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.

VICTOR VALLEY UNION HIGH SCHOOL DISTRICT v. THE SUPERIOR COURT OF SAN BERNARDINO COUNTY

VICTOR VALLEY UNION HIGH SCHOOL DISTRICT, Petitioner,
v.
THE SUPERIOR COURT OF SAN BERNARDINO COUNTY, Respondent;
JOHN DOE, Real Party in Interest.

No. E078673.
(2022) 86 Cal. App. 5th 940.

 

Filed December 22, 2022.
Appeal from the Super.Ct.No. CIVDS1908673.

 

ORIGINAL PROCEEDINGS; petition for extraordinary writ. Wilfred J. Schneider, Jr., Judge. Granted.

Cummings, McClorey, Davis, Acho & Associates and Ryan D. Miller for Petitioner.

No appearance for Respondent.

Carrillo Law Firm, Luis A. Carrillo, Michael S. Carrillo, J. Miguel Flores; The Senators (Ret.) Firm, Ronald T. Labriola; Esner, Chang & Boyer, Holly N. Boyer, Shea S. Murphy and Kathleen J. Becket for Real Party in Interest.

CERTIFIED FOR PUBLICATION

OPINION

McKINSTER, J.

John MM. Doe, by and through his guardian ad litem, C.M. (Doe’s mother), and B.S. (Doe’s father) (collectively real parties in interest), sued petitioner Victor Valley Union High School District (the district) for negligence and other causes of action arising from an alleged sexual assault on Doe while he was a high school student. During discovery, real parties in interest learned video that captured some of the events surrounding the alleged sexual assault had been erased.

Real parties in interest moved the superior court for terminating sanctions or, in the alternative, evidentiary and issue sanctions against the district under Code of Civil Procedure section 2023.030.[1] The trial court concluded the erasure of the video was the result of negligence, and not intentional wrongdoing, and denied the request for terminating sanctions. However, the court granted the request for evidentiary, issue, and monetary sanctions because it concluded that, even before the lawsuit was filed, the district should have reasonably anticipated the alleged sexual assault would result in litigation and, therefore, the district was under a duty to preserve all relevant evidence including the video.

In this original proceeding, the district argues the trial court applied the wrong legal standard when it ruled the district had the duty to preserve the video before it was erased and, therefore, that the district was not shielded from sanctions by the safe-harbor provision of section 2023.030, subdivision (f) (hereafter § 2023.030(f)). We stayed the proceedings in the trial court and subsequently issued an order to show cause. After considering real parties in interest’s opposition to the petition and the district’s reply, we now grant the petition and direct the trial court to vacate its sanctions order and reconsider its ruling.

As explained post, we hold the safe-harbor provision of section 2023.030(f) shields a party from sanctions for the spoliation of electronic evidence only if the evidence was altered or destroyed when the party was not under a duty to preserve the evidence, and the duty to preserve relevant evidence is triggered when the party is objectively on notice that litigation is reasonably foreseeable, meaning litigation is probable and likely to arise from an incident or dispute and not a mere possibility. Although the trial court used some language in its order that seems to indicate the court believed the duty to preserve evidence arises when litigation is a mere possibility, the court nonetheless appears to have applied the reasonably foreseeable standard advanced by the district in its opposition to the sanctions motion. However, we conclude the extant record does not support the trial court’s ruling that, at the time the video was erased, the district was on notice that litigation about Doe’s alleged sexual assault was reasonably foreseeable.

I.
FACTS AND PROCEDURAL BACKGROUND

In their complaint, real parties in interest alleged Doe was a minor and a student enrolled in classes at one of the district’s high schools. Doe required constant adult supervision in or outside the classroom. School personnel had reassured Doe’s father that Doe would not be allowed to move freely around the campus unsupervised “because of his susceptibility to suggestion and [because he] might wander anywhere with anyone.”

Real parties in interest alleged that, on or about March 8, 2019, two male students took Doe, who was not supervised by an adult at the time, to a bathroom where they sexually assaulted him. Real parties in interest alleged the same two students had sexually assaulted Doe on five or six prior occasions, and they threatened Doe that if he told anyone what had happened or if he resisted inappropriate sexual advances “something bad would happen to him.” They also alleged, “the incident of the boys entering into the bathroom to abuse [Doe] was video-recorded.” Real parties in interest alleged the sexual assault was the result of the district’s breach of its duty to protect and supervise Doe while on school grounds. The complaint stated causes of action for negligence and sexual harassment by Doe and a cause of action for negligent infliction of emotional distress by Doe’s mother and father.[2]

When the high school’s assistant principal was informed of the alleged incident, he and a security officer reviewed video footage for March 5, 6, and 7, 2018, from cameras positioned in the lunchroom. According to the assistant principal, the video footage for March 7 showed Doe seated next to another student in the lunchroom. The other student made a gesture with his hand, Doe nodded, and the two got up from the lunch table and walked toward the locked bathroom. When a third student walked out of the bathroom, Doe and the other student entered the bathroom. They were inside the bathroom for about four minutes. A classroom aid, who did not know the boys were inside the bathroom, escorted another student to the bathroom. Doe and the other student then exited the bathroom and lined up with the rest of the class for physical education.

On March 21, 2018, the assistant principal wrote a half-page narrative report about the incident and forwarded it to the district’s risk manager. The assistant principal did not save the March 7 video footage from the lunchroom because he assumed the school security officer had done so or would do so. The video was automatically erased 14 days after the alleged assault.

On September 5, 2018, real parties in interest submitted a government claim for damages to the district.

In their sanctions motion, real parties in interest argued that, because witnesses no longer remembered details of the incident or precisely what the video depicted, real parties in interest were “left with only a limited account” of what had taken place and they were “severely prejudiced” in their ability to develop their case. They argued the trial court should impose a terminating sanction under section 2023.030 by striking the district’s answer and entering a default judgment because: (1) the district knew the importance of preserving the video; (2) the district’s failure to preserve the video proved they had intentionally destroyed evidence; and (3) real parties in interest were prejudiced by the loss of crucial evidence. In the alternative, real parties in interest requested the trial court impose issue and evidence sanctions that essentially precluded the district from proving it did not act negligently and/or that Doe was contributorily negligent. In addition, they requested monetary sanctions in the amount of $7,060.

In its opposition, the district argued the trial court should deny the motion in its entirety. According to the district, it was shielded from any sanctions for the routine and good faith erasure of the video, under the safe-harbor provision of section 2023.030(f), because it was not under a duty to preserve evidence at the time of the erasure. Relying primarily on federal caselaw on the spoliation of evidence, the district argued a duty to preserve evidence that might be relevant in future litigation does not arise until litigation is reasonably foreseeable, meaning it is probable and not merely a possibility. The district argued that, when the video was erased, a lawsuit from Doe was a mere possibility.

In reply, real parties in interest argued the district did reasonably anticipate that litigation would arise from the incident, that the safe-harbor provision of section 2023.303(f) did not apply, and that the district’s intentional destruction of crucial evidence warranted imposition of discovery sanctions.

At the hearing on the motion, counsel for the district argued the motion should be denied because Doe’s lawsuit was not probable when the video was erased. Counsel argued there was no evidence the district had “any notice there was going to be litigation,” and the record did not show the district “had actual knowledge that it was probable litigation would be pending.” Counsel for real parties in interest argued that, based on its practice of saving video footage for law enforcement investigations, the district was on notice of potential litigation. In addition, they argued the district was under a statutory duty to preserve the video.

In its written order dated February 23, 2022, the trial court ruled that the assistant principal (and, therefore, the district) knew the video would be important evidence “if any further investigation, or eventual investigation, arose from the incident.” Based solely on the district’s special relationship with Doe and its attendant duty of care toward him, the court ruled the district “had a duty to preserve the video footage.” The court found that, as early as March 9, 2018, the day Doe’s father was informed of the alleged sexual assault, “it was reasonably foreseeable the incident might result in litigation because of School’s special duty to Doe.” Therefore, the court implicitly rejected the district’s assertion that it was shielded from sanctions by the safe-harbor provision of section 2023.030(f).

However, the court ruled the erasure of the video was “a negligent act due to a lack of due diligence” and not an “intentional act,” so the court denied real parties in interest’s request for terminating sanctions. Instead, the trial court imposed on the district issue and evidence sanctions (set forth in toto in the margin) that essentially precluded the district from defending against the remaining cause of action for negligence.[3] Finally, the court imposed monetary sanctions in the amount of $4,260.

On March 14, 2022, the district filed, in this court, a petition for writ of mandate and/or prohibition and requested an immediate stay of the proceedings in the trial court. On March 25, we issued a stay of the proceedings and invited real parties in interest to file a response. Real parties in interest filed their response on April 21, and on May 2 we issued an order to show cause why the petition should not be granted. The district filed its traverse on May 12, 2022.

II.
DISCUSSION

A. Standard of Review.

Orders imposing discovery sanctions are reviewed for abuse of discretion. (Cornerstone Realty Advisors, LLC v. Summit Healthcare REIT, Inc. (2020) 56 Cal.App.5th 771, 789.) “`We view the entire record in the light most favorable to the court’s ruling, and draw all reasonable inferences in support of it. [Citation.] . . . . The trial court’s decision will be reversed only “for manifest abuse exceeding the bounds of reason.”‘” (Sabetian v. Exxon Mobile Corp. (2020) 57 Cal.App.5th 1054, 1084.) A sanctions order exceeds the bounds of reason when the trial court acted in an “arbitrary, capricious, or whimsical” fashion. (Van v. LanguageLine Solutions (2017) 8 Cal.App.5th 73, 80.)

The trial court’s findings of fact that underlie a discovery sanction are reviewed for substantial evidence. (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390-391.) “In this regard, `the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination [of the trier of fact].'” (Ibid.) And, “[t]o the extent that reviewing the sanction order requires us to construe the applicable discovery statutes, we do so de novo, without regard to the trial court’s ruling or reasoning.” (Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 401.)

B. A Trial Court May Impose Sanctions for the Spoliation of Electronically Stored Information If It Was Lost or Destroyed After the Party To Be Sanctioned Was Under a Duty To Preserve the Evidence Because It Was Relevant To Reasonably Foreseeable Future Litigation, Meaning Litigation That Was Probable or Likely To Arise.
Determining whether the trial court abused its discretion when it imposed the discovery sanctions in this case requires us to interpret the safe-harbor provision of section 2023.030(f). “`”The fundamental purpose of statutory construction is to ascertain the intent of the lawmakers so as to effectuate the purpose of the law. [Citation.] `We begin by examining the statutory language, giving the words their usual and ordinary meaning. [Citation.] If there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs. [Citation.] If, however, the statutory terms are ambiguous, then we may resort to extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.] In such circumstances, we “`select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.'”‘”‘” (Carrasco v. State Personnel Board (2021) 70 Cal.App.5th 117, 139.)

For the following reasons, we hold the safe-harbor provision of section 2023.030(f) insulates a party from discovery sanctions for the material alteration or destruction of electronically stored information if the evidence was lost before the party had a duty to preserve it. The duty to preserve evidence arises when the party in possession and/or control of the electronically stored information was objectively aware the evidence was relevant to reasonably foreseeable future litigation, meaning the future litigation was probable or likely to arise from an event, and not merely when litigation was a remote possibility.

1. The plain language of section 2023.030(f) tethers the application of the safe-harbor provision to the loss of evidence before the party to be sanctioned had a duty to preserve it.

Section 2023.030 provides that a trial court may impose monetary and/or nonmonetary sanctions on a party or the party’s attorney for “misuse of the discovery process.”[4] “Among other forms of sanctions, the court may `impose an issue sanction by an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses.’ ([§ 2023.030], subd. (b).) The court may also prohibit the party from introducing designated matters in evidence. (Id., subd. (c).)” (Aghaian v. Minassian (2021) 64 Cal.App.5th 603, 618; see New Albertson’s, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1422.) And, in extreme cases, the trial court may issue terminating or contempt sanctions. (§ 2023.030, subds. (d), (e).)

One serious form of discovery abuse is the spoliation of evidence, which is defined as the destruction or alteration of relevant evidence or the failure to preserve evidence for another party’s use in pending or future litigation. (Strong v. State of California (2011) 201 Cal.App.4th 1439, 1458; Reeves v. MV Transportation, Inc. (2010) 186 Cal.App.4th 666, 681; Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223.) “No one doubts that the intentional destruction of evidence should be condemned. Destroying evidence can destroy fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action. Destroying evidence can also increase the costs of litigation as parties attempt to reconstruct the destroyed evidence or to develop other evidence, which may be less accessible, less persuasive, or both.” (Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 8 [holding Cal. does not recognize a common law cause of action for the spoliation of evidence].)

“Chief among” the nontort remedies for the spoliation of evidence “is the evidentiary inference that evidence which one party has destroyed or rendered unavailable was unfavorable to that party.” (Cedars-Sinai Medical Center v. Superior Court, supra, 18 Cal.4th at p. 11.) In addition, “[d]estroying evidence in response to a discovery request after litigation has commenced would surely be a misuse of discovery within the meaning of [former] section 2023, as would such destruction in anticipation of a discovery request,” and the available sanctions to remedy that abuse include such “potent” measures as “monetary sanctions, contempt sanctions, issue sanctions ordering that designated facts be taken as established or precluding the offending party from supporting or opposing designated claims or defenses, evidence sanctions prohibiting the offending party from introducing designated matters into evidence, and terminating sanctions that include striking part or all of the pleadings, dismissing part or all of the action, or granting a default judgment against the offending party.” (Cedars-Sinai, at p. 12.)

The safe-harbor provision of section 2023.030(f) specifically addresses when a trial court is authorized to impose sanctions for the spoliation of “electronically stored information”[5] (ESI). “Notwithstanding subdivision (a), or any other section of this title, absent exceptional circumstances, the court shall not impose sanctions on a party or any attorney of a party for failure to provide electronically stored information that has been lost, damaged, altered, or overwritten as the result of the routine, good faith operation of an electronic information system.” (§ 2023.030(f)(1).) Finally, section 2023.030(f)(2) provides: “This subdivision shall not be construed to alter any obligation to preserve discoverable information.”

What constitutes alteration or destruction of ESI during the “routine, good faith” operation of an electronic storage system is clearly tethered to whether the party in possession of and/or control of the information was under an “obligation to preserve discoverable information” at the time the information was altered or destroyed. (§ 2023.030(f)(1), (2).) However, the statute does not define when a party is under such an obligation to preserve information and, instead, expresses an intent not to “alter” such an obligation that may independently exist. (Ibid.)

2. The relevant legislative history demonstrates the safe-harbor provision of section 2023.030(f) was not intended to relieve a party of its duty to preserve evidence when future litigation is reasonably anticipated.

Although section 2023.030(f) is silent about when a duty to preserve ESI arises, its legislative history provides some guidance.[6] Section 2023.030 was enacted in 2004 as part of the Civil Discovery Act. (§ 2016.010 et seq., as added by Stats. 2004, ch. 182, § 23.) The Civil Discovery Act did not, however, “expressly address issues relating to the discovery of electronically stored information.” (Jud. Council of Cal., Rep. on Electronic Discovery: Proposed Legislation (Apr. 16, 2008) p. 1.)[7] In a report submitted to the Legislature, the Judicial Council of California proposed legislation to “modernize the Code of Civil Procedure to reflect the growing importance of discovery of electronically stored information.” (Id. at p. 3.)

Relevant here, the Judicial Council’s report addressed the “important issue . . . of whether sanctions should be imposed on a party that fails to produce electronically stored information that has been lost, damaged, altered, or overwritten because of the routine, good faith operation of an electronic information system.” (Jud. Council of Cal., Rep. on Electronic Discovery: Proposed Legislation, supra, at p. 8.) It recommended the Legislature “add new `safe harbor’ provisions to several sanctions statutes, stating: `absent exceptional circumstances, the court shall not impose sanctions on a party or its attorneys for failure to provide electronically stored information lost, damaged, altered, or overwritten as a result of the routine, good-faith operation of an electronic information system.'” (Ibid.) In addition, the report recommended that, “after each of the new `safe harbor” provisions described above, the following sentence would be added: `This subdivision shall not be construed to alter any obligation to preserve discoverable information.'” (Ibid.)

In 2009, the Legislature enacted the Electronic Discovery Act, which “largely implement[ed]” the Judicial Council’s recommendations. (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 5 (2009-2010 Reg. Sess.) June 9, 2009, p. 1.)[8] The act was designed to “`eliminate uncertainty and confusion regarding the discovery of electronically stored information, and thereby minimize unnecessary and costly litigation that adversely impacts access to the courts.’ (Stats 2009, ch. 5, § 23.) The act added several provisions to the Code of Civil Procedure to integrate . . . (ESI) into the discovery law . . . .” (Park v. Law Offices of Tracey Buck-Walsh (2021) 73 Cal.App.5th 179, 188.) Like the Judicial Council, the Legislature was concerned with a “distinctive feature of electronic information systems,” to wit, “the routine modification, overwriting, and deletion of information which accompanies normal use.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 5, supra, June 9, 2009, p. 10.) To address that specific concern, the Electronic Discovery Act enacted the recommended safe-harbor provision. (Ibid.)

The legislative history of the Electronic Discovery Act demonstrates the safe-harbor provisions were not intended to “relieve parties of their obligations to preserve discoverable information. When a party is under a duty to preserve information because of pending or reasonably anticipated litigation, a party would still be required to modify or suspend features of the routine operation of a computer system to prevent loss of information.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 5, supra, June 9, 2009, p. 10, italics added.)

The Electronic Discovery Act did not amend section 2023.030, but the Legislature addressed that and other apparent oversights in 2012 when it enacted Senate Bill No. 1574 (2011-2012 Reg. Sess.). (See Vasquez v. California School of Culinary Arts, Inc. (2014) 230 Cal.App.4th 35, 41 [the Electronic Discovery Act “was amended in 2012 to expand the provisions regarding electronic discovery”].) Inter alia, Senate Bill No. 1574 amended section 2023.030 to add the safe-harbor provision for ESI and the accompanying language that the section “shall not be construed to alter any obligation to preserve discoverable information.” (§ 2023.030(f)(2), as amend. by Stats 2012, ch. 72, § 19.) As with the Electronic Discovery Act, the legislative history of Senate Bill No. 1574 demonstrates the Legislature expressly intended that the safe-harbor provision of section 2023.030(f) “would not otherwise relieve parties of their obligations to preserve discoverable information,” and that, “[w]hen a party is under a duty to preserve information because of pending or reasonably anticipated litigation, a party would still be required to modify or suspend features of the routine operation of a computer system to prevent loss of information.” (Sen. Com. on Judiciary, Analysis of Sen. Bill. No. 1574 (2011-2012 Reg. Sess.) as amend. Apr. 19, 2012, p. 10, italics added.)[9]

In short, the legislative history demonstrates the safe-harbor provision of section 2023.030(f) is intended to shield a party or a party’s attorney from sanctions for the alteration or destruction of ESI only if the evidence was lost before the party was under a duty to preserve that evidence “because of pending or reasonably anticipated litigation.” (Sen. Com. on Judiciary, Analysis of Sen. Bill. No. 1574, supra, as amend. Apr. 19, 2012, p. 10, italics added.) However, the legislative history does not answer the question: what constitutes reasonably anticipated litigation? Nor does the extant California caselaw provide an answer.[10] (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 8:19.16, pp. 8A-12 to 8A-13 [noting “there is no known California authority in point” regarding a party’s duty to preserve ESI].)

3. Under persuasive federal caselaw about the spoliation of evidence, a duty to preserve evidence arises when the party to be sanctioned was objectively aware that future litigation was reasonably foreseeable, meaning the litigation was probable or likely to arise from an incident.

“There is little California case law regarding discovery of electronically stored information . . . . We look, therefore, to federal case law on the discovery of electronically stored information under the Federal Rules of Civil Procedure for guidance on the subject.” (Vasquez v. California School of Culinary Arts, Inc., supra, 230 Cal.App.4th at pp. 42-43; see Reeves v. MV Transportation, Inc., supra, 186 Cal.App.4th at pp. 681-682 [discussing federal case law on the spoliation of evidence].) “`Because of the similarity of California and federal discovery law, federal decisions have historically been considered persuasive absent contrary California decisions.'” (Ellis v. Toshiba America Information Systems, Inc. (2013) 218 Cal.App.4th 853, 861, fn. 6, quoting Liberty Mutual Ins. Co. v. Superior Court (1992) 10 Cal.App.4th 1282, 1288; accord, Nagle v. Superior Court (1994) 28 Cal.App.4th 1465, 1468.)

The federal courts have held that “`a party can only be sanctioned for destroying evidence if it had a duty to preserve it.'” (Micron Technology, Inc. v. Rambus Inc. (Fed. Cir. 2011) 645 F.3d 1311, 1320 (Micron).) “Spoliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” (Silvestri v. General Motors Corp. (4th Cir. 2001) 271 F.3d 583, 590, citing West v. Goodyear Tire & Rubber Co. (2d Cir. 1999) 167 F.3d 776, 779, italics added.) “The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation.” (Silvestri, at p. 591; see Gerlich v. U.S. Department of Justice (D.C. Cir. 2013) 711 F.3d 161, 170-171 [“Other circuit courts of appeals have held that a duty of preservation exists where litigation is reasonably foreseeable. . . . We now do likewise.”].)

Whether litigation is “`reasonably foreseeable'” “is an objective standard, asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation. [¶] When litigation is `reasonably foreseeable’ is a flexible fact-specific standard that allows a district court to exercise the discretion necessary to confront the myriad factual situations inherent in the spoliation inquiry. [Citation.] This standard does not trigger the duty to preserve documents from the mere existence of a potential claim or the distant possibility of litigation. [Citation.] However, it is not so inflexible as to require that litigation be `imminent, or probable without significant contingencies . . . .'” (Micron, supra, 645 F.3d at p. 1320.)

The parties agree that the reasonably foreseeable standard is the correct test for determining when a party is under a duty to preserve evidence for purposes of the safe-harbor provision of section 2023.030(f), but they disagree about the meaning of the standard. The district argues future litigation is reasonably foreseeable if it is probable or likely to arise from an incident, but litigation is not foreseeable if it is a mere possibility. Real parties in interest reject the suggestion that future litigation must be probable or likely for it to be reasonably foreseeable. We agree with the district.

Many federal district courts have ruled that the duty to preserve evidence arises when future litigation is “probable” or “likely.” (E.g., Freidig v. Target Corp. (W.D. Wisc. 2018) 329 F.R.D. 199, 207 [“When a party is aware of an accident that it knows is likely to cause litigation, it triggers the party’s duty to preserve evidence.”]; In re Napster Inc. Copyright Litigation (N.D. Cal. 2006) 462 F.Supp.2d 1060, 1068 [“The future litigation must be `probable,’ which has been held to mean `more than a possibility.'”]; Realnetworks, Inc. v. DVD Copy Control Ass’n (N.D. Cal. 2009) 264 F.R.D. 517, 524 [same].)[11] Relying on Hynix Semiconductor Inc. v. Rambus Inc. (Fed. Cir. 2011) 645 F.3d 1336 (Hynix II), real parties in interest argue those decisions are not good law. We are not persuaded.

In Hynix Semiconductor Inc. v. Rambus, Inc. (N.D. Cal. 2006) 591 F.Supp.2d 1038 (Hynix I), vacated in part by Hynix II, supra, 645 F.3d 1336, the district court addressed a motion to dismiss the defendant’s patent counterclaims based on unclean hands because it “adopted a document retention plan in order to destroy documents in advance of a planned litigation campaign . . . .” (Hynix I, at pp. 1041-1042.) The court noted that “the primary question” was whether the defendant adopted its document retention policy “in advance of reasonably foreseeable litigation.” (Id. at p. 1060.) “[T]he obligation to preserve evidence arises when `the party has notice that the evidence is relevant to litigation—most commonly when suit has already been filed, providing the party responsible for the destruction with express notice, but also on occasion in other circumstances, as for example when a party should have known that the evidence may be relevant to future litigation.'” (Hynix I, supra, 591 F.Supp.2d at p. 1061, quoting Kronisch v. U.S. (2d Cir. 1998) 150 F.3d 112, 126.) “`When a lawyer who has been retained to handle a matter learns that litigation is probable or has been commenced, the lawyer should inform the client of its duty to preserve potentially relevant documents . . . .'” (Hynix I, at p. 1061, quoting American Bar Association Section of Litigation, Civil Discovery Standards (Aug. 1999) Standard 10.) “`[P]robable’ . . . means that litigation must be more than a possibility [citations]. Litigation `is an ever-present possibility in American life.'” (Hynix I, at p. 1061.)

The court in Hynix I agreed with the plaintiff that whether litigation is “`probable’ must be viewed from the perspective of a plaintiff, who is in control of when the litigation is to be commenced,” and “that litigation is probable when litigation is contemplated.” (Hynix I, supra, 591 F.Supp.2d at p. 1061.) The court ruled, however, that the litigation in that case was not “`probable'” when the defendant adopted its document retention policy because “the path to litigation was neither clear nor immediate” and “several contingencies had to occur before [the defendant] would engage in litigation . . . .” (Id. at p. 1062.) Therefore, the court ruled the defendant had not engaged in the spoliation of evidence. (Id. at p. 1065.)

On appeal, the U.S. Court of Appeals for the Federal Circuit vacated that portion of the decision in Hynix I. (Hynix II, supra, 645 F.3d at p. 1341.) “`[S]poliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.’ [Citation.] Most relevant in this case is the point when the duty to preserve evidence begins. This determination is informed by a number of policy considerations, including `the need to preserve the integrity of the judicial process in order to retain confidence that the process works to uncover the truth,’ [citation], and must balance the reality that `litigation is an ever-present possibility in American life,’ [citation], with the legitimate business interest of eliminating unnecessary documents and data.” (Hynix II, at pp. 1344-1345.)

As in our case, the parties to Hynix II agreed that the “reasonably foreseeable” test was the correct standard but disagreed on what it meant. (Id. at pp. 1345-1347.) The plaintiff argued “that reasonable foreseeability incorporates no requirement of imminence of litigation, while [the defendant] argue[d] that `to be reasonably foreseeable, litigation must be “imminent,” at least in the sense that it is probable and free of significant contingencies.'” (Hynix II, supra, 645 F.3d at p. 1345.) The federal circuit disagreed with the district court (and with the defendant) that the “reasonably foreseeable” standard is only met when the litigation is “`”imminent.”‘” (Ibid.) “In Micron, supra, 645 F.3d 1311], this court held that that standard does not carry a gloss requiring that litigation be `imminent, or probable without significant contingencies.'” [Citation]. The district court here applied just such a standard.” (Hynix II, at p. 1345.)

“The narrow standard applied by the district court in this case vitiates the reasonable foreseeability test, and gives free reign to destroy documents to the party with the most control over, and potentially the most to gain from, their destruction. This fails to protect opposing parties’ and the courts’ interests in uncovering potentially damaging documents, and undermines the level evidentiary playing field created by discovery that lies at the heart of our adversarial system. [Citation.] [¶] Applying the correct standard of reasonable foreseeability, without the immediacy gloss, these considerations compel a finding that litigation was reasonably foreseeable prior to [the defendant’s] Second Shred Day.” (Hynix II, supra, 645 F.3d at pp. 1346-1347.) Therefore, the federal circuit held “the district court erred in applying too narrow a standard of reasonable foreseeability as requiring that litigation be immediate or certain, which was legal error,” vacated the ruling on the plaintiff’s motion to dismiss, and remanded for the district court to apply the correct standard of reasonable foreseeability set forth in Micron, supra, 645 F.3d 1311. (Hynix II, at p. 1347.)

Real parties in interest read Hynix II as expressly disapproving of Hynix I (and, implicitly, the other decisions cited, ante) to the extent it read the reasonably foreseeable standard as requiring that litigation be probable before a party has a duty to preserve evidence. But, this reflects too broad a reading of Hynix II. The federal circuit patently did not hold that the district court had erred by concluding litigation must be probable for it to be reasonably foreseeable. The same appellate court had already ruled in an earlier appeal involving the same defendant that the “`reasonably foreseeable'” test “does not trigger the duty to preserve documents from the mere existence of a potential claim or the distant possibility of litigation” (Micron, supra, 645 F.3d at p. 1320, italics added), which is consistent with saying the litigation must be “probable.” Instead, Hynix II held the district court had erred when it ruled the future litigation must be “`imminent, or probable without significant contingencies.'” (Hynix II, supra, 645 F.3d at p. 1345, italics added; see PacifiCorp v. Northwest Pipeline GP (D. Or. 2012) 879 F.Supp.2d 1171, 1190 [noting Hynix II rejected a “hyper-technical reliance on terms like `probable,'” italics added].) It was the “immediacy” and “certain[ty]” glosses on the reasonable foreseeability standard that the federal circuit disapproved.[12] (Hynix II, at p. 1347.)

Moreover, the requirement that future litigation be probable or likely for it to have been reasonably foreseeable is consistent with the federal analog to Code of Civil Procedure section 2023.030(f). Rule 37(e) of the Federal Rules of Civil Procedure (28 U.S.C.) provides for sanctions “[i]f electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery . . . .”[13] “The . . . rule applies only if the lost information should have been preserved in the anticipation or conduct of litigation and the party failed to take reasonable steps to preserve it. Many court decisions hold that potential litigants have a duty to preserve relevant information when litigation is reasonably foreseeable. Rule 37(e) is based on this common-law duty; it does not attempt to create a new duty to preserve. The rule does not apply when information is lost before a duty to preserve arises.” (Fed. Rules Civ.Proc., rule 37(e), Advisory Com. notes on 2015 amendments.) “In applying the rule, a court may need to decide whether and when a duty to preserve arose. Courts should consider the extent to which a party was on notice that litigation was likely and that the information would be relevant.” (Ibid., italics added.)

Finally, we note that a probable or likely gloss on the reasonably foreseeable standard is consistent with other tests for foreseeability. For example, in the context of a claim of negligence, one of the major considerations in determining whether the defendant owed the plaintiff a duty of care is “the foreseeability of harm to the plaintiff.” (Roland v. Christian (1968) 69 Cal.2d 108, 113.) “`”[F]oreseeability is not to be measured by what is more probable than not, but includes whatever is likely enough in the setting of modern life that a reasonably thoughtful [person] would take account of it in guiding practical conduct.”‘” (Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1145, quoting Bigbee v. Pac. Tel. & Tel. Co. (1983) 34 Cal.3d 49, 57.) “Foreseeability lies on a `continuum from a mere possibility to a reasonable probability.'” (Tan v. Arnel Management Co. (2009) 170 Cal.App.4th 1087, 1101, quoting Castaneda v. Olsher (2007) 41 Cal.4th 1205, 1214.)

