Court Rules Email Exchanges Without Board Action Are Not Board Meetings – Updated 2/12/24

*Updated 2/12/24

LNSU #1, LLC v. Alta Del Mar Coastal Collection Community Association, 2023 Cal. App. LEXIS 646.

 

Previously, we shared the ruling of the Court of Appeals for the Fourth Appellate District in LNSU#1 v. Alta Del Mar Coastal Collection Community Association (2023) 94 Cal. App. 5th 1050.  In that case, the court held that an email discussion among board members regarding items of association business did not violate the Open Meeting Act, because such email exchanges are not considered “board meetings” as that term is defined in Civil Code section 4090(a).

As a reminder, the case involved two homeowners who sued their homeowners association arguing, among other things, that the board violated the Open Meeting Act by conducting board meetings through a series of emails. The trial court found in favor of Alta Del Mar. The homeowners appealed and the Court of Appeals upheld the trial court’s decision.

It’s important to keep in mind that this ruling is limited to email discussions among board members.  It probably would not extend to a discussion among a quorum of the board physically present at the same time and place, because that likely would constitute a “board meeting” under Civil Code section 4090(a), even if the board took no action at that meeting.

It’s also important to remember that the purpose of the Open Meeting Act is to foster transparency.  Although email discussions might not violate the Open Meeting Act, those email exchanges could be discoverable in future litigation.  Certainly, discussions of agendas, date, time and place of meetings, and dissemination of necessary new information would appear to be (both before and after the Alta Del Mar decision) appropriate. However, wisdom dictates that the less a director uses email to discuss board business, homeowner personalities and conflicts, vendor qualifications and the like, the better.

 

ORIGINAL ARTICLE AS PUBLISHED ON 8/31/23

The Court of Appeals for the Fourth Appellate District just held that an email discussion among board members regarding items of association business did not violate the Open Meeting Act, because such email exchanges are not considered “board meetings” as that term is defined in Civil Code section 4090(a).

Two homeowners sued their homeowners association Alta Del Mar Coastal Collection Community Association arguing, among other things, that the board violated the Open Meeting Act by conducting board meetings through a series of emails. The trial court found in favor of Alta Del Mar. The homeowners appealed and the Court of Appeals upheld the trial court’s decision.

The Court of Appeals explained that the definition of “board meeting” in Civil Code section 4090(a) refers to “a gathering of a quorum of the directors … at the same time and in the same physical location….” Consequently, the appellate court reasoned that emails sent by board members at different times from different physical locations did not constitute a “board meeting” within the meaning of Section 4090(a).

The Court of Appeals went on to explain that “[b]y discussing items of Association business in e-mails …, the directors did nothing contrary to the purpose of the [Open Meeting Act], because they took no action on those items in the e-mails. Although the [Open Meeting Act] prohibits the board from acting on items of Association business outside a board meeting…, it does not prohibit the board from discussing the items outside a meeting.” (Emphasis in original.)

Therefore, the appellate court concluded that the phrase, “board meeting,” as defined by Civil Code section 4090(a), refers to “an in-person gathering of a quorum of the directors of a homeowners association at the same time and in the same physical location for the purpose of talking about and taking action on items of association business. E-mail exchanges among directors on those items that occur before a board meeting and in which no action is taken on the items…do not constitute board meetings within the meaning of that provision.”

As momentous as this case is, caution must be exercised for the moment because it is possible that this decision may yet be altered, withdrawn from publication, or further appealed. Once the time to take any of these actions has expired, we will immediately issue an update. Please consult with your own legal counsel, if you have questions concerning the interpretation of this case.

The Corporate Transparency Act (Updated 2/1/2024)

*This article was updated on February 1, 2024.

By Kieran J. Purcell, Esq.

In an effort to enhance corporate transparency and combat money laundering, tax fraud, and other illicit activity, Congress passed The Corporate Transparency Act (CTA) in 2021.  The CTA will be enforced by the Financial Crimes Enforcement Network (FinCEN) of the United States Treasury. FinCEN published the Small Entity Compliance Guide (Guide)[1] to help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule (Reporting Rule) issued on September 30, 2022.[2]  Although the CTA applies to many types of small business entities, this article addresses some of the most frequently asked questions about how the CTA may apply to common interest developments (CIDs) after it goes into effect on January 1, 2024.

Who must file a Beneficial Ownership Information (BOI) Report?

The CTA requires certain entities to file beneficial ownership information (BOI) reports to FinCEN. These reports contain information about the entity itself and two categories of individuals: (1) beneficial owners and for domestic reporting companies created or registered after January 1, 2024,  (2) company applicants.  Generally, a beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company. A company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company.

When will initial BOI Reports be required?

BOI Reports can be filed electronically through FinCEN’s secure filing system beginning January 1, 2024. Reporting companies created or registered to do business before January 1, 2024, have until January 1, 2025, to file their initial BOI reports. Reporting companies created or registered after January 1, 2024, but before January 1, 2025, will have 90 calendar days from their creation/registration to file their initial reports. Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports. Additional information about the Reporting Rule and guidance materials are available at www.fincen.gov/boi.

Is my CID a Reporting Company?

“A reporting company is any entity that meets the ‘reporting company’ definition and does not qualify for an exemption. There are two categories of reporting companies: a ‘domestic reporting company’ and a ‘foreign reporting company.’”[3] This article only addresses domestic reporting companies. If your CID is a corporation created under United States laws, including laws of the individual states or Indian tribes, it is a domestic reporting company unless it meets one of twenty-three (23) exemptions.  For many CIDs, the most likely possible exemption is the large company exemption.

Is my CID eligible for a Large Company Exemption?

A CID qualifies for this exemption if it meets all of the following criteria.[4] It has more than twenty (20) full-time employees employed in the United States, the CID regularly conducts its business at a physical location in the United States, the CID filed a Federal income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales.

My non-exempt CID is a Reporting Company; What do I do next?

If your CID is a reporting company, your next step is to identify its beneficial owners. “A  beneficial owner is any individual who, directly or indirectly: (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company.”[5] FinCEN expects that every reporting company will be able to identify and report one or more beneficial owner to FinCEN. If an individual qualifies as a beneficial owner, information about that individual must be reported to FinCEN in a reporting company’s BOI report.

“A reporting company can have multiple beneficial owners. For example, a reporting company could have several beneficial owners who exercise substantial control over the reporting company and may have no beneficial owners who own or control at least 25 percent of the ownership interests of the reporting company. There is no maximum number of beneficial owners who must be reported.”[6]

Which individuals exercise substantial control over the CID?

“Reporting companies are required to identify all individuals who exercise substantial control over the company. There is no limit to the number of individuals who can be reported for exercising substantial control. “[7]

While the Reporting Rules lists four (4) Substantial Control Indicators (SCIs) for determining the individual(s) who exercise(s) substantial control over a reporting company[8], we will focus on the two (2) SCI categories which may most commonly apply to CIDs, Senior Officers, and Important Decision Makers.

Senior Officers are defined as an individual holding the position of President, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, or General Counsel who perform similar functions as these corporate officers.  Senior Officers are considered Beneficial Owners.

Important Decision Makers are any individuals who direct, determine, or have substantial influence over important decisions made by the reporting company, such as business or financial decisions. Please note managing agents and employees may be exempt from being beneficial owners. Managing agents, such as community association managers, may qualify for an agency exemption to the definition of beneficial owner if they perform ordinary advisory or contractual services. Employees of the reporting company who are not senior officers and whose substantial control is derived solely from their employment status may qualify for an employee exemption.[9]

What specific information does my CID need to report about each beneficial owner?

  • Full Legal Business name and any trade name or doing business as (DBA) name of the reporting company.
  • Complete current United States address of the reporting company.
  • Each Beneficial Owners must provide:
    • Full legal names
    • Date of birth
    • Complete current addresses
    • Unique identifying number/issuing jurisdiction/image (government issued photo identification, such as a driver’s license or passport)

When must reporting company provide updates or corrected BOI Reports?

An updated BOI Report containing updates, corrections, and additions are to be made within 30 days of the reporting company becoming aware of the change.  CIDs should calendar this date when planning election timelines to make sure updates are reported in a timely manner.  However, as the makeup of the CID Board of Directors may shift throughout the year as seats are vacated and filled through appointment, CIDs should keep the 30-day requirement in mind even outside of normal election cycles.

Consequences of failing to provide timely or accurate BOI Reports

The willful failure to provide timely, complete or updated BOI Reports to FinCEN, or the willful submission or attempt to submit a false or fraudulent BOI report may also result in a civil or criminal penalty, including civil penalties of up to $500 for each day the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may also be held accountable for that failure.

Is my reporting company required to report its company applicants?

A domestic reporting company is required to report its company applicants if it is created on or after January 1, 2024.

A domestic reporting company is not required to report its company applicants if it was created before January 1, 2024.

Efforts are being made to exempt CIDs and/or extend the reporting deadline

In late 2023, the U.S. House of Representatives passed the Protect Small Business and Prevent Illicit Financial Activity Act (H.R. 5119) by a vote of 400-1. This bill would delay the Corporate Transparency Act reporting requirements for one year. Currently, a companion bill is before the Senate.  How the Senate will vote on this issue is unclear at the time this article is being written. However, some industry commentators have stated they believe the Senate will approve a 1-year hold on all Corporate Transparency Acts reporting requirements.  In addition, they have stated it is less likely a CID exemption will be approved.


[1] FinCEN’s Small Entity Compliance Guide, December 2023, Version 1.1 can be found at: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

[2] Beneficial Ownership Information Reporting Rule, Title 31, Section 1010.380 of the Code of Federal Regulations.

[3] FinCEN’s Small Entity Compliance Guide, December 2023, Version 1.1, at 2.

[4] Id. at 12.

[5] Id. at 16.

[6] Id.

[7] Id. at 17.

[8] Id. at 17.

[9] Id. at 30.

 

LNSU #1, LLC, et al. v. ALTA DEL MAR COASTAL COLLECTION COMMUNITY ASSOCIATION

Summary by David A. Kline, Esq.

 

The Court of Appeals for the Fourth Appellate District just held that an email discussion among board members regarding items of association business did not violate the Open Meeting Act, because such email exchanges are not considered “board meetings” as that term is defined in Civil Code section 4090(a).

Two homeowners sued their homeowners association Alta Del Mar Coastal Collection Community Association arguing, among other things, that the board violated the Open Meeting Act by conducting board meetings through a series of emails. The trial court found in favor of Alta Del Mar. The homeowners appealed and the Court of Appeals upheld the trial court’s decision.

The Court of Appeals explained that the definition of “board meeting” in Civil Code section 4090(a) refers to “a gathering of a quorum of the directors … at the same time and in the same physical location….” Consequently, the appellate court reasoned that emails sent by board members at different times from different physical locations did not constitute a “board meeting” within the meaning of Section 4090(a).

The Court of Appeals went on to explain that “[b]y discussing items of Association business in e-mails …, the directors did nothing contrary to the purpose of the [Open Meeting Act], because they took no action on those items in the e-mails. Although the [Open Meeting Act] prohibits the board from acting on items of Association business outside a board meeting…, it does not prohibit the board from discussing the items outside a meeting.” (Emphasis in original.)

Therefore, the appellate court concluded that the phrase, “board meeting,” as defined by Civil Code section 4090(a), refers to “an in-person gathering of a quorum of the directors of a homeowners association at the same time and in the same physical location for the purpose of talking about and taking action on items of association business. E-mail exchanges among directors on those items that occur before a board meeting and in which no action is taken on the items…do not constitute board meetings within the meaning of that provision.”

 

***End Summary*

 

Nos. D080208, D081204.
Court of Appeals of California, Fourth District, Division One.
Filed August 25, 2023.
APPEALS from a judgment and postjudgment orders of the Superior Court of San Diego County, Super. Ct. No. 37-2018-00032291-CU-MC-CTL, Eddie C. Sturgeon, Judge. Judgment affirmed; postjudgment orders reversed.

James E. Friedhofer; Knottnerus & Associates, Wilfred Knottnerus and Mark B. Simpkins for Plaintiffs and Appellants.

Gordon & Rees, Craig J. Mariam, John B. Fraher, and Scott W. McCaskill for Defendant and Respondent.

 

CERTIFIED FOR PUBLICATION

 

Appellants LNSU #1 and LNSU #2, two homeowners in a common interest development managed by the Alta Del Mar Coastal Collection Community Association (the Association), appeal the judgment entered against them in their action against the Association for violations of the Common Interest Development Open Meeting Act (OMA; Civ. Code, § 4900 et seq.; subsequent undesignated section references are to this code). After a bench trial, the court rejected appellants’ claims that the Association violated the OMA when its board of directors took action in an executive session that it should have taken in a meeting open to all members, the board failed to prepare minutes concerning a second executive session, and certain directors discussed items of Association business via e-mails without giving all Association members notice and opportunity to participate in the discussions and without preparing related minutes. We affirm the judgment.

Appellants also appeal postjudgment orders denying their motion to strike or tax costs and granting the Association’s motion for attorney fees. The trial court awarded costs under a provision of the OMA authorizing such an award to a prevailing homeowners association in an action the court finds “to be frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)). The court awarded attorney fees under a provision of the Davis-Stirling Common Interest Development Act (Davis-Stirling Act; § 4000 et seq.) applicable to an action to enforce the governing documents of a homeowners association (§ 5975, subd. (c)). We conclude the Association is not entitled to attorney fees or costs, and reverse the challenged orders.

 

I. BACKGROUND

 

A. Parties

The Association is the governing body of a common interest development in San Diego County that includes 10 homes. At most times pertinent to this appeal, the Association had a board of five directors, including Martin Mueller, Richard Pyke, Ponani Sukumar, Anthony Valeri, and Douglas Woelkers.

Appellants LNSU #1 and LNSU #2 are limited liability companies each of which owns a home in the Association. Sukumar is a manager of both entities. Sukumar sometimes sent Douglas Grimes as a proxy to attend Association board meetings. Grimes at some point became a manager of LNSU #2 and was elected to the Association’s board in June 2017.

 

B. E-mails Among Directors

 

From August 2016 through March 2017, Mueller, Pyke, Valeri, and Woelkers exchanged multiple e-mails concerning Association business. Several examples are summarized below.

• On August 23, 2016, Valeri sent Mueller, Pyke, and Woelkers e-mails proposing items for the agenda for a board meeting on August 25, describing appellants’ plans to construct 10,000 square feet of underground living space on their lots, and suggesting imposition of a fine if the plans were not submitted to the board. Mueller responded with a question about another lot approximately 30 minutes later.

• On August 26, 2016, Pyke responded to Valeri’s August 23 e-mails by asking, “Any reaction to our HOA meeting yesterday?” In a separate e-mail, Woelkers responded that he “sense[d] we are heading towards an acrimonious relationship with [Sukumar]” and would need to take “some kind of punitive action just to uphold the precedent of the rules of the [Association].”

• On October 11, 2016, Mueller sent Pyke, Valeri, and Woelkers an e-mail about the landscaping plans for appellants’ lots to state his position appellants should not be granted an extension of time to submit their plans and agreed to a board meeting to address the issues.

• On October 11, 2016, Valeri sent Mueller, Pyke, and Woelkers an e-mail concerning a hearing and potential imposition of a fine on another homeowner for violating the Association’s landscaping guidelines. Woelkers responded the following day to urge consistency in application of the rules regarding hearings and fines to all homeowners.

• On January 30, 2017, Valeri sent Pyke, Mueller, and Woelkers an e-mail stating he had removed an item from the agenda for the February 1 board meeting and how he would “like to get [Grimes] out of everyone’s hair.” Mueller responded the following day that he could not attend the meeting.

• On February 5, 2017, Valeri forwarded Mueller, Pyke, and Woelkers an e-mail he had received from Grimes accusing him (Valeri) of violating the Association’s governing documents and complaining of delays in approval of appellants’ landscaping plans. The following day, Pyke responded,” Blah blah blah!”; and Mueller responded, “We need to get rid of Douglas Grimes. He is not part of our community.”

• On March 3, 2017, Valeri sent Mueller, Pyke, and Woelkers an e-mail about whether to have a hearing on appellants’ landscaping plans and whether to levy a fine. Valeri stated he would be having a call with an attorney on” how to handle this situation over the longer term.” Ten minutes later, Pyke responded, “I think maybe we let the fines slide since [appellants have] submitted plans.”

 

C. E-mails from Sukumar and Grimes

During the same period that Mueller, Pyke, Valeri, and Woelkers were exchanging e-mails with one another, Sukumar and Grimes sent the directors many e-mails about Association business. Some examples follow.

• On September 26, 2016, Grimes sent all directors and two other individuals an e-mail to offer a meeting to discuss appellants’ landscaping plans without other members of the Association present.

• On October 18, 2016, Grimes sent all directors an e-mail asking them to vote that the requirement of notice to neighbors of appellants’ landscaping plans had been satisfied.

• On November 16 and 17, 2016, Grimes and Sukumar exchanged e-mails about the draft of an e-mail concerning board approval of appellants’ landscaping plans, which Grimes later sent to the directors.

• On February 5, 2017, Grimes sent all directors an e-mail accusing Valeri, in his capacity as president of the Association, of having acted “contrary to the spirit and letter of the [Association’s] governing documents” and “interfered with Sukumar’s efforts to landscape [appellants’ lots] in complete accordance with the Design Guidelines.”

• On February 19, 2017, Sukumar sent all other directors and Grimes an e-mail stating that, subject to two conditions, he approved Woelkers’s application to the board to replace a brow ditch with a buried pipe.

• On February 24, 2017, Sukumar sent all other directors, Grimes, and two other individuals an e-mail complaining of delays in approval of appellants’ landscaping plans and requesting a board hearing be postponed and held at a neutral location.

• On March 5, 2017, Sukumar sent all other directors, Grimes, and another individual an e-mail responding to modifications requested by Woelkers to the landscaping plans appellants had submitted.

• On March 10, 2017, Sukumar sent all other directors, Grimes, and two other individuals an e-mail concerning the scheduling of a board meeting to discuss appellants’ landscaping plans.

• On March 29, 2017, Sukumar sent all other directors and his attorney an e-mail complaining of the board’s failures to produce documents he had requested and requesting items be put on the agenda for an upcoming board meeting.

 

D. April 3, 2017 Board Meeting

The board met in executive session on April 3, 2017. Sukumar and all other directors except Mueller attended. They discussed appellants’ landscaping plans and voted 3-0 (Sukumar recused himself) to adopt the recommendations of the design review consultant to reject portions of the plans concerning driveway gates and walls. The directors voted 3-1 (Sukumar was in the minority) to retain legal counsel.

 

E. Prior Litigation

On July 17, 2017, appellants filed a complaint against the Association and its inspector of elections, Therese McLaughlin, to challenge the election of three directors held on June 22, 2017. Appellants alleged that although Grimes had received the third highest number of votes and was eligible to serve on the board because he was a manager of LNSU #2, McLaughlin erroneously determined Grimes was ineligible. While the action was pending, two of the three newly elected directors resigned, and McLaughlin reversed her position and decided Grimes had been validly elected to the board. Sukumar, who was still a director, and Grimes held a board meeting on October 17, 2017, from which Valeri, who was also still a director, was absent. At that meeting, Sukumar and Grimes appointed Girish Prasad, a manager of appellants, to the board. The newly constituted board later voted to oust Valeri as president of the Association, to install Grimes as president and chief financial officer, to install Sukumar as vice-president and secretary, and to look for replacement legal counsel. The trial court enjoined Prasad from serving on the board and stayed the board’s actions concerning appointment of officers and retention of new counsel. On appellants’ appeal, this court affirmed those orders. (LNSU #1 v. McLaughlin (Dec. 20, 2018, D073366) [nonpub. opn.].)

 

F. August 28, 2017 Board Meeting

On August 28, 2017, while the prior action was pending, the board met in executive session to discuss the litigation. No minutes were prepared for the meeting.

 

G. Current Litigation

 

1. Pleadings

Appellants commenced the present action against the Association on June 28, 2018, by filing a complaint alleging violations of the OMA. Specifically, appellants alleged the Association violated the OMA by conducting board meetings and taking action on Association business via e-mails without providing all homeowners notices and agendas in advance of the meetings, without allowing all homeowners to participate, and without making minutes available to homeowners. (See §§ 4910, subd. (a), 4920, subds. (a), (d), 4925, 4930, subd. (a), 4950, subd. (a).) Appellants further alleged the board held executive sessions on matters that should have been the subject of meetings open to all members, and did not note the general nature of the matters discussed in the executive sessions in the minutes of the next board meeting that was open to all homeowners. (See § 4935, subds. (a), (e).) Appellants sought a declaration that the Association had violated the OMA, an injunction requiring compliance, civil penalties, costs, and attorney fees. (See § 4955.)

The Association answered the complaint with a general denial and many affirmative defenses. As its 17th affirmative defense, the Association alleged “all the claims against [it] are barred, in whole or in part, by the doctrine of unclean hands.”

 

2. Pretrial Proceedings

In discovery, the Association provided a response to appellants’ request for admissions that Valeri verified. The Association admitted directors had exchanged e-mails on matters of Association business and the exchanges violated several provisions of the OMA. In response to a request asking the Association to admit it had no facts to support its affirmative defense of unclean hands, the Association responded with certain objections and then stated: “Admit that [the Association] does not contend that the allegations regarding the [OMA] violations identified in [appellants’] Supplemental Response to Special Interrogatories, Set One as [the Association] understands them are barred by the doctrine of unclean hands. Otherwise denied. Discovery and investigation are ongoing.”

The Association filed a motion for summary judgment or, in the alternative, summary adjudication on the grounds there was no actual controversy that would warrant declaratory relief, because the Association did not contest that at most 10 OMA violations had occurred; there was no need for injunctive relief, because the latest violation alleged by appellants had occurred more than two years earlier and there was no evidence of continuing violations; and the court could determine the number of violations and set the amount of civil penalties, if any. The court ruled appellants had not met their burden to establish the threat of future harm, summarily adjudicated the cause of action for injunctive relief against them, and otherwise denied the motion.

 

3. Trial

The case proceeded to a bench trial on appellants’ claims for declaratory relief and civil penalties. In a joint trial readiness report, the parties identified as the legal issues in dispute: (1) whether the e-mails identified by appellants constituted OMA violations; (2) the number of OMA violations each e-mail constituted; (3) whether the two executive sessions identified by appellants violated the OMA; (4) the number of OMA violations that each executive session constituted; and (5) the number and amount of statutory penalties, if any, to which appellants were entitled.

In their trial brief, appellants argued the e-mails the directors had exchanged concerning appellants’ landscaping plans and other Association business violated the OMA because no notices or agendas for the meetings were given to all members of the Association, not all members were allowed to attend and to speak at the meetings, and no minutes were prepared for the meetings. They argued the April 3, 2017 executive session of the board violated the OMA because the board took action on landscaping plans it should have considered in a meeting open to all members, and the August 28, 2017 executive session violated the OMA because the board prepared no minutes describing what was discussed in the session. Appellants also argued the Association’s defense of unclean hands was groundless because they were given no notice of what the allegedly unclean acts were or who allegedly committed them. Appellants asked the trial court to assess 638 civil penalties of $500 each and to award them costs and attorney fees.

In its trial brief, the Association conceded the e-mails were sent but contended the directors did not know at the time they sent them that they could be violating the OMA, and argued that because appellants’ managers (Sukumar and Grimes) had sent similar e-mails during the same period, appellants were “inequitably seek[ing] relief against the Association for the exact same conduct they engaged in.” The Association stated the April 3, 2017 board meeting “arguably” violated the OMA, because the board discussed appellants’ landscaping plans in an executive session rather than in a meeting open to all members, but pointed out Sukumar and Grimes attended the meeting and were allowed to participate. The Association conceded the failure to prepare minutes for the August 28, 2017 executive session violated the OMA, but argued appellants should not be rewarded because it was their unlawful attempt to take over the board (which was the subject of the prior action) that prevented the preparation of minutes. The Association urged the trial court to deny appellants’ claims for relief.

On the first day of trial, the court granted the Association’s unopposed request to take judicial notice of the record in the prior action arising out of the June 22, 2017 election of directors to the Association’s board. The court then heard opening statements from counsel and testimony from Woelkers. Valeri, Grimes, and Sukumar testified the following day. In overruling an objection to a question asking Sukumar whether certain e-mails violated the OMA, the court stated “it’s going to be up to the [c]ourt what constitutes a meeting” under the statute. The court admitted the e-mails described in parts I.B. and I.C., ante, and other documents. The trial court denied appellants’ motion to strike all evidence regarding the Association’s affirmative defense of unclean hands. After the close of evidence, the court asked counsel, “Is there any law on whether an e-mail constitutes a meeting?” Counsel agreed it was a novel issue on which the court would be making new law.

On the third and final day of trial, the court heard closing arguments from counsel. During appellants’ argument, the court asked counsel whether certain e-mail exchanges were board meetings within the meaning of the OMA. Appellants’ counsel answered the exchanges were meetings if the directors discussed “specifics” or offered an “opinion” about a proposed board action, but not if they discussed putting a matter on the agenda or scheduling a meeting. In its closing argument, the Association argued the exchanges were not board meetings within the meaning of the OMA, because the directors were not in the same place at the same time when they exchanged the e-mails and took no action on Association business in them.

After hearing closing arguments, the trial court ordered the parties to submit proposed statements of decision for its review. In their statement, appellants proposed that the court conclude the e-mail exchanges among directors constituted meetings under the OMA and cited statutory and case law purportedly supporting that conclusion. The Association proposed in its statement that the trial court reach the opposite conclusion and cited statutes, cases, and legislative history purportedly supporting that conclusion.

 

4. Trial Court’s Decision and Judgment

After issuing a tentative decision in favor of the Association and considering appellants’ objections thereto, the trial court issued a final statement of decision that largely adopted the Association’s proposed statement. The court ruled the April 3, 2017 executive session of the board substantially complied with the OMA because appellants’ representatives (Sukumar and Grimes) participated in the session. The court ruled appellants’ unclean hands in unlawfully attempting to take over the board caused the failure of the preparation of minutes generally noting what had been discussed at the executive session held on August 28, 2017, and barred appellants from obtaining relief for that failure. The court ruled the e-mail exchanges among directors of which appellants complained were not board meetings under the OMA, and appellants’ unclean hands in sending similar e-mails to directors barred them from obtaining any relief based on the exchanges. The trial court entered a judgment that appellants take nothing from the Association.

 

5. Postjudgment Motions

 

a. Appellants’ Motion to Strike or Tax Costs

The Association filed a memorandum of costs totaling $8,874.61 for filing and motion fees; deposition costs; service of process fees; court reporter fees; models, enlargements, and photocopies of exhibits; electronic filing or service fees; and other costs. Attached to the memorandum were invoices and receipts for the various claimed costs.

Appellants filed a motion to strike or tax costs. They argued the Association could not recover any costs, because the provision governing costs in actions under the OMA allows a homeowners association to recover costs against a homeowner only if the court finds the action “to be frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)), and their action did not fit that description. Appellants also argued the court reporter fees ($1,960.00) were not recoverable, because the parties had agreed to share those costs; and the “[o]ther” costs ($735.18) were insufficiently documented.

