Filed 10/3/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
ALEX CHEVELDAVE,
Plaintiff and Appellant, E066461
v. (Super.Ct.No. PSC1600368)
TRI PALMS UNIFIED OWNERS OPINION ASSOCIATION,
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Harold W. Hopp, Judge.
Reversed.
Law Offices of Leonard Cravens, Leonard Jack Cravens; Zimberoff Deutsch and
Daniel E. Zimberoff for Plaintiff and Appellant.
Epsten Grinnell & Howell, Anne L. Rauch, Joyce J. Kapsal and Rian W. Jones
for Defendant and Respondent.
1 Tri Palms Unified Owners Association (the Association) is a group of
homeowners in the Tri-Palms Estates.1 There is a recreation facility adjacent to the Tri-
Palms Estates, and homeowners pay a fee for that recreation facility. In 2014, in
bankruptcy proceedings, Kort & Scott Financial Group, LLC (K&S) was the successful
bidder on the recreation facility. The Association entered into a settlement agreement
(the Agreement) with K&S. As a result of the Agreement, some members of the
Association were required to pay an increased fee for the recreation facility.
In 2016, Alex Cheveldave and Richard N. Davis, who were members of the
Association, sued the Association, K&S, and Shenandoah Ventures, L.P., arguing that
the Association did not have standing to enter into the Agreement. The Association
filed an anti-SLAPP motion (Code Civ. Proc.,2 § 425.16), which the trial court granted.
Cheveldave contends the trial court erred by granting the anti-SLAPP motion. We
reverse the judgment.
FACTUAL AND PROCEDURAL HISTORY
A. PROPERTY
Tri-Palms Estates was a real estate development consisting of 10 separate
housing tracts. Each housing tract had its own set of covenants, conditions, and
restrictions (CC&Rs). There was a recreation facility adjacent to the housing tracts,
1In the record, respondent’s name and the real property development are sometimes written as “Palms” (plural) and, at other times, as “Palm” (singular).
2 All subsequent statutory references will be to the Code of Civil Procedure unless otherwise indicated.
2 which was a separately owned facility. Tri-Palms Estates’ various CC&Rs required
homeowners to pay fees for the recreation facility.
The recreation facility had been in continuous operation since the early 1960s
and consisted of an 18-hole regulation golf course, a nine-hole executive golf course, a
15,000-square foot clubhouse, a public restaurant, three large swimming pools, two
spas, tennis courts, a shuffleboard complex, a pro shop, banquet facilities, a 1,000-
square foot arts and crafts building, and offices. Throughout the years, there have been
various owners of the recreation facility. In 2003, in a recorded “Master Declaration,”
property owners within Tri-Palms Estates formed the Association for the purpose of
communicating with the management of the recreation facility and for supervising
compliance with the CC&Rs.
B. PRIOR TRIAL COURT CASE
In 2008, the recreation facility was owned by The Club at Shenandoah Springs
Village, Inc. (Shenandoah). The Association and Karla Wilson, a homeowner within
the Association, brought a class action against Shenandoah. The Association and
Wilson alleged that Shenandoah received $3,700,000 per year in fees from members of
the Association. The Association and Wilson accused Shenandoah of (1) allowing the
general public to use the recreation facility for additional fees, thus depriving the
homeowners of their exclusive use of the recreation facility; (2) charging homeowners
unauthorized use and cleaning fees—in addition to the monthly fees already being paid;
and (3) mismanaging the fees received from homeowners.
3 On June 18, 2012, following a trial, the Riverside County Superior Court found
Shenandoah breached the governing documents by not maintaining the recreation
facility in a reasonable manner and by charging fees in excess of those permitted by the
governing documents. The court also found that the homeowners had a nonexclusive
easement for the use and enjoyment of the recreation facility, and therefore, Shenandoah
could permit the public to use the recreation facility.
The trial court issued a permanent injunction requiring Shenandoah to maintain
the recreation facility in a reasonable manner and to hire and retain a professional
management company to operate the recreation facility. The injunction prohibited
Shenandoah from charging homeowners a greater amount of fees than those provided
for in the governing documents. The trial court awarded the Association approximately
$365,648.88 plus interest for attorneys’ fees.
C. BANKRUPTCY CASE
In May 2007, Shenandoah borrowed $15,000,000 from General Electric; the loan
was secured by the recreation facility. On November 28, 2012, General Electric
recorded a notice of default and election to sell under deed of trust against the recreation
facility, alleging at least $11,486,181 was owed. A receiver was to be appointed on
December 4. On December 3, Shenandoah filed a petition for Chapter 11 bankruptcy in
the United States Bankruptcy Court, Central District of California, Riverside Division.
