Moorpark Homeowners Assn. v. Vrt Corp.

74 Cal. Rptr. 2d 712, 63 Cal. App. 4th 1396
CourtCalifornia Court of Appeal
DecidedMay 19, 1998
DocketB110791, B110799
StatusPublished
Cited by23 cases

This text of 74 Cal. Rptr. 2d 712 (Moorpark Homeowners Assn. v. Vrt Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moorpark Homeowners Assn. v. Vrt Corp., 74 Cal. Rptr. 2d 712, 63 Cal. App. 4th 1396 (Cal. Ct. App. 1998).

Opinion

74 Cal.Rptr.2d 712 (1998)
63 Cal.App.4th 1396

MOORPARK HOMEOWNER'S ASSOCIATION et al. Plaintiffs, Cross-defendants and Respondents,
v.
VRT CORP., Defendant, Cross-complainant and Appellant.
HP MOORPARK, LLC, Plaintiff, Cross-defendant and Respondent,
v.
WILLIS INVESTMENT GROUP, Defendant, Cross-complainant and Appellant.

Nos. B110791, B110799.

Court of Appeal, Second District, Division Four.

May 19, 1998.

*714 Wolf, Rifkin & Shapiro, Marc E. Rohatiner, Keli N. Osaki, Los Angeles, Stern, Neubauer, Greenwald & Pauly, Andrew S. Pauly, Santa Monica, and Wendy A. Loo, Los Angeles, for Defendants, Cross-complainants and Appellants VRT Corp. and Willis Investment Group.

Wilner, Klein & Siegel, Leonard Siegel, Floyd W. Cranmore, Beverly Hills, Schimmel, Hillshafer & Loewenthal and Robert D. Hillshafer, Sherman Oaks, for Plaintiffs, Cross-defendants and Respondents 14859 Moorpark Homeowner's Association and Russell Saffer.

Narvid, Glickman, Scott & Frangie, Michael B. Scott and Linda B. Takahashi, Sherman Oaks, for Plaintiff, Cross-defendant and Respondent HP Moorpark, LLC.

CHARLES S. VOGEL, Presiding Justice.

These consolidated appeals involve the purported conveyance of a condominium complex, including the common areas, to a third party developer without obtaining a judicial partition pursuant to Civil Code section 1359. The matter comes to us to review the granting of a preliminary injunction to restrain the holder of the deeds of trust which encumber the individual units from foreclosing, and the denial of a preliminary injunction to restrain the third party developer from performing purported prophylactic demolition on the complex. We conclude that compliance with section 1359 is essential to establish the legitimacy of the conveyance of the complex and that neither judicial nor nonjudicial partition can undermine the security interest of the trust deed holder.

FACTUAL AND PROCEDURAL BACKGROUND

On January 17, 1994, the Northridge earthquake seriously damaged the 36-unit condominium complex at 14859 Moorpark Street in Sherman Oaks (hereafter "the complex"). The complex's Declaration of Establishment of Covenants, Conditions and Restrictions (hereafter "CC & Rs") provide that *715 if the insurance proceeds available to repair the complex's common areas fall below 85 percent of the cost of repairs and three-quarters of the owners do not vote to contribute to the repairs, the complex is to be sold and the sales proceeds are to be distributed to the owners. The CC & Rs further state that the common areas are subject to partition solely as provided in Civil Code section 1359, and that the homeowner's association of the complex (hereafter "the association") has an irrevocable power of attorney to sell the complex "when partition of the [complex] may be had" under section 1359, but only after recordation of a certificate "setting forth compliance with the foregoing condition...."

At a meeting on July 13, 1994, three-quarters of the owners failed to approve repair of the common areas, and on February 6, 1995, the association recorded a certificate of intention not to repair. Following a meeting on May 15, 1996, at which 50 percent of the owners voted not to rebuild the complex, the association recorded a second certificate on June 11, 1996, stating that pursuant to its power of attorney, it intended to sell the complex.

On June 19, 1996, the association agreed to sell the complex to MWH Development Corporation (hereafter "MWH"). On June 26, 1996, the association and its president, Russell Saffer, initiated an action to partition the complex (case No. LC037523). The complaint contained claims for judicial partition, declaratory relief, and injunctive relief against the owners and several mortgage holders, including VRT Corporation (hereafter "VRT").

On January 9, 1997, and before there was any resolution of its action for partition, the association recorded a grant deed conveying the complex to HP Moorpark, LLC (hereafter "HP Moorpark").

On January 27, 1997, VRT filed a cross-complaint in the partition action against the association and Saffer for declaratory and injunctive relief, and asserting tort claims. The cross-complaint alleged, inter alia, that the association and Saffer had allowed the complex to deteriorate, and that they had failed to disburse insurance proceeds and funds arising from a construction defect claim.

On January 31, 1997, HP Moorpark, characterizing itself as MWH's successor-in-interest with respect to the complex, initiated an action against VRT, the association, and all other persons claiming any right, title, or interest in the complex (case No. LC040018). The complaint sought quiet title, as well as injunctive and declaratory relief. On February 14, 1997, Willis Investment Group (hereafter "Willis"), alleging that it owns two units in the complex, cross-complained for quiet title against HP Moorpark, the association, and Saffer. Willis is an affiliate of VRT.

In the partition action, the association and Saffer requested a preliminary injunction barring VRT from foreclosing on its 28 first deeds of trust on units in the complex. The trial court granted the request for a preliminary injunction on or about February 20, 1997.

In the quiet title action, Willis sought a preliminary injunction precluding HP Moorpark and the association from asserting the validity or effectiveness of the grant deed by which HP Moorpark allegedly took title to the complex. The trial court denied Willis's request for a preliminary injunction on March 6, 1997.

VRT appealed from the ruling in the partition action, and Willis appealed from the ruling in the quiet title action. Their appeals were subsequently consolidated.

DISCUSSION

A. Standard of Review

In determining whether to issue a preliminary injunction, the trial court considers two related factors: (1) the likelihood that the plaintiff will prevail on the merits of its case at trial, and (2) the interim harm that the plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction. (King v. Meese (1987) 43 Cal.3d 1217, 1226, 240 Cal. Rptr. 829, 743 P.2d 889.) "The latter factor involves consideration of such things as the inadequacy of other remedies, the degree of *716 irreparable harm, and the necessity of preserving the status quo." (Abrams v. St. John's Hospital & Health Center (1994) 25 Cal.App.4th 628, 636, 30 Cal.Rptr.2d 603.)

The determination whether to grant a preliminary injunction generally rests in the sound discretion of the trial court. (Abrams v. St. John's Hospital & Health Center, supra, 25 Cal.App.4th at p. 636, 30 Cal.Rptr.2d 603.) "Discretion is abused when a court exceeds the bounds of reason or contravenes uncontradicted evidence. [Citation.]" (Jessen v. Keystone Savings & Loan Assn. (1983) 142 Cal.App.3d 454, 458, 191 Cal.Rptr. 104.)

When, as here, the trial court is presented with evidence on the two factors in both cases but fails to make express findings, we presume that the trial court made appropriate factual findings (see MCA Records, Inc. v. Newton-John (1979) 90 Cal.App.3d 18, 23, 153 Cal.Rptr. 153) and review the record for substantial evidence to support the rulings (American Academy of Pediatrics v. Van de Kamp (1989) 214 Cal.App.3d 831, 838-839, 263 Cal.Rptr. 46).

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Bluebook (online)
74 Cal. Rptr. 2d 712, 63 Cal. App. 4th 1396, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moorpark-homeowners-assn-v-vrt-corp-calctapp-1998.