We find federal law on the spoliation of evidence to be persuasive and conclude the safe-harbor provision of section 2023.030(f) applies when ESI was altered or destroyed before the party in possession and/or control of the information was objectively aware that the ESI would be relevant to anticipated future litigation, meaning the litigation was “reasonably foreseeable.” (Silvestri v. General Motors Corp., supra, 271 F.3d at p. 590.) Litigation is reasonably foreseeable when it is “probable” or “likely” to arise from a dispute or incident (e.g., Macneil Automotive Products, Ltd. v. Cannon Automotive, Ltd., supra, 715 F.Supp.2d at p. 801), but not when there is no more than the “mere existence of a potential claim or the distant possibility of litigation.” (Micron, supra, 645 F.3d at p. 1320.) However, the “reasonable foreseeability” standard does not require that the future litigation be “`imminent [or] probable without significant contingencies,'” or even “certain.” (Hynix II, supra, 645 F.3d at pp. 1345, 1347, italics added.)

4. A breach of the district’s statutory duty to preserve evidence, assuming such a breach occurred, does not support the trial court’s sanctions order.

Notwithstanding the foregoing, real parties in interest argue Government Code section 53160 required the district to preserve the video and that its failure to comply with that statutory duty gives rise to an inference of the spoliation of evidence. They argue, at least implicitly, that even if this litigation was not “`reasonably foreseeable'” when the video was erased, because it was not “`probable'” or “`likely,'” the sanctions order was still correct because the district breached that statutory duty.[14]

In principle, we agree that a party may be under a statutory or regulatory duty to preserve evidence, and that, in an appropriate case, breach of that duty may result in some form of sanction. (Cf. Temple Community Hospital v. Superior Court (1999) 20 Cal.4th 464, 477 [“[T]o the extent a duty to preserve evidence is imposed by statute or regulation upon the third party, the Legislature or the regulatory body that has imposed this duty generally will possess the authority to devise an effective sanction for violations of that duty.”]; see Nelson v. Superior Court (2001) 89 Cal.App.4th 565, 572-576 [holding government claim placed a county and its sheriff’s department on notice to preserve audio recordings pursuant to Gov. Code, § 26202.6—the city and county analog to § 53160—and remanding for the trial court to decide whether destruction of the recordings was in bad faith and what, if any, sanctions were appropriate].) However, we are not persuaded that a breach of the district’s statutory duty to preserve evidence, assuming there was such a breach, is controlling here or independently supports the trial court’s sanctions order.

Government Code section 53160, subdivision (a), provides: “The head of a special district, after one year, may destroy recordings of routine video monitoring, and after 100 days may destroy recordings of telephone and radio communications maintained by the special district. This destruction shall be approved by the legislative body and the written consent of the agency attorney shall be obtained. In the event that the recordings are evidence in any claim filed or any pending litigation, they shall be preserved until pending litigation is resolved.”[15]

As real parties in interest contend, “several [federal] courts have held that destruction of evidence in violation of a regulation that requires its retention can give rise to an inference of spoliation.” (Byrnie v. Town of Cromwell Bd. of Educ. (2d Cir. 2001) 243 F.3d 93, 108-109, superseded in part by Fed. Rules Civ.Proc., rule 37(e), as stated in Mazzei v. Money Store (2d Cir. 2016) 656 Fed.Appx. 558, 560.) But those courts have only approved the application of an adverse evidentiary presumption about the content of the destroyed evidence, and they do not support the imposition of more drastic sanctions. For example, the U.S. Court of Appeals for the District of Columbia has held that entry of a default judgment as a sanction for the destruction of evidence that should have been maintained under a regulatory duty “is a `drastic’ sanction [that] is merited only when `less onerous methods . . . will be ineffective or obviously futile,'” and an “evidentiary presumption that the destroyed documents contained favorable evidence for the party prejudiced by their destruction [is] a lesser, more common sanction.” (Talavera v. Shah (D.C. Cir. 2011) 638 F.3d 303, 311.)

In addition, the main decision cited by real parties in interest held that a breach of a regulatory duty to preserve evidence will support an adverse evidentiary presumption only when “the party seeking the inference [is] a member of the general class of persons” that the duty was designed to protect. (Byrnie v. Town of Cromwell Bd. of Educ., supra, 243 F.3d at p. 109.) And the committee notes to the 2015 amendments to rule 37(e) of the Federal Rules of Civil Procedure caution against knee-jerk reliance on a statutory or regulatory duty to preserve evidence when determining whether sanctions for the spoliation of evidence are warranted. “Although the rule focuses on the common-law obligation to preserve in the anticipation or conduct of litigation, courts may sometimes consider whether there was an independent requirement that the lost information be preserved. Such requirements arise from many sources—statutes, administrative regulations, an order in another case, or a party’s own information-retention protocols. The court should be sensitive, however, to the fact that such independent preservation requirements may be addressed to a wide variety of concerns unrelated to the current litigation. The fact that a party had an independent obligation to preserve information does not necessarily mean that it had such a duty with respect to the litigation, and the fact that the party failed to observe some other preservation obligation does not itself prove that its efforts to preserve were not reasonable with respect to a particular case.” (Fed. Rules Civ.Proc., rule 37(e), Advisory Com. notes on 2015 amendments, italics added.)

Finally, under both federal and California law an adverse evidentiary presumption, as a sanction for failure to comply with a statutory or regulatory duty to preserve evidence, is only appropriate if the trier of fact concludes the evidence was intentionally destroyed. (Fed. Rules of Civ.Proc., rule 37(e)(2)(A), (B) [inference permissible if court finds “the party acted with the intent to deprive another party of the information’s use in the litigation.”]; Evid. Code, § 413 [trier of fact may draw adverse evidentiary presumption from a party’s “willful suppression of evidence”]; CACI No. 204 [“You may consider whether one party intentionally concealed or destroyed evidence. If you decide that a party did so, you may decide that the evidence would have been unfavorable to that party.”]; see New Albertson’s, Inc. v. Superior Court, supra, 168 Cal.App.4th at p. 1434.)

Real parties in interest cite no authority for the proposition that they are members of the general class of persons the Legislature intended to protect when it enacted Government Code section 53160, and we have found none. And, even assuming they are members of that general class, they would not be entitled to an adverse evidentiary presumption because the trial court expressly ruled the erasure of the video was negligent and not intentional.

Therefore, we decline to find that a breach of the district’s statutory duty to preserve evidence, assuming there was such a breach, gives rise to a presumption of the spoilation of evidence and independently supports the sanctions order.

C. The Trial Court Appears To Have Applied the Correct Legal Standard of Reasonable Foreseeability, but the Record Does Not Support its Ruling That the District Was Under a Duty To Preserve Evidence When the Video Was Erased.

The district argues the trial court applied the wrong legal standard when it ruled the district had a duty to preserve evidence before the video was erased. Although we conclude the trial court appears to have applied the correct legal standard, we conclude the record does not support its ruling.

“Normally, we must presume the trial court was aware of and understood the scope of its authority and discretion under the applicable law. [Citations.] `This rule derives in part from the presumption of Evidence Code section 664 “that official duty has been regularly performed.”‘ [Citation.] The rebuttable presumption under section 664 `”`affect[s] the burden of proof’ (Evid. Code, § 660), meaning that the party against whom it operates . . . has `the burden of proof’ as to the nonexistence of the presumed fact. (Evid. Code, § 606 . . . .)”‘” (Barriga, supra, 51 Cal.App.5th at pp. 333-334.)

“If the record demonstrates the trial court was unaware of its discretion or that it misunderstood the scope of its discretion under the applicable law, the presumption has been rebutted, and the order must be reversed. [Citation.] `”[A]ll exercises of legal discretion must be grounded in reasoned judgment and guided by legal principles and policies appropriate to the particular matter at issue.” [Citations.] Therefore, a discretionary decision may be reversed if improper criteria were applied or incorrect legal assumptions were made. [Citation.] Alternatively stated, if a trial court’s decision is influenced by an erroneous understanding of applicable law or reflects an unawareness of the full scope of its discretion, it cannot be said the court has properly exercised its discretion under the law. [Citations.] Therefore, a discretionary order based on the application of improper criteria or incorrect legal assumptions is not an exercise of informed discretion and is subject to reversal even though there may be substantial evidence to support that order. [Citations.] If the record affirmatively shows the trial court misunderstood the proper scope of its discretion, remand to the trial court is required to permit that court to exercise informed discretion with awareness of the full scope of its discretion and applicable law.'” (Barriga, supra, 51 Cal.App.5th at p. 334.)

The district contends the trial court did not apply the correct “reasonably foreseeable” standard as we have articulated, post. According to the district, the court applied too speculative a standard when it ruled the district already had a duty to preserve evidence when the video was erased because “`it was reasonably foreseeable the incident might result in litigation.'” We decline to place too much weight on the trial court’s use of the word “might.” As the trial court noted, the district itself had argued in its written opposition to the sanctions motion that it “had no reason to even suspect, let alone reasonably expect, that any litigation might arise from the alleged incident.” (Italics added.) Moreover, the trial court appears to have adopted the reasonably foreseeable standard articulated by the district in its written opposition to the motion, and the court cited federal decisions applying that standard, including Hynix II, supra, 645 F.3d 1336.

In any event, we conclude the trial court’s ruling is not supported by the extant record. The trial court noted the district had a special relationship to Doe and other students. Because of that special duty of care, the trial court ruled the district would have been on notice that litigation would arise from an injury to Doe that was allegedly caused by the district’s breach of its heightened duty of care, and such notice triggered the district’s duty to preserve the video. But the mere fact that the district owed a duty of care toward Doe, and Doe was allegedly injured, does not ineluctably lead to the conclusion that, at the time the video was erased, the district was on notice that litigation was probable or likely. At most, the trial court ruled the assistant principal “knew the significance of the video and that it would be important if any further investigation, or eventual litigation, arose from the incident.” (Italics added.)

“`The mere existence of a dispute does not necessarily mean that parties should reasonably anticipate litigation.’ [Citations.] Instead, the duty seems to begin `somewhere between knowledge of the dispute and direct, specific threats of litigation.'” (Steves and Sons, Inc. v. Jeld-Wen, Inc. (E.D. Va. 2018) 327 F.R.D. 96, 106.) “There is no single bright line that definitively marks when litigation reasonably should be anticipated. Instead, courts consider a variety of factors, including the type and seriousness of the injury; how often similar kinds of incidents lead to litigation; the `course of conduct between the parties, including past litigation or threatened litigation’; and what steps both parties took after the incident and before the loss of the evidence, including whether the defendant initiated an investigation into the incident.” (Bistrian v. Levi (E.D. Penn. 2020) 448 F.Supp.3d 454, 468.) “[A] party’s duty to preserve arises when it has notice that the documents might be relevant to a reasonably-defined future litigation. Ultimately, the court’s decision as to when a party was on notice must be guided by the particular facts of each case.” (Zbylski v. Douglas County School District (D. Colo. 2015) 154 F.Supp.3d 1146, 1164 (Zbylski); see id. at p. 1163 [factors include “notification received from a potential adversary.”].)

Real parties in interest point to nothing in the record that would necessarily have put the district on notice that the specific incident involving Doe would probably or likely have resulted in litigation. Doe’s father learned of the alleged incident a day later. But, the record before us reflects that, until Doe’s parents filed their government claim some six months later, they did not communicate with the district or with school officials in such a manner that would have reasonably caused the district to foresee litigation.[16] (See, e.g., Hollis v. CEVA Logistics U.S., Inc. (N.D. Ill., May 19, 2022, No. 19 CV 50135) ___ F.Supp.3d ___ [2022 U.S.Dist. Lexis 90234, *12] [plaintiff’s “letter that he referred to as a `formal letter of complaint against CEVA Logistics for workplace race discrimination,’ alerted CEVA both to the nature of his allegations and the relevance of any video recording of the incident” and “triggered a duty to preserve video of the incident.”]; Federal Trade Commission v. F&G International Group Holdings, LLC (S.D. Ga. 2021) 339 F.R.D. 325, 330 [defendant’s duty to preserve evidence arose when it was “put on notice” of an investigation by the Federal Trade Commission and when it was instructed to suspend normal document destruction practices].)

Nor would the mere fact of the alleged sexual assault have necessarily caused the district to immediately foresee litigation. (See Archer v. York City School District (M.D. Penn. 2016) 227 F.Supp.3d 361, 380 [rejecting argument that school district’s decision not to renew charter school, which resulted in “`the disruption of 700-800 children” and the loss of “tens of millions of dollars,” would undoubtedly have put the district on notice of probable litigation and triggered its duty to preserve an e-mail outlining the reasons to not renew the charter school].) Certain types of incidents, such as slip and fall accidents or prison assaults, predictably result in litigation. “That is not to say that the mere fact of a slip-and-fall or a prison assault is always enough to put defendants on notice of potential litigation and trigger a duty to preserve. But such an event combined with other circumstances may often be enough that defendants should reasonably anticipate litigation beginning soon after the incident itself.” (Bistrian v. Levi, supra, 448 F.Supp.3d at p. 469, italics added.) For example, a store is placed on notice that litigation is reasonably foreseeable when a customer submits a “guest incident report” stating he or she slipped and fell on a puddle. (Freidig v. Target Corp., supra, 329 F.R.D. at p. 207.) In addition, a party will be on notice that litigation arising from an injury is reasonably foreseeable when, among other things, it learns the injured persons have retained counsel. (See In re New Canyonlands by Night, LLC (D. Utah 2019) 415 F.Supp.3d 1020, 1024-1025.) Nothing similar occurred in this case.

Moreover, the mere fact that a party has conducted an internal investigation of an incident and produced a report about it does not necessarily mean the party was on notice of potential litigation. The assistant principal’s half-page narrative report merely set forth what he observed on the video, the statements he had received from school personnel, and some of the changes that had been made to “restroom protocols to enhance bathroom supervision.” Although the assistant principal prepared his report at the request of the district’s human resources department, nothing in the record indicates the district anticipated the report would be used to defend against reasonably foreseeable litigation. At most, the record demonstrates that preparation of such a report is a routine practice of the district’s risk management department for use to defend against a claim, if one is made. Without more, the report did not place the district “on ample notice of future litigation.” (Black v. Costco Wholesale Corporation (M.D. Tenn. 2021) 542 F.Supp.3d 750, 753, italics added [noting that some courts have ruled a party has a duty to preserve evidence when an internal report puts the party on notice of litigation].)

Finally, we disagree with real parties in interest’s belated assertion that the district’s invocation of the attorney-client privilege and attorney work product protection—when it opposed real parties in interest’s request for production of an unredacted copy of the assistant principal’s report—necessarily demonstrates the district was objectively aware that litigation was reasonably foreseeable before the video was erased.[17] For instance, the assistant principal’s narrative report and his e-mail transmitting the report to the district did not state the contents of the report were protected by the attorney-client privilege. (See, e.g., Zubulake v. UBS Warburg LLC (S.D. N.Y. 2003) 220 F.R.D. 212, 216-217 [ruling defendant reasonably anticipated litigation because internal company e-mails about the plaintiff were labeled attorney-client privilege and most people in the company who were associated with the plaintiff recognized the possibility she might sue].)

When a party asserts the attorney-client privilege and/or attorney work product protection over a document that had been previously entered in a privilege log, courts may consider the act of entry as evidence the party had already identified a potential claim and had reasonably anticipated it would result in litigation. (See Oracle America, Inc. v. Hewlett Packard Enterprise Company (N.D. Cal. 2018) 328 F.R.D. 543, 550-551.) In contrast, the district’s claim of attorney-client privilege made during this lawsuit, without more, “can hardly be read as an admission” that it had reasonably anticipated litigation would commence before the evidence was destroyed. (Edifecs, Inc. v. Welltok, Inc. (W.D. Wash., Nov. 8, 2019, No. C18-1086JLR) [2019 U.S.Dist. Lexis 194858, *12]; see Moore v. Lowe’s Home Centers, LLC (W.D. Wash., June 24, 2016, No. 2:14-cv-01459-RJB) [2016 U.S.Dist. Lexis 82652, *9-*10] [rejecting the plaintiff’s claim that defendant reasonably anticipated litigation and had the duty to preserve e-mails because, among other things, the defendant asserted the attorney-client privilege and attorney work product protection during the litigation].)

In short, we conclude the extant record does not support the trial court’s ruling that the district had a duty to preserve the video because litigation was reasonably foreseeable at the time the video was erased. Therefore, we grant the petition and direct the trial court to vacate its sanctions order and reconsider its ruling. The court may, in its discretion, permit the parties to introduce additional evidence that is relevant to determining whether the district was under a duty to preserve evidence at the time the video was erased.

D. If the Trial Court Once More Concludes the District Should Be Sanctioned for the Spoliation of Evidence, the Court Must Consider Whether Lesser Sanctions Are Appropriate.

Because we now direct the trial court to vacate its sanctions order and reconsider its ruling, we need not decide whether the issue and evidentiary sanctions it imposed were excessive.[18] However, if on remand the trial court once more concludes the district was under a duty to preserve the video before its erasure, the court must consider whether some lesser form of sanction is warranted.

“`The trial court has broad discretion in selecting discovery sanctions, subject to reversal only for abuse. [Citations.] The trial court should consider both the conduct being sanctioned and its effect on the party seeking discovery and, in choosing a sanction, should “`attempt[] to tailor the sanction to the harm caused by the withheld discovery.'” [Citation.] The trial court cannot impose sanctions for misuse of the discovery process as a punishment. [Citation.] [¶] The discovery statutes evince an incremental approach to discovery sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination. “Discovery sanctions `should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.'” [Citation.] If a lesser sanction fails to curb misuse, a greater sanction is warranted: continuing misuses of the discovery process warrant incrementally harsher sanctions until the sanction is reached that will curb the abuse.'” (Padron v. Watchtower Bible & Tract Society of New York, Inc. (2017) 16 Cal.App.5th 1246, 1259-1260, quoting Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.)

“A discovery order, though not in the form of a default or dismissal, is justifiably treated as such where the effect of the order is to preclude proof of essential elements of each cause of action.” (Puritan Ins. Co. v. Superior Court (1985) 171 Cal.App.3d 877, 884, citing Karz v Karl (1982) 137 Cal.App.3d 637, 648.) “The sanction of dismissal or the rendition of a default judgment against the disobedient party is ordinarily a drastic measure which should be employed with caution. [Citation.] The sanction of dismissal, where properly employed, is justified on the theory the party’s refusal to reveal material evidence tacitly admits his claim or defense is without merit.” (Puritan Ins. Co., at p. 885.) Except for in cases of extreme misconduct and when other viable options are unavailable, a trial court abuses its discretion when a sanctions order deprives a party “of any right to defend the action upon its merits” and was “designed not to accomplish the purposes of discovery but designed to punish” the party for not fully complying with its discovery obligations. (Caryl Richards, Inc. v. Superior Court (1961) 188 Cal.App.2d 300, 305; accord, Newland v. Superior Court (1995) 40 Cal.App.4th 608, 613-616 [party’s failure to timely pay monetary sanctions did not warrant terminating sanctions].)

Although the trial court ruled the erasure of the video was not intentional and denied real parties in interest’s request for terminating sanctions, the sanctions it imposed were tantamount to terminating sanctions. The district was precluded from introducing evidence—on the sole remaining cause of action for negligence—to prove that it did not breach a duty of care to Doe or that Doe was contributorily negligent. If, on reconsideration, the court once more concludes the district should be sanctioned for the spoliation of evidence, the court must consider whether some lesser form of sanction will remedy the discovery violation before it imposes the same or similar issue and evidence sanctions that it did before. We express no opinion here about what sanctions would be appropriate.

III.
DISPOSITION

The petition for writ of mandate is granted. Let a writ of mandate issue, directing the superior court to vacate its February 23, 2022 sanction order and to reconsider its ruling. The stay of proceedings issued by this court on March 25, 2022, is hereby lifted.

Petitioner shall recover its costs. (Cal. Rules of Court, rule 8.493(a)(1)(A).)

Petitioner is directed to prepare and have a writ of mandate issued, copies served, and the original filed with the clerk of this court, together with proofs of service on all parties.

RAMIREZ, P. J., Concur.

RAPHAEL, J., Dissenting.

A 14-year-old special-needs student alleges in this lawsuit that he was sexually assaulted by other students in a school bathroom. Investigating before the lawsuit, school officials viewed a monitoring camera video, taken from outside the bathroom that day, that showed employees had violated a school policy of permitting only one student at a time in the bathroom by letting two boys in with the plaintiff. The district allowed the video to be overwritten a couple of weeks after the incident, so it no longer exists. Unlike the majority, I conclude that the trial court correctly found that school officials had a duty to preserve the video because litigation about the sexual assault crime was reasonably foreseeable when the district neglected to preserve it. I therefore respectfully dissent from today’s holding.

I

On March 8, 2018, a special education teacher reported to an assistant principal employed by Victor Valley Union High School District (the defendant and petitioner) that students were discussing John Doe (the plaintiff and real party in interest) and another student engaging in a sex act in the cafeteria restroom the previous day. At that time, the school had a policy where a student needing to use the locked lunch restroom would “notify the instructional assistant” who would “open the door for the student and let them in one at a time.”

By the next school day, the assistant principal, Rafael Navarro, reviewed videos from school monitoring cameras with a security official and wrote a report about one from March 7. That video showed that Doe and another boy entered the restroom together as another boy exited, and then an instructional aide let a third boy into the bathroom. Navarro reviewed the video again when he discussed it with the principal.

Navarro testified that he assumed that the security official had saved the video, as they typically recorded such incidents. Navarro discovered, however, that the video was overwritten by new footage after about two weeks.

Doe filed a motion for terminating, issue, and evidentiary sanctions due to the loss of the video, claiming various ways his case was harmed, including identifying the students involved; “the location of individuals charged with supervising the special education students”; “which student or students instigated the activity”; and whether “coercion or force” was used to lure Doe into the bathroom.

The trial court found that the District knew “as early as March 9, 2018—the day Doe’s parents were notified of the incident—that it was reasonably foreseeable the incident might result in litigation because of the School’s special duty to Doe.” At that time, the district “should have known the video would be relevant to that potential future litigation.” Because of the statute of limitations, the district “would have known within six months” if Doe or his parents would sue, and preserving the video “would not have been burdensome.” To address the district’s “negligent failure to preserve important evidence,” the court applied significant issue and evidentiary sanctions against it.

II

Our Code of Civil Procedure has no section addressing a duty to preserve evidence where a lawsuit has not yet been filed, and our Supreme Court has never articulated a standard for judicial consideration of such a duty as the basis for civil sanctions.

Under federal law, however, the duty to preserve evidence applies “when a party reasonably should know that the evidence may be relevant to anticipated litigation.” (Silvestri v. General Motors Corp. (4th Cir. 2001) 271 F.3d 583, 591.) The majority adopts the federal test as California law and holds that the trial court applied “the correct legal standard of reasonable foreseeability.” (Maj. opn., ante, at p. 33.)

The majority also identifies case law that usefully explains what it means for litigation to be reasonably foreseeable. In particular, the majority cites a test for foreseeability our Supreme Court applied in another context: “`foreseeability is not to be measured by what is more probable than not, but includes whatever is likely enough in the setting of modern life that a reasonably thoughtful person would take account of it in guiding practical conduct.'” (Maj. opn., ante, at p. 27 [cleaned up] [quoting Kesner v. Superior Ct. (2016) 1 Cal.5th 1132, 1145 (Kesner)].)

The majority also applies a case stating that “no single bright line . . . definitively marks when litigation reasonably should be anticipated” and courts consider “a variety of factors” to determine the matter. (Maj. opn., ante, at p. 35 [quoting Bistrian v. Levi (E.D. Pa. 2020) 448 F. Supp. 3d 454, 468].) The question is when the evidence “might be relevant to a reasonably-defined future litigation” and a court “`must be guided by the particular facts of each case.'” (Maj. opn., ante, at p. 35 [quoting Zbylski v. Douglas County School District (D. Colo. 2015) 154 F. Supp. 3d 1146, 1164].)[1]

I agree with the majority on this much and join its conclusion that the trial court applied the correct legal standard when it determined that the school district had a duty to preserve the video containing evidence bearing on the alleged bathroom assault.

III

As the trial court applied the correct standard, the majority recognizes that its duty “`begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination'” of the trial court. (Maj. opn., ante, at p. 9 [quoting Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390-391].) Despite that highly deferential test, the majority holds that no substantial evidence supports the trial court’s finding that litigation was reasonably foreseeable. (Maj. opn., ante, at pp. 33-40.)

Contrary to the majority, I would conclude that ample evidence supports the trial court. In general, a “reasonably thoughtful” school official “`”in the setting of modern life”‘” would consider the possibility of litigation when aware of evidence bearing on whether and how a child’s sexual assault in a school bathroom occurred. (Kesner, supra, 1 Cal.5th at pp. 1144-1145.) School officials cannot not be expected to know detailed legal requirements. But they are professionals trained for their positions, receive communications within their industry, and are accountable to a school board for protecting public interests. Upon learning of a child’s sexual assault at school, reasonable administrators would consider that the matter might end up in court.

Our Supreme Court recognized in 1970 that school districts can be liable for student-on-student assaults through a tort action for negligently supervising the children. (Dailey v. Los Angeles School District (1970) 2 Cal.3d 741, 749-751.) The court later recognized that “a school district and its employees have a special relationship with the district’s pupils” imposing duties “beyond what each person generally owes others.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 869-870 .) That “duty of care owed by school personnel” includes an obligation to take “reasonable measures to protect students from foreseeable injury at the hands of third parties acting negligently or intentionally.” (Id. at p. 870.) The failure to take such measures thus leads to “cases of employees’ alleged negligence resulting in injury to a student by another student.” (Ibid.) School districts thus can face lawsuits that allege student sexual assaults resulted from school personnel’s failure to adequately supervise student perpetrators. (See J.H. v. Los Angeles Unified School Dist. (2010) 183 Cal.App.4th 123 [liability for negligent supervision in student-on-student sexual assault and battery]; Jennifer C. v. Los Angeles Unified School District (2008) 168 Cal.App.4th 1320 [liability for negligent supervision in sexual assault on special needs student in an alcove].) Some federal courts in other states have found litigation reasonably foreseeable to school officials simply because a student has been sexually assaulted.[2]

In California, this matter has been spotlighted for school leaders, as teachers and administrators are “mandated reporters” of child sexual assault (among other types of abuse), subject to misdemeanor prosecution if they do not within 36 hours report the assault to the police, sheriff, or county welfare department. (Pen. Code §§ 11165.1, 11165.7, 11165.9, 11166.) The Department of Justice has developed a form (Form SS 8572) for the mandated reports, and local law enforcement is required to investigate a mandated report. (Pen. Code §§ 11165.14, 11166, subd. (d)(3)(C), 11169.)[3] School districts must provide annual training to mandated reporters, through an online training module developed by the state Department of Social Services or a substitute for it. (Ed. Code § 44691.)[4] District officials would thus know that sexual battery means mandatory expulsion for a student perpetrator, giving the accused student a right to an administrative hearing and a court challenge to it. (See M.N. v. Morgan Hill Unified School Dist. (2018) 20 Cal.App.5th 607, 611, 621, fn. 9; Ed. Code §§ 48900, 48918.)

From these laws and this training, school officials would know that the video could be relevant to civil litigation; to a criminal or juvenile court proceeding; or to expulsion litigation against the alleged perpetrator. This cumulation makes it obvious that evidence about whether a sexual assault occurred and who is responsible should be preserved for litigation, such that a reasonable administrator would not need to parse out the precise likelihood of a particular claim in determining whether to preserve the video. The majority recognizes that some types of incidents “predictably result in litigation,” such as “slip and fall accidents.” (Maj. opn., ante, at p. 37.) A sexual assault of a student at school is such an incident. Reasonably thoughtful people whose profession is to govern schools, charged with a special duty of care, would consider the possibility of litigation when they possess evidence about a sexual assault of a student in their keeping.

Beyond the general and obvious need to preserve evidence of student sexual assaults, however, evidence in our record about this sexual assault provides two compelling justifications for the trial court’s determination that litigation was reasonably foreseeable once the school district reviewed the video.

First, school officials would have realized that the video may contain evidence of the district’s own negligence. The vice principal, Navarro, reviewed the video at least twice and observed evidence that supervisors failed to enforce the rule that they were to unlock the bathroom for only one student at a time, as two boys ended up inside with Doe. The school district was thereby aware that the incident may have resulted in part from a violation of a student-safety procedure by its employees. (See, e.g., Jimenez v. Roseville City School Dist. (2016) 247 Cal.App.4th 594, 602 [reversing grant of summary judgment in a negligent supervision case, in part because the “[d]istrict did not take adequate steps to disseminate and enforce” a policy increased the risk to students].) Such a rule violation would be glaring to a reasonable school administrator, even without legal training, and it distinguishes this case from some other event that the district would have no reason to think might serve as the basis for a negligent supervision lawsuit.

Second, the district recognized that it should act to obtain and preserve information about this sexual assault for future litigation, and it did so. According to a declaration from the district’s risk manager, who received Navarro’s report of the video shortly after it was drafted, and who works with school administrators and attorneys, the district “instructed me and other employees of the District to obtain confidential statements and reports immediately after an incident” such as the sexual assault “and forward them to my department.” This was done so that, when a claim is later filed against the district, “I then forward those statements and reports to any adjuster administering a potential claim and/or to attorneys assigned to assist the District in defending litigation.” Indeed, at the district’s urging, the trial court found that Navarro’s unredacted report of the incident was subject to attorney-client privilege because “the dominant purpose of the report is to communicate to attorneys the nature of the incident,” where the district asserted that the “report was, in fact, prepared in order to communicate with defense counsel effectively.” The trial court’s determination that litigation about the sexual assault was reasonably foreseeable when Navarro reviewed the video is supported by the district’s having acted at that time to prepare and preserve for litigation Navarro’s report about the video.[5] That is, the conclusion that litigation was foreseeable to the district is supported because the district actually prepared for it.[6]

Today’s opinion finds no duty to preserve evidence for litigation where all indications are that the district acted in accordance with a belief that there was a reasonable probability of litigation. The district had an established policy of preserving documentary evidence for litigation through its risk manager, and it preserved that evidence here when Navarro created and shared a written report about the video. Reflecting that intention to maintain evidence, Navarro assumed that video had been preserved by the security official who reviewed it with him, but it was not saved due to a “misunderstanding.” This simple mistake should simply burden the district with sanctions meant to compensate the plaintiff at trial for the loss of the video. Instead, it saddles the state with today’s unfortunate holding that a school district has no duty to preserve evidence that may bear on whether a sexual assault of a student was committed, how, and by whom — even when the evidence appeared to indicate the district bore some responsibility for the assault, and even when the district actually preserved some evidence about it for possible future litigation.

IV

The “safe harbor” provision found in Code of Civil Procedure section 2031.060 would sometimes prohibit sanctions for the failure to produce electronically stored information (ESI). But it has no bearing on the issue before us.

The provision prohibits sanctions for ESI “that has been lost, damaged, altered, or overwritten as the result of the routine, good faith operation of an electronic information system.” (§ 2031.060, subd. (i)(1).) The safe harbor provision, however, “shall not be construed to alter any obligation to preserve discoverable information.” (§ 2031.060, subd. (i)(2).) Here, before the video was overwritten, the school identified it, reviewed it, and determined that it contained content relevant to the district’s civil liability for negligently supervising students. At that time, there was a duty to preserve it for reasonably foreseeable litigation, just as there might be to preserve (for example) a piece of physical evidence that might indicate an assault occurred, such as an item of clothing. Nothing about the nature of ESI made preserving the video onerous. A person just had to “save” the video. The video was lost because of that failure to save it, not as the result of the district’s electronic system. Had the video been downloaded into an electronic file, it would have been preserved even if routine video overwriting continued regularly at the school.