In opposition to appellants’ motion, the Association argued that as the prevailing party it was entitled to recover costs. The Association claimed it was entitled to costs as “the prevailing party” “[i]n an action to enforce [its] governing documents” (§ 5975, subd. (c)), because appellants alleged in their complaint that they had made requests under the Association’s governing documents, those requests underlay their claims for relief, and they recovered nothing in the action. The Association also claimed it was entitled to costs because appellants’ action was “unreasonable” and “without foundation” (§ 4955, subd. (b)) in light of their unclean hands in sending e-mails of the type they alleged violated the OMA and their steadfast resistance to the Association’s efforts to end the litigation, as evidenced by their rejection of a settlement offer,[1] opposition to the motion for summary judgment in which the Association conceded 10 OMA violations, and changing position on how many OMA violations occurred. Based on appellants’ failure to accept the settlement offer, the Association argued it was entitled to recover its postoffer costs. (See Code Civ. Proc., § 998, subd. (c)(1).) The Association finally contended the court reporter fees it had claimed were allowable as costs, and the “other” costs it had claimed were for fees for virtual hearings held during the COVID-19 pandemic.

In reply, appellants argued the statute governing costs was section 4955, subdivision (b), not section 5975, subdivision (c), because their action was to enforce the OMA, not the Association’s governing documents. Appellants further argued the Association could recover no costs, because the action was not frivolous. They also argued the unavailability of costs under section 4955, subdivision (b) rendered the cost-shifting provisions of Code of Civil Procedure section 998 inapplicable.

 

b. Association’s Motion for Attorney Fees

The Association moved for an award of $409,282.50 in attorney fees. It sought fees under the same statutes and for the same reasons as it sought costs.

Appellants opposed the motion. They argued the controlling statute was section 4955, subdivision (b), which they claimed under no circumstances authorizes an award of attorney fees to a prevailing homeowners association in a homeowner’s action for violation of the OMA. Appellants also argued the amount of fees the Association had requested was unreasonable.

In reply, the Association repeated and expanded on points it had made in its initial motion papers, and argued the fees it had requested were reasonably incurred.

 

c. Trial Court’s Orders

The trial court denied appellants’ motion to strike or tax costs. It ruled that section 4955, subdivision (b) authorized the Association’s recovery of costs, because appellants'”pursuit of litigation was unreasonable at multiple stages. . . . Among other reasons, [appellants] pursued the litigation despite unclean hands and rejected a reasonable settlement offer.” The court awarded all claimed costs.

The trial court granted the Association’s motion for attorney fees in part. It ruled fees were recoverable under section 5975, subdivision (c), because the Association had prevailed in an action in which “the complaint asserted requests under [the Association’s] governing documents” and “sought to enforce [the] governing documents.” The court further ruled that “although not necessary for an award of fees under . . . section 5975(c), the court has already found that [appellants’] litigation was unreasonable. [Citation.] Accordingly, [the Association] is entitled to its reasonable fees from the date of its [Code of Civil Procedure s]ection 998 offer.” After consulting with the parties and considering the record, the trial court awarded the Association $348,306 in attorney fees.

The trial court amended the judgment to add the awards of attorney fees and costs.

 

II. DISCUSSION

 

A. Appeal of Judgment

Appellants attack the judgment on several grounds. They contend the trial court erred by interpreting “board meeting” as used in the OMA not to include the e-mail exchanges among directors, and the Association’s failure to assert that interpretation before trial precluded its assertion after trial under principles of waiver or judicial estoppel. Appellants argue that undisputed facts showed the Association violated the OMA by considering their landscaping plans at the April 3, 2017 executive session, rather than at a meeting open to all homeowners, and by failing to note what was discussed at the August 28, 2017 executive session in the minutes of the next board meeting open to all homeowners. Appellants contend the defense of unclean hands does not bar their claims for OMA violations based on the directors’ e-mail exchanges. They ask us to reverse the judgment and to remand the matter for a new trial.

 

1. Appealability and Standard of Review

The trial court’s judgment finally disposed of the parties’ dispute and is appealable. (Code Civ. Proc., § 904.1, subd. (a)(1); UAP-Columbus JV 326132 v. Nesbitt (1991) 234 Cal.App.3d 1028, 1034-1035.) On appeal from a judgment based on a statement of decision after a bench trial, we review questions of law de novo and the trial court’s findings of fact for substantial evidence. (Gajanan Inc. v. City and County of San Francisco (2022) 77 Cal.App.5th 780, 791-792Aljabban v. Fontana Indoor Swap Meet, Inc. (2020) 54 Cal.App.5th 482, 496.)

 

2. OMA Violations Based on Board’s Executive Sessions

We first address appellants’ claims of error regarding the two executive sessions of the Association’s board. The OMA limits the matters a homeowners association board may consider in an executive session to “litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of [past-due] assessments.” (§ 4935, subd. (a).) “Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.” (Id., subd. (e).) Appellants contend undisputed facts showed the Association violated these statutes by discussing their landscaping plans at the April 3, 2017 executive session and by failing to prepare the required minutes concerning the topics discussed at the August 28, 2017 executive session. We conclude appellants forfeited these claims of error.

In their opening brief, appellants expend little effort on discussing the April 3, 2017 executive session. The pertinent portion of the statement of facts describes matters the board discussed and voted on, and states Sukumar and Grimes attended but Grimes was not allowed to speak. As purported record support, appellants cite a trial exhibit (“TE 21, pp. 1-23”) that is not included in their appendices. In the corresponding portion of the legal argument, appellants say the trial court “appeared to conclude” the Association violated the OMA by discussing appellants’ landscaping plans in an executive session rather than in a meeting open to all members, and then go on to argue “the [c]ourt was prohibited from excusing the violation under the facts of the case” as “a mere `technical error’ or [`]immaterial omission'” because other homeowners were excluded and Grimes was not allowed to speak. This portion of the brief contains no citation to the record or legal authority and no reference to the substantial compliance doctrine on which the trial court relied in its statement of decision to conclude there was no OMA violation.

Such a factually and legally unsupported claim of error does not satisfy appellants’ burden on appeal. We presume the trial court’s judgment is correct, and to overcome that presumption appellants must affirmatively establish prejudicial error by providing an adequate record, citing to the record, and presenting a persuasive argument with citations to supportive legal authorities. (Cal. Rules of Court, rule 8.204(a)(1)(B), (C); Jameson v. Desta (2018) 5 Cal.5th 594, 609Lee v. Kim (2019) 41 Cal.App.5th 705, 721 (Lee)Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246.) It is not our role as an appellate court independently to review the record for error and to construct arguments for appellants that would require reversal of the judgment. (United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 (Benach).) Rather, where, as here, the appellants’ opening brief makes contentions unsupported by proper record citations or cogent legal arguments, we may treat the contentions as forfeited. (E.g., County of Sacramento v. Singh (2021) 65 Cal.App.5th 858, 861Lee, at p. 721.) Although in their reply brief appellants discussed the substantial compliance doctrine on which the trial court based its ruling and cited one case concerning the doctrine, that discussion comes too late. An appellant may not put off to its reply brief the presentation of a legal argument supporting a claim of error asserted in its opening brief, for to do so would unfairly deprive the respondent of the ability to rebut the argument. (Bitner v. Department of Corrections & Rehabilitation (2023) 87 Cal.App.5th 1048, 1065, fn. 3 (Bitner)Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277-278.) We thus conclude appellants forfeited their claim of error concerning the April 3, 2017 executive session. (Bitner, at pp. 1065-1066; Benach, at p. 852 & fn. 10.)

We reach the same conclusion on appellants’ claim of error regarding the August 28, 2017 executive session. In their opening brief, appellants barely discuss that session in the statement of facts or the legal argument. Appellants quote the meeting agenda and as purported support cite a trial exhibit (“TE 102”) that is not in their appendices. In the legal argument, appellants contend a new trial should be granted because undisputed evidence established the board’s secretary was tasked with preparing the minutes, and no evidence showed any of their managers ever lawfully held that position. Appellants do not reference the trial court’s ruling that the required minutes for the August 28, 2017 executive session were not prepared because of their unlawful attempt to take over the board and that their resultant unclean hands barred their claim that the Association’s failure to prepare the minutes violated the OMA. Appellants cite the statute they alleged was violated, but no other legal authority. They do not explain why, as a factual or legal matter, the conduct on which the trial court relied does not bar their claim. Appellants expand on their argument in their reply brief, but still cite no legal authority to support their contentions. This claim of error has thus been forfeited. (Bitner, supra, 87 Cal.App.5th at pp. 1065-1066 & fn. 3Lee, supra, 41 Cal.App.5th at p. 721Benach, supra, 149 Cal.App.4th at p. 852 & fn. 10.)

 

3. OMA Violations Based on Directors’ E-mail Exchanges

We next consider appellants’ claim that the trial court erred by concluding the directors’ e-mail exchanges did not constitute board meetings within the meaning of the OMA. Appellants contend a series of e-mails among directors on a matter of Association business, such as those of which they complain, fits within the definition of “board meeting” in section 4090, subdivision (a), and the Association should be barred from asserting a contrary position because it did not do so until after the close of evidence at trial. We are not persuaded.

 

a. Waiver or Estoppel

We first address appellants’ contention that the Association’s litigation conduct bars it from arguing the directors’ e-mail exchanges were not board meetings within the meaning of the OMA. Appellants correctly point out that in a verified response to their request for admissions, the Association admitted the e-mails violated several provisions of the OMA, and in its summary judgment motion, the Association did not contest some of the e-mails constituted board meetings that violated the OMA. (See pt. I.G.2., ante.) Appellants also correctly point out that not until closing arguments did the Association contend the e-mails did not meet the statutory definition of a board meeting. (See pt. I.G.3., ante.) A “litigant cannot be permitted to blow hot and cold in this manner” if “[s]uch a strategy subjects the opposing party to unwarranted surprise” (A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 566) or “would prejudice his or her opponent” (Garcia v. Roberts (2009) 173 Cal.App.4th 900, 913).

Here, however, the Association’s change of position did not unfairly surprise or prejudice appellants. They could not rely on any admissions the Association had made in the summary judgment motion, because such admissions were only for the purpose of the motion and did not estop the Association, as the unsuccessful moving party on the claims for declaratory relief and civil penalties, from taking a contrary position at trial. (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 747-749; see Filtzer v. Ernst (2022) 79 Cal.App.5th 579, 587 [judicial estoppel requires party to be estopped to have successfully asserted position it later abandoned].) Nor could appellants rely on the Association’s response to their request for admissions. During trial, the court considered whether to allow appellants to put on evidence of OMA violations not identified in discovery and the Association to put on evidence of unclean hands not disclosed in discovery. Appellants suggested the court either “allow everybody to put in whatever they want at this time, regardless of what the responses were before,” or “exclude both.” The court ruled the parties would not be bound by their discovery responses and “allow[ed] all that evidence to come in.” Having invited and benefited from that ruling, appellants may not now seek to hold the Association to its discovery responses. (See § 3521 [“He who takes the benefit must bear the burden.”]; Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1685 [party forfeits right to attack on appeal procedure it agreed to at trial].)

Moreover, the record shows appellants were aware before and during trial that the key legal issue to be decided by the court was whether the e-mail exchanges of which they complained constituted board meetings under the OMA. In their joint trial readiness report, the parties identified as the first legal issue in dispute, “Whether the Emails identified by plaintiffs constitute OMA violations.” During trial, the court told the parties “it’s going to be up to the [c]ourt what constitutes a meeting” under the statute. The parties presented their competing views on the issue orally during closing arguments and in writing in their proposed statements of decision. The court was not bound by the Association’s earlier concessions that the e-mails constituted meetings under the OMA. “No litigant, of course, can effectively `abandon’ the correct reading of a statute; [the court] must independently determine the best interpretation . . . regardless of what the parties argue.” (Spanish Speaking Citizens’ Foundation, Inc. v. Low (2000) 85 Cal.App.4th 1179, 1230; see Evid. Code, § 310, subd. (a) [court must decide all questions of law, including construction of statute]; County of Madera v. Superior Court (1974) 39 Cal.App.3d 665, 668 [“proper interpretation of statutory language is a question of law for the court”].)

Because the issue of whether the directors’ e-mail exchanges constituted board meetings under the OMA was a legal one for the court to decide, appellants’ complaint that the Association’s change of position at the end of trial prejudicially prevented them from obtaining and presenting pertinent evidence lacks merit. Specifically, appellants claim that “[h]ad [the Association’s] switch of argument taken place earlier, [they] could have cross-examined both Valeri and Woelkers on the involved directors’ understandings and motivations at the time.” Such matters, however, are irrelevant to the question of statutory interpretation the trial court had to decide. (See Evid. Code, § 310, subd. (a) [construction of statute is question of law for court]; City of Rocklin v. Legacy Family Adventures-Rocklin, LLC (2022) 86 Cal.App.5th 713, 728 [“It is the role of the judge to decide purely legal issues.”]; Maia v. Security Lumber & Concrete Co. (1958) 160 Cal.App.2d 16, 21 [witness’s understanding of statute is inadmissible because “[c]ourts are bound by the statute, not by individual opinions of its interpretation”].) Appellants also claim the issue of whether an e-mail exchange constitutes a board meeting under the OMA may depend on factors that are in part factual (e.g., whether the e-mails functioned as in-person meetings, or whether directors had continuous access to e-mails and the ability to reply in a reasonable time), and they could have explored such factors more fully in discovery and at trial had they known earlier the Association was contesting the issue. Such exploration was unnecessary, because the trial court admitted into evidence all the e-mail exchanges appellants claimed violated the OMA and therefore had the information it needed to decide whether they constituted board meetings within the meaning of the OMA. (See, e.g., Estate of Madison (1945) 26 Cal.2d 453, 456 [“The construction of a statute and its applicability to a given situation are matters of law to be determined by the court.”]; accord, In re Marriage of Martin (2019) 32 Cal.App.5th 1195, 1199.)

 

b. Whether E-mail Exchanges Were Board Meetings

We now turn to the dispositive question of statutory interpretation: Were the directors’ e-mail exchanges that appellants claim violated the OMA “board meetings” under the statute? We review the trial court’s interpretation of the statute de novo. (Segal v. ASICS America Corp. (2022) 12 Cal.5th 651, 658Royals v. Lu (2022) 81 Cal.App.5th 328, 344.) We begin by examining the language of the statute, giving that language its usual and ordinary meaning and adopting a construction that is consistent with the apparent legislative intent. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1232-1233Yu v. Superior Court (2020) 56 Cal.App.5th 636, 644.)

The OMA is part of the Davis-Stirling Act, which defines “board meeting” as “either of the following:

“(a) A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.

“(b) A teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the association and otherwise complies with the requirements of this act. Except for a meeting that will be held solely in executive session or conducted under Section 5450 [which pertains to meetings during a state of disaster or emergency], the notice of the teleconference meeting shall identify at least one physical location so that members of the association may attend, and at least one director or a person designated by the board shall be present at that location. Participation by directors in a teleconference meeting constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board.” (§ 4090.)

The Davis-Stirling Act defines “board” as “the board of directors of the association” (§ 4085) and “item of business” as “any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board” (§ 4155).

Appellants rely solely on subdivision (a) of section 4090 for their claim that the directors’ e-mail exchanges constituted board meetings that violated the OMA. They contend “[t]he usual and ordinary meaning of the phrase `congregation, at the same time and place’ encompasses a `virtual’ assembly by means of email,” because, they say, e-mail allows all directors to communicate with one another simultaneously on items of board business in the same place, namely, cyberspace. We reject this construction of the statutory language as inconsistent with its usual and ordinary meaning.

To determine the usual and ordinary meanings of words used in a statute, courts consider the dictionary definitions of those words. (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122Turo Inc. v. Superior Court (2022) 80 Cal.App.5th 517, 521.) We have consulted three dictionaries available at the time the Legislature enacted the OMA to determine the meaning of the phrase “congregation, at the same time and place.” (§ 4090, subd. (a), as enacted by Stats. 2012, ch. 180, § 2.) Two define “congregation” as “an assembly of persons: gathering.” (Webster’s 3d New Internat. Dict. (2002), p. 478; Merriam-Webster’s Collegiate Dict. (11th ed. 2003) p. 262.) An “assembly” is defined as “a company of persons collected together in one place usu. for some common purpose (as deliberation and legislation, worship, or entertainment)” (Webster’s, p. 131), and a “gathering” as “a coming together of people in a group (as for social, religious, or political purposes)” (id., p. 940). A third dictionary defines “congregation” similarly as “a gathered or assembled body; assemblage” (Random House Unabridged Dict. (2d ed. 1987) p. 430), and “assemblage” as “a group of persons . . . gathered” (id., p. 125). That dictionary defines “place” as “a space, area, or spot, set apart or used for a particular purpose: a place of worship; a place of entertainment.” (Id., p. 1478.) The other two define “place” as “a building or locality used for a special purpose,” and offer as examples “<~ of amusement>,” “<~ of worship>,” and “.” (Webster’s, p. 1727; Merriam-Webster’s, p. 946.)

From these definitions and examples, we conclude a “board meeting,” as defined by section 4090, subdivision (a), means a gathering of a quorum of the directors of a board of a homeowners association at the same time and in the same physical location for the purpose of transacting any matter of association business that is within the board’s purview. By using the word “congregation,” the Legislature intended the directors come together for a common purpose. By specifying the congregation be “at the same time and place,” the Legislature intended the directors simultaneously come together in one location so that they can “hear, discuss, or deliberate upon any item of business that is within the authority of the board.” (Ibid.) Although the definitions of “congregation” in the dictionaries cited in the preceding paragraph say nothing explicit about physical location, the examples in those dictionaries ordinarily involve gatherings of persons in one location for a particular purpose—for deliberation and legislation (e.g., the U.S. Capitol), for religious worship (e.g., a church or temple), or for social engagement or entertainment (e.g., a night club or theater). Every example of a “place” in those dictionaries is a physical location—a building, a place of worship (e.g., a church or temple), a place of amusement or entertainment (e.g., a theater or stadium), a place of education (e.g., an elementary school or college), or a fine eating place (a café or restaurant). We think it is clear from the words chosen that in enacting section 4090, subdivision (a) the Legislature had in mind the traditional board meeting of a homeowners association, i.e., one where the directors gather in the same room with homeowners to talk about and to act on matters of association business. Hence, by sending e-mails to one another through cyberspace, often hours or days apart and from different homes and offices, the Association’s directors did not simultaneously gather in one location to transact board business, and therefore they did not conduct a “board meeting” within the meaning of section 4090, subdivision (a).[2]

In urging us to construe section 4090, subdivision (a) to include e-mail exchanges among the directors of a board of a homeowners association on matters of association business, appellants argue that “[l]egally, a `[b]oard [m]eeting’ under [the] OMA is capable of being conducted via electronic transmissions.” We agree a board meeting conducted by electronic means is permitted by the OMA, but not by virtue of section 4090, subdivision (a). Subdivision (b) of section 4090 defines “board meeting” as “[a] teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both.” In this type of meeting, “[p]articipation by directors . . . constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board.” (Ibid.) The e-mail exchanges at issue in this case do not qualify as such a board meeting, however, because they did not allow the participating directors “to hear one another.” (Ibid.) In any event, appellants have expressly disavowed reliance on section 4090, subdivision (b).

Appellants also rely on section 4910, subdivision (b) as support for their contention that a series of e-mails among directors can satisfy the “same time and place” requirement of section 4090, subdivision (a). Section 4910, subdivision (b) prohibits the board from conducting a board meeting “via a series of electronic transmissions, including, but not limited to, electronic mail,” except “as a method of conducting an emergency board meeting” to which all directors consent in writing. An emergency board meeting may be called “if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice” four days before the meeting. (§ 4923; see § 4920, subds. (a), (b)(1).) Appellants argue an emergency board meeting by e-mail would not be possible unless that type of meeting were a subset of the type defined by section 4090, subdivision (a). We are not persuaded.

Section 4910, subdivision (a) states, “The board shall not take action on any item of business outside of a board meeting.” As noted above, the statute goes on to prohibit the board from conducting a meeting by a series of e-mails unless there is an emergency and all directors give written consent. (§ 4910, subd. (b).) Considering these subdivisions together, as we must (Smith v. LoanMe, Inc. (2021) 11 Cal.5th 183, 190), we read them as authorizing the board, in an emergency as defined by section 4923, to dispense with notice to homeowners and to conduct a meeting and take action on a matter of association business via a series of e-mails or other electronic transmissions, provided all directors give written consent to that procedure. There would have been no need to add these specific provisions if, as appellants argue, an exchange of e-mails among directors on a matter of association business already qualified as a board meeting under section 4090, subdivision (a). We must avoid an interpretation that would make a statutory provision redundant and interpret the provision in a way that gives it independent meaning and enables it to perform a useful function. (Plantier v. Ramona Municipal Water Dist. (2019) 7 Cal.5th 372, 385-386Garcia v. McCutchen (1997) 16 Cal.4th 469, 476.) We therefore read section 4910, subdivision (b) as specifying a third method, in addition to and different from those defined by section 4090, by which the board may conduct a meeting and take action on a matter of homeowners association business, and which may be used only in an emergency as defined by section 4923. It is not a subset of the type of board meeting defined by section 4090, subdivision (a), by which the board may take action on association business matters in nonemergency situations.

Appellants contend “Corporations Code section 7211 . . . also supports the interpretation that the Legislature in general believes a board meeting is capable of being conducted by email.”[3] To confirm that belief, however, we need not look beyond the OMA. By expressly authorizing the board of a homeowners association to hold a meeting and take action by a series of e-mails when there is an emergency and all directors consent in writing to proceed that way (§ 4910, subd. (b)(2)), the Legislature obviously believed a board meeting was capable of being conducted via e-mail. The enactment of a separate provision to authorize that type of board meeting shows, contrary to appellants’ position, that the Legislature did not believe that type of meeting fell within the scope of section 4090, subdivision (a).

Apparently anticipating we might reject their arguments based on the text of the OMA, appellants advise against “exclusive and myopic reliance on statutory language,” and urge consideration of “the overriding purpose of [the] OMA.” That purpose, they say without any analysis or citation of authority, is to permit “all [homeowners association] members [to] have access to the [b]oard’s discussions and action on official [association] business.” Appellants argue their interpretation of section 4090, subdivision (a) as including the directors’ e-mail exchanges at issue in this case furthers that purpose, but an interpretation that excludes them frustrates that purpose by allowing a board to make all decisions on association business via private e-mail exchanges and later hold a meeting as “mere theatre” to confirm the decisions. We disagree.

To discern the purpose of the OMA, we look to its words as the most reliable indicator of legislative intent and consider them in the context of the statute as a whole. (Hoffmann v. Young (2022) 13 Cal.5th 1257, 1266Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, 1184Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 811.) The first substantive provision of the OMA states, “The board shall not take action on any item of business outside of a board meeting.” (§ 4910, subd. (a).) With exceptions for emergency board meetings (§ 4923) and executive sessions (§ 4935), subsequent OMA provisions provide for input of homeowners in board actions by requiring homeowners be given at least four days’ notice of a board meeting (§ 4920, subd. (a)), the notice contain the meeting agenda (§ 4920, subd. (d)), homeowners be allowed to attend and speak at the meeting, (§ 4925), the board not discuss or take action on any item of business not on the agenda (§ 4930, subd. (a)), and minutes of the meeting be made available to homeowners within 30 days (§ 4950, subd. (a)). In short, the OMA “mandate[s] open governance meetings, with notice, agenda and minutes requirements, and strictly limit[s] closed executive sessions.” (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 475 (Damon).) These various requirements make clear the purpose of the OMA is to ensure members of a homeowners association are informed about and have input into the actions to be taken by the association’s board of directors on matters affecting the community in which they live. (See Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 416, 417 (Golden Eagle) [board’s “possess[ion of] broad powers to affect large numbers of individuals through [its] decisions and actions” requires “[h]olding open meetings and taking account of various opinions among community members” before acting on items of association business].)

Our interpretation of section 4090, subdivision (a) as not including the e-mail exchanges of which appellants complain does not frustrate the purpose of the OMA. Section 4090, subdivision (a) defines one method by which the board of directors of a homeowners association may act consistently with the purpose of the OMA, namely, by holding an in-person meeting where homeowners have an opportunity to voice their opinions on items of association business, and then voting on what actions to take on the items. By discussing items of Association business in e-mails (e.g., whether to approve appellants’ landscaping plans and whether to fine another homeowner), the directors did nothing contrary to the purpose of the OMA, because they took no action on those items in the e-mails. Although the OMA prohibits the board from acting on items of Association business outside a board meeting (§ 4910, subd. (a)), it does not prohibit the board from discussing the items outside a meeting. Had the Legislature intended to prohibit such discussions, it knew how to do so. In the Ralph M. Brown Act (Gov. Code, § 54950 et seq.), an open meeting law that governs public agencies and the provisions of which “parallel” those of the OMA (Damon, supra, 85 Cal.App.4th at p. 475), the Legislature provided: “A majority of the members of a legislative body shall not, outside a meeting authorized by this chapter, use a series of communications of any kind, directly or through intermediaries, to discuss, deliberate, or take action on any item of business that is within the subject matter jurisdiction of the legislative body” (Gov. Code, § 54952.2, subd. (b)(1)). Interpreting section 4090, subdivision (a) to include the e-mail exchanges at issue in this case, as appellants would have us do, would effectively add to the OMA a similar provision prohibiting directors from discussing items of association business except at a board meeting. We refuse to adopt an interpretation of a statute that would require insertion of language the Legislature knew how to include but did not include. (Code Civ. Proc., § 1858; Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 545Yao v. Superior Court (2002) 104 Cal.App.4th 327, 332-333.)

In sum, we conclude “board meeting,” as defined by section 4090, subdivision (a), is an in-person gathering of a quorum of the directors of a homeowners association at the same time and in the same physical location for the purpose of talking about and taking action on items of association business. E-mail exchanges among directors on those items that occur before a board meeting and in which no action is taken on the items, such as those at issue in this case, do not constitute board meetings within the meaning of that provision. The trial court therefore correctly rejected appellants’ claims that the e-mail exchanges were board meetings that violated the OMA.

 

4. Unclean Hands Defense

Appellants’ last challenge to the judgment is to the trial court’s ruling that their “unclean hands” in sending the directors e-mails on matters of Association business barred them from pursuing claims that the Association violated the OMA when the directors exchanged similar e-mails among themselves. Appellants contend the doctrine of unclean hands is not available as a defense to a claim for violation of the OMA; the doctrine does not apply to the undisputed facts of this case; and principles of waiver, abandonment, or estoppel preclude the Association from asserting the defense. Because we have rejected appellants’ contention that the e-mail exchanges on which they based their claims constituted board meetings to which the notice, agenda, homeowner participation, and minutes requirements of the OMA apply, their claims the Association violated the OMA by not complying with those requirements fail as a matter of law. We therefore need not, and do not, decide whether the trial court correctly applied the unclean hands doctrine to bar the claims.

 

B. Appeal of Postjudgment Orders

Appellants also attack the trial court’s postjudgment orders denying their motion to strike or tax costs and granting the Association’s motion for attorney fees. They contend the trial court erred by awarding attorney fees under section 5975, subdivision (c), because that section applies to actions to enforce the governing documents of a homeowners association, not to an action like theirs that seeks relief for violations of the OMA. Rather, appellants argue, the statute that applies to their action is section 4955, subdivision (b), which never allows a homeowners association to recover attorney fees from a homeowner. Appellants further contend attorney fees were not recoverable under Code of Civil Procedure section 998, because that statute does not provide an independent basis to award fees, and the settlement offer the Association made under the statute was invalid for requiring a general release. As to costs, appellants contend the trial court relied on the correct statute (i.e., § 4955, subd. (b)), but erred by finding their action was “unreasonable” and therefore justified an award to the Association. They also contend the court abused its discretion by awarding the court reporter fees and “other” costs sought by the Association. Appellants ask us to reverse the challenged orders.

