Coalition etc. Del Mar Beach Club v. Del Mar Beach Club Owners Assn. CA4/1 (2014) · DecisionDepot
Coalition etc. Del Mar Beach Club v. Del Mar Beach Club Owners Assn. CA4/1
California Court of Appeal Aug 21, 2014 No. D064506Unpublished
Filed 8/21/14 Coalition etc. Del Mar Beach Club v. Del Mar Beach Club Owners Assn. CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
COALITION OF CONCERNED OWNERS D064506 AT DEL MAR BEACH CLUB, et al.,
Plaintiffs and Appellants, (Super. Ct. No. 37-2011-00058052- v. CU-MC-NC)
DEL MAR BEACH CLUB OWNERS ASSOCIATION, INC., et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of San Diego County, Timothy M.
Casserly, Judge. Affirmed.
Shewry & Van Dyke and Steven M. Shewry for Plaintiffs and Appellants.
Bremer, Whyte, Brown & O'Meara, Kere K. Tickner, Brian W. Skalsky; Epsten
Grinnell & Howell, Rian W. Jones; and Everett L. Skillman for Defendants and
Respondents.
Plaintiffs and appellants, four homeowners and their interest group, the Coalition
of Concerned Owners at Del Mar Beach Club (the Coalition), brought this action for
declaratory and injunctive relief against the homeowners' association for the common
interest development where their units are located, defendant and respondent Del Mar
Beach Club Owners Association, Inc. (the Association). Their current pleading, the
second amended complaint (SAC), also seeks damages for misrepresentation on behalf of
those four individual homeowners, Ken Bien, Miguel Elias, Don Adams and Mark Dye
(together the individual plaintiffs), who own a total of six beachfront units (on the Pacific
Ocean) at the multi-building development. The dispute arises out of the Association's
decision to terminate natural gas utility service to two of the buildings at the
development.
This appeal challenges the trial court's ruling denying a class certification motion
brought by both the Coalition and the individual plaintiffs (sometimes together
Appellants), who claimed that in a representative capacity, they were entitled to
injunctive and declaratory relief against unfair and illegal conduct. (Bus. & Prof. Code,
§ 17200 et seq., the Unfair Competition Law or UCL; Code Civ. Proc., § 382.) The trial
court denied Appellants' concurrent motion for leave to file a third amended complaint
(TAC), based on similar theories that the Association had wrongfully failed and refused
"to restore natural gas service to Buildings 700 and 800." Appellants allege that the
Association's decision to shut off those gas lines was contrary to the duties it owed to
them by statute and violated the fiduciary duties imposed by its governing documents.1
1 Former Civil Code section 1364, now Civil Code section 4775, is a provision in the Davis-Stirling Common Interest Development Act (the Act), which was repealed, reenacted and renumbered. (Stats. 2012, ch. 180, § 2, p. 2845, operative Jan. 1, 2014; 2
Appellants now contend the trial court erred as a matter of law when it evaluated
the record for (1) the required community of interest among class members and (2)
superiority of class treatment, and determined Appellants had not met their burden of
showing class certification was appropriate. (Brinker Restaurant Corp. v. Superior Court
(2012) 53 Cal.4th 1004, 1021 (Brinker).) Our analysis of the operative pleading, the
SAC, as well as the proposed TAC, together with the admissible portions of the
supporting and opposing declarations, persuades us that the trial court appropriately
denied the motion. There will be significant variations in the proof of harm, if any, to
any individual homeowner that is attributable to the Association's decision to cease
providing natural gas service to the two beachfront buildings at the development. (See
Frieman v. San Rafael Rock Quarry, Inc. (2004) 116 Cal.App.4th 29, 40 (Frieman).)
Moreover, the trial court did not erroneously rely on improper criteria or incorrect
assumptions to reach its conclusions. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429,
436; Brinker, supra, 53 Cal.4th 1004, 1050.) Appellants argue the court must have
erroneously relied on evidence presented in opposition by the Association (i.e., letters
from other homeowners), even though the court simultaneously sustained Appellants'
objections to it. The showing made by Appellants in support of their motion consisted of
their proposed TAC and their attorney's declarations, which stated that the Association
had undertaken discovery that was "focused in large part on [the Coalition's] authority to
represent the owners," and thus he filed the motion for class certification to clarify the
now see Civil Code, § 4000 et seq. on residential properties.) All further statutory references are to the Civil Code unless otherwise noted. 3
issue. Appellants presented essentially no supporting evidence about any factors favoring
class certification. The pleadings outlined the legal issues presented, which the court
adequately addressed, and the references in the ruling to the excluded opposition
evidence did not undermine the court's otherwise well-supported analysis. (Brinker,
supra, 53 Cal.4th at pp. 1021-1022; Ramirez v. Balboa Thrift & Loan (2013)
215 Cal.App.4th 765, 776-777 (Ramirez) [any valid pertinent reason in the ruling is
sufficient to uphold such an order].) We affirm.
