Judge: Walter P. Schwarm, Case: 30-2022-01279372, Date: 2023-08-01 Tentative Ruling
Motion No. 1:
Defendant’s (Harbor View Hills Community Association) Demurrer to Plaintiffs’ First Amended Complaint (FAC), filed on 11-22-22 under ROA No. 34, is OVERRULED in part and SUSTAINED in part as set forth below.
The court DENIES Plaintiff’s (Lloyd M. Rucker) Request for Judicial Notice, filed on 4-10-23 under ROA No. 72, as immaterial to the court’s decision. (Silverado Modjeska Recreation & Parks District v. County of Orange (2011) 197 Cal.App.4th 282, 307, fn. 18 (Silverado.)
“A demurrer tests the pleading alone, and not the evidence or the facts alleged. . . . To the extent there are factual issues in dispute, however, this court must assume the truth not only of all facts properly pled, but also of those facts that may be implied or inferred from those expressly alleged in the complaint. [Citations.]” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) Code of Civil Procedure section 452, states, “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.” Perez v. Golden Empire Transportation Transit District (2012) 209 Cal.App.4th 1228, 1238, provides, “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant. [Citations.]” C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872 (C.A.), provides, “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged. [Citation.]”
The Demurrer challenges first, second, third, and fourth causes of action contained in Plaintiff’s (Lloyd M. Rucker) First Amended Complaint (FAC), filed on 9-19-22 under ROA No. 10, pursuant to Code of Civil Procedure section 430.10, subdivision (e).
First Cause of Action (Breach of Fiduciary Duty):
Mendoza v. Continental Sales, Co. (2006) 140 Cal.App.4th 1395, 1405 (Mendoza), states, “The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach. [Citations.]” The Demurrer states, “. . . the breach of fiduciary duty cause of action must with respect to the Association, as a business entity holds no fiduciary duties.” (Demurrer; 7:1-2.)
Cohen v. Kite Hill Community Association (1983) 142 Cal.App.3d 642, 651 (Cohen), states, “With power, of course, comes the potential for abuse. Therefore, the Association must be held to a high standard of responsibility: ‘The business and governmental aspects of the association and the association's relationship to its members clearly give rise to a special sense of responsibility upon the officers and directors. . . . This special responsibility is manifested in the requirements of fiduciary duties and the requirements of due process, equal protection, and fair dealing.’ [Citations.]” “In sum, we hold that the Association in reviewing the codefendants' improvement plan owed a fiduciary duty to plaintiffs to act in good faith and to avoid arbitrary action, and that there is an issue of fact raised by the pleadings as to whether the Association did so. As a consequence, the demurrer was improperly sustained.” (Id., at pp. 655-656.)
Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Association (2018) 19 Cal.App.5th 399, 425-426 (Golden Eagle), provides, “Generally, fiduciary duties owed by a homeowners association to its members are limited to those arising from its governing documents and relevant statutory requirements. [Citation.] As the sole plaintiff for this cause of action, Golden Eagle cannot show it is entitled to enforce a fiduciary relationship arising out of contract or from another relationship imposing one as a matter of law. [Citation.]”
Paragraph 64 of the FAC pleads, “Plaintiff alleges that the Defendant Association and its ARC breached the fiduciary duties owed to Plaintiff by intentionally and knowingly failing to exercise their authority to approve or disapprove Plaintiff’s construction and improvements plans in conformity with the CC&Rs, and in good faith. Instead of relying on the Defendant Association’s CC&Rs , [sic] the Association simply made up rules to protect owners rights to a view even though the CC&Rs do not contain or authorize any such restriction protecting views or restricting house heights.”
Here, the FAC sufficiently alleges a fiduciary relationship between Defendant and Plaintiff arising from the governing documents. The FAC cites to the Covenants, Conditions and Restrictions (CCRs) that allegedly apply regarding Defendant’s authority to approve or disapprove Plaintiff’s construction plans. (For example, see ¶¶ 6, 9, 10, 27, 33, 34, 35, 42, 63, and 64.) Under Cohen and Golden Eagle, the court OVERRULES the Demurrer to the first cause of action.
Second Cause of Action (Breach of the CC&Rs):
Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 380-381, provides, “As noted earlier, equitable servitudes permit courts to enforce promises restricting land use when there is no privity of contract between the party seeking to enforce the promise and the party resisting enforcement. Like any promise given in exchange for consideration, an agreement to refrain from a particular use of land is subject to contract principles, under which courts try ‘to effectuate the legitimate desires of the covenanting parties.’ [Citation.] Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98, “To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff's performance or excuse for nonperformance, (3) the defendant's breach, and (4) resulting damages to the plaintiff. [Citations.]”
The Demurrer asserts, “Plaintiff’s cause of action for breach of the governing documents fails because it is improperly premised on an unreasonable interpretation of the governing documents.” (Demurrer; 8:9-10.)
Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113-114 (Fremont), explains, “StorMedia stated: ‘In ruling on a demurrer, a court may consider facts of which it has taken judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) This includes the existence of a document. When judicial notice is taken of a document, however, the truthfulness and proper interpretation of the document are disputable. (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 [228 Cal.Rptr. 878].)’ [Citation.] [¶] Joslin v. H.A.S. Ins. Brokerage, supra, 184 Cal.App.3d at page 374, 228 Cal.Rptr. 878 stated: ‘Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. (See Middlebrook–Anderson Co. v. Southwest Sav. & Loan Assn. (1971) 18 Cal.App.3d 1023, 1038 [96 Cal.Rptr. 338].) On a demurrer a court's function is limited to testing the legal sufficiency of the complaint. (Marina Tenants Assn. v. Deauville Marina Development Co. (1986) 181 Cal.App.3d 122, 127 [226 Cal.Rptr. 321].) “A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.” (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879 [138 Cal.Rptr. 426].) The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 605 [176 Cal.Rptr. 824].)’ [Citation.]”