 

1. Appealability and Standard of Review

“A postjudgment order which awards or denies costs or attorney’s fees is separately appealable.” (Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688, 693; see Code Civ. Proc., § 904.1, subd. (a)(2) [postjudgment order is appealable]; DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43 [postjudgment order awarding attorney fees is appealable]; Jimenez v. City of Oxnard (1982) 134 Cal.App.3d 856, 858, fn. 3 [postjudgment order denying motion to tax costs is appealable].) We review the trial court’s determination on whether the statutory criteria for an award of costs or attorney fees have been met de novo, and its determination on the amount of costs or fees for abuse of discretion. (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751McGuigan v. City of San Diego (2010) 183 Cal.App.4th 610, 622-623.) Whether an action is “frivolous,” “unreasonable,” or “without foundation” under a statute authorizing an award of costs or attorney fees in such an action presents a question of law we review de novo where, as here, the pertinent facts are not in dispute. (Rudisill v. California Coastal Com. (2019) 35 Cal.App.5th 1062, 1070Smith v. Selma Community Hospital (2010) 188 Cal.App.4th 1, 31-33 (Smith).)

 

2. Attorney Fees

We first consider the court’s award of attorney fees to the Association. Each party to an action must pay its own attorney fees unless a statute or contract requires the opposing party to pay them. (Code Civ. Proc., § 1021; Tract 19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142Srouy v. San Diego Unified School Dist. (2022) 75 Cal.App.5th 548, 558-559.) No contractual attorney fee provision is at issue here. The Association therefore may recover its attorney fees from appellants only if a statute authorizes recovery. The Association contends that because appellants’ action was, at least in part, an action to enforce the governing documents of the Association and it prevailed in the action, the trial court properly awarded fees under section 5975, subdivision (c). Appellants counter that they sued not to enforce the Association’s governing documents but to enforce the OMA, which does not authorize an award of attorney fees to the Association. As we shall explain, appellants are correct.

The governing documents of a homeowners association are enforceable in a civil action by a homeowner or by the association. (§ 5975, subds. (a), (b).) The Davis-Stirling Act defines “governing documents” as “the declaration and any other documents, such as bylaws, operating rules, articles of incorporation, or articles of association, which govern the operation of the common interest development or association.” (§ 4150.) The “declaration” is the document that “contain[s] [the] legal description of the common interest development”; states whether “the common interest development is a community apartment project, condominium project, planned development, stock cooperative, or combination thereof”; and “set[s] forth the name of the association and the restrictions on the use or enjoyment of any portion of the common interest development that are intended to be enforceable equitable servitudes.” (§§ 4135, 4250, subd. (a).) “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (§ 5975, subd. (c).) An award of attorney fees to the prevailing party is mandatory in such an enforcement action. (Champir, LLC v. Fairbanks Ranch Assn. (2021) 66 Cal.App.5th 583, 590Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 263Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1039.)

To determine whether appellants sought by their action to enforce the Association’s governing documents, and therefore were liable for attorney fees because they failed to do so, we examine the allegations of their complaint. (See Gause v. Pacific Gas & Electric Co. (1923) 60 Cal.App. 360, 367 [“the nature of the action must be determined from the allegations of the complaint”]; Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, 65-66 [reviewing allegations of complaint to determine nature of action for limitations purposes].) The only express reference to the governing documents in the complaint is in a paragraph describing the Association as “a nonprofit mutual benefit association existing by and under the laws of the State of California, and . . . governed by the Davis-Stirling Act, the California Corporations Code, and the Association’s governing documents, including, without limitation, its Covenants, Conditions and Restrictions (`CC&R’s’), its Articles, its By-Laws, and its Community Election Rules as published in the [Association’s] Community Handbook. The foregoing are collectively referred to herein as the `Governing Laws and Rules.'” Later in the complaint appellants alluded to the governing documents by alleging they had repeatedly requested minutes of all board meetings from the Association “in accordance with the Governing Laws and Rules.” The complaint nowhere mentions section 5975; the charging allegations neither cite nor quote any provision of any governing document; the prayer for relief does not ask the court to enforce any provision of the governing documents; and no governing document or part thereof is attached to the complaint. We would expect to find such content in the complaint had appellants sought enforcement of the Association’s governing documents under section 5975. Its absence shows this case is not that type of enforcement action.

The content of the complaint instead shows appellants sued the Association for allegedly violating the OMA. The complaint is labeled one for “VIOLATIONS OF COMMON INTEREST DEVELOPMENT OPEN MEETING ACT [Civil Code §§ 4900, et seq.].” Its first paragraph states that appellants “seek[ ] declaratory and equitable relief, and statutory penalties against [the Association] for violations of the [OMA].” The charging allegations of the complaint quote many provisions of the OMA, and then go on to state facts showing how the Association violated those provisions. In particular, the paragraphs referencing the “Governing Laws and Rules,” which as noted include the governing statutes and documents, alleged the Association’s failure to provide the board meeting minutes as requested by appellants violated the OMA, not the governing documents. Appellants prayed for a judgment declaring the Association violated the OMA and specifying the number of violations; an injunction requiring the Association to comply with the OMA; and civil penalties, costs, and attorney fees as provided in the OMA. (See § 4955.) Hence, appellants’ action was plainly one to enforce the OMA, not the Association’s governing documents. (See Black’s Law Dict. (11th ed. 2019) p. 668 [defining “enforce” as “[t]o give force or effect to (a law, etc.); to compel obedience to”].)

In urging us to reach a contrary conclusion, the Association points to appellants’ participation in alternative dispute resolution as statutorily required before filing an “enforcement action,” certification of such participation in the complaint, and litigation of “enforcement issues” at trial as indicators that their action was one to enforce the governing documents. We are not persuaded.

The alternative dispute resolution requirements of the Davis-Stirling Act apply not only to actions to enforce the governing documents of a homeowners association, but also to actions to enforce the OMA. (§§ 5925, subd. (b) [defining “enforcement action”], 5930, subd. (a) [requiring alternative dispute resolution before filing enforcement action], 5950, subd. (a) [requiring party commencing enforcement action to file certificate regarding alternative dispute resolution efforts].) Appellants’ compliance with those requirements did not transform their action to enforce the OMA into one to enforce the governing documents.

Nor did such a transformation occur as a result of appellants’ litigation tactics. The questioning of the Association’s directors at trial about appellants’ landscaping plans, on which the Association relies for its characterization of the action, did not involve any governing document and was designed to show the Association violated the OMA when directors discussed matters in executive session that should have been discussed in a session open to all homeowners and conducted board meetings via private e-mails. Moreover, in determining the nature of the action, we find it significant that none of the governing documents were introduced at trial and that the trial court made no mention of them in its statement of decision. The court described the action as one alleging violations of the OMA and determined no such violations had occurred. The record thus shows the parties litigated and the court decided claims under OMA, not claims under the Association’s governing documents.

Because appellants sought to enforce the OMA, the provision of the OMA concerning costs and attorney fees governs the award in this case. (See Department of Forestry & Fire Protection v. LeBrock (2002) 96 Cal.App.4th 1137, 1141 [attorney fees must be “specifically authorized” by applicable statute]; Covenant Mutual Ins. Co. v. Young (1986) 179 Cal.App.3d 318, 321 [same].) Under that provision, “[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. . . . A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) Construing the identically worded predecessor version (former § 1363.09, subd. (b)), the Court of Appeal concluded it authorizes the award of ordinary costs to a prevailing association in an action that is frivolous, unreasonable, or without foundation, but it does not authorize an award of attorney fees to the association in such an action. (That v. Alders Maintenance Assn. (2012) 206 Cal.App.4th 1419, 1427-1430; accord, Retzloff v. Moulton Parkway Residents’ Assn., No. One (2017) 14 Cal.App.5th 742, 748-749 (Retzloff).) Under this authority, the Association could not recover attorney fees from appellants.[4]

In sum, the trial court erred by characterizing appellants’ action as one to enforce the Association’s governing documents and awarding the Association attorney fees under section 5975, subdivision (c). As we have explained, appellants sought to enforce the OMA, which does not allow the Association to recover attorney fees from appellants. We therefore reverse the order granting the Association’s motion for attorney fees.

 

3. Costs

We now turn to the trial court’s award of costs to the Association. A homeowners association that prevails in an action alleging violations of the OMA “shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) In opposition to appellants’ motion to strike or tax costs, the Association argued the action was unreasonable and without foundation because appellants had unclean hands that barred the action, rejected a settlement offer “which included everything [they] were seeking,” opposed the motion for summary judgment even though the Association was willing to concede limited liability to end the litigation, and kept on changing the number of OMA violations for which they sought civil penalties. The trial court found appellants'”pursuit of litigation was unreasonable at multiple stages” based on their unclean hands and rejection of a reasonable settlement offer, and denied their motion to strike or tax costs. The court erred in so doing, as we explain below.

Neither the OMA nor any published opinion defines “frivolous,” “unreasonable,” or “without foundation” as those terms are used in section 4955, subdivision (b). Such terms, however, are used in other cost-shifting statutes that courts have construed. For example, in Smith, supra, 188 Cal.App.4th 1, the Court of Appeal construed Business and Professions Code section 809.9, which authorizes an award of costs and attorney fees to the prevailing party “if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith.” The Court of Appeal adopted the view that “a matter is frivolous if any reasonable attorney would agree it is completely without merit in the sense that it lacks legal grounds, lacks an evidentiary showing, or involves an unreasonable delay.” (Smith, at p. 33, italics added; see Retzloff, supra, 14 Cal.App.5th at pp. 752-753 [adopting same definition for “frivolous” as used in § 5235, subd. (c)].) The Court of Appeal held an action is “without foundation” if there is no direct or circumstantial evidence supporting the plaintiff’s factual assertions, or if there is no statute, regulation, case law, or other legal authority supporting the plaintiff’s legal contentions. (Smith, at pp. 30-31.) For the term “unreasonable,” the Court of Appeal adopted the “any-reasonable-attorney standard,” which asks “whether any reasonable attorney would have thought the claim tenable” based on “the facts known to the plaintiff when [it] filed or maintained the action.” (Id. at p. 32.)[5] The terms “frivolous,” “unreasonable,” and “without foundation” partially overlap, since to determine whether an action may be described by any one of them requires the court to assess the grounds underlying the plaintiff’s factual or legal positions and the reasoning process linking those grounds to the ultimate conclusions advocated by the plaintiff. (Smith, at p. 33.) To decide whether appellants’ action qualifies as any of the quoted terms, we shall apply the Smith court’s definitions.

We first consider whether appellants’ unclean hands made their prosecution of the action “unreasonable,” as the Association urged and the trial court found. The trial court’s ruling that the unclean hands doctrine barred the action does not necessarily lead to the conclusion that the “`”action must have been unreasonable or without foundation.”‘” (Pollock, supra, 11 Cal.5th at p. 951 [cautioning against such “`”hindsight bias”‘” when awarding costs].) We need not delve deeply into the unclean hands doctrine, nor decide definitively whether the trial court correctly applied the doctrine, to decide whether appellants’ action was “unreasonable” within the meaning of section 4955, subdivision (b). The applicability of the unclean hands doctrine to appellants’ action was sufficiently debatable that a reasonable attorney could have concluded the doctrine did not bar the action.

To decide whether to apply the unclean hands doctrine, which prevents a plaintiff from profiting from its own inequitable conduct in a transaction by barring relief on a directly related cause of action (DD Hair Lounge, LLC v. State Farm General Ins. Co. (2018) 20 Cal.App.5th 1238, 1246Camp v. Jeffer, Mangels, Butler & Marmaro (1995) 35 Cal.App.4th 620, 638-639), one factor courts consider is analogous case law (Jay Bharat Developers, Inc. v. Minidis (2008) 167 Cal.App.4th 437, 445-446Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1060). This court and others have held the unclean hands doctrine cannot be applied to defeat claims under statutes designed to protect one class of persons from the activities of another. (See, e.g., East West Bank v. Rio School Dist. (2015) 235 Cal.App.4th 742, 752Mendoza v. Ruesga (2008) 169 Cal.App.4th 270, 279Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 544.) The OMA may qualify as that type of statute in that it protects homeowners by prohibiting the board of directors of the homeowners association from holding secret meetings at which it takes action on matters directly affecting the homeowners and their community. (See §§ 4910, subd. (a), 4925; Golden Eagle, supra, 19 Cal.App.5th at p. 416Damon, supra, 85 Cal.App.4th at p. 475.) It was therefore at least arguable under existing case law that as a matter of law the unclean hands doctrine did not bar appellants’ claims for violations of the OMA. (See East West Bank, at p. 752 [unclean hands doctrine did not apply as a matter of law when no analogous case law supported application]; Smith, supra, 188 Cal.App.4th at p. 41 [position is arguable when consistent with language in some cases].) Because a reasonable attorney could have concluded the claims were not barred, appellants’ decision to pursue them was not “unreasonable” (or “frivolous” or “without foundation”) within the meaning of section 4955, subdivision (b). (Smith, at pp. 30-33 [defining quoted terms].)

We next consider whether appellants’ rejection of the Association’s settlement offer (see fn. 1, ante) shows their continued pursuit of the action was “unreasonable” (§ 4955, subd. (b)), as the trial court found. Again, we must resist the distorting effect of “`”hindsight bias”‘” and not conclude that decision “`”must have been unreasonable or without foundation”‘” simply because appellants recovered nothing at trial when they could have settled for $25,000.01 plus costs and attorney fees. (Pollock, supra, 11 Cal.5th at p. 951.) Rejection of a reasonable settlement offer (i.e., one within the range of reasonably possible trial results) may indicate bad faith (i.e., unreasonable litigation conduct). (Covert v. FCA USA, LLC (2022) 73 Cal.App.5th 821, 834 (Covert)Pinto v. Farmers Ins. Exchange (2021) 61 Cal.App.5th 676, 688.) Any assessment of the reasonableness of the offer must take into account the information known or available to the parties at the time of the offer. (Covert, at p. 834; Arno v. Helinet Corp. (2005) 130 Cal.App.4th 1019, 1025.)

When the Association made its offer, there was no case law on whether e-mail exchanges of the type of which appellants complained constituted board meetings in violation of the OMA, and if so, how many violations occurred in the exchanges. The parties’ positions on those issues varied all the way through the end of trial. The amount of civil penalties, if any, appellants were likely to recover was thus uncertain. Moreover, civil penalties were not the only remedy appellants sought; they also requested declaratory and injunctive relief. The Association did not agree to any such relief in the settlement offer, which therefore did not “include[ ] everything [a]ppellants were seeking,” as the Association erroneously asserts. To the contrary, the offer required appellants to release their claims for declaratory and injunctive relief, as well as any other claims “that could have been asserted by [appellants] in relation to the allegations of the Complaint.” “Requiring resolution of potential unfiled claims not encompassed by the pending action renders the offer incapable of valuation.” (Ignacio v. Caracciolo (2016) 2 Cal.App.5th 81, 87.)

Given the difficulty in valuation and the uncertainty in the law, it is unclear whether the Association’s settlement offer was “`within the “range of reasonably possible results” at trial.'” (Covert, supra, 73 Cal.App.5th at p. 834.) We thus cannot say that no reasonable attorney would have rejected the offer, so that to have done so was “unreasonable” (or “frivolous” or “without foundation”) within the meaning of section 4955, subdivision (b). (Smith, supra, 188 Cal.App.4th at pp. 30-33 [defining quoted terms].)

The Association offers grounds in addition to those relied on by the trial court to affirm the award of costs. It argues appellants’ action was “frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)) because appellants: (1) failed to produce any evidence to support their claim for injunctive relief, which was summarily adjudicated against them; (2) opposed the Association’s attempt to resolve the matter by motion for summary judgment by conceding liability for 10 civil penalties; and (3) kept on changing their position on the number of OMA violations to prolong the litigation and to deplete the Association’s resources. We are not persuaded.

We disagree with the Association’s contention that the adverse summary adjudication ruling shows appellants’ request for injunctive relief was “unreasonable and without foundation.” In opposition to the Association’s motion for summary judgment/adjudication, appellants presented evidence the Association had failed to produce minutes for certain board meetings, and argued the failure violated the OMA and warranted injunctive relief. The OMA requires the production of minutes of board meetings and authorizes injunctive relief. (§§ 4950, subd. (a), 4955, subd. (a).) Although the trial court ruled against appellants on the ground they had not met their burden to establish the threat of future harm (see, e.g., Connerly v. Schwarzenegger (2007) 146 Cal.App.4th 739, 751 [“Without a threat of present or future injury, no injunction can lie.”]), their request for injunctive relief was not so lacking in legal or evidentiary support that no reasonable attorney would have pursued it. (See Smith, supra, 188 Cal.App.4th at pp. 30-33 [discussing meanings of “unreasonable” and “without foundation”].)

We also disagree that appellants’ refusal to accept the number of civil penalties the Association was willing to concede to resolve the case by summary judgment and their later changes in position on the number of penalties they were seeking justify the award of costs. The trial court denied the summary judgment motion on the grounds that appellants had raised triable issues of fact on the number of OMA violations for which a penalty could be imposed and the OMA was ambiguous on whether a separate penalty could be awarded to each appellant for each violation. That denial precludes a finding that no reasonable attorney would have thought appellants’ position tenable. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 824Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150, 183-185.) After denial of the summary judgment motion, the parties continued to litigate the case on the assumption the directors’ e-mail exchanges challenged in the complaint violated the OMA. Not until the end of trial, in response to questioning by the court, did the Association take the position the exchanges were not board meetings within the meaning of the OMA. Given the parties’ shared erroneous assumption, the number of e-mails involved, and the lack of case law on point, appellants’ changing position on the number of violations subject to a civil penalty was not so lacking in factual or legal support that it was “frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b); see Smith, supra, 188 Cal.App.4th at pp. 30-33 [defining quoted terms].)

The Association also argues it is entitled to recover costs under Code of Civil Procedure section 998, subdivision (c)(1), which requires a plaintiff that rejects a defendant’s settlement offer and does not obtain a more favorable judgment to pay the defendant’s postoffer costs. We disagree. The cost-shifting provisions of that statute do not apply when a more specific cost-shifting statute applies to the claims at issue. (Cruz v. Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, 240-241Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (2018) 19 Cal.App.5th 525, 551-553.) Under the OMA, “[a] prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) Because we have determined appellants’ action does not meet that description, the Association is not entitled to costs.

In sum, we conclude the OMA precluded the Association from recovering any costs from appellants. We therefore need not, and do not, decide whether the particular items appellants have challenged (i.e., court reporter fees and “other” costs) were recoverable. We reverse the order denying appellants’ motion to strike or tax costs, and direct the trial court on remand to deny all costs and strike the amended judgment awarding costs.

 

III. DISPOSITION

The judgment is affirmed. The order denying appellants’ motion to strike or tax costs is reversed. The order granting the Association’s motion for attorney fees is reversed. The matter is remanded to the trial court with directions: (1) to vacate the order denying appellants’ motion to strike or tax costs, and to enter a new order granting the motion and denying all costs; (2) to vacate the order granting the Association’s motion for attorney fees, and to enter a new order denying the motion; and (3) to strike the amended judgment. In the interest of justice, the parties shall bear their own costs on appeal.

McCONNELL, P. J. and DATO, J., concurs.


[1] On October 10, 2019, the Association offered, “[i]n full settlement, release and dismissal of the Complaint . . ., including the settlement of all claims asserted or that could have been asserted by [appellants] in relation to the allegations of the Complaint,” to pay appellants $25,000.01 and their “reasonable attorney’s fees and taxable costs” incurred in the action up to the date of the offer. The offer stated it was an offer to compromise under Code of Civil Procedure section 998 and was “subject to the terms and conditions” of the statute. Under the statute, “[i]f an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment . . ., the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.” (Code Civ. Proc., § 998, subd. (c)(1).) Such costs include attorney fees when authorized by contract or statute. (Id., § 1033.5, subd. (a)(10).) Appellants allowed the Association’s offer to lapse.

[2] If, as appellants contend, cyberspace qualifies as a “place” within the meaning of section 4090, subdivision (a), because the directors “met” there “to exchange ideas and opinions on [Association] items of business” by sending e-mails to one another, it is unclear how the Association could have discharged its obligation under the OMA to “give notice of the time and place of a board meeting at least four days before the meeting.” (§ 4920, subd. (a).) Appellants provide no answer in their briefs.

[3] As pertinent to appellants’ contention, the cited statute authorizes a director of a corporation to participate in a board meeting “through use of electronic transmission by and to the corporation, other than conference telephone and electronic video screen communication,” provided the director “can communicate with all of the other directors concurrently” and “is provided the means of participating in all matters before the board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation.” (Corp. Code, § 7211, subd. (a)(6).) This statute does not apply to meetings of the board of directors of a homeowners association. The OMA provides, “Notwithstanding Section 7211 of the Corporations Code,” the board “shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail,” except for an emergency board meeting. (§ 4910, subd. (b).) The use of the “notwithstanding” phrase expresses a legislative intent to have the OMA provision override the Corporations Code provision that would otherwise apply. (Ni v. Slocum (2011) 196 Cal.App.4th 1636, 1647.)

[4] In the trial court, the Association sought attorney fees under section 4955, subdivision (b), on the ground appellants’ action was “unreasonable” and “without foundation.” The court did not award fees on that ground, which the Association has abandoned on appeal. The court did, however, limit the award to fees the Association incurred after appellants rejected the Code of Civil Procedure section 998 settlement offer (see fn. 1, ante), apparently because the court found appellants’ continued litigation thereafter was “unreasonable.” Code of Civil Procedure “section 998 does not grant greater rights to attorney’s fees than those provided by the underlying statute,” but “merely expands the group of those who are treated as prevailing parties and who therefore may be entitled to attorney’s fees as prevailing parties under the relevant statute.” (Mangano v. Verity, Inc. (2008) 167 Cal.App.4th 944, 951; see Ford Motor Credit Co. v. Hunsberger (2008) 163 Cal.App.4th 1526, 1532 [Code Civ. Proc., § 998 “does not independently create a statutory right to attorney fees”].) Because the relevant statute (§ 4955, subd. (b)) gave the Association no right to recover attorney fees from appellants, Code of Civil Procedure section 998 did not authorize the fee-shifting ordered by the court.

[5] We reject appellants’ contention that costs could be awarded to the Association only if the trial court found the entire action was unreasonable when it was filed. Our Supreme Court has held that when a defendant may recover costs for defending a “`frivolous, unreasonable, or groundless'” action, recovery is available if “the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.” (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 101, 115, italics added; accord, Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11 Cal.5th 918, 951 (Pollock).) As the Smith court implicitly recognized, an action that was not unreasonable when filed may become so later if factual discoveries or legal developments make the action untenable, because the court must “analyz[e] the facts known to the plaintiff when he or she filed or maintained the action” to determine whether it was unreasonable. (Smith, supra, 188 Cal.App.4th at p. 32, italics added; cf. Zamos v. Stroud (2004) 32 Cal.4th 958, 970 [“continuing to prosecute a lawsuit discovered to lack probable cause” is unreasonable and subjects attorney to liability for malicious prosecution].)

Lake Lindero HOA v. Barone

Summary by Mary M. Howell Esq.,CCAL, & Pejman D. Kharrazian, Esq.

The case of Lake Lindero HOA v. Barone (2023) 89 Cal.App.5th 834, concerned a recall vote.  Defendant was a former director of the association, who had resigned his position in order to take a paid position as the chief executive officer of the association.

Homeowners sought to recall the entire board pursuant to a petition by 5% of the members.  Corporations Code Section 7511 requires an association, within 20 days of receipt of such a petition, to notice a member meeting to vote on the issue of recall.  The board failed to do so, so the petitioning members sent out their own notice of meeting, and duly conducted the meeting.  When this meeting failed to achieve quorum, as prescribed by the association’s bylaws, an adjourned meeting was convened by the same homeowners, resulting in a diminished quorum.  The recall was successful, and a new board elected.

Unfortunately, the recalled board refused to leave, contesting the right of the new board to govern, including instructing management to disregard instructions from the new board.  The new board and association then filed this suit, asking the court to declare the validity of the recall, and to validate the new board’s termination of Defendant’s contract.

Held: new board 1, old board 0.  The trial court’s decision was affirmed on appeal.

The old board made the following arguments: (1) the bylaws required a majority of owners to vote for removal, despite a statute that allowed removal by a majority of a quorum,

(2) the statutes do not permit a reduced quorum, even if the bylaws do, and (3) the Corporations Code only allows a court to determine the validity of “elections”, not “recalls.”  The court properly rejected all of these arguments.  First, the statute which discusses the percentage vote required for recall (§ 7222) specifically states that it will override any contrary language in bylaws.  Second, even though the recall statute doesn’t specifically authorize a lower quorum for adjourned meeting, another statute (§ 7512) specifically provides that bylaws may set a lower quorum for meetings.   As to the third point, the court found that Corporations Code Section 7616, which allows a court to validate election results, should be read broadly to permit a court to review recall votes as well.

***End of Summary*

 

89 Cal.App.5th 834 (2023)

LAKE LINDERO HOMEOWNERS ASSOCIATION, INC., et al., Plaintiffs and Respondents,
v.
CHRISTOPHER T. BARONE, Defendant and Appellant.

No. B306164.
Court of Appeals of California, Second District, Division Three.

February 28, 2023.
APPEAL from an order of the Superior Court of Super. Ct. No. 20VECP00041. Los Angeles County, Shirley K. Watkins, Judge. Affirmed.

Christopher T. Barone, in pro. per., for Defendant and Appellant.

Kulik Gottesman Siegel & Ware, Thomas M. Ware II and Justin Nash for Plaintiffs and Respondents.

 

OPINION

 

EGERTON, J.—

Defendant Christopher T. Barone appeals an order under Corporations Code section 7616 confirming the validity of an election removing the former board of the Lake Lindero Homeowners Association, Inc. (the Association), and electing a new board of directors.[1] Barone makes two principal contentions: (1) the election was not valid because it contravened the Association’s bylaws and statutory provision governing board recall elections, and (2) section 7616 did not authorize plaintiffs’ action or the trial court’s order validating the recall election.[2] We reject both contentions and affirm.

 

 FACTS AND PROCEDURAL HISTORY

 

Consistent with our standard of review for factual questions, we state the evidence in the light most favorable to the trial court’s factual findings, indulging all reasonable inferences in support of the court’s order.[3] (Ryland Mews Homeowners Assn. v. Munoz (2015) 234 Cal.App.4th 705, 712 [184 Cal.Rptr.3d 163].)

 

1. The Recall and Full Board Election

 

The Association is a California nonprofit corporation charged with operating the Lake Lindero development—a 459-lot common interest development and golf community located in Agoura Hills. The Association common areas include a golf course, driving range, tennis courts, pool, restaurant, pro shop, and a lake.

Membership in the Association is appurtenant to ownership of a lot within the development. The Association is governed by a five-member uncompensated board of directors. Since 2018, Lordon Management Company has provided professional management services to the Association.

Barone is a member of the Association and former member of its board of directors. In December 2018, he resigned his board position and accepted paid employment as the Association’s chief executive officer (CEO).

On September 5, 2019, board member Michael Allan was served with a petition signed by more than 5 percent of the Association’s members calling for a special meeting to recall the entire board of directors and elect a new board if the recall was successful. At the time, the other board members, including Allan, were Michael Umann, Dave DiNapoli, Paul Bromley, and Hal Siegel. Allan advised all the board members and Lordon Management of the petition. He hand-delivered the original petition to Lordon Management the next day.

The board did not fix a time for the special meeting or give notice of the meeting to the Association’s members within 20 days of receiving the petition, as is required under section 7511, subdivision (c).[4] When the 20-day statutory period expired, Allan, in his capacity as one of the petitioners, sent notice of the special meeting to the Association’s 459 members.

The notice stated the purpose of the special meeting was to hold a vote on the removal of the entire board and, in the event of a recall, an election of the new board. Due to an error on the e-mail address listed for candidacy submissions, Allan sent a new notice listing the date of the meeting as December 19, 2019.

