Vol. 5, No. 9  Join the Real Property Section  Contact Us  Archive • August 2010

Special Message

I hope you had a good summer. Anecdotal evidence (i.e., what people are saying) supports the belief that activity is increasing somewhat in the commercial real estate arena, so it should be worthwhile to stay on top of new legal developments such as the cases summarized in the Newsletter.


Norm Chernin,
Editor, Real Property Section Newsletter
E-mail address: nchernin@firstam.com

View All Real Property Events

September 1, 2010: Loan Mod 101 - Everything You Wanted to Know about the Ethics of Loan Modifications but were Afraid to Ask (12:30 PM)

September 15, 2010: The Future of Financing (12:30 PM)

September 21, 2010: The Birds & the Bees of the FDIC (12:30 PM)

September 22, 2010: What It Means to be a Leasing Attorney (12:30 PM)

September 28, 2010: BID PROTESTS LIVE (12:30 PM)

Recent Cases
Cases from July 1 through July 31

Where court of appeal issued published opinion interpreting Government Code Sec. 66499.37's 90-day service of summons requirement as applying to CEQA cause of action pertaining to a subdivision, prior to date that 90-day period in petitioner's case expired, petitioner's evidence that clerk's office had a policy of refusing to issue a summons when a mandate petition was filed in a CEQA case did not establish that it was impossible for petitioner to comply with the 90-day statute; due diligence required petitioner's counsel to take affirmative steps to have summons issued. Public Resources Code Sec. 21167.4(a)'s requirement that petitioner in a CEQA action request a hearing within 90 days of filing the petition can only be satisfied by a written request.
Torrey Hills Community Coalition v. City of San Diego (Westbrook Torrey Hills, L.P.) - filed July 2, 2010, Fourth District, Div. One
Cite as D055579

Construction Law
Where two insurers insured homebuilder, and first insurer sued second insurer seeking a proportionate or equitable share of sums first insurer expended to defend homebuilder in an underlying construction defect action, trial court erred in granting second insurer summary judgment on the ground that second insurer’s duty to defend never arose because homebuilder never paid a $25,000 "per claim" self-insured retention for each home involved in the underlying action and completed after the effective date of second insurer’s policy. Homebuilder--in view of the other terms of second insurer’s policy and the apparent circumstances at the time it was issued--might have had an objectively reasonable expectation that the $25,000 SIR would apply only once to the underlying action as a whole rather than to each of the eight homes constructed after the policy’s effective date.
Clarendon America Insurance Company v. North American Capacity Insurance Company - filed June 15, 2010, publication ordered July 7, 2010, Fourth District, Div. Two
     Cite as 2010 S.O.S. 3864

Construction Law
Public works contractors--in addition to generally being able to recover in a contract action for extra work or expenses where the contractor, acting reasonably, was misled by incorrect plans and specifications issued by public authorities as the basis for bids--may also recover when the plans and specifications are correct but the public authority failed to disclose information in its possession that materially affected the cost of performance. Relief for nondisclosure is appropriate only when the contractor submitted its bid or undertook to perform without material information that affected performance costs; the public entity was in possession of the information and was aware the contractor had no knowledge of, nor any reason to obtain, such information; any contract specifications or other information furnished by the public entity to the contractor misled the contractor or did not put it on notice to inquire; and the public entity failed to provide the relevant information.
Los Angeles Unified School District v. Great American Insurance Company - filed July 12, 2010
Cite as S165113

Construction Law/Homeowners Associations
Where homeowners association filed a construction defect action against the developer of a condominium project on its own behalf and as a representative of its members, an arbitration provision in a declaration of covenants, conditions, and restrictions recorded by the developer of the condominium project--which could not be changed by the association without the written consent of the developer--did not constitute an "agreement" sufficient to waive the constitutional right to jury trial for construction defect claims. Assuming the homeowners association was bound by a jury waiver provision contained in purchase and sale agreements signed by the individual condominium owners, the jury waiver provision in the purchase and sale agreements was not enforceable where it was unconscionable, and trial court did not err in denying the developer's motion to compel arbitration.
Pinnacle Museum Tower Association v. Pinnacle Market Development (US), LLC - filed July 30, 2010, Fourth District, Div. One
Cite as D055422

Default Remedies
Property of a guarantor of a debt--the debt being secured by the real property of the principal debtor and also that of a joint and several co-guarantor--was subject to attachment where the guarantor contractually waived the benefit of that security.
Bank of America, N.A. v. Stonehaven Manor, LLC - filed July 12, 2010, Third District
Cite as C060089

Document Recording
County recorder did not owe plaintiff, who alleged that recorder negligently accepted for recording certain documents purporting to authorize plaintiff's brother to engage in certain transactions on her behalf and alleged to have been fraudulently procured by the brother, a duty to look beyond the notary's certificate of acknowledgment and determine whether the power of attorney was legally sufficient to confer the powers purportedly authorized. Government Code Sec. 27201 requires recorder to accept for recording any document that contains required notarization and meets the requirements of the statute as to form.
Jackson v. County of Amador - filed July 7, 2010, Third District
Cite as C060845