I
BACKGROUND
The SAC describes this development as consisting of 192 total units. The 63
beachfront units are located in two of the buildings (Buildings 700 and 800). The
remaining 129 units are located east of the beachfront buildings. For about 40 years, the
natural gas lines which served the beachfront units were on one meter and ran along the
common area outside of Buildings 700 and 800, and provided fuel for barbecues on those
exterior patios and balconies. The SAC represents that the Association allowed some
owners of beachfront units, including these individual plaintiffs, to extend the exterior
natural gas lines into their residences to power their interior natural gas fueled appliances.
Those owners purchased separate gas meters from the Association for their units and
were billed for their natural gas usage.
Although the 129 nonbeachfront units at the development have continuously been
provided with both natural gas and electric utility service, the gas service for the 63
beachfront units was disrupted by leaks starting in July 2010. After investigation, the
4
Association had the gas line to Building 700 shut off, and determined the cost of
replacement was approximately $20,000. It planned to shut down both gas lines.
After a predecessor to this action was filed, Appellants obtained a temporary
restraining order to prevent shutoff of the other gas line. However, when a leak was
detected in the remaining gas line, the utility (San Diego Gas & Electric) shut it down in
late 2010.
In the SAC, Appellants cite to language in the development's declaration of
restrictions (the Declaration), stating that the Association was created to acquire, hold
title to, and manage the common areas. (Art. VI, § 6.1 of the Declaration.) Also, under
its article VI, section 6.2.6, the "Association has and shall have the following rights and
duties, . . . [t]o contract, provide and pay for (i) maintenance, utility, gardening and other
services benefitting the Common Areas." They allege that by statute, such an association
"is responsible for repairing, replacing, or maintaining the common area, other than
exclusive use common area . . . ," unless otherwise provided in the governing documents.
The SAC defines the potential class and the Coalition as "all owners and residents
of Buildings 700 and 800 of the [development] who own or reside in units that previously
were serviced by natural gas lines and, therefore, are real parties in interest . . . ."2 The
2 In the respondent's brief, the Association claims none of the four individual plaintiffs is alleged to be suing in a representative capacity. However, both the SAC and the TAC cite to Business and Professions Code section 17200, et seq., as well as Code of Civil Procedure section 382, and they evidently attempt to plead a representative-type UCL action. 5
SAC seeks declaratory relief and an injunction to prevent further alleged breaches of the
Association's statutory and fiduciary duties pursuant to the Declaration. The SAC pleads
that the Association is obligated to "pay for and implement the repairs and improvements
necessary to restore natural gas service to Buildings 700 and 800." An injunction is
requested to require the Association to take such action. Appellants claim entitlement to
an award of fees and costs under the terms of the Declaration and former section 1354
(now § 5975).3
The proposed TAC seeks the same basic relief, except the proposed class
definition appears to be expanded to include beachfront owners who purchased natural
gas meters or extended gas lines into their units for use with their appliances.4
B. Motion and Opposition; Ruling
Along with their motion for class certification, Appellants filed their motion to
allow filing of the TAC, which they said would be withdrawn if class certification were
denied. Neither the SAC or the TAC is verified by representatives of Appellants. (Code
Civ. Proc., § 446.)
3 Former section 1354, subdivision (a) (reenacted without change as § 5975, subd. (a)), provides in pertinent part: "The covenants and restrictions in the declaration shall be enforceable equitable servitudes, unless unreasonable, and shall inure to the benefit of and bind all owners of separate interests in the development. Unless the declaration states otherwise, these servitudes may be enforced by any owner of a separate interest or by the association, or by both." (Italics added.)
4 In the SAC, the individual plaintiffs also sought damages for the Association's alleged misrepresentations and promises without intent to perform. Had the TAC been approved, it would have dropped the Coalition as a plaintiff and omitted any damages claims by the individual plaintiffs. 6
In support of the class certification motion, Appellants' points and authorities
argued that the individual plaintiffs will be adequate class representatives, and since the
case deals with the legality of standardized documents, it is generally appropriate for
resolution on a class basis. As factual support, Appellants mainly relied on their
attorney's declaration, which explained that the motion was made in response to the
Association's discovery requests about the existence of Appellants' authority to represent
all the putative class members.
In opposition, the Association argued no community of interest was shown to
exist, because some of the proposed class members had not sustained the alleged damage.
The opposition papers included an attorney declaration attaching seven letters from the
owners of units in Buildings 700 and 800 stating they approved of the way the
Association handled the gas line issue.5
Appellants objected to the letters and any discussion of them as inadmissible
hearsay.