The Association filed a claim as a secured creditor.
Shenandoah sought to increase the fees paid by homeowners. The CC&Rs
permitted the fees to be recalculated based upon the consumer price index; however,
4 such an increase had not occurred “for years.” The Association opposed Shenandoah’s
recalculation of the fees. In January 2014, the Association and Shenandoah participated
in a mediation concerning the increased fees, but the issue was not resolved. The
Association then filed a demand for arbitration against Shenandoah.
In March 2014 Shenandoah sought the bankruptcy court’s permission to sell
Shenandoah’s assets. Shenandoah hoped to sell the recreation facility to Inspire
Communities for $15,000,000 with $850,000 used exclusively for improvements and
repairs on the recreation facility. The Association was worried that the bankruptcy
court would soon grant Shenandoah’s motion to sell the recreation facility, and
therefore entered into a settlement agreement (the Agreement) with Inspire
Communities. The Agreement required the Association to (1) withdraw its arbitration
case, and (2) permit Shenandoah’s suggested fee increase, in exchange for Inspire
Communities agreeing to (a) maintain the recreation facility as required by the state trial
court’s 2012 injunction, and (b) not having the increased fees be retroactive to an earlier
date
In May, the bankruptcy court held a hearing on Shenandoah’s motion for
authorization to sell the recreation facility. The Association was at the hearing. The
bankruptcy court granted the motion. The court approved K&S as the successful bidder
and explained that K&S substituted into the Agreement for Inspire Communities. In the
bankruptcy court’s order it wrote, “The Court approved K&S as the successful bidder at
the hearing on the Motion in lieu of Inspire Communities, in part, based on K&S’
5 agreement on the record in open court to the terms and conditions of the Inspire
Settlement Agreement.”
D. CURRENT CASE
1. COMPLAINT
In January 2016, Cheveldave and Davis (collectively, Plaintiffs) sued the
Association, K&S, and Shenandoah Ventures, L.P. Cheveldave owned property within
Tri-Palms Estates, and Davis also owned property within Tri-Palms Estates. Plaintiffs
alleged there is no common property within Tri-Palms Estates, that Tri-Palms Estates is
not a common interest development, and therefore the Association did not have the
authority to enter into the Agreement on behalf of the homeowners. Plaintiffs asserted
that the fee increase set forth in the Agreement was void because such an increase can
only occur upon a vote to amend the CC&Rs.
Plaintiffs sought a declaration that (1) Tri-Palms Estates is not a common interest
development; (2) the fee increase is a breach of the CC&Rs; and (3) “that [the]
bankruptcy settlement agreement is void.”
2. ANTI-SLAPP MOTION
The Association filed an anti-SLAPP motion. (§ 425.16.) The Association
asserted Plaintiffs’ complaint arose from protected activity because it concerns the
settlement agreement that resulted from an arbitration proceeding, which was connected
to bankruptcy proceedings. The Association asserted that the Agreement concerned the
Association’s right to petition in a judicial proceeding. (§ 425.16, subd. (e)(1).)
6 The Association contended Plaintiffs did not have a probability of prevailing
because the bankruptcy court’s judgment was final. The Association argued that the
state trial court “lacks subject matter jurisdiction to adjudicate the claims and causes of
action in Plaintiffs’ Complaint.” The Association further asserted that principles of res
judicata caused Plaintiffs to be estopped from obtaining relief. The Association
contended that Plaintiffs, as members of the Association, were in privity with the
Association, and thus bound by the terms of the Agreement.
3. OPPOSITION
Plaintiffs opposed the Association’s anti-SLAPP motion. Plaintiffs asserted,
“This lawsuit is a collateral attack on a void judgment because it excluded indispensable
parties, i.e. the plaintiffs.” Plaintiffs contended, “If what [the Association] says is true,
then in every case in which [a] plaintiff is seeking to collaterally attack a judgment, that
collateral attack would be subject to a SLAPP motion. That is ridiculous.” Plaintiffs
contended their complaint did not concern a public issue and did not concern the
Association’s right to petition; rather, it concerned the Association unilaterally agreeing
that homeowners’ fees could be raised.
