Volume 4, Number 3

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February 2009

 


Special Message

        
               Dear Members,

     The Benjamin S. Crocker Symposium on Real Estate Law and Business is now open to the public. 
     
     You can register today. 
     
     It takes place on Tuesday, May 5, 2009, at the Los Angeles Convention Center. 
     Please save the date and check the symposium Web site (
www.crockersymposium.com) to register today.

     It is one of the most important events in Southern California for real property attorneys and professionals.
     We encourage everyone to participate.

The State Bar Real Property Law Section Annual Retreat:
“Real Estate in Turbulent Times,” will be held May 15-17, 2009,
at the Resort at Squaw Creek, Lake Tahoe. For additional information please visit:
www.calbar.org/rpsection

                Sincerely,

                Norm Chernin, co-editor, Real Property Newsletter


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Recent Cases

Cases from January 1 through January 31


 -Bankruptcy Law-
Bankruptcy court’s decision to dismiss debtor’s chapter 11 case--filed immediately before scheduled sale of real property that state court ordered divided in divorce proceedings--as a bad faith filing under 11 U.S.C. Sec. 1112(b) rather than converting case to chapter 7 was not an abuse of discretion where objecting creditor could not show that conversion would be in best interests of debtor's other creditors. State court had jurisdiction to order division of property despite debtor’s ex-husband’s previously filed bankruptcy case where earlier bankruptcy proceeding had ended.
     In re Owens - filed December 31, 2008, amended January 15, 2009
     Cite as 07-35634
    
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-CEQA-
Water district minimally satisfied California Environmental Quality Act requirement that agency incorporate written findings setting forth basis for a claim of exemption from CEQA review with specificity in record by identifying statutory purposes for which agency claimed its action to be exempt, and including board resolution's references in related findings to portions of agency's annual report and other information and evidence during hearing process in record because reviewing court could readily ascertain analytic route that district traveled from evidence to action; such evidence adequately exposed district's mode of analysis and thus its findings must be upheld if supported by substantial evidence. CEQA does not require an agency to do more than set forth specific basis for agency's ultimate finding and does not require agency to set forth its evidentiary sub-conclusions supporting this ultimate fact or its rationale. Where district's annual report made clear that rate increases were intended to maintain prior year's projections, correlated with service level maintenance and would not fund additional operations and capital investments, administrative record contained relevant information that a reasonable mind might accept as sufficient to support conclusion that agency's rate increases fell within scope of CEQA rate-setting exemption.
     Great Oaks Water Co. v. Santa Clara Valley Water District - filed January 28, 2009, Sixth District
     Cite as 2009 SOS 550
     
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-CEQA-
Where county adopted an ordinance allowing developers in a defined geographic area to pay a rare plant impact fee so that money collected could be used to create professionally managed rare plant habitats, any payment of impact fee by developers did not eliminate need to evaluate and address impacts on plants of a particular project within that area. To be considered adequate, a fee program at some point must be reviewed under California Environmental Quality Act, either as a tiered review eliminating the need to replicate the review for individual projects or on a project-level, as-applied basis. Where fees set by ordinance never passed a CEQA evaluation, payment of fee did not presumptively establish full mitigation for a discretionary project. Where environmental group challenged county’s approval of a development by mitigated negative declaration, group did not have to show fee program was ineffective but needed only to demonstrate that evidence supported a fair argument that project would have a significant effect on environment. Views of biologists with adequate background and knowledge to support their opinions about impact of project on plants were adequate to raise factual conflicts requiring resolution through an environmental impact report.
     California Native Plan Society v. County of El Dorado (Cameron Park Ventures) - filed January 28, 2009, Third District
     Cite as 2009 SOS 601
       