Due to the full board’s inaction, the petitioners also took it upon themselves to conduct the election.[5] As part of that process, Allan, on behalf of the petitioners, contracted with the League of Women Voters (LWV), a non-partisan entity with no stake in the outcome of the election, to retain an inspector of elections. Judy Murphy of the LWV was ultimately appointed inspector of elections for the December 2019 recall.

In its customary role as an inspector of elections, the LWV receives and tallies ballots, but does not mail out election materials. Accordingly, the petitioners prepared the election materials, stuffed the ballot envelopes, and mailed ballots out to the homeowners at the petitioners’ individual expense.

The LWV conducted the election meeting on December 19, 2019. Murphy, in her role as inspector of elections, announced a quorum was not present, as the LWV had not received in excess of 50 percent of the votes of the membership (the minimum participation required to constitute a quorum under the Association’s bylaws).[6] Following Murphy’s announcement, a majority of the members present at the meeting voted to adjourn the meeting to December 23, 2019.[7]

At the December 23, 2019 meeting, Murphy determined the required quorum of 25 percent of the membership (115 of the 459 members) had been met. (See fn. 7, ante.) Of the 190 ballots received, Murphy counted 156 votes in favor of recalling the entire board.

Having determined the recall passed, the LWV proceeded to certify the election of the new board: Allan; Harriet Cohen; Siegel; Umann; and Bromley. Lordon Management mailed notice of the election results to the membership.

On December 31, 2019, the new board of directors eliminated Barone’s CEO position.

 

2. The Complaint

 

On January 21, 2020, plaintiffs (the Association, Allan, and Cohen) filed this action against Barone and current and former board members Umann, Bromley, and DiNapoli, asserting two causes of action for declaratory relief under section 7616 and common law nuisance.

The complaint alleged defendants had refused to “recognize the validity of the recall” and continued to assert that “the prior Board remains in power and that Defendant Barone remains the putative `CEO’ of the Association.” It further alleged defendants were “engaged in extensive efforts to hinder the new Board of Directors from conducting the affairs of the Association.”

As relevant to this appeal, plaintiffs prayed for a declaration under section 7616 that the December 2019 election recalling the Association’s board of directors was valid; that the Association’s board of directors consists of Allan, Bromley, Cohen, Siegel, and Umann; and that “Barone is not the CEO of the Association and not its authorized agent.”

 

3. The Statement of Decision

 

On May 4, 2020, after an 11-day bench trial, the court filed a final statement of decision and order declaring, among other things: The December 23, 2019 full board recall election was valid; Allan, Bromley, Cohen, Siegel, and Umann “are (and have been since [December 23, 2019])” the Association’s directors; and the “former CEO Christopher Barone has no authority (and has had no authority since the date of his termination) to act on behalf of the [Association] … unless granted by the current board.”

The court found: The petitioners properly presented the petition for full board recall to the former board; the former board unreasonably violated its duties under the Association’s bylaws and governing statutory law to set a special meeting on the recall election after receipt of the petition; the petitioners properly conducted the recall election when the former board failed to do so; the LWV properly executed its duties as inspector of elections and did not prejudice or demonstrate bias against any interested party; and the election was conducted in accordance with the Association’s bylaws and governing statutory law, including provisions prescribing a majority vote and quorum requirements. In making these findings, the court determined defense witnesses testifying to alleged bias or improprieties in the petition and voting process were “not credible.”

As relevant to this appeal, the trial court determined, as a legal matter, that a provision in the Association’s bylaws requiring a “vote of the majority of the votes held by the entire membership” to remove the entire board or an individual director was legally invalid and “unenforceable.” The court concluded this provision conflicted with and was displaced by statutes specifying that, for a nonprofit mutual benefit corporation of 50 or more members (like the Association), only the majority of the votes represented and voting at a duly held meeting at which a quorum is present was needed to remove a director. (See §§ 7222, subd. (a)(2), 5034, 7151, subd. (e).)

On May 22, 2020, plaintiffs voluntarily dismissed their remaining cause of action for nuisance. On May 28, 2020, Barone filed this appeal.[8]

 

DISCUSSION

 

 

1. The Appeal Is Not Moot: Material Questions Remain Regarding the Construction of the Bylaws and Statutes Governing the Vote Required To Remove the Association’s Board of Directors

 

As a threshold matter, plaintiffs contend this appeal should be dismissed as moot because reversal of the challenged order will not grant Barone effective relief now that subsequent board elections have taken place since the trial court’s order. We disagree.

Because the duty of every judicial tribunal is “`”`to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions … [,] [i]t necessarily follows that when … an event occurs which renders it impossible for [the] court, if it should decide the case in favor of [the appellant], to grant him any effectual relief whatever, the court will not proceed to a formal judgment….’ [Citations.]” [Citation.] The pivotal question in determining if a case is moot is therefore whether the court can grant the [appellant] any effectual relief. [Citations.] If events have made such relief impracticable, the controversy has become “overripe” and is therefore moot. [Citations.] [¶] … When events render a case moot, the court, whether trial or appellate, should generally dismiss it.'” (Parkford Owners for a Better Community v. County of Placer (2020) 54 Cal.App.5th 714, 722 [268 Cal.Rptr.3d 653].)

Plaintiffs did not file a written motion to dismiss with supporting affidavits and evidence establishing subsequent elections have in fact occurred that render this appeal moot. (See, e.g., American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 557 [49 Cal.Rptr.2d 686] [respondent should “have made a formal, written motion for dismissal of the appeal, which, because it would have been based on matters not appearing in the appellate record, would have required the submission of affidavits or other supporting evidence”].)[9] Be that as it may, even if we assume there have been subsequent board elections since December 2019—as seems practically certain given the requirement for annual elections in the Association’s bylaws—we still cannot consider this appeal moot. The challenged order grants declaratory relief embracing a disputed judicial construction of the bylaws and statutes governing the vote required to remove a director from the Association’s board. Under these circumstances, “the general rule governing mootness becomes subject to the case-recognized qualification that an appeal will not be dismissed where, despite the happening of the subsequent event, there remain material questions for the court’s determination.” (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541 [63 Cal.Rptr. 21, 432 P.2d 717] (Eye Dog Foundation).)

Eye Dog Foundation is instructive. In that case, the plaintiff sought injunctive relief and a declaratory judgment to invalidate provisions of the Business and Professions Code covering “the subject `Guide Dogs for the Blind,'” the enforcement of which had led to the suspension of the plaintiff’s business license to train seeing eye dogs. (Eye Dog Foundation, supra, 67 Cal.2d at p. 540.) Several months after the trial court entered a judgment upholding all but one section of the challenged provisions, the regulatory state board formally reinstated the plaintiff’s license after the plaintiff took action to comply with the challenged statutes. (Id. at pp. 540-541.) Recognizing that the pending appeal could no longer result in effective relief enjoining enforcement of the challenged statutes, our Supreme Court nonetheless held the appeal was not moot because the plaintiff “not only sought injunctive but declaratory relief, to wit, a declaratory judgment that the subject legislation is unconstitutional on its face and as applied to plaintiff’s operation,” such that there “remain[ed] material questions for the court’s determination” on appeal. (Id. at p. 541.) As our high court explained, an exception to the general mootness doctrine “has been applied to actions for declaratory relief” in such circumstances “upon the ground that the court must do complete justice once jurisdiction has been assumed [citation], and the relief thus granted may encompass future and contingent legal rights.” (Ibid.)

Even if we accept plaintiffs’ contention that we can neither reinstate the former board, nor restore Barone to his CEO position, this does not render the appeal moot. Regardless of the board’s current composition, Barone’s appeal presents a material question for this court’s determination encompassing his future and contingent legal rights under the Association’s bylaws and the statutes governing the recall of its board of directors. As in Eye Dog Foundation, our reversal of the trial court’s declaratory relief order would grant Barone effective relief by embracing his construction of the relevant bylaws and statutory provisions, which remain enforceable against him and the rest of the Association’s current membership for future recall elections. (Eye Dog Foundation, supra, 67 Cal.2d at p. 541, fn. 2 [“`while it has been said that the declaratory judgment acts necessarily deal with the present rights, the “present right” contemplated is the right to have immediate judicial assurance that advantages will be enjoyed or liabilities escaped in the future'”].) This material question warrants disposition on the merits.

 

2. The Trial Court Correctly Determined the Former Board Was Validly Recalled Under the Association’s Bylaws and Statutory Law

 

Barone contends the trial court improperly disregarded a provision of the Association’s bylaws requiring a majority vote of the “entire membership” to remove the board or an individual director from office. In the alternative, he argues the recall was not valid because the relevant special meeting did not achieve a quorum. We conclude the trial court correctly construed the bylaws and governing statutes.

Barone’s contentions challenge the trial court’s application of the bylaws and statutes to essentially undisputed facts. The contentions are therefore subject to our de novo review. (Roybal v. Governing Bd. of Salinas City Elementary School Dist. (2008) 159 Cal.App.4th 1143, 1148 [72 Cal.Rptr.3d 146].) Likewise, insofar as the contentions concern the trial court’s construction of the Association’s bylaws and our state’s governing statutes, these issues too are subject to our de novo review. (See ibid.; PV Little Italy, supra, 210 Cal.App.4th at pp. 144-145.)

It is undisputed that the recall election was approved by a vote of 156 in favor of recalling the entire board, with 190 ballots received out of 459 total membership votes. Barone contends this was insufficient to approve the recall under article VI, section 3 of the Association’s bylaws, which provides: “The entire Board of Directors or any individual Director may be removed from office with or without cause at any time by a vote of the majority of the votes held by the entire membership of record at any regular or special meeting of members.” (Italics added.) Because a majority of the 459 votes held by the entire membership of record is 230 votes, Barone contends the trial court erred in declaring the recall election valid.

The trial court rejected this contention based on a collection of interconnected statutes that effectively prohibit a nonprofit mutual benefit corporation with 50 or more members from requiring more than “a majority of the votes represented and voting at a duly held meeting at which a quorum is present” to remove a director from the corporation’s board. (§ 5034; see §§ 7222, subd. (a)(2), 7151, subd. (e).)

Section 7222 expressly governs the recall of directors serving on the board of a nonprofit mutual benefit corporation. The statute provides, in relevant part: “[A]ny or all directors may be removed without cause if: [¶] (1) In a corporation with fewer than 50 members, the removal is approved by a majority of all members (Section 5033). [¶] (2) In a corporation with 50 or more members, the removal is approved by the members (Section 5034).” (§ 7222, subd. (a).) Under its plain terms, the statute permits a corporation with fewer than 50 members to require the approval of “a majority of all members” (as specified in the Association’s bylaws); however, for a corporation with 50 or more members (like the Association), the statute dictates that the removal need only be “approved by the members” as that phrase is defined in section 5034.

Section 5034 provides: “`Approval by (or approval of) the members’ means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or written ballot … or by the affirmative vote or written ballot of such greater proportion, including all of the votes of the memberships of any class, unit, or grouping of members as may be provided in the bylaws (subdivision (e) of Section 5151, subdivision (e) of Section 7151, or subdivision (e) of Section 9151) or in Part 2, Part 3, Part 4 or Part 5 for all or any specified member action.” (Italics added.) The statute’s reference to subdivision (e) of section 7151 is critical because, while section 5034 permits a nonprofit mutual benefit corporation to require a greater proportion of votes in its bylaws, section 7151, subdivision (e) expressly withdraws this authorization for a vote to remove a director from the corporation’s board.

Section 7151, subdivision (e) provides: “The bylaws may require, for any or all corporate actions (except as provided in paragraphs (1) and (2) of subdivision (a) of Section 7222 …) the vote of a larger proportion of, or all of, the members or the members of any class, unit, or grouping of members or the vote of a larger proportion of, or all of, the directors, than is otherwise required by this part.”

Because section 7151, subdivision (e) expressly prohibits a nonprofit mutual benefit corporation with 50 or more members (like the Association) from requiring a greater proportion of votes than is specified in section 7222, subdivision (a)(2) for the removal of a director, the trial court correctly concluded article VI, section 3 of the Association’s bylaws could not be enforced to invalidate the recall election. And, because section 7222, subdivision (a)(2) requires only “approv[al] by the members” as defined in section 5034 to remove a director (§ 7222, subd. (a)(2)), the trial court correctly concluded the recall was valid if approved “by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present.” (§ 5034.)

Notwithstanding the foregoing, Barone contends there were insufficient votes cast in the recall election to represent a quorum under the Association’s bylaws. The relevant bylaws provision states: “The presence at any meeting, in person or by proxy, of members entitled to cast in excess of 50 percent (50%) of the votes of the membership, shall constitute a quorum for any action …. If, however, such quorum shall not be present or represented at any meeting, the members present either in person or by proxy, may without notice other than announcement at the meeting, adjourn the meeting to a time not less than forty-eight (48) hours nor more than thirty (30) days from the time the original meeting was called, at which meeting twenty-five percent (25%) of the votes of the membership shall constitute a quorum.”

The evidence at trial proved that, following the inspector of election’s announcement that a quorum was not present at the December 19, 2019 meeting, a majority of the members present voted to adjourn the meeting to December 23, 2019, in accordance with the foregoing provision of the bylaws. The evidence further proved that, at the December 23, 2019 meeting, the inspector of elections had received 190 ballots, exceeding the required 25 percent of the votes of the membership (115 of the total 459 votes) needed to constitute a quorum at that meeting.

Barone does not dispute the foregoing facts. Rather, he argues the 25 percent quorum provision in the Association’s bylaws “conflict[s]” with sections 7222 and 5034, which, he emphasizes, “contain[] no language about a `reduced quorum.'” Contrary to Barone’s premise, neither section 5034 nor section 7222 governs minimum quorum requirements for a nonprofit mutual benefit corporation. The relevant statute is section 7512.

Section 7512, subdivision (a) provides: “One-third of the voting power, represented in person or by proxy, shall constitute a quorum at a meeting of members, but, subject to subdivisions (b) and (c), a bylaw may set a different quorum.” (Italics added.) Subdivision (b) stipulates that “[w]here a bylaw authorizes a corporation to conduct a meeting with a quorum of less than one-third of the voting power, then the only matters that may be voted upon … by less than one-third of the voting power are matters notice of the general nature of which was given.”[10]

Consistent with section 7512, the Association’s bylaws authorized a quorum of 25 percent of the voting power after an adjournment. (See § 7512, subd. (a).)[11] And, the record proves the matter voted upon at the meeting— the recall of the board and election of a new board in the event the recall was successful—was disclosed in the original meeting notice. (§ 7512, subd. (b).) The trial court correctly determined the December 2019 vote validly recalled the former board under the Association’s bylaws and governing statutory law.

 

3. Section 7616 Authorized the Order Validating the December 2019 Recall Election

 

Barone contends section 7616 authorizes a claim to validate an election only—”not a recall.” He emphasizes there is “nothing” in the statute expressly addressing “a recall or removal of directors,” and he argues it is a “decisive issue” that “there cannot be an election absent a successful recall” under the Association’s bylaws. Additionally, Barone argues he is not a proper defendant under the statute.

Barone’s arguments raise questions of statutory interpretation subject to our independent de novo review. (Committee to Save the Beverly Highlands Homes Assn. v. Beverly Highlands Homes Assn. (2001) 92 Cal.App.4th 1247, 1261 [112 Cal.Rptr.2d 732].) “In the construction of statutes, the primary goal of the court is to ascertain and give effect to the intent of the Legislature. [Citations.] The court looks first to the language of the statute; if clear and unambiguous, the court will give effect to its plain meaning.” (Id. at p. 1265.) “The words used should be given their usual, ordinary meanings and, if possible, each word and phrase should be given significance. [Citations.] The words used `must be construed in context, and statutes must be harmonized, both internally and with each other, to the extent possible.'” (Ibid.)

Contrary to Barone’s narrow reading of section 7616, we find the statutory text evidences a clear legislative intent to confer broad authority on the trial court in determining the validity of a board election. Under section 7616, subdivision (a), “[u]pon the filing of an action therefor by any director or member or by any person who had the right to vote in the election at issue, the superior court of the proper county shall determine the validity of any election or appointment of any director of any corporation.” Critically, while this directive does not expressly refer to a recall election (as Barone emphasizes), subdivision (d) of the statute authorizes “[t]he court, consistent with the provisions of [the statutes governing nonprofit mutual benefit corporations] and in conformity with the articles and bylaws to the extent feasible, [to] determine the person entitled to the office of director … and [to] direct such other relief as may be just and proper.” (§ 7616, subd. (d), italics added.)

In Kaplan v. Fairway Oaks Homeowners Assn. (2002) 98 Cal.App.4th 715 [120 Cal.Rptr.2d 158] (Kaplan), the reviewing court considered whether an action under section 7616 properly encompassed the plaintiffs’ claim that the challenged election violated their right to vote by proxy, such that the plaintiffs were entitled to prevailing party attorney fees under Civil Code former section 1354 for enforcing the association’s bylaws.[12] (Kaplan, at pp. 717-718.) The Kaplan court acknowledged that section 7616 “does not create any substantive rights … to vote by proxy,” but recognized the statute was nonetheless broad enough to provide a “procedural vehicle” to adjudicate an action “to enforce the members’ proxy and cumulative voting rights under the bylaws.” (Kaplan, at pp. 719, 720.)

We similarly conclude the language of section 7616 is broad enough to provide a procedural vehicle for vindicating plaintiffs’ recall rights under the Association’s bylaws, even absent an express reference to recall elections in the statute’s text. Article VI, section 3 of the bylaws authorizes a recall of the entire board of directors and makes the election of a new board part and parcel of the recall process: “The entire Board of Directors or any individual Director may be removed from office with or without cause at any time by a vote … at any regular or special meeting of members duly called, and a successor or successors may then and there be elected to fill the vacancy or vacancies thus created.[13] (Italics added.) In adjudicating plaintiffs’ claim under section 7616 to enforce this provision of the bylaws, the statute not only unambiguously directed the trial court to “determine the validity of [the new board’s] election” (§ 7616, subd. (a)), but also authorized the court, “in conformity with the [recall provision of the] bylaws …, [to] determine the person entitled to the office of director … and [to] direct such other relief as may be just and proper” (id., subd. (d)). Because the trial court could not determine the validity of the election or “the person entitled to the office of director” without adjudicating the validity of the underlying recall election, it was “just and proper” for the court to enter an order under section 7616 confirming the recall election was valid. (§ 7616, subd. (d); see Kaplan, supra, 98 Cal.App.4th at p. 721.)

For much the same reason, we reject Barone’s argument that he was not a proper defendant in this action. Section 7616, subdivision (c) directs the superior court, “[u]pon the filing of the complaint, and before any further proceedings are had” to “enter an order fixing a date for the hearing … and requiring notice of the date for the hearing and a copy of the complaint to be served upon the corporation and upon the person whose purported election or appointment is questioned and upon any person (other than the plaintiff) whom the plaintiff alleges to have been elected or appointed.” (Italics added.) Barone contends this provision establishes the parties who may be named as defendants under section 7616, and, because he was neither elected nor appointed in the December 2019 election, he argues he could not be sued under the statute.[14] We disagree.

As we have said and as the trial court correctly recognized, section 7616, subdivision (d) authorizes the court to “direct such other relief as may be just and proper” in connection with confirming the validity of a board election. Here, the complaint alleged Barone, in his role as CEO and with the sanction of a majority of the former board, was engaged in frustrating the new board’s efforts to fulfill its duties under the Association’s bylaws. Having confirmed the validity of the new board’s election, the statute plainly authorized the trial court to enter an order confirming Barone had no authority to act on behalf of the Association, as was “just and proper” under the Association’s bylaws. (§ 7616, subd. (d).) Plaintiffs properly named Barone as a defendant in their section 7616 claim.[15]

 

DISPOSITION

 

The order is affirmed. Plaintiffs the Lake Lindero Homeowners Association, Inc., Michael Allan, and Harriet Cohen are entitled to their costs.

Edmon, P. J., and Lavin, J., concurred.

[1] Statutory references are to the Corporations Code, unless otherwise designated.

Barone noticed an appeal from a “Judgment after court trial” entered on May 4, 2020. The record, including the register of actions, does not reflect the entry of a judgment on May 4, 2020, or any other date. Rather, on May 4, 2020, the trial court entered an order and final statement of decision confirming the validity of the board election under section 7616. Although that order disposed of only one of plaintiffs’ two causes of action, plaintiffs subsequently dismissed their remaining claim on May 22, 2020. Because the court’s May 4, 2020 order and plaintiffs’ voluntary dismissal collectively have “all the earmarks of a final judgment,” Barone properly took this appeal on May 28, 2020. (Estate of Miramontes-Najera (2004) 118 Cal.App.4th 750, 755 [13 Cal.Rptr.3d 240]; see Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 304 [63 Cal.Rptr.2d 74, 935 P.2d 781] [a judgment is final “`”when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined”‘”]; PV Little Italy, LLC v. MetroWork Condominium Assn. (2012) 210 Cal.App.4th 132, 144 [148 Cal.Rptr.3d 168] (PV Little Italy) [order invalidating corporate election under § 7616 appealable where “order appealed from accomplished that goal, and neither party has indicated that anything more of substance remains to be done in the litigation, except entry of judgment”].)

 

[2] Barone commits several pages of his opening brief to challenging the trial court’s credibility determinations. It is settled that “`”[c]onflicts and even testimony [that] is subject to justifiable suspicion do not justify the reversal of a judgment, for it is the exclusive province of the trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends.”‘” (People v. Penunuri (2018) 5 Cal.5th 126, 142 [233 Cal.Rptr.3d 324, 418 P.3d 263], italics added, quoting People v. Zamudio (2008) 43 Cal.4th 327, 357 [75 Cal.Rptr.3d 289, 181 P.3d 105].) We thus disregard all contentions challenging the trial court’s credibility determinations as insufficient to support reversal of the order.

Barone makes other contentions that do not warrant meaningful discussion. These include that the trial court refused to consider an earlier ruling in an unrelated case involving an Association recall election; that the board election violated procedures pertaining to the election of public officials under the Elections Code; that the court refused to admit 500 pages of exhibits submitted after the pretrial deadline and after plaintiffs rested their case; that the court refused to compel testimony from the Association’s attorney after Barone failed to make an offer of proof; that the Association’s attorney violated the Rules of Professional Conduct by his presence at the election; that the court disregarded conflicting evidence about which parties sent and received election materials; and that several procedural violations (such as the failure to sign a case management form) occurred during pretrial proceedings. Among other shortcomings, Barone fails to support these scattershot claims with a reasoned argument or citation to relevant legal authorities, and he categorically fails to address, let alone satisfy, his burden to demonstrate a miscarriage of justice occurred. (See Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1069 [232 Cal.Rptr. 528, 728 P.2d 1163] [An appellant “must also show that the error was prejudicial [citation] and resulted in a `miscarriage of justice'”—i.e., that “`”it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.”‘”].) Because the opening brief fails to fulfill these fundamental requirements of appellate process, we deem all these contentions waived. (People v. Stanley (1995) 10 Cal.4th 764, 793 [42 Cal.Rptr.2d 543, 897 P.2d 481] [“`[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.'”].)

We likewise deem forfeited arguments Barone makes for the first time in his reply brief, including his claim (without citation to the record) that the trial court purportedly interfered with a contract Barone had with his legal counsel. (Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11 [142 Cal.Rptr. 429, 572 P.2d 43] [“Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.”].)

 

[3] Barone filed a motion to augment the record with documents that were not filed or lodged in the trial court. The motion is denied. (See Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [58 Cal.Rptr.2d 899, 926 P.2d 1085] [“Augmentation does not function to supplement the record with materials not before the trial court.”]; Cal. Rules of Court, rule 8.155(a)(1).)

[4] Section 7511, subdivision (c) provides, “Upon request in writing to the corporation … by any person (other than the board) entitled to call a special meeting of members, the officer forthwith shall cause notice to be given to the members entitled to vote that a meeting will be held at a time fixed by the board not less than 35 nor more than 90 days after the receipt of the request…. If the notice is not given within 20 days after receipt of the request, the persons entitled to call the meeting may give the notice or the superior court of the proper county shall summarily order the giving of the notice, after notice to the corporation giving it an opportunity to be heard.”

[5] Evidence elicited at trial showed Barone, ostensibly speaking for a majority of the board, had instructed Lordon Management, which normally would have assisted with an Association election, to “do nothing until legal counsel and/or the board advises differently.”

[6] As of December 19, 2019, the LWV had received a total of 182 sealed ballot envelopes of a possible 459 (39.6 percent).

[7] As we will discuss, the Association’s bylaws provide that if a quorum is not present, “the members present either in person or by proxy, may without notice other than announcement at the meeting, adjourn the meeting to a time not less than forty-eight (48) hours nor more than thirty (30) days from the time the original meeting was called, at which meeting twenty-five percent (25%) of the votes of the membership shall constitute a quorum.”

[8] The other defendants did not appeal and are not parties to this appeal.

[9] Plaintiffs filed a request for judicial notice of a grant deed showing Umann conveyed his interest in one lot in the development on July 30, 2020. (Evid. Code, §§ 452, subd. (c), 459, subd. (a); see Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194 [147 Cal.Rptr.3d 41].) While we grant that request, we cannot accept, as plaintiffs assert, that the grant deed proves Umann could not have maintained his position on the board after the conveyance. Significantly, the Association’s bylaws contemplate that a member may own multiple lots, such that a member is “entitled to one vote for each Lot in which they hold the interest required for membership.” (Italics added.) Because we have no evidence to establish how many lots Umann owned when he conveyed the subject lot, the grant deed is insufficient to prove he is no longer a member of the Association entitled to serve on its board of directors.

[10] Section 7512, subdivision (c) authorizes members to “continue to transact business until adjournment notwithstanding the withdrawal of enough members to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the members required to constitute a quorum.”

[11] The Association’s bylaws also comply with regulations pertaining to quorum requirements promulgated by the Department of Real Estate for common interest developments like Lake Lindero. In particular, section 2792.17, subdivision (e)(2) of title 10 of the California Code of Regulations provides: “In the absence of a quorum at a members’ meeting a majority of those present in person or by proxy may adjourn the meeting to another time, but may not transact any other business…. The quorum for an adjourned meeting may be set by the governing instruments at a percentage less than that prescribed for the regular meeting, but it shall not be less than 25 percent of the total voting power of the Association.” (Italics added.)

[12] Civil Code former section 1354, subdivision (f) then provided for an award of prevailing party attorney fees in an action “`to enforce the governing documents.'” (Kaplan, supra, 98 Cal.App.4th at p. 718, italics omitted.)

[13] As discussed in part 2, ante, while this provision of the bylaws requires “a vote of the majority of the votes held by the entire membership of record,” that part of the provision violates section 7151, subdivision (e) and thus is displaced by the vote requirement in section 7222, subdivision (a)(2) for the removal of directors from a nonprofit mutual benefit corporation with 50 or more members.

[14] Barone also suggests the Association is not a proper plaintiff in this action, emphasizing that section 7616, subdivision (c) requires service of the complaint upon “the corporation.” However, as plaintiffs correctly argue, Barone fails to demonstrate how this purported error resulted in prejudice, given that Cohen and Allan (each a “member” and “person who had the right to vote in the election”) undisputedly had standing under the statute. (§ 7616, subd. (a).)