Plaintiffs contended they had a probability of succeeding on the merits because
the bankruptcy court’s judgment was open to collateral attack due to the bankruptcy
court lacking jurisdiction or exceeding its jurisdiction. Plaintiffs argued res judicata did
not apply because the bankruptcy court’s judgment is void. Additionally, Plaintiffs
disputed that they were in privity with the Association. Plaintiffs contended the
Association’s priority in the bankruptcy proceedings was receiving the payment for its
7 attorneys’ fee award from the 2012 case. In order to secure its payment, the Association
“sold the owners of the individual properties down the road.”
4. HEARING ON THE ANTI-SLAPP MOTION
The trial court held a hearing on the Association’s anti-SLAPP motion. The
court asked Plaintiffs if their lawsuit arose out of a protected activity. Plaintiffs
responded, “It does. But what we have here is . . . basically a motion to undo a
judgment . . . .” The trial court asked why Plaintiffs did not intervene in the bankruptcy
case. Plaintiffs explained the bankruptcy case was closed by the time they learned of it.
In regard to the probability of prevailing, the Association said, “And I would
argue that because this settlement was approved in bankruptcy court, that they don’t
even have standing to object to it here in this court. Their remedy would be to go to
Judge Houle in bankruptcy court and argue before him.”
Alternatively, the Association asserted that it had standing to represent the
members of the Association in the Agreement, without naming the members or giving
notice to the members. Plaintiffs argued that the Association did not have standing to
represent them because Tri-Palms Estates is not a common interest development in that
there is no common property. The Association contended common property is not a
requirement for a common interest development, and that reciprocal easements are
sufficient for a common interest development. The Association contended there were
easements for the homeowners to use the recreation facility.
8 5. ORDER
The trial court granted the anti-SLAPP motion. The trial court found that
plaintiffs’ complaint “obviously arises out of constitutionally protected activity. The
complaint specifically references the settlement agreement made in the bankruptcy
proceedings and seeks to challenge it.”
In regard to the probability of prevailing, the trial court explained that plaintiffs
failed to address the reciprocal easement issue, i.e., that a common interest development
can be based upon reciprocal easements. The court found that plaintiffs’ failure to
address this issue meant that the Association had “the statutory authority to sue in its
own name without joining all of its members (including plaintiffs) and the settlement
agreement is not void for lack of naming plaintiffs as parties to the underlying litigation.
[¶] Because the Court finds that plaintiffs have not and cannot meet their burden under
the second prong of the analysis, it need not address the additional contention by [the
Association] that any challenge to the settlement agreement may only be made in the
bankruptcy court.” The trial court awarded the Association attorneys’ fees in the
amount of $33,720.50 and costs in the amount of $1,505.77 for a total award of
$35,225.77.
6. MOTION FOR RECONSIDERATION
Plaintiffs filed a motion for reconsideration. As to the first prong of the analysis,
plaintiffs asserted a new case was published after the hearing on the anti-SLAPP
motion, which required the trial court to consider the act underlying the cause of action.
Plaintiffs argued the act at issue in this case was the raising of the homeowners’ fees; it
9 did not concern speech. Plaintiffs explained, “In our case, the cause of action is to set
aside a void judgment, not to silence [the Association] in any way. It is also not a
matter of public concern, it is dispute between some homeowners and a HOA.”
As to the second prong, plaintiffs contended there were no reciprocal easements.
Plaintiffs explained that homeowners have an easement to use the recreation facility, but
the easement is not reciprocal because there is no right for the owner of the recreation
facility to enter the homeowners’ properties.
7. HEARING ON THE MOTION FOR RECONSIDERATION
The trial court held a hearing on plaintiffs’ motion for reconsideration. The trial
court said that plaintiffs’ argument concerning the lack of reciprocal easements was not
a new fact. Plaintiffs responded, “If the Court can look at that—again, there is just no
easement—Your Honor, there is just no easements, there is nothing, there is no common
property.” Plaintiffs asserted that a reciprocal or mutual easement does not mean all the
homeowners had access to the recreation facility, it meant the homeowners had access
to the recreation facility and the owners of the recreation facility had access to the
homeowners’ properties. The trial court said it was not persuaded by plaintiffs’
easement argument.
In regard to the first prong, plaintiffs asserted their lawsuit was about increased
fees; it was not about petitioning activity. The trial court explained that plaintiffs
framed their case as being about the Association’s lack of standing to enter into the
Agreement, which arose from litigation, and therefore, plaintiffs’ case concerned
petitioning activity. The trial court denied the motion for reconsideration.
10 DISCUSSION
I. ANTI-SLAPP MOTION
A. CONTENTION
Cheveldave contends the trial court erred by granting the anti-SLAPP motion.3
(§ 425.16.)
