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- In This Issue -

Introductory Comment

Coming Events

Recent Cases


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An ePublication of the Los Angeles County Bar Association
Volume 8, Number 7 • July 2013 • Archive of Past Issues
Real Property Home Page


Introductory Comment

Lots of interesting stuff this month. The cases involving proper legal representation reminded me of my experience as a trial lawyer where I won a case that I thought I should have lost, and lost a case that I thought I should have won. See what you think.

Sincerely,

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

Coming Events


Drafting Financeable Leases
July 25

Subsection/Committee: Commercial Development Subsection Program

Information:
Leases and loan documents seem worlds apart, but in reality, the leases we draft must be compatible with the loan documents that govern the property being leased. Even when a property has no debt in place, the potential need for financing must be considered in order to keep the property flexible, and therefore, to maximize value. Our job as leasing attorneys can't stop at the four corners of the lease itself. We must be cognizant of the issues that make a lease more or less financeable and therefore be able to advise our clients whether we are drafting a lease, or reviewing one from a diligence perspective for acquisition purposes. This presentation will explain the major elements of making sure your leases and your loan documents "play well with others."

Speakers: Shireen Enayati, Westfield LLC
Leslie D. Reed, Pircher Nichols & Meeks

Location: Los Angeles County Bar Association 1055 West 7th Street,
27th Floor Los Angeles, CA 90017

Room: La Brea/La Cienega Conference Room

Times: Registration: 12:00 PM - 12:30 PM
Meal/Reception: 12:00 PM - 1:00 PM
Program: 12:30 PM - 1:30 PM
Custom Communication: Appropriate for all levels


Recent Cases

Bankruptcy--Relief from Automatic Stay
Bank, by providing a copy of a copy of a promissory note with respect to which the bank sought relief from an automatic stay, and a declaration establishing the bank's possession of the original note, established prudential standing to file a motion for relief from the stay.
In re Griffin - filed June 26, 2013
Cite as 12-60046
Full text http://www.metnews.com/sos.cgi?0613//12-60046

CEQA
City's early efforts to assist in development of affordable housing project--including making a predevelopment loan covering a small percentage of the eventual project cost, creating a special use district, committing staff resources, and making public statements in support of the project--did not constitute environmental preapproval in violation of CEQA.
Neighbors for Fair Planning v. City and County of San Francisco (Booker T. Washington Community Service Center) - filed May 31, 2013, publication ordered June 25, 2013, First District, Div. Three
Cite as A135745
Full text http://www.metnews.com/sos.cgi?0613//A135745

Coastal Commission
Coastal Commission lacked administrative appellate jurisdiction pursuant to Public Resources Code Section 30625 to consider appeals of City's ordinance declaring public access trails at site of development to be a nuisance and mandating gates to prevent access at certain times. An ordinance is not an "appealable action" within the meaning of the statute. Trial court erred in granting writ of mandate, precluding Commission from reviewing City's action, where City purported to act under Section 30005(b)--which provides that no provision of the Coastal Act is a limitation on "the power of any city or county or city and county to declare, prohibit, and abate nuisances"--but trial court failed to determine whether City's declaration of a nuisance was legitimate.
City of Dana Point v. California Coastal Commission (Headlands Reserve LLC) - filed June 17, 2013, Fourth District, Div. One
Cite as D060260
Full text http://www.metnews.com/sos.cgi?0613//D060260

Construction Law
Public policy principles applicable to the freedom to contract afford sophisticated contracting parties the right to abrogate the delayed discovery rule by agreement. Clause in owner-contractor agreement stating that time for bringing claims by owner would run from substantial completion of the project unambiguously abrogated the delayed-discovery rule and was enforceable.
Brisbane Lodging, L.P. v. Webcor Builders, Inc. Builders - filed June 3, 2013, First District, Div. Four
Cite as A132555
Full text http://www.metnews.com/sos.cgi?0613//A132555

