California Appeals Court

Tezak v. Blanco

WILLIAM TEZAK, Plaintiff and Appellant,

v.

NORMAN J. BLANCO et al., Defendants and Respondents.

G038315

Court of Appeals of California, Fourth Appellate District, Division Three

September 9, 2008

Not to be Published

Law Office of Alan Goldberg, and Alan M. Goldberg for Plaintiff and Appellant.

John C. Teal, Jr., for Defendants and Respondents.

OPINION

IKOLA, J.

Undaunted by five fruitless appeals in the past four years, William Tezak once again presents this court with the opportunity to review legal issues that arise out of his longstanding dispute with the Greenbrook Fountain Valley Homeowners Association (HOA). This time, Tezak names 120 of his fellow members in the HOA as defendants (Homeowners). Tezak's lawsuit seeks injunctive and declaratory relief against the Homeowners, claiming the Homeowners are in violation of certain covenants, conditions, and restrictions (CC&R's) in the HOA's publicly recorded declaration.

During the action's pendency, the HOA amended the declaration by vote of its members. The amendments purported to eliminate the substantive basis for some of Tezak's claims and to rescind Tezak's standing to pursue certain other claims. Ruling on the Homeowners' motion for summary adjudication, the trial court found it to be undisputed that the HOA validly amended its declaration pursuant to Civil Code section 1355, that the amendments were reasonable as a matter of law pursuant to section 1354, subdivision (a), and that the Homeowners were therefore entitled to summary adjudication of Tezak's second cause of action for declaratory relief. Although the court also indicated that Tezak would not be entitled to injunctive relief pursuant to his first cause of action, the matter proceeded to trial on the issue of "incidental" damages allegedly suffered by Tezak before the effective date of the amendments. The bench trial resulted in a defense judgment for the Homeowners and an award of $264,549.60 in attorney fees to the Homeowners pursuant to section 1354, subdivision (c). Tezak appeals the judgment, contending the court erred by: (1) granting summary adjudication; (2) limiting the issues at trial to incidental damages suffered before the CC&R's were amended; and (3) awarding attorney fees. We disagree and affirm the judgment and the order awarding attorney fees.

FACTS

The HOA's Declaration of CC&R's and Tezak's Initial Complaint

On June 15, 1970, a Declaration of Covenants, Conditions, and Restrictions for Tract 6918 in Fountain Valley, Orange County, California was recorded. This declaration created the HOA and established various CC&R's governing the residential properties and common areas comprising the common interest development at issue in this appeal. The only amendment of the original declaration until the filing of this lawsuit added Tracts 6919, 6920, 6921, and 6922 to the area covered by the CC&R's. Tezak and the Homeowners each own real property located in the common interest development, and are each therefore owners of separate interests in the common interest development and members of the HOA.

Part I of the declaration as recorded in 1970 includes the following provisions, quoted in relevant part:

Paragraph 2: "No building shall be erected, placed or altered on any residential lot described herein until the building plans, specifications, and plot plan showing the location of such building, have been approved in writing" by the HOA board or a committee designated thereby.

Paragraph 3: "All buildings erected or constructed on any lot shall conform to the ordinances and statutes pertaining thereto."

Paragraph 4: No buildings may encroach upon particular front lot, side street, or interior lot setback lines as set forth in local ordinances and as specified herein.

Paragraph 12: "If any person or persons shall violate or attempt to violate any of the covenants in this Part I, it shall be lawful for any other person or persons owning any of the lots described herein to prosecute any proceedings at law or in equity against the person or persons violating or attempting to violate any such covenants, and either to prevent him or them from so doing or to recover damages or other dues for such violations."

Paragraph 14: "Certain of the lots in this tract shall be conveyed with easements over adjacent property or subject to easements for the benefit of adjacent property or both[.]" The portion of the lots subject to the easement may be used for landscaping, swimming pool decking, patio decking, and general recreational or gardening area. However, "[a]ll other uses are not allowed" on land subject to such an easement.

Tezak purchased his home in the HOA in May 2002 for $490,000 and moved in shortly thereafter. Tezak's epic confrontation with the HOA (and particular members and agents thereof) ensued. As set forth in detail in Greenbrook, supra, G032358, the HOA enforced its CC&R's against Tezak with regard to a non-conforming gate he built on the street-facing side of the home. While defending the Greenbrook action and prosecuting the Feldsott action, Tezak discovered many of his fellow members in the HOA maintained storage shed structures on their properties that he believed ran afoul of the CC&R's.

Tezak filed his initial complaint in this action on January 21, 2005. He alleged each named homeowner violated (and continued to violate) multiple CC&R's due to the presence of "out-buildings" utilized for storage on each of the Homeowners' lots. More specifically, he alleged the storage sheds were not approved in accordance with paragraph 2 of the declaration, did not meet the setback requirements set forth in paragraph 4 of the declaration, and violated the easements granted to adjacent owners pursuant to paragraph 14 of the declaration. Tezak sought injunctive relief to enforce the CC&R's against the Homeowners, declaratory relief, and damages.