B. LAW AND STANDARD OF REVIEW
The anti-SLAPP statute is designed to “encourage continued participation in
matters of public significance” by stopping lawsuits that would otherwise chill a
person’s public participation due to abuse of the judicial process. (§ 425.16, subd. (a).)
There are two steps to determining if a lawsuit is designed to curb the defendant’s
participation in matters of public significance.
The first step is examining the causes of action to determine if they arise from
any act in furtherance of the defendant’s “right of petition or free speech under the
United States Constitution or the California Constitution in connection with a public
issue.” (§ 425.16, subd. (b).) The second step is determining whether the plaintiff has a
probability of prevailing on his claims. (§ 425.16, subd. (b).) If a cause of action arises
from an act in furtherance of the defendant’s right of petition or free speech and the
plaintiff does not have a probability of prevailing, then the cause of action will be
stricken. (§ 425.16, subd. (b).) We apply the de novo standard of review. (Park v.
Board of Trustees of California State University System (2017) 2 Cal.5th 1057, 1067.)
3 Davis requested the appeal be dismissed only as to him. This court granted Davis’s request. Thus, Cheveldave is the sole appellant.
11 C. PROTECTED ACTIVITY
An “ ‘act in furtherance of a person’s right of petition or free speech under the
United States or California Constitution in connection with a public issue’ includes . . .
any written or oral statement or writing made in connection with an issue under
consideration or review by a . . . judicial body, or any other official proceeding
authorized by law.” (§ 425.16, subd. (e)(2).)
“In deciding whether the initial ‘arising from’ requirement is met, a court
considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon
which the liability or defense is based.’ (§ 425.16, subd. (b).)” (Navellier v. Sletten
(2002) 29 Cal.4th 82, 89.) “ ‘The mere fact that an action was filed after protected
activity took place does not mean the action arose from that activity for the purposes of
the anti-SLAPP statute. . . . In the anti-SLAPP context, the critical consideration is
whether the cause of action is based on the defendant’s protected free speech or
petitioning activity.’ ” (In re Episcopal Church Cases (2009) 45 Cal.4th 467, 477.)
The act complained of in Cheveldave’s complaint is the Association’s entering
into the Agreement, which resulted in increased fees for homeowners. Cheveldave
asserts the Association did not have authority to agree to the fee increase, and he
requests the fee increase be declared void and the Agreement be declared void as to the
homeowners in the Tri-Palms Estate unit three development.
The fee increase clause of the Agreement provides, in relevant part, “Pursuant to
the Fee Schedule attached hereto as Exhibit 2, and in order to resolve that Lawsuit, the
Parties agree that K&S may charge increased Usage and Maintenance Fees for each Lot
12 Owner (as defined in the Declaration) within each Tract.” The “Lawsuit” refers to the
state trial court case for which a judgment was entered in 2012. At the time of the
Agreement, an appeal and cross-appeal from the 2012 judgment were pending in this
court. (Tri Palms Unified Owners Association, Inc. et al. v. The Club at Shenandoah
Springs Village, Inc. (E056546) [dismissal order July 28, 2014].)
The Agreement further provides, “[The Association] shall file a Request for
Dismissal with prejudice of its Cross-Appeal in its entirety as to all parties and claims
with each Party bearing its own fees and costs within 15 business days after date of the
Close of Escrow pursuant to the Purchase Agreement. [The Association’s] obligation to
file a Request for Dismissal with prejudice of its Cross-Appeal is contingent upon the
dismissal, with prejudice, of the appeal filed by the Debtor.”
The Agreement also provides, “[The Association] asserts certain claims against
Debtor, and filed a proof of claim as a secured creditor in the Bankruptcy Action for the
amount of $382,478.75 plus interest. . . . After a trial on June 8, 2012, a judgment was
entered against Debtor in the amount of $365,648.88 plus interest and for a permanent
injunction. Debtor then filed an appeal from the Judgment and [the Association] filed a
cross appeal on July 31, 2012.”
The Agreement continues, “K&S shall not object to [the Association’s] secured
claim of Three Hundred Eighty Two Thousand Four Hundred Seventy-Eight and
75/100ths Dollars ($382,478.75) plus interest, being deemed an allowed claim, which
shall be paid from proceeds of the Sale Motion, and [the Association] covenants not to
file another claim in the Debtor’s bankruptcy case. [The Association] shall cooperate in
13 and support K&S’s purchase of the Purchased Assets pursuant to the Purchase
Agreement and Sale Motion.”