Construction Law
Property owner sued contractor in connection with work done on premises and contractor tendered defense to its insurer. Coverage dispute arose as to whether certain damages allegedly caused by independent contractors were covered under the "contractor's special condition". Insured was entitled to independent counsel, even if insurer's filing of a declaratory action against insured did not create a conflict of interest by itself. A conflict existed because insurer-retained counsel had an ethical duty to insured to try to establish that the responsible workers were employees, and at the same time, had an ethical duty to insurer to try to establish that the workers were independent contractors. Trial court did not abuse its discretion by disqualifying conflicted counsel, rather than merely permitting insured to hire independent counsel at insurer's expense, where conflicted counsel had actually engaged in simultaneous representation of insured and insurer.
Schaefer v. Elder - filed May 16, 2013, publication ordered June 12, 2013, Third District
Cite as C068229
Full text http://www.metnews.com/sos.cgi?0613//C068229

Construction Law--Miller Act
One-year limitation on suits under Miller Act, which requires that a general contractor on a federal construction project furnish a payment bond for the protection of all persons supplying labor and material on the project, is a claim processing rule, not a jurisdictional requirement. District court erred in dismissing as time-barred a subcontractor's complaint alleging federal question jurisdiction over Miller Act claim, where nothing on the face of the complaint indicated the subcontractor did not work on the project or rent equipment to the general contractor within one year of the date the complaint was filed.
Air Control Technologies, Inc. v. Pre Con Industries, Inc. - filed June 28, 2013
Cite as 11-56230
Full text http://www.metnews.com/sos.cgi?0713//11-56230

Ethics of Multiple Representation
Trial court abused its discretion by disqualifying law firm from simultaneously representing a limited liability company ("LLC"), a partnership that was the LLC's managing member, and the person who managed that partnership in a lawsuit against two of the company's minority members, based on a potential conflict of interest. Attorney's duty of loyalty to simultaneously represented clients does not preclude such representation where there is no actual conflict and no reasonable likelihood such a conflict would arise.
Havasu Lakeshore Investments, LLC v. Fleming - filed May 28, 2013, publication ordered June 18, 2013, Fourth District, Div. Three
Cite as G047244
Full text http://www.metnews.com/sos.cgi?0613//G047244

Homeowners Associations
Civil Code Section 1363.03(a)(1), which requires that members of homeowner's associations in common interest developments be given equal access to "association media" to advocate opposing viewpoints, is not subject to an exception permitting board of directors to advocate a point of view using association media without triggering the equal-access requirement. Where board proposed amendments to CC&Rs and sent members a letter--written by board members who supported the amendment--setting forth the proposal with a one-page attachment containing a section entitled "Case for amending the CC&Rs" and another section entitled "Case against amending the CC&Rs," and board did not ask any opposing members for written input for the "Case against" but did listen to their arguments at homeowner forums and attempted to incorporate those arguments but specifically decided not to include any opposition material, the letter was not merely informational but was advocacy that triggered the equal-access requirement. Trial court finding that association did not violate Section 1363.03(a)(2), which requires an association to permit free access to common areas for purposes reasonably related to an election, was unsupported by substantial evidence where it was undisputed that either the board or the manager had improperly charged member a fee to use clubhouse to hold election-related meeting and that another member was, without explanation, denied the use of community greenbelt for a campaign rally.
Wittenberg v. Beachwalk Homeowners Association - filed June 26, 2013, Fourth District, Div. Three
Cite as G046891
Full text http://www.metnews.com/sos.cgi?0613//G046891

Homeowners Associations
Right of member to attend board meeting of homeowner's association did not include any right to be represented at such meeting by an attorney. Where home ownership was transferred to a limited liability company ("LLC"), which thereby became a member of the association, the LLC's right to attend board meetings could be exercised through any member or manager of the LLC but not through an attorney who was not authorized by the association bylaws to exercise rights of membership and who did not manage the LLC's affairs.
SB Liberty, LLC v. Isla Verde Association, Inc. - filed May 22, 2013, publication ordered June 18, 2013, Fourth District, Div. One
Cite as D061261
Full text http://www.metnews.com/sos.cgi?0613//D061261