Amendment of the CC&R's and Tezak's Third Amended Complaint

On April 6, 2005, the HOA sent by first class mail to its members (including the Homeowners) information and ballots concerning two proposed amendments to the CC&R's. Because the declaration already had been amended once in 1970, the HOA termed the two proposed amendments the "Second Amendment to Declaration" and "Third Amendment to Declaration." The proposed second amendment deleted paragraphs 2, 3, and 4 of part I of the original declaration's CC&R's, and substituted new paragraph 2 (setting forth the approval process for new "building[s], fence[s], walkway[s], wall[s] or other structure[s] of any kind"); paragraph 3 (requiring prior approval for finishing, staining, or painting of any residence, building, fence, wall or other structure); and paragraph 4 (disclaiming liability for the HOA, its members, and the board for any engineering issues, zoning violations, building ordinance violations, or construction defects that may arise following board approval of improvements). In sum, the second amendment eliminated the setback restrictions contained in paragraph 4, clarified the scope of the HOA's approval process for improvements, and eliminated provisions in the original paragraphs 3 and 4 requiring members to comply with local ordinances and statutes as a distinct duty under the CC&R's (as opposed to a resident of the city's independent duty to comply with municipal ordinances).

The proposed third amendment added subsection (h) to paragraph 14 of part I of the declaration as follows: "Notwithstanding anything to the contrary herein or elsewhere contained, only the owner of the dominant tenement and the owner of the underlying fee (servient tenement) of the lot shall have the right, standing or power to enforce any of the rights, duties and/or obligations created by the easements referred to in this Paragraph 14." The HOA's cover letter transmitting the amendments indicated that the proposed third amendment was designed "to eliminate anyone other than you and your neighbor from having the right to dispute and bring legal action as to whether the use of the side yard easement is in violation of the CC&R's. This amendment prevents members of the Association that live in different areas of Greenbrook from filing lawsuits relating to your or your neighbor's use of the side yard easement." There is nothing in the record indicating that Tezak owned rights to an easement as dominant tenement holder with regard to any of the Homeowners.

At the time of voting, there were 474 voting members of the HOA. The declaration required a simple majority of votes to amend the CC&R's. The HOA required the return of voting ballots by 5:00 p.m. on June 30, 2005. The members cast 381 ballots; 337 members voted in favor of the second amendment and 362 members voted in favor of the third amendment. On July 1, 2005, the president of the HOA certified that a majority of the owners had voted in favor of the second amendment and third amendment to the declaration. The HOA subsequently recorded the second and third amendments with the Orange County Recorder on July 5, 2005.

Following the amendment of the declaration, the court provided Tezak with the opportunity to amend his complaint on two occasions. In the third amended complaint (Tezak's operative pleading), Tezak continued to allege violations of the CC&R's as originally constituted. The crux of the third amended complaint as against the Homeowners is that the amendments to the declaration are invalid and unenforceable, and the Homeowners are therefore in violation of the original CC&R's. Tezak names the Homeowners in the first cause of action for injunctive relief and the second cause of action for declaratory relief. The third amended complaint also includes allegations in the third, fourth, and fifth causes of action against certain members of the HOA board of directors (Directors) for injunctive relief, declaratory relief, and damages for breach of fiduciary duty in proposing and shepherding the amendments through the voting process. The Homeowners are not named as defendants in the third, fourth, and fifth causes of action against the Directors.

The Homeowners' Motion for Summary Adjudication

The Homeowners brought a motion for summary adjudication arguing that the second and third amendments to the declaration were validly enacted, thereby foreclosing the relief sought by Tezak. The Homeowners' separate statement of undisputed facts relied on the declaration of Gregory Heuser, the president of the HOA, to make an evidentiary showing that the amendments were enacted as set forth above.

Tezak opposed the motion for summary adjudication, arguing the amendments were improperly enacted and the amendments were substantively unreasonable. Tezak's opposition relied on his own declaration. Tezak attested that the HOA did not follow appropriate procedures in enacting the amendments, without countering any of the specific facts set forth by Heuser, and that the amendments were recorded for the purpose of "absolving the personal liability of [the] Directors [of the HOA board] and over 120 other members in the community."

The trial court ruled: "It is the finding of this court that there are no factual issues on whether the second and third amendments to the declaration at issue were properly made or enforceable. The court finds that the amendments were properly enacted and enforceable." The court indicated that the motivation or purpose behind the enactment of the amendments was irrelevant. The court later clarified that its ruling was to grant summary adjudication on the second cause of action for declaratory relief, but to deny summary adjudication on the first cause of action for injunctive relief on the ground there remained an issue of fact whether Tezak suffered damages prior to the amendment of the CC&R's in July 2005.

The Trial

At a pretrial hearing, the Directors and Tezak announced they had reached a settlement, and the court dismissed the third, fourth, and fifth causes of action. Tezak continued to argue that evidence of "animus" toward him was admissible and relevant to his claims. The court prospectively excluded such evidence, explaining: "I am not going to hear any evidence of hatred, of the animosity of everybody to him, because it really doesn't matter."

Thus, the remaining issues for trial were: (1) whether the Homeowners' storage sheds had violated CC&R's between May 7, 2002 (the date Tezak purchased his home in the common interest development) and July 5, 2005 (the date the amendments were recorded); and (2) whether Tezak had suffered any damages during this three year period as a result.

After opening statements and limited testimony from two witnesses, the parties stipulated to dismiss the jury and proceed with a bench trial. Freed from the evidentiary constraints of a jury trial, the court in fact heard testimony related to the issue of motive. A former board member, Rebecca Seifert, testified that her fellow Directors "said they were changing the CC&R's to get out of litigation." Ms. Seifert further testified there certainly were "a lot of unhappy people regarding Mr. Tezak and his suing the Homeowners." In addition, Tezak testified as to his adversarial relationship with various neighbors. Notwithstanding this evidence, the court reiterated after closing that evidence relating to the personal motivations of the Homeowners in supporting the amendments to the CC&R's was irrelevant.

Much of the evidence concerned the issue of damages. Tezak contended that his house would have been worth approximately $1.3 million (rather than approximately $900,000) absent the CC&R violations and testified as to other purported categories of damages. The parties called competing experts with regard to the issue of damages.

The court found in favor of the Homeowners. "In summary, Mr. Tezak failed to meet his burden that each of the alleged violations were actual violations. He failed to meet his burden that he suffered any damages from the alleged violations. He failed to meet his burden that his claimed damages were caused by the alleged violations. He failed to particularize the damages caused by each of the named defendants." Judgment was entered in favor of the Homeowners. After denying Tezak's motion for a new trial, the court awarded costs to the Homeowners in the amount of $47,335.72 pursuant to Code of Civil Procedure section 1032. The court awarded attorney fees to the Homeowners in the amount of $264,549.60 pursuant to section 1354, subdivision (c).

DISCUSSION

Summary Adjudication of Second Cause of Action

The court granted summary adjudication to the Homeowners on Tezak's second cause of action for declaratory relief. Liberally construed, this cause of action seeks a declaration as to the validity of the amendments, the (non)compliance of the Homeowners with the CC&R's, and the right of Tezak to enforce the CC&R's against the Homeowners. Code of Civil Procedure section 1060 authorizes actions for declaratory relief: "Any person interested under a written instrument . . . or under a contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action . . . in the superior court for a declaration of his or her rights and duties . . ., including a determination of any question of construction or validity arising under the instrument or contract." "A declaratory relief action is an appropriate means to test the enforceability of covenants or servitudes asserted against property." (Ross v. Harootunian (1967) 257 Cal.App.2d 292, 294.)

Tezak frames the issue on appeal as whether the amendments are valid and enforceable if they were adopted for the "evil" or "malicious" purpose of harming Tezak by eliminating or adversely affecting his causes of action against the Homeowners. Tezak does not contend that the Association failed to complete the procedural steps required by section 1355 to amend its CC&R's. Instead, Tezak posits that a finding of "bad" motivation or purpose would undermine the reasonableness of the CC&R's pursuant to section 1354, subdivision (a). Tezak also suggests that the amendments raise certain constitutional issues, including equal protection, due process, civil rights, the ex post facto clause, and bills of attainder.

Standard of Review

"[T]he principles governing summary judgment also apply to summary adjudication." (Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1370.) To obtain summary adjudication of a cause of action, a defendant must demonstrate that the plaintiff cannot establish an element of the applicable cause of action, or show a complete defense thereto. (Code Civ. Proc., § 437c, subd. (f)(1); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) The moving party bears the initial burden of making "a prima facie showing of the nonexistence of any triable issue of material fact." (Aguilar, at p. 850.)

If the moving party makes this showing, the burden shifts to the plaintiff. (Aguilar, supra, 25 Cal.4th at p. 850.) A plaintiff "may not rely upon the mere allegations or denials of its pleadings," but must "set forth the specific facts showing that a triable issue of material fact exists. . . ." (Code Civ. Proc., § 437c, subd. (p)(2).) On appeal, our review is de novo and "we must independently examine the record to determine whether triable issues of material fact exist." (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.)

Common interest development declarations, and the particular CC&R's contained therein, are considered contracts. (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 512.) "The same rules that apply to interpretation of contracts apply to the interpretation of [CC&R's]." (Chee v. Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1377.)

With regard to statutory provisions at issue in this appeal, "[o]ur primary task in construing a statute is to ascertain the intent of the Legislature. [Citation.] We make this determination by looking to the words used in the statute and giving them their plain meaning. [Citation.] `"`If there is no ambiguity in the language of the statute, "then the Legislature is presumed to have meant what it said."'"'" (Villa De Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 79 (Terifaj).)

