Volume 3, Number 9 Join the Real Property Section Contact Us

August 2008     

 

 


Castle Lyons Expert Real Estate Witness


Recent Cases

Cases from July 1 through July 31

-Construction Contracts- -Land Use-
-Easements- -Mechanic's Liens-
-Environmental Law- -Nuisance-
-Homeowners Associations- -Real Property Taxation-
-Homesteads- -Trust Deed Foreclosure-
-Inverse Condemnation- -Specific Performance-
-Joint Ventures- -Subdivisions-
-Judgment Liens-

-Scheduled Events-


-Construction Contracts-
Where subcontractor entered into residential construction subcontract agreement with developer-builder of a project and agreed to indemnify developer-builder from "all claims for damages to persons or to property and claims for loss, damage and/or theft...growing out of the execution of [subcontractor's] work," and a specific promise to "defend any suit or action brought against [developer-builder] founded upon the claim of such damage...loss,...or theft" at subcontractor's own expense, contract obliged subcontractor to defend developer-builder in lawsuits brought against both parties, insofar as plaintiffs' complaints alleged construction defects arising from subcontractor's negligence, even though a jury ultimately found that subcontractor was not negligent, and parties previously accepted an interpretation of subcontract that gave builder no right of indemnity unless the subcontractor was negligent. By specifying an indemnitor's "duty to defend" indemnitee upon latter's request, indemnitor assumes a duty to defend against all claims embraced by the indemnity unless agreement provides otherwise; however, this duty is separate from a contractual obligation to pay an indemnitee's defense costs, after the fact, as part of any indemnity owed under agreement. Duty "to defend" expressly set forth in subcontract clearly contemplated a duty that arose when a claim was made, and was not dependent on whether the very litigation to be defended later established subcontractor's obligation to pay indemnity.

Crawford v. Weather Shield MFG. Inc. - filed July 21, 2008
    Cite as 2008 SOS 4289
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-Easements-
Where husband and wife divorced, separating land into two parcels and ultimately conveying it to others, and sons had continued to live on wife’s parcel prior to conveyance, trial court’s conclusion in action by wife’s successors-in-interest for prescriptive easement across parcel held by husband’s successors-in-interest that sons’ use of road was not adverse but a matter of family accommodation was reasonable, and plaintiffs were not entitled to presumption that sons’ open, notorious, and continuous use of land was adverse.

Grant v. Ratliff - filed July 16, 2008, Second District, Div. Six
     Cite as 2008 SOS 4210
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-Environmental Law-
Specific performance was an appropriate remedy for a buyer's breach of a contractual obligation to perform environmental remediation by closing idle oil wells pursuant to a land sale contract because seller had bargained to avoid potential future liability, and a covenant to maintain a property in a specified condition is entitled to a presumption that a breach of this promise cannot be adequately compensated by money damages.

Union Oil Company of California v. Greka Energy Corporation - filed July 2, 2008, publication ordered July 24, 2008, Second District, Div. Six
     Cite as 2008 SOS 4431
     
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-Homeowners Associations-
Condominium owners' association, which sought to intervene in a construction defect action filed by homeowner's association against developer of complex that included facilities shared by the two associations, was not entitled to intervene as a matter of right because it did not have a direct interest in action. Where condominium association did not demonstrate that disposition of action in its absence would impair or impede its ability to protect its interest in repair of allegedly defective joint common facilities, under either a de novo or abuse of discretion standard, denial of intervention was proper. Trial court properly denied condominium association's bid to intervene in order to pursue claim that it was entitled to a portion of plaintiff's recovery from developer pursuant to a joint use and maintenance agreement between it and plaintiff, since intervention would have improperly enlarged the issues in the litigation, the respective obligations of the two associations for repair and maintenance of joint common areas being independent of the issues in construction defect action.

Siena Court Homeowners Association v. Green Valley Corporation - filed July 18, 2008, Sixth District
     Cite as 2008 SOS 4300
     
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-Homesteads-
Under Code of Civil Procedure Sec. 697.310(a), allowing a creditor to obtain a judgment lien on real property owned by a debtor that attaches to any interest in real property acquired after lien was recorded, lien that creditor recorded prior to debtor’s acquisition of a condominium had priority over any possible homestead exemption where debtor failed to show he purchased property with proceeds from sale, damage, or destruction of a prior homestead within Sec. 704.720’s six-month safe harbor period.

SBAM Partners v. Wang - filed July 9, 2008, Second District, Div. Three
     Cite as 2008 SOS 4052
     
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-Inverse Condemnation-
Damages claims by private landowners against public utility, claiming that defendant was invading plaintiffs’ property rights by attempting to sell to telecommunications providers a use of rights-of-way that utility did not own, were not preempted by Public Utilities Code Sec. 1759, which precludes trial courts from reviewing decisions of the Public Utilities Commission or ruling on matters within the PUC’s jurisdiction, because the commission has no regulatory authority or interest in private disputes over property rights between utilities and private landowners. In granting relief for alleged invasion of plaintiffs’ property rights, trial court may not award "disgorgement of unjustly obtained profits" or restitutionary or declaratory or other relief requiring utility to pay to plaintiffs some or all of the revenues from leasing or licensing its facilities since allocation of such revenues is within PUC’s jurisdiction.

