Judge: Christian R. Gullon, Case: 23PSCV03132, Date: 2024-08-29 Tentative Ruling

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Case Number: 23PSCV03132    Hearing Date: August 29, 2024    Dept: O

Tentative Ruling

DEFENDANT DIAMOND BAR VILLAGE ASSOCIATION’S DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT is SUSTAINED with leave to amend.

Background

This is a habitability case. Plaintiffs HANAA ZLALI, an individual; KARIM ZLALI, an individual; RITA SAYOUTY, a minor by and through their Guardian ad Litem Hanaa Zlali; and SULAIMAN ZLALI, a minor by and through their Guardian ad Litem, Hanaa Zlali allege the following against Defendants CHUNGCHUAN JOSEPH LEE (“Lee”); CHARLIE NANCHING (“Nanching”), an individual; THE AVALON MANAGEMENT GROUP, INC., a California corporation; DIAMOND BAR VILLAGE ASSOCIATION (“DBV” or “the HOA”): On February 1, 2021, Plaintiffs entered into a written lease agreement with Lee. Then, Nanching purchased the property from Lee and became the owner of the property; thus, on May 18, 2021, Plaintiffs entered into a lease agreement with Nanching. The unit was infested with water damage, termites, mold, mites, and other related allergens, all things which both Lee (and Nanching) knew about from Khatri International’s 2017 report.

On October 10, 2023, Plaintiffs filed suit asserting the following nine causes of action (COAs):

On March 6, 2024, Plaintiffs filed their first amended complaint (FAC) asserting the same COAs against the same defendants.

On June 3, 2024, Plaintiffs dismissed Avalon.

On June 6, 2024, Plaintiffs and DBV filed a ‘JOINT STIPULATION TO STRIKE PLAINTIFFS’ FOURTH CAUSE OF ACTION AS TO DEFENDANT DIAMOND BAR VILLAGE ASSOCIATION.’

On July 8, 2024, DBV filed the instant demurrer.

On August 16, 2024, Plaintiffs filed their opposition.

On August 22, 2024, DBV filed its reply.

On August 27, 2024, Nanching filed his answer.

Discussion[1]

Defendant DBV demurs to the 3^rd COA for negligence.

The negligence COA alleges that DBV had a duty to “maintain and repair the subject property… As owners, operators and manager of the Subject Property, the [DBV] owed PLAINTIFFS the duty to exercise reasonable care in the ownership, management and control of the Subject Property… [DBV] breached their duty of care by negligently and carelessly failing to maintain and/or provide a safe and habitable unit, or in the alternative, completely covering the cost of reasonable alternate living accommodations until the ongoing habitability issues were fully remediated.” (FAC p. 13.)[2]

DBV demurs on the grounds that (1) Plaintiffs lack standing and (2) the action is time barred. (Demurrer p. 4:21-24.)

Here, for reasons to be discussed below, the court agrees with DBV that Plaintiffs lack standing.

1.     Whether a Third-Party (i.e., Lessor) Has Standing to Sue the HOA?[3]

According to the HOA, in accordance with California Civil Code section 5975(a) and the CC&Rs, the HOA does not owe any duties to non-members/non-owners.

California Civil Code §5975(a) (‘Enforcement of Governing Documents’) provides:

The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both.” (California Civil Code §§5975(a), emphasis added.)

On page 7, Section 2.03 titled “Membership”, the CC&Rs state in relevant part the following: “Ownership of a Condominium shall be the sole qualification for Membership in the Association.” Section 2.04 titled “Transfer”, states the following in relevant part, “The Membership held by any Unit Owner shall not be transferred, pledged or alienated in any way, except upon the sale or encumbrance of such Unit Owner’s Condominium, and then only to the purchaser or Beneficiary of such Condominium.” (emphasis added.)

Here, as Plaintiffs are not owners and thus not members of the HOA, they may not enforce the equitable servitude to maintain the premises in a safe, healthy, and habitable condition. (FAC ¶61.)

To the extent that Plaintiffs argue they are required to sue the HOA instead of the individual owner of the property (Opp. p. 5:8-10), not so. 

Plaintiffs cite to Civil Code 5805. The statute provides the following:

(a) It is the intent of the Legislature to offer civil liability protection to owners of the separate interests in a common interest development that have common area owned in tenancy-in-common if the association carries a certain level of prescribed insurance that covers a cause of action in tort.

(b) Any cause of action in tort against any owner of a separate interest arising solely by reason of an ownership interest as a tenant-in-common in the common area of a common interest development shall be brought only against the association and not against the individual owners of the separate interests….(emphasis added.)

Effectively, that statute is inapplicable as both the plain language and legislative history behind the statute pertains to liability of individual condominium unit owners when a third party is injured in the common area; here, the purported duties are as to the unit itself.[4]

To the extent that Plaintiffs argue they are alleging duties to maintain the common areas like the roof of the project (Opp. p. 6:6-7), the negligence COA is not limited to certain substandard conditions in the common area. (See Reply p. 3.) As explained by Defendant, Plaintiffs allege that they have suffered personal injuries related to serious adverse reactions to mold growth including rashes, itching, redness, swelling, and other allergy related symptoms. (Complaint ¶27). They alleged that these injuries were due to a water leak at the subject property and that a visible lack substance was discovered in the closet wall abutting the restroom, carpet, and under the kitchen sink. (Complaint ¶27). This area has nothing to do with Defendant HOA. Ultimately, as articulated by DBV, the Plaintiffs have failed to correlate their alleged personal injuries with any area in which Defendant HOA had a duty to maintain, and a negligence COA requires that any breach(es) be the proximate or legal cause of the resulting injury. (Demurrer p. 6, citing Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.)

Therefore, the court agrees with DBV that the 3^rd COA is uncertain and fail to state facts sufficient to constitute a negligence COA.

Conclusion

Based on the foregoing, the demurrer is SUSTAINED with leave to amend. At this juncture, the court need not address the SOL argument.