Cases have held even more broadly that a party must suspend the routine destruction of electronic evidence when litigation is foreseeable. “Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and . . . ensure the preservation of relevant documents.” (Zubulake v. UBS Warburg LLC (S.D.N.Y. 2003) 220 F.R.D. 212, 218; see Apple Inc. v. Samsung Elecs. Co., Ltd. (N.D. Cal. 2012) 881 F.Supp.2d 1132, 1146-1147 [adverse inference jury instruction was appropriate when the defendant kept an auto-delete email policy in place even though litigation was reasonably foreseeable]; Zubulake v. UBS Warburg LLC, supra, 220 F.R.D. at p. 218 [“Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a `litigation hold’ to ensure the preservation of relevant documents”]). As the legislative history of the safe harbor provision recognized, “this provision would not otherwise relieve parties of their obligations to preserve discoverable information. When a party is under a duty to preserve information because of pending or reasonably anticipated litigation, a party would still be required to modify or suspend features of the routine operation of a computer system to prevent loss of information.” (Sen. Judiciary Comm., Bill Analysis dated 4/30/12, SB 1574 (2011-2012) Leg. Session.) This case presents an even stronger case for preserving evidence. The district’s routine overwriting of video did not have to be suspended; the district simply had to save a particular video it had identified.

The safe harbor provision might protect the school district where, acting in good faith, it did not identify ESI before it was overwritten. The situation we have, though, is a piece of identified evidence in the hands of school officials that should have been copied or downloaded, as the vice principal in fact intended.

V

The vexing question here, in my view, is identified in the last section of the majority opinion. (Maj. opn., ante, at pp. 40-42.) What sanctions are appropriate where a school has negligently failed to preserve, rather than intentionally destroyed, evidence like the video here?

As discussed above, I would hold that the trial court properly found that sanctions applied. Having decided that issue differently than the majority, I would grant the petition to order the trial court to reconsider the heavy-handed sanctions to craft them as primarily curative rather than punitive. (See Fed. R. Evid., rule 37(e)(1) [failure to take reasonable steps to preserve information requires “measures no greater than necessary to cure the prejudice”]; Fed. R. Evid., rule 37 advisory committee’s note [“curative measures” should not be so severe as would be ordered for intentional destruction]; Silvestri v. General Motors Corp., supra, 271 F.3d at p. 590 [sanctions for lost evidence should be molded to reflect prophylactic, punitive, and remedial purposes].)

That the school district here received harsh sanctions where it meant to preserve the video (but accidentally did not) obscures the potentially pernicious effect of today’s holding. Had the Victor Valley Union High School District—realizing that it might bear some culpability for a child’s sexual assault in the bathroom—decided to erase the video and shred memos about it, the majority’s holding means that no sanctions could be imposed for that destruction. Today’s opinion appears less ignominious because the school district, responsibly, intended to preserve the video. Where we hold there is no duty to preserve evidence about a school sexual assault, though, that means that there is nothing wrong with a less-responsible entity destroying it.

 

 

[1] All undesignated statutory references are to the Code of Civil Procedure.

[2] The trial court subsequently granted judgment on the pleadings for the district and dismissed the cause of action for sexual harassment without leave to amend, and the court granted a request from real parties in interest to dismiss their cause of action for negligent infliction of emotional distress.

[3] The issue sanctions were as follows: “1. District’s employees were negligent in supervising . . . students in the School’s cafeteria during lunch. [¶] 2. District and its employees did not comply with the policies and procedures for the supervision of . . . students during lunch in the cafeteria. [¶] 3. Doe was not responsible for, and did not contribute to, his alleged harm. [¶] 4. District negligently allowed the destruction of video surveillance footage of the moments immediately before and after the March 8, 2018 incident, despite having knowledge that the video evidence was relevant and needed to be preserved as evidence in potential litigation that was reasonably foreseeable.”

The evidence sanctions were as follows: “1. District is precluded from offering any evidence or argument that it did not have knowledge that School’s restrooms were being used for sexual assaults by . . . students. [¶] 2. District is precluded from offering any evidence, argument, or cross-examination that Doe was comparatively at fault for the subject incident. [¶] 3. District is precluded from offering any evidence, argument, or cross-examination that it complied with its policies and procedures relating to the supervision of students.”

[4] Section 2023.010 provides a “nonexhaustive list” of conduct that constitutes a “`misuse of the discovery process.'” (Kwan Software Engineering, Inc. v. Hennings (2020) 58 Cal.App.5th 57, 74.)

[5] “`Electronically stored information’ means information that is stored in an electronic medium.” (§ 2016.020, subd. (e).) “`Electronic’ means relating to technology having electrical, digital, magnetic, wireless optical, electromagnetic, or similar capabilities.” (Id., subd. (d).)

[6] Although the parties to this proceeding have discussed some of the legislative history materials recounted in this opinion, neither party has moved that we take judicial notice of those materials. (See Cal. Rules of Court, rules 8.252(a), 8.485(a).) We do so now on our own motion. (Evid. Code, §§ 452, 459; PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 174, fn. 11.)

[7] Available at (as of Dec. 22, 2022).

[8] Available at (as of Dec. 22, 2022).

[9] Available at (as of Dec. 22, 2022).

[10] In its petition, the district cites two nonpublished Court of Appeal decisions that did address when the duty to preserve evidence for future litigation arises. Except for in limited circumstances, nonpublished decisions of the Court of Appeal may not be cited or relied upon by a party or a court. (Cal. Rules of Court, rule 8.1115(a).) Because we find no applicable exception to that rule (id., rule 8.1115(b)), we will ignore the cited decisions.

[11] Accord, Pettit v. Smith (D. Ariz. 2014) 45 F.Supp.3d 1099, 1106 [ruling nonparty “had a duty to preserve evidence relevant to this case once it knew that litigation was reasonably likely.”]; Bruno v. Bozzuto’s, Inc. (M.D. Penn. 2012) 850 F.Supp.2d 462, 470 [“Plaintiffs had a duty to preserve evidence once litigation became likely.”]; Philips Electronics North America Corp. v. BC Technical (D. Utah 2010) 773 F.Supp.2d 1149, 1195 [“In most cases, the duty to preserve is triggered by the filing of a lawsuit, but that duty may arise even before a lawsuit is filed if a party has notice that future litigation is likely.”]; John B. v. Goetz (M.D. Tenn. 2010) 879 F.Supp.2d 787, 867 [“A duty to preserve may also arise before the filing of the complaint, if a party has notice that litigation of a matter is likely to be filed.”]; Macneil Automotive Products, Ltd. v. Cannon Automotive, Ltd. (N.D. Ill. 2010) 715 F.Supp.2d 786, 801 [party has a duty to preserve evidence “even prior to the filing of a complaint as long as it is known that litigation is likely to commence”; ruling plaintiff would not “have known that litigation between itself and [the defendant] was probable” when it disposed of evidence at issue in later litigation]; Kounelis v. Sherrer (D. N.J. 2008) 529 F.Supp.2d 503, 518 [“An independent duty to preserve relevant evidence arises when the party in possession of the evidence knows that litigation by the party seeking the evidence is pending or probable. . .”]; Cache La Poudre Feeds, LLC v. Land O’Lakes Farmland Feed, Inc. (D. Colo. 2007) 244 F.R.D. 614, 621 [“[T]he obligation to preserve evidence may arise even earlier [than the filing of a complaint] if a party has notice that future litigation is likely.”]; Creative Resources Group of New Jersey, Inc. v. Creative Resources Group, Inc. (E.D. N.Y. 2002) 212 F.R.D. 94, 106 [“[T]he duty to preserve may arise even prior to the filing of a complaint where a party is on notice that litigation is likely to be commenced.”]; Larison v. City of Trenton (D. N.J. 1998) 180 F.R.D. 261, 267 [ruling plaintiff could not prove cause of action for the spoliation of evidence because videotape of his arrest was destroyed before litigation was “pending or probable”]; Baliotis v. McNeil (M.D. Penn. 1994) 870 F.Supp. 1285, 1290 [duty to preserve evidence arises when party becomes reasonably aware of “`pending or probable litigation,'” italics omitted].)

“Unlike in the federal courts of appeals (see, e.g., U.S. Cir. Ct. Rules (9th Cir.), rules 36-1 to 36-5), in the federal district courts there is no formal provision to certify decisions for publication. District court orders that are included in reports such as the Federal Supplement are only `unofficially reported.'” (Barriga v. 99 Cents Only Stores LLC (2020) 51 Cal.App.5th 299, 316, fn. 8 (Barriga).) However, the prohibition on citing nonpublished California decisions (cited ante, fn. 10), does not apply to decisions of the lower federal courts. (Ibid.)

[12] Other circuit U.S. Courts of Appeals require that future litigation be “imminent” before a party is held to a duty to preserve relevant evidence. (See, e.g., Norman-Nunnery v. Madison Area Technical College (7th Cir. 2010) 625 F.3d 422, 428-429; Turner v. Public Service Co. of Colorado (10th Cir. 2009) 563 F.3d 1136, 1149.) We will follow the federal circuit and decline to impose such an imminence requirement on the “`reasonably foreseeable'” standard. (Micron, supra, 645 F.3d at p. 1320; see Hynix II, supra, 645 F.3d at pp. 1345, 1347.)

[13] Rule 37(e) of the Federal Rules of Civil Procedure states in full: “Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court: [¶] (1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or [¶] (2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may: [¶] (A) presume that the lost information was unfavorable to the party; [¶] (B) instruct the jury that it may or must presume the information was unfavorable to the party; or [¶] (C) dismiss the action or enter a default judgment.”

[14] The trial court did not address a statutory duty to preserve evidence.

[15] “[R]outine video monitoring’ means video recording by a video or electronic imaging system designed to record the regular and ongoing operations of the special district, including mobile in-car video systems, jail observation and monitoring systems, and building security recording systems.” (Gov. Code, § 53160, subd. (c).) “`[S]pecial district'” has the same meaning as “`public agency'” in section 53050 (§ 53160, subd. (d)), to wit, “a district, public authority, public agency, and any other political subdivision or public corporation in the state, but does not include the state or a county, city and county, or city.” (§ 53050.) For the limited purpose of this proceeding, we will assume a public school district is a “special district” as contemplated in section 53160.

[16] Real parties in interest’s reliance on J.K. v. Bellevue School Dist. No. 5 (2021) 20 Wash.App.2d 291 is misplaced. In that case, the defendant school district failed to preserve video footage that likely captured sexual assaults of a student “despite having received requests to do so—before the evidence was destroyed—from both the plaintiff and the defendant’s own counsel.” (Carroll v. Akebono Brake Corp. (2022) 22 Wn.App.2d 845, 878 [distinguishing J.K.].) No such requests to preserve the video were made in this case.

Likewise, Zbylski, supra, 154 F.Supp.3d 1146 is distinguishable. In that case, the district court ruled a school district had a duty to preserve evidence about the alleged sexual assault of a student by a teacher even before the student’s parents threatened litigation. (Id. at p. 1165.) We assume without deciding that an alleged sexual assault of a student by a teacher or adult school staff member is more likely to result in litigation than an alleged assault by a fellow student. Moreover, in Zyblski, the school district was aware of rumors of inappropriate relationships between the teacher and two other female students well before the incident alleged in the lawsuit, the school expressly promised parents that it would investigate the rumors but never conducted such an investigation, and the school placed the teacher on administrative leave. (Id. at pp. 1164-1167.)

[17] Real parties in interest did not make this argument in support of their sanctions motion and the trial court did not rely on the district’s invocation of the attorney-client privilege and attorney work product protection when it ruled the district was under a duty to preserve the video before it was erased.

[18] Nor need we decide whether the district forfeited any challenge to the severity of the sanctions by not fully articulating such a claim in its petition. (See Magana v. Superior Court (2018) 22 Cal.App.5th 840, 854, fn. 2 [finding argument petitioner had made in the trial court but did repeat in his petition was forfeited “despite his belated attempt to resurrect it in his reply brief.”]; County of Los Angeles v. Superior Court (2013) 222 Cal.App.4th 434, 452, fn. 14 [disregarding petitioner’s argument “made for the first time in its reply to opposition to petition for writ of mandate”].)

[1] Though employing these expressive descriptions of the “reasonably foreseeable” test, the majority insists upon the unenlightening “gloss” that reasonably foreseeable means “probable or likely.” (Maj. opn., ante, at p. 27.) Probable, in this context, simply “has been held to mean `more than a possibility.'” (In re Napster, Inc. Copyright Litig. (N.D. Cal. 2006) 462 F.Supp.2d 1060, 1068; RealNetworks, Inc. v. DVD Copy Control Assn, Inc. (N.D. Cal. 2009) 264 F.R.D. 517, 524 [“The future litigation must be `probable,’ which has been held to mean `more than a possibility'”].) The tests quoted in the text above are more informative.

[2] See Doe v. Fairfax County School Board (E.D. Va. June 28, 2019, No. 1:18-cv-00614-LO-MSN) [2019 U.S. Dist.LEXIS 231371, *14] [“duty to preserve started on [the date] when Oakton administrators were informed of a potential sexual assault” by a student telling persons who communicated to school officials]; Zbylski v. Douglas County School District (D. Colo. 2015) 154 F.Supp.3d 1146, 1164 (Zbylski) [“duty to preserve was triggered no later than [the date] when the School District placed [a teacher] on administrative leave” due to concerns about inappropriate conduct with children].

The majority distinguishes Zbylski partly by “assum[ing] without deciding” that teacher sexual assaults result in litigation more often than student-on-student ones. (Maj. opn., ante, at p. 36, fn.16.) That method purportedly distinguishes the case whether or not the assumed fact is incorrect. Litigation in the two situations, however, is similar in that each requires negligence by school employees apart from the perpetrator’s actions. A teacher’s abuse of a student falls “outside the scope of her employment,” so a plaintiff cannot base a claim against a district directly on the acts but instead must base it on the negligence of personnel who knew, or should have known, of the employee’s propensities but “nevertheless hired, retained, and inadequately supervised her.” (C.A. v. William S. Hart Union High School Dist., supra, 53 Cal.4th 861 at p. 865.) Contrary to the majority, I would assume that with equivalent evidence of school officials’ negligence in supervising a person, a lawsuit is equally likely whether a sexual assault perpetrator is a teacher or student.

[3] The district here had previously provided video of incidents to law enforcement, but the police did not request the video in this case until after it had been overwritten.

[4] At present, the mandated reporting website associated with the State Department of Social Services contains a four-hour general training that is a required precursor for a three-hour training for school personnel. (See [accessed Dec. 19, 2022].)

[5] The district claims that its invocation of attorney-client privilege over Navarro’s report “at best, indicates the mere distant possibility of litigation” when drafted, which it views as insufficient to trigger a duty to preserve evidence. District employees surely would provide evidence to the risk manager in situations where a skilled lawyer would deem the possibility of litigation “distant,” as well as those where a lawsuit would be more certain. But adopting the district’s view here means that litigation can be foreseeable enough that a party can choose to preserve as privileged some evidence in case of litigation (Navarro’s report of the video), but not foreseeable enough to create a duty to preserve similar evidence about the same matter (the video itself). At the least, under our deferential review standard, the privilege invocation provides substantial evidence in support of the trial court’s determination that litigation was reasonably foreseeable.

[6] It should be of no moment that the district did not receive notification of a lawsuit until well after the video was lost. One thing that is not foreseeable is that Doe’s parents—presumably concerned with dealing with a child who had been sexually assaulted, finding out the facts, and perhaps proceeding to consult a lawyer—would threaten a lawsuit within the fourteen days before the video was overwritten.

Ambassador Real Estate v. Kashay

Summary by Pejman D. Kharrazian, Esq.:

 

Management company and the owner of the management company, who also served as the community manager for a 28-unit senior mobile home community (hereinafter “Plaintiffs”), sued Kashay who is a resident and owner of the mobile home community for defamation. The Plaintiffs’ defamation claim was based on the following: (1) Kashay raised her concerns to other members about Plaintiffs’ handing of the association’s finances, their handling of a recent board election, and the Plaintiff manager’s general mistreatment of other members; (2) Kashay filed a criminal complaint with the Sheriff’s Department alleging the Plaintiff manager committed elder abuse; and (3) Kashay also filed a complaint against Plaintiff management company with the Better Business Bureau (“BBB”) claiming the management company violated its contract with the association. In response to Plaintiffs’ defamation lawsuit, Kashay filed an anti-SLAPP motion. While the trial court denied Kashay’s anti-SLAPP motion, on appeal the appellate court found that Kashay’s criminal complaint, complaint to the BBB, and statements made to the community related to Plaintiffs’ handling of the association’s finances and recent board election were protected activity under the anti-SLAPP statute. The appellate court remanded the matter to the trial court for the trial court to consider whether Plaintiffs could demonstrate that their claims are meritorious such that they would likely prevail at trial.

TAKEAWAY: Homeowner criticisms of board members, the association’s management company, or the association’s manager related to association business or other association matters may be protected activity under the anti-SLAPP statute. Consequently, if a complaint is based on a defendant’s protected activity, the plaintiff may need to overcome a defendant’s anti-SLAPP motion before the lawsuit can move forward.
Additionally, it is extremely important to have all of the evidence needed to prove each element of defamation before filing a defamation lawsuit. It is also important to confirm that any witnesses are able and willing to testify in support of your defamation claim.

***End Summary***

2022 Cal. App. Unpub. LEXIS 1970; 2022 WL 951238.

No. D078302.

Court of Appeals of California, Fourth District, Division One.

 

Filed March 30, 2022.
APPEAL from an order of the Superior Court of San Diego County, Super. Ct. No. 37-2020-00000017-CU-DF-NC, Jacqueline Stern, Judge. Reversed.

Lynna Kashay, in pro. per., for Defendant and Appellant.

Lowell Robert Fuselier, in pro. per., for Plaintiffs and Respondents.

 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

DO, J.

 

INTRODUCTION

 

Lowell Robert Fuselier, a California licensed attorney and real estate broker, owns and runs Ambassador Real Estate, Inc. (Ambassador), a property and homeowner association management service company. In July 2019, Osborne Mobile Home Park (Osborne Park), through its homeowner’s association (HOA), hired Ambassador to manage the HOA. Osborne Park is a senior community of 28 units with residents 55 years or older. Soon after Ambassador was hired, Lynna Kashay, a resident, raised concerns about the company’s management of the HOA, including its handling of the election of the HOA Board of Directors and Fuselier’s mistreatment of the members. Those concerns prompted Kashay to report Fuselier for elder abuse to the San Diego County Sheriff’s Department and to file a business complaint with the Better Business Bureau (BBB).

As a result, Ambassador and Fuselier (together, Plaintiffs) sued Kashay for defamation. As alleged in their complaint, the alleged defamatory statements arose from Kashay: (1) making a “criminal complaint against F[uselier] for [e]lder [a]buse to the San Diego Sheriff”; (2) filing “a business complaint against A[mbassador]” to the BBB; and (3) making various, vague statements “publicly” about Plaintiffs’ performance of their professional duties in managing the HOA.[1]

Kashay filed a special motion to strike the complaint as a strategic lawsuit against public participation (SLAPP) (Code Civ. Proc., § 425.16),[2] asserting that Plaintiffs filed the defamation action to chill her and other members of Osborne Park in “their attempt to speak out” against Plaintiffs’ mismanagement of the HOA. The trial court denied the anti-SLAPP motion, finding that Kashay failed to establish the alleged defamatory statements arose from any protected activity. We conclude that was error and we reverse.

 

FACTUAL AND PROCEDURAL BACKGROUND

 

 

I.

 

 

Relevant Facts

 

Osborne Park is a senior mobile home community of 28 separate units, located in Vista, California. Osborne Park was incorporated as a California non-profit mutual benefit corporation in 1987. Osborne Park, Inc. (OPI) is the corporate entity for Osborne Park. In 2018, OPI filed a “Statement by Common Interest Development Association” with the Secretary of State of California, in which it declared that it was a common interest development (CID) under the Davis-Stirling Common Interest Development Act (Davis-Stirling Act) (Civ. Code, § 4000 et seq.).[3]

The OPI articles of incorporation stated that its purpose “is to provide its members with space for mobile homes and community facilities on a non-profit basis.” The articles also stated that “any adult person” approved by the Board of Directors shall be eligible for membership, but that “at least eighty percent (80%)” of the heads of household must be 55 years of age or older, and that “no one under 45 may reside in [Osborne] Park.” (All capitalizations omitted.) According to Kashay, Osborne Park provides housing for low-income seniors, many of whom are primarily homebound due to illness or disability.

In July 2019, OPI hired Ambassador to manage the HOA. They entered into an “HOA Management Retainer Agreement” (the Agreement) for Ambassador to serve as the HOA’s “exclusive managing agent as that term is defined in California Civil Code section 4158.”[4] Civil Code section 4158 is part of the Davis-Stirling Act and defines “`managing agent'” as “a person who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development.” (Civ. Code, § 4158, subd. (a).) The Agreement provided that Ambassador “shall utilize its experience, professional skills and knowledge to assist the [HOA]’s Board and its committees in accordance with generally accepted industry standards in the area of Common Interest Development Management.” Among other responsibilities, Ambassador was to help the HOA’s Board of Directors in “accurately maintain[ing]” HOA records to comply with the Davis-Stirling Act.

In the summer of 2019, Kashay became a resident at Osborne Park.[5] Approximately six months later, in December 2019, Kashay was nominated to the HOA Board of Directors along with four other residents—Bill Bouma, John Fageol, Steve Guidry, and Sharon Payne. As reflected in the minutes of the December 10, 2019 board meeting, the nominees assumed their board positions without “the expense of an election” because “there were only nominations equal to the number of vacant positions.” Kashay “offered to be President” and Payne “offered to be Treasurer, but there was no motion or vote taken by the board to appoint the officers.”

Conflict quickly followed. According to Fuselier, Kashay “concluded that she was the President of [the] Osborne HOA over the objection of other board members.” She “immediately began issuing instructions to A[mbassador] regarding the finances of the [Osborne Park] HOA” but “A[mbassador] refused to follow [her] instructions.” When Fuselier “refused to support Kashay’s contention that she was appointed president,” Kashay “began a slanderous campaign” attacking Fuselier’s and Ambassador’s competency, “made a criminal complaint against F[uselier] for [e]lder [a]buse,” and filed a business complaint against Ambassador with the BBB.

On December 30, 2019, Fuselier sent an email to Kashay. He told Kashay: “You have 24 hours to withdraw your complaint to the BBB. If you do not, you will be named as a defendant in a suit for slander per se that I will file with the Superior Court this week. [¶] Also, if I hear that you spoke my name or the name Ambassador for any reason to anyone, I will file the action in the Superior Court.” (Italics added.) Three days later, on January 2, 2020, Fuselier and Ambassador filed this lawsuit against Kashay for defamation.

 

II.

 

 

The Defamation Lawsuit

 

In their complaint, Ambassador and Fuselier alleged their “business reputation for providing professional and ethical services to the public is critical to its success in the market place.” Further, “[k]eeping a client requires A[mbassador] to maintain a positive and trusting relationship with the HOA Board and the individual homeowners in an HOA.”

Plaintiffs alleged the Osborne Park HOA hired Ambassador to be its manager in July 2019. They attached to the complaint a copy of the Agreement for Ambassador to provide “HOA management” for Osborne Park. In December 2019, “[i]n accordance with California [l]aw and Osborne’s CC&R’s, A[mbassador] prepared election materials for the election of the Board of Directors,” but the election became unnecessary because “there were only nominations equal to the number of vacancies.” Plaintiffs also attached to the complaint a copy of the minutes of the December 10, 2019 board meeting, which showed Bouma, Fageol, Guidry, Payne and Kashay were nominated to the Board of Directors.

Plaintiffs alleged Kashay “nominated herself” for a position on the Board. “At the December 20, 2019 meeting, a disagreement arose about who should be president.” Kashay had “offered to be president . . . [but] no motion was made, and no vote was taken by the Board on the matter as required for the appointment of an officer pursuant to Osborne’s CC&R’s.” Plaintiffs also alleged that “Osborne’s CC&R’s require[ed] a minimum of six (6) months residency in the HOA in order to be eligible to hold a Board position” and Kashay’s “residency [was] less than 6 months at the drafting of [the] complaint.”

Plaintiffs alleged Kashay “nevertheless concluded that she was the President of [the] Osborne HOA over the objection of other board members.” She “immediately began issuing instructions to A[mbassador] regarding the finances of the HOA” but Ambassador refused to follow her instructions. Kashay then “attempted to intimidate board members into accepting her as the President” and, when they refused, Kashay “began a slanderous campaign to convince homeowners [to] force the Board to cancel A[mbassador]’s contract.”

“As part of that effort, K[ashay] made a criminal complaint against F[uselier] for [e]lder [a]buse to the San Diego Sheriff,” and “openly and publicly accused F[uselier] of the crime of [e]lder [a]buse.” Kashay then “made a second report to the San Diego Sheriff of a suspicious person harassing elderly people” while Fuselier was conducting business at the park. Law enforcement responded and Kashay identified Fuselier “as that `dangerous person.'”

Plaintiffs alleged Kashay “filed a business complaint against A[mbassador] and falsely stated in that complaint: Bob F[uselier], A[mbassador] Property Management, violating Osborne Park’s Contract. When these issues were brought to his attention, he slandered, smeared, called names, threatened, harassed, bullied and intimidated. He’s also taking advantage of the elderly and disabled.” (Italics omitted.)

Plaintiffs further alleged, “[i]ncluded but not limited to the following summary, K[ashay] has falsely and publicly stated that A[mbassador] and F[uselier] have committed crimes; breached fiduciary duties while performing their professional duties; committed gross negligence in the performance of their professional duties; breached their Contract while performing their duties; conduct[ed] management duties contrary to the Davis Sterling [sic] Act et seq.; conducted a fraudulent election; [committed] incompetence in performing management duties; improperly handled HOA funds; and [committed] the crime of [e]lder [a]buse in performing their management duties.”

Plaintiffs alleged Kashay’s statements were false, she knew them to be false and they were malicious because she made them with the intent to cause Plaintiffs injury and damage. Asserting a single cause of action for defamation, both libel and slander, Plaintiffs sought compensatory damages in an amount “exceeding $50,000” and an additional $100,000 in punitive damages.

 

III.

 

 

The Anti-SLAPP Motion

 

 

A. Kashay’s Anti-SLAPP Motion

 

As a self-represented litigant, Kashay filed a special motion to strike the complaint pursuant to section 425.16. Kashay asserted Plaintiffs filed the complaint “as an attempt to chill [hers and] an entire senior community’s First Amendment Right of free speech and their attempt to speak out regarding the way they are being treated by Plaintiff[s], improper elections, violations of [the HOA’s] Bylaws/CCRs, violations of [the] Davis-Stirling Law, and other laws.” She asserted the defamation cause of action arose from activities protected under section 425.16,[6] and identified the following three specific categories of protected speech.

First, Kashay asserted her statements criticizing Plaintiffs’ performance as the HOA manager were protected speech. She explained that “[t]here [wa]s an ongoing controversy of holding official, proper, defensible, and lawful elections of [the Osborne Park HOA] Board” that began “on or before September 10, 2019.” At some point, Kashay “was informed” by homeowners “of election irregularities,” including that “some members were not given nomination forms,” “election rules were not disseminated,” and “write-in candidates were not allowed.” So she “began communicating about the elections being improper, asking for new elections, and documenting” Plaintiffs’ alleged mishandling of the elections.

Relying on this court’s decision in Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468 (Damon), she argued the Osborne Park HOA was a “quasi-governmental entity” with “legislative, judicial, and executive duties,” and that Plaintiffs’ performance and failure to hold proper elections were “topics of public interest” that directly impacted “a narrow and definable portion of the public, namely all [28 Osborne Park members].” Thus, she contended, her statements criticizing Plaintiffs in their performance as HOA manager, specifically regarding unlawful elections, were protected speech under section 425.16, subdivisions (e)(1) through (e)(4), and were further protected as pre-litigation communication.

Second, Kashay asserted any reports to law enforcement were protected speech. She explained that she “learned from multiple” homeowners that Payne, who was appointed to the board and was a signatory on the HOA bank accounts, had a stroke in the past and is 80 years old. She asserted that “many” homeowners became “alarmed” when Payne allegedly “moved” HOA money into a new bank account with Ambassador, and the HOA “may have lost control and/or ownership of its Reserve Account funds.” On December 17, 2019, Payne told Kashay “that she was `confused’ as to why she moved . . . [HOA] money to new bank accounts, . . . that she was directed to do so by [Fuselier], and . . . that she didn’t want to be on the . . . Board but was `forced'” by Fuselier.

As a result, Kashay asserted that “[s]ome” homeowners reported “suspicions” of elder abuse to “the [p]olice.” When the police arrived on December 19, 2019, “multiple” homeowners “informed” the police “about the circumstances that they were aware of and the police looked into the matter.” Kashay pointed out that the San Diego County District Attorney’s public website encourages “`[a]nyone who has even the slightest suspicion that an elder or dependent adult is a potential victim of abuse’ “to report their concerns, and argued such reports are protected under section 425.16, subdivision (e)(1) and (e)(2). She further asserted that “[a]ll communications leading up to calling the [p]olice, with the [p]olice, and about what happened with the [p]olice” are protected activities under section 425.16, subdivision (e)(3) and (e)(4) as they, too, pertained to matters of public interest concerning a definable portion of the public.

Third, Kashay asserted her filing of the BBB complaint was protected activity. She explained that she “started a BBB reconciliation/arbitration process” regarding Plaintiffs and their “potentially unlawful activities” on December 28, 2019. She asserted that the topics addressed in the complaint were, similarly, of public interest and that “[o]nline reviews of service providers are a matter of public concern, because of the community interest in staying informed about the quality of services rendered by businesses.” She stated that she “attempted to write [an] opinion that was true and accurate regarding the services of Ambassador.” But on December 30, 2019, Fuselier sent an email to Kashay threatening to sue her for slander if she did not withdraw the BBB complaint. She attached the email as an exhibit to the motion to strike. Kashay stated that she withdrew the BBB complaint on January 2, 2020 “in response to threats [by Fuselier] of being sued if it was published.”

Kashay asserted the BBB “provides a platform and reconciliation/arbitration process to address disputes before involving the courts” and the process is substantially similar to pre-litigation communications. Thus, she argued her communications with the BBB were protected activity under section 425.16, subdivisions (e)(1) through (e)(4), as well as the pre-litigation privilege.

