Noxsel v. Boquet Estates Owners Assn. CA4/2 (2013) · DecisionDepot
Noxsel v. Boquet Estates Owners Assn. CA4/2
California Court of Appeal Mar 8, 2013 No. E053305Unpublished
Filed 3/8/13 Noxsel v. Boquet Estates Owners Assn. CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
E. RAY NOXSEL, as Trustee etc.,
Plaintiff, Cross-defendant and E053305 Appellant, (Super.Ct.Nos. CIVRS704624 & v. CIVRS809589)
BOQUET ESTATES OWNERS OPINION ASSOCIATION,
Defendant, Cross-complainant and Respondent.
APPEAL from the Superior Court of San Bernardino County. David A. Williams,
Judge. Affirmed.
Ward & Ward and Alexandra S. Ward for Plaintiff, Cross-defendant and
Appellant.
Law Offices of Edward W. Hess, Jr., Edward W. Hess, Jr.; Slaughter & Regan,
Barry J. Reagan and Gabriele M. Lashly for Defendant, Cross-Complainant and
Respondent.
1
I
INTRODUCTION
Plaintiff and appellant E. Ray Noxsel1 and respondent Boquet2 Estates Owners
Association (HOA), have sued one another in a dispute involving 59 garages, owned by
Noxsel as part of a condominium development. Noxsel contends that the garages can be
rented or sold to anyone, including members of the general public. In contrast, the HOA
contends that Noxsel can rent or sell the garages only to HOA members and not to
members of the general public. With regard to HOA assessments, the parties disagree on
how much the assessments may be increased each year.
On appeal, Noxsel contends the trial court misinterpreted the covenants,
conditions and restrictions (CC&Rs) for the Boquet Estates development (Boquet), as
well as the 1977 conditional use permit (CUP) issued by the City of Upland (Upland).
Noxsel also argues the court misapplied Civil Code section 1366. Noxsel seeks a
reversal of the judgment and the award of attorney‘s fees to the HOA.
The fundamental contention advanced by Noxsel is that the CUP and the CC&Rs
should be interpreted to allow sale or rental of the garages to anyone, not limited to
owners of the Boquet condominiums. As the reviewing court, we have thoroughly
1 Trustee of the E. Ray Noxsel Charitable Remainder Unitrust #21 dated December 22, 2006 (the Trust), and the Trust (collectively, Noxsel),
2 ―Boquet‖ is the spelling used in the covenants, conditions and restrictions.
2
examined the trial record and the appellate briefs submitted by the parties.3 Like the trial
court, we disagree with Noxsel‘s proposed interpretation of the written documents. We
conclude the CUP and the CC&Rs unambiguously prohibit Noxsel from selling or
renting the garages to the general public.
We conduct a combined review, engaging in independent contractual and statutory
interpretation, and find the trial court did not abuse its discretion in enjoining Noxsel
from selling or renting the 59 garages to the general public. Additionally, we affirm the
trial court‘s rulings on the amount and allocation of the HOA assessment fees and the
trial court‘s grant of attorney‘s fees to the HOA.
II
STATEMENT OF FACTS
A. The CUP and the History of the Boquet Estates Development
In 1977, Noxsel began to develop Boquet, a planned residential development
consisting of 64 condominium lots and 60 separate garage lots in Upland. Each
condominium lot included an attached two-car garage; each garage lot was improved
with a single-car garage. The single-car garage lots are located in a separate row and are
not attached to the condominiums.
3 At oral argument, Noxsel‘s counsel protested this court had not considered large portions of appellant‘s brief. We not only considered the entire appellant‘s opening brief, we also note about half consisted of boilerplate recitations of legal principles of which this court is cognizant and large verbatim portions of the record. As we discuss below, Noxsel‘s argument depends on this court accepting his interpretation of the CUP and the CC&Rs.