In other words, the Association had a claim for $382,478.75 as a result of a
judgment entered in the state trial court, and the Association hoped to have its claim
paid within the bankruptcy proceedings. In connection with that $382,478.75 judgment,
an appeal and cross-appeal were pending. Additionally, the Association had made a
demand for arbitration against Shenandoah, in relation to the fee increase. In the
Agreement, the Association agreed to (1) dismiss its cross-appeal, (2) dismiss its
demand for arbitration, and (3) permit the fee increase, in exchange for (A) dismissal of
Shenandoah’s appeal, and (B) an agreement that the $382,478.75 judgment would be
paid.
Thus, the Association’s act of agreeing to the fee increase resulted in the
dismissal of an appeal and cross-appeal that were pending before this court, and the
resolution of the Association’s creditor claim that was pending before the bankruptcy
court. When the bankruptcy court issued its order, it wrote, “The Court approved K&S
as the successful bidder at the hearing on the Motion in lieu of Inspire Communities, in
part, based on K&S’ agreement on the record in open court to the terms and conditions
of the Inspire Settlement Agreement.” Thus, the terms of the Agreement were part of
the bankruptcy court’s decision to select K&S as the successful bidder.
In sum, the Agreement led to the settlement of the Association’s creditor claim in
the bankruptcy court and the appeal and cross-appeal in the state appellate court. The
14 Agreement was also used by the bankruptcy court as a reason to select K&S as the
successful bidder after the terms of the Agreement were discussed in open court.
Given that the Agreement affected a number of issues before the courts, the
Agreement constitutes a “written . . . statement . . . made in connection with an issue
under consideration or review by a . . . judicial body.” (§ 425.16, subd. (e)(2).)
Accordingly, the Association’s act of entering into the Agreement is a protected
activity.
Cheveldave contends the Association’s act of entering into the fee increase
portion of the Agreement is not a protected activity because the Association did not
have authority to enter into that section of the Agreement. Cheveldave’s argument
pertains to the merits of the case, i.e., whether the Association had the authority to enter
into the fee increase portion of the Agreement. Cheveldave does not cite to the anti-
SLAPP statute and explain how an alleged lack of authority means the statement was
not made in connection with an issue pending before a court. (§ 425.16, subd. (e)(2).)
Accordingly, because Cheveldave’s argument appears to pertain to the merits of his
complaint, we find his contention to be unpersuasive.
D. PROBABILITY OF PREVAILING
1. Law
If a cause of action arises from the defendant’s protected activity then the
plaintiff must show he has a probability of prevailing on the claim. (§ 425.16, subd.
(b)(1); Navellier v. Sletten, supra, 29 Cal.4th at p. 95.) The plaintiff must establish that
his case has “minimal merit” by presenting a “ ‘ “prima facie showing of [evidence] to
15 sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” ’ ”
(Navellier, at pp. 88-89, 93.)
2. Davis-Stirling Act
When a development contains a common area, then the Davis-Stirling Act
applies. (Civ. Code, § 4201.) The Davis-Stirling Act confers standing on a
homeowners’ association to pursue legal claims in its own name without joining the
individual members. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development
(US), LLC (2012) 55 Cal.4th 223, 241; Civ. Code, § 5980.) A “common area may
consist of mutual or reciprocal easement rights appurtenant to the separate interests.”
(Civ. Code, § 4095, subd. (b).) A reciprocal easement arises when adjoining
landowners impose corresponding restrictions or rights upon each of their properties.
(Whelan v. Rosseter (1905) 1 Cal.App. 701, 704; see also Redevelopment Agency v.
Tobriner (1989) 215 Cal.App.3d 1087, 1091, fn. 1.)
An example of a reciprocal easement is a small condominium building with a
common driveway. Each condominium owner may grant a reciprocal easement to the
other condominium owners that allows each owner to drive anywhere on the driveway
and preventing any owner from erecting a barrier. (See Hill v. San Jose Family
Housing Partners, LLC (2011) 198 Cal.App.4th 764,775-776; see also Howeth v.
Coffelt (2017) 18 Cal.App.5th 126, 129; see also Baccouche v. Blakenship (2007) 154
Cal.App.4th 1151, 1555; see also Redevelopment Agency v. Tobriner, supra, 153
Cal.App.3d at pp. 370-371; see also Fobbs v. Smith (1962) 202 Cal.App.2d 209, 211;
see also Civ. Code, § 4505, subd. (a).)
16 The 2003 Master Declaration provides, “Every Member of the Association shall
have a non-exclusive easement for use and enjoyment of the Recreational Facilities and
any improvements thereon or open space areas therein, which shall be appurtenant to
and pass with title to each Lot, subject to all of the easements, covenants, conditions,
restrictions and other provisions contained in the Declarations and this Master
Declaration.”