Although Kashay did not file a separate declaration in support of her motion to strike, Kashay personally signed the motion since she was acting in pro. per. She also attached a number of exhibits to the motion, which she asserted substantiated her claims. Among those already described, the exhibits include multiple petitions for a special meeting regarding a new election submitted by other HOA members, surveys of several HOA members regarding the allegedly improper elections, and a January 26, 2020 email from Fuselier suggesting the HOA Board of Directors not respond to the petitions. The email’s subject line was “Official Park Business[/]4th Petition for Special Meeting About Elections” and in it Fuselier told the directors, “I suggest that you do not respond to her improper demands.” Kashay also submitted a redacted bank statement for an account named “Osborne Park . . . Reserve Account,” which showed Ambassador was also named on the account.

To substantiate her claim that Fuselier was engaging in “threatening or inflaming” conduct, Kashay submitted a copy of a letter written by Fuselier on Ambassador’s letterhead, dated January 16, 2020, to another member of the HOA Board of Directors. In the letter, Fuselier told the director: “I have not done anything inappropriate, illegal, or unethical. Please stop shouting in my face and accusing me of things that I have not done. . . . [¶] Kashay is not a member of the board of directors . . . [s]he does not have a winning hand, and you should not bet on her. [¶] . . . [¶] If it is not going to be possible for us to work together, then it is a rainy day, and it will be hard for us to play ball. Just like you, I stand my ground when people try to push me around. My preference is that we both win by working together, but if we have to be at odds, so be it. Know this for sure, I am not going anywhere.”

Kashay also submitted a letter dated October 31, 2019 that was sent to Elaine Johnson, another Osborne Park member. The letter was written by an attorney named Joseph A. Lara of the Business Law Group PC, which appears to be Fuselier’s law firm. In it, Lara stated he represented Ambassador and Fuselier and accused Johnson of “[d]efamatory [s]tatements” against Ambassador and Fuselier, including public statements that she was “going to get Ambassador fired as the HOA manager,” and demanded she “cease and desist [her] slander of both.”[7] (Boldface omitted.)

 

B. Plaintiffs’ Opposition to the Anti-SLAPP Motion

 

Fuselier, representing himself and Ambassador, filed an opposition to the anti-SLAPP motion. Plaintiffs argued the motion to strike failed for seven reasons: (1) the alleged defamatory statements were not a matter of public interest, as they advanced Kashay’s personal agenda to be president of the HOA Board of Directors; (2) the alleged defamatory statements were not made in a public forum because Osborne Park was not a CID under the Davis-Stirling Act; (3) Kashay was not a member of the HOA and therefore did not have standing to complain; (4) the alleged defamation was “[k]nowingly [f]alse and [m]aliciously [m]ade”; (5) the motion to strike was not supported by a sworn declaration; (6) the litigation privilege does not apply; and (7) Plaintiffs had a high probability of success on the merits.

In support of their opposition, Plaintiffs filed declarations from Fuselier, Payne, Fageol, and attorney Lara. The record indicates that Fuselier “prepare[d]” both the Payne and Fageol declarations himself.[8] Payne’s declaration stated: “I am not incompetent,” “I am not confused,” “I am not afraid,” “I am not powerless,” and “I am not controlled by Ambassador or Fuselier.” Both the Payne and Fageol declarations stated that the HOA Board of Directors removed Kashay from the board after concluding she “had not been a resident of Osborne for 6 months at the time that the new board was constituted.”

Lara averred that after researching Osborne Park’s history between February 17 to February 24, 2020, he determined Osborne Park was incorporated as a non-profit mutual benefit corporation on February 3, 1987 and, in his opinion, Osborne Park “does not meet the [Davis-Stirling Act’s] requirements for it to be considered a CID” because “there has never been CC&Rs recorded” nor has a “`final map or parcel map'” been recorded regarding the property.

In his own declaration, Fuselier provided additional details regarding the dispute that arose from the election of the HOA Board of Directors and the alleged defamation. Specifically as to the BBB complaint, Fuselier averred that Kashay “filed a defamatory complaint with the [BBB]” and “submitted an untrue review to the BBB accusing Ambassador of despicable behavior.” He disputed “K[ashay]’s claim that she withdrew the complaint” as “false.” Elsewhere, he averred that Kashay made the defamatory statements “publicly” to the BBB. He further asserted that Kashay also committed defamation by “republishing” defamatory statements made by “The San Diego Minute Men and its president, Jeff Schwilk,” whom Fuselier had represented in a federal lawsuit, regarding a legal dispute with Fuselier’s prior law firm over funds held in a trust account. Fuselier also asserted that Osborne Park “has no CC&Rs” and is not a CID.

Plaintiffs also filed evidentiary objections to Kashay’s special motion to strike, including multiple objections to nearly every statement made in the motion and to every exhibit submitted in support of the motion.

 

C. Kashay’s Responsive Declaration and Motion in Limine

 

Approximately nine days after Plaintiffs filed their opposition, Kashay filed her own declaration in support of the special motion to strike. Kashay averred that she did own a home in Osborne Park, and that she was in good standing. She further declared that Osborne Park “has had and does have ongoing controversies, that predate [her], regarding . . . having proper and lawful elections” and whether Ambassador should continue managing the HOA. She re-asserted the defamation lawsuit was a clear attempt to prevent her, and other Osborne Park members, from speaking up about these abuses. As with the original motion, Plaintiffs filed extensive evidentiary objections to Kashay’s declaration.

Kashay also filed a “Motion in Limine” before the original hearing date on her special motion to strike, in which she raised evidentiary objections to the declarations of Lara, Payne and Fageol. She attached several exhibits to the motion in limine, which she argued demonstrated the falsity of several assertions in Plaintiffs’ declarations.

Addressing Lara’s and Fuselier’s declarations averring that Osborne Park was not a CID under the Davis-Stirling Act, Kashay submitted a copy of the “Statement by Common Interest Development Association” that OPI filed with the Secretary of State in December 2018, declaring it to be a CID under the Davis-Stirling Act. She also submitted a copy of the “Statement of Information” filed with the Secretary of State certifying that Osborne Park was a CID under the Davis-Stirling Act. Fuselier himself signed the document on December 31, 2019, and it was subsequently filed with the Secretary of State on March 16, 2020, after Fuselier submitted his sworn declaration stating Osborne Park was not a CID. In response to Lara’s declaration that no final map or parcel map had been recorded for Osborne Park, Kashay submitted a copy of what appears to be a parcel map for Osborne Park with a stamp from the San Diego County Assessor’s Office stating it was prepared for purposes of assessment. The “recorder’s certificate” is dated June 1981.

In addition, Kashay attached a number of emails between Fuselier and various Osborne Park owners. In one, Fuselier stated, “[t]he Association is governed first by the Civil Code — Davis Sterling [sic] Act.” In another, dated December 13, 2019, Fuselier confirmed his understanding that Kashay was president of the HOA Board of Directors and provided her with a hyperlink to the Davis-Stirling Act so she could “familiarize [her]self with [her] responsibilities and obligations as president.” In a subsequent email dated January 27, 2020, Fuselier told Kashay the petitions she had submitted for a special meeting had been reviewed by legal counsel and were not actionable as they were not for a proper purpose.

In the motion in limine, Kashay alerted the trial court that Plaintiffs had sued three other Osborne Park members, and had threatened to sue a fourth. She concluded by stating, “[t]here are only 19 people living at Osborne Park and most of these individuals are sickly, disabled, and/or housebound. There are only a handful of active people at [Osborne Park] and Plaintiff is suing all of us.”

Plaintiffs objected to the motion in limine as an unauthorized sur-reply. In addition, they asserted the motion and the exhibits contained hearsay, and that the exhibits were not authenticated as required by Evidence Code section 1400.

 

D. The Trial Court’s First Tentative Ruling

 

On July 8, 2020, Judge Earl Maas issued a tentative ruling denying Kashay’s special motion to strike. The trial court focused exclusively on the communications regarding the allegedly improper elections and Ambassador’s performance as manager of the HOA. The court found Kashay had not proven that “a proceeding before a homeowner’s association is an `official proceeding authorized by law’ within the meaning of [section 425.16] subdivisions (e)(1) or (e)(2).” As to subdivision (e)(3), the court found Kashay “failed to establish that the alleged defamatory statements were made in a public forum.” The court stated, unlike Damon, “[t]he alleged defamatory statements [at issue here] were not made in a board meeting or an official newsletter. [Kashay] has failed to cite any authority that the e-mails and statements were made in a public forum.”[9] As to subdivision (e)(4), the court found the statements were not made in connection with an issue of public interest because they did not impact “`a broad segment of society.'” The court distinguished the present case from Damon once again, based on the fact that there were approximately 3,000 members in the HOA at issue in Damon. As a final matter, the court awarded Plaintiffs—who were represented by Fuselier in pro. per.—$12,000 in attorney fees for time spent preparing their opposition.

Kashay asked for a continuance at the July 10, 2020 hearing, due to a family emergency. The court granted the motion and continued the matter to September 11. The court also granted Kashay leave to file additional papers related to her motion, on or before August 28, and likewise permitted plaintiffs to file a reply, no later than September 4.

Kashay filed a brief opposition to the trial court’s tentative ruling on July 20, 2020. On August 28, she filed a supplemental brief. The brief was supported by her own declaration and she stated twice, at the outset and conclusion of the brief, “I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. [¶] All the content of the Motion to Strike is included herein, including any and all attachments and exhibits, under penalty of perjury.” Kashay pointed out that the complaint alleged defamation based on the reports of elder abuse to law enforcement and the BBB complaint. She asked the court to, at a minimum, strike those allegations.

On September 8, 2020, Kashay filed a second supplemental brief. Kashay alleged Plaintiffs were continuing the pattern of intimidation and threats of lawsuits against her and other members of Osborne Park. She included a declaration, under penalty of perjury, and a number of exhibits. The first exhibit is an email from Fuselier to Bouma, a member of the HOA Board of Directors, and although it is undated, the content indicates the email was at least sent after Judge Maas issued the court’s tentative ruling. Fuselier began the email with, “Bill I am so tire[d] of your stupidity,” and continued with the following statements, in part: “Ambassador is the property manager because Judge Stern of the Superior Court put me in charge of Osborne to protect the other owners. You never had the authority to fire Ambassador. Only the Board of Directors for Osborne can fire me, and that is not you and your band of crazies.” Fuselier attached Judge Maas’s tentative ruling on the motion to strike to the email, and told Bouma:

“The things you and your group have said about me are actionable in court. That is where Kashay is now. She lost her motion to stop my case, and the judge sanctioned her $12,000 for her meritless motion. His ruling is attached. . . . She will pay a lot more for slandering me and Ambassador after the trial. So will anyone else that damages my reputation as a professional, ethical and honest businessman in the community.” (Italics added.)

The other exhibits include a number of other emails and letters from Fuselier to various Osborne Park members, similarly calling them “ignorant” and a “band of crazies” and threatening, “I am currently dealing with Kashay in Superior Court, and I will deal with the others in due time.”

 

E. The Trial Court’s Order Denying the Motion

 

On September 9, 2020, Judge Maas recused himself based on “familiarity . . . with one of the parties.”

After hearing argument on September 18, 2020, Judge Jacqueline M. Stern, now presiding, denied the anti-SLAPP motion. In the written order, the court noted that it “could disregard all pleadings [Kashay] filed after July 20, 2020, as unauthorized sur-replies.” However, despite what the trial court characterized as Kashay’s “blatant disregard for the court’s orders,” the court stated that it had exercised its discretion to consider all of the various supplemental materials submitted by both sides. The court did not, however, rule on any of the myriad evidentiary objections raised by Plaintiffs.

With respect to the merits, the trial court’s written order provides largely the same analysis, using verbatim much of the same language, as the previous tentative order issued by Judge Maas on July 8, 2020. However, unlike the previous tentative ruling, Judge Stern denied Plaintiffs’ request for attorney’s fees. First, the court found “[t]he motion was not frivolous in that it mostly involved statements criticizing the handling of a homeowner’s association election.” And second, Fuselier represented himself and was not entitled to an attorney fee award, as a matter of law. Kashay timely appealed.

 

DISCUSSION

 

 

I.

 

 

Relevant Legal Principles

 

Section 425.16, the anti-SLAPP statute, provides a mechanism to protect defendants from meritless lawsuits that chill their exercise of constitutional rights to speech and petition. (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 883-884; Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral); § 425.16, subd. (a).) The statute provides in pertinent part: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) The statute creates a summary-judgment-like procedure that allows for early dismissal of actions deemed to be strategic lawsuits against public participation, or SLAPP suits. (Baral, at p. 384, fn. 5; see Navellier v. Sletten (2002) 29 Cal.4th 82, 85.)

As the California Supreme Court recently explained, in Baral, a single cause of action may include multiple claims. In the context of a motion to strike pursuant to section 425.16, “courts may rule on plaintiffs’ specific claims of protected activity,” even if those claims are mixed, in a single cause of action, with other claims arising out of activity that is not protected by the statute. (Baral, supra, 1 Cal.5th at p. 393; accord Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009-1011 (Bonni) [confirming “courts should analyze each claim for relief—each act or set of acts supplying a basis for relief, of which there may be several in a single pleaded cause of action—to determine whether the acts are protected”].)

Our high court then summarized the showings and findings required by section 425.16: “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff’s showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing.” (Baral, supra, 1 Cal.5th at p. 396.)

On appeal, we independently review a trial court’s order denying a special motion to strike pursuant to section 425.16. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3 (Soukup).) Like the trial court, “[w]e consider `the pleadings, and supporting and opposing affidavits . . . upon which the liability or defense is based.’ [Citation.] However, we neither `weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.'” (Ibid.)

As this court recently explained in Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869 (Medical Marijuana), “`the issues in an anti-SLAPP motion are framed by the pleadings.’ [Citations.] Thus, the act or acts underlying a claim for purposes of an anti-SLAPP statute is determined from the plaintiffs’ allegations. [Citation.] Because the issues to be determined in an anti-SLAPP motion are framed by the pleadings, we will not `insert into a pleading claims for relief based on allegations of activities that plaintiffs simply have not identified. . . . It is not our role to engage in what would amount to a redrafting of [a] complaint in order to read that document as alleging conduct that supports a claim that has not in fact been specifically alleged, and then assess whether the pleading that we have essentially drafted could survive the anti-SLAPP motion directed at it.'” (Id. at p. 883.)

The complaint at issue pleads a single cause of action for defamation. Defamation occurs either through libel or slander. (Civ. Code, § 44.) “`The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.'” (John Doe 2 v. Superior Court (2016) 1 Cal.App.5th 1300, 1312.) Libel is defamation based on a publication in writing or other fixed, visible representation (Civ. Code, § 45; see Medical Marijuana, supra, 46 Cal.App.5th at p. 884), while slander is based on an oral utterance (Civ. Code, § 46).

Both libel and slander have special pleading requirements. Because defamation “is not committed unless the defamatory matter is `published’ or communicated to a third person[,] . . . publication must be pleaded.” (5 Witkin Cal. Procedure (5th ed. 2008) Pleading, § 740, p. 160.) Further, “`[t]he general rule is that the words constituting an alleged libel must be specifically identified, if not pleaded verbatim, in the complaint.'” (Medical Marijuana, supra, 46 Cal.App.5th at p. 884, quoting Kahn v. Bower (1991) 232 Cal.App.3d 1599, 1612, fn. 5.) The pleading requirements for slander are less strict, but even when pleading slander, “the substance of the defamatory statement” must be alleged. (Okun v. Superior Court (1981) 29 Cal.3d 442, 458 (Okun).) No matter the theory of defamation, the complaint must be alleged with sufficient certainty to “`acquaint [the] defendant with what he must defend against.'” (Medical Marijuana, at p. 894, quoting Albertini v. Schaefer (1979) 97 Cal.App.3d 822, 832-833; see also Okun, at p. 458 [discussing pleading requirements for slander; stating the complaint must “give[ ] notice of the issues sufficient to enable preparation of a defense”].)

 

II.

 

 

Kashay Met Her Initial Burden of Establishing the Defamation Claims

 

 

Arise Out of Protected Activity

 

Kashay asserts, as she did in the trial court, that the complaint alleged three categories of defamatory statements: (1) communications to law enforcement reporting elder abuse; (2) communications with the BBB in connection with a consumer complaint; and (3) communications criticizing Plaintiffs’ performance as the HOA manager, including the refusal to hold lawful elections.

Relying on Baral, Kashay contends the trial court erred by failing to address the allegations related to the first two categories. We agree. (See Bonni, supra, 11 Cal.5th at pp. 1009-1011 [“courts should analyze each claim for relief—each act or set of acts supplying a basis for relief, of which there may be several in a single pleaded cause of action—to determine whether the acts are protected”]; Baral, supra, 1 Cal.5th at p. 393 [“courts may rule on plaintiffs’ specific claims [within a cause of action] of protected activity”].) For reasons that are not apparent, the court focused solely on Kashay’s communications regarding Plaintiffs’ management of the HOA, and did not address the reports of elder abuse to law enforcement or the BBB complaint.

Kashay also asserts the trial court erred by concluding her communications criticizing Plaintiffs’ performance as the HOA manager were not protected speech because the communications did not occur in a public forum and did not pertain to issues of public interest. We agree with this contention as well. On our independent review, we conclude that Kashay has met her initial burden of establishing that all three categories of communications underlying Plaintiffs’ defamation claim fall within protected speech under section 425.16, subdivisions (e)(1), (e)(2), (e)(3), and (e)(4).

 

A. Communications to Law Enforcement

 

First, Plaintiffs alleged Kashay “made a criminal complaint against F[uselier] for [e]lder [a]buse to the San Diego Sheriff,” and “made a second report to the San Diego Sheriff of a suspicious person harassing elderly people in Osborne [Park],” whom she later identified as Fuselier. Reports of criminal activity to law enforcement are generally protected activity under section 425.16, subdivisions (e)(1) and (e)(2), as communications made in connection with an official proceeding authorized by law, so long as the reports are not admittedly false. (See Chabak v. Monroy (2007) 154 Cal.App.4th 1502, 1512 [complaints about abuse to investigative authorities arise from the right to petition the government and are protected]; but see Lefebvre v. Lefebvre (2011) 199 Cal.App.4th 696, 705 (Lefebvre) [uncontested allegation of false criminal report made for purpose of gaining litigation advantage not protected].) Plaintiffs do not contend otherwise.

Rather, in summary fashion, Plaintiffs assert that “Kashay knows her claim that Fuselier is committing elder abuse by forcing Member Payne to remain a board member is false.” As an initial matter, the allegations in the complaint are not specific to Payne. Plaintiffs alleged Kashay reported to law enforcement that Fuselier was “harassing elderly people.” Further, Plaintiffs provide no evidence that Kashay knows her claim to be false or, more importantly, that she knew it to be false when she made the report. They assert in their response brief, based on their declarations, that “[b]oth F[a]ge[o]l and Payne deny being helpless fools.” However, it is apparent from the record that it was Fuselier himself that prepared the declarations signed by Payne and Fageol. Beyond those declarations, Plaintiffs rely solely on Fuselier’s own conclusory self-serving declaration. While we accept the evidence presented by plaintiff as true under the relevant standard of review (Soukup, supra, 39 Cal.4th at p. 269, fn. 3), we may disregard “declarations that lack foundation or personal knowledge, or that are argumentative, speculative . . . or conclusory” (Gilbert v. Sikes (2007) 147 Cal.App.4th 13, 26 (Gilbert)).

Moreover, Kashay disputes that the reports were false. She contends that several Osborne Park residents had concerns over Plaintiffs’ conduct, including but not limited to Plaintiffs’ control over Payne, and that several residents made good faith complaints regarding elder abuse, which the authorities investigated. An admission that a report to law enforcement was false may render the report unlawful, thereby removing it from the protection of the anti-SLAPP statute, but the mere allegation that the report was false is not sufficient. (See Lefebvre, supra, 199 Cal.App.4th at p. 705 [admittedly false police report not protected]; Kenne v. Stennis (2014) 230 Cal.App.4th 953, 966-967 [finding an allegation that report was false insufficient to remove anti-SLAPP protection].) Where, as here, the defendant denies that the report was false, and there is no conclusive evidence to the contrary, it remains protected activity under section 425.16, subdivisions (e)(1) and (e)(2). (Kenne, at pp. 966-967.)

We therefore conclude that Kashay has met her burden of establishing the defamation claims related to Kashay’s reports of elder abuse arise from protected activity under section 425.16, subdivisions (e)(1) and (e)(2).

 

B. The BBB Complaint

 

Second, Plaintiffs alleged Kashay “publicly” filed a “business complaint” to the BBB against Ambassador in which she falsely stated: “Bob F[uselier], A[mbassador] Property Management, violating Osborne Park’s Contract. When these issues were brought to his attention, he slandered, smeared, called names, threatened, harassed, bullied and intimidated. He’s also taking advantage of the elderly and disabled.” (Italics omitted.) We note that this is the only allegedly defamatory language identified with any specificity in the complaint. (See Medical Marijuana, supra, 46 Cal.App.5th at p. 884 [“`The general rule is that the words constituting an alleged libel must be specifically identified, if not pleaded verbatim, in the complaint.'”]; Okun, supra, 29 Cal.3d at p. 458 [“the substance of the defamatory statement” must be alleged].) However, as with the reports of elder abuse to law enforcement, the trial court failed to consider whether these specific statements arose from protected activity. We conclude that they do.

Postings to consumer-oriented websites, such as Yelp or, as here, the BBB, that implicate matters of public concern that can affect other consumers—such as the business practices of a service provider—are generally considered to be protected activity under section 425.16, subdivision (e)(3). (See Chaker v. Mateo (2012) 209 Cal.App.4th 1138, 1142, 1147 (Chaker) [finding statements made on website “where members of the public may comment on the reliability and honesty of various providers of goods and services” to be protected]; Wong v. Jing (2010) 189 Cal.App.4th 1354, 1359, 1366-1367 [finding statements on Yelp criticizing dental services to be protected]); Willbanks v. Wolk (2004) 121 Cal.App.4th 883, 889-890, 894-901 [finding statements published on a consumer watchdog website concerning ethical practices of investment broker to be protected].)

“The Better Business Bureau identifies its mission as advancing trust in the marketplace by offering objective and unbiased information about business to consumers.” (Makaeff v. Trump Univ., LLC (9th Cir. 2013) 715 F.3d 254, 263 (Makaeff) [applying California law], fn. omitted.) In Makaeff, the Court of Appeals for the Ninth Circuit concluded that an individual’s statements about a business dispute to the BBB addressed issues of public interest, because “even if made in the context of a request that [the BBB] intercede in [a defendant’s private] dispute with [the subject business], [such statements] are not so easily separated from `information . . . provided to aid consumers.'” (Id. at p. 263.)

Here, Plaintiffs—in their complaint and their filings in opposition to the special motion to strike—consistently alleged that Kashay “filed a defamatory complaint with the [BBB]” and “submitted an untrue review to the BBB accusing Ambassador of despicable behavior.” In his own declaration, Fuselier specifically averred that Kashay made the defamatory statements “publicly” to the BBB.[10] The content of the BBB complaint, as Plaintiffs have alleged, included statements that “F[uselier], A[mbassador] Property Management, violat[ed] Osborne Park’s Contract” and “[w]hen these issues were brought to [Fuselier’s] attention, he slandered, smeared, called names, threatened, harassed, bullied and intimidated. He’s also taking advantage of the elderly and disabled.” (Italics omitted.) Thus, by Plaintiffs’ own account, the BBB complaint alerted other potential consumers that might otherwise contract with Ambassador of a concern regarding Ambassador’s and Fuselier’s business practices. Accordingly, we conclude the BBB complaint qualifies as protected speech under section 425.16, subdivision (e)(3). (See Chaker, supra, 209 Cal.App.4th at pp. 1142, 1147; Makaeff, supra, 715 F.3d at p. 263.) Again, Plaintiffs do not contend otherwise.

Rather, Plaintiffs summarily state that Kashay’s desired resolution was termination of Ambassador’s contract with the HOA, and that Kashay “knows” she is not a party to that contract. But they provide no legal authority to explain why that matters to the determination of whether an otherwise legitimate consumer complaint to the BBB on a matter of public interest is protected speech under section 425.16. Moreover, to make the assertion, Plaintiffs rely primarily on conclusory statements in Fuselier’s declaration, which we may disregard, as factual support.[11] (See Gilbert, supra, 147 Cal.App.4th at p. 26 [court may disregard “declarations that lack foundation or personal knowledge, or that are argumentative, speculative . . . or conclusory”].)

Further still, as an Osborne Park resident, Kashay had an interest in the management of the HOA, even if she was not a party to the HOA management contract itself. As was stated in Makaeff, an individual’s statements about a business dispute to the BBB addressed issues of public interest “even if made in the context of a request that it intercede in [a private] dispute with [the subject business],” because such statements “are not so easily separated from `information . . . provided to aid consumers.'” (Makaeff, supra, 715 F.3d at p. 263.) So too are Kashay’s statements to the BBB, even if (as Plaintiffs assert) her complaints involved her private dispute with Plaintiffs’ contract with the HOA. Kashay’s individual statements about a business dispute with Ambassador to the BBB are protected speech under section 425.16, subdivision (e)(3) because they are not so easily separated from the aim of providing information to aid other consumers at large.

Thus, we conclude that Kashay has met her burden of establishing the defamation claims related to the BBB complaint arise from protected activity under section 425.16, subdivision (e)(3).

 

C. Communications Criticizing Plaintiffs’ Management of the HOA

 

Third, Plaintiffs alleged, that: “Included but not limited to the following summary, K[ashay] has falsely and publicly stated that A[mbassador] and F[uselier] have committed crimes; breached fiduciary duties while performing their professional duties; committed gross negligence in the performance of their professional duties; breached their Contract while performing their duties; conduct[ed] management duties contrary to the Davis Sterling [sic] Act et seq.; conducted a fraudulent election; [are] incompeten[t] in performing management duties; improperly handled HOA funds; and [committed] the crime of [e]lder [a]buse in performing their management duties.” These “summary” allegations are too vague. As noted, we must determine “the act or acts underlying a claim for purposes of an anti-SLAPP statute . . . from the plaintiffs’ allegations,” (Medical Marijuana, supra, 46 Cal.App.5th at p. 883), but deciphering those claims are challenging when, as here, they are impermissibly vague. Taking what we can from these vague allegations, we conclude Kashay has met her burden of establishing that the alleged communications arise from protected activity as well.

As she did in the trial court, Kashay relies primarily on this court’s decision in Damon and asserts the communications criticizing Plaintiffs’ performance as the HOA manager were protected speech under section 425.16, subdivision (e)(3). In Damon, we concluded alleged defamatory statements made at an HOA board meeting and in a newsletter published by a group of residents concerning the manner in which a large residential community would be governed fell within the protection of section 425.16, subdivision (e)(3). (Damon, supra, 85 Cal.App.4th at pp. 474-475.) In reaching that conclusion, we considered both whether the statements were made in a public forum and whether they related to an issue of public interest. (Ibid.)

We observed, “[a]s our Supreme Court has recognized, [that] owners of planned development units `”comprise a little democratic subsociety[.]”‘” (Damon, supra, 85 Cal.App.4th at p. 475, quoting Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 374.) Further, “[i]n exchange for the benefits of common ownership, the residents elect a[ ] legislative/executive board and delegate powers to this board. This delegation concerns not only activities conducted in the common areas, but also extends to life within `”the confines of the home itself.”‘” (Damon, at p. 475, quoting Nahrstedt, at p. 373.) An HOA board “is in effect `a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.’ [Citation.] [¶] Because of [an HOA] board’s broad powers and the number of individuals potentially affected by a board’s actions, the Legislature has mandated that boards hold open meetings and allow the members to speak publicly at the meetings. (Civ. Code, §§ 1363.05, 1363, 1350-1376.)” (Damon, at p. 475.) We thus concluded an HOA board meeting is a “`public forum[ ]'” within the meaning of section 425.16, subdivision (e)(3). (Ibid.)

Turning to the public issue requirement, we explained, “[t]he definition of `public interest’ within the meaning of the anti-SLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.” (Damon, supra, 85 Cal.App.4th at p. 479, cited with approval in FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, 145-146 (FilmOn.com).) The alleged defamatory statements in Damon “concerned (1) the decision whether to continue to be self-governed or to switch to a professional management company; and/or (2) [plaintiff’s] competency to manage the [HOA].” (Damon, at p. 479.) We observed “the statements were made in connection with the Board elections and recall campaigns,” and noted that “`[t]he right to speak on political matters is the quintessential subject of our constitutional protections of the right of free speech. “Public discussion about the qualifications of those who hold or who wish to hold positions of public trust presents the strongest possible case for applications of the safeguards afforded by the First Amendment.”‘” (Ibid.) Thus, “[a]lthough the allegedly defamatory statements were made in connection with the management of a private homeowners association, they concerned issues of critical importance to a large segment of our local population. `For many Californians, the homeowners association functions as a second municipal government[.]'” (Ibid.)

Although the HOA at issue in Damon included a much larger number of residents, other courts have applied these same principles to smaller communities. For example, the court in Cabrera v. Alam (2011) 197 Cal.App.4th 1077 applied the reasoning in Damon to conclude the annual “untelevised” meeting and election of board of directors of a significantly smaller and less technologically sophisticated HOA likewise fell within the protection of section 425.16, subdivision (e)(3). (Id. at pp. 1087-1092.) “[T]he impact the association and its leadership had on all the residents . . . was not any less significant.” (Id. at p. 1088.) Of relevance here, relying on Damon, the Cabrera court viewed that “statements made in connection with elections to the board of directors constitute a public issue in that such elections affect all members of the [HOA] and `concern[ ] a fundamental political matter—the qualifications of a candidate to run for office.'” (Id. at p. 1089.)

Thus, as other courts have explained, communications may concern a matter of public interest, and fall under the protection of section 425.16, subdivision (e)(3), “`in cases where the issue is not of interest to the public at large, but rather to a limited, but definable portion of the public (a private group, organization, or community), [but,] the constitutionally protected activity must, at a minimum, occur in the context of an ongoing controversy, dispute or discussion, such that it warrants protection by a statute that embodies the public policy of encouraging participation in matters of public significance.'” (Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1468 (Ruiz), first italics added, quoting Du Charme v. International Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 119.) Such communications are also protected under section 425.16, subdivision (e)(4). (Ruiz, at pp. 1467-1470 [private letters from community association’s attorney concerned a dispute about governance of the association, a topic of interest to the members of the association, a definable portion of the public]; see FilmOn, supra, 7 Cal.5th at pp. 148, 152 [holding that “context matters” under the catchall provision of subdivision (e)(4), requiring consideration of the “audience, speaker, and purpose” of assertedly protected speech].)

Here, the dispute related to a definable portion of the public—the elderly residents of Osborne Park. (See Ruiz, supra, 134 Cal.App.4th at p. 1468.) Further, it is apparent from the complaint and the record before us that the alleged defamatory statements here arose from and were made in connection with disputes concerning Plaintiffs’ competency to manage the HOA, the HOA board elections, and the petitions to hold a special meeting regarding those elections. These are the precise types of concerns that we found to be matters of public interest in Damon. (See Damon, supra, 85 Cal.App.4th at p. 479.) Further, like the community in Damon, the members of Osborne Park delegated matters that affected their daily lives to the HOA Board, which, in turn, served both a legislative and executive function. (Id. at p. 475.) Thus, as we concluded in Damon, Kashay’s right to speak on such matters, on behalf of herself and others living under the governance of Plaintiffs’ management and the HOA Board of Directors at Osborne Park, is a “quintessential subject of our constitutional protections of the right of free speech.” (Id. at p. 479.)