3
In January 1977, Noxsel obtained a CUP from Upland. The CUP included a
condition of approval, requiring the Boquet CC&Rs to ―include a provision that all one-
car garages shall be under Homeowner‘s Association control and no ownership of any
such garage shall be transferred to any non-member of said Association.‖
B. The CC&Rs
The recorded CC&Rs contain the following relevant provisions, which define
many of the terms to be discussed. According to article I, Definitions:
―7. A ‗lot‘ shall mean any numbered plot of land, together with the residential and
other improvements thereon, . . .
―8. A ‗member‘ shall mean every person or entity who holds a membership in the
Association. [¶] . . . [¶]
―10. An ‗owner‘ shall mean each person and entity holding a record ownership
interest in a lot, . . .‖
According to article III, Use Restrictions:
―1. Residential, Garage and Land Use. Lots shall be used for residential purposes
only, . . . Nothing herein shall prevent an owner from leasing or renting his lot, . . .‖
provided the lessee or renter is subject to HOA regulation as discussed in Article XIV.
―2. Commercial Use. . . . no part of the development shall ever be used or caused,
allowed or authorized to be used in any way, directly or indirectly, for any business,
commercial, manufacturing, mercantile, storing, vending, or other such non-residential
purpose, . . .‖
4
―4. Offensive Conduct; Nuisances. No noxious or offensive activities shall be
carried on upon, or within the development, nor shall anything be done thereon which
may be or become an annoyance or nuisance to the residents of the development, or
which shall in any way interfere with the quiet enjoyment of owners or occupants of
lots.‖
―5. Parking Restrictions; Use of Garages. . . . Garages shall be used for parking
and storage only and shall not be converted for living or recreational activities. . . .‖
―12. Compliance with Laws, Etc. . . . No owner shall permit anything to be done
or kept on his lot which is in violation of any law, ordinance, statute, rule or regulation of
any local, county, state or federal body.‖
According to article V, Membership and Voting Rights, ―[e]ach owner of a lot, or
interest therein, shall be a member of the Association. Ownership of a lot or interest
therein shall be the sole qualification for and entitlement to membership in the
Association‖ until ownership or interest ceases. The CC&Rs define a member‘s rights,
duties, and obligations. Any transfer of ownership or interest transfers the membership
rights automatically to the new owner.
At trial, Noxsel asserted that, according to Article VI, anyone can become an HOA
member by buying a garage, thereby satisfying the condition of the CUP that no
ownership of a garage shall be transferred to a nonmember of the HOA. Noxsel testified
that a buyer of a garage becomes an HOA member ―during the sale.‖ Noxsel elaborated
5
further ―that if a person bought a single-car garage, they automatically become a
member‖ of the HOA and under its control.4
Regarding Assessments, article VI provides that total assessments should be
allocated 90/10 between the condominium lots and the garage lots. Any increase in the
total assessment is limited to 20 per cent annually.
Finally, article XIV governs the rental or leasing of lots, including making the
renter or lessor subject to HOA regulation.
C. Noxsel’s Ownership and Rental of the Garage Lots
The 64 condominium lots were sold but the garage lots were not sold. Ultimately
Noxsel retained ownership of 59 garage lots.5 Over the years, Noxsel continued to offer
the garage lots for sale to the public and also began renting the lots.
In 1982, Upland notified Noxsel that he was violating the city‘s zoning laws by
selling or renting the garage lots to anyone except an owner or purchaser of a
condominium lot. The Upland city attorney strongly emphasized: ―It is the clear intent
of [the CUP] that the owners of any one car garages . . . should also be homeowners. . . .
It is clear . . . that the City contemplated only that homeowners within the tract would be
owners of the garages and that we could not spew [sic] the ownership of garages out to
people who . . . did not own homes in the tract itself. The city attorney explained, ―The
4Presumably, the same transformation from nonmember to an HOA member would apply to a renter of a garage.
