Welcome to Abbott & Kindermann, Inc.’s Inaugural Real Estate Law Action News. This summary provides a follow-up to the Abbott & Kindermann Land Use Conference and Outline provided in January 2020 with new case summaries from 2020.
- PREVIOUS MONTH’S UPDATE
Abbott & Kindermann, Inc., will begin providing a monthly review for real estate law starting in May 2020. Check back next month for a summary of this month’s Real Estate Law Action News.
- CASES PENDING AT THE CALIFORNIA SUPREME COURT
There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:
Weiss v. People ex rel. Dept. of Transportation, S248141. (G052735; 20 Cal.App.5th 1156; Orange County Superior Court; 30-2012-00605637.) Petition for review after the Court of Appeal reversed the judgment in a civil action. This case presents the following issue: Can the procedure permitted by Code of Civil Procedure section 1260.040 be used in an inverse condemnation action to determine in advance of a bench trial whether a taking or damaging of private property has occurred?
- UPDATE
A. TAKINGS
The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7 Cal.4th 327 (1994), held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property in order for the County to be held liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since there was no evidence that the County controlled or even owned any portion of the private pipeline. The Court, thus, held that Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorneys fees on appeal.
B. GENERAL REAL ESTATE
Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. (Code of Civ. Proc., § 425.16, subd. (e)(3).) The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; and FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:
- Statements or conduct concerning a person or entity in the public eye,
- Conduct that could directly affect a large number of people,
- A topic of widespread public interest,
- Whether the issues affect only those directly involved,
- Gathering ammunition for a private controversy, and
- Where issues are too remotely connected to the public conversation to assert the issue within the public interest.
The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories because, among other reasons, the use of a website to seek more ammunition to continue the clash did not otherwise inflate this private squabble amongst two neighbors into a matter of widespread public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.
The Court of Appeal awarded statutory attorneys fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers’ right of first refusal. Plaintiffs, the Houses, appealed the decision of the trial court denying their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered: (1) whether the Fosses entering the Houses’ leased property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses, and (2) whether such claims gave rise to an award of attorney’s fees. Code of Civil Procedure section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” Defendant argued that the Houses could not recover under Section 1021.9 for attorneys fees because the majority of their fees related back to other claims and did not represent the actual fees incurred for the trespass claims. The Court held that the Houses could recover attorneys fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land and the other related claims may be sufficiently “intertwined, that it would be impracticable, if not impossible, to separate [the fees for each claim].” The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses’ attorney’s fees under section 1021.9 as it relates to the trespass claim and determine whether apportionment is appropriate under the circumstances.
C. COMMON INTEREST DEVELOPMENTS
In a construction defect case before the Second District Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for the project developer in a lawsuit with the condominium association (“association”). The Court of Appeal concluded that the requirement in the association’s governing documents that a majority vote of members must vote in favor of binding arbitration prior to beginning, and that the arbitrator’s rejection of a ratifying vote of the association constituted an “unreasonable servitude” under Code of Civil Procedure section 1286.2, subdivision (a)(4). As the Court reasoned, the arbitrator’s award violated the public policy embodied in the statute because it gives a developer standing to assert a clause intended to protect the association’s members as a bar to rights of the association. The Court reversed the trial court’s decision and awarded costs to the appellant.
D. REAL ESTATE CONTRACTS & TRANSACTIONS
On appeal, the Second District Court of Appeal reversed the lower court’s denial of Appellants’, Jaman Properties 8 LLC (“Jaman”), motion to compel arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit against Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between the parties, Jaman moved for arbitration under the Federal Arbitration Act, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The appellate court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates the FAA on its face. The real estate purchase agreement between the parties expressly stated that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. It reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA was immaterial since the agreement’s incorporation of the FAA meant that the FAA preempts the CAA and controls. Thus, the Court held that Victrola must arbitrate its claims under the FAA unless the trial court is able to find that Jaman is estopped from doing so as a result of Jaman’s reliance on provisions of the CAA earlier in the litigation and remanded the case back to the trial court to make that determination.
E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
The Second District Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on a lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court held that because the 1950 affidavit was not recorded meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the affidavit. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.
In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence and continually parked inoperable cars on plaintiff Madani’s property, the Second District Court of Appeal affirmed that the fence and parked cars were continuing encroachments. It held that since the fence and parked cars were a continuing encroachment, the statute of limitations did not apply and the Court could review the case subject to independent review of the facts. The appellate court also agreed with the trial court that costs to move the fence were insufficient to warrant leaving the fence as a permanent structure. It noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. It reasoned that since the trial court granted injunctive relief, that was sufficient to deny an award of monetary damages and ruled both parties shall split costs.
William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.