Moreover, as in Ruiz, the record also establishes that there was an ongoing dispute regarding Plaintiffs’ conduct and interaction with the HOA Board of Directors, which affected the governance of the entire low-income senior community and “therefore would also be of interest to community members,” as well as the public at large. (Ruiz, supra, 134 Cal.App.4th at p. 1468.) Kashay’s comments, at a minimum, “`contribute[d] to the public debate'” on issues related to those ongoing disputes and the inherent political issues regarding the HOA board elections and the overall governance of the HOA. (Id. at pp. 1468-1469.) Stated differently, Kashay’s statements were not just tangentially related to these topics, but rather they “furthered[ ] the discourse” on matters of critical importance to the Osborne Park community. (See FilmOn, supra, 7 Cal.5th at p. 151.) For those reasons, we independently conclude that Kashay met her initial burden of proving her communications criticizing Plaintiffs’ performance as HOA manager fell within the protection of section 425.16, subdivisions (e)(3) and (e)(4).

Plaintiffs assert, as they did in the trial court, that the communications were not made in a public forum and did not concern a matter of public interest, primarily because, as they contend, Osborne Park is a not a CID under the Davis-Stirling Act. We are not persuaded, for several reasons. First, Plaintiffs alleged in the complaint that Kashay made the allegedly defamatory statements regarding the HOA board elections and Ambassador’s management “publicly.” (Italics added.) But they now contend that Kashay actually made private statements to other Osborne Park members, orally and in personal letters and emails. They rely, at least in part, on additional allegations presented in the declarations submitted in opposition to Kashay’s special motion to strike and which attempt to expand on the vague allegations in the complaint.

Our review is delimited by the complaint itself, and not the additional allegations presented in declarations submitted only after Kashay filed her special motion to strike. (Medical Marijuana, supra, 46 Cal.App.5th at p. 883.) Kashay is not required to prove that these additional, allegedly private statements were made in a public forum when the complaint itself alleged defamation based only on vague categories of things Kashay has allegedly “falsely and publicly” stated. (See id., at pp. 898-899 [explaining the “procedural quagmire” that would result from allowing a SLAPP plaintiff to amend the complaint after the court finds the defendant has met their burden on the first prong].) Instead, we consider only the allegedly public statements that form the basis of Plaintiffs’ claims in the complaint.

Second, there is no real dispute that at the time Kashay made the allegedly defamatory statements, all parties believed that Osborne Park was a CID under the Davis-Stirling Act. Indeed, Plaintiffs attached to the complaint a copy of the “HOA Management Retainer Agreement” between the HOA Board of Directors and Ambassador, which clearly stated the board hired Ambassador “as its exclusive managing agent as that term is defined in California Civil Code section 4158 [of the Davis-Stirling Act].” Consistent with that understanding, Osborne Park filed a “Statement by Common Interest Development Association” in 2018, declaring that it was a CID with 28 separate interests.

It was only in February 2020—after both the complaint and Kashay’s special motion to strike were filed—that Lara researched whether Osborne Park was actually a CID under the Davis-Stirling Act. And contrary to Lara’s and Fuselier’s declarations in opposition to the special motion to strike, Fuselier himself signed a “Statement of Information” certifying to the Secretary of State that Osborne Park was a CID under the Davis-Stirling Act. Although he signed the document on December 31, 2019, it was filed with the Secretary of State on March 16, 2020, after Fuselier and Lara submitted sworn declarations stating Osborne Park was not a CID.

Plaintiffs further contend that Osborne Park is not a CID because it does not have recorded CC&Rs, but, again, the complaint itself alleged Osborne Park was governed by CC&Rs, in at least three different places. Thus, to accept Plaintiffs’ argument, we would have to ignore that the complaint explicitly alleged the statements were made “publicly,” that the complaint alleged Osborne Park did have CC&Rs, and that the HOA management contract attached to the complaint expressly called Osborne Park a CID under the Davis-Stirling Act. We see no reason to do so.

Regardless, it is not apparent that the analysis in Damon, or the cases that followed Damon, is limited to CIDs under the Davis-Stirling Act. Plaintiffs provide no authority suggesting it does. We noted in Damon that the Davis-Stirling Act requires HOA boards to hold open meetings, in the context of determining that the meetings were, therefore, a public forum. (Damon, supra, 85 Cal.App.4th at p. 475.) The remainder of our analysis, however, focused on the role of HOAs more generally, without any further reference to CIDs or the Davis-Stirling Act. As we explained, “[a] homeowner’s association board is in effect `a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government,'” and the private conduct of an HOA may be an issue of “`public interest'” insofar as it impacts the HOA community in a manner similar to that of a governmental entity. (Id. at pp. 475, 479, italics added.) Here, again, there was no real dispute that Osborne Park was governed by an HOA at the time Kashay made the allegedly defamatory statements. Indeed, although our review is de novo, we note that even the trial court described the alleged defamatory statements as primarily “criticizing the handling of a homeowner’s association election.”

In sum, we conclude Kashay has met her burden to establish Plaintiffs’ claims arise from protected activity under section 425.16, subdivision (e), with respect to all three categories of defamatory statements alleged in the complaint.

 

III.

 

 

We Decline to Make an Independent Determination of Plaintiffs’ Demonstration on the Second Prong

 

Because the trial court concluded Kashay had not met her initial burden to establish that the challenged cause of action arose from protected activity, it did not reach the second step of the anti-SLAPP analysis of whether Plaintiffs demonstrated a probability of prevailing on the merits or, as the Court in Baral put it, whether the claim is “legally sufficient and factually substantiated.” (Baral, supra, 1 Cal.5th at p. 396.) Plaintiffs assert, as they did in the trial court, that they have “a [h]igh [p]robability” of success on the merits.

Under the applicable standard of review, we have discretion to reach the second step and make an independent determination as to whether Plaintiffs have established a probability of prevailing. (See Collier v. Harris (2015) 240 Cal.App.4th 41, 58.) However, we decline to exercise that discretion here, because doing so would require us to consider the evidence, and the numerous evidentiary objections that have not been addressed by the trial court in the first instance.[12] (See ibid. [noting the majority of appellate courts have declined to reach the second prong where “contested evidentiary issues existed or simply because it was appropriate for the trial court to decide the issue first”]; Baral, supra, 1 Cal.5th at p. 393 [court may strike one claim of many within a single cause of action and allegations supporting the stricken claim are eliminated from the complaint].)

Accordingly, we remand the matter to the trial court with instructions to consider whether Plaintiffs have demonstrated that each challenged claim based on protected activity is legally sufficient and factually substantiated.

 

IV.

 

 

Kashay Has Not Established That She Did Not Receive a Fair Hearing

 

Kashay asserts that she did not receive a fair hearing by an impartial judge in the trial court. She contends Judge Stern issued the order denying her special motion to strike just days after Judge Maas recused himself for familiarity with a party,[13] and that Judge Stern’s order was substantially similar to the previous tentative decision issued by Judge Maas. Kashay does not adequately develop the argument or provide any legal authority to support her position. (See Los Angeles Unified School Dist. v. Torres Construction Corp. (2020) 57 Cal.App.5th 480, 498 [“`We may and do “disregard conclusory arguments that are not supported by pertinent legal authority or fail to disclose the reasoning by which the appellant reached the conclusions he wants us to adopt.”‘”].) But the mere fact that Judge Stern’s order is substantially similar to the previous tentative order issued by Judge Maas is not sufficient to demonstrate that Kashay did not receive a fair hearing. The transcripts from the hearing are not included in the record on appeal, and Kashay presents no other evidence of bias or impartiality. Regardless, having reviewed the issues independently under the applicable de novo standard of review, we reverse the trial court’s ruling on prong one for the reasons already stated.

 

V.

 

 

Attorney Fees

 

As a final matter, Plaintiffs assert Kashay’s special motion to strike was frivolous and requests that this court award attorney fees in an amount to be determined by the trial court. We reject that request, for three reasons. First, Plaintiffs did not file a cross-appeal from the order denying their request for attorney fees in the superior court, and do not provide any authority indicating it is appropriate for this court to award attorney fees in the first instance. Second, as the trial court noted, to the extent he is representing himself, Fuselier is not entitled to an attorney fee award as a matter of law. (See Witte v. Kaufman (2006) 141 Cal.App.4th 1201, 1211.) Third, we have independently concluded Kashay met her burden as to the first prong, and agree with the trial court’s finding that Kashay’s special motion to strike was not frivolous. (See Cabral v. Martins (2009) 177 Cal.App.4th 471, 491 [abuse of discretion standard of review applies in the context of fee awards under the anti-SLAPP statutes].)

 

DISPOSITION

 

The order denying Kashay’s special motion to strike the complaint is reversed and the matter is remanded for further proceedings consistent with this opinion. Kashay shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)

HALLER, Acting P. J. and AARON, J., concurs.

[1] The original verified complaint was not designated for inclusion in the Clerk’s Transcript on appeal. In the interests of justice and in order to resolve the appeal, we obtained a copy from the superior court and, on our own motion, augment the record to include it. (Cal. Rules of Court, rule 8.155(a)(1)(A); see also State Comp. Ins. Fund v. WallDesign Inc. (2011) 199 Cal.App.4th 1525, 1528, fn. 1 [“We have frequently used our discretionary authority under California Rules of Court, rule 8.155 to augment the appellate record with documents contained in the trial court record that were omitted by the parties, through mistake or neglect, in order to assist us in reviewing appeals on their merits.”].)

[2] All further unspecified statutory references are to the Code of Civil Procedure.

[3] As we will discuss in more detail, the Davis-Stirling Act governs the creation and operation of CIDs, which are defined to include condominium projects, planned developments and stock cooperatives. (Civ. Code, § 4000 et seq.)

[4] The Agreement expressly referred to “the Osborne Mobile Home Park Homeowner’s Association” as the party to the Agreement, but also provided that the HOA is “a California Mutual Benefit, Non-Profit Corporation.” The Agreement was also signed by the president of the “OPI board.” It appears the terms OPI (the official name of the corporate entity) and Osborne Mobile Home Park Homeowner’s Association (the HOA) were used interchangeably. Further, Plaintiffs alleged that it was the “Board of Directors for Osborne Park HOA” that hired Ambassador. We shall refer to the relevant entity as the Osborne Park HOA or the HOA.

[5] Kashay claimed she bought a home in Osborne Park but Plaintiffs contend there is no record of the sale or of Kashay applying for HOA membership. Kashay was a resident and was appointed to the Board of Directors, nonetheless.

[6] Section 425.16, subdivision (e) sets forth the following four categories of protected activity: “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.”

[7] It seems that Fuselier also sued Johnson for defamation. Johnson’s attorney, Conrad Joyner, filed a declaration on October 28, 2020 to “set the record” straight regarding his interaction with Fuselier concerning Johnson’s deposition. According to Joyner, when he tried to persuade Fuselier to drop the defamation case against his client, “Fuselier’s demeanor changed from polite and pleasant to angry” and “shouted out . . . `I will break their f—ing knees !'” (Boldface omitted.)

[8] Fuselier submitted a “Time sheet” in support of his request for attorney fees, in which he indicated his time billed for preparing the Payne and Fageol declarations.

[9] We note that the complaint does not include any allegations regarding e-mails and the order provides no further detail as to the “e-mails and statements” it found were not made in a public forum.

[10] While there is some indication that Kashay may have eventually withdrawn the BBB complaint in response to Fuselier’s threatening email, it remains that the complaint was at least initially made to the BBB as part of the ongoing dispute regarding Plaintiffs’ management of the Osborne Park HOA. Moreover, Plaintiffs disputed Kashay’s claim that she withdrew the complaint as “false.” Plaintiffs instead continued to assert that Kashay did not withdraw her complaint and “published” her claims to the BBB.

[11] Plaintiffs also cite to “Exhibits 15, 16” but do not provide record citations or identify what pleading, if any, to which those Exhibits are attached. It would appear these exhibits were the subject of Plaintiffs’ motion to augment, filed on February 8, 2021. In particular, Exhibit 15, described by Plaintiffs as Kashay’s BBB complaint, is a printout of page “2/2” of an internet webpage titled “BBB Complaint Case ID #14044872.” Its contents are consistent with the parties’ descriptions of the BBB complaint. On February 25, 2021, this court denied the motion to augment without prejudice because Plaintiffs failed to establish the exhibits were filed or lodged with the trial court when it ruled on the appealed-from order. In their respondents’ brief, Plaintiffs confirm they tried to lodge the exhibits in the trial court, but the lodgment was rejected.

[12] We note, however, that we have some serious concerns as to whether the vague, unlimited allegations set forth in paragraph 32 of Plaintiff’s original verified complaint are sufficient to meet the heightened pleading standards for defamation. (See Medical Marijuana, 46 Cal.App.5th at p. 894; Okun, supra, 29 Cal.3d at p. 458.)

[13] Kashay contends Fuselier is that party but the record before us does not establish which party Judge Maas was referencing in his recusal order.

Olson v. Doe

Summary by Pejman D. Kharrazian, Esq.:

 

Homeowner Doe filed a civil harassment restraining order lawsuit against her association’s board president Olson, among others, for sexual battery, assault and discrimination. At the court hearing, the parties were ordered to mediate. At the mediation, Doe and Olson signed a mediation agreement wherein they agreed not to contact or communicate with one another. One of the terms of the mediation agreement was that the “parties agree not to disparage each other.” After the mediation agreement was reached, Doe alleged that Olson’s harassment did not stop. Doe filed an administrative complaint with United States Department of Housing and Urban Development which was referred to the Department of Fair Employment and Housing alleging discrimination based on sex and gender. Doe subsequently filed a civil complaint against Olson and the association. Olson filed a cross-complaint alleging Doe breached the mediation agreement’s nondisparagement clause by filing the administrative complaint and civil complaint. Doe filed an anti-SLAPP motion to strike Olson’s cross-complaint. The trial court granted Doe’s anti-SLAPP motion. Olson appealed. The appellate court affirmed the trial court’s decision in part and reversed in part. The decision was appealed to the California Supreme Court who found that Doe’s filing of the administrative complaint and civil complaint is protected activity under the anti-SLAPP statute. Consequently, the court analyzed prong two of the anti-SLAPP statute analysis, i.e., whether Olson had enough evidence to prevail on his breach of contract claim. For myriad reasons, the court determined that Doe’s filing of an administrative complaint and civil complaint against Olson was not a breach of the nondisparagement clause of their mediation agreement.

TAKEAWAY: Like all contracts, mediation agreements need to be carefully drafted so that all parties to the mediation agreement understand and agree to their terms. If there is a dispute as to how a mediation agreement should be interpreted, courts will utilize the general principals regarding contract interpretation, such as construing contracts as a whole and considering the circumstances under which the contract is made and the matter to which the contract relates.

***End Summary***

12 Cal.5th 669 (2022)
288 Cal. Rptr. 3d 753

No. S258498.

Supreme Court of California.

January 13, 2022.
Appeal from the Superior Court of Los Angeles County, No. SC126806. Craig D. Karlan, Judge.

Second Appellate District, Division Eight, B286105.

Buchalter, Robert M. Dato, Eric Michael Kennedy, Robert Collings Little and Paul Augusto Alarcón for Cross-complainant and Appellant.

Martinez Business & Immigration Law Group, Gloria P. Martinez-Senftner; Keiter Appellate Law, Mitchell Keiter; Sidley Austin, David R. Carpenter, Collin P. Wedel, Andrew B. Talai, Joel L. Richert, Paula C. Salazar; Bryan Cave Leighton Paisner, Jean-Claude André, Anne Redcross Beehler and Kristy Anne Murphy for Cross-defendant and Respondent.

Goodwin Procter, Neel Chatterjee, Alexis S. Coll-Very, Stella Padilla, Megan D. Bettles; Arati Vasan, Janani Ramachandran, Jennafer Dorfman Wagner, Erin C. Smith; and Amy C. Poyer for Family Violence Appellate Project and California Women’s Law Center as Amici Curiae on behalf of Cross-defendant and Respondent.

Law Offices of Aimee J. Zeltzer and Aimee Zeltzer for John K. Mitchell and Dr. Jack R. Goetz as Amici Curiae on behalf of Cross-defendant and Respondent.

 

673*673 OPINION

 

LIU, J.—

Code of Civil Procedure section 527.6 provides a specialized procedure for a petitioner who has suffered harassment within the meaning of the statute to expeditiously seek a limited judicial remedy— injunctive relief to prevent threatened future harm. (All undesignated statutory references are to the Code of Civil Procedure.) A petitioner who also desires retrospective relief in connection with the same underlying conduct, such as tort damages, must do so separately.

Cross-defendant Jane Doe and cross-complainant Curtis Olson each own units in the same condominium building. Doe sought a civil harassment restraining order against Olson pursuant to section 527.6. As a result of court-ordered mediation, the parties agreed “not to contact or communicate with one another or guests accompanying them, except in writing and/or as required by law,” to “go[] their respective directions away from one another” 674*674 if “the parties encounter each other in a public place or in common areas near their residences,” and “not to disparage one another.”

The question here is whether the nondisparagement clause in the parties’ mediation agreement potentially applies to and thereby limits Doe’s ability to bring a subsequent unlimited civil lawsuit against Olson seeking damages. Doe later filed such a lawsuit; Olson cross-complained for breach of contract and specific performance, arguing that Doe’s suit violated the nondisparagement clause; and Doe moved to strike Olson’s cross-complaint under the anti-SLAPP statute. We hold that the mediation agreement as a whole and the specific context in which it was reached—a section 527.6 proceeding— preclude Olson’s broad reading of the nondisparagement clause. Accordingly, Olson has failed to show the requisite “minimal merit” on a critical element of his breach of contract claim—Doe’s obligation under the agreement to refrain from making disparaging statements in litigation—and thus cannot defeat Doe’s anti-SLAPP motion. (Navellier v. Sletten (2002) 29 Cal.4th 82, 94 [124 Cal.Rptr.2d 530, 52 P.3d 703] (Navellier).)

 

I.

 

Doe and Olson met in 2002 and worked together to acquire and preserve a historic apartment building. Olson acquired the building, converted the apartments into eight condominium units, and ultimately became the owner and part-time resident of one of the units. Olson served as the president of the building’s homeowners association (HOA) board from 2013 to January 2016, and Doe resided in one of the condominium units.

In December 2016, Doe filed an unlimited civil lawsuit against Olson and various other defendants, including other residents of the building, the HOA, and the property management company. Through the complaint, Doe seeks damages for a variety of claims, including sexual battery, assault, and discrimination based on perceived ethnicity, religion, and marital status. The complaint alleges multiple romantic advances over a long period of time by Olson toward Doe, which Doe rejected, followed by “a pattern of retaliatory events” by Olson, friends and associates of Olson (some of whom resided in the building after purchasing units from Olson), and the HOA. Doe ultimately moved out of the building for a period from 2009 to 2013.

The complaint further alleges that in May 2015, after Doe had resumed living in her unit, Olson invited her to meet with him in order to “`bury the hatchet,'” and after socializing in the courtyard of the building, Doe accompanied Olson to his condominium unit to watch a short video on the Internet that he was having difficulty loading. According to the complaint, Doe was sitting on a sofa in Olson’s unit when Olson “forced himself on top of” her 675*675 and “started touching her face, hair, and breasts and tried to kiss” her before she was able to struggle free and leave. After this incident, Doe alleges, Olson confronted her in the courtyard visibly upset, and over the ensuing months Olson and his associates continued to harass and stalk her by, for example, “peeping, filming, videotaping, and/or photographing [Doe] and her guests,” including through the bedroom and bathroom windows of her condominium unit, which prompted Doe to file police reports.

The events described in the complaint initially prompted Doe to seek a civil harassment restraining order against Olson pursuant to section 527.6 in October 2015. Her request included allegations of sexual battery, peeping, harassment, and threats to Doe’s life and property, and it sought both personal conduct and stay-away orders against Olson. The court granted Doe’s request for a personal conduct order against Olson and issued a temporary restraining order, but the court denied Doe’s request for a stay-away order in advance of a hearing.

Olson opposed Doe’s request for a civil harassment restraining order, “vehemently deny[ing] th[e] allegations” in her request and asserting that the HOA “and its vendors have had a well-documented history of problems with [Doe] in connection with her use and residency” at the building, including her continued use of a basement storage unit. At a hearing on December 10, 2015, the court ordered the parties to mediation supervised by a volunteer mediator from the California Academy of Mediation Professionals (CAMP). The parties then entered into single-page “Mediation” and “Mediation/Confidentiality” agreements that same day.

Pursuant to the mediation agreement, Doe’s request for a civil harassment restraining order was dismissed without prejudice, and the parties agreed to resolve their dispute in pertinent part as follows: “(1) [Olson] denies each and every allegation made by [Doe] in the dispute. (2) This agreement is made voluntarily by mutual agreement of the parties, and nothing contained herein is to be construed as an admission of any wrongdoing of the parties. (3) The parties agree not to contact or communicate with one another or guests accompanying them, except in writing and/or as required by law. (4) Should the parties encounter each other in a public place or in common areas near their residences, they shall seek to honor this agreement by going their respective directions away from one another. (5) The parties agree not to disparage one another. (6) The term of this agreement shall be three (3) years.”

According to Doe’s civil complaint, harassment by the HOA board and other associates of Olson continued even after the mediation agreement was reached, including a demand by the HOA board in May 2016 that Doe pay a 676*676 percentage of the legal fees incurred by Olson in connection with opposing the civil harassment restraining order. In August 2016, Doe filed an administrative complaint with the United States Department of Housing and Urban Development (HUD), naming Olson and the HOA as respondents and alleging discrimination based on sex and gender. The administrative complaint was referred to the Department of Fair Employment and Housing (DFEH) for investigation. In the administrative complaint, Doe claimed “discrimination based on sex and gender,” alleging that Olson “stalked her,” “subjected her to unwanted sexual comments and touching,” took “pictures of [her] while she [wa]s in the bathroom and in her bedroom,” and “used his position as board president to direct the maintenance man to install cameras in [her] unit,” and that “as a result of the restraining order [Olson and the HOA] tied in a portion of the attorney fees to her home” such that “[i]f the balance[] is not paid in full a 10% monthly fee is added to the unpaid balance and they are able to foreclose on [her] property.”

Doe subsequently filed a civil complaint against Olson and the other defendants seeking damages. In May 2017, Olson filed a cross-complaint against Doe for breach of contract damages and specific performance. The cross-complaint alleges that Doe breached the mediation agreement’s nondisparagement clause by filing her administrative complaint and her civil complaint for damages, and it requests contract damages and an order for specific performance requiring Doe “to withdraw and dismiss all claims in this case, the HUD Complaint, and the DFEH Complaint against Olson or that otherwise disparage Olson.”

Doe moved to strike Olson’s cross-complaint under the anti-SLAPP statute, asserting that it was “retaliatory litigation” and “an attempt to chill Doe’s exercise of her rights of free speech under the United States or California Constitution … and right to petition the courts and the executive branch for redress of grievances.” (See § 425.16, subds. (b)(1), (e)(1) & (e)(4).) Doe argued that Olson could not establish a probability of prevailing because “[t]here was an exception clause that expressly preserves Doe’s right to sue and no release of all claims executed by Doe and Doe’s Complaint and reports to HUD and DFEH are absolute [sic] privileged under California Civil Code § 47.” Olson opposed the motion, arguing that the parties “agreed not to disparage one another for three years,” that Doe breached that agreement by filing the administrative and civil complaints, and that “having contractually obligated herself not to disparage Olson, Doe is not entitled to th[e] protections” of the anti-SLAPP statute.

The trial court granted Doe’s special motion to strike, and Olson appealed. The Court of Appeal affirmed in part and reversed in part. With respect to Doe’s administrative complaint, the Court of Appeal agreed with the trial 677*677 court and viewed Vivian v. Labrucherie (2013) 214 Cal.App.4th 267 [153 Cal.Rptr.3d 707] as dispositive, concluding that applying the litigation privilege was necessary to promote full and candid disclosure to a public agency whose purpose is to protect the public from illegal activity and thus absolved Doe of any liability. With respect to Doe’s civil complaint, however, the Court of Appeal disagreed with the trial court, concluding that the public policy underlying the litigation privilege did not support its application to Doe’s complaint. The Court of Appeal further concluded that Olson had demonstrated the minimal merit needed to pass the second prong of the anti-SLAPP inquiry with respect to his breach of contract claim for damages but had failed to do so with respect to his claim for specific performance. We granted review to decide under what circumstances the litigation privilege of Civil Code section 47, subdivision (b) applies to contract claims, and whether an agreement following mediation between the parties in an action for a civil harassment restraining order, in which they agree not to disparage one another, can lead to liability for statements made in a later unlimited civil lawsuit arising from the same alleged misconduct.

 

II.

 

The parties’ dispute centers on the construction of their mediation agreement, which was reached within the context of a civil harassment restraining order proceeding. (§ 527.6.) We begin with some background on this specialized civil procedure.

The Legislature enacted section 527.6 in 1978 in order “to protect the individual’s right to pursue safety, happiness and privacy as guaranteed by the California Constitution.” (Stats. 1978, ch. 1307, § 1, p. 4294; see Cal. Const., art. I, § 1.) The provision was intended to “`establish an expedited procedure for enjoining acts of “harassment”‘” in order “`to provide quick relief to harassed persons.'” (Smith v. Silvey (1983) 149 Cal.App.3d 400, 405 [197 Cal.Rptr. 15] (Smith).) In the Legislature’s view, “procedures under [then-]existing law”—namely “a tort action based either on invasion of privacy or on intentional infliction of emotional distress”—were “inadequate to remedy the mental and emotional distress suffered by a person,” and “[t]he length of time it takes to obtain an injunction in many cases is too long.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 3093 (1977-1978 Reg. Sess.) as amended June 19, 1978, pp. 1-2.) Section 527.6, subdivision (a)(1) enables a victim of “harassment” to “seek a temporary restraining order and an order after hearing prohibiting harassment.” In its current form, section 527.6 provides “for the issuance of a temporary restraining order without notice … on the same day that the petition is submitted to the court” (§ 527.6, subd. (e)) and generally requires the court to hold a hearing on the petition within 21 days (id., subd. (g)). “If the judge finds by clear and convincing 678*678 evidence that unlawful harassment exists, an order shall issue prohibiting the harassment.” (Id., subd. (i).)

Thus, “section 527.6 provides a quick, simple and truncated procedure… and was drafted with the expectation that victims often would seek relief without the benefit of a lawyer.” (Yost v. Forestiere (2020) 51 Cal.App.5th 509, 521 [265 Cal.Rptr.3d 175], citation omitted (Yost).) To that end, section 527.6 from its inception has required the Judicial Council to develop forms for use in these proceedings (Stats. 1978, ch. 1307, § 2, subd. (k), pp. 4294, 4296; see § 527.6, subd. (x)(1)), and current law requires that “[t]he petition and response forms … be simple and concise, and their use by parties in actions brought pursuant to [section 527.6] is mandatory” (§ 527.6, subd. (x)(1)).

Section 527.6 has also made clear since its inception that utilizing this specialized civil procedure does not “preclude a plaintiff’s right to utilize other existing civil remedies.” (Stats. 1978, ch. 1307, § 2, subd. (j), pp. 4294, 4296; see § 527.6, subd. (w).) “The quick, injunctive relief provided by section 527.6 `lies only to prevent threatened injury’—that is, future wrongs”—and “is not intended to punish the restrained party for past acts of harassment.” (Yost, supra, 51 Cal.App.5th at p. 520, quoting Scripps Health v. Marin (1999) 72 Cal.App.4th 324, 332 [85 Cal.Rptr.2d 86].)

 

III.

 

With this statutory context in mind, we consider the subject of Doe’s special motion to strike Olson’s cross-complaint: whether Doe’s civil lawsuit violated the nondisparagement clause in the parties’ mediation agreement arising from Doe’s section 527.6 action seeking a temporary restraining order. (See § 425.16.) The question is whether such a nondisparagement clause applies to statements made in a later unlimited civil lawsuit arising from the same alleged misconduct.

 

A.

 

Pursuant to section 425.16, a party may file a special motion to strike a cause of action or particular claims underlying a cause of action that arise from activity protected by the anti-SLAPP statute. The moving party “must establish that the challenged claim arises from activity protected by section 425.16”; if the moving party does so, “the burden shifts” to the nonmoving party “to demonstrate the merit of the claim by establishing a probability of success.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 [205 Cal.Rptr.3d 475, 376 P.3d 604] (Baral); see § 425.16, subd. (b)(1).) Before the trial court and on appeal, Olson conceded that Doe’s administrative and civil complaints— 679*679 the conduct that gave rise to Olson’s actions for breach of contract and specific performance—constitute petitioning activity protected by section 425.16. Thus, the only issue before us is whether Olson has shown a probability of success. In that regard, we address only the breach of contract claim that Olson raised in the Court of Appeal: that Doe breached their agreement, not by suing him under his own name, but by filing the administrative and civil complaints against him. The Court of Appeal held that Olson “failed to prove the requisite minimal merit” for his claim for specific performance and affirmed that portion of the trial court’s order, and Olson did not seek review. (Doe v. Olson (Aug. 30, 2019, B286105) [nonpub. opn.].)

To succeed in opposing a special motion to strike, the nonmoving party must “demonstrate both that the claim is legally sufficient and that there is sufficient evidence to establish a prima facie case with respect to the claim.” (Taus v. Loftus (2007) 40 Cal.4th 683, 714 [54 Cal.Rptr.3d 775, 151 P.3d 1185].) “[C]laims with the requisite minimal merit may proceed.” (Navellier, supra, 29 Cal.4th at p. 94.) The moving party prevails by “defeat[ing]” the “claim as a matter of law” (Baral, supra, 1 Cal.5th at p. 385) in “a summary-judgment-like procedure” (Taus, at p. 714).

As relevant here, we recognized in Navellier that the anti-SLAPP statute can apply to a breach of contract claim, but the statute “preserves appropriate remedies for breaches of contracts involving speech” since “a defendant who in fact has validly contracted not to speak or petition has in effect `waived’ the right to the anti-SLAPP statute’s protection in the event he or she later breaches that contract.” (Navellier, supra, 29 Cal.4th at p. 94.) An essential element of Olson’s breach of contract action is showing that Doe breached the mediation agreement. (E.g., Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 [124 Cal.Rptr.3d 256, 250 P.3d 1115] [setting forth elements of breach of contract claim].) In light of the language of the nondisparagement clause, the mediation agreement as a whole, and the broader context in which the agreement was negotiated, we hold that the nondisparagement clause does not apply to statements made by Doe in the litigation context. Thus, Olson has failed to make a prima facie showing on this element sufficient to overcome Doe’s special motion to strike.

