Judge: Elaine W. Mandel, Case: 23SMCV05106, Date: 2024-07-15 Tentative Ruling

Case Number: 23SMCV05106    Hearing Date: July 15, 2024    Dept: P

Tentative Ruling

Browner v. 1118 17^th St. Homeowners Association, et al. Case No. 23SMCV05106

Hearing Date: June 15, 2024

Defendant’s Demurrer to Plaintiff’s Complaint; Motion to Strike; and Motion to Disqualify Counsel

Plaintiff alleges defendants failed to pay for repair costs associated with water damage in the common area of a condominium complex. Defendants demur to various causes of action, arguing failure to state a claim and lacks of standing as a former, not present, member of the HOA. Defendants also move to strike punitive damages and to disqualify Browner’s counsel on the grounds that his prior representation of both Browner and the HOA is substantially related to this action.

Demurrer

This order does not address the causes of action for unjust enrichment and intentional infliction of emotional distress, as plaintiff concedes those causes of action.

1.      First Cause of Action – Breach of Covenants, Conditions, and Restrictions

Defendants argue Browner lacks standing and fails to state a claim. To establish a cause of action for breach of covenants, conditions, and restrictions, plaintiff must establish 1) existence of a CC&R; 2) the party against whom enforcement is sought had notice or knowledge of the CC&Rs.; 3) breach of the CC&R 4) the right to enforce the CC&R; 5) damages. Cutujian v. Benedict Hills Estates Ass’n. (1996) 41 Cal.App.4th 1379.

The complaint alleges the following: Browner owned the condo and purchased subject to the CC&Rs. Compl. ¶143. Defendants knew the CC&Rs required the HOA to pay for claimed repairs. Id. ¶27. Defendants had notice of the CC&R because the development was governed by the CC&Rs, which created duties and obligations, including maintaining the pipes. Id. ¶¶144, 146-148. Defendants breached by failing to maintain the pipes, causing Browner to suffer damages. Id. ¶¶149-152.

Browner argues she has standing because she sustained damages, and the HOA’s obligation to pay for repairs accrued while she owned the condo. Defendants do not cite authority that her right was extinguished when she sold the condo. Defendant's reliance on Farber v. Bay View Terrace Homeowners Ass’n. (2006) 141 Cal.App.4th 1007, 1011 is misplaced. The court held “[one] who no longer owns land in a development subject to reciprocal restrictions cannot enforce them, absent showing the original covenanting parties intended to allow enforcement by one who is not a landowner.” However, Faber is distinguishable because the court did not address the issue of accrual when damages occurred while a party had an interest in the land.

Barring authority to the contrary, Browner’s right to enforce the covenant was not extinguished with the sale of the condo. Thus, at the pleadings stage, this is enough to have a cause of action for breach of covenants, conditions, and restrictions.

2.      Breach of Fiduciary Duty

“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.” Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.

The complaint alleges defendants had a fiduciary duty to the members of the HOA and were required to act with good faith, loyalty, and care as board members. Compl. ¶16. Defendants allegedly breached by violating the business judgment rule when they unreasonably, in bad faith, and engaging in self-dealing, refused to pay the repair cost for the pipes located in the common spaces. Id. ¶¶ 49-59.

The complaint sufficiently alleges duty, breach via not paying for the repair, and damages. This is enough to state a cause for action at the pleadings stage.

3.      Third Cause of Action – Violation of Davis Stirling Common Interest Development Act (Civil Code ¶¶4000-6150)

Civil Code §4775(a)(1) provides “Except as provided in paragraph (3), unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, and maintaining the common area.”

The complaint alleges defendants failed to repair and maintain the pipes in the common area. This is enough to have a cause for action at the pleadings stage.

4.      Sixth Cause of Action – Declaratory relief

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted. “‘Strictly speaking, a demurrer is a procedurally inappropriate method for disposing of a complaint for declaratory relief. As Witkin observes: “The complaint is sufficient if it shows an actual controversy; it need not show that plaintiff is in the right.” 5 Witkin, Cal. Procedure, (4th ed. 1997) Pleading § 831, pp. 288–289.’” Lockheed Martin Corp. v. Continental Ins. Co. (2005) 134 Cal.App.4th 187, 221, disapproved of on another ground by State of California v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1036, fn. 11.

There is an actual controversy alleged.

OVERRULED. Defendants to file responsive pleadings within 10 days.

Motion to Strike Punitive Damages

Defendants argue punitive damages are not pled with requisite specificity.  