Inverse Condemnation for Regulatory Taking
Land-use agency's denial of construction permit--based on developer's rejection of conditions that he either reduce the size of the development and deed the district a conservation easement on the remainder of the property, or hire contractors to make improvements to agency-owned wetlands several miles away--constituted a taking of property without just compensation. Constitutional requirements that restrictions on development have a nexus and be roughly proportional to the impact of the development on the environment apply whether a permit is granted or denied, and whether the restrictions require the property owner to give up an interest in land or to pay an exaction in money.
Koontz v. St. Johns River Water Management District - filed June 25, 2013
Cite as 11-1447_6j37
Full text http://www.metnews.com/sos.cgi?0613//11-1447_6j37

Land Use
City's ordinance requiring developers to provide a specified amount of affordable housing in new residential developments, or pay a fee in lieu of building such housing, was a proper exercise of City's police powers in absence of a showing by developers that it was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair.
California Building Industry Association v. City Of San Jose (Affordable Housing Network of Santa Clara County) - filed June 6, 2013, Sixth District
Cite as H038563
Full text http://www.metnews.com/sos.cgi?0613//H038563

Land Use
Planning commission posted an agenda that set forth, as one item of business for its upcoming meeting, the potential approval of a subdivision application. The agenda failed to mention that the commission would also be considering whether or not to adopt a mitigated negative declaration ("MND") under CEQA concerning the environmental impact of the project. The approval of the MND violated the Ralph M. Brown Act.
San Joaquin Raptor Rescue Center v. County of Merced (Morris) - filed May 31, 2013, Fifth District
Cite as F064930
Full text http://www.metnews.com/sos.cgi?0613//F064930

Land Use
Public employees' tort immunity for legislative decision-making applies even when that decision-making is also alleged to involve the making of misrepresentations motivated by "actual fraud, corruption or actual malice."
Freeny v. City of San Buenaventura - filed June 4, 2013, Second District, Div. Six
Cite as B240893
Full text http://www.metnews.com/sos.cgi?0613//B240893

Landlord and Tenant
With regard to sale of restaurant and long-term lease of restaurant property, evidence of defendant seller/landlord's alleged guarantee as to the quality of the restaurant's equipment was inconsistent with the express representation in the lease that plaintiff buyers/tenants had relied upon their own inspection in finding the premises and improvements to be in "good order, repair, and condition," and defendant's alleged promise to repair any faulty equipment was inconsistent in that it did not appear in the lease or the buy-sell agreement, so such evidence was inadmissible absent an exception to the parol evidence rule. Fraudulent inducement exception to parol evidence rule applies without regard to the business sophistication of the parties, so judgment was properly entered on verdict for plaintiffs who met their burden to prove that, notwithstanding both the lease's integration clause and the "as is" language with respect to the restaurant equipment, they reasonably relied on defendant's prior oral assurances in entering into the agreements.
Julius Castle Restaurant Inc. v. Payne - filed June 10, 2013, First District, Div. One
Cite as 2935
Full text http://www.metnews.com/sos.cgi?0613//A130955

Real Estate Finance
Surety's specific exclusion of a specified asset from a continuing guaranty did not extend to proceeds from the sale of that asset, where surety could have inserted language extending the exclusion to those proceeds but did not.
Series AGI West Linn of Appian Group Investors DE LLC v. Eves - filed June 14, 2013, First District, Div. Two
Cite as A135832
Full text http://www.metnews.com/sos.cgi?0613//A135832

Tax Liens
District court did not err in finding tax liens enforceable against properties whose owners of record were the nominees of taxpayers against whom IRS had recorded liens. Doctrine of nominee ownership is well-recognized under California law, and totality of circumstances--including lack or inadequacy of consideration, anticipation of litigation at time of transfer, relationship between nominees and owners of record, and continuing use and enjoyment of the property by the transferees--strongly supported finding of nominee ownership in this case.
Fourth Investment LP v. United States - filed June 13, 2013
Cite as 11-56997
Full text http://www.metnews.com/sos.cgi?0613//11-56997

