HALBERDA VS. HIDDEN CANYON ESTATES HOMEOWNERS ASSOCIATION

The motion is unopposed. The motion and supporting declaration comply with California Rules of Court, Rule 3.1324.

The court may, in the furtherance of justice, and on such terms as may be proper, allow amendment of a complaint at any time before or after commencement of trial. (Code Civ. Proc. §§ 473, 576.) “There is a policy of great liberality in permitting amendments to the pleadings at any stage of the proceeding.” (Sullivan v. City of Sacramento (1987) 190 Cal.App.3d 1070, 1081.)

Here, trial is set for 4/9/27 and there is no showing of prejudice arising from the proposed amendment. Therefore, the motion is granted.

Plaintiff shall file and serve the amended complaint within 20 days of this order.

8. HALBERDA VS. HIDDEN CANYON ESTATES HOMEOWNERS ASSOCIATION 2022-01299111 1. DEMURRER TO AMENDED COMPLAINT Defendants John Alevizos and Georgia Alevizos’ Demurrer is SUSTAINED in part as to 2nd cause of action without leave to amend the OVERRULED in part as to the 1st cause of action. The Alevizoses’ and Halberdas’ requests for judicial notice are granted as records of this court. Additionally, the Court takes judicial notice, sua sponte, of the signed stipulation dismissing the prior lawsuit with prejudice. (ROA 64, Case No. 30-2020- 01145204-CU-BC-CJC.)

1st Cause of Action – Breach of Equitable Servitudes “The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797, [cleaned up].)

The Halberdas first claim they lacked privity with the HOA in the prior action because their claims in this case are in conflict with the prior settlement agreed upon. Privity requires the party in the prior proceeding represented the same legal right. (Zaragosa v. Craven (1949) 33 Cal.2d 315, 318.) The claim in the prior proceeding was whether the Alevizoses could maintain a fence on their property. (RJN, Ex. A.) The Sub-HOA was defending the prior proceeding to enforce the CC&Rs. (RJN, Ex. A.) Thus, part of the Halberdas’ claims in the first cause of action are precluded.

“The Halberdas seek preliminary and permanent injunctive relief compelling the Defendants to rescind their settlement agreement ... and further compelling Defendants to remove any and all landscaping, fencing and other “Improvements” ....” (4AC, ¶ 37.) The second part of the sought injunctive relief was the exact issue previously determined in the prior proceeding. Further, the first part of the injunctive relief regarding whether the Sub-HOA had the authority to enter into the settlement agreement which the Halberdas claim is in direct violation of the CC&R is also precluded.

This situation presents a similar situation to Duffy v. Superior Court (1992) 3 Cal.App.4th 425. In Duffy, a homeowners association filed a complaint against a homeowner who was attempting to build an improvement on their property as well as the neighbors to the homeowners. (Id. at 427.) The association argued the neighbors were proper parties because they may sue the association if they were unhappy with the outcome of the case. (Id. at 432.) However, in ruling the neighbors were not proper parties to the case, the court reasoned: If, after this litigation is over, the Duffeys and the Mehrenses are unhappy because the court has rejected their interpretation of the CC & Rs on the merits, they will have only themselves to blame. [Code of Civil Procedure, section 5975, previously Civil Code, section 1354,] gives them the right to join the litigation to enforce the CC & Rs if they so desire.

If they are at all concerned that the homeowner association will not vigorously press their interpretation of the CC & Rs to the trial court, now is the time for them to exercise their rights under section [5975] and do so. [¶] The association, for its part, need only make a good faith effort to obtain a judicial declaration on the merits of the dispute. Code of Civil Procedure section [5980, previously section 374,] gives an association standing to pursue “matters pertaining” to the “[e]nforcement of the governing documents” of a “common interest development.”

Enforcement is impossible when governing documents are unclear as applied in a given context. Interpretation of governing documents is undoubtedly a “matter pertaining” to their enforcement. Accordingly, we conclude section [5980] authorizes homeowner associations to file declaratory relief actions such as this one where there is a need for an authoritative interpretation of governing documents. [¶] At the same time, however, section [5980] specifically relieves homeowner associations from the need to join “the individual owners of the common interest development.”

When read in conjunction with [sic] section [5975], an important implication emerges from this aspect of the statute: if there is a good faith dispute concerning the interpretation of the CC & Rs, a homeowner association need not vigorously advocate any particular interpretation—individual owners can do that if they want to under section [5975]. As long as the “matters” relate to the enforcement of the CC & Rs (which would entail joining the parties against whom they are to be enforced), the association has standing to litigate them without joining the neighboring owners with their various viewpoints.

If those owners want to press their own interpretations, section [5975] allows them to jump into the fray directly. Otherwise, they are free to stay on the sidelines. (Duffy, supra, 3 Cal.App.4th 425, 432-433.)

The Halberdas are claiming the opposite, that they may “stay on the sidelines” in the prior proceeding and then challenge the outcome once it has concluded. Thus, creating the exact scenario anticipated and prohibited in Duffy. As is the case here, an association can be left with conflicting obligations if multiple homeowners may sue it in a piecemeal fashion. Therefore, the Halberdas’ claim that they lack privity with the Sub-HOA in the prior proceeding is without merit.

Additionally, the lawsuits involve the same primary rights, whether the fence is permitted under the CC&Rs. Under both lawsuits, the primary issue is whether the fence violates the CC&Rs. The Halberdas claim the CC&Rs do not permit the Sub-HOA to allow a variance to permit improvements outside of the building envelope. If the Halberdas were worried the Sub-HOA was not interpreting the CC&Rs correctly, they could have litigated their interpretation in the prior proceeding. They chose not to. Thus, their claim rests on the primary right that the fence violates the CC&Rs. Therefore, the lawsuits involve the same primary rights.

