Judge: Gary I. Micon, Case: 22CHCV01446, Date: 2024-08-23 Tentative Ruling

Case Number: 22CHCV01446    Hearing Date: August 23, 2024    Dept: F43

PDI LP I, LLC, et al. vs. The Madison and Town Center Community Association

 

DEMURRER TO FIRST AMENDED COMPLAINT WITH MOTION TO STRIKE

 

MOVING PARTY: Defendant The Madison at Town Center Association

RESPONDING PARTIES: Plaintiffs PDI LP I, LLC and NOJRD LLC

 

RELIEF REQUESTED

Demurrer to the First Amended Complaint

·         1st Cause of Action for Breach of Declaration of Covenants, Conditions, and Restrictions

·         2nd Cause of Action for Injunctive Relief

·         4th Cause of Action for Declaratory Relief

·         6th Cause of Action for Breach of Fiduciary Duty

 

Motion to Strike

·         General Allegations [Paragraphs 16-29]

·         Actions and Omissions by Defendant and Does 1-25 [Paragraphs 30-33, 37]

·         First Cause of Action [Paragraphs 49-56]

·         Second Cause of Action [Paragraphs 60-66]

·         Fourth Cause of Action [Paragraphs 73-78]

·         Sixth Cause of Action [Paragraphs 84-88]

·         Prayer for Judgment [Sections B(2)-(3), D(2)-(6)]

 

RULING: Demurrer is overruled. Motion to strike is denied.

 

SUMMARY OF ACTION

Plaintiffs PDI LP I, LLC and NOJRD LLC (Plaintiffs) have alleged various claims related to the governing documents of Defendant The Madison at Town Center Association (Defendant). Defendant is the homeowners’ association that operates and manages a mixed-used common interest development in Santa Clarita, California. Plaintiffs are the owners of a commercial unit and parking structure at the development. This dispute is over a shared budget between Plaintiffs, as the commercial owners, and the residential condominium owners. The budget is controlled by Defendant’s Declaration of Covenants, Conditions, & Restrictions. Plaintiffs have alleged that the budget has been improperly allocated since 2017 and that this has continued to the present. Plaintiffs have also alleged that Defendant failed to correct a water intrusion into Plaintiffs’ unit.

 

Plaintiffs’ First Amended Complaint (FAC) alleges six causes of action for (1) Breach of Declaration of Covenants, Conditions, and Restrictions; (2) Injunctive Relief; (3) Nuisance; (4) Declaratory Relief; (5) Negligence; and (6) Breach of Fiduciary Duty.

 

Defendant filed its demurrer with motion to strike on June 24, 2024. Plaintiffs oppose the demurrer and motion to strike.

 

Defendant’s Request for Judicial Notice: Defendant has requested that the Court take judicial notice of Plaintiffs’ property deed. The Court grants this request.

 

ANALYSIS

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (CCP § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law…” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

 

            Statute of Limitations

Defendant demurs to the First, Second, Fourth, and Sixth Causes of Action on the basis that they are time-barred by the applicable statutes of limitations.

 

“The statute of limitations is a “ground for objection to a complaint” for purposes of this provision and, therefore, may be raised in a demurrer.” (Cavey v. Tualla (2021) 69 Cal.App.5th 310, 325.) Under CCP § 336(b), the statute of limitations for a person seeking to enforce a restriction on real property runs five years “from the time the person seeking to enforce the restriction discovered or, through the exercise of reasonable diligence, should have discovered the violation.” Furthermore, “[a] claim for declaratory relief is subject to the same statute of limitations as the legal or equitable claim on which it is based.” (Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 943.) Therefore, to the extent that Plaintiffs’ declaratory relief claim is based on negligence, it is subject to a two-year statute of limitations, and five-years if it is based on CCP § 336(b).

 

Defendant appears to argue in its demurrer that Plaintiffs are challenging the Declaration of Covenants, Conditions, and Restrictions, which have been in place since 2006 and which Plaintiffs should have known about since they bought their unit in 2007. However, Plaintiffs actually appear to be alleging that Defendant has been in ongoing breach of the Declaration since 2017 because it has been overcharging Plaintiffs. (FAC, ¶¶ 17, 55.) Plaintiffs allege that Defendant has refused “to act in accordance with the applicable and governing documents” and that as a result, Plaintiffs have been “damaged by the improper allocation of expenses and overcharging of assessments to Plaintiff since approximately 2017, and continuing to the present and into the foreseeable future.” (FAC, ¶ 55.) Furthermore, Plaintiffs seek enforcement of specific provisions of the Declaration. (See FAC, ¶ 57.) Plaintiffs are not challenging the Declaration.

