Volume 5, Number 4

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March 2010 

Special Message

The Crocker Symposium 2010, Negotiating the Real Estate Maze: Challenges and Opportunities, will bring together Southern California’s top leaders in real estate, including developers, investors, bankers, attorneys, accountants, brokers, academics, government representatives, and property owners. Participants will enjoy an extraordinary day of networking, thought leadership, discussion, and analysis. You will gain the essential tools required to turn obstacles into opportunities in today’s real estate maze.

The real estate industry enjoyed unprecedented growth over the past decade until the market plummeted in value in the fall of 2008. While this market downturn was initially thought to be temporary, it is now entirely unclear when the market will turn and what will precipitate that turn. Those developers, investors, and advisors who come to the Crocker Symposium will be armed with the knowledge and professional network to negotiate the industry’s convoluted maze of complex market conditions—efficiently and cost effectively. They will inevitably surpass those who choose to take on the maze unarmed.

Register now for March 23, 2010, and attend the Benjamin S. Crocker Symposium on Real Estate Law and Business 2010, at the Los Angeles Convention Center.

Great Learning, Terrific Networking, and a Whole Lot of Fun: The State Bar Real Property Law Section’s Annual Retreat 2010: “The Road to Recovery.” This is your place to benefit from real property CLE with camaraderie and friends. The 29th Annual Real Property Retreat takes place from April 30 to May 2, 2010, at the Silverado Resort in the Napa Valley. You will receive up to 12.25 hours of MCLE credit and be able to choose from 21 substantive, in-depth and timely programs on a wide variety of subjects that will greatly expand your practice skills.

You will hear two separate keynote speakers on the state of the real estate industry: Luis A. Belmonte of Seven Hills Properties, and Brian Pretti of Mechanics’ Bank. Professor Roger Bernhardt will lead a panel of law professors who discuss the year’s most important law developments.

You can attend terrific social and networking events, including a dinner with legal humorist Sean Carter. You will enjoy the Friday Barbecue Dinner and Leadership Party (both free to 3-day registrants) and the Saturday After-hours Party (free to all attendees).

You will delight in this event. There’s still plenty of time to sign up. For more information, and for registration, or contact Theresa Raglen at Theresa.Raglen@calbar.ca.gov or 415-538-2393.

Silverado recently completed a five-year, $15 million, property-wide upgrade, including the golf courses, the spa, a new restaurant, accommodations, meeting rooms, and all public spaces. There’s still plenty of time to sign up. Mark your calendar. You'll love this event.

Also, please note this useful article:

A User’s Guide to 2008-2009 California Statutes Relating to Title Insurance.


Norm Chernin , co-editor, Real Property Newsletter
E-mail address:

Real Property Scheduled Events 
View All Real Property Events

March 17, 2010 at 12:30 p.m.: Everything a Construction Lender Needs to Know about Stop Notices

March 23, 2010 at 7:30 a.m. : The 39th Annual Crocker Symposium on Real Estate Law and Business

April 22, 2010: at 12:30 p.m. : Drafting Non-Disturbance and Subordination Agreements

April 27, 2010: LEED Certification

Recent Cases
Cases from February 1 through February 31

Agreements of Purchase and Sale
Agreements of Purchase and Sale
Construction Law
Construction Law

Homeowners Associations
Mechanic's Lien Foreclosure
Real Property Taxation
Real Property Taxation
Rent Control
Rent Control

