accordingly, neither sections 4065 or 4070 are an “unwaivable statutory right” in this context.
Branches contends, for the first time on appeal, that section 6150, which requires notice and a meeting before filing a claim against a developer, is “triply germane here.” First, it asserts it is the “same requirement imposed by CC&R section 12.4.2.” This is incorrect on its face. Section 12.4.2 of the CC&R does not require a meeting, it requires a vote. Branches next claims that section 6150’s “prior to” language mirrors the CC&R language. While this is indisputably true, it is of little import here. The statute and the CC&R section have different requirements.
Most importantly, Branches claims, section 6150 permits an association to file its claim before giving notice of the required meeting if it “has reason to believe that the applicable statute of limitations will expire before the association files the civil action, the association may give the notice, as described above, within 30 days after the filing of the action.” (§ 6150, subd. (b).) Branches claims this to be the situation here, because Standard had previously filed and served a dispositive motion based on the statute of limitations (which, in fact, the arbitrator denied).
This does not help Branches in any event. Section 6150, subdivision (b), does not provide for “ratification,” as Branches claims. Section 6150 does not require membership approval, merely notice and a meeting; there is nothing to “ratify.” After complying with the section, the board can proceed to do anything it wishes with respect to filing a claim. Allowing notice after filing the claim if the statute of limitations is a concern merely creates a limited exception to the notice requirement. Section 6150 simply does not apply here.
Further, as Standard points out, even if the section did apply, Branches failed to comply with it. It filed its arbitration claim in January 2016 and did not obtain a vote of the membership until October 2016. It points to nothing in the statute that permits “ratification” outside the 30-day notice period.
Branches also contends that Corporations Code section 5034 confers an unwaivable right on an association’s members to ratify any action taken. Branches is incorrect. That section states that the phrase “`Approval by (or approval of) the members’ means approved or ratified by the affirmative vote of a majority of the votes. . . .” (Corp. Code, § 5034.) Branches argues, in effect, that the plain language of the CC&Rs must be ignored. It cites cases that do not interpret this language in the context of a homeowners association, and which do not stand for this proposition. It does not cite any case (or statute) stating that CC&Rs requiring membership approval before the board takes a certain action are unenforceable. Accordingly, we reject this contention. “Prior to” means “prior to.” It does not mean “after,” unless there is specific statutory authority permitting later ratification.
Branches next turns to section 5000, which states association meetings “shall be conducted in accordance with a recognized system of parliamentary procedure. . . .” Branches contends that because Robert’s New Rules of Order (4th ed. 2013) art. VI, section 39, states that approval of an action may occur by ratification, ratification is required as a method of approval in all circumstances. No authority on point supports this argument. Robert’s New Rules of Order, supra, art. VI, section 39, itself states that ratification is only available when ratifying an action would not “violate . . . [an organization’s] own constitution or by-laws.” Here, the association’s “constitution” — its CC&Rs — state that prior assent is required.
Branches’ next argument (offered for the first time on appeal) is that “[a]s a practical matter” the association “acts as the owner’s agent.” Branches cites no California authority for this proposition, but asserts that because section 2307 provides that an agent’s authority to act for its principal “may be” ratified after the fact, this creates a legal requirement that ratification “be available” as an alternate method of approval. We fundamentally disagree with Branches'”agency” theory, given that the Act sets forth extensive legal principles governing the management of associations. (§ 4000, et seq.; see Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 81.) At no point in the Act is the association declared the “agent” of the owners; surely, had the Legislature intended to create an agency relationship, it would have done so. Moreover, even if we were to accept this theory, the fact that section 2307 states that actions “may be” ratified after the fact does not create a statutory right requiring that ratification be available in all circumstances.
Branches’ attempts to bring the relatively few cases that found an arbitrator violated an unwaivable statutory right within the facts here are unavailing. Those cases involve specific statutory directives or address the conduct of the arbitration itself, as Branches admits. (See, e.g., Board of Education v. Round Valley Teachers Assn. (1996) 13 Cal.4th 269; Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21; Jordan v. Department of Motor Vehicles (2002) 100 Cal.App.4th 431; City of Palo Alto v. Service Employees Internat. Union (1999) 77 Cal.App.4th 327.) Branches insists “the Act mandates ratification,” however, which, as discussed above, we find to be untrue. Therefore, these cases are unhelpful. In sum, we conclude Branches has not identified an unwaivable statutory right preventing an association’s CC&Rs from requiring approval prior to the board instituting a legal claim against a developer.
Branches alludes to public policy at several points, claiming, for example, that the Legislature has made a “clear pronouncement of public policy favoring ratification.” We disagree that public policy works in its favor here.