5 The 60th garage lot was purchased at a foreclosure sale by the Thompsons who are not parties in this action.
6
ownership of a garage on a separate parcel of land . . . would be clearly in violation of our
zoning ordinance,‖ allowing only residential and incidental uses: ―[E]ven if you allow
someone to come into your homeowners association as a member, you still have the basic
problem of having a use which is not incidental to the dwelling use as far as the owner is
concerned. . . . This is nothing more than a storage and lock facility. I assumed that your
interpretation [c]ould allow one man to join your homeowners association and own all 60
garages if he wanted to buy them. He would then rent all 60 garages as a store and lock
concession using one of your tenants as the storekeeper. [¶] The City could not[,] under
any circumstances, permit the independent sale of your one car garages. . . .‖
The city attorney‘s reasoning is consistent with the 2010 version of the Upland
Municipal Code, Chapter 17.54.030, providing: ―The following accessory structures and
land uses may be permitted in the RM [Multiple Family Residential] zones, only where
clearly incidental to a permitted primary use of structures: [¶] A. Accessory buildings
and uses including, but not limited to: [¶] . . . [¶] 2. Noninhabitable accessory buildings
and structures, including garages, carports, storage areas, and tool sheds.‖
In a second 1982 letter, the city attorney continued: ―Under no circumstances and
I repeat, under no circumstances, could the City permit 60 garages to be sold in a
residential zone to people who do not live in a residential structure to which the garages
are appurtenant. This is definitely a requirement in a residential zone.‖ In 1986, Upland
reiterated its position that renting the garage lots was a prohibited commercial use,
violating the CUP and the city‘s zoning law. Between 1978 and 2002, Noxsel discussed
Upland‘s concerns on several occasions. In 2004, the city attorney again notified Noxsel
7
that ―third party rental‖ of the garage lots was never intended and suggested Noxsel seek
to amend the existing CUP. Apparently, Upland never pursued any legal action against
Noxsel for renting or selling the garage lots.
In 2002, Noxsel sold all 60 garage lots to Jamie Naranjo. After Naranjo sued
Noxsel, Noxsel took back ownership of 59 lots in December 2006. After reacquiring
title, Noxsel again began renting the garage lots to nonowners.
Noxsel advertised the garages for rent as storage units. All potential renters were
screened by Noxsel‘s property manager. The garages rented for $100 a month.
Approved renters signed a written rental agreement and were required to comply with the
HOA‘s regulations. No renter was permitted to have keys to use the Boquet common
area facilities, other than the alley driveway which is accessible by the general public.
The complaints received about the garage renters involved minor issues–such as missing
locks or garages that were not properly secured after being vacated–and more serious
complaints–such as claims of people purportedly living in or running businesses out of
the garage lots.
D. Assessments
During the time Noxsel served on the HOA Board, the 90/10 allocation of the total
assessment was never made. Instead, the respective assessments imposed on the
condominium lots and garage lots were recommended to the board by a hired consultant.
Between 1978 and 2003, the regular monthly assessments on the garage lots ranged from
a low of $1.27 to a high of $3.40. When Noxsel sold the garage lots to Naranjo, the
monthly regular assessments were $2 per lot.
8
In late 2003, based on the CC&Rs‘s 90/10 split requirement, the HOA board voted
to increase the total assessment from $70,560 to $82,416—less than 20 percent.
According to the 90/10 allocation, the condominium assessment increased from $90 to
$97 per month and the garage assessment increased from $2 to $11 per month. Since
2003, the 90/10 assessment allocation has been used by the HOA board when setting the
amount of the monthly regular assessments, resulting in an $11 per month regular
assessment on each garage lot from 2004 through 2010. Noxsel tried to pay an
assessment of $2 monthly on the garage lots but the HOA refused to accept his tender and
he stopped trying to pay. The HOA billed Noxsel for assessments at the higher rate of
$11 per month per garage lot. When those amounts were not paid, the HOA placed liens
on the 59 garage lots.
E. The Pleadings
In September 2007, Noxsel filed a complaint for declaratory relief and a
permanent injunction, seeking a determination about the assessments and enjoining the
assessments, as well as related damages.
In November 2007, the HOA filed a cross-complaint for foreclosure of its
assessment liens and for a judicial declaration prohibiting the sale or lease of the garage
lots to the public.6
6In September 2008, Noxsel filed a second action for declaratory relief and emotional distress caused by voting irregularities in the HOA election conducted in February 2008. The parties stipulated to consolidate the actions.