Agreements of Purchase and Sale

In a rising market, a seller may not retain buyer's deposit after buyer breached sales agreement if seller cannot establish any damages caused by buyer's breach, even if sales agreement specifies that deposit was nonrefundable.
     Kuish v. Smith - filed February 3, 2010, publication ordered February 10, 2010, Fourth District, Div. Three
     Cite as 2010 SOS 843
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Agreements of Purchase and Sale
Where prospective sellers of real property intended to sell property and buy other property as part of an Internal Revenue Code Sec. 1031 exchange, but sale failed and sellers were eventually awarded damages based on rescission, damage award should not have included benefits they would have obtained had the rescinded contract been performed, such as difference in rental income as a result of their purchasing a less-profitable building than the one they intended to buy if the sale and the intended Sec. 1031 exchange had gone through.
     Sharabianlou v. Karp - filed February 5, 2010, First District, Div. Five
     Cite as 2010 SOS 744
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Filing of notice of determination under CEQA triggers a 30-day statute of limitations for all CEQA challenges to the decision announced in the notice. Environmental impact description that is in substantial compliance with CEQA Guidelines Section 15094 is sufficient for NOD to trigger 30-day statute of limitations. Agency is not required to prepare an EIR or negative declaration to accompany an NOD.
     Committee for Green Foothills v. Santa Clara County Board of Supervisors (Board of Trustees of the Leland Stanford Junior University) - filed February 11, 2010
     Cite as 2010 SOS 827
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Indian tribe’s casino development did not constitute a "project" of City—which entered into municipal services agreement (“MSA”) with tribe—under the California Environmental Quality Act where the City had no legal authority over the property upon which the casino was to be situated, and agreement by City to support tribe’s efforts to acquire the land for the casino and to obtain the requisite approvals from the Bureau of Indian Affairs, and the Governor did not transform the casino into a "project" triggering an obligation by the City to prepare an environmental impact report; MSA was best understood as a mechanism for funding proposed projects that may be modified or not implemented at all depending upon a number of factors, including CEQA environmental review, where the City did not unconditionally commit itself to making any of the physical changes referenced in the MSA. Requirement in MSA that parties negotiate a fire protection and emergency response agreement after the tribe provided the City with its operational plan were not subject to CEQA review where actual options for placement of a firehouse remained vague. MSA’s commitments governing transportation improvements were not subject to CEQA review where it was unclear City had agreed to allow tribe to construct traffic improvements.
     Parchester Village Neighborhood Council v. City of Richmond - filed February 24, 2010, First District, Div. One
     Cite as 2010 SOS 1020 
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Construction Law
Where subcontractors' policies defined "you" to mean the named insured and specified that "it is a condition precedent to our liability that you make actual payment...until you have paid" the self-insured retention amount, and further stated "Payments by others, including but not limited to additional insureds or insurers, do not serve to satisfy the self-insured retention," it was unambiguous that payments by general contractor, whom subcontractors were contractually required to add to their general liability policies as an additional insured, did not satisfy the self-insured retention.
     Forecast Homes, Inc. v. Steadfast Insurance Company - filed January 12, 2010, publication ordered February 11, 2010, Fourth District, Div. Three
     Cite as 2010 SOS 854
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Construction Law
A general liability insurer that has paid a claim to a third party on behalf of its insured may have an equitable right of subrogation against other parties who contributed to the harm suffered by the third party under an equitable indemnification theory and other parties who are legally liable to insured for the harm suffered by the third party under a contractual indemnity theory. A good faith settlement will preclude claims based on an equitable indemnity theory but not claims based on a contractual indemnity theory. Collateral source rule has nothing to do with whether an insurer can recover in subrogation on its insured’s contractual indemnification claim. Insurer’s acceptance of premiums did not itself preclude subrogation as a matter of law, since the risk it insured was distinct from risk defendant agreed to indemnify, and defendant’s alleged negligence contributed to the loss. Where contractor tendered its defense to defendant and another subcontractor pursuant to contractual indemnity agreement, indemnity agreement between contractor and defendant created greater equitable responsibility for indemnification as compared to that of the other subcontractor’s general liability insurer, absent language in insurance policy or indemnification agreement leading to a contrary conclusion.
     Interstate Fire and Casualty Insurance Company v. Cleveland Wrecking Company - filed February 22, 2010, First District, Div. Five
     Cite as 2010 SOS 917
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Homeowners Associations
Where defendants sought to build house within development governed by homeowner association pursuant to Davis-Stirling Common Interest Development Act, trial court’s finding that height guidelines were adopted by a duly constituted architectural committee was supported by substantial evidence, despite lack of testimony as to when or how the guidelines were adopted, where testimony demonstrated that guidelines were available in printed form at the time plaintiffs sought to build, were distributed to all who planned to build in the development, were followed by the committee throughout the time in question in evaluating applications, and were believed by committee members to constitute enforceable regulations governing construction within development. Testimony that association had been following its height guidelines since 1995 was sufficient to support finding that guidelines were exempt from statutory requirements for adoption of "operating rules," since Civil Code Sec.1357.150, subdivisions (a) and (b), provide that those requirements apply only "to a rule change commenced on or after January 1, 2004" and do not affect "the validity of a rule change commenced before January 1, 2004." Lack of documentation as to how two particular persons came to be members of the architectural committee did not render the committee’s actions invalid where there was no dispute the committee had been in existence for many years, conducted weekly meetings, and reviewed the planned construction within the development, all as required by the governing declaration; the declaration did not preclude appointment of "pro tem" committee members, and defendants' cited no prejudice from the participation of the two purportedly unofficial members. Trial court did not abuse its discretion in enjoining violation of height guidelines, rather than awarding damages, where violation was knowing rather than innocent and was at least negligent, there was substantial evidence violation irreparably harmed defendants’ neighbors by obstructing their views and by negatively impacting the value and enjoyment of their homes, and there was no evidence the cost of correcting the violation would be grossly disproportionate to the hardship caused to the association.
     Clear Lake Riviera Community Association v. Cramer - filed February 26, 2010, First District, Div. One
     Cite as 2010 SOS 1026 
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Mechanic's Lien Foreclosure 
Where developer breached contract by failing to pay general contractor in full for construction of golf course, financing for which was provided by public entity/property owner based on agreement of defendant adjacent property owners to transfer land needed for completion of project, general contractor's mechanic's lien extended to--but not beyond--those portions of the defendants' adjacent land required for the convenient use and occupation of the golf course. Trial court erred in ordering adjacent property owners to pay interest based on the stipulated value of the entire amount owed general contractor when the stipulated amount was for work performed, not only on adjacent land, but also primarily for work performed on golf course property.
     Forsgren Associates, Inc. v. Pacific Golf Community Development LLC - filed February 23, 2010, Fourth District, Div. Two
     Cite as 2010 SOS 961
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Real Property Taxation