Koponen v. Pacific Gas & Electric Company - filed July 28, 2008, First District, Div. One
     Cite as 2008 SOS 4624
     
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-Inverse Condemnation-
Where water collected in a public catch basin off a public street and channeled into a section of public drain pipe, then private drain pipe, then flowed onto plaintiffs' property and caused damage, city could be held liable in inverse condemnation for any damage substantially caused by city's unreasonable diversion of water through city-owned portions of drainage system; entire drainage system did not need to be a public improvement to find city liable.

Skoumbas v. City of Orinda - filed July 31, 2008, First District, Div. Three
     Cite as 2008 SOS 4734
     
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-Joint Ventures-
Where plaintiff and defendant testified they worked together for common purpose of developing real estate for profit and entered into a memorandum of understanding clearly stating that plaintiff and defendant would work together toward common goal of acquiring, developing, and selling specific property and providing a profit sharing formula, substantial evidence supported a finding of fiduciary duty between parties as joint venturers. Substantial evidence demonstrated that defendant breached this duty by attempting to oust plaintiff as CEO of corporation formed by parties that owned property at issue, canceling plaintiff’s stock certificate in corporation, and transferring funds from corporate bank account to one plaintiff could not access. Where parties’ MOU was only agreement upon which plaintiff asserted a cause of action for attorney fees and only agreement incorporated by reference into complaint, and MOU did not contain an attorney fee provision, plaintiff had no legal basis for fee award sought.

Pellegrini v. Weiss - filed July 29, 2008, Sixth District
     Cite as 2008 SOS 4562

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-Judgment Liens-
Where U.S. District Court for the District of Hawaii entered judgment that prevailing plaintiff later registered in United States District Court for the Northern District of Texas to enforce judgment against non-party Texas defendant and defendant contended judgment was not timely registered because under Texas' borrowing statute, judgment had expired, then plaintiff sought to have Hawaiian district court declare judgment live and extend judgment, defendant was entitled to intervene in extension proceeding because defendant had a significant protectable interest not having its property executed upon pursuant to an expired judgment and loss of its real property. Although registering a judgment is functional equivalent of obtaining a new judgment in court where registration takes place, effect is to allow newly registered judgment to be enforced for period allowed by state of registration; registration in one district--even if accomplished when the judgment was live--does not extend statute of limitations in other districts; thus, district court clearly erred in resurrecting judgment after judgment had expired before plaintiff sought to extend it.

In re Estate of Marcos - filed July 31, 2008
     Cite as 06-16301

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-Land Use-
A party bringing a challenge governed by Government Code Sec. 65009(d) has 90 days from date a legislative action is taken or approval is given to notify local land use authority of any claimed deficiencies in such an action or approval, and party's claim accrues 60 days after giving such notice. Plaintiff's causes of action based on alleged inconsistencies between city's growth management program and city's obligations under state law that did not challenge a specific action taken by city were not subject to Sec. 65009's statute of limitations because a failure to comply with duties allegedly imposed by law is neither an "action" nor a "decision" and were subject to Code of Civil Procedure Sec. 338(a)'s statute of limitations, which applies to an action upon a liability created by statute, other than a penalty or forfeiture. Cause of action based on alleged discrimination arising from events that took place following city's enactment of general plan was not subject to Sec. 65009's statute of limitations. Where plaintiff alleged conflict between city's obligation to meet regional housing needs and city's growth control ordinance, which could be resolved through declaratory and mandamus relief and alleged city's failure to provide affordable housing harmed parties and public, dispute was ripe for adjudication. Because city's duty to ameliorate shortage of affordable housing is "sharp" and the public's need for such housing is "weighty," citizen had sufficient interest to confer standing. Organization that alleged facts establishing that city's housing policies caused a drain on organization's resources that it was sufficiently established an aggrieved party.

Urban Habitat Program v. City of Pleasanton - filed June 20, 2008, publication ordered July 21, 2008, First District, Div. Two
     Cite as 2008 SOS 4333
     
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-Land Use-

Action to recover fees paid for sewer service provided by city, based on allegation that such fees constituted a non-voter-approved tax in violation of Proposition 218, the Right to Vote on Taxes Act, was subject to state and local laws requiring that plaintiff pay the disputed amounts under protest and then sue for refund.

Los Altos Golf and Country Club v. County of Santa Clara - filed June 30, 2008, publication ordered July 25, 2008, Sixth District
     Cite as 2008 SOS 4467
     
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-Land Use-

Where members of a private nonprofit organization dedicated to water skiing constructed various structures in an area designated "open space" in county plan, such development violated county’s land use and related ordinances and constituted a public nuisance. Organization had no protectable property right or interest in illegal development. Where organization was aware development violated county land use and zoning laws, and continued illegal use of area until compelled to desist, organization did not suffer actual injury in reliance on county’s actions or inactions. Absent exceptional circumstances, doctrine of equitable estoppel will not allow a landowner to circumvent land use restrictions when public entity fails to take early action to warn landowner that plans violate land use requirements.