9
F. The Trial and Statement of Decision
A two-day court trial was conducted in October 2010. The court filed a statement
of decision. It found that the letters by the Upland city attorney notified Noxsel that
renting the garages to the general public was a zoning violation and violated the CUP. It
also found that the CC&Rs ―clearly state that no one is to own a garage unless they are a
current member of the condominium [sic].‖ Over the years, Noxsel had succeeded in
arguing that ―he was free to rent the garages and sell the garages to outside parties as they
would then become members of the association.‖ Noxsel was also able to block Upland
from enforcing its zoning laws.
The court concluded that Noxsel ―is in fact conducting a commercial operation
renting out the garages to the general public as storage units.‖ The commercial operation
violates the CUP and the Upland Municipal Code. Noxsel has been on notice of his
illegal activities since 1982. Noxsel is also violating the CC&Rs prohibiting commercial
operations. Under the CUP and the CC&Rs, Noxsel cannot own or rent the garages to
anyone except HOA owners and is enjoined from doing so. The court ordered Noxsel to
desist his storage rental as of January 31, 2011. The amount of the annual assessments
and the 90/10 allocation were valid actions by the HOA. The HOA could not obtain
judicial foreclosure of the delinquent assessment amounts but Noxsel owed past due
assessment fees of $25,254.
The court entered judgment in February 2011. After the HOA‘s motion, the court
awarded attorney‘s fees of $82,272.21 to the HOA.
10
III
INJUNCTION AGAINST SALE OR RENTAL OF GARAGES
A. Standard of Review
On the issue involving the sale or rental of the garage lots, Noxsel urges this court
to conduct an independent review of the record, engaging in contractual interpretation of
the CUP and the CC&Rs—which Noxsel contends are clear and unambiguous–and
determining that the trial court committed a plethora of legal error. (Ghirardo v.
Antonioli (1994) 8 Cal.4th 791, 799; Parsons v. Bristol Development Co. (1965) 62
provisions reflect the Legislature‘s recognition of the importance of assessments to the
proper functioning of condominiums in this state‘‖ and that homeowners associations
would cease to exist without regular payment of assessment fees. (Bear Creek, at p.
1489.) In this case, the increase in the garage assessment from $2 to $11–after many
years of assessments that were too low–did not violate Civil Code section 1366,
subdivision (b).
15
According to the Boquet CC&Rs, the owners of the 60 garage units were to pay 10
percent while the owners of the 64 condominiums units were to pay 90 percent of the
assessment. This formula was not followed during the years in which appellant was an
HOA board member, resulting in the garage units being assessed at a much lower rate
than 10 percent. In 2004, the board passed an assessment which increased the total
assessments from $70,560 to $82,416 per year, which is less than a 20 percent increase.
The board also assessed the garage units at 10 percent, as required under the CC&Rs,
which resulted in an increase of the garage units from about $2 to $11 per unit. Noxsel
objects to this increase of ―550%‖ in the garage assessment.
The trial court correctly determined that the board could pass the increase without
member approval and that the increase did not violate article VI, section 8 of the CC&Rs
or Civil Code section 1366, subdivision (b). Both article VI, section 8 of the CC&Rs and
Civil Code section 1366, subdivision (b), permit a 20 percent annual increase in the
assessment.
Noxsel‘s argument that the increase of the assessment for the garage lots violated
the CC&Rs and Civil Code section 1366 fails for various reasons. First, beginning in
2004, the increases of the total assessment were less than 20 percent per year. Article VI,
section 5 ―Uniform Rate of Assessment‖ makes it clear that the amount of the assessment
is to be considered in its total, not by class of property owners, since it refers to ―percent
of the total assessments.‖ Nothing in the CC&Rs or Civil Code section 1366 requires a
membership vote for an assessment increase which is less than 20 percent of the total
16
assessment, even if it results in an assessment increase greater than 20 percent for certain
properties.