After hearing argument and taking the matter under submission, the trial court
sustained Appellants' objections to the Association's homeowner letters. The motion for
class certification was denied, as was the motion to amend. The court concluded
Appellants had not shown a community of interest as alleged, because the conditions at
the individual beachfront units presented individualized questions about any entitlement
5 The Association complains that the moving papers were not served in a timely fashion. However, the trial court received opposition and reached the merits of the issues presented, and we do likewise. 7
to the requested relief, based on variations in proof of harm. (Frieman, supra,
116 Cal.App.4th 29, 40.) Further, there was no adequate showing that a class action
method would be superior to litigation of individual lawsuits, based on the lack of a
community of interest and remaining questions about proper identification of class
members.
Appellants appealed, designating the clerk's transcript as the record on appeal. In
their briefs on appeal, they represent that at the time of the trial court hearing, their
attorney had letters from several other beachfront owners who agreed with the goal of the
action, but he decided not to submit them after his objections to the Association's similar
letters were sustained.6
II
CLASS CERTIFICATION REQUESTS
The denial of certification is an appealable order, effectively dismissing the
proposed class action. (Daar v. Yellow Cab, Inc. (1967) 67 Cal.2d 695, 699.) " 'Section
382 of the Code of Civil Procedure authorizes class suits in California when "the question
is one of a common or general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before the court." The burden is on
the party seeking certification to establish the existence of both an ascertainable class and
a well-defined community of interest among the class members.' " (Lockheed Martin v.
6 California Rules of Court, rule 8.120(b) requires a record of the superior court oral proceedings if the appellant raises an issue that requires consideration of them. However, this case presents primarily questions of law on a given set of facts, and our review may be conducted without any need of a reporter's transcript. 8
A class action must be the "superior" means of resolving the litigation, for both the
parties and the court. (Newell v. State Farm Gen. Ins. Co. (2004) 118 Cal.App.4th 1094,
1101.) Group action has the potential to create injustice, and therefore trial courts are
required to " ' "carefully weigh respective benefits and burdens and to allow maintenance
of the class action only where substantial benefits accrue both to litigants and the
courts." ' " (Ibid.)
The burden is on the party seeking certification to establish the existence of an
ascertainable class, as well as a community of interest. (Lockheed Martin, supra,
29 Cal.4th 1096, 1103-1104.) A properly identified class must be "ascertainable,"
meaning that the class must comprise a "group that was [actually] harmed by the
defendant[s]." (See Akkerman v. Mecta Corp., Inc. (2007) 152 Cal.App.4th 1094, 1100.)
Again we note that under section 5975, subdivision (a) (formerly § 1354,
subd. (a)), the covenants and restrictions in the Declaration "inure to the benefit of and
bind all the owners of separate interests," and the Association must enforce them, "unless
unreasonable." (Ibid.; italics added.) The record supports an inference that the interests
of some of the beachfront unit owners may well have been harmed, as alleged, by the
Association's discontinuation of natural gas service to the two buildings. Based on the
SAC's pleading of the projected expenses for restoring the common area natural gas lines,
15
not only the interests of these beachfront property owners are affected, but also, the
individualized interests of the owners of the 129 other properties in this common interest
development. Determining the enforceability of the Declaration's provisions about
maintenance of utilities and common areas in this context will require not only legal
analysis but also fact-intensive showings about the physical and regulatory conditions at
various units.
In determining whether injunctive or declaratory relief is proper, the court must
balance the equities, including the relative hardships or benefits for not only Appellants
and the Association, but also other stakeholders. (See 8 Miller & Starr, supra, § 24:26,
p. 24-98.) We cannot conclude that the trial court abused its discretion in concluding that
the resolution of these complicated issues, as presented, would not be feasible in a class
setting. Even though interpretation of the Declaration in light of statutory provisions will
be required, the availability of the requested relief does not depend only upon facts
common to all members of the proposed class. (Brinker, supra, 53 Cal.4th 1004, 1021-
1022.)
In conclusion, Appellants did not demonstrate to the trial court that a class action
was the fairest and most efficient way to decide the claims of all 63 beachfront owners.
(Code Civ. Proc., § 382.) We affirm the order, and in this procedural context, express no
opinion on the merits of the substantive issues.
16
DISPOSITION
The order is affirmed. Costs are awarded to Respondent Association.
HUFFMAN, Acting P. J.
WE CONCUR:
HALLER, J.
McINTYRE, J.
17
AI Brief
AI-generated · verify before citing
Holding. The court affirmed the denial of class certification, holding that the plaintiffs failed to meet their burden of demonstrating a community of interest or that class treatment was superior, as the claims required individualized proof of harm and liability.
Issues
Did the trial court err in finding that the plaintiffs failed to establish a community of interest among class members?
Did the trial court err in determining that class treatment was not the superior method for resolving the dispute?
Did the trial court improperly rely on excluded evidence in its ruling on class certification?
Disposition. Affirmed
Quotations verified verbatim against the opinion
“There will be significant variations in the proof of harm, if any, to any individual homeowner that is attributable to the Association's decision to cease providing natural gas service to the two beachfront buildings at the development.”
“The burden is on the party seeking certification to establish the existence of both an ascertainable class and a well-defined community of interest among the class members.”