The Master Declaration does not create a reciprocal easement because there is
not a shared burden. The members’ properties are not burdened by an easement—only
the recreation facility is burdened by an easement. Based upon the current evidence,
there is not a shared burden, and therefore, there are not reciprocal easements.
A mutual easement has the same meaning as a reciprocal easement: “[A] general
plan of real estate development can give rise to mutual equitable servitudes only when
both the grantor and grantee intend that the land conveyed is to be restricted pursuant to
a general plan, that intent appears in the deed, the parties’ agreement shows that the
parcel conveyed is subject to restrictions in accordance with the plan for the benefit of
all the other parcels in the subdivision and such other parcels are subject to like
restriction for its benefit.” (Terry v. Jones (1977) 72 Cal.App.3d 438, 442.) Thus,
mutual easements are defined by a “mutuality of obligation.” (Welsch v. Goswick
(1982) 130 Cal.App.3d 398, 405.)
As explained ante, there is not a mutuality of obligation. Rather, there is a single
obligation. The recreation facility, alone, bears the burden of an easement. The
homeowners’ properties do not have the burden of a mutual obligation. As a result,
17 based upon the current evidence, there is not a mutual easement. Because the evidence
reflects there is not a reciprocal easement or a mutual easement, Chevldave has
established minimal merit regarding his allegation that there is not a common area, and
thus that there is not standing pursuant to the Davis-Stirling Act.
The Association contends the unit three declaration created easements on
homeowners’ lots for the installation and maintenance of drainage facilities, and thus,
there is a common area. The “Declaration of Restrictions and Charges for Tri-Palm
Estates Unit Three” provides that Mobilife of California, Inc. created easements on the
homeowners’ lots. Specifically, the unit three declaration provides, “Easements for the
installation and maintenance of utilities and drainage facilities are reserved, as shown on
the recorded map or plat, over the rear and side of each lot and parcel of land. Within
these easement areas, no structure, planting or other material shall be placed or
permitted to remain which may damage or interfere with the installation and
maintenance of utilities. The easement areas of each lot and parcel of land, and all
improvement in it, shall be maintained continuously by the owner of said lot and parcel
of land.”
The foregoing easement is not mutual or reciprocal because the easement runs in
only one direction—the burden is only on the homeowner. There is not a shared
burden. The utility companies have not granted an easement to the homeowners, such
that the utility companies are burdened. Accordingly, because the easements are not
reciprocal or mutual, we are not persuaded that the easements create a common area.
18 The Association contends it owns an office, and the office constitutes a common
area. In support of this contention, the Association cites to Cheveldave’s attorney’s
argument in the opposition to the anti-SLAPP motion. Because the Association (1) does
not provide evidence of its ownership of the office; and (2) does not provide an
explanation as to how owning the office constitutes a common area for homeowners, we
find the Association’s contention to be unpersuasive. (Central Valley Gas Storage LLC
v. Southam (2017) 11 Cal.App.5th 686, 694-695 [provide relevant analysis].)
3. Master Declaration
The Association contends that if, under the current evidence, the Davis-Stirling
Act could be found to be inapplicable, then the Association had standing to authorize
the fee increase pursuant to the recorded 2003 Master Declaration.
The Master Declaration provides, “The Association may do all other acts and
things that nonprofit mutual benefit corporations are empowered to do, which may be
necessary, convenient or desirable in the administration of its affairs and in order to
carry out the powers and duties described in this Master Declaration, including those
powers described in Section 374 of the California Code of Civil Procedure and (to the
extent not inconsistent herewith) those powers described in Section 1350 et seq. of [the]
California Civil Code, as those sections may be amended from time to time.”
The Master Declaration was executed in 2003. In 2003, section 374 provided
that a minor under 12 years of age, accompanied by a guardian ad litem, “shall be
permitted to appear in court without counsel for the limited purpose of requesting or
opposing a request for” a protective order or an injunction to stop harassment or
19 violence. The fee increase did not arise from a case involving a protective order or
injunction related to harassment or violence. Accordingly, we do not rely upon section
374.
In 2003, Civil Code section 1350 et seq. was the Davis-Stirling Act. (Former
Civ. Code, § 1350.) The Master Declaration provides, “The Association may do all
other acts and things that nonprofit mutual benefit corporations are empowered to do . . .
including . . . (to the extent not inconsistent herewith) those powers described in Section
1350 et seq. of [the] California Civil Code, as those sections may be amended from time
to time.”