Paragraph 76 of the FAC alleges, “Plaintiff alleges that the Defendant Association breached its CC&Rs by relying on rules which are not authorized by the CC&Rs, i.e., a rules restricting the height of new construction and protecting views, of existing homeowners and by using its power to determine whether an improvement is in harmony with the surrounding structures and terrain, as a pretext and ruse for imposing height restrictions which are intended protect views.” Paragraph 76 adequately alleges a dispute over the interpretation of the CCRs. Further, under Fremont, a demurrer is not the proper procedure to address the proper interpretation of the CCRs. Therefore, the court OVERRULES the Demurrer to the second cause of action.
Third Cause of Action (Declaratory Relief):
The Demurrer identifies “Preliminary and Permanent Injunction” as the third cause of action. (Demurrer; 3:13-17.) The FAC does not contain a cause of action labeled “Preliminary and Permanent Injunction.” The Demurrer also identifies the fourth cause of action a claim for Declaratory Relief. (Demurrer; 3:18-21.) The FAC does not allege a fourth cause of action. Rather, the FAC alleges a cause of action for declaratory relief as the third cause of action. Therefore, the court will address the third cause of action labeled “Declaratory Relief.”
The Demurrer contends, “. . . a declaration prohibiting the Association’s denial of Plaintiff’s remodel plans would serve not other purpose in this litigation and would effectively duplicate Plaintiff’s breach of CC&Rs claim.” (Demurrer; 10:3-5.)
Plaintiff’s Opposition to Demurrers [sic] of Defendant Harbor View Hills Community Association (Opposition), filed on 4-10-23 under ROA No. 68, states, “Plaintiff demonstrated that the CC&Rs do not contain any provision protecting views from construction or imposing a height restriction on construction. Further, the laws of our state do not protect views. The Association’s denial of Mr. Rucker’s plans on the ground that they would interfere with the view from surrounding properties is not authorized by the CC&Rs, or the laws of the state and is therefore constituted a breach of the fiduciary duties the association owes to Plaintiff, i.e, to enforce the CC&Rs in good faith. It also constitutes an actionable breach of the CC&Rs claim.” (Opposition; 11:20-26.) The Opposition does not address the third cause of action. Therefore, the court SUSTAINS the Demurrer to the third cause of action.
Based on the above, the court OVERRULES Defendant’s (Harbor View Hills Community Association) Demurrer to Plaintiffs’ First Amended Complaint (FAC), filed on 11-22-22 under ROA No. 34, as to the first and second causes of action. The court SUSTAINS the Demurrer as to the third cause of action with 14 days leave to amend from the date of the service of the notice of the court’s ruling. (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747.)
Defendant is to give notice.
Motion No. 2:
Defendant’s (Harbor View Hills Community Association) Motion to Strike Plaintiff’s First Amended Complaint (Motion), filed on 11-22-22 under ROA No. 33, is GRANTED.
Code of Civil Procedure section 436, states, “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: [¶] (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. [¶] (b) Strike 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.” Code of Civil Procedure section 435, subdivision (b)(1), states, “Any 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, but this time limitation shall not apply to motions specified in subdivision (e).” Pierson v. Sharp Memorial Hospital, Inc. (1989) 216 Cal.App.3d 340, 342, explains, “Preliminarily, we note a motion to strike is generally used to reach defects in a pleading which are not subject to demurrer. A motion to strike does not lie to attack a complaint for insufficiency of allegations to justify relief; that is a ground for general demurrer. [Citation.]” Code of Civil Procedure section 437, subdivision (a), “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.”
The Motion seeks to strike the references to punitive damages and mediation in Plaintiff’s (Lloyd M. Rucker) First Amended Complaint (FAC) filed on 9-19-22 under ROA No. 10. (Motion; 3:10-4:5.)
Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 (Turman), states, “ ‘In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.’ [Citation.] [¶] In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. [Citation.] These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ.Code, § 3294, subd. (a).) ‘ “Malice” ’ is defined in the statute as conduct ‘intended by the defendant to cause injury to plaintiff, or despicable conduct that is carried on by the defendant with a willful and conscious disregard for the rights or safety of others.’ [Citations.] ‘ “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.’ [Citation.] ‘ “Fraud” ’ is ‘an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.’ [Citation.]”
In order to plead punitive damages, a plaintiff must plead allegations of fraud, malice, or oppression with sufficient particularity. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872; Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)
Plaintiff’s Opposition to Motion to Strike (Opposition), filed on 4-11-23 under ROA No. 74, states, “The Association knew the CC&Rs did not protect views, yet, the Association acted as if views were protected and denied to Plaintiff the right to the free use his [sic] property.” (Opposition; 6:24-25.) Although the FAC pleads that “. . . the CC&Rs do not contain or authorize any such restriction protecting views or restricting house heights . . .” (for example, see FAC at ¶ 64), the FAC does not sufficiently allege malice or oppression. The FAC does not adequately allege facts that Defendant intended to cause injury to Plaintiff, acted in willful and conscious disregard of Plaintiff’s rights, and that Defendant subjected Plaintiff to cruel and unjust hardship. Therefore, the court GRANTS the Motion to strike the allegations relating to punitive damages.
The Opposition does not address the Motion’s request to strike the allegation regarding mediation. Therefore, the court GRANTS the Motion as to the allegation regarding mediation.
Based on the above, the court GRANTS Defendant’s (Harbor View Hills Community Association) Motion to Strike Plaintiff’s First Amended Complaint, filed on 11-22-22 under ROA No. 33, with 14 days leave to amend from the date of service of the notice of the court’s ruling. (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146-1147.)
Defendant is to give notice.