[15] Barone has moved for sanctions against plaintiffs’ counsel and the trial court. With respect to the lower court, he appears to argue the court reporter failed to provide him with electronic transcripts of the reported proceedings. (See Cal. Rules of Court, rule 8.23 [authorizing sanctions for failure of a court reporter to perform a duty imposed by statute or these rules].) Barone relies upon rule 8.144, which specifies the format requirements that apply “to clerks’ and reporters’ transcripts delivered in electronic form and in paper form.” (Id., rule 8.144(b)(1), italics added.) As the rule’s reference to “paper form” suggests, there is no mandate that the reporter deliver an electronic transcript—a paper form is also acceptable. (Ibid.; see also id., rule 8.130 [specifying general requirements for delivery of reporter’s transcript].) Thus, Barone has not demonstrated sanctions are warranted under rule 8.23.

Barone’s motion for sanctions against plaintiffs’ counsel appears to relate largely to events that occurred before the underlying action or in connection with plaintiffs’ efforts to enforce the terms of the challenged order, neither of which is properly before this court on a motion for appellate sanctions. (See Cal. Rules of Court, rule 8.276(a) [specifying grounds for appellate sanctions].) To the extent his motion raises issues relevant to the appeal, it simply repeats arguments that Barone made in his principal briefs, which we have rejected. Moreover, as plaintiffs correctly argue, nothing in the relevant rule authorizes appellate sanctions against a respondent for defending an appeal. (See ibid.) The motion for sanctions is denied.

Takiguchi v. Venetian Condo. Maintenance Corp.

Summary by Mary M. Howell Esq.,CCAL, & Pejman D. Kharrazian, Esq.

 

In Takiguchi v. Venetian Condo. Maintenance Corp. (2023) 90 Cal.App.5th 880, a small group of owners held multiple units and had controlled the board with its nominees for many years.  In January 2021, as the association moved toward its annual meeting to elect directors, there were opposition candidates lined up to change the complexion of the board.  The existing board sent out statutorily-prescribed notices of meeting and ballots, and engaged a professional inspector of elections.

Then the fun began.  The governing documents prescribed a quorum of 51% of the voting power, with a provision for a lower quorum for an adjourned meeting should the association fail to meet quorum at the initial meeting.  The notice of meeting anticipated a failure to achieve quorum, and actually noticed a follow-up meeting to take advantage of the lower quorum requirement for an adjourned meeting. The notice stated that members could participate by mail in ballot, or by attending the meeting virtually, since COVID-19 restrictions were in effect. Ballots were duly mailed to homeowners by the inspector of elections, and the inspector of elections kept a log of which owners had returned their ballots.  Ostensibly, to save money and given a long history of failures to achieve quorum, the inspector did not attend the first meeting.

On the date of the first meeting, there was confusion as to whether quorum had been achieved; in determining that quorum had not been met, management relied strictly on the number of written ballots which had been received by the inspector, and did not include persons who attended online.

The failure to count for purposes of quorum those who had not actually cast a written ballot but who appeared via internet did not sit well with the opposition.  One homeowner took pictures of the participants who were only appearing virtually.  Despite some of those images being identified only by screen names, the opposition was able to persuade the court of the identities of those participating virtually, and counting those as well as the received ballots, it was clear quorum had been achieved at the first meeting.

To compound its problems, the holdover board next voted against holding the (already noticed) subsequent meeting with its lower quorum.

The opposition filed a suit pursuant to Corporations Code Section 7510, which allows a court to order a meeting be held if the corporation’s board had failed or refused to do so.  In granting relief to the owners, the court noted that, despite no minutes having been kept, there was sufficient evidence quorum had been achieved at the first meeting.  The court accepted the identification of owners who had not submitted a written ballot but participated virtually, and counted those participants toward the quorum. In fashioning its remedy, the court ordered that a new meeting be held for the purpose of counting the ballots which had been received at that first meeting.

A dissenting opinion questioned whether the statute actually supported this type of relief, or whether instead the court should have ordered a new meeting to be held.  While the dissent is well reasoned, the remedy prescribed by the court saved the association the not insignificant costs of conducting a second election.

 

***End Summary*

90 Cal.App.5th 880 (2023)

GUY TAKIGUCHI, Plaintiff and Respondent,
v.
VENETIAN CONDOMINIUMS MAINTENANCE CORPORATION, Defendant and Appellant.

No. D079441.
Court of Appeals of California, Fourth District, Division One.
April 21, 2023.
APPEAL from an order of the Superior Court of San Diego County, Super. Ct. No. 37-2021-00010110-CU-PT-CTL, Richard E. L. Strauss, Judge. Affirmed.

Weintraub Tobin Chediak Coleman Grodin and Brendan J. Begley for Defendant and Appellant.

Law Offices of Michael G. Kim and Michael Gene Kim for Plaintiff and Respondent.

 

883*883 OPINION

 

BUCHANAN, J.—

A homeowners association is aptly described as “`a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.'” (Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 651 [191 Cal.Rptr. 209].) And “[w]ith power, of course, comes the potential for abuse.” (Ibid.) One form of abuse may occur when incumbent board directors try to perpetuate their own power by failing to hold regular homeowner meetings or elections. Corporations Code[1] section 7510, subdivision (c) provides homeowners with a judicial remedy to counteract such conduct in a nonprofit mutual benefit corporation. Specifically, the statute allows a court to summarily order the corporation to hold a regular meeting or election if it has failed to do so within specified timeframes.

We here conclude that the trial court properly exercised this statutory authority by summarily ordering Venetian Condominiums Maintenance Corporation (Venetian) to hold a meeting for the purpose of counting the 166  written ballots cast for its January 20, 2021 annual member meeting and election. Substantial evidence supports the trial court’s finding that there was a quorum present for that meeting. By adjourning the meeting based on the purported absence of a quorum, Venetian failed to conduct the scheduled meeting or cover the noticed agenda items, which included counting the ballots and determining the results. Accordingly, we affirm the trial court’s order.

 

FACTUAL AND PROCEDURAL BACKGROUND

 

 

A. Venetian’s Bylaws and Election Rules

 

Venetian is a condominium project with 368 condominium units in the University Town Center area of San Diego. It is a nonprofit mutual benefit corporation governed by the Nonprofit Mutual Benefit Corporation Law. (§ 7110 et seq.)

Venetian is run by a board of directors with three directors. Its bylaws require the board to hold regular annual member meetings to elect directors. The members include all unit owners, with each unit having one vote.

Section 3.04 of the bylaws (entitled “Quorum”) imposes a 51 percent quorum requirement for annual member meetings, with the percentage based on the number of units entitled to vote. The bylaws also provide for a reduced one-third quorum requirement if the higher quorum is not met at the initial meeting. Specifically, section 3.04 states in relevant part: “The presence at any meeting, either in person or proxy, of Members entitled to cast at least fifty-one (51%) percent of the total voting power of the Association shall constitute a quorum for any action except as otherwise provided in the Restrictions. If, however, such quorum shall not be present or represented at any meeting, a majority of the Members entitled to vote thereat shall have the power to adjourn the meeting to [a] date not less than five (5) days nor more than thirty (30) days from the meeting date, at which meeting the quorum requirements shall be one-third (1/3) of the total voting power.”

Venetian’s board has also adopted election rules, which require the appointment of an independent, third party inspector of elections to preside over elections, receive ballots, count votes, and determine the results. Voting for directors must be by secret written ballot sealed in two envelopes. The inspector must provide notice of any election, including the date, time, and address where written ballots must be returned by mail or handed to the inspector of elections, and the date, time and location of the meeting at which ballots will be counted. The envelopes may be opened and the ballots counted and tabulated only at a properly noticed board or member meeting. Only the inspector of elections or a designee may open the envelopes and count and tabulate the ballots.

 

B. Prior History of Director Elections

 

Ali Ghorbanzadeh owns 18 units at the Venetian. He was elected to Venetian’s board of directors in 2008. In 2009, Ghorbanzadeh appointed his son Sean Gorban[2] to the board. They have controlled the three-member board continuously from 2009 through at least 2021. Guy Takiguchi was elected as the third director in 2015.

From 2009 to 2021, the board repeatedly failed to hold annual elections, either due to the absence of a quorum or for other reasons. Ghorbanzadeh and his son also targeted opposition candidates Takiguchi and Elaine Nishime by fining them and trying to exclude their candidate statements from the ballot packets. Takiguchi successfully challenged these actions in court several times.

 

C. January 2021 Meeting and Election

 

There were three directors on the board in 2020: Ghorbanzadeh, his son Sean Gorban, and Takiguchi. Ghorbanzadeh’s seat was up for reelection at the 2020 annual meeting, and there were two other candidates for the seat, including Nishime. The annual meeting was supposed to be conducted in November or December 2020, but was delayed until January 2021.

Lisa Schwartz is the owner of The Ballot Box, Inc. (Ballot Box), which had a contract with Venetian to serve as its inspector of elections. On December 18, 2020, on behalf of the Venetian board, Ballot Box sent out a notice of annual homeowners meeting and director election, along with an agenda and written ballots for the election. The notice was for both an annual meeting to be held on January 20, 2021, and an “adjourned meeting” to be held on January 25, 2021. The notice explained the reason for the adjourned meeting as follows: “As the Association usually does not reach quorum at the first meeting, an adjournment date is also provided on this notice. The quorum for any such adjourned meeting is 25% [sic—should be one-third] of the total voting power. The inspector of election will not be present at the first meeting.”

The notice of annual meeting stated that due to COVID-19 restrictions, “the meeting will only be available virtually although members will be permitted to deliver a ballot or obtain a replacement at the physical location. Members will not be permitted to remain at the physical location. To join the meeting and observe the ballot counting, members must use the virtual platform.” The notice provided members with the necessary information to join the meeting online or by telephone and identified the physical location as the complex’s clubhouse. A cover letter sent by Ballot Box along with the notice advised: “It is important that you participate in this meeting, by returning the enclosed ballot either by mail or in person at the meeting.”

The notice advised that the election would be for one 2-year term on the board. With regard to the quorum requirement, it stated: “Representation may be by attendance in person at the meeting, by the return of a ballot, or by proxy.” The notice provided members with voting instructions and set a deadline of January 15, 2021, for Ballot Box’s receipt of any mailed ballots. It further stated: “The envelopes are received and held by The Ballot Box until they are opened at the meeting…. The SECRET BALLOT envelopes are then opened and the ballots tabulated. The envelopes are only opened IF a quorum is met.”

The written agenda for the membership meeting included seven agenda items as follows: (1) “Call to Order”; (2) “Introductions”; (3) “Balloting” (including “Verification of Quorum” and “Begin Tabulation of Ballots”); (4) “Board Reports”; (5) “Homeowner Open Forum”; (6) “Election Results”; and (7) “Adjournment.”

Before the meeting, Ballot Box received the mailed ballots and maintained a ballot receipt list identifying the unit owners from whom it received them. Schwartz provided a copy of this list to multiple owners and board members both before and after the scheduled January 20, 2021 meeting. By the time of the meeting, Ballot Box had received 166 ballots.

Venetian’s management specifically instructed Ballot Box not to attend the regular annual meeting scheduled for January 20, 2021, and only to attend the adjourned meeting scheduled for January 25, 2021. According to Schwartz, “[t]he adjourned meeting was specifically chosen and noticed for us to attend in lieu of the original meeting, to save the Association money from having us attend 2 meetings.”

The regular meeting was convened virtually on January 20, 2021. There was no inspector of elections present at the clubhouse or remotely. Amber Korody, the community manager for Venetian, presided over the meeting remotely even though she was not the inspector of elections. She informed the participants that Ballot Box would not be attending “to save us money.” Korody did not take roll, did not count the members present online or by  telephone, and did not determine the number of units they represented or whether an owner of those units had already submitted a written ballot.

According to Korody, she called Schwartz during the meeting to determine the status of the ballots, and Schwartz informed her that based on the number of ballots received by the voting deadline, she had determined that a quorum was not met. But Schwartz denied making this determination. Schwartz explained: “I was not present at the Venetian’s January 20, 2021 annual meeting and therefore could not and did not rule on anything that occurred at that meeting.”

Korody declared that there was no quorum for the meeting because Ballot Box had only received 166 ballots, and the quorum was 188. However, Korody did not include in her count any members who were present online or by telephone representing units for which no written ballot had been submitted. After Korody declared that there was no quorum, there was a motion to adjourn the meeting and move the ballot count to the “adjourned meeting” previously scheduled for January 25, 2021. Sean Gorban seconded the motion, and the meeting was adjourned without a formal vote. No one prepared minutes for the meeting. Ghorbanzadeh later acknowledged that “people at the meeting were led to believe that there would be a [further] meeting on Monday [January 25].”

Nishime participated in the January 20, 2021 meeting remotely by computer and took multiple screenshots of the participants. With one exception, the screenshots showed only the participants’ screen names, not their faces. However, Nishime was able to identify eight members who were present representing 37 units for which no written ballot had been submitted to Ballot Box. Ballot Box’s ballot receipt list showed that no written ballot had been submitted for these 37 units. If those 37 units had been counted along with the 166 written ballots, there would have been a quorum of 203 present at the meeting—exceeding the 188 minimum.

The eight participating members who represented units for which no ballot had been submitted included Ghorbanzadeh (representing 18 units), his son Sean Gorban (representing one unit), his other son Brian Gorban (representing three units), and an ally of Ghorbanzadeh’s who was also running for the director’s seat, Ben Ariannejad (representing one unit). Takiguchi asserted that Ghorbanzadeh and his allies did not submit their ballots “in a deliberate and tactical effort to not reach quorum so they could remain in power another year or two.” Venetian submitted no evidence refuting this accusation, or disputing that Ghorbanzadeh and his allies participated in the meeting, or explaining why they did not submit a written ballot.

On January 22, 2021, two days after the aborted member meeting, Venetian’s three-member board of directors convened an emergency board meeting. Ghorbanzadeh announced that the annual membership meeting had “failed.” He and his son Sean Gorban voted to cancel the “adjourned meeting” previously scheduled for January 25, 2021, due to the lack of a quorum on January 20, 2021. Takiguchi voted against the motion. Later the same day, at the board’s direction, Korody sent a notice to the members notifying them of the board’s action. The notice stated in relevant part: “On Wednesday January 20, 2021, there was an attempt to hold the Annual Meeting of the members for the purposes of holding the Annual Director Election. Due to a lack of a quorum, the meeting was not held…. [¶] As there was no motion, as required by the governing documents in the Annual Meeting to reconvene, there could be no reduced quorum for any subsequent meetings. Therefore, the Board has cancelled the Special Membership Meeting that was previously scheduled for January 25, 2021.”

Because the January 25 meeting was cancelled, nobody ever counted the 166 written ballots that were mailed to Ballot Box. Many Venetian members were upset by this decision. Fifty-six members representing 15 percent of the voting power signed a petition calling on the board to conduct a meeting to count the ballots. Schwartz also sent an e-mail to Korody and Venetian’s counsel stating her “professional opinion” that “it was bad form/bad faith for the Board” to cancel the January 25 meeting without counting the ballots. She advised that Ballot Box “would be happy to attend a rescheduled meeting to open and count the ballots so the election may be completed for the owners of this community.” On behalf of the board, however, Korody responded to the members’ petition as follows: “Please be advised that the submitted petition is not appropriate in that the members cannot hold a meeting to count ballots that were failed as a result of a failed election.”

 

D. Trial Court Proceedings

 

On March 8, 2021, Takiguchi filed a petition against Venetian seeking a court order under section 7510. The petition argued that there was a quorum present at the January 20, 2021 annual meeting—counting both the 166 written ballots received by Ballot Box and the 37 additional units represented by members participating online or by telephone for which no ballot had been submitted. The petition sought a summary order directing Venetian to “notice and hold the annual meeting for the sole purpose of counting the ballots in custody of [Ballot Box] as of January 20, 2021 and tabulating and certifying the results of that vote as the election results for the Venetian in 2021.”

In support of the petition, Takiguchi submitted declarations from himself, Nishime, and Schwartz, copies of Nishime’s screenshots, the 56 member petitions, Ballot Box’s ballot receipt list, Venetian’s bylaws, election rules, and homeowner directory, the December 18, 2020 notice of annual meeting and election, and e-mails written by various participants.

Venetian filed a five-page opposition to the petition, but submitted no defense evidence and made no objections to Takiguchi’s evidence.[3] Venetian’s initial opposition acknowledged that under its bylaws and applicable statutes, the annual meeting required “a quorum of the members present in person, by proxy, or by submitting a secret written ballot by mail.” Venetian nevertheless argued that there was no quorum for the January 20, 2021 meeting because only “160 ballots were received by the voting deadline on January 15, 2021, and 185 [sic—should be 188] ballots were needed to reach a quorum.” Venetian’s opposition did not mention or dispute Takiguchi’s evidence that there were 37 additional units represented by members who were participating in the virtual meeting for which no ballot had been submitted.

At an initial hearing in April 2021, the trial court requested supplemental briefing on several issues. Represented by new counsel, Venetian changed its position and filed a supplemental brief arguing that only the 166 ballots received before the January 20, 2021 meeting counted towards the quorum; that Venetian did not fail to hold an annual meeting because the 166 ballots did not satisfy the quorum requirement; and that the requirements for reconvening the annual meeting with a lower quorum were not met. Venetian’s supplemental opposition again did not dispute Takiguchi’s evidence that there were 37 units represented at the January 20, 2021 meeting for which no written ballot had been submitted.

At another hearing in June 2021, the court instructed Venetian to provide the available meeting minutes. Venetian later submitted Korody’s declaration with attached exhibits, which did not include any minutes of the January 20, 2021 meeting. Korody’s declaration purported to describe aspects of the meeting, but again did not dispute Takiguchi’s evidence regarding the 37 nonvoting units represented at the meeting.

After taking the matter under submission, the trial court granted Takiguchi’s petition. The court reasoned: “A virtual Annual Meeting was scheduled for January 20, 2021. The Venetian’s quorum requirements are 51% and 33%. (Venetian Bylaws 3.04….) There are 368 members of the Association and thus, a quorum is 185 [sic—should be 188] members. The quorum requirement may be met by the members present in person, by proxy or by submitting a secret written ballot. (Corp. Code, § 7512; Bylaws § 3.04 and CC § 5115(d); see also Respondent’s Opposition, p. 3:12-14.) Here, 160 ballots were received by the voting deadline … with another five or six ballots received thereafter constituting a total of 166 ballots. Petitioner has submitted evidence that 37 units were present at the virtual meeting. (Nishime Dec. ¶23.) Respondent provides no contrary evidence. Further, Respondent confirms that no contemporaneous record was made of the meeting by any of Respondent’s agents. Thus, based upon the evidence submitted, the quorum requirements were met.”

Accordingly, the trial court ordered Venetian “to hold the annual meeting for the purpose of counting the ballots in custody of the Ballot Box as of January 20, 2021.”

 

DISCUSSION

 

 

I

 

We first consider whether Venetian’s appeal is moot. The January 20, 2021 annual member meeting was for the purpose of electing a director for a two-year term to the seat held by Ghorbanzadeh. Because more than two years have now passed, we asked the parties to brief the mootness issue. In response, the parties notified us that there was another annual membership meeting scheduled in November 2022 for the purpose of conducting an election for the same director’s seat, but the election was unsuccessful because there was no quorum for the meeting. There has been no successful election for this seat since the disputed meeting of January 20, 2021. Because section 4.02 of the Venetian bylaws provides that “all incumbent Directors shall hold their office until their successors are elected,” Ghorbanzadeh continues to hold the seat that was the subject of the January 20, 2021 election, even though he has not been reelected.

Both parties take the position that we should not dismiss the appeal as moot. We agree that the appeal is not moot. Even though the original two-year term would have expired by now, the winner of the January 20, 2021 election would still remain in the seat under Venetian’s bylaws because a successor has not yet been elected. Thus, if the ballots from the January 20, 2021 meeting are counted as directed by the trial court, and Ghorbanzadeh is determined not to have been the winner, the winner will be entitled to take his place on the board until a successor is elected. In these circumstances, Venetian’s appeal is not moot because we would still be able to grant it effective relief if we were to reverse the trial court’s order directing that the ballots be counted. (See Lockaway Storage v. County of Alameda (2013) 216 891*891 Cal.App.4th 161, 175 [156 Cal.Rptr.3d 607] [appeal is moot if superseding events make it impossible to grant appellant any effective relief].)

 

II

 

We next consider whether there is sufficient evidence to support the trial court’s finding that there was a quorum for the January 20, 2021 meeting. On appeal, Venetian has once again abandoned its argument that only the written ballots received by Ballot Box count towards the quorum. More specifically, Venetian does not contest the trial court’s conclusion that nonvoting units represented by members who personally attended the meeting online or by telephone count towards the quorum, as well as units for which a written ballot had been submitted.[4] For the first time in its opening brief, however, Venetian now asserts that the evidence does not support the trial court’s finding that there were 37 units represented at the virtual meeting for which no written ballot had been submitted. Although Venetian did not make this argument in either of its written oppositions to Takiguchi’s petition, we will decide this issue on the merits because a sufficiency of evidence claim may be raised for the first time on appeal.[5] (Tahoe National Bank v. Phillips (1971) 4 Cal.3d 11, 23, fn. 17 [92 Cal.Rptr. 704, 480 P.2d 320].) We review the trial court’s factual finding of a quorum for substantial evidence, viewing the entire record in the light most favorable to the finding. (See Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053 [68 Cal.Rptr.2d 758, 946 P.2d 427].)

Substantial evidence supports the trial court’s finding that there was a quorum present for the January 20, 2021 meeting. Nishime participated in the meeting online and took multiple screenshots of the participants. She had lived at Venetian for several years, she knew who the owners were and how many units they owned, and she had the Venetian homeowner directory with her during the meeting. Based on her observations and screenshots, she was able to identify the participants by their screen names and compile a list of them. Moreover, the inspector of elections (Ballot Box) had disseminated its ballot receipt list, which identified the units for which a written ballot had already been submitted. Thus, Nishime was able to identify eight members who were present online or by telephone representing 37 units for which no written ballot had been submitted to Ballot Box. Counting those 37 units along with the 166 units for which written ballots had been submitted, there is substantial evidence to support the trial court’s finding of a quorum in excess of the 188 minimum.

Venetian argues that Nishime had no personal knowledge of the screen names used by those who participated in the meeting remotely. For example, Venetian claims that the screen name “Dr. ali” used by one of the participants could refer to another owner with the first name Ali, rather than Ali Ghorbanzadeh. Absent any contrary evidence, however, there was ample evidence for the trial court to infer that this was Ghorbanzadeh’s screen name. Ghorbanzadeh was both an incumbent director and a candidate for reelection with an obvious interest in the meeting. Ghorbanzadeh later wrote an e-mail purporting to describe what happened in the meeting. Moreover, according to one of Nishime’s screenshots, the person with the “Dr. ali” screen name also spoke at the meeting and the trial court could reasonably infer that Nishime would have recognized his voice from her attendance at past board meetings. Finally, it would have been a simple matter for Venetian to submit a declaration refuting the evidence that Ghorbanzadeh participated in the meeting using the screen name “Dr. ali.” But Ghorbanzadeh submitted no declaration, and Korody’s declaration submitted on Venetian’s behalf is conspicuously silent on the issue, even though she presided over the meeting. The trial court could reasonably infer from Venetian’s failure to present any contrary evidence that Ghorbanzadeh did in fact participate in the meeting using this screen name. (Evid. Code, §§ 412, 413; Westinghouse Credit Corp. v. Wolfer (1970) 10 Cal.App.3d 63, 69 [88 Cal.Rptr. 654] [adverse inference against party whose declaration did not address material issues].)

As for the other meeting participants Nishime identified as representing nonvoting units, at least four of them used real first and last names of known unit owners as their screen names in the meeting. These included Sean Gorban (one unit), Mike Fani (one unit), Margarita Abagyan (eight units), and Bahram (“Ben”) Ariannejad (one unit)—whose face was also shown in the screenshots. Absent any evidence that these people were imposters, the trial court could reasonably conclude that they were who they purported to be. Together with Ghorbanzadeh and his 18 units, these individuals accounted for a total of 29 nonvoting units, which was more than enough for a quorum when added to the 166 ballots received.

Finally, we reject Venetian’s argument that there were no “adequate safeguards” in place to verify that each person participating remotely was a member. It was Venetian’s responsibility to have proper procedures in place to determine who was participating in the meeting and whether there was a quorum. Venetian deliberately chose not to have the inspector of elections attend the January 20, 2021 meeting. Venetian also chose not to take roll, keep minutes or other records, or determine how many units represented at the meeting had not submitted a written ballot. In these circumstances, Venetian cannot fault Takiguchi for presenting the best evidence available to prove the existence of a quorum. Taken together, Takiguchi’s evidence and the reasonable inferences from Venetian’s failure to refute it constitute substantial evidence to support the trial court’s finding of a quorum.

 

III

 

Venetian contends that the trial court exceeded its statutory authority by directing that ballots cast for the January 20, 2021 annual meeting be counted. According to Venetian, even assuming that there was a quorum for the meeting, section 7510, subdivision (c) is only “future-looking” and does not give a court authority “to count ballots from a prior meeting.” Venetian argues that an order directing that completed ballots be counted may be issued only “via a regular civil action that affords discovery and other due process, not in the summary proceedings that section 7510 and 7511 contemplate.”[6] This is an issue of statutory interpretation, which we review de novo. (Lopez v. Ledesma (2022) 12 Cal.5th 848, 857 [290 Cal.Rptr.3d 532, 505 P.3d 212].)

Section 7510 governs meetings of nonprofit mutual benefit corporations, including their place and time, frequency, and remote participation. Subdivision (b) provides: “A regular meeting of members shall be held on a date and time, and with the frequency stated in or fixed in accordance with the bylaws, but in any event in each year in which directors are to be elected at that meeting for the purpose of conducting such election, and to transact any other proper business which may be brought before the meeting.”

Section 7510, subdivision (c) provides for a summary judicial remedy if the corporation fails to hold a regular meeting or written ballot within specified timeframes. It states: “If a corporation with members is required by subdivision (b) to hold a regular meeting and fails to hold the regular meeting for a period of 60 days after the date designated therefor or, if no date has been designated, for a period of 15 months after the formation of the corporation or after its last regular meeting, or if the corporation fails to hold a written ballot for a period of 60 days after the date designated therefor, then the superior court of the proper county may summarily order the meeting to be held or the ballot to be conducted upon the application of a member or the Attorney General, after notice to the corporation giving it an opportunity to be heard.” (§ 7510, subd. (c).)

By its terms, this summary remedy is available in two different circumstances: (1) if the corporation is required by subdivision (b) to hold a regular meeting and “fails to hold the regular meeting” within the specified time-frames, or (2) “if the corporation fails to hold a written ballot” within 60 days of the designated date. (§ 7510, subd. (c).) If either of these conditions is present, the court “may summarily order the meeting to be held or the ballot to be conducted….” (Ibid.)

We begin by considering whether the statutory phrase “fails to hold a written ballot” includes failing to count ballots cast by members in an election, and whether the court’s statutory authority to order “the ballot to be conducted” includes ordering that completed ballots be counted. (§ 7510, subd. (c).) On this issue, the literal meaning of the statutory language is arguably susceptible to differing interpretations. On the one hand, to “hold” or “conduct” a ballot could conceivably be construed narrowly to mean only allowing members to cast votes in an election—but not counting the completed ballots. On the other hand, the statutory language could reasonably be interpreted more broadly to include counting the ballots as an inherent part of conducting any election. (See, e.g., Elec. Code, § 15702 [defining word “vote” as used in the California Constitution to include “all action necessary to make a vote effective,” including “having the ballot counted properly and included in the appropriate total of votes cast”].)