 

Based on these allegations, Plaintiffs argue in their opposition that the specified causes of action are not time-barred because a new budget and expenses are prepared and adopted annually; therefore, the statute of limitations did not begin running as soon as the Declaration was recorded or when Plaintiffs took possession of the property.

 

Plaintiffs argue that they may recover based on the continuing violation doctrine, which allows for a plaintiff to recover for unlawful acts occurring outside the limitations period if they continued into that period. (Jumaane v. City of Los Angeles (2015) 241 Cal.App.4th 1390, 1402) The continuing violation doctrine requires proof that (1) the defendant’s actions inside and outside the limitations period are sufficiently similar in kind; (2) those actions occurred with sufficient frequency; and (3) those actions have not acquired a degree of permanence. (Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 823-824; Wassmann v. South Orange County Community College District (2018) 24 Cal.App.5th 825.)

 

Plaintiffs argue that they have met the requirements for the continuing violation doctrine because their allegations of Defendant misallocating expenses over continuous years have been sufficiently similar in kind. Next, the charging of the assessments and the water intrusions as alleged in the FAC have occurred with sufficient frequency. Finally, no permanent solution has been reached because the budget is different every year.

 

Plaintiffs also cite Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, in which the Supreme Court reversed the granting of a demurrer based on statute of limitations arising out of alleged wrongful monthly billing by Defendant, and held that where a party alleges a recurring unfair act, then the theory of continuous accrual applies so long as the complaint alleges at least some such acts within the time period for the statute of limitations. Each alleged breach must be treated as triggering a new statute of limitations. (Id.)

 

In its reply, Defendant repeats the argument that the statute of limitations would have begun to run when Plaintiffs took title. However, as previously discussed, this argument does not make sense based on the allegations in Plaintiffs’ FAC. Plaintiffs have alleged continuous violations of the provisions of the Declaration starting in 2017 and continuing to the present. Plaintiffs do not challenge the provisions of the Declaration itself, so the statute of limitations would not have begun to run when Plaintiffs took title in 2007.

 

Defendant also argues that continuous accrual does not apply to actions based on CCP § 336(b). Even if continuous accrual did not apply, it would not matter because Plaintiffs filed this case in 2022, and they allege that the violations of the Declaration began occurring in 2017 (five years prior), and there have been new and ongoing violations each year since then.

 

Based on the foregoing, Plaintiffs have sufficiently alleged continuous violations of the Declaration that began in 2017 and have continued to the present. This is sufficient to overcome Defendant’s statute of limitations argument. Accordingly, Defendant’s demurrer to the First, Second, Fourth, and Sixth Causes of Action based on the statute of limitations argument is overruled.

 

            Fourth Cause of Action for Declaratory Relief

Defendant also demurs to the Fourth Cause of Action on the basis that it is duplicative.

 

Defendant argues that there is no basis for declaratory relief and that declaratory relief is duplicative where only past wrongs are involved. (See Baldwin v. Marina City Properties, Inc. (1978) 79 Cal.App.3d 393.) However, more than past wrongs are at issue in this case because Plaintiffs have alleged continuing violations of the Declaration. Because Plaintiffs have alleged that there are continuing violations, declaratory relief is appropriate in order to put the controversy to rest.

 

Plaintiffs also seek an order determining and declaring that Defendants must undertake a proper revision of the Association’s current and future budget. (FAC, Prayer for Relief, No. 2.) This is clearly an instance where declaratory relief would be appropriate. Thus, Plaintiffs’ request for declaratory relief is not duplicative.

 

Accordingly, Defendant’s demurrer to Plaintiffs’ Fourth Cause of Action on the basis that it is duplicative is overruled.

 

Motion to Strike

A court may strike from the complaint any irrelevant, false, or improper matter. Under CCP § 435, “[a]ny party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof.” Under CCP § 436(a), “[t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper . . . [s]trike out any irrelevant, false, or improper matter inserted in any pleading.” Under CCP § 436(b), the court may “[s]trike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

 

Defendants move to strike Plaintiffs’ First, Second, Fourth, and Sixth Causes of Action on the basis that they are time-barred. However, the Court has already found that these causes of action are not time-barred, so the motion to strike is denied on this basis.

 

Likewise, the Court found that the Fourth Cause of Action is not duplicative, so the motion to strike is also denied on that basis.

 

Additionally, Defendant has failed to argue a proper basis for a motion to strike because Defendant has failed to argue how the causes of action are irrelevant, false, improper, or not drawn in conformity with the laws of the state.

 

Defendant’s motion to strike is denied.

 

CONCLUSION

Defendant’s demurrer to Plaintiffs’ First, Second, Fourth, and Sixth Causes of Action is overruled. Defendant’s motion to strike is denied.

 

Moving party to give notice to all parties.