Fowler v. M&C Ass'n Management Services, Inc.

Filed 10/28/13 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

FRED FOWLER, Plaintiff and Appellant, A137462 v. M&C ASSOCIATION MANAGEMENT (Alameda County SERVICES, INC. et al., Super. Ct. No. RG 11600700) Defendants and Respondents.

Plaintiff Fred Fowler, suing on behalf of himself and a putative class of home buyers and sellers, appeals from an adverse judgment entered after the trial court granted a motion for summary judgment in favor of defendants M&C Association Management Services, Inc. and Associations, Inc. (collectively, M&C).1 Plaintiff‟s complaint challenges the imposition of transfer fees upon the sale of homes in residential real estate developments by M&C, a property management company retained by residential homeowners associations, without previously having recorded a notice of the fee as allegedly required by Civil Code section 1098.5, subdivision (b).2 We conclude, as did the trial court, that no such notice was required and therefore shall affirm the judgment. Background In connection with his purchase of a home in Diablo Grande, a common-interest development in Patterson, California, plaintiff was charged a “Transfer Fee” of $125 and a “Foreclosure Transfer Fee” of $100 (collectively, Transfer Fees). These Transfer Fees

1 M&C Association Management Services, Inc. apparently is a wholly owned subsidiary of Associations, Inc. 2 All statutory references are to the Civil Code unless otherwise noted.

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were imposed by M&C as the managing agent for Diablo Grande‟s homeowners association (the HOA). As part of the purchase agreement, plaintiff had agreed to be responsible for all HOA Transfer Fees (and the seller had agreed to pay a certain “processing fee”). The Transfer Fees were imposed by a document labeled “Resale Disclosure Certificate” that was provided to plaintiff prior to the close of escrow; the fees were paid through the escrow account. The fees were charged for processing paperwork, filing documentation, and updating the HOA and M&C records. Plaintiff purchased the property from a bank that had obtained title by a prior foreclosure, giving rise to the two fees since the bank had not notified the HOA of the prior transfer. As with all these uncontroverted facts, it is undisputed that M&C did not record a notice of the Transfer Fees as plaintiff contends is required by section 1098.5, subdivision (b). Plaintiff‟s complaint contains two causes of action, alleging that M&C‟s imposition of the Transfer Fees without having recorded the notice required by section 1098.5, subdivision (b) violates both that statute and Business and Professions Code section 17200. Summary judgment was requested and granted on the ground that the Transfer Fees do not constitute “transfer fees” within the meaning of section 1098, so that no recorded notice is required by section 1098.5, subdivision (b). Plaintiff has timely appealed. Discussion Section 1098.5, subdivision (b) provides: “When a transfer fee, as defined in Section 1098, is imposed upon real property on or after January 1, 2008, the person or entity imposing the transfer fee, as a condition of payment of the fee, shall record in the office of the county recorder for the county in which the real property is located, concurrently with the instrument creating the transfer fee requirement, a separate document” entitled “Payment of Transfer Fee Required” that contains specified information, including the amount of the fee. The definition of a “transfer fee” in section 1098 begins: “A „transfer fee‟ is any fee payment requirement imposed within a covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale