Case Name: Casa del Valle Homeowners’ Association v. Arlyne M. Diamond, Ph.D., et al.
Case No.: 1-07-CV-099053

Cross-complainant Arlyne M. Diamond, Ph.D. moves for summary adjudication of issues related to her first cause of action for breach of contract, sixth cause of action for breach of statutory duties, seventh cause of action for breach of fiduciary duties, and eighth cause of action for negligence. Cross-defendant Casa del Valle Homeowners’ Association (“Cross-Defendant”) opposes Ms. Diamond’s motion.

Ms. Diamond’s request for judicial notice is DENIED as to item nos. 1-3 and GRANTED as to item nos. 4-5. In item nos. 1-3, Ms. Diamond requests that the Court take judicial notice of “the pleadings, papers and orders on file in this action” generally and certain California statutory and judicial legal authorities, none of which are included with the request as required by California Rules of Court, rule 3.1308, subdivision (c). The Court notes, however, that a formal request for judicial notice of legal authorities is unnecessary. In item nos. 4 and 5, Ms. Diamond requests judicial notice of Exhibits QQ, UU, and ZZ to the “Appendix of Exhibits” filed in support of her motion. Judicial notice of Exhibit UU, the complaint in this action, is proper given that it is a court record relevant to the issues to be decided in connection with this motion and judicial notice of Exhibits QQ and ZZ, the lien and lien release associated with Ms. Diamond’s property, is also proper given that these are recorded real property records relevant to the motion. (See Evid. Code, § 452, subds. (c), (d), and (h); Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264 [judicial notice of the existence and recordation of real property records appropriate when the authenticity of the documents is not challenged]; People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters are subject to judicial notice].)

Cross-Defendant opposes Ms. Diamond’s motion on procedural grounds and on the basis of its argument that the motion is duplicative of a ruling by the Court of Appeals concerning Cross-Defendant’s underlying complaint in this action. The Court finds that these arguments lack merit, and notes that Cross-Defendant does not appear to oppose Ms. Diamond’s motion in substance. The objections to evidence submitted in connection with Ms. Diamond’s reply brief are consequently deemed MOOT.

Nevertheless, the motion is DENIED insofar as it seeks summary adjudication of whether Cross-Defendant has breached the duties alleged by Ms. Diamond (issue nos. 2 and 4 relative to each cause of action). Code of Civil Procedure section 437c, subdivision (f)(1) provides that “[a] party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty,” and a motion for summary adjudication shall be granted only if it completely disposes of such issue. With respect to an issue of duty, the party may seek summary adjudication as to whether a defendant “either owed or did not owe a duty” to a plaintiff. (Code Civ. Proc., § 437c, subd. (f)(1).) Breach of a duty is not an appropriate issue for summary adjudication absent a stipulation by the parties and order by the court. (See Code Civ. Proc., § 437c, subd. (s); cf. Gill v. Hughes (1991) 227 Cal.App.3d 1299, 1304 [summary judgment is an appropriate remedy when the doctrine of collateral estoppel refutes all triable issues of fact suggested by the pleadings].)

The remainder of Ms. Diamonds’ motion seeks summary adjudication of whether Cross-Defendant owes her the duties she alleges under the Davis-Sterling Act, Civil Code sections 1367.1 and 1367.4 (issue nos. 1 and 3 relative to each cause of action).

It is undisputed that Cross-Defendants were required to comply with Civil Code sections 1367.1 and 1367.4 prior to, respectively, recording a lien against and commencing a lien foreclosure action against Ms. Diamond. (See Diamond v. Super. Ct. (Casa del Valle Homeowners Association) (2013) 217 Cal.App.4th 1172; Separate Statement of Undisputed Material Facts ISO Motion for Summary Adjudication (“SSUF”), ¶¶1-2.) Accordingly, the motion is GRANTED as to the existence of a duty to comply with these statutes with respect to the sixth cause of action (issue nos. 1 and 3).

However, Ms. Diamond does not assert that these requirements were actually incorporated into the 1998 Amended and Restated Covenants, Conditions and Restrictions (“CC&Rs”) that form the basis for her breach of contract claim. Her argument that they are incorporated by operation of law relies upon three cases: 14859 Moorpark Homeowner’s Ass’n v. VRT Corp. (1998) 63 Cal.App.4th 1396; Martin v. Bridgeport Community Ass’n, Inc. (2009); and Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093. However, these cases merely apply the general principal that applicable laws are considered part of a contract as a rule of construction where a conflict between a contract and applicable law would otherwise arise. (See Miracle Auto Center v. Super. Ct. (Pacific Specialty Insurance Company) (1998) 68 Cal.App.4th 818, 821 [“As a general rule of construction, the parties are presumed to know and to have had in mind all applicable laws extant when an agreement is made. These existing laws are considered part of the contract just as if they were expressly referred to and incorporated.”].)

Ms. Diamond cites no authority for the proposition that the Davis-Sterling Act creates contractual duties under the CC&Rs that would independently support a claim for breach of contract. (Cf. 14859 Moorpark Homeowner’s Ass’n v. VRT Corp., supra, 63 Cal.App.4th at p. 1410 [“the CC&R’s cannot be construed to permit the unit owners or the association to partition the complex by nonjudicial means” because such partition is not permitted by the Civil Code]; Martin v. Bridgeport Community Ass’n, Inc., supra, 173 Cal.App.4th at p. 1038 [resident non-owners did not have standing to sue under CC&Rs because not permitted by the Civil Code]; Thaler v. Household Finance Corp., supra, 80 Cal.App.4th at p. 1102 [CC&Rs did not provide that assessment lien took priority over an earlier recorded conveyance; “[i]n the event of a conflict between CC&R’s and the Act, the Act prevails as a matter of law”].) Ms. Diamond’s motion for summary adjudication is thus DENIED as all issues related to her first cause of action for breach of contract.

As to the seventh cause of action for breach of fiduciary duties, Ms. Diamond correctly contends that “[a] homeowners association has a fiduciary relationship with its members” that extends to complying with statutory notice requirements. (Ostayan v. Nordhoff Townhomes Homeowners Ass’n., Inc. (2003) 110 Cal.App.4th 120, 126 [homeowners association did not owe former condominium owner a fiduciary duty to inform him of filing of insurance litigation over earthquake damage to complex where not required by contract or statute].) Similarly, a duty of care for purposes of Ms. Diamond’s eighth cause of action for negligence arises through statute. (See The Ratcliff Architects v. Vanir Constr. Management, Inc. (2001) 88 Cal.App.4th 595, 604 [“A duty of care may arise through statute, contract, the general character of the activity, or the relationship between the parties.”].) Ms. Diamond’s motion is thus GRANTED as to the existence of a fiduciary duty and ordinary duty of care to comply with these statutes (issue nos. 1 and 3 relative to the seventh and eighth causes of action).

The Court will prepare the order. The parties are reminded of the trial setting conference scheduled for May 13, 2014 at 11:00 A.M.