Environmental Law
County’s approval of coastal permit to construct a residence and a use permit allowing reduction of the riparian corridor setback from 100 feet to 50 feet for the project was not an abuse of discretion under local coastal plan where the riparian area involved was not an environmentally sensitive habitat area and was not identified as a "Sanctuary-Preservation area" under Local Coastal Plan. Coastal Commission decision that appeal from county’s approval of coastal permit and 50-foot buffer raised no substantial issue was not an abuse of discretion where there was a high degree of support for the approval and little or no statewide or regional impact from the project. Contention that project would impact riparian wildlife and open the door to successive projects of the same type in the same area, and thus supported exception to general rule that single-family residence projects are not reviewable under CEQA, failed where petitioners did not raise CEQA issues in administrative proceedings.
Hines v. California Coastal Commission (Star) - filed June 17, 2010, publication ordered July 13, 2010, First District, Div. Two
Cite as A125254

Environmental Law
Owner and operator status under the Comprehensive Environmental Response, Compensation, and Liability Act is determined at the time that cleanup costs are incurred, and the owner of the property at that time is the current owner for purposes of determining CERCLA liability.
State of California Department of Toxic Substances Control v. Hearthside Residential Corporation - filed July 22, 2010
Cite as 09-55389

Homeowners Associations 
A provision in a commercial general liability insurance policy requiring the insurer to "defend the insured against any 'suit' seeking...damages" to which the insurance applies includes the duty to defend the insured in proceedings under the Calderon Act, which requires a common interest development association to satisfy certain dispute resolution requirements with respect to the builder, developer, or general contractor before the association may file a complaint in court for construction or design defects.
Clarendon America Insurance Company v. Starnet Insurance Company - filed July 27, 2010, Fourth District, Div. Three
Cite as G042353

Homeowners Associations
Where homeowners association filed suit against homeowners who replaced their windows with an unapproved color and obtained a judgment for injunctive and declaratory relief declaring them in violation of association rules and requiring them to modify or replace their windows, and homeowners appealed, association's judgment for attorney fees, awarded as a matter of right to the prevailing party, should have been automatically stayed.
Chapala Management Corporation v. Stanton - filed July 29, 2010, Fourth District, Div. One
Cite as D055532

Inverse Condemnation
Where plaintiff brought inverse condemnation action against a number of public entities and a railroad claiming the defendants caused his property to flood when it rained, trial court did not err in dismissing because it properly applied three-year statute of limitations for damage to property rather than five-year limitation on actions to recover taken property, and plaintiff failed to carry his burden of proof as to causation.
Bookout v. State of California ex rel. Department of Transportation - filed June 28, 2010, publication ordered July 28, 2010, Second District, Div. Six
Cite as B214906

Premises Liability
Civil Code Sec. 846--which provides that a landowner "owes no duty of care to keep the premises safe for entry or use by others for any recreational purpose"--does not extend to acts of vehicular negligence by a landowner or by the landowner’s employee while acting within the course of the employment because the statutory phrase "keep the premises safe" describes the property-based duties underlying premises liability, a liability category that does not include vehicular negligence, and a broad construction of the statutory phrase would render superfluous another provision of Sec. 846 shielding landowners from liability for failure to warn recreational users about hazardous conditions or activities on the land.
Klein v. United States - filed July 26, 2010
Cite as S165549


Reader Reactions
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Los Angeles County Bar Association
2010 Real Property Section Newsletter
Daniel L. Goodkin, Editor, Real Property Section Review
Norman A. Chernin, Editor, Real Property Section Newsletter

Pamela L. Westhoff

First Vice Chair
Gregg J. Loubier

Second Vice Chair
Theresa C. Tate

Treasurer/Crocker Chair
Sarah V. J. Spyksma

Norman A. Chernin

Immediate Past Chair
Michael S. Klein

Section Administrator
Terrina Scott


Eric Altoon
Nedra E. Austin
Babak B. Baradaran
Susan J. Booth
Claire Hervey Collins
Caroline Dreyfus
Brant Dveirin
Robert T. Flick
Daniel L. Goodkin
Marcia Z. Gordon

Linda S. Koffman
Trudi J. Lesser
Peter J. Niemiec
Robert C. Pearman
Leslie D. Reed
D. Eric Remensperger
Michael G. Smooke
Linda E. Spiegel
Andrew J. Yamamoto

Commercial Development and Leasing, Nadav Ravid
Construction Law, Richard Mah
Land Use Planning and Environmental Law, Laurence L. Hummer
Real Estate Finance, Owen P. Gross
General Real Estate Law, Brian R. Hochleutner
Title Insurance, Vanessa A. Widener

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