“In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255. Civ. Code §3294 authorizes punitive damages upon a showing of malice, fraud, or oppression. Malice is defined as either “conduct which is intended by the defendant to cause injury to the plaintiff,” or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” Civ. Code, § 3294(c)(1). “Despicable conduct is conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal. App. 4th 306, 331.

The complaint alleges defendants chose not to pay for the requested repairs and damages, even though they knew it was the HOA's responsibility to fix and maintain the pipes. Compl ¶10. It alleges “Defendants engaged in a pattern of abusive conduct intended to deprive Plaintiff of her rights as a member of the condominium association.” Id. ¶11. This included expressing animosity to Browner by referring to her as greedy, stupid, and treasonous. Id. ¶12.

The complaint alleges on October 27, 2021, Khona sent an email to plaintiff, copied to several others, reading: “Are you stupid? We’ve indemnified them from your crazy extortion of money issues. So I have all the time in the world to deal with you and your treasonous ways.” Id. ¶ 125.

This is sufficient to allege malice in support of punitive damages. DENIED.

Motion to Disqualify Counsel

“‘A trial court’s authority to disqualify an attorney derives from the power inherent in every court ‘[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.’’” Ontiveros v. Constable (2016) 245 Cal.App.4th 686, 694, quoting People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145 (quoting Code Civ. Proc., §128(a)(5)). “‘[D]isqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility.’” Id. at 694-95. “The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar.” Id. at 695.

In ruling on a motion to disqualify, the court should weigh: (1) the party's right to counsel of choice; (2) the attorney's interest in representing a client; (3) the financial burden on a client of change of counsel; (4) any tactical abuse underlying a disqualification motion; and (5) the principal that fair resolution of disputes requires vigorous representation of parties by independent counsel. Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116, 126. Whether an attorney should be disqualified is a matter addressed to the sound discretion of the trial court. Henriksen v. Great American Savings & Loan (1992) 11 Cal.App.4th 109, 113.

Kurkhill defended the underlying case on behalf of both Browner and the HOA against third party, Structa, for alleged unpaid services relating to repair work on Browner’s condo. Marks decl. ¶ 4; Exh B, C. Legal filings also establish Kurkhill’s representation of both the HOA and Browner. Id.; Exh D.

Brower argues the claims are not related, as damage alleged from Structa in her cross-complaint do not reference cracked drainage pipes. Browner argues defendants conflate the issues because both cases contain the same parties and the same property.

“[W]here a former client seeks to have a previous attorney disqualified from serving as counsel to a successive client in litigation adverse to the interests of the first client, the governing test requires that the client demonstrate a ‘substantial relationship’ between the subjects of the antecedent and current representations.” Flatt v. Superior Court (1994) 9 Cal.4th 275, 283 [emphasis in original]. “Where the requisite substantial relationship between the subjects of the prior and the current representations can be demonstrated, access to confidential information by the attorney in the course of the first representation (relevant, by definition, to the second representation) is presumed and disqualification of the attorney’s representation of the second client is mandatory; indeed, the disqualification extends vicariously to the entire firm.” Id. [emphasis in original]. “The former client need not establish that the attorney actually possesses confidential information.” In re Marriage of Zimmerman, supra, 16 Cal.App.4th at 563. “It is the possibility of the breach of confidence, not the fact of an actual breach that triggers disqualification.” Id. 

“[A] ‘substantial relationship’ exists whenever the ‘subjects’ of the prior and the current representations are linked in some rational manner.” Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 711 citing Flatt, supra, 9 Cal.4th at 283. The “subject” of a representation includes “information material to the evaluation, prosecution, settlement or accomplishment of the litigation or transaction given its specific legal and factual issues.” Id. at 712-13. 

“[S]uccessive representations will be ‘substantially related’ when the evidence before the trial court supports a rational conclusion that information material to the evaluation, prosecution, settlement or accomplishment of the former representation given its factual and legal issues is also material to the evaluation, prosecution, settlement or accomplishment of the current representation given its factual and legal issues.” Id. at 713. 

The lawsuits are substantially related as they involve the same parties and property, and Brower claims damages to the same condominium via the same mechanism. Mark’s declaration indicates Kurkhill’s previous representation may have allowed him to gain insight into HOA’s defense strategies, including information relevant to potential settlement or litigation strategies.

Given the instant case stems from the water damage to the subject property, which ultimately led to discovery of the cracked pipes, the information gained could be material to the evaluation, litigation, and settlement of the instant action. Kurkhill’s representation in this matter is substantially related to his representation of HOA in the previous matter. There is a presumption Kurkhill had access to confidential information and is disqualified. GRANTED.