When the language of a statute is ambiguous and reasonably susceptible to more than one meaning, we look to a variety of extrinsic aids to resolve the ambiguity, including the ostensible objects to be achieved, the evils to be remedied, legislative history, public policy, and the statutory scheme of which the statute is a part. (DiCampli-Mintz v. County of Santa Clara (2012) 55 Cal.4th 983, 992 [150 Cal.Rptr.3d 111, 289 P.3d 884].) Our ultimate objective is to construe the statute in a way that most closely comports with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute and avoiding an interpretation that would lead to absurd consequences. (People v. Rubalcava (2000) 23 Cal.4th 322, 328 [96 Cal.Rptr.2d 735, 1 P.3d 52].)

Although the legislative history is silent on the issue,[7] one evident purpose of section 7510, subdivision (c) is to provide a quick judicial fix when an existing board is unfairly retaining its own power by prolonging its existence without holding regular member meetings or elections. The statute seeks to prevent this by providing a summary remedy for members to compel the corporation to hold regular meetings and elections when it fails to do so.

This purpose is best served by interpreting the statute to permit a court to order completed ballots to be counted. Counting the ballots is a necessary part of conducting any bona fide election. An essential purpose of the required member meetings and ballots is to elect directors—and directors cannot be elected unless the ballots are counted. (See §§ 7510, subd. (b) [referring to regular member meetings “in which directors are to be elected”], 7513, subd. (e) [“Directors may be elected by written ballot under this section….”].) Thus, an essential purpose of the law—to provide a quick and efficient mechanism for members to prevent directors from perpetuating their own power—favors construing the trial court’s statutory authority to order a “ballot to be conducted” to include counting the completed ballots. (§ 7510, subd. (c).)

Venetian’s contrary interpretation would provide a virtual roadmap for easy evasion of the statute. For example, a board of directors could retain its own power and circumvent the statutory remedy simply by holding an election and allowing members to vote, but then locking the ballots away in a file cabinet without counting them. “We will not adopt `[a] narrow or restricted meaning’ of statutory language `if it would result in an evasion of the evident purpose of [a statute], when a permissible, but broader, meaning would prevent the evasion and carry out that purpose.'” (Copley Press, Inc. v. Superior Court (2006) 39 Cal.4th 1272, 1291-1292 [48 Cal.Rptr.3d 183, 141 P.3d 288] (Copley Press).)

A remedial statute should be liberally construed to effectuate its object and purpose, and to suppress the mischief at which it is directed. (Leader v. Cords (2010) 182 Cal.App.4th 1588, 1598 [107 Cal.Rptr.3d 505].) A remedial statute is one which provides a means for the enforcement of a right or the redress of a wrong. (Id. at p. 1597.) Section 7510, subdivision (c) is a remedial statute because it provides a judicial remedy for members of a mutual benefit corporation to redress the corporation’s failure or refusal to conduct required meetings or elections. As a remedial statute, it must be liberally construed to effectuate its basic purpose and prevent evasion.

We therefore conclude that the trial court’s statutory authority to order “the ballot to be conducted” includes counting the completed ballots. (§ 7510, subd. (c).) “[F]rom the perspective of both statutory language and practical consequences, [Venetian]’s narrow interpretation is not the more reasonable one, and would not produce reasonable results that most closely comport with the Legislature’s apparent intent.” (Copley Press, supra, 39 Cal.4th at p. 1296.)

For similar reasons, we also conclude that the trial court’s order is authorized by the language of the statute permitting it to “summarily order the meeting to be held” if the corporation “fails to hold the regular meeting” within 60 days after the date designated. (§ 7510, subd. (c).) Venetian noticed an annual member meeting for January 20 and January 25, 2021. The notice of meeting was accompanied by a meeting agenda, and the agenda items included tabulating the ballots and determining election results. But the January 20, 2021 meeting was adjourned without covering any of these substantive agenda items, and the January 25, 2021 meeting was cancelled and never rescheduled. As a result, Ghorbanzadeh remained in office even though Venetian did not actually conduct a meeting to count the completed ballots for his expired term.

Construing the statutory language liberally to achieve its objectives, we conclude that Venetian “fail[ed] to hold the regular meeting” that was scheduled for the purpose of counting the ballots and determining the election results. (§ 7510, subd. (c).) Adjourning a meeting immediately after calling it to order—without covering any of the substantive agenda items—is the functional equivalent of not holding the meeting at all. For this reason, the trial court had authority to “summarily order the meeting to be held” for the purpose of completing the previously noticed agenda items, including counting the ballots and determining the results.[8] (§ 7510, subd. (c).)

 

IV

 

Finally, Venetian argues that the trial court’s order “disenfranchises” members who might have cast a ballot at the January 20, 2021 meeting if it had not been adjourned prematurely. This argument is forfeited because Venetian did not make it in either of its briefs opposing Takiguchi’s petition below. (Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 417 [194 Cal.Rptr. 357, 668 P.2d 664].) Even if it were not forfeited, however, there is no evidence to support it. Under Venetian’s instructions for the election, written ballots could be returned only by mail to Ballot Box or in person at the clubhouse at the time of the meeting. Venetian submitted no evidence that any member was present at the clubhouse to deliver a written ballot and prevented from doing so at the time of the meeting. On the contrary, Ghorbanzadeh himself stated that Takiguchi “was the only one at the Clubhouse” and “[t]he rest of the interested members had joined in.” Takiguchi had already submitted a written ballot by mail. Thus, the record does not support Venetian’s argument that anyone would be disenfranchised by the trial court’s order directing that the submitted ballots be counted.

 

DISPOSITION

 

The trial court’s order is affirmed. Takiguchi shall recover his costs on appeal.

Dato, J., concurred.

O’ROURKE, Acting P. J., Dissenting.—

I respectfully dissent. The trial court in this case issued an order under Corporations Code section 7510 (section 7510) that defendant and appellant Venetian Condominiums Maintenance Corporation (Venetian) hold an annual meeting for the purpose of counting ballots collected by an election inspector for its January 2021 annual membership meeting. In its ruling, the court found a quorum was reached by the members present at a previously noticed annual meeting that was adjourned for a claimed lack of quorum. If the court ordered Venetian to hold a new annual meeting because it never conducted its annual meeting in 2021, the order is erroneous because under section 7510, Venetian’s quorum requirement is irrelevant. At a meeting ordered under that statute, any voting members who appear constitute a quorum and those members are entitled to elect directors at that meeting. If the court’s order is that Venetian must reconvene the annual meeting that took place in January 2021 so as to count the ballots collected at that time, the court acted without authority under section 7510 because the summary remedy under that statute comes into play only when a meeting has not taken place at all. When a meeting has occurred and a faulty election has been conducted, the preconditions to section 7510 are absent. In any case, the court erred. The majority—stretching the statute beyond its bounds to give homeowners a truncated remedy for perceived abuses of power by homeowners associations—have compounded the court’s error. Plaintiff and respondent Guy Takiguchi’s remedy was not via summary relief under section 7510, but to seek a mandatory injunction under Code of Civil Procedure section 526 in a lawsuit contesting the election’s validity, affording the parties the protections and process associated with such a proceeding.

The majority recognizes that section 7510, subdivision (c) sets forth a summary judicial remedy. Section 7510, subdivision (c) provides: “If a corporation with members is required by subdivision (b) to hold a regular meeting and fails to hold the regular meeting for a period of 60 days after the date designated therefor or, if no date has been designated, for a period of 15 months after the formation of the corporation or after its last regular meeting, or if the corporation fails to hold a written ballot for a period of 60 days after the date designated therefor, then the superior court of the proper county may summarily order the meeting to be held or the ballot to be conducted upon the application of a member or the Attorney General, after notice to the corporation giving it an opportunity to be heard.” (§ 7510, subd. (c).)

The statute allows a court to grant relief in two circumstances: when a corporation required by subdivision (b) to hold a regular meeting “fails to hold the regular meeting” within specified timeframes, “or if the corporation fails to hold a written ballot” within a specified period of time. (§ 7510, subd. (c); see People v. Perez (2021) 67 Cal.App.5th 1008, 1015 [282 Cal.Rptr.3d 796] [use of word “if” signifies a statutory condition]; Mel v. Franchise Tax Board (1981) 119 Cal.App.3d 898, 908, fn. 10 [174 Cal.Rptr. 269]Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715 [3 Cal.Rptr.3d 623, 74 P.3d 726] [courts must give ordinary and usual meaning to words used in statutes].)[1] Because section 7510 sets out a summary proceeding for limited injunctive relief, its provisions must be strictly construed. (Accord, Dr. Leevil, LLC v. Westlake Health Care Center (2018) 6 Cal.5th 474, 480 [241 Cal.Rptr.3d 12, 431 P.3d 151] [holding with respect to unlawful detainer statutes]; see also Bawa v. Terhune (2019) 33 Cal.App.5th Supp. 1, 5 [244 Cal.Rptr.3d 854] [same].) “`The statutory requirements in such proceedings “`must be followed strictly'”‘” and “`relief not statutorily authorized may not be given….'” (Dr. Leevil, at p. 480; see Bawa, at 899*899 p. 5.) Thus, it is only when either condition is met does the court have authority to “summarily order the meeting to be held or the ballot to be conducted” upon a proper application and notice to the corporation. When, as in this case, the meaning is clear, “`there is no need for construction and courts should not indulge in it.'” (Mutual Life Ins. Co. v. City of Los Angeles (1990) 50 Cal.3d 402, 413 [267 Cal.Rptr. 589, 787 P.2d 996], italics omitted.)

No reading of the court’s order saves it under a proper interpretation of section 7510. As stated, the court ordered Venetian “to hold the annual meeting for the purpose of counting the ballots in custody of [Venetian’s election inspector] as of January 20, 2021.” If the court ordered Venetian to conduct a new annual meeting, the order cannot stand properly viewing subdivision (c) of section 7510 in context with subdivision (d) of the statute. (See Orange County Water Dist. v. Alcoa Global Fasteners, Inc. (2017) 12 Cal.App.5th 252, 300 [219 Cal.Rptr.3d 474] [statutory language must be examined in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment].)

Section 7510, subdivision (d) comes into play when the court orders a meeting or a written ballot take place “pursuant to subdivision (c)….” Subdivision (d) provides: “The votes represented, either in person (or, if proxies are allowed, by proxy), at a meeting called or by written ballot ordered pursuant to subdivision (c), and entitled to be cast on the business to be transacted shall constitute a quorum, notwithstanding any provision of the articles or bylaws or in this part to the contrary. The court may issue such orders as may be appropriate including, without limitation, orders designating the time and place of the meeting, the record date for determination of members entitled to vote, and the form of notice of the meeting.” (§ 7510, subd. (d), italics added.)

When ordering a new annual meeting to be held under subdivision (c), the quorum is specified in subdivision (d). It is not for the trial court to determine whether a quorum is met under association rules, as the court did here. The statute specifies that for any court-ordered meeting or ballot, a quorum is reached by the votes represented and entitled to be cast notwithstanding the corporation’s bylaws, articles, or other parts of the Corporations Code pertaining to nonprofit mutual benefit corporations. To interpret section 7510 as permitting a trial court in a section 7510, subdivision (c) summary proceeding to judicially determine whether a quorum was reached under an association’s bylaws or rules renders subdivision (d) “`meaningless or inoperative'” (Hassan v. Mercy American River Hospital, supra, 31 Cal.4th at pp. 715-716; see also Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, 1119 [260 Cal.Rptr.3d 306]) contrary to settled principles of statutory construction.

The “without limitation” language in the remainder of section 7510, subdivision (d) does not authorize the relief given by the lower court, as Takiguchi maintains. In Johnson v. Tago, Inc. (1986) 188 Cal.App.3d 507 [233 Cal.Rptr. 503], the Court of Appeal addressed nearly identical language in section 600 of the General Corporation Law relating to shareholder meetings.[2] The court agreed that the sentence at issue “is `concerned with the mechanical aspects of holding the annual shareholders meeting.'” (Johnson v. Tago, Inc., at p. 515.) “The judicial power to `issue such orders as may be appropriate’ is reasonably construed as referring to caretaking details and procedure involved in such a meeting. It cannot be construed as a license for courts to trespass upon substantive matters confided to the directors and shareholders of a corporation.” (Ibid.)

If the court’s order was that Venetian must count ballots collected at the duly noticed and conducted January 2021 annual meeting (a quorum having been met), it is still not authorized by section 7510. When a meeting has taken place or a written ballot held, the preconditions to section 7510 summary relief have not occurred.

The majority characterizes section 7510 as remedial (Maj. opn., ante, at pp. 895-896) so as to engage in broad judicial construction and conclude the statutory authority of a court to order “the ballot to be conducted” includes counting previously collected ballots. (Maj. opn., ante, at pp. 895-896.) Section 7510 is no more remedial than any injunction. The relevant question is whether the statute gives the court authority to proceed as it did, and even with a remedial statute, “liberal construction can only go so far.” (Soria v. Soria (2010) 185 Cal.App.4th 780, 789 [111 Cal.Rptr.3d 91], distinguishing Leader v. Cords (2010) 182 Cal.App.4th 1588 [107 Cal.Rptr.3d 505].) “The rule that a remedial statute is construed broadly does not permit a court to ignore the statute’s plain language….” (Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 842 [189 Cal.Rptr.3d 824, 352 P.3d 391]; see Quarry v. Doe I (2012) 53 Cal.4th 945, 988 [139 Cal.Rptr.3d 3, 272 P.3d 977] [citing cases for proposition that “rule of liberal construction of remedial statutes `does not mean that a court may read into the statute that which the Legislature has excluded, or read out that which it has included'”]; Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 645 [88 Cal.Rptr.3d 859, 200 P.3d 295] [“A mandate to construe a statute liberally in light of its underlying remedial purpose does not mean that courts can impose on the statute a construction not reasonably supported by the statutory language”].) Courts do not have the authority to rewrite legislation “to `”conform to [a party’s] view of what [the law] should be.”‘ [Citations.]… “`[U]nder the guise of construction, a court should not rewrite the law, add to it what has been omitted, omit from it what has been inserted, give it an effect beyond that gathered from the plain and direct import of the terms used, or read into it an exception, qualification, or modification that will nullify a clear provision or materially affect its operation so as to make it conform to a presumed intention not expressed or otherwise apparent in the law.'”‘” (Soto v. Motel 6 Operating, L.P. (2016) 4 Cal.App.5th 385, 393 [208 Cal.Rptr.3d 618].)

Under its plain terms, section 7510, subdivision (c) authorizes the court only to summarily order a “ballot to be conducted” when one has not taken place previously. That the Legislature did not intend in section 7510 to permit a court to summarily order the counting of collected ballots for a previously held meeting is evidenced by other provisions of the chapter in which it refers to ballots being “counted.” Section 7513, which addresses actions of a nonprofit mutual benefit corporation without a meeting, states in part: “Ballots shall be solicited in a manner consistent with the requirements of subdivision (b) of Section 7511 and Section 7514. All such solicitations shall indicate the number of responses needed to meet the quorum requirement and, with respect to ballots other than for the election of directors, shall state the percentage of approvals necessary to pass the measure submitted. The solicitation must specify the time by which the ballot must be received in order to be counted.” (§ 7513, subd. (c), italics added.) The Legislature knows how to reference “count[ing]” ballots, but deliberately did not use that term in section 7510, which only permits the court to summarily order a ballot be “conducted” when one has not taken place at all. (See Merriam-Webster Unabridged Dict. Online (2023) [as of Apr. 21, 2023] [defining “conduct” as the “act, manner, or process of carrying out (as a task) ….”].) “`When the Legislature “has employed a term or phrase in one place and excluded it in another, it should not be implied where excluded.”‘” (People v. Buycks (2018) 5 Cal.5th 857, 880 [236 Cal.Rptr.3d 84, 422 P.3d 531]; see also Hicks v. E.T. Legg & Associates (2001) 89 Cal.App.4th 496, 507.) [108 Cal.Rptr.2d 10].)

In short, the trial court’s power under section 7510 does not encompass declaring quorums or ordering ballots collected in previously held meetings to be counted. The statute does not permit the remedy imposed by the court. Because the trial court lacked authority to grant relief under section 7510, I would reverse the order.

[1] All further statutory references are to the Corporations Code unless otherwise specified.

[2] Sean Gorban and his brother Brian Gorban are also referred to in the record by the last name Gorban-Zadeh.

[3] Venetian later filed evidentiary objections to some supplemental evidence submitted by Takiguchi, but the trial court overruled all evidentiary objections and Venetian has not renewed those particular objections on appeal. Venetian submitted no evidentiary objections to any of the evidence submitted with Takiguchi’s original moving papers.

[4] Because the issue has not been raised on appeal, we express no view as to whether this is a correct interpretation of Venetian’s bylaws and applicable provisions of the Corporations Code. We note, however, that Venetian’s notice of annual meeting similarly stated that for the purpose of the quorum requirement, “[r]epresentation may be by attendance in person at the meeting, by the return of a ballot, or by proxy.”

[5] Although the sufficiency of evidence issue is preserved for appeal, the evidentiary objections to Takiguchi’s evidence asserted for the first time in Venetian’s opening brief are not. These include Venetian’s multiple objections based on lack of personal knowledge and hearsay. Venetian forfeited these objections by failing to assert them in the trial court. (Evid. Code, § 353, subd. (a); Gormley v. Gonzalez (2022) 84 Cal.App.5th 72, 82 [300 Cal.Rptr.3d 156].)

[6] Although Venetian did not make this argument in the trial court, we exercise our discretion to consider it on appeal because it presents a pure question of law based on undisputed facts. (Howitson v. Evans Hotels, LLC (2022) 81 Cal.App.5th 475, 489 [297 Cal.Rptr.3d 181].)

[7] The Legislature enacted section 7510 in 1978 as part of Assembly Bill No. 2180, a lengthy bill that added the Nonprofit Corporation Law (§ 5000 et seq.), the Nonprofit Mutual Benefit Corporation Law (§ 7110 et seq.), and the Nonprofit Religious Corporation Law (§ 9110 et seq.). (Stats. 1978, ch. 567, § 6, p. 1821.) We have examined the available legislative history and found nothing that sheds light on the question before us.

[8] In fact, the legislative scheme suggests to us that the Legislature intended the statute to apply when a regular meeting is not conducted because of the absence of a quorum. The statute specifically provides that when the corporation fails to hold a regular meeting and the court summarily orders the meeting to be held under section 7510, subdivision (c), the corporation’s usual quorum requirements will not apply. Section 7510, subdivision (d), provides in relevant part: “The votes represented, either in person (or, if proxies are allowed, by proxy), at a meeting called or by written ballot ordered pursuant to subdivision (c), and entitled to be cast on the business to be transacted shall constitute a quorum, notwithstanding any provision of the articles or bylaws or in this part to the contrary.” (Italics added.) We see no reason why the Legislature would have decided to override the corporation’s usual quorum requirement unless it contemplated that regular meetings and elections might not be conducted because of the absence of such a quorum. We need not decide this issue, however, because we conclude that there was substantial evidence to support the trial court’s finding of a quorum.

[1] Venetian’s meeting was conducted in part via electronic video screen communication. Subdivision (f) of section 7510 permits meetings to be held in such a manner under specified conditions, including that the “corporation implements reasonable measures … to provide members and proxyholders, if proxies are allowed, a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with those proceedings….” Effective January 1, 2022, the Legislature amended subdivision (f) of the statute to, among other things, add another prerequisite for conducting a membership meeting by electronic transmission, namely that the corporation implement reasonable measures “to verify that each person participating remotely is a member or proxyholder, if proxies are allowed.” (§ 7510, subd. (f), as amended by Stats. 2022, ch. 617, § 61.) Any order that Venetian hold a regular membership meeting would require it to engage in such reasonable verification methods.

[2] Section 600 of the General Corporation Law vests courts with the authority to summarily order members to hold a meeting. It “grants the trial court power to order an annual meeting if one has not been scheduled in the ordinary course of events.” (Johnson v. Tago, Inc., supra, 188 Cal.App.3d at p. 515, italics added; see also Legis. Com. com., Deering’s Ann. Corp. Code, § 600 (2009 ed.) p. 13 [“subdivision (c) [of section 600] authorizes the superior court upon application of a shareholder to summarily order the meeting to be held” so as “[t]o provide prompt relief in the event an annual meeting is not held”].)

Costa Serena Owners Coalition v. Costa Serena Architectural Com. (2009) 175 Cal.App.4th 1175.

Costa Serena Owners Coalition v. Costa Serena Architectural Com. (2009) 175 Cal.App.4th 1175.

Counsel: Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Matthew B. Stucky, Esther P. Holm and Lisa Ricksecker for Defendant and Appellant and for Defendant and Respondent.

Shifflet, Kane & Konoske and Gregory C. Kane for Plaintiff and Respondent and for Plaintiff and Appellant.

K. Martin White for Movant and Appellant.

Judges: Opinion by Aaron, J., with McConnell, P. J., and McIntyre, J., concurring.

OPINION

 

I. INTRODUCTION

Costa Serena is a planned development located in Oceanside, California, that was built in the 1970’s. A “Declaration of Restrictions” that governed the community was set to expire at the end of 2006. During that year, a group of homeowners led by the Costa Serena Architectural Committee (the Architectural Committee)—a committee comprising homeowners who had been elected to enforce the Declaration of Restrictions—attempted to extend the life of the Declaration of Restrictions beyond 2006. Other homeowners in the community opposed extending the Declaration of Restrictions. The group that opposed extending the Declaration of Restrictions was particularly opposed to a provision in the Declaration of Restrictions that required that residents be at least 55 years old. Some of these homeowners formed a group—the Costa Serena Owners Coalition (the Coalition)—and filed an action challenging the actions of the Architectural Committee. The Coalition attacked the Architectural Committee’s attempt to extend the Declaration of Restrictions by, among other things, challenging the validity of amendments to the Declarations of Restrictions that had been recorded in 1986, 1987 and 1999, including a unification amendment that was intended to ensure that the entire Costa Serena community would be governed by a single Declarations of Restrictions and a single Architectural Committee.[1]

Both the Architectural Committee and the Coalition filed motions for summary judgment. The trial court granted summary judgment in favor of the Coalition, concluding that the Architectural Committee could not establish that the extension of the UDoR had been accomplished in the manner required by the provisions of the UDoR. The trial court’s ruling was premised on its conclusion that the 1986, 1987 and 1999 amendments to, variously, the DoR’s and the UDoR were void ab initio because they were enacted in a manner that did not comply with the provision in the DoR’s and subsequent UDoR pertaining to amendments. The court entered judgment in favor of the Coalition.

After judgment was entered, homeowner Jess Diaz filed a motion to vacate the judgment. The trial court denied the motion on the ground that the court did not have jurisdiction to consider the motion because the Architectural Committee had filed a notice of appeal before the court was able to rule on Diaz’s motion. In addition, the Coalition filed a motion for attorney fees, arguing that the DoR’s provided that the prevailing party in litigation concerning the DoR’s was entitled to attorney fees. The trial court denied the Coalition’s motion for attorney fees.

This matter involves three consolidated appeals, one filed by the Architectural Committee, one filed by Diaz, and one filed by the Coalition. First, the Architectural Committee appeals from the trial court’s order granting summary judgment in favor of the Coalition. The Architectural Committee contends that the judgment must be reversed because (1) the Coalition’s claims are barred by the statute of limitations; (2) the Coalition’s claims are barred by the doctrine of laches; and (3) the trial court erred in interpreting the amendment provisions of the DoR’s/UDoR to require that the Architectural Committee(s) have recorded a document signed by 75 percent of record owners of the Units, in order to properly amend the DoR’s/UDoR.  The Architectural Committee further appeals from the trial court’s order excluding a number of exhibits that the Architectural Committee filed in support of its motion for summary judgment.

Diaz appeals from the postjudgment order of the trial court denying his motion to vacate the judgment. Diaz contends that the trial court retained jurisdiction to consider his motion, and that the court should have vacated the judgment on essentially the same grounds that the Architectural Committee raises on appeal.

The Coalition appeals from the postjudgment order of the trial court pertaining to attorney fees. The Coalition contends that the trial court erred in failing to award it attorney fees pursuant to the language of the DoR’s.

We conclude that the trial court erred in ruling that the amendments to the DoR’s/UDoR were void ab initio and that they therefore could be collaterally attacked at any time. We further conclude that the Coalition’s claims with regard to those amendments are barred by the statute of limitations. Thus, we need not consider whether the amendments that were recorded in 1986, 1987 and 1999 were properly adopted under the terms of the DoR’s/UDoR.

We also conclude that the trial court erred in ruling that the Architectural Committee did not comply with the provisions of the UDoR in extending the UDoR in 2006. In reaching this conclusion, we determine that the trial court erroneously sustained objections to a number of the homeowner consent forms that the Architectural Committee submitted in support of its motion for summary judgment. The trial court apparently concluded that some of the consent forms were inadmissible because the property owners’ names and the property descriptions on the forms were not identical to the names and property descriptions that appear on the deeds to the properties. We conclude that the consent forms are sufficient to demonstrate that a majority of property owners agreed to extend the UDoR, and that the trial court improperly sustained the Coalition’s objections to the consent forms. We therefore reverse the judgment, and direct the trial court to enter judgment in favor of the Architectural Committee.

By reversing the judgment, we render moot Diaz’s appeal from the trial court’s refusal to consider his motion to vacate the judgment, since, having reversed the judgment, this court can no longer grant Diaz the relief he seeks. Similarly, our reversal of the judgment renders moot the Coalition’s appeal pertaining to attorney fees, since the Coalition is not the prevailing party in the litigation.

 

II. FACTUAL AND PROCEDURAL BACKGROUND

Rosedale Homes Development Corporation developed the Costa Serena community in the early 1970’s. Upon completion of the seven Units, the entire community consisted of 724 homes.

Each of the seven DoR’s governing the seven Units originally contained a restriction that provided that no person under the age of 45 could regularly occupy a residence in Costa Serena.

Each DoR also contained a provision that stated that the DoR would expire on December 31, 2006, and set forth the process by which the DoR could be extended beyond that date. That provision, located in paragraph 16 of each DoR, provided: “Each and all of the foregoing conditions and restrictions shall terminate on December 31, 2006, unless the owners of a majority of said lots have executed and recorded at any time within six (6) months prior to December 31, 2006, in the manner required for a conveyance of real property, a writing in which they agree that said Conditions and Restrictions shall continue for a further specified period and providing therein a similar provision for the further extension of said Conditions and Restrictions, or some of them, provided, also, that the above and foregoing Conditions and Restrictions may be modified, after said termination date at the times and in the manner hereinabove provided for the extension of said Conditions and Restrictions in force at the time of such extension or modification.”

The procedure for amending a DoR was set forth in paragraph 28 of each DoR: “Subject to the provisions of paragraph[s] 16 and 27[2], the provisions of these restrictions, other than this paragraph, may be amended by an instrument in writing signed and acknowledged by record owners of at least seventy-five percent (75%) of the units located on the real property, which amendment shall be effective upon recordation in the Office of the Recorder of San Diego County, California.”

In 1986, in response to a change in the law in California, the Architectural Committee for each of the seven Units recorded amendments to the DoR’s increasing the minimum age of residents from 45 to 55. Each amendment was signed by one or more individuals. The signatures appeared below a paragraph in each document that reads as follows: “We, the undersigned[,] comprising all of the members of the Costa Serena Architectural Committee, the unincorporated Association named in the Declaration to enforce the provisions thereof, hereby certify and declare that the foregoing provisions related to use and occupancy of living units in Costa Serena Unit No. [respective Unit number], are the provisions applicable to and enforceable and enforced with respect to the above-described property.”