Finally, a dismissal with prejudice “is the equivalent of a final judgment on the merits .... (Boeken, supra, 48 Cal.4th 788, 804.) The prior proceeding was dismissed with prejudice. (ROA 64, Case No. 30-2020-01145204-CU-BC-CJC.) The Alevizoses would be entitled to join this lawsuit under Code of Civil Procedure, section 5975, just as the Halberdas were entitled to join the prior lawsuit to advocate for their interpretation of the CC&Rs, namely whether the fence was permitted under the CC&Rs. However, they are not currently a party to the first cause of action. Therefore, they may not object to the pleading. (Code Civ. Proc., § 430.10.)

Allegations Regarding Civil Code § 5930 The Court granted limited leave to amend the TAC and instructed Plaintiffs to plead sufficient facts to support their claim the complaint fall within the exception to Code of Civil Procedure, section 5930. Plaintiffs added paragraph 46 stating: Upon information and belief, the Halberdas have been damaged though diminution of their property’s value and costs associated with curing the Defendants’ unlawful conduct. Specifically, the presence of the fenced in adjoining orchard have impaired previously unobstructed views from the Halberdas’ property as well as increasing the landslide and fire risk to the Halberdas’ property.

The precise diminution in the Halberdas’ property value is to be proven at trial through expert valuation testimony, but, upon information and belief, exceeds $25,000. Accordingly, the Halberdas have been damaged in an amount to be proven at trial from the Defendants’ blatant violation of the CC&Rs.

The allegation conflicts with paragraph 44 which alleges “[t]he future losses associated with Alevizos’ refusal to honor the CC&Rs and Rules, as well as the HOA’s final decision alleged hereinabove, will be difficult if not impossible to ascertain.” Plaintiffs do not explain how they have now determined the damages are ascertainable and over $25,000. Under the sham pleading doctrine, the trial court may disregard amendments that omit harmful allegations in the original complaint or add allegations inconsistent with it. (State of California ex rel.

Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 412.) “If a party files an amended complaint and attempts to avoid the defects of the original complaint by either omitting facts which made the previous complaint defective or by adding facts inconsistent with those of previous pleadings, the court may take judicial notice of the prior pleadings and may disregard any inconsistent allegations. [Citations.]” (Colapinto v. County of Riverside (1991) 230 Cal.App.3d 147, 151-152.) “The sham pleading doctrine is not ‘intended to prevent honest complainants from correcting erroneous allegations ... or to prevent correction of ambiguous facts. [Citation.]

Instead, it is intended to enable courts ‘ “to prevent an abuse of process.” [Citations.]’ Plaintiffs therefore may avoid the effect of the sham pleading doctrine by alleging an explanation for the conflicts between the pleadings. [Citations.] (Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.3d 336, 343.)

Here, Plaintiff alleges the damages caused by the obstructed view are both “difficult if not impossible to ascertain,” thus warranting injunctive relief, and, based on information and belief, exceeding $25,000. Plaintiffs have not alleged an explanation for this conflict, thus, it is not evident paragraph 46 is a correction to an erroneous allegation or an ambiguous fact. Therefore, the newly added paragraph 46 is a sham allegation. Accordingly, Plaintiffs have failed to adequately allege their claim falls within the exception to Civil Code § 5930. Thus, the Alevizoses’ demurrer to the 2nd cause of action is sustained without leave to amend. (See [Le Mere v. Los Angeles Unified School Dist. (2019) 35 Cal.App.5th 237, 245 [unreasonable delay sufficient grounds for denying leave to amend].)

2. MOTION TO STRIKE PORTIONS OF COMPLAINT Defendants John Alevizos and Georgia Alevizos’ Motion to Strike is DENIED. The Alevizoses’ requests for judicial notice are granted as records of this court. The Alevizoses do not have standing to challenge the first cause of action because the cause of action does not name them as defendants. (Code Civ. Proc., § 430.10.) The Alevizoses requests to strike paragraphs 7, 28, 29, and 46 of the 4AC; paragraphs 1, 2, and 4-7 of the prayer for relief; and all references to litigation expenses, attorney’s fees, expert fees, and costs are denied as moot in light of sustaining the demurrer as to the 2nd cause of action without leave to amend. The Alevizoses are no longer parties to the lawsuit because there are no causes of action asserted against them.

9. HAUNGS VS. NB TECH ACQUISITIONS CORP. 2025-01503830 1. DEMURRER TO AMENDED CROSS-COMPLAINT

Plaintiffs/Cross-defendants Jeff Haungs and Matthew Steffens’ demurrer to the first, second, and third causes of action in Defendants/Cross-complainants NB Tech Acquisitions Corp. and 041 LLC’s Cross-complaint is OVERRULED in part and SUSTAINED in part with leave to amend.

First and Second Causes of Action for Breach of Contract

Defendants/Cross-complainants’ first and second causes of action allege breach of contract against Plaintiff/Cross-defendant Jeff Haungs and Plaintiff/Cross-defendant Matthew Steffens, respectively.

“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant’s breach and resulting damage.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307 [citation omitted].) “If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Ibid.)

“In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199 [citation omitted].) Plaintiffs/Cross-defendants demur on the grounds Defendants/Crosscomplainants failed to attach a copy of the alleged contracts to the