Harvey v. The Landing Homeowners Association

162 Cal. App. 4th 809 (2008)

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Nature of the Case

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Facts

The Landing is a four-story, 92-unit condominium complex. On the fourth floor, each of the 23 units has attic space adjacent to the units designated on the condominium plan as common area. The attic space common area is accessible only to the unit adjacent to it. Several fourth-floor homeowners used the vacant attic space for storage. In mid-2002, a homeowner complained about that use, which prompted the Board to inspect the fourth-floor units. Of the 23 units on the fourth floor, the Board discovered 18 of the homeowners were using between 50 and 288 square feet of the common area attic space for storage, with 10 homeowners using in excess of 120 square feet of that space as storage. One other fourth-floor owner had converted a portion of the common area attic space into habitable living space. P, who was then president of D, and two members of The Landing Architectural Review Committee (ARC) prepared a memorandum. It recognized fourth-floor homeowners had been using the attic space common area for at least 15 years, with many of these homeowners improving the space by adding features such as wallboard, lights, flooring, carpeting, closets, shelves, and doors. It cited the homeowners' use of the attic space was governed by Article IV, section 12 of the CC&Rs, which provides: “The Board shall have the right to allow an Owner to exclusively use portions of the otherwise nonexclusive Common Area, provided that such portions of the Common Area are nominal in the area and adjacent to the Owner's Exclusive Use Area(s) or Living Unit, and, provided further, that such use does not unreasonably interfere with any other Owner's use or enjoyment of the Project.” It found the use of the attic space common area as storage by the fourth-floor homeowners did not interfere with any other owner's use or enjoyment of the project and, with one exception, the memorandum concluded the homeowners' use of that space was “nominal” within the meaning of section 12 of the CC&R's. The memorandum outlined the proposed terms of the license agreement, including, among other things, requiring the fourth-floor homeowners to obtain insurance to cover their use of the attic space, preventing additional modifications or improvements to the space without written approval from the Board and imposing a one-time assessment of $350 to cover the costs and fees associated with the drafting and recording of the license agreement. Legal counsel stated that D lacked authority to “grant the encroaching owners the ‘right’ to continue their use of the common area” because “using an attic for storage is not a nominal use.” P requested D to issue notices of violation under the CC&Rs. D refused and P resigned as president. The City of Coronado issued D notice of violation under the California Building Code. The inspectors stated that the attic space could be used for storage, but not living space. D voted four to one in support of a motion finding a violation of the CC&Rs and the building codes. It then decided by the same margin that (1) 120 square feet or less of the attic space common area could be used for “rough storage; (2) the homeowners would have to ask the Board for “permission” to use the 120 square feet for storage; and (3) this “resolution would also apply to storage space in the pillars that are located in the entrance to front patios.” The total area approved for attic storage for all fourth-floor units combined is 2,760 square feet; approximately 3.5 percent of the total common area. D also required each fourth-floor homeowner seeking to use the attic space to obtain liability insurance coverage of $ 1 million. The City inspected and found code compliance. The Board passed a resolution in 2006 transferring to the fourth-floor owners the “exclusive right to use the common area attic space in that owner's unit.” P sued alleging trespass, breach of fiduciary duty, and injunctive relief. Ds moved for summary judgment. The trial court granted D's motion, finding the language of the CC&Rs “grants D broad authority and discretion to determine whether to allow an owner to exclusively use portions of the common area and this necessarily includes determining what portions are ‘nominal in area.’” The court deferred to D's presumed expertise on the use of the attic space common area, based on undisputed evidence showing the “Board conducted a reasonable investigation, in good faith and with regards for the best interests of the community association and its members and exercised discretion within the scope of its authority.” D appealed.