As explained ante, the Davis-Stirling Act applies when there is a common area.
(Civ. Code, § 4201.) The law specifically provides that the Davis-Stirling Act does not
“apply to a real property development that does not contain [a] common area.” (Civ.
Code, § 4201.) Arguably, it would be inconsistent to apply the Davis-Stirling Act to the
Association because there is evidence reflecting Tri-Palms Estates does not have a
common area. Because it is arguably inconsistent, one could reasonably argue that,
under the Master Declaration, the authority granted by the Davis-Stirling Act does not
apply in this case. The argument would be as follows: the Master Declaration allows
the authority of the Davis-Stirling Act to be exercised by the Association “to the extent
not inconsistent herewith,” but it is inconsistent in this case because there is no common
area, and thus, no authority may be exercised under the Davis-Stirling Act. Because
such an argument can reasonably be made, we conclude there is minimal merit to
Cheveldave’s case.
20 4. Proper Fees
The Association contends that even if it lacked authority to agree to the fee
increase, the increase itself was proper. In other words, the Association’s lack of
authority is harmless in that K&S could have increased the fees in the same manner,
without any agreement by the Association, because there is no error in K&S’s fee
calculation.
It may be that the result of Cheveldave’s lawsuit is that the Agreement is
declared void and then nothing of substance changes because the fee increase was
properly calculated and could have been unilaterally imposed by K&S. If it is declared
that the Association did not have the authority to enter into the Agreement, then that
declaration could affect similar issues in the future between the Association and the
homeowners. This lawsuit may ultimately be more about procedure, than a decrease in
fees, but it could clarify the rights between the Association and the homeowners.
Therefore, there is minimal merit to Cheveldave’s case.
5. Deference
The Association contends Cheveldave’s case does not have minimal merit
because deference is given to decisions made by the governing board of a community
association. The Association relies upon the following quote: “ ‘Generally, courts will
uphold decisions made by the governing board of an owners association so long as they
represent good faith efforts to further the purposes of the common interest development,
are consistent with the development’s governing documents, and comply with public
21 policy.’ ” (Lamden v. La Jolla Shores Clubdominium Homeowners Assn. (1999) 21
Cal.4th 249, 264.)
If Cheveldave’s complaint concerned the merits of the fee increase, then the
foregoing rule might be applicable. However, Cheveldave is disputing the
Association’s authority to enter into the Agreement. The quote that the Association
relies upon is not relevant to determining whether the Association had the authority to
enter into the Agreement; rather, it would be relevant if we were examining if it were a
good decision to enter into the fee increase portion of the Agreement. Accordingly, we
find the Association’s argument to be unpersuasive.
6. Collateral Estoppel
a. Law
“The doctrine of collateral estoppel is one aspect of the concept of res judicata.”
(Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, fn. 3.) “Collateral estoppel, or
issue preclusion, ‘precludes relitigation of issues argued and decided in prior
proceedings.’ ” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.)
Collateral estoppel has five requirements: “First, the issue sought to be precluded
from relitigation must be identical to that decided in a former proceeding. Second, this
issue must have been actually litigated in the former proceeding. Third, it must have
been necessarily decided in the former proceeding. Fourth, the decision in the former
proceeding must be final and on the merits. Finally, the party against whom preclusion
is sought must be the same as, or in privity with, the party to the former proceeding.”
22 (Lucido v. Superior Court, supra, 51 Cal.3d at p. 341.) We apply the de novo standard
of review. (Johnson v. GlaxoSmithKline, Inc. (2008) 166 Cal.App.4th 1497, 1507.)
b. Bankruptcy Court
The Association contends the bankruptcy court’s order was final and on the
merits, and therefore Cheveldave’s case is barred by collateral estoppel. The issue
before the bankruptcy court was Shenandoah’s debts. There is nothing in the record
indicating that the bankruptcy court decided whether the Association had the authority
to agree to a fee increase. Because the issue raised in Cheveldave’s case is not identical
to the issue raised in the bankruptcy court, collateral estoppel does not apply.
c. The Agreement
The Association contends the Agreement is a final decision on the merits and
therefore Cheveldave’s case is barred by collateral estoppel. The Association relies
upon Citizens for Open Access to Sand and Tide, Inc. v. Seadrift Assn. (1998) 60
Cal.App.4th 1053, 1065, which provides, “The settlement agreement, as incorporated
into the judgments in the Kelly and federal court actions, meets the first requirement of
res judicata that there was a final decision on the merits.”
