Dunn v. Silver Lakes Association 1/14/03 CA4/2

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: E031229

Case Date: 05/15/2003

Preview:Filed 1/14/03 Dunn v. Silver Lakes Association CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO CHARLINDA L. DUNN et al., Plaintiffs, Cross-defendants and Respondents, v. OPINION SILVER LAKES ASSOCIATION, Defendant, Cross-complainant and Appellant. APPEAL from the Superior Court of San Bernardino County. John M. Tomberlin, Judge. Affirmed with directions. Flore, Racobs & Powers, Peter E. Racobs and Thomas L. Bosworth for Defendant, Cross-complainant and Appellant. Doss & Page, Dennis H. Doss and Daniel A. Nassie for Plaintiffs, Crossdefendants and Respondents. Defendant and cross-complainant Silver Lakes Association (the association) appeals judgment entered in favor of plaintiffs and cross-defendants Charlinda Dunn et E031229 (Super.Ct.No. VCV 021864)

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al. (plaintiff). This action arises from a dispute over whether the association can assess plaintiff's undeveloped lot, referred to as lot 288, at a higher rate, as a multiple family residential lot, as opposed to assessing it as a single family residential lot. The trial court granted plaintiff summary adjudication of the declaratory relief cause of action seeking a determination of the dispute. The trial court concluded it was undisputed that the association was required to assess the lot as a single family residential lot. The association contends triable issues of fact exist as to whether the lot qualified as a multiple family residential lot under the applicable covenants and restrictions (CC&Rs). Although the matter was previously decided by binding arbitration in a prior lawsuit, the association argues that the decision did not have collateral estoppel effect in this action. The association claims the prior agreement to arbitrate and mutual release were superseded and replaced by a subsequent settlement agreement. We conclude the arbitration decision and dismissal with prejudice of the prior action litigating the same issue raised in this action has collateral estoppel effect. The association is barred from disputing that the lot is a single family residential lot. The association complains that the trial court abused its discretion in awarding plaintiff $68,831.93 in attorney's fees. We disagree and affirm the judgment. 1. Facts and Procedural Background Plaintiffs are 17 elderly investors who acquired lot 288 through nonjudicial foreclosure of a loan to the former owner of the property, Evergreen Golf Course Estates,

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L.P. (Evergreen). Plaintiff's property, lot 288, consists of 36 acres of undeveloped raw land, located in Silver Lakes, a resort-recreational community near Victorville. The association is a homeowner's association and or residential real estate management association. Plaintiff's property is governed by the association's CC&Rs. Lot 288 originally was zoned as a multiple family residential lot. In 1989, it was re-zoned for single family residential use. In the early 1990's, the former owner of lot 288, Evergreen, obtained approval of a tentative subdivision map proposing to divide lot 288 into 143 single family residential lots. The association then began assessing the lot as a multiple family residential lot, rather than as a single family residential lot, resulting in the monthly assessment fees increasing from $74.88 to $4,015. Evergreen objected to the association assessing lot 288 as a multiple family residential lot, at a much higher rate. The association sued Evergreen to collect the unpaid assessments and foreclose on the assessment lien. Evergreen and the association entered into an arbitration agreement and mutual release (arbitration agreement) whereby they agreed to binding arbitration. The parties further agreed to release and forever discharge Evergreen and its successors-in-interest (such as plaintiff) from "any and all claims, damages, demands, liabilities and causes of action, known or unknown, suspected or unsuspected, arising at any time from any of the allegations brought by any party in the Action." The arbitration agreement further stated, "This Agreement shall be binding upon the heirs, successors, assigns, agents, beneficiaries and representatives of all parties to this Agreement."

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Following arbitration in 1993, the arbitrator found in Evergreen's favor that the association was required to assess lot 288 as a single family residential lot. In accordance with the arbitration agreement, the association dismissed with prejudice its complaint and plaintiff dismissed its cross-complaint. Thereafter, Evergreen sued the association for a refund of $73,700.36 in assessment fees which the association had overcharged Evergreen prior to the arbitration decision. In 1994, Evergreen and the association entered into a settlement agreement resolving the matter. The association agreed to refund the overcharged fees (debt) by offsetting each month Evergreen's monthly assessment fees against the debt until the debt was refunded in full. In the event Evergreen's ownership interest transferred to a third party before full refund of the overcharged fees, the association was to pay Evergreen the balance in full and the new owner was to commence paying the assessment fees to the association "consistent with the ASSOCIATION's assessment collection policy." At the time of transfer of ownership of lot 288 to plaintiff in 1999, the association had been assessing lot 288 as a single family residential lot at $100 a month. After plaintiff acquired the property, the association billed plaintiff $100 for the monthly assessment fees. But in April 2000, shortly after discovering plaintiff was attempting to sell the property to a developer, the association notified plaintiff that the assessment fee had increased from $100 to $5,400 per month based on assessing lot 288 as a multiple family residential lot. In May, 2000, the association notified plaintiff that the monthly

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assessment had been increased again to $5,724. The potential buyer of the property backed out of the pending sale due to the drastically increased assessment fees. Plaintiff filed the instant declaratory relief and breach of contract action, requesting a declaration that the proper assessment for lot 288 was $100 per month, as a single family residential lot, rather than $5,400 a month, as a multiple family residential lot. After prevailing on its motion for summary adjudication of the declaratory relief cause of action, plaintiff dismissed its breach of contract claim and filed a motion for attorney's fees. The trial court granted plaintiff $68,831.93 in attorney's fees and costs. 2. Summary Adjudication The association contends the trial court erred in granting plaintiff's motion for summary adjudication of the first cause of action for declaratory relief. The trial court found that it was undisputed that the association was required to assess lot 288 as a single family residential lot rather than as an unimproved multi-family lot. A. Standard of Review "If a cause of action or an affirmative defense similarly lacks any triable issue of material fact, the trial court may grant summary adjudication of issues, if the adjudication completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (Code Civ. Proc.,

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