We review any pure issues of law de novo. (Lee v. Southern California University for Professional Studies (2007) 148 Cal.App.4th 782, 785.) We review the trier of fact's resolution of disputed factual questions under the substantial evidence standard. (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 798.)

The Amendments to the Declaration

The Davis-Stirling Common Interest Development Act, section 1350 et seq. (the Act), applies to common interest developments in California. A prerequisite to the creation of a common interest development is the recordation of a declaration. (§ 1352.) Section 1353 sets forth a list of information required to be included in all declarations recorded after 1986, including a legal description of the common interest development, the name of the association, and any applicable CC&R's. So long as the declaration containing the CC&R's is recorded before the execution of a contract of sale executed by the purchaser of a property in the common interest development, the CC&R's are enforceable against the purchaser of the property. (Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 349.)

A declaration "may be amended pursuant to [its] governing documents" or as provided in the Act. (§ 1355. subd. (a).) Paragraph 11 of part I of the HOA's declaration states: "The covenants in this Part I are to run with the land and shall be binding on all parties and persons claiming under them until December 31, 2001, at which time said covenants shall automatically be extended for successive periods of ten (10) years, unless by vote of a majority of the then owners of the lots, it is agreed to change said covenants in whole or in part." As we explained in Feldsott, supra, G035804, even if this provision of the declaration were interpreted to limit the implementation of amendments to every 10 years (2001, 2011, etc.), such a provision would be rendered unlawful by section 1355, subdivision (b). Section 1355, subdivision (b) provides: "Except to the extent that a declaration provides by its express terms that it is not amendable, in whole or in part, a declaration which fails to include provisions permitting its amendment at all times during its existence may be amended at any time." (Italics added.) In other words, because the declaration permits amendments, it must permit amendments at any time.

It is undisputed the HOA complied with the procedural requirements of section 1355, subdivision (b).³ Tezak does not argue there were procedural shortcomings in enacting the amendments. Moreover, our independent review of the record confirms there was no genuine issue of fact with regard to compliance with section 1355, subdivision (b). The Homeowners relied on the declaration of Gregory Heuser (the HOA president) to establish the HOA met the requirements of section 1355, subdivision (b). Mr. Heuser set forth in detail how he conducted the vote on the amendments. This is precisely the type of evidence that is at issue when making a determination whether amendments to the CC&R's are lawfully passed. (Haley v. Case Del Rey Homeowners Assn. (2007) 153 Cal.App.4th 863, 872-73 [affirming determination at trial that amendment of CC&R's was effective based on testimony of a board member and the association's manager].) The Heuser declaration shifted the burden to Tezak to demonstrate there was a genuine issue of material fact regarding these procedural requirements. Tezak did not submit any evidence suggesting the HOA failed to comply with such requirements. Thus, the HOA effectively amended its declaration by repealing paragraphs 2, 3, and 4 of part I of the declaration, and adding new paragraphs 2, 3, 4, and 14(h) of part I of the declaration.

The Enforceability of the Amendments

Tezak repeats the mantra throughout his briefs that there is an issue of fact as to the state of mind of the Homeowners and Directors. Tezak argues (without pertinent legal authority) that the amendments were "unreasonable" and therefore invalid if the Homeowners and/or Directors were "malicious" or had an "evil purpose" in enacting them. Responding to the issues as presented by the parties, the court found each of the amendments to be reasonable as a matter of law pursuant to section 1354, subdivision (a).

Section 1354, subdivision (a), states in relevant 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." (Italics added.) The California Supreme Court interprets this statute as establishing a presumption that properly recorded CC&R's are enforceable, subject to a showing by an objecting homeowner that "the restriction is arbitrary, imposes burdens on the use of lands it affects that substantially outweigh the restriction's benefits to the development's residents, or violates a fundamental public policy." (Nahrstedt v. Lakeside Village Condominium Assn. (1994) 8 Cal.4th 361, 386 (Nahrstedt).) "[C]ourts do not conduct a case-by-case analysis of the restrictions to determine the effect on an individual homeowner; [instead they] consider the reasonableness of the restrictions by looking at the goals and concerns of the entire development." (Dolan-King v. Rancho Santa Fe Assn. (2000) 81 Cal.App.4th 965, 975.) The same judicial deference is afforded to amended CC&R's, regardless of whether an individual challenging the CC&R's purchases a unit prior to the amendment. (Terifaj, supra, 33 Cal.4th at p. 79.)

As an initial matter, it is not apparent that section 1354, subdivision (a), is applicable to the entirety of Tezak's declaratory relief claim. When Tezak filed his initial complaint, he sought to enforce then-existing CC&R's against the Homeowners. As explained in Nahrstedt, supra,8 Cal.4th 361, and its progeny, section 1354, subdivision (a), provided a potential defense for the Homeowners to Tezak's initial claims: If the CC&R's relied on by Tezak were unreasonable, then Tezak could not enforce them against the Homeowners. Instead, the HOA responded to the suit by amending the CC&R's as of July 5, 2005, repealing some CC&R's from the declaration and adding other language. Following the amendments, Tezak no longer wishes to enforce any of the CC&R's "in the declaration." (§ 1354, subd. (a).) Instead, Tezak hopes to invalidate amended paragraphs 2, 3, 4, and 14(h) of part I of the declaration and reinstitute (and then enforce) the former paragraphs 2, 3, 4, and 14.

Cases interpreting the Act shed light on the question whether section 1354, subdivision (a), may be used affirmatively to invalidate an amendment adopted pursuant to the procedures provided in section 1355, subdivision (b). In Terifaj, supra, 33 Cal.4th at page 73, the HOA adopted an unrecorded rule banning pets prior to Terifaj's purchase of her unit. (Terifaj, at pp. 79-80.) Terifaj violated the rule, and was sued by the homeowners association to enforce its rule against pets. (Id. at p. 80.) Following an unsuccessful motion for preliminary injunction, and while the litigation with Terifaj was pending, the homeowners association amended its declaration in conformity with the Act to ban pets. (Ibid.) The Terifaj court held that all owners, regardless of the purchase date of their homes, were subject to the amended CC&R's. (Id. at p. 86.) The court also held the Nahrstedt presumption (that CC&R's are reasonable unless proven otherwise) applied to the amended CC&R's banning pets. (Id. at pp. 88-93.)

The Terifaj court explained its decision in part by analyzing another section of the Act alongside sections 1354, subdivision (a), and 1355, subdivision (b). (Terifaj, supra, 33 Cal.4th at p. 92.) Section 1356 establishes a procedure for amending a common interest development's declaration by petition to a court. This procedure is available if the declaration requires more than a simple majority of the votes to amend the declaration, and the association has not been able to obtain the number of votes required by the declaration. The Terifaj court observed that, pursuant to section 1356 of the Act, an amendment must be proven "`reasonable'" by the petitioner before a court may approve a petition to amend the declaration, whereas "[n]o similar limitation was inserted in the text of section 1355(b)." (Ibid.) The Terifaj court further noted that "the Legislature, if it wished, could have provided that an amendment must be reasonable to be enforceable against a current homeowner under section 1354(a)," but instead made no distinction in the treatment of amendments and the original CC&R's in the declaration. (Ibid.)

Similarly, in Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159 Cal.App.4th 563 (Seith), the court compared section 1356 to section 1354 to establish statutory meaning. In Seith, the court affirmed a petition to amend the association's declaration pursuant to section 1356. (Seith, at p. 568.) In doing so, the court was presented with the issue of whether the Nahrstedt presumption of reasonableness applies to proposed amendments under section 1356. (Seith, at pp. 576-77.) The Seith court observed that the textual distinction between section 1354, subdivision (a), and 1356, subdivision (c)(5), precluded such an extension of Nahrstedt. (Seith, at pp. 576-577.) Whereas section 1354, subdivision (a), states that CC&R's are enforceable "unless unreasonable," section 1356 sets forth as one of its requirements for court approval that the "amendment is reasonable." (Seith, at pp. 576-577; § 1356, subd. (c)(5).) In seeking amendment pursuant to section 1356, the petitioner has the burden of proof to show the proposed amendment is reasonable. (Seith, at pp. 576-77.)

Here, the issues are different, but the same principles of statutory construction compel the conclusion that the amendments were effective and the current CC&R's are enforceable. The Legislature could have inserted an explicit requirement that amendment (by insertion, replacement, or repeal of language) of CC&R's pursuant to section 1355, subdivision (b), or the enforcement of CC&R's in the declaration pursuant to section 1354, subdivision (a), requires subjective good faith on behalf of the individuals enacting or enforcing the CC&R's. The Legislature also could have inserted an explicit requirement that the repeal of CC&R's is required to be objectively "reasonable" (or, as with section 1354, subdivision (a), not unreasonable). Indeed, the Legislature did precisely these things in other sections of the Act.

Amendments proposed pursuant to section 1356 must be proven "reasonable" by the petitioner. In contrast, there is no such requirement under section 1355, subdivision (b). Once such section 1355, subdivision (b), amendments are made effective, they are subject to the not "unreasonable" standard of section 1354, subdivision (a), and the Nahrstedt presumption. Even more damaging to Tezak's argument is section 1357.100, which concerns "`operating rule[s]'" rather than CC&R's. An "`operating rule'" of a common interest development is defined as "a regulation adopted by the board of directors of the association that applies generally to the management and operation of the common interest development or the conduct of the business and affairs of the association." (§ 1357.100.) Section 1357.110 sets forth the requirements for an "`operating rule'" of an association to be valid and enforceable. Included amongst the requirements is that "[t]he rule is adopted, amended, or repealed in good faith . . . ." (§ 1357.110, subd. (d).) Also included is a separate requirement that the "rule is reasonable." (§ 1357.110, subd. (e).)

By contrast, section 1355, subdivision (b), includes only procedural requirements for the enactment of an "effective" amendment; section 1355, subdivision (b), does not include an explicit requirement that the amendment be objectively "reasonable" or enacted with subjective "good faith" by the HOA or individual owners. Section 1354, subdivision (a), indicates that CC&R's "in the declaration" (including amendments made "effective" pursuant to section 1355) are "enforceable equitable servitudes, unless unreasonable." There is no explicit requirement in section 1354 that, to be "enforceable," the CC&R's must have been enacted with a subjective legitimate purpose ("good faith") by the HOA or individual owners. Furthermore, there is no mention in 1354, subdivision (a), that the repeal of a CC&R (as opposed to enforcement of CC&R's then in existence) must comply with the "unless unreasonable" standard.

Thus, by interpreting the Act as a whole, several conclusions are readily apparent. First, the Act provides only for procedural review of an amendment to repeal CC&R's pursuant to section 1355, subdivision (b). As a result, it is unnecessary to consider the objective reasonableness of the repeal of the original paragraphs 2, 3, and 4 of part I of the declaration. If a homeowners association amends its declaration pursuant to section 1355, subdivision (b), it can eliminate CC&R's in the declaration without regard to the substantive merit of the repeal.

Second, the Act does not require subjective "good faith" to amend the declaration pursuant to section 1355, subdivision (b), by inserting new CC&R's. Current paragraphs 2, 3, and 4 of part I of the declaration were added in the manner required by section 1355, subdivision (b). Tezak does not wish to enforce these CC&R's, nor does he fear enforcement of these provisions. His complaint is that the CC&R's are not as strict as the former paragraphs 2, 3, and 4, which required compliance with particular setback requirements, local government ordinances, and approval processes. Tezak's request for declaratory relief as to the legitimacy of new paragraphs 2, 3, and 4 is in reality dependent on the application of section 1355, subdivision (b); he is not actually seeking to enforce or block enforcement of paragraphs 2, 3, and 4 pursuant to section 1354, subdivision (a). Thus, it is unnecessary to consider the reasonableness of new paragraphs 2, 3, and 4.

Third, there is no subjective "good faith" component that factors into the reasonableness of the current CC&R's. The fact that the HOA, its Directors, or any of the individual Homeowners may have detested Tezak and hoped to adversely affect his interests by voting for or advocating in favor of the amendments is simply irrelevant.

Tezak's challenge of paragraph 14(h) of part I of the declaration, which limits the right to sue upon easements described in paragraph 14 to dominant tenement holders, is, however, properly analyzed under section 1354, subdivision (a), because the Homeowners seek to enforce that provision and Tezak asserts the standing limitation is unreasonable. But there are legitimate, non-arbitrary reasons to limit the enforcement of the easements described in the CC&R's to those with direct interests. As persuasively stated by the trial court, there is nothing on the face of the amendments that appears to be arbitrary or against public policy. Tezak's factual submission in opposition to summary adjudication was insufficient to raise a genuine issue of material fact as to the reasonableness of any of the amendments. As discussed above, the motivations of the Homeowners and others involved in the HOA are irrelevant. Further, consideration of the personal impact of the amendments on Tezak alone is insufficient; the goals and concerns of the entire development must be considered. (Nahrstedt, supra, 8 Cal.4th at p. 386.) The most obvious benefit of the amendments is the elimination of the basis for Tezak's lawsuit. The amendments preclude Tezak or like-minded individuals from suing the Homeowners in the future (at least with regard to the issues at stake here). It is entirely legitimate for a common interest development to take steps to avoid legal liability for its Homeowners. Indeed, one of the policy considerations supporting deference to properly enacted CC&R's is that "it discourages lawsuits by owners of individual units" and allows courts to dispose of suits that have been brought "more expeditiously." (Id. p. at 383.) Other benefits of the amendments to the HOA and its members include the replacement of CC&R's that no longer met the preferences of the owners and the elimination of unnecessary verbiage in the former paragraph 2. The amendments are not arbitrary and any burdens placed on the owners as a whole do not substantially outweigh the benefits to the HOA and its owners.

Public Policy and Constitutional Issues

Tezak makes several miscellaneous arguments based on public policy and the United States and California Constitutions. Tezak asserts the amendments were unreasonable because the HOA did not apply for and receive the approval of the City of Fountain Valley, as allegedly required by zoning regulation number 21.84.050. This ordinance appears to require that the declaration for a "subdivision" shall include a CC&R prohibiting amendment absent "city approval." First, it is apparent from a review of the declaration that it does not include such a provision. Second, it appears from a review of section 21.84.020 of the Fountain Valley Municipal Code that section 21.84.050 applies to parties seeking "tract or parcel map" approval, and is not a requirement that common interest developments formed nearly 40 years ago amend their CC&R's to include a provision requiring the permission of local authorities to amend the declaration. Third and most importantly, it is unclear why a municipal code would have any impact on the interpretation of the Act, which specifically allows a common interest development to amend its declaration at any time, absent an express provision that it may never be amended. (§ 1355, subd. (b).) Tezak has cited no authority for his contention other than citations to regulation number 21.84.050, and we reject his unsupported claim.

Tezak also claims his constitutional rights have been violated by the enactment of the amendments, and the amendments were therefore null and void. In particular, Tezak asserts the amendments violate the equal protection clause, violate due process, violate his "civil rights," violate the ex post facto clause, and constitute bills of attainder. Tezak only raised the issue of equal protection at the trial level, however, and we shall therefore confine our review to that issue here. (DiCola v. White Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 676 [legal issues not raised by plaintiff on summary judgment below cannot be raised on appeal].)

It is absurd to contend that the individual Homeowners violated Tezak's constitutional rights, as such a claim would be equivalent to suing individual voters for their support of an amendment to the Constitution or a voter initiative. Thus, if Tezak intends to claim that the Homeowners individually violated his constitutional rights to equal protection of the laws (or any other constitutional right), that claim is summarily rejected.

Construed in the light most favorable to Tezak, his argument appears to be that the state and/or federal Constitution(s) protect his right to pursue a legal claim based on the CC&R's without a "malicious" conspiracy of Directors and Homeowners changing the CC&R's. In other words, Tezak thinks the amendments to a common interest development's CC&R's violate the Constitution(s) and must be invalidated not because of their objective content but rather because they were motivated by hatred for him. To say the least, this is a novel theory of law.

It is true that in California, a homeowners association of a common interest development exercises authority of a "`quasi-governmental'" nature. (Chantiles v. Lake Forrest II Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 922.) It is also true that homeowners' associations owe fiduciary duties to their members. One court, quoting a mid-1970's law review article, has suggested that homeowners associations are required to meet standards of due process, equal protection, and fair dealing in administering CC&R's. (See Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 651.) There is no authority, however, for the proposition that the amendment or repeal of CC&R's constitutes "state action" as required for a constitutional claim. (Syngenta Crop Protection, Inc. v. Helliker, (2006) 138 Cal.App.4th 1135, 1174.) And, as discussed above, the HOA has met the procedural requirements set forth in section 1355, subdivision (b), and the substantive requirements set forth in section 1354, subdivision (a). There is no constitutional claim. And there is no claim that the CC&R's at issue in this action are being unfairly enforced against Tezak — indeed, Tezak is the one attempting to enforce CC&R's by this action. The Homeowners were entitled to summary adjudication of Tezak's cause of action for declaratory relief.

There Was No Prejudicial Error at Trial

It is unclear precisely what issues Tezak raises with regard to the conduct of the trial. He first claims the trial court improperly excluded the third, fourth, and fifth causes of action from consideration at trial. A review of the Third Amended Complaint discloses that the first and second causes of action are "As Against All Defendants Lot Owners And All Doe Defendants." The third, fourth, and fifth causes of action are "As Against All Defendants Directors And All Doe Defendants." The facts referenced in the third, fourth, and fifth causes of action are tailored to the alleged activities of the Directors of the HOA. The Directors were dismissed from the case pursuant to a settlement at the outset of trial. As these causes of action were against dismissed defendants only, there was no error in limiting the scope of the trial to issues raised by the first two causes of action.

Next, Tezak argues that the trial court improperly limited the scope of evidence to damages suffered prior to July 5, 2005, and refused to consider the alleged "malicious" motivation of the board and the Homeowners in passing the amendments. This is simply a rehash of the issues correctly decided by the trial court pursuant to the motion for summary adjudication.

As a matter of law, the trial court was compelled to structure the trial as it was by the summary adjudication ruling and as a result of the dismissal of the third, fourth, and fifth causes of action by settlement. Some of the CC&R's that Tezak sought to enforce were no longer in the declaration; others were no longer enforceable by Tezak. The only possible issue for trial was whether Tezak suffered damages as a result of any violations of the particular Homeowners from May 2002 to July 2005.⁴ Moreover, to the extent Tezak challenges the judgment on the ground of insufficient evidence, the record includes substantial evidence demonstrating that Tezak did not prove liability or damages as a result of alleged violations of CC&R's by the Homeowners. As the trial court aptly noted, Tezak attempted to cast himself in the role of David facing Goliath, when in fact this "is more of a Don Quixote case[,] Mr. Tezak is . . . tilting against windmills[.]"

Reasonable Attorney Fees Were Awarded to the Homeowners

Tezak's primary argument for reversal of the $264,549.60 attorney fees award is that the judgment should be reversed, thereby eliminating the basis for an award of attorney fees to the Homeowners. As discussed above, we affirm the judgment.