The language of the nondisparagement clause is simple: “The parties agree not to disparage one another.” Read in isolation, this language is vague as to its scope and conceivably could be understood to sweep broadly as Olson suggests. Yet a few reasons suggest that such a reading—i.e., one that prevents Doe from making any allegations potentially disparaging against Olson in future litigation—is foreclosed as a matter of law. (See People v. Doolin (2009) 45 Cal.4th 390, 413, fn. 17 [87 Cal.Rptr.3d 209, 198 P.3d 11] (Doolin) [“[w]here … the meaning of [the] agreement does not turn on the credibility of extrinsic evidence, interpretation is a question of law”].)

680*680 First, the nondisparagement clause must be understood in connection with the mediation agreement as a whole. (See Doolin, supra, 45 Cal.4th at p. 413, fn. 17 [“Our interpretation of the agreement is guided by the basic principle that `[a]ny contract must be construed as a whole, with the various individual provisions interpreted together so as to give effect to all, if reasonably possible or practicable.'”].) It is one of only six numbered terms of the one-page agreement, and only three of those constitute the substantive terms intended to directly govern the prospective conduct of the parties. Apart from the nondisparagement clause, Doe and Olson agreed “not to contact or communicate with one another or guests accompanying them, except in writing and/or as required by law,” and “to honor this agreement by going their respective directions away from one another” if “the parties encounter each other in a public place or in common areas near their residences.” The purpose and primary focus of the mediation agreement is self-evident from the agreement as a whole: to set forth mutually agreeable parameters to govern the parties’ potential future physical interactions with one other, including encounters rendered unavoidable by the fact that both owned condominium units in the same building.

The terms of Doe and Olson’s agreement were handwritten. The mediator had apparently run out of the standard-issue, typed mediation agreements used at the courthouse. But the substantive terms contained in Doe and Olson’s agreement nonetheless share substantial similarity with those contained in the version provided by the clerk in response to a request for the “standard mediation agreement.” The standard agreement provides: “The parties agree not to communicate with each other directly or through persons acting on their behalf….” Further, although the standard agreement does not anticipate parties sharing a residential building, it says: “The parties agree to stay away from each other and their respective property, including but not limited to, their residences, places of employment, and personal property,” and “[s]hould the parties encounter each other in a public place, they agree to continue going in their respective directions away from one another.”

The standard-issue mediation agreement also has a nondisparagement clause of sorts. It provides that the “parties agree to not gossip about each other to anyone. The parties further agree to not comment … about each other to nongovernmental 3rd parties unless specifically requested to do so. If they are asked to comment, they shall refer to each other using neutral terms and shall not use negative words or disparage one another.” By specifically exempting “governmental 3rd parties” from its ambit, the form makes clear that such agreements are intended to prevent interpersonal third party “gossip” and rumor-spreading, not official filings with legal authorities. The similarities between Doe and Olson’s agreement and the standard-issue form suggest that the parties did not intend something out of the ordinary with 681*681 their agreement. The standard-issue form, moreover, makes clear that the typical nondisparagement clause is not intended to apply to litigation conduct.

Absent from either Doe and Olson’s agreement or the standard mediation agreement are terms providing any release from liability or waiver of claims. Olson seeks a broad reading of the nondisparagement clause, one that would effectively serve the purpose of those missing terms. Yet we must tread carefully in such circumstances. “`Release, indemnity and similar exculpatory provisions are binding on the signatories and enforceable so long as they are … “clear, explicit and comprehensible in each [of their] essential details. Such an agreement, read as a whole, must clearly notify the prospective releasor or indemnitor of the effect of signing the agreement.”‘” (Skrbina v. Fleming Companies (1996) 45 Cal.App.4th 1353, 1368 [53 Cal.Rptr.2d 481], quoting Powers v. Superior Court (1987) 196 Cal.App.3d 318, 320 [242 Cal.Rptr. 55].) Moreover, according to the terms of the agreement, Doe’s section 527.6 petition was dismissed “without prejudice,” in clear contemplation of the potential for further section 527.6 proceedings. A broad reading of the nondisparagement clause would render a dismissal without prejudice meaningless if Doe could be liable for breach of the mediation agreement were she to exercise her right to seek further section 527.6 relief against Olson or against any other party where the underlying factual allegations touch on Olson. Olson concedes that the mediation agreement does not limit Doe’s ability to file a renewed petition for a restraining order against him; he agrees that Doe would not face contract damages for doing so. But he provides no reason to believe the parties intended to permit Doe to make disparaging remarks in one kind of litigation (a subsequent petition for a restraining order) but not in other litigation seeking a different type of relief.

The parties’ agreements further suggest that they contemplated the possibility of future litigation outside of section 527.6 proceedings. The “Mediation/Confidentiality Agreement” between Doe and Olson says that “each party … understands and acknowledges that evidence presented during this mediation may be verified outside of the mediation process and used as evidence in subsequent legal proceedings.” (Italics added.) The mediation agreement itself also specifically provides, immediately above the signature line, that “this written settlement may be disclosed in a court of law. Upon disclosure, this agreement may be admitted as evidence and/or enforced as determined to be appropriate by the court.” Thus, the parties’ agreements as a whole counsel against an expansive reading of the nondisparagement clause.

Second, the mediation agreement is inextricably linked to the broader context in which it was negotiated—i.e., in a proceeding for a civil harassment restraining order. This context is critical. (See Civ. Code, § 1647 682*682 [“A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates.”]; id., § 1648 [“However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract.”].) Such a proceeding is statutorily designed to narrowly focus on interpersonal conflict. Its purpose, when warranted by the circumstances, is to prevent threatened future injury through a resulting “order enjoining a party from harassing, intimidating, molesting, attacking, striking, stalking, threatening, sexually assaulting, battering, abusing, telephoning, including, but not limited to, making annoying telephone calls, as described in Section 653m of the Penal Code, destroying personal property, contacting, either directly or indirectly, by mail or otherwise, or coming within a specified distance of, or disturbing the peace of, the petitioner.” (§ 527.6, subd. (b)(6)(A).)

The narrow focus of these proceedings is communicated to petitioners through instructions issued by the Judicial Council. Judicial Council form CH-100-INFO explains that the purpose of a civil harassment restraining order is to “protect people from harassment.” The instructions explain that in a civil harassment case, the court can “order a person to … [¶] [n]ot harass or threaten you[,] [¶] [n]ot contact or go near you, and [¶] [n]ot have a gun.” But the court cannot, among other things, “[O]rder a person to pay money that he or she owes you.”

That the petitioner in a section 527.6 proceeding has no ability to seek, and the court has no authority to order, redress of past wrongs through damages or otherwise does not mean that a petitioner waives the right to separately seek such other remedies merely by utilizing this specialized statutory procedure for imminent injunctive relief. To the contrary, the statute expressly provides that “a petitioner” is “not preclude[d] from using other existing civil remedies.” (§ 527.6, subd. (w).) “Section 527.6 was passed to supplement the existing common law torts of invasion of privacy and intentional infliction of emotional distress by providing quick relief to harassment victims threatened with great or irreparable injury,” not to supplant those complementary remedies. (Grant v. Clampitt (1997) 56 Cal.App.4th 586, 591 [65 Cal.Rptr.2d 727], italics added.)

“Compromise agreements are, of course, `governed by the legal principles applicable to contracts generally …’… [and] `regulate and settle only such matters and differences as appear clearly to be comprehended in them by the intention of the parties and the necessary consequences thereof, and do not extend to matters which the parties never intended to include therein, although existing at the time.'” (Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 677 [186 Cal.Rptr. 589, 652 P.2d 437], citation omitted.) We have applied this principle in a somewhat analogous 683*683 context where we considered the meaning of the standard language used to release claims and causes of action in workers’ compensation settlements. (See Claxton v. Waters (2004) 34 Cal.4th 367 [18 Cal.Rptr.3d 246, 96 P.3d 496].) Despite the broad language of the release at issue in Claxton— “`releas[ing] and forever discharg[ing] said employer and insurance carrier from all claims and causes of action, whether now known or ascertained, or which may hereafter arise or develop as a result of said injury'”—we held that it “releases only those claims that are within the scope of the workers’ compensation system, and does not apply to claims asserted in separate civil actions.” (Claxton, at pp. 371, 376.) We construed this language in light of the statutory context governing workers’ compensation—in particular, the statute focuses narrowly on eligible employee injuries where it provides the exclusive remedy; some claims based on conduct contrary to fundamental public policy are not subject to the scheme’s exclusivity provisions; and other claims are not compensable or cognizable under the scheme at all and must be pursued separately. (Id. at pp. 372-374.) We also noted the goal of “quickly provid[ing] benefits” to “injured workers,” the “informal rules of pleading [that] apply to such proceedings,” and the fact that “workers may be represented by individuals other than attorneys.” (Id. at p. 373.)

Similar reasoning applies here. As noted, a petitioner seeking a civil harassment restraining order and a court reviewing such a request are confined by the limited nature of section 527.6 proceedings. Tort and other actions seeking retrospective relief by way of damages for the conduct underlying a petition are not cognizable. It is clear from the statute and legislative history that section 527.6 proceedings are not intended to provide a forum for a global resolution of a petitioner’s potential claims related to the underlying conduct at issue. Rather, section 527.6 provides “`an expedited procedure … to provide quick relief to harassed persons'” (Smith, supra, 149 Cal.App.3d at p. 405), not to the exclusion of a petitioner’s right to seek other relief through traditional civil litigation and at a much slower pace (see § 527.6, subd. (w)). Like the workers’ compensation scheme in Claxton, section 527.6 procedures are relatively informal, proceeding by “simple and concise” forms that parties are required to use (§ 527.6, subd. (x)(1)) and “with the expectation that victims often … seek relief without the benefit of a lawyer,” as was the case here with Doe proceeding in propria persona (Yost, supra, 51 Cal.App.5th at p. 521).

Moreover, the specific procedures governing the mediation process for section 527.6 proceedings seem uniquely unsuited to expanding a section 527.6 mediation beyond the statute’s narrow focus. The parties were referred to mediation on the day of the trial court hearing on Doe’s petition. As amici curiae note, such mediations “are conducted only by court appointed specially trained mediators,” “only on the court’s premises,” and agreements “must be agreed to and signed the same day, by the close of the courthouse day, which 684*684 is usually about 4:30 p.m.” If the parties fail to reach an agreement, an evidentiary hearing on the section 527.6 petition typically begins the following day. These procedures appear tailored to the narrow focus and expedited nature of section 527.6 proceedings; expanding the mediation to consider additional issues would run counter to the statutory purpose of “`provid[ing] quick relief to harassed persons.'” (Smith, supra, 149 Cal.App.3d at p. 405.) This counsels skepticism toward reading an agreement reached through such a process to have far-reaching implications beyond the section 527.6 context.

Finally, it is undisputed that Doe’s administrative and civil complaints constitute petitioning activity protected by section 425.16 and article I, section 3 of the California Constitution. (See Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115 [81 Cal.Rptr.2d 471, 969 P.2d 564] [“`petitioning activity involves lobbying the government, suing, [and] testifying'” and “`”[t]he constitutional right to petition … includes the basic act of filing litigation or otherwise seeking administrative action”‘”].) Although the right to petition is somewhat differently situated from the right to a jury trial under article I, section 16 of the California Constitution (see Code Civ. Proc., § 631; Grafton Partners v. Superior Court (2005) 36 Cal.4th 944 [32 Cal.Rptr.3d 5, 116 P.3d 5]), the fact that Olson’s broad construction of the nondisparagement clause in the mediation agreement would impair Doe’s exercise of constitutional rights remains an important consideration. (Janus v. State, County, and Municipal Employees (2018) 585 U.S. ___ [201 L.Ed.2d 924, 138 S.Ct. 2448, 2486] [waiver of 1st Amend. rights “cannot be presumed” and, “to be effective, … must be freely given and shown by `clear and compelling’ evidence”].)

In sum, the mediation agreement as a whole, the statutory context in which it was negotiated, and the fact that it implicates constitutionally protected petitioning activity lead us to conclude that the nondisparagement clause does not apply to the circumstances here. Under the reading Olson urges, the clause would seem to constrain Doe’s ability to further avail herself of the very protections provided by section 527.6, including filing another petition or utilizing the “other existing civil remedies” that the statute expressly preserves. (§ 527.6, subd. (w).) Under Olson’s interpretation of the agreement, the nondisparagement clause would even apply to statements the parties make in litigation involving third parties or about conduct occurring after Doe and Olson entered into the agreement. We see no indication that the parties understood the nondisparagement clause to sweep so broadly. Olson’s reliance on the bare text of the clause, devoid of context and without more, is insufficient to proceed on a breach of contract claim in the face of an anti-SLAPP motion.

We are not confronted with factual circumstances that might make the anti-SLAPP question more difficult, such as conduct that falls somewhere 685*685 between direct communication between the parties as contemplated by the mediation agreement and subsequent litigation. For example, this case does not concern whether the nondisparagement clause might apply to a concerted, hostile media campaign by one party against the other. We have no occasion here to address such a scenario. Olson has failed to show “the requisite minimal merit” to “proceed” on his breach of contract claim. (Navellier, supra, 29 Cal.4th at p. 94.)

 

B.

 

Olson argues that Doe may “try to prove her tort causes of action” but “cannot shoot and miss without facing the penalty of contract damages.” First, Olson analogizes the Court of Appeal’s holding to the statutory provisions governing family law proceedings and custody determinations in the face of one parent’s potentially false accusations of sexual abuse by the other. According to Olson, such family law provisions demonstrate “another context where the Legislature has recognized the incentive to make false accusations can be so great as to overwhelm the motivation for veracity.” But the analogy does not hold. We are not confronted with how to apply a highly reticulated statutory scheme reflecting the Legislature’s sensitive policy judgments. This case turns on an ordinary question of contract interpretation that the Legislature likely did not contemplate when enacting section 527.6 or the anti-SLAPP statute.

Next, Olson contends that the answer to the question before us is “simple because the Court of Appeal’s holding does not bar Doe’s claims but allows Olson to plead and prove his.” Olson’s argument is that “the non-disparagement clause in the mediated agreement does not operate to `bar’ Doe’s `unlimited civil lawsuit'” because Doe can still proceed with her claims, just with the specter of breach of contract liability hanging over her head. This fails to respond to the substance of the question at hand. Whether the claim is that Doe cannot file suit or that she may be subject to damages liability for doing so is materially the same for purposes of assessing whether the nondisparagement clause applies to statements made in connection with subsequent litigation.

In Olson’s view, even if Doe prevailed on her sexual battery claim, he could also prevail on his breach of contract claim and seek damages for economic injury based on reputational harm to offset any damages he owed her. Such an interpretation could require Doe to pay Olson after having successfully proven her case if his damages exceed those awarded to her. There are strong public policy reasons to refrain from such an interpretation. Not long after the mediation agreement in this case was signed, the Legislature clarified that a provision within a settlement agreement that prevents the 686*686 disclosure of factual information related to sexual assault or harassment is prohibited. (Code Civ. Proc., § 1001, subd. (a)(1), (2); see Assem. Com. on Judiciary, Analysis of Sen. Bill No. 820 (2017-2018 Reg. Sess.) as amended June 20, 2018, pp. 3-4 [expressing concerns with confidentiality provisions in settlement agreements in cases involving sexual harassment and assault].) While Olson’s interpretation of the clause would not prohibit Doe from revealing factual information, the specter of liability would clearly disincentivize it.

Olson is correct, of course, that generally speaking a party can “validly contract[] not to speak or petition” and thereby “`waive[]’ the right to the anti-SLAPP statute’s protection in the event he or she later breaches that contract.” (Navellier, supra, 29 Cal.4th at p. 94.) But the circumstances here are meaningfully different from what we have confronted in other cases.

In Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781 [249 Cal.Rptr.3d 295, 444 P.3d 97], a tort settlement “included several provisions purporting to impose confidentiality obligations on the parties and their counsel,” and counsel signed the agreement “under a notation that they approved [it] as to form and content.” (Id. at p. 785.) Monster Energy subsequently sued counsel, alleging that public statements about the settlement constituted breach of the agreement. We held that Monster Energy had met its burden of showing the “minimal merit” needed to proceed on the breach of contract claim “[i]n light of the nature and extent of provisions in the agreement here purporting to bind counsel, and the other properly submitted evidence.” (Id. at p. 796.) We specifically looked to the agreement’s “numerous references to counsel as one whose keeping of confidentiality is assured,” which “reflect[ed] an expectation that the confidentiality provisions would apply to counsel as well.” (Ibid.) Thus, we found it “reasonable to argue that counsel’s signature on the document evinced an understanding of the agreement’s terms and a willingness to be bound by the terms that explicitly referred to him.” (Ibid.)

Whereas the agreement as a whole, together with extrinsic evidence, supported the breach of contract claim in Monster Energy, Olson relies solely on the text of the nondisparagement clause. Going beyond that isolated language, as we must, to consider the mediation agreement as a whole and the context in which it was negotiated undermines Olson’s showing on a critical element of his claim: Doe had no obligation under the contract to refrain from making disparaging statements in litigation. Olson thus cannot defeat Doe’s anti-SLAPP motion.

 

687*687 C.

 

We also granted review to decide under what circumstances the litigation privilege of Civil Code section 47, subdivision (b) applies to contract claims. Because we conclude that Olson has not demonstrated a probability of success necessary to overcome Doe’s anti-SLAPP motion, we need not and do not reach the question whether the litigation privilege also poses a barrier to Olson’s claims. (See Flatley v. Mauro (2006) 39 Cal.4th 299, 323 [46 Cal.Rptr.3d 606, 139 P.3d 2] [“The litigation privilege is also relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense a plaintiff must overcome to demonstrate a probability of prevailing.”].) We note only that the approach we have taken here—carefully construing a clause that would effectively waive claims—is similar to the approach of courts that have assessed the application of the privilege in the context of a contract said to have waived it. (See O’Brien & Gere Engineers v. City of Salisbury (2016) 447 Md. 394 [135 A.3d 473, 489-491].)

 

CONCLUSION

 

We reverse the judgment of the Court of Appeal insofar as it reversed the trial court’s order granting Doe’s special motion to strike the breach of contract cause of action with respect to statements in Doe’s civil complaint. We remand the matter for further proceedings consistent with this opinion.

Cantil-Sakauye, C. J., Corrigan, J., Kruger, J., Groban, J., Jenkins, J., and Moor, J.,[*] concurred.

[*] Associate Justice of the Court of Appeal, Second Appellate District, Division Five, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

 

Orangecrest Country Cmty. Ass’n v. Burns

Summary by Pejman D. Kharrazian, Esq.:

 

Homeowner Burns submitted an architectural request for various improvements to her property, one of which was the construction of six-foot high stucco walls in her front yard. The association’s architectural guidelines restrict owners from constructing walls or fences in their front yards. The association sent Burns a letter approving her proposed improvements with the following condition: “The stucco walls in the front yard have been denied.” Burns began constructing the walls anyway resulting in the association demanding that she immediately stop. Burns instead constructed non-stucco walls. When Burns failed to respond to the association’s mediation request, the association sued. At trial, Burns argued the “partial approval” letter denied her stucco walls, but did not deny her from building non-stucco walls. She also argued that the association allowed other owners to build walls in their front yards. The association argued that its intent to deny Burns’ proposed walls (stucco or not) is clear from its letter, but admitted that on occasion the association had allowed short walls no taller than three feet to be constructed in front yards. The trial court found in the association’s favor and issued a mandatory injunction ordering Burns to remove the walls. Burns appealed relying on the doctrine of equitable estoppel and arguing selective enforcement. The appellate court found Burn’s arguments unpersuasive. For equitable estoppel to exist, one party must be intentionally misled by another into doing something injurious to themselves that they would not have otherwise done. The appellate court found that the association made it abundantly clear in its letter that it had flatly denied Burns’ request to build the walls contemplated in her architectural request. As to Burns’ selective enforcement argument, the appellate court held that she failed to provide evidence that the association allowed other walls similar to hers to be built.

TAKEAWAY: Make sure your association’s architectural improvement approval or denial letters are abundantly clear and leave no room for other reasonable interpretations as to the association’s decision regarding those improvements. Additionally, if your association has allowed other violations of a particular restriction to stand, then it has effectively given up its right to enforce that same restriction against another owner for the same or similar violation.

***End Summary***

June 9, 2022, No. E074445) 2022 Cal. App. Unpub. LEXIS 3563; 2022 WL 2072063.*

No. E074445.

Court of Appeals of California, Fourth District, Division Two.

 

Filed June 9, 2022.
APPEAL from the Superior Court of Riverside County, Super. Ct. No. RIC1813722, Steven G. Cornelis, Judge. Affirmed.

Sandra Burns, in pro per.; Keiter Appellate Law and Mitchell Keiter for Defendant and Appellant.

Tinnelly Law Group and Sarah A. Kyriakedes, for Plaintiff and Respondent.

 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

 

OPINION

 

SLOUGH, J.

Defendant Sandra Burns sought approval to build a wall across her front yard, and when her homeowners association said no, she built it anyway. After multiple attempts to get her to stop construction (and later to mediate the issue) failed, the association sued Burns, seeking a permanent injunction requiring her to remove the wall. Following a two-day bench trial, the judge found Burns had willfully violated her community’s declaration of covenants, conditions, restrictions and reservations (CC&R’s) and issued the injunction.

On appeal, Burns asserts two grounds for reversal. She argues the trial judge erred by failing to find that: (1) the affirmative defense of equitable estoppel applied to justify her construction of the wall, and (2) the association acted unfairly and discriminatorily because they have allowed other homeowners to build walls in their front yards. We conclude these contentions lack merit and affirm.

 

I

 

 

FACTS

 

Burns owns a home in Orangecrest Country, a residential community managed by Orangecrest Country Community Association (the association). She purchased the home subject to the association’s governing documents, which include the community’s CC&R’s and Architectural Guidelines.

Under Article VII, section 7.18 of the CC&R’s, a homeowner may not alter the exterior appearance of their lot without prior approval from the association’s Architectural Committee (the committee). Among other criteria, before approving an alteration, the committee must find that it “will not be detrimental to the appearance of the surrounding area” and “will be in harmony with the surrounding structures.” (CC&R, Art. VIII, § 8.4.1.) Certain structures, however, are flatly prohibited. As relevant here, section 4.11 of the Architectural Guidelines restricts homeowners from installing any walls or fences in the front “setback,” which is the area from the property line located in the center of the street to the front of the home. In practical terms, the setback is the front yard.

On April 27, 2017, Burns submitted an application requesting approval for six modifications to her property—front yard landscaping, painting, a patio cover for the backyard, new rain gutters, and stucco walls in the side yard and front yard. On May 9, the association sent Burns a “partial approval” letter informing her that her plans submitted on April 27 “for installation of front yard landscape, rear yard patio cover, painting and rain gutters . . . have been approved by the Architectural Committee with the following conditions: The stucco walls in the front yard have been denied.” (Emphasis in original.)

On June 30, the association learned that contractors had begun construction on a wall in Burns’s front yard. That same day, the association reached out to Burns by mail, email, and telephone. Elmorabit sent Burns an email and left her a voice message informing her that she lacked approval for the wall she was building on her property and asking her to stop construction immediately. The association sent Burns a cease and desist letter saying the wall being built on her property had not been approved, pointing her to the approval requirement in Article VII, section 7.18 of the CC&R’s, and asking her to “cease work immediately.” The following day, Burns called Elmorabit and “made some remark about not having time for this.”

On July 2, Etienne Caroline, the president of the association’s board of directors, spoke with the construction workers at Burns’s property, told them to check to see if Burns had approval to build the wall, and left his telephone number for her to call him. Burns called Caroline later that day and hung up on him after a brief, contentious conversation.

About a week later, on July 10, the association gave Burns notice they would hold a disciplinary hearing on her noncompliance on August 10. Construction was completed on Burns’s wall sometime later that month.

On August 8, Burns submitted a new application for a wall in her front yard on which she wrote, “no stucco!! Per approval with conditions letter dated 5/9/2017.” On August 9, the association sent Burns a denial letter stating the committee had never approved her wall and demanding she remove it.

At the disciplinary hearing the following day, Burns told the association’s board of directors she had “nothing to say” to them. On August 15, the association sent her a Hearing Decision letter informing her that she had until September 1 to remove the unapproved wall from her front yard.

When Burns failed to remove the wall or respond to their attempts to mediate the dispute, the association filed this lawsuit. In the parties’ joint pretrial statement, Burns informed the court she would not be offering any affirmative defenses at trial. She stipulated that she had received the partial approval letter denying the stucco walls in the front yard and that she had instructed her contractors to build “a wall without stucco” across the front of her property sometime in June or July 2017. She also stipulated that the association had sent her a cease and desist letter and that the wall was still present on her property.

Riverside County Superior Court Judge Steven Counelis presided over the two-day bench trial. The association called four witnesses—Elmorabit, Caroline, Jeff Smith (the association’s architecture expert), and committee member Dennis Friedman. The first two witness described their interactions with Burns about her wall and the association’s attempts to resolve the issue. Smith explained the purpose of the setback rule was twofold—to maintain a consistent open and expansive design and to prevent interference with utility easements. He said Burns’s wall, which was seven feet tall at its highest point, clearly violated the setback rule. Not only was it located in the setback area (or front yard), but Burns had it installed only seven feet beyond her property line, which was immediately adjacent to the sidewalk and interfered with the public’s right-of-way. Smith explained that under the applicable city zoning ordinance, any wall located in the setback area cannot exceed three feet in height, except semitransparent parts of the wall can be as high as four feet tall. Friedman said that during his four years serving on the committee they had never approved a “full size” front yard wall. He said the committee would approve short retaining, landscaping, or decorative walls in the front yard, but nothing taller than three feet. The association also presented evidence that they had recently enforced the setback rule against another resident with a tall front wall similar to the one Burns erected, resulting in the wall’s removal.

Burns, who represented herself at trial as she does on appeal, cross-examined the association’s witnesses but called no witnesses of her own and did not testify on her own behalf. During her cross-examination of Friedman, Burns attempted to impeach his testimony that the committee had never approved a full-size front yard wall by showing him photographs of three other properties in the community that had walls in the front yard. The first photograph depicted a short retaining wall covered by landscaping. The second depicted a short wall on the side of the front yard that ran perpendicular to the side walk and separate that homeowner’s yard from their neighbor’s. And the third depicted an even shorter wall running across a portion of the front yard located several feet behind the sidewalk. Friedman said he wasn’t familiar with the second and third walls because he wasn’t on the committee when they were approved but said the first wall was a permissible retaining wall that didn’t violate the setback rule.

During closing statements, Burns argued she did in fact have approval to build the wall. She argued the phrase “[t]he stucco walls in the front yard are denied” in the May 9 partial approval letter constituted a “conditional approval” to build a wall, so long as it wasn’t made of stucco. She said, “You just don’t put the term conditional approval not relating to anything. So I don’t have a reading comprehension problem. I have a Ph.D. I think I can read, and I think I can articulate what I’m reading. . . . I spent $10,000 on that wall. I wouldn’t be sitting here [having] dedicated 28 months to this case if I truly believed I don’t have in my possession a conditional approval for the wall. That’s it, Your Honor.”

The judge rejected Burns’s claim of conditional approval, finding that even if she had initially (and unreasonably) read the May 9 letter as a conditional approval, the association disabused her of that interpretation when construction began. The judge found Burns “was put on notice, that there was no approval . . . [and] willfully violated the CC&R’s [and] chose to proceed with construction of the wall in opposition to communications from the homeowners association.” He found Burns “led herself to believe that she may establish her own loophole and proceed with construction.”

The judge entered judgment in the association’s favor and issued a mandatory injunction ordering Burns to remove the wall and to submit an application to restore the landscaping that had been removed to construct the wall. Burns filed this appeal.

 

II

 

 

ANALYSIS

 

 

A. Equitable Estoppel

 

For the first time on appeal, Burns argues that the doctrine of equitable estoppel justifies her construction of the wall. Based on principles of fairness, we do not consider factual theories not raised during trial. (Ghazarian v. Magellan Health, Inc. (2020) 53 Cal.App.5th 171, 191; see also Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847 [permitting a party to “`adopt a new and different theory on appeal . . . would not only be unfair to the trial court, but manifestly unjust to the opposing litigant'”].) But even if we were to consider this newly raised defense, we would conclude it doesn’t apply.

“`The doctrine of equitable estoppel is founded on concepts of equity and fair dealing. It provides that a person may not deny the existence of a state of facts if he intentionally led another to believe a particular circumstance to be true and to rely upon such belief to his detriment. The elements of the doctrine are that (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel has a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.'” (City of Goleta v. Superior Court (2006) 40 Cal.4th 270, 279.)

The crux of estoppel is that one party has intentionally misled another to do something injurious to themselves that they otherwise would not have done. (Brown v. Chiang (2011) 198 Cal.App.4th 1203, 1227.) But “simple reliance on a false statement or conduct is not enough.” (Ibid.) To invoke the doctrine of equitable estoppel, “the reliance must be reasonable.” (Ibid.)

According to Burns, the association intentionally misled her to believe she had been given conditional approval for the wall by stating in the May 9 letter that “[t]he stucco walls in the front yard have been denied.” She claims she believed she could install the wall on the condition she not use stucco. The problem with this argument is that Burns’s claimed reliance was not reasonable. To begin with, there is no basis for her interpretation of the May 9 letter. The association couldn’t have been more clear. The letter was entitled a “partial approval” is because everything in Burns’s application except the wall had been approved; nothing about the direct assertion “[t]he stucco walls in the front yard have been denied” suggests a condition or the opportunity for negotiation. But even more importantly, even if there were two ways to interpret the May 9 letter, the association made it abundantly clear that it had flatly denied the walls on June 30, when they contacted Burns through multiple media to ask her to stop construction and reiterate that she did not have approval for the wall. Thus, if Burns had raised an equitable estoppel defense at trial, the defense would have failed.

 

B. Evidence of Other Walls

 

Next, Burns claims she presented evidence the association acted unfairly and unreasonably by allowing other homeowners within the community to construct walls in their front yards, and she argues the judge should have afforded that evidence more weight. We conclude the judge properly afforded little significance to the existence of the other walls because they bore no similarity to Burns’s wall.

When a homeowners association seeks to enforce its CC&R’s, the association bears the burden of demonstrating “that it has followed its own standards and procedures prior to pursuing such a remedy, that those procedures were fair and reasonable and that its substantive decision was made in good faith, and is reasonable, not arbitrary or capricious.” (Pacific Hills Homeowners Assn. v. Prun (2008) 160 Cal.App.4th 1557, 1565-1566.) The homeowner, however, bears the burden of proving the affirmative defense of waiver—that is, that the association has allowed so many violations of a particular restriction to stand that it has effectively given up its right to enforce the rule. (E.g., Id. at p. 1567 [homeowner bears the burden of producing “evidence of another homeowner’s violation” of the CC&R’s to “support their waiver argument”].)