Golden Gate Water Ski Club v. County of Contra Costa - filed July 25, 2008, First District, Div. One
     Cite as 2008 SOS 4541
     
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-Mechanic's Liens-
Where plaintiff, a contractor with a single claim for payment for building a street through a nine-home subdivision, recorded separate mechanic's liens against the nine parcels, each for the full amount of that claim, even though it conceded that it could only be paid once, defendant was entitled to have all nine liens released upon posting a single surety bond for one and one-half times the amount of the claim.

T.O. IX v. Superior Court (Asphalt Professionals, Inc.) - filed July 24, 2008, Second District, Div. Six
     Cite as 2008 SOS 4464
     Full text


-Nuisance-
Purchasers of commercial real property who sued former owners for continuing nuisance, alleging that defendants polluted the property with chemical solvents before they sold it to plaintiffs, and that because of the contamination, a prospective lender had refused to refinance plaintiff’s note secured by a first trust deed to the property, could not recover the higher interest that they allegedly had to pay because of that refusal. Plaintiffs were effectively claiming a diminution in value, not physical damage to property, and damages for diminution in value may only be recovered for permanent, not continuing, nuisances.

Gehr v. Baker Hughes Oil Field Operations, Inc. - filed July 30, 2008, Second District, Div. Four
     Cite as 2008 SOS 4661
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-Real Property Taxation-
Proposition 218, the Right to Vote on Taxes Act, requires trial court, in determining whether an assessment specially and proportionally benefits the people who must pay it, so that it is not a tax subject to voter approval, to apply an independent standard of review rather than the deferential abuse-of-discretion standard normally applied to quasi-legislative acts of local governments. Where local agency created a large open space district to be funded by an assessment on property owners without identifying any specific open space acquisition or planned acquisition, agency could not show distinct benefits to particular properties above those that the general public using and enjoying the open space received, so assessment was subject to voter approval under Proposition 218.

Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority - filed July 14, 2008
     Cite as 2008 SOS 4104
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-Trust Deed Foreclosure-
Where property was foreclosed upon before trial court’s order requiring defendant to specifically perform on a contract to sell property to plaintiff, and court ordered defendant to pay plaintiff rents accruing during time defendant was able to perform but refused, defendant was not entitled to offset rent payments with an amount in compensation for the loss of use of purchase price because property was over-encumbered, and defendant would not have obtained any money from property’s sale.

Kassir v. Zahabi -filed March 5, 2008, publication ordered April 3, 2008 (received July 16, 2008), Fourth District, Div. Three
      Cite as 2008 SOS 4270

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-Specific Performance-
Where property was foreclosed upon before trial court’s order requiring defendant to specifically perform on a contract to sell property to plaintiff, and court ordered defendant to pay plaintiff rents accruing during time defendant was able to perform but refused, defendant was not entitled to offset rent payments with an amount in compensation for the loss of use of purchase price because property was over-encumbered, and defendant would not have obtained any money from property’s sale.

Kassir v. Zahabi -filed March 5, 2008, publication ordered April 3, 2008 (received July 16, 2008), Fourth District, Div. Three
      Cite as 2008 SOS 4270

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-Specific Performance-
Specific performance was an appropriate remedy for a buyer's breach of a contractual obligation to perform environmental remediation by closing idle oil wells pursuant to a land sale contract because seller had bargained to avoid potential future liability, and a covenant to maintain a property in a specified condition is entitled to a presumption that a breach of this promise cannot be adequately compensated by money damages.

Union Oil Company of California v. Greka Energy Corporation - filed July 2, 2008, publication ordered July 24, 2008, Second District, Div. Six
     Cite as 2008 SOS 4431
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-Subdivisions-
Subdivision map laws in effect in 1915 imposed few or no constraints on development and thus did not "regulat[e] the design and improvement of subdivisions" within the meaning of Government Code Sec. 66499.30, a provision of the Subdivision Map Act recognizing antiquated maps recorded in accordance with such laws. County supervisors’ policy of refusing to recognize pre-1919 maps did not constitute a "de facto land use regulation" whose lack of legislative formalities would violate due process rights.

Witt Home Ranch, Inc. v. County of Sonoma - filed July 29, 2008, First District, Div. One
     Cite as 2008 SOS 4665
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-Subdivisions-
Where parcels in a subdivision are re-subdivided by a subsequent parcel map and recorded in compliance with the Subdivision Map Act, the new parcel map amends the provisions of any previously recorded parcel map made in compliance with the act. Where owners of certain parcels were misled to believe, by the incorporation of an older parcel map in their deeds, that they had an easement connecting their parcels to a certain road, the defendants--whose predecessors in interest purported to convey an easement that they could not convey--were estopped to claim that more recent parcel map showing the easement did not constitute an amendment of the older parcel map.

Christian v. Flora - filed June 30, 2008, Third District
     Cite as 2008 SOS 3894
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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
Devid 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