Taxpayer, who did not file an application for assessment reduction under Revenue and Taxation Code Sec. 1603(a) with county board of equalization prior to filing refund claim with county auditor-controller, failed to exhaust administrative remedies, where refund claim was based on a contention that assessment increase violated Proposition 13 because no change in ownership of the property had occurred. County’s insistence in trial and appellate courts that a change in ownership had occurred did not, under futility doctrine, excuse taxpayer’s failure to raise the issue before equalization board. Change in ownership occurred within the meaning of Proposition 13 upon the death of a trust settlor who transferred her residence to a trust that was revocable during her life, who was the sole present beneficiary of that revocable trust, and who provided in the trust document that upon her death the trust would become irrevocable and that her sister would have the right to occupy the residence during her lifetime.
     Steinhart v. County of Los Angeles - filed February 4, 2010
     Cite as 2010 SOS 667
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Real Property Taxation
A commercial tenant on public property can have a taxable possessory interest in defined common areas; issue is a question of law that is reviewable de novo. Where tenant had beneficial rights to an area that members of the public clearly did not share, but which tenant did share with a limited number of cotenants in a fashion that restricted neither the quantity of the property nor the quality of its use, tenant’s rights were sufficiently exclusive to establish tenant’s possessory interest and permit taxation.
     Vanguard Car Rental USA, Inc. v. County of San Mateo - filed February 8, 2010, First District, Div. Five
     Cite as 2010 SOS 797
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Rent Control
San Francisco’s Rent Stabilization and Arbitration Ordinance does not require tenants to voluntarily vacate a dwelling to retain the right to occupy. Nothing in ordinance authorizes a landlord to recover permanent possession upon tenant’s refusal to voluntarily vacate after receipt of a 60-day notice. Where issue determined in prior unlawful detainer action was whether landlord was entitled to temporary possession to effect repairs pursuant to ordinance, such judgment did not entitle landlord to permanent possession, and so doctrines of res judicata and collateral estoppel did not bar tenants’ later wrongful eviction action based on their right to reoccupy after repairs were made. Where parties entered into agreement that tenants would "surrender complete possession" of premises to avoid forced eviction, use of such language indicated that parties intended to assure tenants would vacate premises for period of repairs, rather than to secure a permanent termination of tenants’ rights in the leasehold. Such an interpretation of agreement was supported by extrinsic evidence as well. Landlord’s claim of permanent possession of premises was not done in furtherance of prior unlawful detainer action or parties’ agreement since neither awarded landlord permanent possession, and so litigation privilege did not apply to landlord’s refusal to allow tenants to reoccupy property. Trial court did not abuse its discretion in determining that the lodestar method was appropriate for calculating reasonable attorney fees and costs under ordinance; Board of Supervisors, in adopting a fee shifting provision, presumably intended courts to use the lodestar method. Fee that exceeded amount tenants and their attorney agreed to in their fee agreement was not excessive where court applied an hourly rate that was undisputedly reasonable based on the attorney’s level of experience.
     Chacon v. Litke - filed January 19, 2010, publication ordered February 8, 2010, First District, Div. Two
     Cite as 2010 SOS 788
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Rent Control
City’s Rent Stabilization and Eviction for Good Cause Ordinance did not permit recovery of attorney fees by a landlord in successful litigation against the city where entirety of ordinance provided strong indication that voters intended to limit recoverability to proceedings between landlords and tenants.
     Woodland Park Management, LLC v. City of East Palo Alto Rent Stabilization Board - filed February 1, 2010, First District, Div. Five
     Cite as A124154
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Los Angeles County Bar Association
2010 Real Property Section Newsletter
Daniel L. Goodkin, Editor    *   Norman A. Chernin, Co-Editor

Michael S. Klein

First Vice-Chair
Pamela L. Westhoff

Second Vice-Chair
Gregg J. Loubier

Theresa C. Tate

Sarah V. J. Spyksma

Immediate Past-Chair
Donald C. Nanney

Section Administrator
Terrina Scott


Eric Altoon
Nedra E. Austin
Babak B. Baradaran
Susan J. Booth
James L. Brat
Norman A. Chernin
Brant Dveirin
Robert T. Flick
Daniel L. Goodkin
Brian Richard Hochleutner
Linda S. Koffman
Rebecca H. Lessley

Peter J. Niemiec
Robert C. Pearman
Leslie D. Reed
D. Eric Remensperger
David C. Sampson
Michael G. Smooke
Linda E. Spiegel
Andrew J. Yamamoto

Commercial Development & Leasing, Marcia Z. Gordon
Construction Law, Richard Mah
Land Use Planning & Environmental Law, Claire Hervey Collins
Real Estate Finance, Caroline Dreyfus
General Real Estate Law, Nadav Ravid
Title Insurance, Gytis L. Nefas


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