Reynolds v. Auburn Country Villa HOA CA3

CourtCalifornia Court of Appeal
DecidedOctober 31, 2013
DocketC068315
StatusUnpublished

This text of Reynolds v. Auburn Country Villa HOA CA3 (Reynolds v. Auburn Country Villa HOA CA3) 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
Reynolds v. Auburn Country Villa HOA CA3, (Cal. Ct. App. 2013).

Opinion

Filed 10/31/13 Reynolds v. Auburn Country Villa HOA CA3 NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Placer) ----

DEBORAH J. REYNOLDS, as Trustee, etc.,

Plaintiff and Appellant, C068315

v. (Super. Ct. No. SCV0025861)

AUBURN COUNTRY VILLA HOMEOWNERS ASSOCIATION et al.,

Defendants and Respondents.

Plaintiff Deborah J. Reynolds is trustee for the Joan Martin Trust, which holds title to a condominium in a common interest community known as Auburn Country Villa. Reynolds sued the Auburn Country Villa Homeowners Association and various board members (collectively the Association), challenging an amendment to the Covenants, Conditions and Restrictions (CC&Rs) that prevented the trust from renting the condominium.

1 The trial court sustained the Association’s demurrer without leave to amend, ruling that the action is barred by the four-year statute of limitations in Code of Civil Procedure section 343,1 and that the rental restriction was reasonable and did not violate public policy. Reynolds now contends: 1. The trial court abused its discretion in denying leave to amend the complaint, because Reynolds can establish that the rental restriction is void ab initio, i.e., that her lawsuit is not barred by the statute of limitations and that the rental restriction can be challenged at any time. 2. The trial court erred in denying Reynolds’s motion for reconsideration. 3. The trial court erred in awarding the Association its attorney fees. We conclude Reynolds fails to establish that the challenged CC&Rs provision is void ab initio or that the trial court erred in sustaining the demurrer without leave to amend. She also fails to demonstrate that the trial court erred in denying her motion for reconsideration or in awarding the Association its attorney fees. Accordingly, we will affirm the judgment. BACKGROUND The Auburn Country Villa’s CC&Rs initially permitted homeowners to rent their condominiums without significant restrictions; they only prohibited short term leases. However, in February 2003, a majority of the Association approved an amendment to the CC&Rs that limited the number of permissible rental units in the community to six. The amendment was approved to protect the value of the homes in the development and to retain eligibility requirements for secondary financing. The restriction did not apply to any owners who were renting their condominiums at the time the amendment was

1 Undesignated statutory references are to the Code of Civil Procedure.

2 recorded, but once a “grandfathered” owner transferred title the rental restriction would apply to the condominium’s new owner. Grandfathered units counted toward the six rental limitation. Those who subsequently decided to rent their home were placed on a waiting list, and had to wait until the number of rentals fell below six. A variance could be requested for a short duration based on demonstrated hardship, such as pending probate proceedings, illness, or a reasonable period of time in which to sell the unit. The amendment was recorded on March 27, 2003. Reynolds sued the Association in September 2009 for declaratory and injunctive relief. She filed a first and then a second amended complaint after the Association successfully demurred twice to her pleadings. Her second amended complaint sought (1) to enjoin the application of the rental amendment; (2) to compel the Association to grant a hardship exemption; (3) a declaration that the rental amendment was void as applied; (4) a declaration that the amendment was void ab initio; and (5) damages for breach of contract. Reynolds claimed the amendment was not approved by a majority of the Association, was not adopted in compliance with the amendment procedure set forth in the CC&Rs, and the solicitation for the amendment made false assertions about the need for the amendment. She said this violated the contract between the original developer and all of the subsequent owners, as set forth in the original CC&Rs, by illegally revoking the right to rent or lease the residential units. Reynolds further maintained that the rental restriction was void as applied because it interfered with the property rights of homeowners in violation of public policy. She also sought to pursue a class action, alleging that the existence of the CC&Rs amendment was unknown to her and members of the class because it was not included in title documents provided to buyers. She said she learned of the restriction within five years of filing the lawsuit.

3 According to a declaration filed by Reynolds, which we reference solely to provide context,2 her mother, Joanne Martin, purchased a unit in Auburn Country Villa in September 2004, but did not learn of the rental restriction until May 2006. After her health deteriorated, Martin moved into an assisted living facility and sought a hardship exception to the rental restriction in 2006. Reynolds also made an unsuccessful request for a hardship exemption after she became trustee of the Joanne Martin Trust. The Association demurred to the second amended complaint on the ground it was barred by the statute of limitations. The Association argued all of the complaint’s allegations were premised on the invalidity of the CC&Rs amendment, but it was too late to raise such a challenge because the four-year statute of limitations in section 343 applied, and a manifest and palpable injury occurred more than four years earlier. The Association said there were no allegations demonstrating that the amendment was void ab initio, and rental restrictions in common interest developments have been held to be reasonable. The trial court sustained the demurrer without leave to amend, ruling that the CC&Rs amendment was recorded in 2003, but the complaint was not filed until 2009, which meant the lawsuit was barred by the statute of limitations. The trial court also ruled that the rental restriction was reasonable and did not violate public policy. The trial court subsequently denied Reynolds’s motion for reconsideration, observing that most of the documents on which Reynolds relied for reconsideration were in her possession prior to the filing of the first amended complaint. The trial court ruled that Reynolds did not meet her burden of showing that she could not have produced the evidence earlier in the exercise of reasonable diligence. The trial court said that although

2 In reviewing a demurrer, we consider all well pleaded facts and matters that may be judicially noticed (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126 (Zelig)), but that does not include a party’s declaration.

4 Reynolds presented a “new” notice of hearing issued in January 2011, in which the Association advised Reynolds to remove her for-rent sign and imposed a $50 per day fine, that did not establish wrongful conduct or exclusion from the board’s deliberations because the notice permitted Reynolds to attend and testify at the hearing. STANDARD OF REVIEW In reviewing the sufficiency of a complaint against a general demurrer, we consider matters that may be judicially noticed and treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. (Zelig, supra, 27 Cal.4th at p. 1126.) We determine whether the complaint states facts sufficient to constitute a cause of action under any legal theory. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Rakestraw v.

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Reynolds v. Auburn Country Villa HOA CA3, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reynolds-v-auburn-country-villa-hoa-ca3-calctapp-2013.