Second, even assuming for the sake of argument, that Civil Code section 1366 or
article VI, section 8 of the CC&Rs could be interpreted to require a vote of the
membership for an increase of more than 20 percent for the garage lots, the requirement
only applies to increases that are ―20 percent greater than the regular assessment.‖ (Civ.
Code, § 1366, subd. (b).) It is undisputed that the garage units were not assessed
pursuant to a regular assessment of 10 percent as required under the CC&Rs, and that the
owners of the garage units had, for many years, paid much less than their 10 percent
share of the regular assessment. If the garages had been properly assessed over the years,
the $11 assessment imposed in 2004 and after would not have been 20 percent greater
than the ―regular assessment.‖ (Civ. Code, § 1366, subd. (b).)
V
ATTORNEY‘S FEES
Noxsel claims that the matter should be remanded because the trial court failed to
exercise its discretion in making the award of attorney‘s fees when Noxsel had also
achieved some success. This issue was waived because it was not raised below.
(Woodward Park Homeowners Assn., Inc. v. City of Fresno (2007) 150 Cal.App.4th 683,
712.) Even if the error was not waived, the trial court did not abuse its discretion in
awarding attorney‘s fees to the HOA.
The HOA was the prevailing party under Civil Code sections 1354, subdivision
(c), and 1717, by statute and by contract. The definition of ―prevailing party‖ for
17
purposes of statutory attorney‘s fees is set forth in Code of Civil Procedure section 1032,
subdivision (a)(4), which defines ―prevailing party‖ as ―the party with a net monetary
recovery, a defendant in whose favor a dismissal is entered, a defendant where neither
plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who
do not recover any relief against that defendant.‖ The HOA received a net monetary
recovery in the amount of $25,254. Accordingly, the HOA was the prevailing party for
purposes of statutory attorney‘s fees.
The HOA was also the prevailing party for purposes of contractual attorney‘s fees.
Civil Code section 1717, subdivision (b)(1), provides that: ―The court, upon notice and
motion by a party, shall determine who is the party prevailing on the contract for
purposes of this section, whether or not the suit proceeds to final judgment. Except as
provided in paragraph (2), the party prevailing on the contract shall be the party who
recovered a greater relief in the action on the contract. The court may also determine that
there is no party prevailing on the contract for purposes of this section.‖
The HOA obtained greater relief on the action on the contract. The court denied
Noxsel‘s request to set aside the assessment and awarded the HOA $25,254 in unpaid
assessments. Even though Noxsel prevailed in having the court set aside the suspension
of appellant‘s voting rights, the HOA clearly obtained greater relief on the contract. The
HOA also prevailed on its cross-complaint since the court permanently enjoined Noxsel
from renting or selling the garage units to the public.
18
Accordingly, the trial court did not abuse its discretion when it awarded attorney‘s
fees to the HOA. (Estate of Drummond (2007) 149 Cal.App.4th 46, 50, citing Hsu v.
Abbara (1995) 9 Cal.4th 863, 871.)
VI
DISPOSITION
The court did not abuse its discretion in granting an injunction against Noxsel, in
approving the increased assessment, or in awarding attorney‘s fees to the HOA. We
affirm the judgment.
The HOA, the prevailing party, shall recover its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON J.
We concur:
McKINSTER Acting P. J.
KING J.
19
AI Brief
AI-generated · verify before citing
Holding. The court held that the development's governing documents and conditional use permit unambiguously prohibit the owner from selling or renting garage lots to the general public, and that the homeowners association's assessment increases were valid.
Issues
Whether the conditional use permit and CC&Rs prohibit the sale or rental of garage lots to the general public.
Whether the homeowners association's assessment increases complied with the CC&Rs and Civil Code section 1366.
Whether the trial court properly awarded attorney's fees to the homeowners association.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“We conclude the CUP and the CC&Rs unambiguously prohibit Noxsel from selling or renting the garages to the general public.”
“The trial court did not abuse its discretion in enjoining Noxsel from selling or renting the 59 garages to the general public.”
“The trial court correctly determined that the board could pass the increase without member approval and that the increase did not violate article VI, section 8 of the CC&Rs or Civil Code section 1366, subdivision (b).”