Here, the association demonstrated they followed their own standards and procedures, but Burns failed to provide evidence that the association had allowed another wall like hers to stand. According to the testimony of Elmorabit and Friedman, the committee reviewed Burns’s application under the rules and criteria contained in the CC&R’s and Architectural Guidelines and denied her wall proposal based on the setback rule in section 4.11 of the Architectural Guidelines. They communicated this decision in their May 9 letter to Burns; sent letters, emails, and made phone calls demanding that Burns comply with the decision once they found out she was moving forward with construction; held a disciplinary hearing and informed her of the outcome; invited her to participate in alternative dispute resolution; and—when none of those responses worked—finally filed suit. They also presented evidence of a similar wall they successfully had removed for violating the same setback rule. This evidence supports a finding that the association followed their ordinary procedures in reviewing and partially denying Burns’s application and in attempting to enforce their decision.

Burns, on the other hand, did not present any evidence the association had allowed other homeowners to build similar nonconforming walls. As we’ve noted, none of the three walls Burns relies on are higher than three feet, and none abut (and run parallel to) the sidewalk. Because of these differences, the judge’s determination that he was “not persuaded by that argument at all” is entirely reasonable. We are unpersuaded by Burns’s claim the judge committed legal error by ignoring the evidence of the other walls she presented during trial. Rather, our review of the judge’s ruling satisfies us that he considered the evidence Burns presented but simply found it insufficient to prove the other walls were in any way similar to hers or even in violation of the setback rule. It was Burns’s burden (not the association’s) to demonstrate the association had let residents erect walls like hers in the community, and she failed to carry that burden.

We conclude Burns’s claims of error fail and uphold the order granting the injunction.

 

III

 

 

DISPOSITION

 

We affirm the judgment. Respondent shall recover their costs on appeal.

RAMIREZ, P. J. and FIELDS, J., concurs.

Schwindt v. Omar

Summary by Pejman D. Kharrazian, Esq.:

 

Homeowner Omar built a room addition that was approved by the association, over the objection of Schwindt, a complaining neighbor. Schwindt sued alleging the room addition was built in a prohibited patio area and interfered with her view. The court agreed that Omar built the room addition in a prohibited patio area, but found the board did not act arbitrarily or capriciously when it determined the addition did not unreasonably interfere with Schwindt’s view. The court denied Schwindt’s request for a mandatory injunction because the hardship to Omar in having to remove his improvements would outweigh the hardship to Schwindt in having to live with a slightly reduced view.

TAKEAWAY: Courts will look at reasonableness in light of the project as a whole and consider the language of the governing documents. In this case, the governing documents gave the board discretion to allow some items in the prohibited patio area. The court distinguished this association’s governing document from the more restrictive CC&Rs language in Ekstrom v. Marquesa at Monarch Beach Homeowner’s Assn. In Ekstrom, the CC&Rs did not give the association discretion to allow trees to obstruct any portion of any lot view, whereas the CC&Rs provision in this case gave the board discretion to approve an improvement, unless the “Proposed Improvement . . . would unreasonably obstruct the view from any other Residence in the Project.”

***End Summary***

(May 17, 2022, Nos. G05943, G059687) 2022 Cal. App. Unpub. LEXIS 3011; 2022 WL 1550691.*

Nos. G059343, G059687.

Court of Appeals of California, Fourth District, Division Three.

 

Filed May 17, 2022.
Appeal from a judgment of the Superior Court of Orange County, Super. Ct. No. 30-2015-00774201, Randall J. Sherman, Judge. Affirmed.

Bohm Wildish & Matsen, Daniel R. Wildish and Charles H. Smith for Plaintiff and Appellant.

Stuart Kane, Eve A. Brackmann, Donald J. Hamman; Apex Lawyers, Shazad Z. Omar; Howard & Howard Attorneys and Ryan A. Ellis for Defendants and Appellants.

 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

 

OPINION

 

MOORE, J.

Dr. Christina Schwindt lives in a Newport Beach community (the Bluffs) governed by a Homeowners Association (HOA). Schwindt’s next door neighbors, Ruhksana and Akbar Omar, built a room addition onto their home. The HOA’s Board of Directors (the Board) approved the room addition over Schwindt’s objection.

Schwindt sued the Omars alleging the room addition violated the Bluffs’ Covenants, Conditions, and Restrictions (CC&Rs). Schwindt alleged the addition was built in a prohibited patio area and it unreasonably interfered with her view. In an earlier bench trial, the court issued a mandatory injunction ordering the Omars to demolish their room addition and return their home to its original state. The Omars appealed.

This court reversed and remanded because the trial court’s statement of decision failed to address whether the room addition was built in a prohibited patio area and whether the court found the Board’s approval to be clearly arbitrary and capricious. (Schwindt v. Omar et al., (Sept. 28, 2018, G054373) [nonpub. opn.].)

On remand, a different trial court judge conducted a second bench trial, which included a site visit. The court found the Omars built the room addition in a prohibited patio area, but the court found the Board was not arbitrary and capricious when it determined the addition did not unreasonably interfere with Schwindt’s view. The court denied Schwindt’s request for a mandatory injunction because “the hardship to [the Omars] in having to remove their improvements would outweigh the hardship to [Schwindt] in having to live with her slightly reduced view.”

The Omars requested $377,134.32 in attorney fees. The trial court ordered Schwindt to pay the Omars $100,000.00 in attorney fees.

Schwindt filed an appeal from the trial court’s denial of her requested injunction and an appeal from the award of attorney fees. Omar filed a cross-appeal, challenging the amount of attorney fees. This court consolidated the appeals.

We find no abuse of the trial court’s discretion in any of its rulings. Thus, we affirm the judgment in all regards.

 

I

 

 

FACTS AND PROCEDURAL HISTORY

 

In 2004, Schwindt purchased a home in the Bluffs Community in Newport Beach. From the rear of the property, Schwindt’s home features views of the back bay, to include views of the Pacific Ocean and Catalina Island.

In 2014, the Omars purchased a home next door to Schwindt’s home. The Omars hired an architect, David Bailey, who drafted plans for an enclosed room addition. The room addition extended into the rear portion of the Omars’ home; an area that had formerly been used by the prior owner as a patio.

Bailey submitted the building plans to the Bluffs’ Architectural Control Committee (ACC), which initially rejected the proposed improvements. Bailey revised the plans at least twice and erected “story poles,” indicating how the views of surrounding neighbors would be impacted. Bailey conducted a “view analysis” and determined the impact of the proposed room addition on Schwindt’s view would be minimal. The ACC visited the property and eventually approved the plans for the (now smaller) room addition. Schwindt appealed the ACC’s decision to the Board.

Schwindt and other homeowners attended a Board meeting. A long-time resident, Claude Whitney, who had participated in the drafting of the Bluffs’ revised CC&Rs, attended the meeting. Whitney “specifically read the applicable CC&R’s to the Board about . . . the prohibition of building on a patio.” According to Whitney: “To our surprise, the Board went ahead, despite actual knowledge of the CC&R’s . . ., they approved it.”

Shortly thereafter, construction began on the Omars’ room addition. Schwindt sent a letter to the Omars requesting alternative dispute resolution. The Omars did “not consent to any form of arbitration, mediation, or alternative dispute resolution.”

In February 2015, Schwindt filed a complaint, alleging violations of the CC&Rs: 1) the Omars’ room addition was being built in a prohibited patio area; and 2) the structure unreasonably interfered with Schwindt’s view. The complaint sought declaratory and injunctive relief, and “damages according to proof at the time of trial in excess of $25,000.”

In March 2015, Schwindt, filed a motion for a temporary restraining order, seeking to prohibit the Omars “from continuing to build, construct, erect or otherwise install any room addition or other enclosed improvement on any portion of their patio area and/or future patio area.” The trial court denied the temporary injunction but told the Omars they were proceeding at their own risk.

In July 2016, after a three-day bench trial, the trial court issued a mandatory injunction requiring the Omars “to promptly demolish the enclosed room addition and to restore the premises, insofar as is possible, to its condition prior to the construction of the enclosed room addition.” The Omars appealed from the judgment.

In September 2018, this court reversed: “We direct the trial court on remand to directly address . . . within its statement of decision (whether the court found the decision of the Board to be clearly arbitrary and capricious, and whether the Omar’s room addition was built on a prohibited patio easement).” (Schwindt v. Omar et al., supra, G054373.)

In December 2019, the trial court (a different judge) presided over a three-day bench trial. After visiting the site, the court denied Schwindt’s request for a permanent mandatory injunction (there was no longer a request for damages).

In August 2020, the Omars filed a motion requesting $377,134.32 in attorney fees. The trial court found the Omars to be the prevailing party and awarded $100,000.00 in attorney fees.[1]

 

II

 

 

DISCUSSION

 

Schwindt filed an appeal from the trial court’s denial of her request for a permanent injunction, and later filed an appeal from the court’s order granting the Omars attorney fees. Omar filed a cross-appeal challenging only the amount of the attorney fee award. This court consolidated the appeals.

In this opinion, we will address the: A) the trial court’s denial of Schwindt’s request for an injunction; and B) the attorney fee award to the Omars.

 

A. The Trial Court’s Denial of Schwindt’s Request for an Injunction

 

Schwindt argues the trial court erred when it denied her request for an injunction (the demolition of the Omars’ room addition). We disagree.

A trial court’s decision to deny a party’s request for an injunction is reviewed for an abuse of its discretion. (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 771; Husain v. California Pacific Bank (2021) 61 Cal.App.5th 717, 727-728 [“`the trial court is better equipped than we are to fashion equitable relief and we afford it considerable discretion'”].)

“The abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court’s ruling under review. The trial court’s findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious.”[2] (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)

In this part of the discussion, we will: 1) review relevant legal principles; 2) summarize the trial court proceedings; and 3) analyze the law as applied to the facts.

 

1. Relevant Legal Principles

 

Generally, “while the right to injunctive relief under proper circumstances is well established, its issuance is largely discretionary with the court and depends upon a consideration of all the equities between the parties. No hard and fast rule can be adopted which will fit all cases and hence each must be determined upon its own peculiar facts.” (Pahl v. Ribero (1961) 193 Cal.App.2d 154, 161.)

This “balancing of the equities” legal doctrine has been known by several names over the years, including “a balancing of the conveniences,” “a balancing of the equities and hardships,” and “the relative hardship doctrine.” (See Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 526; Associated Cal. Loggers, Inc. v. Kinder (1978) 79 Cal.App.3d 34, 38-39; Hirshfield v. Schwartz, supra, 91 Cal.App.4th at p. 758.)

“Under the relative hardship test, the trial court must identify the competing equities underlying each party’s position. It then must balance the relative hardships of granting or denying an injunction to remove encroachments from the plaintiff’s property.” (Hirshfield v. Schwartz, supra, 91 Cal.App.4th at pp. 761-762.)

“An injunction that requires no action and merely preserves the status quo” is known as a “prohibitory injunction”; “while an injunction requiring the defendant to take affirmative action” is known as a “mandatory injunction.” (Daly v. San Bernardino County Bd. of Supervisors (2021) 11 Cal.5th 1030, 1035.) Generally, “courts give greater scrutiny to mandatory injunctions.” (People ex rel. Brown v. iMergent, Inc. (2009) 170 Cal.App.4th 333, 343.)

CC&Rs are interpreted according to the principles applicable to all written contracts. (Westrec Marina Management, Inc. v. Arrowood Indemnity Co. (2008) 163 Cal.App.4th 1387, 1391-1392.) “The mutual intention of the contracting parties at the time the contract was formed governs. [Citations.] We ascertain that intention solely from the written contract, if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. [Citations.] We consider the contract as a whole and construe the language in context, rather than interpret a provision in isolation. [Citation.] We interpret words in a contract in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. [Citation.] If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs.” (Ibid.)

 

2. Trial Court Proceedings

 

In her complaint, Schwindt alleged the Omars violated the CC&Rs by building their room addition in a prohibited patio area and the home improvement unreasonably interfered with her view.

As to patio areas, the CC&Rs provide:

“No Owner shall build, construct, erect or otherwise install any Proposed Improvement which requires a Building Permit on any portion of his Patio Area and/or Future Patio Area without complying with the provisions of this Article and without first obtaining a Lot Line Adjustment. . . . Notwithstanding the foregoing, the [ACC] shall not have any right, power or authority to approve, and no Owner shall build, construct, erect or otherwise install any room addition or other `enclosed’ Improvement on any portion of his Patio Area and/or Future Patio Area.”

As to views, the CC&Rs provide:

“No owner shall build, construct or erect any Improvement or otherwise allow any Improvement located on such Owner’s Residential Estate to unreasonably interfere with the passage of light and air to, or the view from, any other Residence in the Project.” “The [ACC] shall not approve any Proposed Improvement which would unreasonably obstruct the view from any other Residence in the Project.” “All decisions of the Board shall be conclusive on the issue and binding on the parties unless such decision is clearly arbitrary and capricious.”

During the bench trial, Schwindt testified the room addition “has blocked the . . . entire left side of my home which was — actually the side that’s oriented towards the Catalina Island and ocean view, so it was the most important part of the view. . . .”

Whitney, the longtime resident, testified that although a person may have an ownership interest in “the patio . . . they still couldn’t build on it.” Whitney said the Omars’ room addition constituted a “clear encroachment on the patio.” The person who previously owned the Omars’ home testified the enclosed room addition extended into an area that he previously used as a patio. A construction expert similarly testified the Omars’ room addition was built in a patio area in violation of the CC&Rs, under the common sense understanding of the word patio.

Bailey, the Omars’ architect, testified the room addition did not extend into a prohibited “`Future Patio Easement Area.” Bailey said the story poles were erected based on feedback from the ACC, and the plans were revised to reduce the depth of the project based “in response to some of the neighbors comments about the addition.” In preparation for the Board meeting, Bailey prepared a “view analysis” based on the views from the neighbors’ homes. Bailey said Schwindt’s view was reduced about seven to 10 percent.

A Bluffs’ Board member testified the terms “Future Patio Area” and “Future Patio Area Easement” are used interchangeably in the CC&Rs. The Board member voted to approve the Omars’ proposed room addition. The Board member lived near the Omars’ home and had visited the site several times while the story poles were erected. The Board member concluded Schwindt’s view “would not be unreasonably obstructed.”

An ACC member testified the term “patio area” is not defined in the CC&Rs.[3] The ACC member said he had visited the Omars’ property to “evaluate the concerns to the adjacent neighbors, and then ultimately when the story poles are erected, to evaluate the concerns of the neighbors with physical evidence in place to understand whether it’s reasonable or unreasonable or what other impact it may have.” The ACC member testified: “By the time the second go-around went and story poles were reviewed by the committee, the committee was satisfied that it was not unreasonable. Not unreasonable view obstruction.”

After the close of evidence, “the Court concludes that the CC&Rs unambiguously prevents building in a patio area.” The court further concluded it was “clearly arbitrary and capricious for the Board to conclude otherwise.”

After the site visit, the court found “the view of the back bay water was not affected by the development. The view of Catalina, which was obstructed that day by clouds, that wasn’t obstructed by the development. The view of the Pacific Ocean was not obstructed by the development. The view that got obstructed was of — I guess it’s called the bluffs which is kind of like the side of the mountain.” The court concluded: “It would not be clearly arbitrary and capricious for the Board of Directors to have concluded that there was no unreasonable affect on [Schwindt’s] view.”

As far as the requested relief, the court said: “So this case is not about money damages. It’s about an injunction. Whenever the court issues an injunction, the court has to balance the hardships. And mandatory injunctions typically have a more stringent test than prohibitory injunctions. And in this case, it’s not necessarily true that just because an owner violates the CC&Rs by building in a prohibited patio area, that that has an adverse effect or significant adverse effect on one of the homeowners.”

The court concluded, “I do think it really comes down to whether [Schwindt’s] view was significantly impaired and that the patio area, as a legal issue for the decision in this case, kind of becomes somewhat moot.

“I mean, the fact that the CC&Rs specifically prohibit unreasonably obstructing a view kind of gives you the standard for the court to use on this hardship. It’s kind of the same thing even though it’s somewhat coincidental because it states the hardship was a loss of view. And so if the court were to conclude that the loss of view was unreasonably affected, then the court would find that that’s a significant hardship to the [Schwindt]. But in this case, the court is concluding that the hardship to the [Omars] outweighs the hardship to [Schwindt] in that the cost of tearing down what they built, even it [was], at the time of the denial of preliminary injunction, is a greater hardship than what is a somewhat minimal view loss for [Schwindt].

“You know, I appreciate the fact that the plaintiff didn’t want her view impeded whatsoever, but the standard in the CC&Rs is unreasonably, and the court of appeals mandate to the superior court that the court must go with the HOA’s conclusion unless it is clearly arbitrary and capricious. I mean, not even arbitrary and capricious, but clearly arbitrary and capricious, that based on these facts mandates a ruling in favor of the [Omars] on the injunction issue.

“You know, if this was a case about money and there was some quantitative showing of view loss or property value loss, I could get into that, but that’s not part of this case. [¶] So judgment will be for the [Omars].”[4]

 

3. Analysis and Application

 

It is apparent from the trial court’s cogent ruling that it was not arbitrary or capricious when it applied the law to the facts. The court was aware of the relevant case law. (See, e.g., Kahn v. Price, supra, 69 Cal.App.5th at pp. 241-242.) The court was also aware of the underlying facts; indeed, the court conducted a three-day bench trial, which included a site visit to see the impact of the room addition on Schwindt’s view.

The trial court properly identified the competing equities to the parties: the burden of tearing down the room addition to the Omars, versus the loss of view to Schwindt. (See, e.g., Hirshfield v. Schwartz, supra, 91 Cal.App.4th at pp. 761-762.) The court then concluded the “greater hardship” to the Omars outweighed the “minimal” hardship to Schwindt and denied her request for an injunction that would have required the destruction of the Omars’ room addition.

While we may have come to a different decision, we find no abuse of the trial court’s discretion. Thus, we affirm the court’s ruling.

Schwindt argues this court’s opinion in Ekstrom v. Marquesa at Monarch Beach Homeowner’s Assn. (2008) 168 Cal.App.4th 1111, 1121 (Ekstrom), compels a different result. We disagree.

In Ekstrom, a residential beach community Association’s CC&Rs provided: “All trees . . . shall be trimmed by the Owner of the Lot upon which they are located so that they shall not exceed the height of the house on the Lot; provided, however, that where trees do not obstruct the view from any of the other Lots in the Properties . . . they shall not be required to be so trimmed.” (Ekstrom, supra, 168 Cal.App.4th at pp. 1114-1115.) The Association routinely enforced the CC&R by ordering homeowners to trim their trees; however, the Association did not enforce the CC&R as to palm trees because the Board determined “the aesthetic benefit to the entire community from the maturing and now very lush looking palm trees outweighed the value of preserving views of just a few homeowners.” (Id. at p. 1116.) Some plaintiffs whose views were obstructed by the palm trees sued for injunctive relief. The trial court granted the mandatory injunction requiring the Association to enforce the tree trimming CC&R, even though the trimming (or topping) of the palm trees would result in their destruction. (Id. at pp. 1120-1121.) This court affirmed the ruling of the trial court. (Id. at p. 1127.)

In this case, the trial court found the Board’s approval of the Omars’ room addition in a prohibited patio area was clearly arbitrary and capricious.[5] Schwindt appears to be arguing that under the holding of Ekstrom—as a pure issue of law—the trial court was required to issue an injunction requiring the Omars to demolish their room addition and return their home to its original state. We disagree. In Ekstrom, the tree trimming CC&R did not give the Association the discretion to allow any trees to obstruct any portion of the view from any of the community’s lots. Conversely, the improvement provision in the Bluffs’ CC&Rs gave the Board the discretion to approve a proposed home improvement, unless the “Proposed Improvement which would unreasonably obstruct the view from any other Residence in the Project.” (Italics added.)

Here, after visiting Schwindt’s home, the trial court found the Board was not arbitrary and capricious when it determined that Schwindt’s view was not unreasonably obstructed by the Omars’ room addition. Thus, the trial court was not required to issue a mandatory injunction as the trial court did in Ekstrom.

Schwindt quotes Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 975, for the proposition: “Restrictions are evaluated for reasonableness in light of `the restriction’s effect on the project as a whole,’ not from the perspective of the individual homeowner. [Citations.] Accordingly, courts do not conduct a case-by-case analysis of the restrictions to determine the effect on an individual homeowner [but rather] must consider the reasonableness of the restrictions by looking at the goals and concerns of the entire development.” But the quoted portion of the published opinion concerns the presumptive reasonableness of an Association’s land use restrictions. The quotation certainly does not stand for the notion that a trial court must always issue a mandatory injunction every time a homeowner violates a CC&R, regardless of the seriousness or trivialness of the violation, or the court’s balancing of the equities.

Schwindt also argues “the Superior Court’s judgment left Schwindt wronged without a remedy.” We disagree.

At the time of the trial, Schwindt was no longer seeking damages and was only requesting declaratory and injunctive relief. As the trial court stated: “You know, if this was a case about money and there was some quantitative showing of view loss or property value loss, I could get into that, but that’s not part of this case.”

In other words, there may have been a remedy available to Schwindt—as the trial court seemed to suggest—but we will never know because Schwindt took the possibility of money damages off the table prior to trial. (See Vlahovich v. Cruz (1989) 213 Cal.App.3d 317, 323 [“A litigant will be held to his choice of remedies”].)

In sum, this case is not about a trial court judge ignoring a requirement of the CC&Rs (the patio building restriction). Indeed, the court recognized the Omars’ violation. But then the court deftly used another CC&R (the reasonable view restriction) to accurately weigh the equities because Schwindt’s action was only brought in equity.

 

B. The Attorney Fee Award

 

In this case: 1) Schwindt contends the trial court erred by awarding the Omars any attorney fees; and 2) the Omars contend the court erred by reducing their attorney fee award. We shall analyze the parties’ contentions.

 

1. The trial court did not err by awarding attorney fees to the Omars.

 

“In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civ. Code, § 1717, subd. (a).)[6]

“In an action to enforce the governing documents [CC&Rs], the prevailing party shall be awarded reasonable attorney’s fees and costs.” (§ 5975, subd. (c).)

Generally, “the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract. . . .” (§ 1717, subd. (b)(1).)

“A trial court has broad discretion in determining which party has obtained greater relief on the contract, and we will not disturb such a determination on appeal absent a clear abuse of discretion.” (In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 578.) “We are required to uphold a reasonable ruling even if we may not have ruled the same way and a contrary ruling would also be sustainable.” (Ibid.)

The Bluffs’ CC&Rs provide: “In the event the Declarant, the Association or any Owner shall commence legal proceedings to enforce any of the covenants and/or terms of this Declaration, or to declare rights and/or obligations arising hereunder, . . . the prevailing party in such action shall be entitled to recover its costs of suit and reasonable attorneys’ fees as may be fixed by the Court.” (Italics added.)

Here, after the trial court’s judgment on the merits, the Omars filed a motion for determination of the prevailing party and $377,134.32 in attorney fees, which was supported by numerous declarations and billing records. Schwindt filed an opposition, arguing “the `mixed results’ herein support a determination of `no party prevailing’ under Civil Code Section 1717.” Schwindt also argued the requested award should be denied or lowered because the Omars refused to participate in alternative dispute resolution. The Omars filed a reply.

After hearing oral argument, the trial court awarded the Omars $100,000.00 in attorney fees. The court found: the Omars “undoubtedly were the prevailing parties, because they ultimately received a Judgment in their favor.”

Since Schwindt was unsuccessful in obtaining a mandatory restraining order to remove the room addition, and the trial court found that impact on Schwindt’s view was minor, we agree with the court’s ruling that the Omars were the prevailing party. Thus, we find no abuse of the court’s discretion.

Schwindt argues the trial court found the Omars built their room addition in a prohibited patio area, and therefore they did not achieve a complete victory. Schwindt cites various opinions for the proposition that the trial court should have found there was no prevailing party. (See, e.g., Marina Pacifica Homeowners Assn. v. Southern California Financial Corp. (2018) 20 Cal.App.5th 191, 205-206 [court of appeal affirmed ruling of the trial court that there was no prevailing party for purposes of attorney fees because neither party achieved a complete victory].)

While we may have affirmed the trial court’s designation of no prevailing party (had that been the court’s ruling), such a finding is not required under section 1717, or any cases cited by Schwindt. The court was well within its discretion to designate the Omars as the prevailing party, and we will not disturb that finding on appeal.

 

2. The trial court did not err by reducing the attorney fee award.

 

“`The trial court has broad discretion to determine the amount of a reasonable fee, and the award of such fees is governed by equitable principles.'” (Ellis v. Toshiba America Information Systems, Inc. (2013) 218 Cal.App.4th 853, 881-882.)

“In an enforcement action in which attorney’s fees and costs may be awarded, the court, in determining the amount of the award, may consider whether a party’s refusal to participate in alternative dispute resolution before commencement of the action was reasonable.” (§ 5960.)

Trial courts ordinarily use the lodestar method to calculate an attorney fee award “`by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate. Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative “multiplier” to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented.'” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 489.)

In this case, the trial court ruled: “This case went through a bench trial, a reversal on appeal, and a new trial with a new judge. [The Omars] seek attorneys’ fees of $377,134.32, which includes $59,465.32 for the appeal. But if the parties had arbitrated, they would have had a binding decision the first time, rather than incur more fees on an appeal and a retrial. Thus, pursuant to Civil Code §5960, this court will `consider whether a party’s refusal to participate in alternative dispute resolution before commencement of the action was reasonable’, [and] conclude that [the Omars’] refusal to arbitrate was not reasonable, and award [the Omars] only the court’s best estimate of the fees [they] would have incurred if they had arbitrated this dispute.”

Here, we do not find the amount of the attorney fee award to be clearly wrong, so we find no abuse of discretion. (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 [“The `”experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong”‘”].)

On appeal, the Omars argue because Schwindt’s complaint requested $25,000.00 in damages and emergency injunctive relief, the Davis-Sterling Common Interest Development Act, which allowed for the lowering of the attorney fee award based on the refusal to arbitrate, does not apply. (See § 4000 et seq.) But this specific argument and other related issues were not raised in the trial court, so they have been forfeited for purposes of appeal. (See Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 417 [“As a general rule, `issues not raised in the trial court cannot be raised for the first time on appeal'”].)

Finally, the Omars argue “the trial court was required to follow the `lodestar’ approach.” However, the trial court was not required to provide a statement of decision. (See, e.g., Ketchum v. Moses, supra, 24 Cal.4th at pp. 1140-1141.) Nor was the court required to “otherwise detail its fealty to the law, which we presume.” (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1323; citing Evid. Code, § 664 [“It is presumed that official duty has been regularly performed”].)

To reiterate and conclude, we find no abuse of the trial court’s discretion in any of its rulings.

 

III

 

 

DISPOSITION

 

The judgment is affirmed. Neither party shall be awarded costs on appeal.

BEDSWORTH, Acting P.J. and GOETHALS, J., concurs.

[1] The trial court’s proceedings and rulings will be covered in greater detail in the discussion section of this opinion.

[2] Schwindt argues the standard of review is de novo “since the court below erred in its interpretation of the CC&R’s when it denied the injunction.” As we shall discuss, we find the trial court did not err in interpreting the CC&Rs. In any event, that aspect of the court’s ruling still falls within the scope of the broad abuse of discretion standard of review. (See Haraguchi v. Superior Court, supra, 43 Cal.4th at pp. 711-712.)

[3] At oral argument in this court Omars’ counsel argued the phrase “patio area” is defined in various provisions of the CC&Rs. However, we note that in the “Definitions” section of the CC&Rs (Article I), the phrase “patio area” is not among the several words or phrases that is specifically listed.

[4] The court later incorporated its oral ruling into its written statement of decision.

[5] The Omars argue the trial court was mistaken as to “patio area” portion of its ruling. But they did not file a cross-appeal as to this issue. (See California Rules of Court, rule 8.406(b).) In any event, we agree with the trial court that the issue is essentially moot given the court’s denial of Schwindt’s requested injunction.

[6] Further undesignated statutory references are to the Civil Code.

 

Miller v. Roseville Lodge No. 1293

Summary by Pejman D. Kharrazian, Esq.:

 

Roseville Lodge No. 1293, Loyal Order of Moose, Inc. (the Lodge) hired contractor Gelatini to move an automated teller machine (ATM) on its premises. Miller worked for Gelatini and performed the work. Miller was injured on the job when he fell from a scaffold that did not have its wheels locked at the time, and he sought to hold the Lodge and its bartender liable for his injuries. Citing the Privette doctrine the Lodge and bartender argued they were not liable, and they moved for summary judgment. The Privette doctrine says: “[g]enerally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work.” Miller argued triable issues of fact existed over whether an exception to the Privette doctrine applied. The trial court granted the Lodge’s summary judgment motion, and Miller appealed. The appellate court found none of the exceptions to the Privette doctrine applied. First, because the alleged hazard in this case was not concealed, but rather was reasonably ascertainable to Gelatini (and Miller), the concealed hazardous condition exception to the Privette doctrine did not apply. Instead, the Lodge delegated to Gelatini any duty it had to protect Miller from hazards associated with using a wheeled scaffold. Second, the court found that the Lodge merely offered the scaffold for use, but did not insist on its use. Therefore, the Lodge did not retain control of Miller’s use of the scaffold. Accordingly, the court of appeal affirmed the trial court’s judgment.

TAKEAWAY: When an independent contractor is hired, the hirer not only delegates to that contractor the responsibility to do the work safely, but also control of the worksite. Whatever reasonable care required of the hirer, then becomes the responsibility of the contractor. If a worker of the contractor becomes injured after that delegation takes place, the contractor alone is presumed to be responsible for any failure to take reasonable precautions. Therefore, do not direct your independent contractors! Retaining control over a jobsite in a manner that contributes to an injury is one of the exceptions to the Privette doctrine that otherwise shields the hirer from liability when an independent contractor or its employees are injured on the job.

A hirer must, however, warn a contractor of any concealed hazardous conditions on its property, and failing to do so is will expose the hirer to liability if a worker becomes injured due to that concealed hazardous condition. Therefore, if your association knows that a component or a portion of the property is hazardous and that hazardous condition is not reasonably ascertainable, then your association must notify any independent contractor it hires (and anyone else for that matter) about that concealed hazardous condition.

***End Summary***

83 Cal.App.5th 825 (2022)
299 Cal. Rptr. 3d 151

No. C090751.

Court of Appeals of California, Third District.

September 2, 2022.
Appeal from the Superior Court No. 34-2017-00207092-CU-PO-GDS.

Demas Law Group, John N. Demas, Brad A. Schultz; and C. Athena Roussos for Plaintiff and Appellant.

Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Ernest Slome and Joann M. O. Rangel for Defendants and Respondents.

 

828*828 OPINION

 

EARL, J.—

This case involves application of the so-called Privette doctrine (Privette v. Superior Court (1993) 5 Cal.4th 689 [21 Cal.Rptr.2d 72, 854 P.2d 721]), which deals with whether an entity that hires an independent contractor can be liable for on-the-job injuries sustained by the independent contractor’s workers. Under the Privette doctrine, the answer is no, unless an exception applies.