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-CEQA-
Where operation of a landfill would require trucking of water to landfill site and construction of an asphalt road and loading pad at landfill site, activity of trucking water to a landfill was part of whole action or operations of landfill project for purposes of California Environmental Quality Act. Water district supplying water was a "responsible agency" under CEQA because water district exercised its discretionary authority as a public agency to approve part of landfill project by agreeing to supply water, which would, in effect, carry out part of landfill project. Water district's signing of agreement to provide water constituted approval of landfill project for purposes of CEQA, because agreement committed water district to a definite course of action with regard to landfill project and did not condition performance on water district's subsequent exercise of its CEQA discretion to take other actions after considering final environmental impact report. Water district failed to comply with its CEQA duties because district's agreement to supply water effectively precluded any alternatives or mitigation measures that CEQA would otherwise require to be considered, including alternative of not going forward with landfill project. Lead agency charged by CEQA to prepare and certify EIR for landfill project was not a necessary party to action by environmental groups challenging validity of agreement between water district and landfill owner because plaintiffs did not challenge lead agency's actions in preparing EIR for landfill project or otherwise allege lead agency did not comply with its CEQA obligations and requested relief would not affect validity of lead agency's EIR.
     Riverwatch v. Olivenhain Municipal Water District (Gregory Canyon Ltd.) - filed January 19, 2009, publication ordered January 30, 2009, Fourth District, Div. One
     Cite as 2009 SOS 643
     
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-Church Property-
Where parish sued Episcopal Church for asserting control over parish property following parish’s disaffiliation from church, parish sought to resolve a property dispute, which was not a protected activity for purposes of anti-SLAPP statute; facts that action was filed after protected activity took place and that rift between parties may have arisen from protected activity did not transform property dispute into a SLAPP. If resolution of property dispute between two formerly affiliated churches involves a doctrinal dispute, trial court must defer to position of highest ecclesiastical authority to have decided doctrinal issue, but to extent court can resolve dispute without reference to church doctrine, trial court should consider "neutral principles of law"--sources such as property deed, church articles of incorporation, church constitution, canons, and rules, and relevant statutes, including statutes specifically concerning religious property. Where deed to property was in name of local parish but parish had agreed from incorporation to be a part of Episcopal Church and be bound by general church’s governing documents--which provided that property was held in trust by church and could only be controlled by parish so long as parish was part of general church--property reverted to church once parish disaffiliated itself from church.
     Episcopal Church Cases - filed January 5, 2009
     Cite as 2009 SOS 35
      
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-Construction Law-
Exemption to 10-year statute of limitations for latent construction defect actions in Code of Civil Procedure Sec. 337.15 for "actions based on willful misconduct" applies to cross-complaints for indemnity. A willful misconduct claim may be made in a cross-complaint by way of incorporating by reference allegations contained in complaint.
     Pine Terrace Apartments, L.P. v. Windscape, LLC (Jeffrey Scott, Inc.) - filed January 12, 2009, Fifth District
     Cite as 2009 SOS 275
     
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-Construction Law-
Code of Civil Procedure Sec. 337.15(a)--which sets a 10-year statute of limitations for latent construction defects in design or construction of improvement to real property--does not bar actions for damages in property damage cases filed more than 10 years after improvement was completed if recovery is sought on some other legal basis than construction defect. A landfill amounts to an "improvement" under Sec. 337.15. Where landowner asserted causes of action seeking injunctive and declaratory relief to require former lessee that had operated a landfill on property to address lessee’s "past, present and future legal and contractual responsibilities with respect to the landfill," landowner asserted financial injury proximately caused by breaches of arrangements reached between parties in dealing with property, regardless of how condition of property was originally created, and landowner’s allegations were broad enough to encompass theories of both express or implied equitable indemnity. Landowner did not base its alleged contractual rights in manner of landfill’s construction, and Sec. 337.15 did not clearly bar entirety of complaint for purposes of summary judgment. Landowner’s non-contractual causes of action were also not barred by Sec. 337.15.
     San Diego Unified School District v. County of San Diego - filed January 20, 2009, Fourth District, Div. One
     Cite as 2009 SOS 330
    
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-Environmental Law-
Coastal Commission failed to proceed in the manner required by law and abused its discretion by granting permit for development in habitat areas for other than resource-dependent uses without finding that denial of the permit would constitute a taking.
     McAllister v. California Coastal Commission (County of Monterey) - filed December 30, 2008, Sixth District
     Cite as 2009 SOS 97
     
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-Environmental Law-
Code of Civil Procedure Sec. 337.15(a)--which sets a 10-year statute of limitations for latent construction defects in design or construction of improvement to real property--does not bar actions for damages in property damage cases filed more than 10 years after improvement was completed if recovery is sought on some other legal basis than construction defect. A landfill amounts to an "improvement" under Sec. 337.15. Where landowner asserted causes of action seeking injunctive and declaratory relief to require former lessee that had operated a landfill on property to address lessee’s "past, present and future legal and contractual responsibilities with respect to the landfill," landowner asserted financial injury proximately caused by breaches of arrangements reached between parties in dealing with property, regardless of how condition of property was originally created, and landowner’s allegations were broad enough to encompass theories of both express or implied equitable indemnity. Landowner did not base its alleged contractual rights in manner of landfill’s construction, and Sec. 337.15 did not clearly bar entirety of complaint for purposes of summary judgment. Landowner’s non-contractual causes of action were also not barred by Sec. 337.15.
     San Diego Unified School District v. County of San Diego - filed January 20, 2009, Fourth District, Div. One
     Cite as 2009 SOS 330
       
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-Inverse Condemnation-
County’s denial of electrical permit, which plaintiff property owners eventually obtained pursuant to writ of mandate, did not constitute a regulatory taking of the property where substantial evidence supported conclusion that the property’s value or its ongoing use by the plaintiffs was not impaired, and that initial denial was supported by a reasonable policy of barring extension of electrical service to vacant land, discouraging illegal occupancy.
     Shaw v. County of Santa Cruz - filed December 19, 2008, ordered published January 16, 2009, Sixth District
     Cite as 2009 SOS 349
     
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-Landlord and Tenant-
Because Code of Civil Procedure Sec. 1174.2 imposes duties on trial court if tenants raise affirmative defense that a landlord has breached his obligations to maintain premises in a habitable condition, trial court erred in awarding a judgment to landlord for past rent due where trial court impliedly found that property was not in a condition fit for occupation by reducing award of past rent due but failed to comply with trial court’s remaining obligations to deny landlord possession, adjudge tenant to be prevailing party conditioned upon the payment by tenant of rent that has accrued as adjusted, order monthly rent be limited to reasonable rental value of the premises until repairs were made, and award tenant costs and attorney fees if provided by and pursuant to any statute or contract of the parties. Because municipal code prohibited occupation of a building without obtaining a certificate of occupancy, occupancy of premises for which no such certificate had been issued was illegal, and lease agreement for property was thus illegal.
     Espinoza v. Calva - filed December 16, 2008, publication ordered January 7, 2009, Fourth District, Div. Three
     Cite as 2009 SOS 215
    
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-Landlord and Tenant-
A child living with her family in a rented apartment has standing to bring a private nuisance claim based on interference with her right to enjoy common areas of rented premises. Plaintiff was not required to suffer damage different in kind from that suffered by general public. Allegation that condition affected all persons present in a common area was adequate to satisfy pleading requirement that nuisance simultaneously adversely affected a substantial number of people and to withstand defendant’s demurrer. Although plaintiff may not be able to prove seriousness of harm based on presence of secondhand smoke or establish that harm outweighs social utility of complex’s conduct, plaintiff’s allegation that smoke was "offensive," "toxic, noxious, hazardous...[and]carcinogenic" and "often pervades" various outdoor common areas was sufficient to withstand defendant’s demurrer as well. Issue was not whether complex had a duty to ban smoking but rather whether, given complex’s indisputable duty to take reasonable steps to maintain its premises in a reasonably safe condition, its failure to impose any type of limitation on smoking in common areas breached that duty.
     Birke v. Oakwood Worldwide - filed January 12, 2009, Second District, Div. Seven
     Cite as 2009 SOS 269
     
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-Landlord and Tenant-
Plaintiff's evidence of three prior sudden, unprovoked, increasingly violent assaults causing great bodily injury on people in un-gated parking areas of apartment complex were sufficiently similar to carjacking of plaintiff to impose duty on property owner to protect tenants. Where plaintiff's requested remedy was to have landlord move existing security gate from back of access road or installing similar gates before visitor and leasing office parking lots (a one-time expenditure that did not require significant funds), plaintiff's proposed security measures were minimal and not financially or socially onerous; because plaintiffs only asked for relatively minimal security measures, requisite degree of foreseeability was not especially high, and plaintiff's evidence was sufficient.
     Tan v. Arnel Management Company - filed January 29, 2009, Second District, Div. Three
     Cite as 2009 SOS 655
     
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-Land Use-
Coastal Commission failed to proceed in the manner required by law and abused its discretion by granting permit for development in habitat areas for other than resource-dependent uses without finding that denial of the permit would constitute a taking.
     McAllister v. California Coastal Commission (County of Monterey) - filed December 30, 2008, Sixth District
     Cite as 2009 SOS 97
         
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-Real Property Litigation-
Exemption to 10-year statute of limitations for latent construction defect actions in Code of Civil Procedure Sec. 337.15 for "actions based on willful misconduct" applies to cross-complaints for indemnity. A willful misconduct claim may be made in a cross-complaint by way of incorporating by reference allegations contained in complaint.
     Pine Terrace Apartments, L.P. v. Windscape , LLC (Jeffrey Scott, Inc.) - filed January 12, 2009, Fifth District
     Cite as 2009 SOS 275
       
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-Real Property Litigation-
Code of Civil Procedure Sec. 337.15(a)--which sets a 10-year statute of limitations for latent construction defects in design or construction of improvement to real property--does not bar actions for damages in property damage cases filed more than 10 years after improvement was completed if recovery is sought on some other legal basis than construction defect. A landfill amounts to an "improvement" under Sec. 337.15. Where landowner asserted causes of action seeking injunctive and declaratory relief to require former lessee that had operated a landfill on property to address lessee’s "past, present and future legal and contractual responsibilities with respect to the landfill," landowner asserted financial injury proximately caused by breaches of arrangements reached between parties in dealing with property, regardless of how condition of property was originally created, and landowner’s allegations were broad enough to encompass theories of both express or implied equitable indemnity. Landowner did not base its alleged contractual rights in manner of landfill’s construction, and Sec. 337.15 did not clearly bar entirety of complaint for purposes of summary judgment. Landowner’s non-contractual causes of action were also not barred by Sec. 337.15.
     San Diego Unified School District v. County of San Diego - filed January 20, 2009, Fourth District, Div. One
     Cite as 2009 SOS 330
        
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-Trust Deed Foreclosure-
Trustee in a non-judicial foreclosure sale does not contract with purchaser for sale of foreclosed property but performs ministerial acts which, when properly executed, result in a transfer of title to purchaser; thus, trial court erred in finding a contract between trustee and purchaser, and imposing statutory default interest rate chargeable after a breach of a contract that does not stipulate an interest rate. Where trustee did not properly execute ministerial acts set forth by statute resulting in a void sale requiring trustee to return purchase price plus interest to purchaser, applicable interest rate was seven percent per annum as set forth in California Constitution.
     Pro Value Properties, Inc. v. Quality Loan Service Corp - filed January 23, 2009, Second District, Div. Five
     Cite as 2009 SOS 433
       
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Los Angeles County Bar Association
2008 Real Property Section Newsletter
REAL PROPERTY SECTION REVIEW
Daniel L. Goodkin, Editor    *   Norman A. Chernin, Co-Editor

SECTION OFFICERS
Chair
Donald C. Nanney

First Vice-Chair
Michael S. Klein

Second Vice-Chair
Pamela L. Westhoff

Treasurer
Gregg J. Loubier

Secretary
Theresa C. Tate

Immediate Past-Chair
Timothy M. Truax

Chair Emeritus
Norma J. Williams,

Section Administrator
Terrina Scott

EXECUTIVE COMMITTEE MEMBERS

Eric Altoon
Nedra E. Austin
Susan J. Booth
James L. Brat
Norman A. Chernin
Brant H. Dveirin
Daniel L. Goodkin
Rebecca H. Lessley

Peter J. Niemiec
D. Eric Remensperger
David C. Sampson
Michael G. Smooke
Linda E. Spiegel
Sarah J. Spyksma
Valerie Wisot
Andrew J. Yamamoto


SUB-SECTION CHAIRS
Commercial Development & Leasing, Marcia Z. Gordon
Construction Law, Brian Ostler
Land Use Planning & Environmental Law, Claire Hervey Collins
Real Estate Finance, Caroline Dreyfus
General Real Estate Law, Nadav Ravid
Title Insurance, David M. Marcus

 

Readers are advised that changes in the law may affect the accuracy of this publication or the functionality of links after the publication date.