Tezak also argues the court erred by awarding attorney fees for work performed by the attorneys for the Homeowners following the trial court's summary adjudication ruling in favor of the Homeowners. Section 1354, subdivision (c), provides: "In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney's fees and costs." Tezak theorizes that his claim for damages was unrelated to his claims for injunctive and declaratory relief (to undo the amendment of the CC&R's, and enforce the old CC&R's), and there is no basis for recovery of attorney fees in an action for the categories of damages he sought at trial. This appears to be a pure issue of law, which we review de novo.

In Chee v. Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1380-81 (Chee), the court awarded attorney fees to the defendant. The court held that a cause of action for breach of contract, requesting damages for breach of CC&R's, amounted to enforcement of the CC&R's pursuant to section 1354, subdivision (a). "[T]he fact the plaintiff did not limit her prayer for relief to equitable remedies, and also sought damages, did not preclude an award of fees under Civil Code section 1354." "Instead, the relevant question concerning entitlement to fees under Civil Code section 1354 is whether the action is to enforce the rights and obligations of the parties under the governing documents, specifically the CC&R's." "The cause of action for breach of contract also constituted an action to enforce the CC&R's. . . . [T]he alleged source of the contractual obligation and its terms was the CC&R's and plaintiff sought damages for the alleged breach. An action for damages arising out of a breach of contract is an action to `enforce' the contract." (Chee, supra, at pp. 1380-1381.) Likewise, in pursuing damages related to alleged breaches of the CC&R's from 2002 to 2005, Tezak was attempting to enforce the CC&R's pursuant to section 1354, subdivision (a). The Homeowners are therefore entitled to attorney fees pursuant to section 1354, subdivision (c).

Finally, Tezak contends the trial court abused its discretion by failing to adequately review the request for attorney fees and merely providing a "rubber stamp" for the Homeowners in approving the fee request. Courts interpret section 1354, subdivision (c), to require an analysis of which party "prevailed on a practical level." (Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574.) In considering the amount of an award of attorney fees pursuant to section 1354, subdivision (c), section 1369.580 permits a court to consider "whether a party's refusal to participate in alternative dispute resolution before commencement of the action was reasonable." We will affirm an award of attorney fees pursuant to section 1354, subdivision (c), absent an abuse of discretion. (Heather Farms Homeowners Assn., at p. 1574.) The trial court did not abuse its discretion. The Homeowners clearly prevailed in the action, and the record provides ample support for the amount of attorney fees awarded by the court. Moreover, the record provides support for a finding that Tezak, and not the Homeowners, failed to comply with alternative dispute resolution processes required by the Act.

DISPOSITION

The judgment and order are affirmed. Defendants and Respondents shall recover their costs on appeal.

WE CONCUR:

O'LEARY, ACTING P. J.

FYBEL, J.

Footnotes

1. As we noted the last time Tezak appeared before this court, we are familiar with the backdrop against which the present controversy is set. In Greenbrook Fountain Valley Homeowners Assn. v. Tezak (Jan. 28, 2004, G032358) [nonpub. opn.]) (Greenbrook), we affirmed a judgment ordering William and Anice Tezak to remove an unapproved construction on their property and pay the HOA's attorney fees.

In Tezak v. Feldsott & Lee (Aug. 13, 2007, G035804, consolidated with G036220, G036315, and G037356) [nonpub. opn.] (Feldsott), the Tezaks sued the HOA, some of its members, and its attorneys for malicious prosecution, abuse of process, slander of title, and related causes of action arising out of the conduct of the Greenbrook action. We affirmed judgment of dismissal of the Tezaks' claims following Code of Civil Procedure section 425.16 anti-SLAPP motions.

2. Unless otherwise stated, all further statutory references are to the Civil Code.

3. Section 1355, subdivision (b) provides that an amendment is effective only after: "(1) the proposed amendment has been distributed to all the owners of separate interests in the common interest development by first-class mail postage prepaid or personal delivery not less than 15 days and not more than 60 days prior to approval being solicited; (2) the approval of owners representing more than 50 percent, or any higher percentage required by the declaration for the approval of an amendment to the declaration of the separate interests in the common interest development has been given, and that fact has been certified in a writing, executed and acknowledged by an officer of the association; and (3) the amendment has been recorded in each county in which a portion of the common interest development is located. A copy of any amendment adopted pursuant to this subdivision shall be distributed by first-class mail portage prepaid or personal delivery to all of the owners of separate interest immediately upon its recordation."

4. The third amended complaint referred to such damages as "incidental" damages. Presumably, this is because Tezak's only remaining cause of action was for injunctive relief: "The compensation awarded as incident to a decree for specific performance is not for breach of contract and is therefore not legal damages." (Ellis v. Mihelis (1963) 60 Cal.2d 206, 219.)