In 1987, an amendment was recorded that, by its terms, applied to all seven DoR’s (the 1987 Amendment). The amendment made three significant changes to the original DoR’s. First, the 1987 Amendment combined all seven Units into a single community that would be subject to a single governing document, the UDoR. The 1987 Amendment identified the DoR that had been previously governing Unit 7 as the new UDoR. Second, the 1987 Amendment provided for the creation of a single Architectural Committee, which was to comprise five individuals who would be responsible for enforcing the UDoR.[3]  Third, the 1987 Amendment altered the procedure for amending the UDoR, providing: “Any amendment to the Declaration of Restrictions as amended, may be signed and acknowledged by a majority of the elected members of the Architectural Committee, said members certifying that the contents contained therein have been approved by a vote of the Owners as required by the Declaration.”

The 1987 Amendment was signed by three members  of the Architectural Committee, and included a provision that stated:  “[W]e the undersigned, comprising all of the members of the COSTA SERENA ARCHITECTURAL COMMITTEE hereby certify that pursuant to the requirements of said Declaration of Restrictions, owners of dwelling units located within Units 1 through 7 of COSTA SERENA, constituting at least seventy-five (75%) of the present Ownership of dwellings within each respective unit have declared and fixed the conditions and restrictions as contained in the Declaration of Restrictions recorded at File Page No. 73-186901, recorded July 6, 1973, as amended at File Page N[o]. 86-082339, recorded March 3, 1986, upon and subject to which each and all of the lots of all units shall be hereinafter held, used, occupied, leased, sold and/or conveyed.”

The Architectural Committee thereafter recorded an amendment to the UDoR on April 22, 1999 (the 1999 Amendment), which further purported to alter the amendment procedure. The 1999 Amendment provides:

“ARTICLE 28

“AMENDMENT OF DECLARATION

“28.1 Subject to the provisions of paragraphs 16 and 27, this Declaration may be amended or revoked in any respect by the vote or assent by written ballot of more than 50% of all owners entitled to vote and casting ballots.  With respect to any vote, the Association shall be entitled to accept the vote of an owner of record of a unit within Costa Serena. Each unit will be entitled to only one vote, regardless of how many titleholders appear of record.

“28.2 An amendment to the Declaration will be effective upon the recording in the Office of Recorder of San Diego County, a Certificate of Amendment duly executed and certified by the President and Secretary of the Association, and the Chairman of the Architectural Committee setting forth in full the amendment so approved and that the approval requirements of 28.1 above, have been duly met. Notwithstanding anything to the contrary contained herein, no such amendment shall [a]ffect the rights of the holder of any first deed of trust or mortgage recorded prior to the recording of such amendment.

“28.3 Any amendment made in accordance with the terms of this Declaration shall be presumed valid by anyone relying on them in good faith.”

The 1999 Amendment was signed by the chairman and two members of the Architectural Committee, as well as the president and secretary of the Costa Serena Community Association.[4]  The signatories “certifi[ed] and declare[d]” that the 1999 Amendment “was approved by a vote of the owners as required by the Declaration of Restrictions.”

There is no evidence in the record that the validity of the 1986, 1987 or 1999 amendments was challenged at any time prior to the current litigation.

In 2006, the Architectural Committee attempted to extend the UDoR by utilizing the voting process provided for in paragraph 28.1 of the UDoR, as amended by the 1999 Amendment.

On July 14, 2006, in response to the Architectural Committee’s efforts to extend the UDoR pursuant to the amendment process provided for in paragraph 28.1 of the UDoR, the Coalition filed a complaint seeking to enjoin the Architectural Committee from proceeding with the voting process. The Coalition contended that the DoR’s for the separate Units had not been unified into a single DoR, and requested declaratory relief regarding the proper interpretation of the provisions in the DoR’s that set forth the procedure for amending and extending the DoR’s. That day, the trial court issued a preliminary injunction enjoining the Architectural Committee from completing the voting process identified in paragraph 28.1 to extend the UDoR.

The Coalition filed an amended complaint (First Amended Complaint) on July 6, 2006, in which it alleged the same two causes of action that it alleged in its original complaint.

After the court enjoined the Architectural Committee from pursuing the voting process in an effort to extend the UDoR, the Architectural Committee took a different approach to extend the DoR beyond December 31, 2006. The Architectural Committee collected 375 signed and notarized forms captioned, “CONSENT[S] TO EXTENSION” from Costa Serena property owners.[5]  On September 25, 2006, the Architectural Committee recorded a document entitled “Extension of Declaration of Restrictions” (Extension Document). The notarized consent documents were included in an exhibit to the Extension Document, as well as in a supplemental exhibit to the Extension Document that was recorded November 22, 2006.

On December 21, 2006, the Coalition filed a document entitled “SUPPLEMENTAL COMPLAINT FOR DECLARATORY RELIEF AND CANCELLATION OF WRITTEN INSTRUMENT (CCP § 464)” (Supplemental Complaint). In the Supplemental Complaint, the Coalition alleged that the Extension Document was invalid, and requested a declaration of the parties’ rights and duties with respect to the Extension Document and the DoR’s/UDoR. In a second cause of action in the Supplemental Complaint, the Coalition sought cancellation of the prior amendments to the DoR’s/UDoR and cancellation of the Extension Document, on the same grounds that it alleged in support of its request for declaratory relief.

The Coalition moved for summary judgment or, in the alternative, summary adjudication of a number of issues. Shortly after the Coalition filed its motion, the Architectural Committee also moved for summary judgment and/or summary adjudication.

On November 29, 2007, the trial court issued a tentative ruling in which the court addressed both parties’ motions. The trial court ruled in the Coalition’s favor on a number of issues, and granted summary adjudication in favor of the Coalition on three of its four causes of action. The court concluded that the original DoR’s required that the property owners’ signatures be attached to any amendment document and that these signatures also be recorded with the amendment. The court concluded that the 1986, 1987 and 1999 Amendments (jointly, Amendments) were void ab initio, rejecting the Architectural Committee’s arguments that the Coalition’s challenges to these Amendments were barred by the statute of limitations and laches. The court also determined that portions of the 1987 Amendment and the 1999 Amendment were void because they attempted to amend the amendment provision itself, which, by its terms, was not subject to amendment.

Based on its determination that the 1987 Amendment was void, the court concluded that the seven original Units remained separate for purposes of the DoR’s, and, therefore, that the Extension Document was invalid because a majority of owners in Units 1, 2, 6, and 7, individually, had not voted in favor of extending their DoR’s. The court also held that the Extension Document did not apply to Units 3, 4, and 5 because the consent forms referred to an extension of the DoR for Unit 7, only.

The court made a number of rulings with regard to the Coalition’s First Amended Complaint. In the first cause of action (for injunctive relief) in the First Amended Complaint, the Coalition sought (1) a temporary restraining order and preliminary injunction preventing the Architectural Committee from taking a number of actions in going forward with the May 2006 vote to extend the UDoR; (2) a preliminary and permanent injunction enjoining the Architectural Committee “from recording any document … certifying, declaring or otherwise asserting that the [Unified] Declaration of Restrictions for Costa Serena has been changed, amended or extended by virtue of the May 2006 Election”; and (3) a preliminary and permanent injunction enjoining the Architectural Committee from “conducting any vote or ballot purporting to be for the purpose of amending, changing or extending the term of the [Unified] Declaration of Restrictions of Costa Serena or seeking to amend the Declaration except by an instrument in writing signed and acknowledge[d] by record owners of at least seventy-five percent (75%) of the units located on the real property.” The trial court ruled that the Coalition’s request for a temporary restraining order and preliminary injunction was moot because the court had already granted that relief. As to the Coalition’s other two requests for injunctive relief and its request for declaratory relief, the court granted summary adjudication in favor of the Coalition, and denied the Architectural Committee’s motion for summary adjudication with respect to those requests for relief.

With regard to the Coalition’s Supplemental Complaint, the trial court ruled that the Coalition was entitled to summary adjudication of its cause of action for declaratory relief, but that summary adjudication of its claim for cancellation of a written instrument was not appropriate as to either party. The Coalition’s claim for declaratory relief involved requests that the court determine the parties’ rights and duties pursuant to the UDoR, that the court declare the Amendments to the UDoR to be invalid and without effect, and that the court declare the “purported extension” of the UDoR to be “void, invalid and of no effect.”

In ruling with respect to the Coalition’s Supplemental Complaint, the court repeated its conclusion that the 1987 Amendment was void ab initio, and that the Amendment therefore failed to “combine the seven Units into a single community operating under the DORs of Unit 7.” The court further ruled that the “purported extension instruments recorded on 9/25/06 and 11/22/06 were insufficient under ¶16 of the Original DORs for each [Unit],” and that those instruments therefore did not effect an extension of the DoR’s past December 31, 2006. Consequently, the court granted the Coalition’s motion for summary adjudication as to the cause of action for declaratory relief in the Supplemental Complaint, and on similar grounds, denied the Architectural Committee’s motion for summary adjudication as to the same cause of action.

The court denied summary adjudication in favor of either party as to the Coalition’s cause of action for cancellation of a written instrument on the grounds that (1) the Coalition failed to present any evidence of damages, and (2) the Architectural Committee failed to present evidence that a majority of the property owners in each of the Units had consented to extending the original DoR’s for the individual Units.

The court heard oral argument regarding its tentative decision on November 30, and confirmed the tentative ruling in its entirety that same day. Because there remained triable issues of fact with regard to the Coalition’s cause of action for cancellation of a written instrument, the court did not enter judgment in favor of the Coalition at that time.

The Architectural Committee filed a petition for a writ of mandate seeking review of the trial court’s summary adjudication order in favor of the Coalition. This court summarily denied the petition.[6]

On January 7, 2008, the Coalition requested dismissal without prejudice of its claim for damages under the cause of action for cancellation of a written instrument (par. 26 of the Supplemental Complaint). On April 4, 2008, the Coalition appeared before the trial court and stipulated to dismissing “any and all causes of action which request cancellation of a written instrument without prejudice.” The trial court entered judgment that same day.

The judgment provided:

“IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

“That COSTA SERENA ARCHITECTURAL COMMITTEE is hereby permanently enjoined from recording any document asserting that the Declaration of Restrictions for Costa Serena has been changed, amended, or extended by virtue of the May 2006 election.

“That the Declaration of Restrictions for the seven units of COSTA SERENA have expired as of December 31, 2006.

“That COSTA SERENA ARCHITECTURAL COMMITTEE is hereby permanently enjoined from conducting any vote or ballot purporting to be for the purposes of amending, changing, or extending the term of the Declaration of Restrictions of Costa Serena or seeking to amend the Declaration, except by an instrument in writing, signed and acknowledged by record owners of at least seventy-five percent (75%) of the units located on the real property.

“That the 1986, 1987, and 1999 purported amendments to the Declaration of Restrictions are void ab initio.

“That Paragraph 28 of the Declaration of Restrictions for the seven individual units cannot be amended.

“That the seven individual units of Costa Serena remain separate, each operating under its own Declaration of Restrictions.

“That Plaintiff COSTA SERENA OWNERS COALITION, shall recover from said Defendant attorneys fees and costs in the sum of $ ______.” (Italics added.)

On April 18, 2008, Jess Diaz, identifying himself as a “party aggrieved by the Judgment entered on April 4, 2008,” filed a motion to vacate the judgment. Five days later, on April 23, the Architectural Committee filed a notice of appeal from the judgment (case No. D052903).

On April 30, the Coalition moved for an award of attorney fees and expenses. The Coalition contended that paragraph 20 of each Unit’s DoR, which concerned maintenance and repairs, provided for an award of attorney fees to the Coalition as the prevailing party.

The Coalition filed an opposition to Diaz’s motion to vacate the judgment on May 9, 2008, arguing that the filing of the notice of appeal terminated the trial court’s jurisdiction over the judgment, such that the court was without authority to rule on Diaz’s motion to vacate.

On May 29, 2008, the trial court issued a tentative ruling denying Diaz’s motion to vacate on the ground that it had lost jurisdiction to rule on the motion when the Architectural Committee filed a notice of appeal. After hearing oral argument on May 30, the court confirmed its tentative ruling.

On May 30, Diaz filed a notice of appeal from the April 4 judgment and the May 30 postjudgment order denying his motion to vacate (case No. D053159).

On June 30, 2008, this court consolidated the two appeals under case No. D052903 and set a briefing schedule accommodating the three parties involved.

On July 11, 2008, the trial court considered the Coalition’s motion for an award of attorney fees and expenses. After hearing oral argument from both parties, the court denied the Coalition’s motion, without prejudice.

On August 6, 2008, the Coalition filed a notice of appeal from the trial court’s attorney fee order (case No. D053553).

The Architectural Committee filed its opening brief in case No. D052903 on September 18, 2008.

Diaz filed his opening brief on October 10, 2008. Diaz raises two main contentions: (1) that the trial court erred in declining to assert jurisdiction to consider his motion to vacate the judgment, and (2) that the judgment is erroneous. Diaz attacks the judgment on a variety of grounds, including that the Coalition’s claims are barred by the statute of limitations and laches, that there remain triable issues of material fact as to the intentions of the property owners who signed documents consenting to an extension of the UDoR, and that the Coalition failed to sue the appropriate parties, i.e., the property owners, and that, as a result, those property owners were denied the opportunity to challenge claims that implicate the chains of title on the subject properties.

On October 24, 2008, the City of Oceanside (Oceanside) applied to file an amicus curiae brief in support of the Architectural Committee. In its proposed brief, Oceanside argues that the four-year statute of limitations in Code of Civil Procedure section 343 applies to the Coalition’s claims, or, in the alternative, that homeowners associations act in a manner similar to municipal governments and, therefore, should receive the benefit of short statutes of limitations that often apply to local agency land use decisions. Oceanside also requested that this court take judicial notice of resolution No. 2008-P18—a resolution that was adopted at a meeting of the Planning Commission of the City of Oceanside on March 24, 2008. The resolution approves certain land use entitlements for a recent Oceanside condominium development unrelated to Costa Serena.

On November 7, 2008, the Coalition filed a combined opposition to Oceanside’s application to file an amicus curiae brief and objection to the city’s request for judicial notice.

This court informed the parties that it would consider Oceanside’s application to file an amicus curiae brief with the appeal, and that if the court were to grant the application, the court would also specify the time within which the parties would be permitted to file an answer to the brief pursuant to California Rules of Court, rule 8.200, subd. (c)(6).

The Coalition filed a brief in response to the Architectural Committee’s and Diaz’s opening briefs, in which it addressed the Architectural Committee and Diaz, together, as “Appellants.” The Coalition did not respond to Diaz’s argument that the trial court should have considered his motion to vacate because the motion was already pending at the time the Architectural Committee filed a notice of appeal. Both Diaz and the Architectural Committee filed reply briefs.

On March 13, 2009, this court ordered that the Coalition’s appeal concerning attorney fees (case No. D053553) would be considered with the Architectural Committee’s and Diaz’s already pending appeal (case No. D052903). In an order filed concurrently with this opinion, we consolidate the Coalition’s appeal with the Architectural Committee’s appeal for purposes of disposition.

 

III.        DISCUSSION

The trial court granted summary adjudication of three of the Coalition’s causes of action (two in the First Amended Complaint and one in the Supplemental Complaint) in favor of the Coalition. The Coalition dismissed its fourth cause of action for cancellation of a written instrument, thereby permitting the trial court to enter judgment in favor of the Coalition on the remaining causes of action. Although the Coalition continued to assert what purported to be only three causes of action (one seeking injunctive relief and two seeking declaratory relief), each cause of action actually encompasses a number of claims. The Coalition essentially challenges the validity of the 1986, 1987, and 1999 Amendments, and the validity of the Extension Document recorded in 2006. The court ruled in favor of the Coalition on all issues, ultimately determining that as of January 1, 2007, there exists no valid declaration of restrictions or similar instrument governing any of the lots in the Costa Serena community.

We conclude that the trial court erred in finding that the 1986, 1987, and 1999 Amendments are void ab initio. Our rejection of the trial court’s conclusions concerning these Amendments necessarily affects our determination of the correctness of the trial court’s ruling with regard to the 2006 Extension Document. As we explain below, we conclude that the Costa Serena community successfully extended the UDoR, such that the lots in Costa Serena remain governed by the restrictions of the UDoR that was created pursuant to the 1987 Amendment and amended thereafter.

Because we decide the issues based on the arguments of the parties, there is no need to address the additional arguments that Oceanside raises in its proposed brief. For this reason, we deny Oceanside’s application to file an amicus curiae brief in support of the Architectural Committee, and deny Oceanside’s request for judicial notice of an Oceanside resolution.

 

A. Standards on summary judgment

“The standards applicable to appellate court review of a motion for summary judgment are well established.” (Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 139 [127 Cal. Rptr. 2d 145] (Alexander), citing Code Civ. Proc., § 437c, Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826 [107 Cal. Rptr. 2d 841, 24 P.3d 493] (Aguilar).)  “We determine de novo whether a triable issue of material fact exists and whether the moving party was entitled to summary judgment as a matter of law. [Citation.]” (Alexander, supra, 104 Cal.App.4th at p. 139.) A triable issue of fact exists—and summary judgment is inappropriate—where the evidence reasonably permits the trier of fact, under the applicable standard of proof, to find the purportedly contested fact in favor of the party opposing the motion. (Aguilar, supra, 25 Cal. 4th at p. 850.)

 

B. The Coalition’s challenge to the 1986, 1987, and 1999 Amendments is untimely

The trial court concluded that the Architectural Committee’s affirmative defenses challenging the timeliness of the Coalition’s claims lacked merit on the ground that all of the Amendments at issue were void ab initio and thus could be challenged at any time. The court interpreted paragraph 28 in the original DoR’s as requiring “that the acknowledged signatures [of the owners of at least 75 percent of the ‘units located on the real property’[7]] be attached to the document itself.” Because “it [was] undisputed that no such signatures [were] attached [to the 1986, 1987, or 1999 Amendments], the instruments are void.” The court cited City of Los Angeles v. Morgan (1951) 105 Cal.App.2d 726 [234 P.2d 319] (Morgan) and Taormina Theosophical Community, Inc. v. Silver (1983) 140 Cal.App.3d 964 [190 Cal. Rptr. 38] (Taormina) in reaching this conclusion.

We have found no authority supporting the trial court’s conclusion that the 1986, 1987, and 1999 Amendments are void ab initio and that they therefore may be challenged at any time. We specifically reject the court’s reliance on Morgan and Taormina. The trial court apparently misapprehended the limited circumstances in which a court may conclude that an instrument is a complete nullity, as opposed to being voidable pursuant to a timely challenge by a party, due to a deficiency in the instrument’s creation.

Morgan, supra, 105 Cal.App.2d 726, is inapplicable to this case for a number of reasons. Morgan involved a judgment that was determined to be void ab initio because the defendant in a quiet title action had never been served with the summons and complaint. (Morgan, supra, 105 Cal.App.2d at pp. 730–731.) The Morgan court noted, “Under the due process clause of the federal Constitution a personal judgment rendered without service of process on, or legal notice to, a defendant is not merely voidable, but void, in the absence of a voluntary appearance or waiver. [Citation.]” (Morgan, supra, 105 Cal.App.2d at p. 730.) The court explained: “Where it is contended, as here, that the court had no jurisdiction to enter the decree for want of service upon respondent’s predecessor, evidence is admissible to challenge the fact of service. … ‘It has long been established that a false affidavit of service constitutes extrinsic fraud. A party is thus prevented from having his day in court. Courts of equity will relieve a party from an unjust judgment rendered against him when, without service of process, either actual or constructive, no opportunity has been given him to be heard in his defense. [Citations.]’” (Morgan, supra, 105 Cal.App.2d at p. 731.)

The Morgan court held that “‘[a] judgment absolutely void upon its face may be attacked anywhere, directly or collaterally, whenever it presents itself, either by parties or strangers. It is simply a nullity, and can be neither the basis nor evidence of any right whatever.’” (Morgan, supra, 105 Cal.App.2d at p. 732, italics added.)

Because the instruments at issue in this case are not judgments, the rule announced in Morgan does not directly apply.

Nor does the rule in Morgan apply by analogy to the circumstances that exist in this case. The absence of service on the affected party in Morgan, and the defendant’s resultant lack of an opportunity to respond to the complaint, meant that the trial court never had jurisdiction over the defendant, and thus, lacked jurisdiction to enter any judgment at all. Here, the Architectural Committee(s) clearly had the authority to amend the DoR’s/UDoR in 1986, 1987 and 1999. There has been no allegation that the Amendments were created in secret, or that persons affected by the Amendments were unaware of their existence. In fact, there has been no allegation that the Architectural Committee(s) amended the DoR’s/UDoR without providing the affected parties notice of the proposed changes and an opportunity to vote on the matter. Nor is there any allegation that the required number of owners did not approve of any of the Amendments. Because the Coalition has not challenged the authority of the Architectural Committee(s) to enact the Amendments, its challenges do not undermine the very existence of the Amendments, as the challenge to the judgment in Morgan did, but rather seek only to redress alleged infirmities in the adoption and recording of the Amendments. Morgan involved an invalid act, while this case involves a valid act, the result of which might have been voided if challenged in a timely manner.

In addition, neither the First Amended Complaint nor the Supplemental Complaint contains any allegation that the 1986, 1987 or 1999 Amendments were procured by fraud or some other method that would undermine the validity of the instruments in question from their inception. (See Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 416 [58 Cal. Rptr. 2d 875, 926 P.2d 1061] [“If the entire contract is void ab initio because of fraud, the parties have not agreed to arbitrate any controversy; under that circumstance, Prima Paint [v. Flood & Conklin (1967) 388 U.S. 395 [18 L.Ed.2d 1270, 87 S.Ct. 1801]] does not require a court to order arbitration.”].)

(1) Even if the Coalition had alleged fraud in the enactment of the Amendments, the fraud would have to have been one by which the homeowners were induced to agree to Amendments different from the Amendments that were actually recorded. As the court observed in Erickson v. Bohne (1955) 130 Cal.App.2d 553, 556 [279 P.2d 619]:  “‘[T]he courts distinguish between those cases in which a purported instrument never had any legal inception or existence—due to the fact that one party was induced to execute an agreement totally different from that which he apparently made, or where, due to the fraud, there was no execution at all—and those cases in which the agreement was induced by fraudulent misrepresentations or concealments which in no degree make the instrument anything other than it purports to be. In the first case it is clear that the purported agreement is void ab initio and an action to avoid it may be brought at any time, or it may be treated as nonexistent; while in the second case the agreement is voidable and may be rescinded at the election of the party defrauded … .’”

The Coalition’s only challenge to the Amendments is that they were enacted in a manner that failed to conform to the requirements of the provision that outlined how the DoR’s/UDoR could be amended.[8] 8 Since this is the only challenge to the validity of the Amendments, the Coalition’s claims would render the Amendments voidable, not void ab initio. (Cf. Peyton v. Cly (1960) 184 Cal.App.2d 193, 196 [7 Cal. Rptr. 504] [“A contract not executed in conformity with the provisions of the statute of frauds is not void but merely voidable. [Citation.]”].)

(2) The trial court also cited Taormina, supra, 140 Cal. App. 3d 964, in support of its conclusion that the Amendments were void ab initio. However, Taormina supports only the limited proposition that amendments to CC&R’s (covenants, conditions and restrictions) that are not made pursuant to the procedure “established in the provision” for modifying the restrictive covenants may be voided under certain circumstances. (Id. at p. 970.) The case does not speak to the issue here—i.e., whether an amendment that was not enacted pursuant to the procedure set out in the provisions of a declaration of restrictions is void ab initio, or merely voidable. The Taormina court never expressly considered the question whether the parties’ challenge to the amendment at issue in that proceeding would render the amendment voidable or rather, void ab initio. The Taormina court simply stated: “The trial court found that 75 percent of the owners had not approved the changes embodied in the November 9 CCRs. The changes therefore are not enforceable and to the extent that they purport to make such changes, the November 9 CCRs are void.” (Id. at p. 970.) The Taormina court did not refer to the documents at issue as void ab initio, nor did it appear to reach this conclusion. Rather, it appears that the court was simply permitting the plaintiff to void a voidable instrument.

At a minimum, Taormina simply does not support the trial court’s conclusion in this case because it does not state that amendments to CC&R’s and/DoR’s that are not adopted in conformance with the provisions of those CC&R’s and/or DoR’s may be challenged on this basis and voided at any time. The lawsuit in Taormina was filed less than three years after the amendment in question was recorded; there was no statute of limitations issue raised in that case. Thus, whether the provisions in that case were voidable, and thus subject to the statute of limitations, or rather, void ab initio, and thus subject to challenge at any time, was immaterial. For these reasons, Taormina does not provide authority for the trial court’s conclusion that the Amendments in this case were void ab initio.

We conclude that the Coalition has not demonstrated that the Amendments were void ab initio; at most, the Amendments may be voidable. We therefore consider whether the arguments that the Architectural Committee raised in its summary judgment motion, i.e., challenges to the validity of the 1986, 1987 and 1999 Amendments, are timely. (See Marin Healthcare Dist. v. Sutter Health (2002) 103 Cal.App.4th 861, 879 [127 Cal. Rptr. 2d 113] (Marin) [“Actions to void contracts are nonetheless subject to the statute of limitations. [Citations.]”].)

(3) “‘To determine the statute of limitations which applies to a cause of action it is necessary to identify the nature of the cause of action, i.e., the “gravamen” of the cause of action. [Citations.] “[T]he nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations under our code.” [Citation.]’ [Citations.]” (Marin, supra, 103 Cal.App.4th at pp. 874–875.)

(4) The Coalition’s causes of action for declaratory and injunctive relief are premised upon its claims that the 1986, 1987 and 1999 Amendments are void. The Architectural Committee contends that the statute of limitations applicable to the Coalition’s claims attacking the Amendments is the four-year limitations period provided under Code of Civil Procedure[9] section 343—the general catch-all statute of limitations period. Section 343 provides: “An action for relief not hereinbefore provided for must be commenced within four years after the cause of action shall have accrued.”  Other courts have applied section 343 to causes of action seeking to cancel a voidable instrument (see Marin, supra, 103 Cal.App.4th at p. 878, and cases cited therein), and the Coalition has not asserted that any other statute of limitations applies. Further, the Supreme Court has acknowledged that the four-year limitations period of section 343 has been applied to claims seeking to set aside all kinds of instruments for a variety of reasons: “Citing a broad range of cases, including actions to set aside a deed made under undue influence, a proceeding to set aside a satisfaction of judgment, and actions to set aside void bonds, the [Supreme Court] concluded: ‘Although plaintiff contends that laches and lapse of time cannot be defenses in an action to cancel an instrument void because contrary to public policy … equitable factors … may not be used as a means of avoiding the express mandate of the statute of limitations. We must hold, therefore, that if plaintiff had a cause of action for cancellation, it is now barred by section 343 … .’ [Citation.]” (Robertson v. Superior Court (2001) 90 Cal.App.4th 1319, 1326 [109 Cal. Rptr. 2d 650].)

We conclude that the four-year limitations period provided in section 343 applies to the Coalition’s claims that the Amendments are invalid.

(5) The Coalition did not bring its claims challenging the Amendments within the four-year limitations period.  “As a general rule, a statute of limitations accrues when the act occurs which gives rise to the claim [citation], that is, when ‘the plaintiff sustains actual and appreciable harm. [Citation.] Any “manifest and palpable” injury will commence the statutory period. [Citation.]’ [Citation.]” (Marin, supra, 103 Cal.App.4th at p. 879.)