The Act, as we have mentioned, provides a comprehensive framework for the governance of homeowners associations. The Act provides for numerous limits on the power of the board, and a system of checks on the board’s power. Associations are required to publish certain information to the membership to keep them informed. (§§ 5300, 5305, 5310.) Associations are required to act by a majority vote or a majority of a quorum if a vote is required. (§§ 4065, 4070.) Even amendments to the governing documents to delete construction or marketing provisions after an association is built must be approved by the membership. (§ 4230.) Rules adopted by the board must be in writing, within the authority of the board as conferred by the governing documents, and reasonable. (§ 4350.) On certain subjects, the board cannot act by fiat and must provide notice to members of potential changes in the association’s rules (§ 4360), and a sufficient number of members can call a special meeting to attempt to reverse those changes (§ 4365).
Section 6150 is a part of those checks. As we discussed above, it requires notice to the membership and a meeting before legal action may be instituted against a developer. The reason for this is sound: to ensure that a board, dealing with a difficult issue like construction defects, has not lost the forest for the trees and decided to institute legal action without notifying the members. This is completely consistent with the many other homeowner rights that are set forth in the Act.
The CC&R provision here goes a step further, requiring affirmative consent of a quorum of the members “prior to” instituting such action. This, too, is consistent with the aims of the Act — to balance the association’s need to operate efficiently with the rights of its members to be informed and participate in decisions that could impact the association for years, if not decades, to come. Branches would have us believe that there is a “right to ratify” after the fact, as if that confers some benefit on the owners. It does not; it ignores their explicit right to consent beforehand, before a road has been taken that will be difficult, expensive, and time consuming. We cannot ignore such a provision because it is inconvenient for the association in this particular case; the association had the CC&Rs and was on notice of their contents. Public policy requires us to follow their plain language.
Accordingly, we find no violation of public policy in the arbitrator’s decision, and conclude that judicial review of the arbitration award was not merited in this instance.
The judgment is affirmed. Respondent is entitled to its costs on appeal.
O’LEARY, P. J. and FYBEL, J., concurs.
 Subsequent statutory references are to the Civil Code unless otherwise indicated.
 The referenced “ADR Provisions” state that any “dispute” is governed by the arbitration provisions in the home or common property warranties. “Dispute” is defined as “any and all actions or claims between any Neighborhood Builder party on the one hand and any Owner and/or the Neighborhood Corporation on the other hand arising out of or in any way relating to the Neighborhood, any real property or Improvements in the Neighborhood . . . the Common Property Warranty, and/or any other agreements or duties or liabilities as between any Neighborhood Builder party and any Owner and/or the Neighborhood Corporation relating to the sale or transfer of the Condominiums or the Common Property, or regarding the use or condition of the Condominiums and/or the Common Property, or the design or construction of or any condition on or affecting the Neighborhood and/or any Condominium and/or the Common Property in the Neighborhood, including without limitation construction defects. . . .”
 In the interests of brevity, we refer to this as the “unwaivable right exception,” although it encompasses both unwaivable statutory rights and public policy.
 Despite the California Supreme Court’s useful discussion of the exception, the facts of Richey itself are not helpful to our analysis, as the case ultimately turned on the lack of prejudicial error. In Richey, the court was reviewing an appeal under the California Family Rights Act (CFRA). (Gov. Code, §§ 12945.1, 12945.2.) The arbitrator had rejected an employee’s claim for reinstatement under the CFRA, relying on a federal defense previously untested in California. The trial court confirmed the award, but the Court of Appeal reversed, concluding the arbitrator had violated the employee’s statutory right to reinstatement when he applied the federal defense to the employee’s claim. (Richey, supra, 60 Cal.4th at pp. 912, 915.) The California Supreme Court reinstated the award on the alternate ground that the employee had not demonstrated that applying the federal defense was prejudicial. (Id. at p. 920.)
 The official comments of the California Law Revision Commission “are declarative of the intent not only of the draftsman of the code but also of the legislators who subsequently enacted it.” (People v. Williams (1976) 16 Cal.3d 663, 667-668.) The comments are persuasive, albeit not conclusive, evidence of that intent. (Conservatorship of Wendland (2001) 26 Cal.4th 519, 542.) Branches, however, offers no contrary evidence of legislative intent, and when taken together with the plain language of the statute, we find the comment accurately expresses the intent of the statute.
 An association’s “`[g]overning documents'” include its CC&Rs. (§ 4150.)
 The arbitrator made no such finding.
 Branches next looks to maxims of interpretation to support its argument that “prior” does not really mean what it says it means. But because it does not identify a statute including an “unwaivable statutory right,” we need not consider the arbitrator’s interpretation of the contract.