829*829 Defendant and respondent Roseville Lodge No. 1293, Loyal Order of Moose, Inc. (the Lodge), hired Charlie Gelatini to move an automated teller machine (ATM) on its premises. Plaintiff and appellant Ricky Lee Miller, Jr., worked for Gelatini and was the person who performed the work. Miller was injured on the job when he fell from a scaffold, and he seeks to hold the Lodge and its bartender John Dickinson liable for his injuries. Citing the Privette doctrine, the Lodge and Dickinson argued they are not liable, and they moved for summary judgment. Miller argued triable issues of fact exist over whether an exception applies. The trial court granted the motion, and Miller appealed. We now affirm.

 

I

 

 

FACTUAL AND PROCEDURAL BACKGROUND

 

Gelatini owns Tri-Valley Amusement, Inc. (collectively Gelatini). Miller worked part time for Gelatini installing, upgrading, repairing, maintaining, and cleaning ATM’s. Gelatini was the point of contact with the customer, and about 40 percent of the time he would be at the jobsite with Miller. Gelatini would tell Miller what needed to be done, and Miller would complete the work. Miller was working for Gelatini at the time of the incident and considered himself to be Gelatini’s employee.[1]

Gelatini was hired by the Lodge to relocate an ATM. On the day of the incident, Gelatini and Miller arrived at the Lodge without a ladder. They walked inside the Lodge and saw a scaffold up against one of the walls near the bar area. Dickinson was the only other person present at the Lodge when the incident occurred. He was working as a bartender and was in charge of the area where the scaffold was located.

Miller, Gelatini, and Dickinson offered slightly different accounts of what happened next. Miller states he asked Dickinson for a ladder so he could check where in the ceiling he was going to have to run cables for the ATM. 830*830 Dickinson replied that he did not have a ladder, but that Miller could use the scaffold. Miller states he asked Dickinson if the scaffold was safe, and Dickinson responded that it was and that he used it to change lightbulbs.

According to Gelatini, the scaffold was already in the room where the work would be done. Miller put his hands on the scaffold and yelled to Dickinson, “Hey, is this thing safe?” Dickinson responded, “I don’t know.” Miller then proceeded to climb the scaffold.

According to Dickinson, Gelatini asked him if Miller could use the scaffold. Dickinson replied, “Does he know how to use it?” and Gelatini responded, “Of course he does because he does this for a living.”

The scaffold had four wheels that had to be locked to prevent it from moving while in use. Miller had never used a scaffold before, and did not know that it had wheels or that the wheels had to be locked in order to prevent it from moving. Dickinson did not say anything about the scaffold having wheels or the wheels needing to be locked, and he did not know whether the wheels were locked.

Miller proceeded to climb onto the scaffold. He testified he was not actually moving the ATM while he was on the scaffold, and that he was “just looking at where we can run the line.” While getting down off the scaffold he put his hand on the wall, the scaffold shifted away from the wall, and he fell and hit his head. Immediately after the incident, Dickinson took a picture of the scaffold that showed one of the wheels was unlocked.

Miller sued the Lodge and Dickinson for negligence and respondeat superior.[2] In support of his negligence claim, Miller alleged the Lodge owned, controlled, and maintained the scaffolding. He also alleged: (1) defendants negligently permitted, encouraged, or instructed him to use the scaffold; (2) they knew or should have known the scaffold was dangerous, or unsecured, or unsafe; and (3) he was not aware the scaffold was dangerous, or unsecured, or unsafe. Finally, he alleged that, as a result of defendants’ negligence, the scaffold moved while he was on it, which caused him to fall to the ground and suffer personal injuries. In support of his respondeat superior claim, Miller alleged Dickinson was an employee of the Lodge, and was acting within the scope of his employment at the time of the incident.

The Lodge and Dickinson moved for summary judgment on the ground that the Privette doctrine provides a complete defense to Miller’s claim for 831*831 negligence and his derivative claim for respondeat superior.[3] The trial court agreed and granted the motion. Judgment was entered in favor of the Lodge and Dickinson.

Miller timely appealed.

 

II

 

 

DISCUSSION

 

 

1. Standard of Review

 

On appeal from the grant of a motion for summary judgment, “`”`[w]e review the trial court’s decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.'” [Citation.] We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.'” (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 717 [68 Cal.Rptr.3d 746, 171 P.3d 1082].) “We accept as true both the facts shown by the losing party’s evidence and reasonable inferences from that evidence.” (Castro-Ramirez v. Dependable Highway Express, Inc. (2016) 2 Cal.App.5th 1028, 1036 [207 Cal.Rptr.3d 120].) “`A trial court properly grants a motion for summary judgment only if no issues of triable fact appear and the moving party is entitled to judgment as a matter of law. [Citations.] The moving party bears the burden of showing the court that the plaintiff “has not established, and cannot reasonably expect to establish,”‘ the elements of his or her cause of action.” (Wilson, at p. 720.)

Because the trial court’s judgment is presumed to be correct, Miller (as appellant) has the burden of affirmatively establishing reversible error. (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609 [234 Cal.Rptr.3d 831, 420 P.3d 746]; Swigart v. Bruno (2017) 13 Cal.App.5th 529, 535 [220 Cal.Rptr.3d 556].) Because “we review `the ruling, not the rationale,'” on this appeal from summary judgment, we may affirm on any basis supported by the record and the law. (Skillin v. Rady Children’s Hospital & Health Center (2017) 18 Cal.App.5th 35, 43 [226 Cal.Rptr.3d 505].)

 

2. The Privette Doctrine and Its Exceptions

 

The Privette doctrine takes its name from Privette v. Superior Court, supra, 5 Cal.4th 689 (Privette), which held that a person or entity that hires an 832*832 independent contractor to do work generally is not liable for on-the-job injuries to the independent contractor’s workers. The doctrine has produced a large body of case law, including 10 cases from our Supreme Court alone: Privette, supra, 5 Cal.4th 689; Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253 [74 Cal.Rptr.2d 878, 955 P.2d 504] (Toland); Camargo v. Tjaarda Dairy (2001) 25 Cal.4th 1235 [108 Cal.Rptr.2d 617, 25 P.3d 1096] (Camargo); Hooker v. Department of Transportation (2002) 27 Cal.4th 198 [115 Cal.Rptr.2d 853, 38 P.3d 1081] (Hooker); McKown v. Wal-Mart Stores, Inc. (2002) 27 Cal.4th 219 [115 Cal.Rptr.2d 868, 38 P.3d 1094] (McKown); Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659 [36 Cal.Rptr.3d 495, 123 P.3d 931] (Kinsman); Tverberg v. Fillner Construction, Inc., supra, 49 Cal.4th 518 (Tverberg); SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590 [129 Cal.Rptr.3d 601, 258 P.3d 737] (SeaBright); Gonzalez v. Mathis (2021) 12 Cal.5th 29 [282 Cal.Rptr.3d 658, 493 P.3d 212] (Gonzalez); and Sandoval v. Qualcomm Incorporated, supra, 12 Cal.5th 256 (Sandoval). According to our Supreme Court, the rationale for the doctrine is delegation.[4]

“[A]t common law it was regarded as the norm that when a hirer delegated a task to an independent contractor, it in effect delegated responsibility for performing that task safely, and assignment of liability to the contractor followed that delegation.” (Kinsman, supra, 37 Cal.4th at p. 671; see also Gonzalez, supra, 12 Cal.5th at p. 54 [noting “strong presumption under Privette that a [hirer] delegates all responsibility for workplace safety to the independent contractor”]; SeaBright, supra, 52 Cal.4th at p. 594 [“By hiring an independent contractor, the hirer implicitly delegates to the contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract”]; Tverberg, supra, 49 Cal.4th at p. 528 [“When an independent contractor is hired to perform inherently dangerous construction work, that contractor, unlike a mere employee, receives authority to determine how the work is to be performed and assumes a corresponding responsibility to see that the work is performed safely. The independent contractor receives this authority over the manner in which the work is to be performed from the hirer by a process of 833*833 delegation”].) In its most recent Privette case, our high court explained, “When a person or organization hires an independent contractor, the hirer presumptively delegates to the contractor the responsibility to do the work safely. [Citations.] This presumption is grounded in two major principles: first, that independent contractors by definition ordinarily control the manner of their own work; and second, that hirers typically hire independent contractors precisely for their greater ability to perform the contracted work safely and successfully.” (Sandoval, supra, 12 Cal.5th at p. 269.) “A presumptive delegation of tort duties occurs when the hirer turns over control of the worksite to the contractor so that the contractor can perform the contracted work. Our premise is ordinarily that when the hirer delegates control, the hirer simultaneously delegates all tort duties the hirer might otherwise owe the contract workers. [Citations.] Whatever reasonable care would otherwise have demanded of the hirer, that demand lies now only with the contractor. If a contract worker becomes injured after that delegation takes place, we presume that the contractor alone—and not the hirer—was responsible for any failure to take reasonable precautions.” (Id. at p. 271.) In other words, because the hirer delegates to the contractor all tort duties it might otherwise owe to the contractor’s workers, the hirer cannot be held liable if those workers are injured on the job.

Thus, “The Privette doctrine holds that a hirer generally delegates to an independent contractor all responsibility for workplace safety and is not liable for injuries sustained by the contractor or its workers while on the job.” (Gonzalez, supra, 12 Cal.5th at p. 40; see also SeaBright, supra, 52 Cal.4th at p. 594 [“Generally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work”].) In this case, the Lodge is the hirer, Gelatini is the independent contractor, and Miller is the worker who was injured on the job. Under the Privette doctrine, the Lodge is not liable for Miller’s on-the-job injuries because we presume the Lodge delegated to Gelatini “all tort duties [it] might otherwise owe [to] contract workers” like Miller, and that “[w]hatever reasonable care would otherwise have demanded of the [Lodge], that demand lies now only with [Gelatini].” (Sandoval, supra, 12 Cal.5th at p. 271.)

There are, however, two exceptions to the Privette doctrine “that apply where [the hirer’s] delegation is either ineffective or incomplete.” (Sandoval, supra, 12 Cal.5th at p. 271.) The first exception was recognized in Hooker, supra, 27 Cal.4th 198 and is usually referred to as the retained control exception. It applies if: (1) the hirer retains control over the manner in which the contractor performs the work; (2) the hirer actually exercises its retained control by involving itself in the work such that the contractor is not entirely free to do the work in its own manner; and (3) the hirer’s exercise of retained control affirmatively contributes to the worker’s injury. (Sandoval, at pp. 276-277.) Under this exception, the hirer’s delegation of tort duties to the 834*834 independent contractor can be seen as “incomplete” or “only partial[]” because it retains control over some aspect of the work and actually exercises that retained control. (Id. at p. 271.)

The second exception was recognized in Kinsman, supra, 37 Cal.4th 659 and is usually referred to as the concealed hazard exception. It applies if the hirer is also an owner or possessor of land, and if “the landowner knew, or should have known, of a latent or concealed preexisting hazardous condition on its property, the contractor did not know and could not have reasonably discovered this hazardous condition, and the landowner failed to warn the contractor about this condition.” (Id. at p. 664, fn. omitted.) Under this exception, the hirer’s delegation of tort duties can be seen as “ineffective” because the independent contractor cannot protect its workers against a hazard it does not know about and could not reasonably discover. (Sandoval, supra, 12 Cal.5th at p. 271.)

 

3. The Privette Presumption Applies

 

The recent case of Alvarez v. Seaside Transportation Services LLC (2017) 13 Cal.App.5th 635 [221 Cal.Rptr.3d 119] explained how the Privette doctrine affects the parties’ respective burdens on a motion for summary judgment. Again, our Supreme Court has held that “[w]hen a person or organization hires an independent contractor, the hirer presumptively delegates to the contractor the responsibility to do the work safely.” (Sandoval, supra, 12 Cal.5th at p. 269, italics added.) The Alvarez court referred to this as the “Privette presumption.” (Alvarez, supra, 13 Cal.App.5th at p. 642.) It held the Privette presumption arises once the defendant establishes the requisite factual foundation—namely, that it hired an independent contractor to perform certain work, and the independent contractor’s worker was injured in the course of that work. (Id. at p. 644.) Once the presumption arises, the burden shifts to the plaintiff to raise a triable issue of fact as to whether one of the exceptions to the Privette doctrine applies, and if it cannot, the defendant is entitled to summary judgment. (Ibid.)

Here, the trial court applied the Alvarez burden shifting analysis, and found (1) the Lodge met its burden of establishing the Privette presumption, and (2) the burden thus shifted to Miller to raise a triable issue of fact as to whether an exception applies. Miller does not challenge this portion of the trial court’s decision. We will thus presume that the Lodge delegated to Gelatini any tort duties it might otherwise have owed to Miller, and that the sole issue on appeal is thus whether Miller has raised a triable issue of fact as to whether an exception to the Privette doctrine applies.

 

835*835 4. There Is No Triable Issue of Fact as to Whether an Exception Applies

 

 

A. The Retained Control Exception

 

Miller cites McKown, supra, 27 Cal.4th at page 222, for the proposition that “a hirer is liable to an employee of an independent contractor insofar as the hirer’s provision of unsafe equipment affirmatively contributes to the employee’s injury.” He contends McKown “is on all fours with the present case” and “directly on point” because Dickinson supplied him with a scaffold that was unsafe unless the wheels were locked, but negligently failed to either check that the wheels were locked or tell Miller to do so.

McKown is a short decision, and the facts are quite simple. Wal-Mart Stores, Inc. (Wal-Mart), hired an independent contractor to install a sound system in one of its stores, and the plaintiff was an employee of the independent contractor. Installing the sound system involved running wires and installing speakers in the store’s ceiling. Wal-Mart requested—but did not direct—that the contractor use Wal-Mart’s forklift when performing the work, and the contractor complied with the request. The forklift was missing a chain that secured a work platform to the forklift, and the plaintiff was injured when the platform disengaged and fell to the floor. A jury found Wal-Mart was negligent in providing unsafe equipment and allocated it 23 percent of the responsibility for the plaintiff’s injuries. (McKown, supra, 27 Cal.4th at p. 223.) Wal-Mart appealed, arguing it was immune from liability under the Privette doctrine, and our Supreme Court affirmed.

The McKown court began by summarizing its decision in Hooker, which recognized the retained control exception to the Privette doctrine and which held a hirer could be liable for injuries to an independent contractor’s employee if the “hirer’s exercise of retained control affirmatively contributed to the employee’s injuries.” (McKown, supra, 27 Cal.4th at p. 225, italics added.) The McKown court then noted, “Imposing tort liability on a hirer of an independent contractor when the hirer’s conduct has affirmatively contributed to the injuries of the contractor’s employee is consistent with the rationale of our decisions in Privette, Toland and Camargo, because the liability of the hirer in such a case is not in essence vicarious or derivative in the sense that it derives from the act or omission of the hired contractor. `To the contrary, the liability of the hirer in such a case is direct in a much stronger sense of that term.’ (Hooker, supra, 27 Cal.4th at p. 212.)” (McKown, supra, 27 Cal.4th at p. 225, italics omitted.) Finally, it held, “For the same reason, when a hirer of an independent contractor, by negligently furnishing unsafe equipment to the contractor, affirmatively contributes to the injury of an employee of the contractor, the hirer should be liable to the employee for 836*836 the consequences of the hirer’s own negligence.” (Ibid., italics added.) The McKown court thus appears to have viewed the negligent furnishing of unsafe equipment as one way a hirer can exercise retained control over a contractor’s work, and later cases have made that clear.

In Gonzalez, supra, 12 Cal.5th 29, for example, our Supreme Court recently explained its holding in McKown as follows: “[W]e did find that the hirer in Hooker‘s companion case, McKown[, supra,] (2002) 27 Cal.4th 219 …, exercised its retained control in a manner that affirmatively contributed to the injury where it required the independent contractor to use the hirer’s own defective equipment in performing the work.” (Id. at p. 42, italics added.) It also explained: “In the nearly two decades following our opinion in Hooker, courts have consistently reaffirmed that `[a] hirer’s failure to correct an unsafe condition’ is insufficient, by itself, to establish liability under Hooker‘s exception to the Privette doctrine. [Citations.] To be liable, a hirer must instead exercise its retained control over any part of the contracted-for work—such as by directing the manner or methods in which the contractor performs the work; interfering with the contractor’s decisions regarding the appropriate safety measures to adopt; requesting the contractor to use the hirer’s own defective equipment in performing the work; contractually prohibiting the contractor from implementing a necessary safety precaution; or reneging on a promise to remedy a known hazard—in a manner that affirmatively contributes to the injury. (See Hooker, at pp. 212, fn. 3, 215; McKown, supra, 27 Cal.4th at p. 225; [citations].)” (Gonzalez, supra, 12 Cal.5th at pp. 46-47, italics added.) Even more recently, in Sandoval, supra, 12 Cal.5th 256 the Supreme Court cited McKown as an example of a retained control case where “affirmative contribution” was found because the “hirer `requested’ that contractor use faulty equipment, thus at least in part inducing the contractor’s decision to use it.” (Id. at p. 277.) Thus, furnishing unsafe equipment is simply one example of exercising retained control, rather than its own separate exception to the Privette doctrine.[5]

Miller argues McKown is directly on point. Miller contends that there are triable issues of fact as to whether Dickinson, the Lodge’s agent, negligently provided him with unsafe equipment. The unsafe equipment in this case is the scaffold, and Miller concedes that what made the scaffold unsafe was the fact that the wheels were not locked.[6] (He acknowledges in his briefs, for example: “While Miller was on the scaffold, it moved because at least one of 837*837 the wheels was not locked, causing him to fall and sustain a significant head injury”; “The scaffold here was dangerous to use unless the wheels were locked”; “Dickinson knew the scaffold was not safe to use unless the wheels were locked, yet he said nothing about the wheels and failed to check them”; “The scaffold is clearly unsafe to use if the wheels are unlocked”; and “The failure to ensure that the wheels were locked, or to even tell Miller to check the wheels, … created an unreasonable risk of danger and was precisely why Miller was injured.”) We find Miller fails to raise a triable issue of fact as to whether the retained control exception applies.

The trial court found McKown was distinguishable because the hirer in that case “specifically requested the contractor to use [the] hirer’s own forklift.” We agree. Here, and in contrast to McKown, Dickinson did not ask Miller or Gelatini to use the scaffold. At best, he offered the scaffold for use, thereby permitting its use because Miller and Gelatini apparently had no equipment that would allow the necessary access, and “passively permitting an unsafe condition to occur … does not constitute affirmative contribution” within the meaning of the retained control exception. (Tverberg v. Fillner Construction, Inc. (2012) 202 Cal.App.4th 1439, 1446 [136 Cal.Rptr.3d 521].)

Miller argues this attempt to distinguish McKown is unpersuasive. He contends the evidence shows Dickinson offered him the scaffold in lieu of a ladder, and he analogizes this to Wal-Mart’s request in McKown that the contractor use its forklift. We find the analogy to be inapt. There is a difference between asking a contractor to use your equipment and allowing a contractor to use your equipment. Again, “a hirer is not liable under Privette where it merely permits a dangerous work condition or practice to exist. [Citation.] This is true even where the hirer knows of the danger and has the authority and ability to remedy it.” (Gonzalez, supra, 12 Cal.5th at p. 46.) At best, the evidence in this case would support a finding that Dickinson knew the scaffold was unsafe unless the wheels were locked and had the ability to either advise Miller of that fact or make sure the wheels were locked, but that he failed to do so. This is insufficient to hold the Lodge liable for Miller’s injuries. Instead, “Something more is required, such as `”inducing injurious action or inaction through actual direction”‘ [citation]; directing `”the contracted work be done by use of a certain mode”‘ [citation]; or interfering with `”the means and methods by which the work is to be accomplished”‘ [citation].” (Id. at p. 42.) Here, that “[s]omething more” is lacking because 838*838 Dickinson did not direct Miller to use the scaffold, he did not direct that the work be done by use of a certain mode, and he did not interfere with the means and methods by which the work was done.

“A hirer `retains control’ where it retains a sufficient degree of authority over the manner of performance of the work entrusted to the contractor,” and it “`actually exercise[s]'” its retained control “when it involves itself in the contracted work `such that the contractor is not entirely free to do the work in the contractor’s own manner.’ [Citations.]'” (Sandoval, supra, 12 Cal.5th at pp. 274, 276.) In McKown, Wal-Mart involved itself in the work when it asked the contractor to use its forklift such that the contractor was not entirely free to do the work in its own manner. Here, in contrast, Dickinson did not ask Gelatini and Miller to use the scaffold or otherwise involve himself (or the Lodge) in the work of moving the ATM, and Gelatini and Miller were free to do the work as they saw fit.

SeaBright, supra, 52 Cal.4th 590, is instructive. There, the defendant was an airline that hired an independent contractor to maintain and repair a conveyor that it used to move luggage at an airport. An employee of the independent contractor was inspecting the conveyor and was injured when his arm got caught in its moving parts. The employee sued the airline, alleging causes of action for negligence and premises liability.[7] The airline moved for summary judgment based on Privette and Hooker, arguing it was not liable for the employee’s injuries because it did not retain control over the independent contractor’s work or exercise the control it retained in a way that affirmatively contributed to the employee’s injury. The employee opposed the motion with a declaration from an expert who stated the conveyor’s lack of safety guards violated Cal-OSHA regulations and the safety guards would have prevented the employee’s injury. The trial court granted the motion, and the appellate court reversed, holding that, under the Cal-OSHA regulations, the airline had a nondelegable duty to ensure that the conveyor had safety guards and that there was a triable issue of fact as to whether the airline’s failure to perform this duty affirmatively contributed to the employee’s injury. (SeaBright, supra, 52 Cal.4th at pp. 594-595.)

Our Supreme Court reversed, holding the airline “presumptively delegated to [the independent contractor] any tort law duty of care the airline had under Cal-OSHA and its regulations to ensure workplace safety for the benefit of [the independent contractor’s] employees. The delegation … included a duty to identify the absence of the safety guards required by Cal-OSHA regulations 839*839 and to take reasonable steps to address that hazard.” (SeaBright, supra, 52 Cal.4th at p. 601, italics added.) Thus, even though the employee was injured because the conveyor lacked guardrails that were required by Cal-OSHA regulations, the airline was not liable.

This case is similar. In SeaBright, the employee was injured because the equipment he was working on lacked safety guards required by Cal-OSHA regulations. Here, Miller was injured because the equipment he was using to perform the work (i.e., the scaffold) was unsafe unless its wheels were locked. Just as in SeaBright the airline delegated to the independent contractor the duty to identify the absence of the safety guards and to take reasonable steps to address the hazard, here, the Lodge delegated to Gelatini the duty to identify the fact that the scaffold had wheels and was unsafe to use unless the wheels were locked or the scaffold was steadied in some manner, and to take reasonable steps to address that hazard.

We thus agree with the trial court that the retained control exception does not apply.

 

B. The Concealed Hazardous Condition Exception

 

Miller also argues the Lodge is liable for his injuries because it failed to warn him of a concealed hazardous condition on its property (i.e., the unsafe scaffold). We disagree.

The concealed hazardous condition exception applies when the hirer is also an owner or occupier of land. In that case, “the hirer as landowner may be independently liable to the contractor’s employee, even if it does not retain control over the work, if: (1) it knows or reasonably should know of a concealed, preexisting hazardous condition on its premises; (2) the contractor does not know and could not reasonably ascertain the condition; and (3) the landowner fails to warn the contractor.” (Kinsman, supra, 37 Cal.4th at p. 675.) Here, the undisputed facts demonstrate the hazardous condition was not concealed, and the exception thus does not apply even if we assume Dickinson knew of the hazardous condition, and Dickinson failed to warn Gelatini and Miller.

“[A] `concealed’ hazard means something specific: a hazard that the hirer either knows or reasonably should know exists, and that the contractor does not know exists and could not reasonably discover without the hirer’s disclosure.” (Sandoval, supra, 12 Cal.5th at p. 272, italics added; see also Kinsman, supra, 37 Cal.4th at p. 664 [describing concealed hazard as one that is hidden].) If the hazard is “reasonably ascertainable” to the independent contractor, the hazard is not concealed and the hirer is not liable. (Kinsman, at p. 682.)

840*840 Here, the fact that the scaffold had wheels was not concealed. Gelatini and Miller could have discovered their existence had they simply inspected the scaffold before Miller climbed onto it. Miller argues that whether a condition is concealed is an issue of fact that cannot be decided on summary judgment. Given the evidence in this case, we disagree.

To create an issue of fact, Miller contends, “It was dark inside the room” where the accident occurred. Presumably his point is that it was so dark the wheels on the scaffold were not visible. Again, a concealed hazard is a hazard “that the contractor does not know exists and could not reasonably discover without the hirer’s disclosure.” (Sandoval, supra, 12 Cal.5th at p. 272, italics added.) That the room may have been dark does not establish that Gelatini and Miller could not reasonably discover that the scaffold had wheels unless Dickinson pointed that out—all they had to do to discover the wheels was simply to look at the scaffold deploying adequate lighting.

Moreover, and more importantly, the evidence cited by Miller does not actually support his contention that the room was so dark the wheels were not visible. He cites deposition testimony from Gelatini and Dickinson. Gelatini was shown a photograph (marked as exhibit No. 2) of a scaffold that was taken at an inspection that occurred sometime after the accident, and he was asked, “Does that appear to be the scaffold that was involved?” He responded, “I can’t tell because it’s light out—dark in that room.” It is unclear whether Gelatini was referring to the room depicted in the photograph or the room where the accident occurred. Even if we assume he was referring to the room where the accident occurred, however, at best his testimony might prove the room was too dark to tell whether the scaffold depicted in a photograph was the same scaffold that Miller used. Gelatini’s testimony does not create a triable issue as to whether the wheels on the scaffold were visible when Miller used it.

Dickinson’s testimony is even less helpful to Miller. Dickinson was asked whether it was “bright or dark” inside the Lodge on the day of the incident, and he responded there “probably would have been lights on. But I don’t remember.” Dickinson’s testimony that he doesn’t remember whether the lights were on is insufficient to create a triable issue of fact as to whether Gelatini and Miller could not reasonably discover the scaffold had wheels without Dickinson’s disclosure. (See, e.g., Johnson v. Tosco Corp. (1991) 1 Cal.App.4th 123, 140 [1 Cal.Rptr.2d 747] [“It cannot seriously be argued that a partially assembled and unstable scaffold placed over a hard and uneven surface constitutes a concealed danger”].)

Miller also contends the fact that the wheels needed to be locked to safely use the scaffold was not something he and Gelatini could discover without 841*841 Dickinson’s disclosure.[8] Again, we disagree. Upon simple inspection, including checking whether the scaffold would move before Miller climbed on it, Gelatini (and Miller) reasonably should have known that the scaffold could move while Miller was on it if the wheels were not locked or the scaffold was not otherwise steadied in some manner. Again, they failed to inspect the scaffold.

Because the alleged hazard in this case was not concealed and was reasonably ascertainable to Gelatini (and Miller), the concealed hazardous condition exception does not apply. Instead, the Privette presumption remains unrebutted, and the Lodge delegated to Gelatini any duty it had to protect Miller from hazards associated with using a wheeled scaffold.

 

DISPOSITION

 

The judgment is affirmed and the Lodge shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)

Mauro, Acting P. J., and Duarte, J., concurred.

[1] There is a hint in Miller’s brief that there may be a dispute over whether he was Gelatini’s employee or was an independent contractor. However, neither party directly addresses this issue in their briefs, and assuming there is such a dispute, we find it to be immaterial because the Privette doctrine applies whether the injured worker is an employee or is himself an independent contractor, and Miller does not suggest otherwise. (See, e.g., Sandoval v. Qualcomm Incorporated (2021) 12 Cal.5th 256, 270 & fn. 2 [283 Cal.Rptr.3d 519, 494 P.3d 487] [doctrine applies when “`contract worker'” is injured on the job, and “`contract worker'” includes “the independent contractor personally, the independent contractor’s employees, the independent contractor’s subcontractors personally, the subcontractors’ employees, and so on”]; Tverberg v. Fillner Construction, Inc. (2010) 49 Cal.4th 518, 528 [110 Cal.Rptr.3d 665, 232 P.3d 656] [“It would be anomalous to allow an independent contractor … to recover against the hirer … while denying such recovery to an independent contractor’s employee“].)

[2] He also sued Gelatini and Tri-Valley Amusement, Inc. Although they are also defendants in the underlying action, they are not parties to the underlying summary judgment motion or to this appeal.

[3] The Lodge also argued the respondeat superior claim failed for an additional reason because Dickinson was not acting as its agent or employee when he interacted with Miller. The trial court did not address this argument, and neither do we.

[4] In Privette itself, and in earlier cases discussing the doctrine, our Supreme Court explained the rationale in terms of the injured employee’s entitlement to workers’ compensation benefits, and the fact that workers’ compensation is the exclusive remedy against an employer for injuries arising in the course and scope of employment. (See Privette, supra, 5 Cal.4th at pp. 696-702; Toland, supra, 18 Cal.4th at pp. 261, 266-67; Camargo, supra, 25 Cal.4th at pp. 1238-1240, 1244-1245; Hooker, supra, 27 Cal.4th at pp. 204-206.) Starting with Kinsman, supra, 37 Cal.4th 659, our Supreme Court began explaining the doctrine “in terms of delegation rather than workers’ compensation.” (Sandoval, supra, 12 Cal.5th at p. 270.) It has also made clear that the doctrine applies “to a solo independent contractor who has no employees and who has declined to obtain workers’ compensation insurance, such that the contractor will receive no coverage for his or her injuries.” (Gonzalez, supra, 12 Cal.5th at p. 42.)

[5] In a footnote, Miller suggests that the negligent exercise of retained control is one exception to the Privette doctrine, and the negligent provision of unsafe equipment is an entirely separate exception. For the reasons just stated, we disagree, and find the provision of unsafe equipment is simply one way a hirer can exercise retained control over the worksite.

[6] Miller also argues the trial court erred in overruling his objection to a defense expert’s declaration that the expert inspected the scaffold about seven months after the accident, and “[a]ll component parts were in serviceable condition. To my knowledge, no portion of the scaffold had been repaired or replaced.” Miller objected on the grounds that the statement lacked foundation and personal knowledge. Assuming for the sake of argument that the objection should have been sustained, we find the error to be harmless. The Lodge proffered the expert’s declaration to refute any argument that the scaffold was defective, but Miller did not make such an argument in opposition to the motion. Instead, he contended that the scaffold was unsafe to use unless the wheels were locked, not that it was unsafe because it was not in serviceable condition or was otherwise defective in some way.

[7] The lawsuit was initially filed by the independent contractor’s workers’ compensation insurer, which claimed the airline had caused the employee’s injury and which sought to recover the workers’ compensation benefits it had paid; the employee intervened in that lawsuit. (SeaBright, supra, 52 Cal.4th at pp. 594-595.)

[8] In other words, even if the wheels themselves were visible, the concealed hazard was the fact that the wheels needed to be locked.