If the Amendments were, in fact, ineffective as a result of being enacted/adopted in a manner that did not comply with the amendment provisions of the DoR’s/UDoR, as the Coalition asserts, then homeowners in the Costa Serena community sustained a “manifest and palpable” injury at the time each of the Amendments was recorded and thereby made effective. Further, the recording of the Amendments served to provide notice to anyone who may have wished to challenge their validity. The Architectural Committee’s recording of each of the instruments that contained the Amendments thus triggered the statutory period for bringing an action to invalidate the Amendments, since the recording of the Amendments ensured that homeowners and subsequent purchasers had at least constructive knowledge that there existed amendments to the DoR’s/UDoR that purported to change the provisions of the DoR’s/UDoR. (See Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 355 [47 Cal. Rptr. 2d 898, 906 P.2d 1314] (Citizens for Covenant Compliance) [recording of CC&R’s provides constructive notice of restrictions on property].) The statute of limitations therefore began to run as to each Amendment as soon as the Architectural Committee recorded that Amendment.

The Coalition has offered no evidence that the commencement of the running of the statute of limitations should be tolled for any reason. The Coalition suggests in its briefing that the statutes of limitations for challenges to the Amendments should be tolled because the Coalition “did not have any interest in challenging the 1986, 1987 or 1999 amendments until such time as it appeared Appellants were going to attempt to rely upon those amendments to extend the Declaration of Restrictions in 2006.” This clearly does not constitute a valid reason to toll the statute of limitations.

(6) All of the information that was available to the Coalition in 2006 concerning the potential invalidity of the Amendments was available to all homeowners in Costa Serena as soon as the Amendments were recorded in 1986, 1987, and 1999. The Architectural Committee conducted business for years under the DoR’s and the UDoR, as amended by the Amendments at issue. There is no indication that the Architectural Committee(s) did not interpret the DoR’s/UDoR as incorporating the Amendments after they were approved by the owners and recorded by representatives of the Architectural Committee(s). The Coalition is deemed to have had notice of the Amendments at least from the time they were recorded (see Citizens for Covenant Compliance, supra, 12 Cal.4th at p. 355), and does not allege that the Amendments were procured by fraud. There is thus no basis for tolling the statute of limitations.

We conclude that the Coalition’s claims challenging the 1986, 1987 and 1999 Amendments—brought 20, 19, and seven years, respectively, after the Amendments were passed and recorded—are time-barred. The trial court thus erred in rejecting the Architectural Committee’s statute of limitations defense to the Coalition’s claims pertaining to the 1986, 1987 and 1999 Amendments.

Because the Coalition’s challenges to the Amendments are barred by the statute of limitations, the trial court should have given effect to the amended version of the UDoR, which incorporates all three challenged Amendments.

C. The Architectural Committee successfully effected an extension of the UDoR by executing and recording a writing evidencing that a majority of lot owners agreed to the extension

 

1. Under the governing UDoR, the Architectural Committee needed the assent of a majority of owners in the Costa Serena community, as a whole, to extend the DoR

In granting summary adjudication in favor of the Coalition on its cause of action for declaratory relief in its Supplemental Complaint (seeking to declare the Extension Document void), the trial court ruled that the Extension Document was insufficient to extend the UDoR because the 1987 Amendment was void ab initio. Based on the trial court’s determination that the 1987 Amendment was void ab initio, the court concluded that there had been no unification of the separate DoR’s for each of the original Units, and, therefore, that each of the seven Units remained distinct, and operated under its own separate DoR. According to the trial court, each individual Unit had to extend its individual DoR by the consent of a majority of homeowners within that Unit. The trial court concluded that although the Architectural Committee “ha[d] provided competent evidence that a majority [of consents] was received as to the Costa Serena communities as a whole,” the Architectural Committee had not demonstrated that “a majority of consents were received as to each separate unit.” Instead, the trial court found that the Coalition had provided competent and admissible evidence that the Architectural Committee “did not achieve a majority of consents to extend as to Units 1, 2, 6, and 7.”[10]

As we have already concluded, the trial court erred in its determination that the 1987 Amendment was void. The court’s determination that each original Unit in Costa Serena had to individually agree to extend the applicable original DoR before December 31, 2006, by the consent of a majority of the owners within each Unit was thus also erroneous. As of 2006, the entire Costa Serena community operated under a single governing document—the UDoR. Therefore, pursuant to paragraph 16 of the UDoR, in order to extend the UDoR in 2006, the Architectural Committee was required to execute and record a writing evidencing that a majority of the owners of the lots in the Costa Serena community, as a whole, agreed to the extension.

 

2. The Architectural Committee presented evidence sufficient to establish that a majority of owners agreed to extend the UDoR

The Architectural Committee asserts that the trial court should have granted summary judgment in its favor because it presented the court with evidence that a majority of the owners of lots in Costa Serena consented to extend the UDoR, and that the Architectural Committee had thus fulfilled the requirements of paragraph 16 of the UDoR. We agree.[11]

 

a. Interpreting the relevant language in the UDoR

The Coalition contends that paragraph 16 of the UDoR should be interpreted to require that “any desire to continue the restrictions be made ‘in a manner required for a conveyance of real property.’” Although the Coalition fails to explain its interpretation beyond this single sentence, we presume, based on the Coalition’s arguments concerning the effect of the Architectural Committee’s proffered evidence, that the Coalition means that the UDoR should be read to require that the owner or owners of each lot demonstrate his, her, or their consent to extend the UDoR by way of an individual document that both evidences the owner or owners’ consent and identifies the owner or owners and the property in a manner that would be sufficient to convey that real property. In other words, the Coalition maintains that the UDoR requires that the information in each consent form be identical to that found in the deeds to the lots owned by consenting homeowners. We conclude that this interpretation of the relevant provision is unreasonable.

(7) “It is our duty to interpret the deed restriction ‘in a way that is both reasonable and carries out the intended purpose of the contract.’ [Citation.]” (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1378 [89 Cal. Rptr. 3d 659].) The same rules that govern the interpretation of contracts apply to the interpretation of CC&R’s. (Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 575 [71 Cal. Rptr. 3d 299].)  Contracts, in turn, are to be construed in accordance with substantially the same canons of interpretation as statutes. (Verdier v. Verdier (1953) 121 Cal.App.2d 190, 193 [263 P.2d 57].) “ ‘ “ ‘[W]e must independently interpret the provisions of the document. …’ ” ’ [Citation.]” (Gray v. McCormick (2008) 167 Cal.App.4th 1019, 1024 [84 Cal. Rptr. 3d 777].)

“The language of the CC&R’s governs if it is clear and explicit, and we interpret the words in their ordinary and popular sense unless a contrary intent is shown. [Citations.] The parties’ intent is to be ascertained from the writing alone if possible. [Citation.]” (Harvey v. The Landing Homeowners Assn. (2008) 162 Cal.App.4th 809, 817 [76 Cal. Rptr. 3d 41], fn. omitted.) “‘Where the language of a contract is clear and not absurd, it will be followed. [Citations.]’ ” (Templeton Development Corp. v. Superior Court (2006) 144 Cal.App.4th 1073, 1085 [51 Cal. Rptr. 3d 19].)

Paragraph 16, the provision in question, provides in relevant part that the UDoR will expire on December 31, 2006, “unless the owners of a majority of said lots have executed and recorded … , in the manner required for a conveyance of real property, a writing in which they agree” that the UDoR shall continue to govern the properties. The most reasonable interpretation of this provision is that the DoR requires that the owners execute and record “in the manner required for a conveyance of real property” a single “writing” that in some way evidences that a majority of the owners have agreed to the proposed extension. This requirement may be met by a document that certifies that a majority of owners of lots in the Costa Serena community have agreed to extend the UDoR. Such an instrument would constitute sufficient evidence that the requirement that a majority of owners have agreed to the extension has been met. As long as that instrument is executed and recorded in the same manner in which a deed or other instrument conveying real property would be executed and recorded, all of the requirements of paragraph 16 of the UDoR are met.

The plain language of paragraph 16 does not require that each owner express his/her agreement in a separate document that itself must be “executed and recorded … , in the manner required for a conveyance of real property.” Rather, a single writing that sufficiently evidences the fact that a majority of owners have agreed to the extension is the document that the UDoR requires be executed and recorded in the same manner in which the conveyance of real property would have to be executed and recorded, in order for the extension to be effective.[12]

 

b. The evidence establishes that the Architectural Committee met the requirements of paragraph 16 and that the UDoR was extended before it expired

The Architectural Committee submitted evidence of the existence of the required “writing,” as well as evidence that the writing was executed and recorded in the official records of the San Diego County Recorder’s Office in the same manner in which a conveyance of real property would be executed and recorded. Specifically, the Architectural Committee submitted a document, recorded September 25, 2006, entitled “EXTENSION OF DECLARATION OF RESTRICTIONS.” The document includes a notarized certification of the extension, signed by DeLoris Devine, chairperson of the Architectural Committee, which states, “The extension of DECLARATION OF RESTRICTIONS has been consented to by at least a majority of the owners of the lots in accordance with Section 16 of the DECLARATION OF RESTRICTIONS. The consents are collectively attached hereto as Exhibit ‘1’ to this Extension of DECLARATION OF RESTRICTIONS.” Immediately following Devine’s certification is the Extension Document itself.

The Extension Document identifies each DoR for each of the original Units by its official record number and identifies each of the properties in Costa Serena by referencing the lots by Unit, as originally identified by the individual DoR’s for the Units. The Extension Document then states: “The owners of a majority of the lots subject to the DECLARATION OF RESTRICTIONS, and any valid amendment(s) thereto, hereby extend the DECLARATION OF RESTRICTIONS, and any valid amendment(s) thereto, until December 31, 2039.”

The Extension Document is signed by four members of the Architectural Committee, and each member’s signature is notarized. The Extension Document is clearly a “writing” that evidences that a majority of owners in Costa Serena have agreed to the extension. The document was executed and recorded in “the manner required for conveyance of real property” since it included all of the necessary formalities: it contained a sufficient description of the properties affected by the extension, identified the restrictions on the properties that were being extended, was signed and notarized, and was recorded at the county recorder’s office. The effect of the execution and recordation of the Extension Document is that any person having title to or interested in acquiring title to an affected property has, at a minimum, constructive notice that the residences in Costa Serena continue to be governed by the UDoR. (Citizens for Covenant Compliance, supra, 12 Cal.4th at p. 355.)

In its ruling on the Architectural Committee’s motion for summary judgment/adjudication, the trial court found that the Architectural Committee obtained the consent of a majority of the owners in Costa Serena, and that the Architectural Committee presented sufficient evidence to establish this fact. In the part of the court’s order rejecting the Architectural Committee’s argument that it was entitled to judgment as to the first cause of action (declaratory relief) in the Supplemental Complaint, the court states, “Defendant has provided competent evidence that a majority [of consents] was received as to the Costa Serena communities as a whole.” However, having erroneously concluded that the 1987 Amendment was void, the trial court proceeded to conclude that the Architectural Committee’s evidence was insufficient to establish that it had obtained the consents of a majority of the owners within each separate Unit. The trial court’s finding that the Architectural Committee provided competent evidence that a majority of owners of property in the Costa Serena community as a whole had agreed to extend the UDoR is sufficient to support a judgment in favor of the Architectural Committee.

Further, the parties do not dispute that 375 lot owners did in fact agree to extend the UDoR. Even the Coalition agrees that the consents sufficiently establish the intent of the homeowners who signed them: “In any event, the intention of the homeowners who signed a consent to extend the Declaration of Restrictions is not in issue. It can be assumed a homeowner who signed a consent form wished to extend the Declaration of Restrictions.” According to the Coalition, the question is not whether there is sufficient evidence to establish that a majority of the owners agreed to extend the UDoR, but, rather, whether “that homeowner compl[ied] with the requirements of the Declaration of Restrictions.” Based on the most reasonable interpretation of the UDoR, we conclude that it is not necessary that each home owner have executed and recorded a consent document that would be sufficient to convey property in order to comply with the UDoR’s extension provision. The Architectural Committee and the homeowners, as a whole, complied with the requirements of paragraph 16 of the UDoR by having the Architectural Committee representatives sign and record a writing evidencing that a majority of the owners of lots in Costa Serena agreed to extend the UDoR. This is sufficient to meet the procedural requirements of paragraph 16.

No additional evidence of the owners’ signatures, consent forms, or any other documents were required, since Devine’s certification is sufficient to establish that a majority of owners of lots in Costa Serena agreed to extend the UDoR. This is particularly true in view of the fact that the Coalition does not dispute that the owners who signed the consent forms agreed to the extension. In the face of the recorded “writing” that the Architectural Committee submitted, the Coalition did not argue or present evidence that Devine’s certification in the Extension Document that a majority of owners of lots in Costa Serena had consented to extend the UDoR was somehow invalid, mistaken, or fraudulent. The Coalition thus has not placed in dispute the fact that a majority of owners of lots in Costa Serena did in fact agree to extend the UDoR.

Despite conceding that a majority of owners agreed to extend the UDoR, the Coalition objected to the form of more than 200 of the consent forms that the Architectural Committee submitted as evidence to support its motion for summary judgment. In a ruling that seems to conflict with the trial court’s finding that the Architectural Committee had submitted sufficient proof that a majority of owners of Costa Serena agreed to the extension, the trial court sustained the Coalition’s objections to 70 of the consent forms that the Architectural Committee submitted. This ruling left the Architectural Committee with evidence of only 305 owner consents. We conclude that the trial court erred in sustaining the Coalition’s objections to the consent forms.[13]

We review a trial court’s rulings on evidentiary objections for an abuse of discretion. (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169 [121 Cal. Rptr. 2d 79].) Although the abuse of discretion standard gives the trial court substantial latitude, “[t]he scope of discretion always resides in the particular law being applied, i.e., in the ‘legal principles governing the subject of [the] action … .’” (City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297 [255 Cal. Rptr. 704].) “Action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an ‘abuse’ of discretion.” (Ibid.) Here, the trial court appears to have erroneously interpreted the UDoR, and on this basis, rejected some of the consent forms. In doing so, the court incorrectly applied legal principles of contract interpretation. The trial court’s evidentiary rulings premised on its erroneous interpretation constitute an abuse of the court’s discretion.

The Architectural Committee included the 375 consent forms in two exhibits to the Extension Document.[14]  Each consent form was in the same format. In the first paragraph, the consent form states, “The undersigned, is/are the Owner(s) of the following real property located within San Diego County, California: … .” Each consent form then identifies the property by street address. The second paragraph of each form provides a legal description of each property, in a form similar to the following example from consent No. 1: “Lot 3, inclusive, of COSTA SERENA UNIT NO. 1, in the City of Oceanside, County of San Diego, State of California, according to Map thereof no. 6892 filed in the Office of the County Recorder of said San Diego County on March 31, 1971.”

The third paragraph states: “Said real property is subject to a DECLARATION OF RESTRICTIONS which was recorded in the official records of San Diego County, California, on July 6, 1973, as Instrument No. 186901.” The fourth paragraph of each consent form affirms the owner’s or owners’ consent, stating, “I/we, by affixing our signature below, hereby consent to extend the DECLARATION OF RESTRICTIONS, and any valid amendment thereto, until December 31, 2039.” The Architectural Committee also submitted to the trial court copies of the deeds of each of the properties for which an owner had signed a consent form.

The Coalition objected to a large number of the consent forms on the ground that the consents suffered from one or more of three identified deficiencies: (1) discrepancies between the legal descriptions of the properties provided on the consent forms and those on the deeds for those properties; (2) discrepancies between the signatures on the consent forms and the names on the deeds; and (3) the form was signed by only one of two record owners or trustees. For example, the Coalition’s grounds for objecting to consent No. 1 was, “Lacks foundation.[15]  Legal description of the property and the Deed does not match that in the Consent.” Another example of the type of objection the Coalition raised was its objection to consent No. 90 on the following grounds: “Lacks foundation. Signature on Consent does not match name on Deed.” The Coalition similarly objected to consent No. 281, on the following grounds: “Lacks foundation. Consent not signed by one of the owners per Deed.” The Coalition’s position was that consents that suffered from such discrepancies were insufficient to “convey real property,” and thus did not meet the requirements of paragraph 16 of the UDoR, rendering the consents invalid and inadmissible.

The Coalition’s presumption that the consent forms had to be in precisely the same form as a document intended to convey real property is based on an unreasonable interpretation of paragraph 16 of the UDoR. The Coalition seems to have persuaded the trial court to read the words “in the manner required for a conveyance of real property” to refer to each property owner’s, or owners’, consent form.

The court appears to have determined that each consent form had to describe the relevant property in a manner identical to the description of the property in the deed establishing the consenter’s ownership, and had to be signed by each owner in exactly the same manner as he or she is identified in the deed. For example, the court sustained the Coalition’s objection to the consent form signed by “Elenore L. Buitenman” and “Charles T. Buitenman,” apparently on the basis that the deed names “Elenore Louise Buitenman” and “Charles Taze Buitenman” as the owners of the property, using middle names rather than initials. Similarly, the court rejected all of the consent forms signed by owners of lots that had originally been part of Unit 7 because those consent forms incorrectly identified the plat map number in the legal descriptions of the properties as 6939, while the true plat map number is 6940. The court rejected these consent forms in spite of the fact that each form contained the street address of the owners’ property.

As we have already explained, this interpretation misconstrues the language of paragraph 16. The UDoR cannot reasonably be read to require that the consent forms include a legal description of the properties. Nor can it be understood to require that each individual owner consenting to the extension sign his or her name in exactly the same manner as he or she took title to the property. The consent forms that the Architectural Committee collected are more than sufficient to establish that a majority of Costa Serena lot owners agreed to the Extension Document. Each individual owner certified that he or she was the owner of the property, and each consent form identifies the property by address. There is no allegation that the persons who signed the consent forms are not the owners of the properties.

Reading the UDoR to mean that the consent of an owner who signed his name “Floyd A. Beatty” on his consent form will not be counted because the deed to his property identifies him as “Floyd Andrew Beatty” would lead to an absurd result, particularly where Floyd A. Beatty attested to the fact that he owns the relevant property. It is clear that Floyd A. Beatty is Floyd Andrew Beatty, and the Coalition has presented no evidence that he, or any of the other individuals who signed the consent forms, was not an owner who was entitled to vote to extend the UDoR.

A majority of owners agreed to extend the UDoR, as evidenced by the signed consent forms that the Architectural Committee filed as exhibits to the recorded Extension Document and presented to the court. As long as the consent forms identify the person or persons who signed the form, reasonably identify their properties (by, for example, providing the street address), and indicate that the person or persons owns or own the identified property, the forms are sufficient. All of the consent forms that the Architectural Committee submitted meet these requirements. The consent forms are relevant to determining whether a majority of owners agreed to extend the UDoR, and are admissible in evidence. The trial court thus erred in sustaining the Coalition’s objections to some of the consent forms.

We conclude that the trial court erred in entering judgment in favor of the Coalition and not entering judgment in favor of the Architectural Committee. The judgment must be reversed and a new judgment entered in favor of the Architectural Committee.

 

D. Jess Diaz’s appeal from the trial court’s order denying his motion to vacate is moot

Our disposition of the Architectural Committee’s appeal from the judgment in this case renders moot Diaz’s appeal from the trial court’s denial of his motion to vacate the judgment. The judgment that Diaz wishes to have vacated is no longer in effect. Therefore, neither the trial court nor this court can grant him the relief that he requests in his motion to vacate, or in his appeal from the denial of that motion.

(8) “ ‘ “It is this court’s duty ‘ “to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it. …” ’ …” … “ ‘When no effective relief can be granted, an appeal is moot and will be dismissed.’ ” ’ ” (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1215 [78 Cal. Rptr. 3d 572], citations omitted.) “Accordingly, because our decision on the matter would be academic” (ibid.), we express no opinion as to the trial court’s jurisdiction to consider a filed and pending motion to vacate a judgment after another party has filed a notice of appeal from the same judgment.

 

E. The Coalition’s appeal concerning attorney fees

Our reversal of the judgment and our remand of the case with directions to enter judgment in favor of the Architectural Committee renders moot the Coalition’s consolidated appeal challenging the court’s refusal to award it attorney fees as the prevailing party, since the Coalition is no longer the prevailing party in this litigation. (See Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 831 [171 Cal. Rptr. 604, 623 P.2d 165] [consolidated appeal from special order after judgment taxing costs relating to attorney fees dismissed as moot after underlying judgment confirming award of arbitrator was reversed]; see also Oakland Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th 1175, 1195 [51 Cal. Rptr. 3d 144] [reversing trial court’s order denying defendant’s motion for judgment notwithstanding the verdict, vacating judgment in favor of plaintiff, and dismissing as moot plaintiff’s appeal from a postjudgment order denying attorney fees]; Kreutzer v. City and County of San Francisco (2008) 166 Cal.App.4th 306, 312, fn. 3 [82 Cal. Rptr. 3d 644] [stating that the court would be entering a “separate order in the [defendant’s] attorney fees appeal dismissing it as moot” after reversing a judgment for plaintiff]; Kotla v. Regents of University of California (2004) 115 Cal.App.4th 283, 296, fn. 10 [8 Cal. Rptr. 3d 898] [after reversing judgment and remanding case for new trial, court dismissed as moot defendant’s appeal from postjudgment order awarding attorney fees].)

 

IV. DISPOSITION

The judgment of the trial court is reversed. The case is remanded to the trial court with instructions to enter judgment in favor of the Architectural Committee.

Jess Diaz’s appeal from the denial of his motion to vacate, and the Coalition’s appeal from the denial of its motion for attorney fees, are dismissed.

The Architectural Committee is entitled to costs on appeal for both its appeal and its opposition to the Coalition’s appeal. Diaz is to bear his own costs on appeal.

McConnell, P. J., and McIntyre, J., concurred.


[1] The Costa Serena development was built in seven phases. Each phase was called a “Unit.” As each Unit was completed, a Declaration of Restrictions for that Unit was recorded, so that upon completion of the entire community, seven Declarations of Restrictions existed and seven separate architectural committees were established to enforce the Declaration of Restrictions for each Unit. The Declarations of Restrictions for the Units were essentially identical, and differed only with respect to the properties identified as being subject to the restrictions.

In an attempt to make clear which document and/or documents are being referenced, we will identify the single Declaration of Restrictions that purports to govern the entire Costa Serena community as a whole at the time this lawsuit was filed as the “Unified Declaration of Restrictions” (UDoR). We will refer to the individual Declarations of Restrictions that originally governed the seven separate Costa Serena Units as the Declarations of Restrictions (DoR’s), together, or individually as a Declaration of Restrictions (DoR).

[2] Paragraph 27 involves protecting mortgagers and title insurance companies from the consequences of homeowner breaches of a DoR.

[3] The original DoR’s for the seven Units provided for Architectural Committees consisting of three individuals.

[4] The record does not disclose the relationship between the Architectural Committee and the Costa Serena Community Association, or the various rights and duties of each entity.

[5] There were a total of 696 Costa Serena residences in 2006. Although Costa Serena had 724 residences at the time it was completed in the 1970’s, only 696 Costa Serena residences existed in 2006 because, during the 1990’s, the City of Oceanside took title to and vacated 28 of the original 92 lots in Unit 7 in order to build a road. On appeal, the parties dispute the effect of the City of Oceanside’s ownership of land that formerly represented 28 Costa Serena lots for purposes of determining how many owners would constitute a “majority.”

[6] On our own motion, we take judicial notice of Costa Serena Architectural Committee v. Superior Court (Feb. 28, 2008, D052235), in which we denied the Architectural Committee’s petition for a writ of mandate.

[7] The use of the word “units” in paragraph 28 of the DoR’s is odd, since each phase of the development was referred to as a “unit.” However, in view of the fact that the DoR for each of the seven Units contained paragraph 28, the most reasonable interpretation is that the word “units” in paragraph 28 refers to the “lots” in each Unit.

[8] Without explaining the relevance of the issue, the Coalition raises a question in its brief on appeal as to the legality of the age restriction in the DoR, suggesting that Costa Serena’s age restriction may be illegal under the Unruh Civil Rights Act (Civ. Code, § 51.2) because Costa Serena does not qualify as senior citizen housing—an exception to the Unruh Civil Rights Act’s prohibition against age discrimination. However, the narrow issues presented in this appeal do not include questions relating to Costa Serena’s status as a senior citizen community, or the application of the Unruh Civil Rights Act to Costa Serena’s UDoR. The Coalition did not allege in its complaint that the age restriction in the UDoR is illegal and/or unconstitutional. Rather, the Coalition challenged the validity of a number of amendments to the DoR’s/UDoR and the extension of the UDoR, based on the interpretation and application of the DoR’s/UDoR provisions. In its points and authorities supporting its motion for summary adjudication in the trial court, the Coalition outlines what is and is not at issue in this case:

“Contrary to rhetoric in prior proceedings, this action is not about whether Costa Serena is or is not a senior citizen community! This action is solely about:

“1. Whether the 1987, 1999 and 2006 recorded documents are valid, and

“2. Whether the 2006 election should be permanently enjoined.”

We agree with the Coalition’s position in the trial court and conclude that the legality of the age restriction in the DoR is also not at issue in this appeal.

[9] Further statutory references are to the Code of Civil Procedure unless otherwise indicated.

[10] The court also faulted the Architectural Committee’s evidence in that it demonstrated that the consents “purport to extend the DORs of Unit 7 only, not the DORs of each individual unit.” As a result, the court concluded that the Coalition had demonstrated that the Extension Document “did not sufficiently describe the real property at issue to effect an extension of the DORs for Units 3, 4, and 5,” and, therefore, that there had been no extension of any DoR for any of the Costa Serena Units.

[11] Again, the parties disagree as to the number of owner consents required to extend the UDoR. In support of its motion for summary judgment, the Architectural Committee submitted evidence that during the 1990’s, title to 28 of the original 724 lots in Costa Serena was transferred to Oceanside so that the city could build a road. The Architectural Committee argues that in 2006, there were only 696 voting lots in Costa Serena. If the Architectural Committee is correct, then the number of lot owners needed to consent to an extension is 349. The Coalition asserts that the Architectural Committee has cited no authority for its position that Oceanside’s ownership of the lots altered the number of lots given a vote under the UDoR, and contends that the consent of a majority of 724 voting lots is therefore necessary to effectuate an extension of the UDoR. Under the Coalition’s theory, the number of lot owners needed to consent to an extension of the UDoR is 363. We need not determine whether the relevant number of lots is 724 or 696, however, because the Architectural Committee offered sufficient evidence that it complied with paragraph 16, demonstrating that 375 owners agreed to extend the UDoR. This number constitutes a majority of lot owners under either scenario.

[12] The Coalition suggests that if there exists any “perceived ambiguity” in the UDoR, the Architectural Committee should “not get to benefit from” such ambiguity. The only support that the Coalition offers for this assertion is the following claim: “There is no basis to interpret the Declaration of Restrictions against Respondent [Coalition].” However, since neither of these parties drafted paragraph 16 (which has not been amended since the DoR’s were drafted by the original developer of Costa Serena), neither party should receive a more favorable interpretation by virtue of the fact that it did not draft the language at issue.

[13] We are not convinced that the evidence of the consent forms was required at all, given the fact that the Architectural Committee provided sufficient evidence of a “writing” that met the requirements of paragraph 16, and that the Coalition never challenged the veracity of Devine’s certification that a majority of homeowners in Costa Serena had agreed to extend the DoR. Nevertheless, to the extent that the Coalition’s claims can be seen as a challenge to the sufficiency of Devine’s certification of the Extension Document, these excluded consent forms are relevant, and, as we conclude, the trial court erred in excluding them.

[14] The two exhibits to the Extension Document were recorded on different dates, September 25, 2006, and November 22, 2006.

[15] The Coalition made the same foundation objection to every consent form to which it objected. However, because the trial court sustained the Coalition’s objections to only some of the consent forms, we infer that the court did not exclude these forms on the ground that they lacked foundation. To the extent that the court may have sustained some of the Coalition’s objections on foundational grounds, this would have been an abuse of discretion, since the Architectural Committee laid the same foundation for the excluded forms as for the forms that the court did not exclude.