The bankruptcy court did not incorporate the Agreement into its order. In its
order, the bankruptcy court wrote, “The Court approved K&S as the successful bidder at
the hearing on the Motion in lieu of Inspire Communities, in part, based on K&S’
agreement on the record in open court to the terms and conditions of the Inspire
Settlement Agreement.” The Agreement was a reason for the bankruptcy court
selecting K&S as the successful bidder, but the court did not order K&S to comply with
23 the terms of the Agreement. Because the terms of the Agreement are not part of the
bankruptcy court’s order, the Agreement does not constitute a final decision on the
merits. Therefore, Cheveldave’s case is not barred by collateral estoppel.
d. Small Claims
The Association contends that Davis, who is no longer a party to this appeal, is
barred by collateral estoppel from pursuing this case because he previously litigated the
same issues in small claims court. Because Davis is no longer a party to this appeal, we
deem this issue to be moot. (Schoshinski v. City of Los Angeles (2017) 9 Cal.App.5th
780, 791 [an issue is moot when the court cannot provide further relief].)
E. CONCLUSION
Cheveldave has established that his case has minimal merit. Accordingly, the
trial court erred by granting the anti-SLAPP motion.
II. ATTORNEYS’ FEES
The Association contends it should be awarded attorneys’ fees on appeal if this
court affirms the trial court’s order. We deny the Association’s request because we are
reversing the trial court’s order. Further, because the Association is not the prevailing
party on the anti-SLAPP motion, the trial court’s award of attorneys’ fees must be
reversed. (§ 425.16, subd. (c)(1).)
We note that Cheveldave’s notice of appeal did not expressly include the award
of attorneys’ fees. In the trial court’s May 18 order granting the anti-SLAPP motion,
the trial court explained that the Association was the prevailing party and cited to the
subdivision mandating an award of attorneys’ fees (§ 425.16, subd. (c)). The exact
24 amount of attorneys’ fees was awarded on May 26. Cheveldave’s notice of appeal
reflects he is appealing from the May 18 order and the July 11 denial of his motion for
reconsideration. Because the trial court’s May 18 anti-SLAPP order included a citation
to the law for a mandatory award of attorneys’ fees, and Cheveldave is appealing from
the May 18 order, we conclude the issue is within our jurisdiction. (Grant v. List &
Lathrop (1992) 2 Cal.App.4th 993, 997; Chodos v. Cole (2012) 210 Cal.App.4th 692,
697-698, 706.)
III. MOTION TO DISMISS
The Association filed a motion to dismiss Cheveldave’s appeal due to
Cheveldave no longer residing within Tri Palms Estates. The Association explains that
Cheveldave’s home was foreclosed upon, and in March 2018 ownership of
Cheveldave’s home was transferred to the Association. The Association was listed as
the creditor in the foreclosure.4 The Association asserts that because Cheveldave is no
longer a homeowner within Tri Palms Estates, he lacks standing to pursue the instant
appeal.
“Any party aggrieved may appeal.” (§ 902.) “[A] prevailing defendant on a
special motion to strike shall be entitled to recover his or her attorney’s fees and costs.”
(§ 425.16, subd. (c)(1).)
4 The Association requests this court take judicial notice of the “Sheriff’s Deed County of Riverside, State of California Under Writ of Execution,” that was recorded by the Riverside County Clerk-Recorder, against Cheveldave’s property. This court grants the request as required by law. (Evid. Code, §§ 452, subd. (c), 453; Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549.)
25 Because the Association was the prevailing party on the anti-SLAPP motion, the
trial court awarded the Association attorneys’ fees in the amount of $33,720.50 and
costs in the amount of $1,505.77, for a total award of $35,225.77.5 Because Cheveldave
was required to pay an award of $35,225.77, he was aggrieved. Because attorneys’ fees
are required for a prevailing defendant on anti-SLAPP motion, the only means of
addressing the attorneys’ fee award on appeal was to argue that the trial court erred in
granting the anti-SLAPP motion. Accordingly, because Cheveldave was aggrieved by
the trial court’s order, he could properly appeal. (§ 902.) Therefore, we deny the
Association’s motion to dismiss.
DISPOSITION
The judgment of dismissal is reversed. The orders granting the anti-SLAPP
motion and awarding attorney’s fees are reversed. Cheveldave is awarded his costs on
appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
MILLER J.
We concur:
McKINSTER Acting P. J.
CODRINGTON J.
5 The trial court calculated the total award as $35,225.77. However, it appears the total amount should be $35,226.27.