Title Insurance
Title insurer had no duty to defend action in which plaintiff did not allege defects in title but rather tortious conduct in the manner in which insured acquired title.
Liberty National Enterprises, L.P. v. Chicago Title Insurance Company - filed May 22, 2013, publication ordered June 13, 2013, Second District, Div. Eight
Cite as B234341
Full text http://www.metnews.com/sos.cgi?0613//B234341

Water Law
Petitioners alleged that defendants--a county and the State Water Resources Control Board--had failed to manage certain groundwater resources in a manner consistent with the public trust doctrine, and prayed for injunctive, mandamus, and declaratory relief to recognize the authority of the Board to protect groundwater under the doctrine and to compel the County to put in place a well-drilling permit or management plan to protect public trust resources. The doctrine of exclusive concurrent jurisdiction did not require that the action be heard in the county where rights in certain interconnected groundwater were previously adjudicated. The issue of whether County was compelled to follow the public trust doctrine to monitor groundwater extractions not subject to the prior adjudication was not a matter necessarily related to the prior decree, nor were the issues in the petition "substantially the same" as the issues adjudicated in the prior decree. Code of Civil Procedure Section 392, which provides that venue in certain actions involving real property lies in the county where the real property is located, is not exclusive, so trial court was not required to transfer action properly brought in another county under another statute. Section 392 did not apply to an action allegedly affecting water rights where the individual water rights holders were not parties to the action.
County of Siskiyou v. Superior Court (Environmental Law Foundation) - filed June 13, 2013, Third District
Cite as C067252
Full text http://www.metnews.com/sos.cgi?0613//C067252

Williamson Act
CEQA

County did not violate Williamson Act, which allows counties to contract with landowners to maintain their property as agricultural in exchange for tax benefits, by cancelling contracts to allow development of renewable energy project. Substantial evidence supported board's findings that project benefits substantially outweighed impact on agricultural resources and that there was no proximate, non-contracted land that was a suitable alternative for the proposed project. Approval of project did not violate CEQA where substantial evidence supported board's finding that proposed alternative was infeasible, in part because it would require acquisition of privately owned land located in other counties that might not approve the project.
Save Panoche Valley v. San Benito County (PV2 Energy, LLC) - filed June 25, 2013, Sixth District
Cite as H037599
Full text http://www.metnews.com/sos.cgi?0613//H037599

Los Angeles County Bar Association
2013 Real Property Section Newsletter

 

REAL PROPERTY SECTION PUBLICATIONS
Daniel L. Goodkin, Editor, Real Property Section Review
Norman A. Chernin, Editor, Real Property Section Newsletter

SECTION OFFICERS

Chair

Sarah V.J. Spyksma

First Vice Chair

Norman A. Chernin

Second Vice Chair
Brant Dveirin

Treasurer
Susan J. Booth


Secretary
Caroline Dreyfus

Crocker Chair
Eric Remensperger

Section Administrator
Fatima Jones

EXECUTIVE COMMITTEE MEMBERS

Eric Altoon
Nedra E. Austin
Claire Hervey Collins
Robert T. Flick
Daniel L. Goodkin
Marcia Z. Gordon
Marybeth Heydt
Laurence L. Hummer
Ryan Iwasaka

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


SUBSECTION CHAIRS
Commercial Development and Leasing, Nadav Ravid
Construction Law, James Earle
Finance, Owen Gross
General Real Estate Law, Beth Peterson
Land Use Planning and Environmental Law, Glenn Block
Title Insurance, Susan Vignale

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

The foregoing practice tips were prepared for information purposes only. Such practice tips do not constitute tax, legal or other advice and no responsibility is assumed for any reliance upon them or with respect to assessing or advising the reader as to tax, legal, or other consequences arising from a particular situation. The accuracy of the information
provided should be independently verified by the reader and should not be treated as authoritative.

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