Judge: Kerry Bensinger, Case: 23STCP04016, Date: 2023-12-19 Tentative Ruling

Case Number: 23STCP04016    Hearing Date: December 19, 2023    Dept: 31

Tentative Ruling

Judge Kerry Bensinger, Department 31

HEARING DATE:      December 19, 2023                                     TRIAL DATE:  N/A

CASE:                         In the Matter of: Chadwick Terrace Homeowners’ Association, Inc.

CASE NO.:                 23STCP04016

PETITION TO REDUCE PERCENTAGE OF VOTES REQUIRED TO AMEND CC&RS

MOVING PARTY:               Petitioner Chadwick Terrace Homeowners’ Association, Inc.

RESPONDING PARTY:     No opposition

I.          BACKGROUND

Petitioner Chadwick Terrace Homeowners’ Association, Inc. (the “HOA”) is common interest development and a non-profit mutual benefit corporation.  HOA’s existing declaration of covenants, conditions and restrictions, captioned “Declaration of Covenants, Conditions, and Restrictions Establishing a Plan of Condominium Ownership” (the “Existing CC&Rs”), were originally recorded on April 26, 1985, as Document Number 85-470708 in the Official Records of Los Angeles County, California.  The Existing CC&Rs do not comply with current law, including the David-Stirling Act, and require more understandable language.

The HOA now petitions the Court for an order reducing the required voting percentage to amend its Existing CC&Rs and to enact the proposed Restated CC&Rs.

The petition is unopposed.

II.        LEGAL STANDARD

            “If in order to amend a declaration, the declaration requires owners having more than 50 percent of the votes in the association … to vote in favor of the amendment, the association … may petition the superior court … for an order reducing the percentage of the affirmative votes necessary for such an amendment.”  (Civ. Code, § 4275.)

            A petition under Civil Code Section 4275 must include the following information: the efforts made to solicit approval of the owners as required under the declaration; the number of affirmative and negative votes received; the number or percentage of votes required to approve the amendment pursuant to the declaration; and other information that may be relevant to the court’s determination. 

            A petition under Civil Code Section 4275 must also include the following exhibits: the governing documents; a complete copy of the amendment; copies of any notice and solicitation materials used to solicit owner approval; a brief explanation of the reason for the amendment; and other documents that may be relevant to the court’s determination. 

III.       DISCUSSION

            The HOA petitions the Court to reduce the required voting percentage to amend its Existing CC&Rs pursuant to Civil Code section 4275.  The Court may grant the Petition if it finds all the requirements under that Section have been met.  Here, each of the requirements under Section 4275 has been satisfied.

1. HOA made appropriate efforts to solicit homeowner approval for the Proposed Amended CC&Rs. 

            HOA provides that it took the following steps to try and obtain homeowner approval for the proposed Restated CC&Rs: 

• HOA’s legal counsel drafted a letter to the homeowners that contained summary of the proposed Amended CC&Rs which my office mailed to all Owners.  (Ryan Decl., ¶ 8, Ex. A.)

• At the direction of the Board of Directors, a Governing Document Ballot package was mailed to every member of the Association, which included a copy of the proposed Amended CC&Rs, as well as voting instructions relating to balloting procedures, return envelopes, and a ballot. Each of the members were asked to return their ballot in the envelopes provided by December 20, 2021.  (Ryan Decl., ¶ 9.)
• The Board and its counsel engaged in significant efforts to increase voter turnout for the proposed Amendments, including soliciting and responding to questions from homeowners regarding the impact of the Amendments and any changes to their obligations or restrictions.  (Ryan Decl., ¶ 10.)
• Counsel sent email reminders to each of the homeowners prior to the initial voting deadline to remind them to return the required ballots.  Counsel also sent individual emails and solicited door to door to those Owners that had not returned their ballots.  (Ryan Decl., ¶ 11, Ex. C.)
• Despite these efforts, at the meeting on December 20, 2021, the Association did not receive enough ballots for the proposed Amendments to have passed. As a result, the ballots were not opened and the vote was extended to afford additional time for more ballots to be returned. Counsel continued to reach out to individual homeowners to encourage them to return their ballots and offered to provide replacement ballots if needed. Counsel also informed the homeowners that the new meeting had been extended to February 8, 2023, and invited them to attend.  (Ryan Decl., ¶ 12.)
• Due to poor voter turnout, the Board of Directors decided to extend the voting for many months to try to allow additional time and opportunity for the Members to respond with their votes. As reflected in multiple Board meeting minutes, the Board continued this process for each of their meetings the ballots were finally opened and counted on February 8, 2023.  (Ryan, ¶ 13.)

            HOA explains the following:  On November 14, 2021, HOA circulated the proposed Restated CC&Rs to its members.  The amendments were proposed to bring the Existing CC&Rs into compliance with current law and to incorporate clearer and more understandable language for the members.  To approve the amendments, the Existing CC&Rs require 75% of the voting rights of members.  Due to lower voter participation, the voting was extended several times.  Finally, on February 8, 2023, HOA obtained sufficient ballots to potentially meet the approval threshold.  The Restated CC&Rs did not pass. 

2. HOA has attached copies of documents required under Civil Code section 4275 as exhibits to the Petition. 

            The HOA attached the following documents as exhibits to the Petition: 

• The Existing CC&Rs.  (Table of Exhibits, Ex. G.) 
• The proposed Restated CC&Rs.  (Table of Exhibits, Ex. H.)

• The notice and solicitation materials used to solicit owner approval.  (Table of Exhibits, Exs. A-D.) 
• Certification of Voting Results verifying the ballot count tabulation and executed by Nikitas Kavouklis.  (Table of Exhibits, Ex. E.)
• HOA By-Laws.  (Table of Exhibits, Ex. F.)

            HOA further provides that the proposed Restated CC&Rs are necessary to bring the CC&Rs into compliance with existing law and to provide clearer language to its members.

            The foregoing inclusions meet the minimum requirements of Civil Code section 4275.  The proposed Restated CC&Rs appear reasonable to the Court, and the Court finds good reason to grant the Petition.  The petition will be granted. 

IV.       CONCLUSION

            The unopposed petition is Granted.

            The Court ORDERS, ADJUDGES and DECREES that Petitioner Chadwick Terrace Homeowners Association, Inc. has complied with the requirements under Civil Code Section 4275.  The proposed Restated CC&Rs are hereby deemed approved by the Court and shall be effective upon: (1) this Court's order; (2) recordation of the proposed Restated CC&Rs (attaching this order) with the County Recorder's Office; and (3) distribution of the recorded CC&Rs and this Order to all members. 

Dated:   December 19, 2023