MONARCH POINT HOMEOWNERS ASSOCIATION v. ARDITI No. G043700.

MONARCH POINT HOMEOWNERS ASSOCIATION, Plaintiff and Respondent, v. SCOTT ARDITI et al., Defendants and Appellants.

Court of Appeals of California, Fourth District, Division Three.
Filed July 6, 2011.
Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller, Matthew B. Stucky; Hickey & Petchul, David A. Hickey and Christopher J. Bonkowski for Plaintiff and Respondent.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

RYLAARSDAM, ACTING P. J.

In our prior opinion, we affirmed the trial court's order granting a preliminary injunction in favor of plaintiff Monarch Point Homeowners Association against defendants Scott Arditi and his wife, Loren Zidell, prohibiting the short-term rental of their property. (Monarch Point Homeowners Association v. Scott Arditi (June 26, 2009, G040668) [nonpub. opn.].) Upon remand, plaintiff obtained summary judgment on its complaint for injunctive relief, nuisance, breach of the covenants, conditions, and restrictions (CC&R's) and declaratory relief and an order permanently enjoining defendants from renting or advertising their property for rent for less than 30 days. It also secured judgment on the pleadings on defendants' cross-complaint for declaratory relief. Thereafter, the court granted plaintiff's two motions for attorney fees, one as to its complaint and the other as to the cross-complaint.

An amended judgment including the fee award on the complaint was entered but defendants appealed from the two earlier separate judgments on the complaint and cross-complaint and from the order awarding attorney fees on the complaint. They did not appeal from the order awarding attorney fees as to the cross-complaint.

Defendants contend triable issues of material fact remain as to the interpretation of the CC&R's, and the causes of action for breach of the CC&R's and nuisance and that the court abused its discretion in denying their request for a continuance. They also argue that if the judgments are reversed, the attorney fee awards should be as well. We affirm.

FACTS

We incorporate the facts from our prior opinion up to the granting of the preliminary injunction.

"Plaintiff manages the residential development where defendants bought a house in 2005. Five months later, defendants began short-term rentals of their house for vacations, parties, and commercial uses, including the filming of movies and commercials.

"In February 2007, plaintiff sent defendants a cease and desist letter citing sections 10.1, 10.2, 10.3, and 10.14 of the CC&R's. Section 10.1 allows the property to be used only as a single family residence. Section 10.2 forbids the use of the property for business or commercial purposes while section 10.3 prohibits noxious or offensive activity. Section 10.14 in turn bans "further partition or subdivi[sion] of . . . lot[s] . . . [but not] the right of an [o]wner (1) to rent or lease all or any portion of his [l]ot by means of a written lease or rental agreement subject to the restrictions of this [d]eclaration, so long as the [l]ot is not leased for transient or hotel purposes . . . ."

"When defendants continued short-term rentals of their property, plaintiff sent notices of hearing to address the issue. Defendants attended several hearings but the parties were unable to resolve their differences.

"In August, plaintiff adopted an addendum to its rules and regulations specifically prohibiting short-term rental of residential properties: `No [o]wner shall rent, lease, or let all or any portion of his or her [l]ot for any period less than thirty . . . days. No [o]wner may advertise, either in print format or electronic media, including the [I]nternet, an offer to rent, lease, or let all or any portion of his or her [l]ot for transient, hotel or vacation rental purposes for a period of less than thirty . . . days. Any lease or rental agreement shall be in writing and any tenant shall abide by and be subject to all the provisions of the Association's governing documents . . . ." Defendants refused to comply with the new rule and were fined.

"Plaintiff sued defendants in January 2008, alleging causes of action for nuisance, breach of CC&R's, and declaratory relief, seeking a preliminary and a permanent injunction. Three months later, plaintiff moved for a preliminary injunction, asserting defendants' short-term rental of the property violated section 10.14 of the CC&R's and constituted a nuisance. [It] submitted the declarations of several of defendants' neighbors attesting to defendants' Internet advertisement of the property for short-term rental and their short-term rental of their property as a weekly vacation or party house, a commercial film set for movies and commercials, including the use of bright flood lights with bounce screens and other equipment, which disrupted the serenity of the neighborhood, and for other commercial gatherings. The declarants described broken glass, trash and liquor bottles strewn on the streets and sidewalks near defendants' property, which they claimed created a nuisance and safety hazard for pedestrian and vehicular traffic. They also attested to the excessive parking of cars and other commercial vehicles on the street when the property was used for commercial purposes.

"Defendants filed opposition and objected to the declarations supporting the motion. After a hearing, the court granted the motion without ruling on defendants' objections or setting forth any findings." (Monarch Point Homeowners Association v. Arditi, supra, G040668, at pp. 2-3.) We affirmed the order.

Upon remand, plaintiff moved for summary judgment on the ground the CC&R's prohibit the short-term rental and commercial use of defendants' property. It cited our prior opinion in G040668 as the "law of the case" on the interpretation of the CC&R's. It further argued that because the CC&R's provided any violation constituted a nuisance and defendants breached their provisions, plaintiff was entitled to summary judgment.

Defendants filed, in pro. per., a combined opposition and summary judgment motion, requesting a 45-day extension to hire an attorney in the event the court determined it was procedurally deficient. They also asserted there were triable issues of fact.

Although the court did not expressly address the continuance request, it implicitly denied it when it granted plaintiff's summary judgment motion and issued a permanent injunction. It found "the CC&R[']s prohibit the use of the property for [any period of less than 30 days or commercial purposes] and that plaintiff is entitled to enforce such provisions. [It] further f[ound] that defendant[s'] responsive brief is procedurally and substantively defective and that defendants have not met their burden to rebut the facts entitling plaintiff to summary judgment." It also sustained plaintiff's objections to defendants' evidence and hearsay statements.

Plaintiff moved for judgment on the pleadings as to defendants' cross-complaint for declaratory relief. Defendants applied ex parte to continue the dates of the hearing on the motion and trial and to set a briefing schedule to vacate the summary judgment order based on a "CC&R[']s expert witness" they recently retained. The court denied the ex parte application. It subsequently granted plaintiff's motions for judgment on the pleadings and attorney fees as to the complaint and cross-complaint.

DISCUSSION

1. Request For Continuance

Defendants contend the trial court erred in denying their request for a continuance. We disagree.

Code of Civil Procedure section 437c, subdivision (h) (all further statutory references are to this code unless otherwise stated) "mandates a continuance of a summary judgment hearing upon a good faith showing by affidavit that additional time is needed to obtain facts essential to justify opposition to the motion. [Citations.]" (Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 253-254.) The declaration "`must show: (1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts. [Citations.]' [Citation.]" (Frazee v. Seely (2002) 95 Cal.App.4th 627, 633.) "Continuance of a summary judgment hearing is not mandatory, however, when no affidavit is submitted or when the submitted affidavit fails to make the necessary showing under section 437c, subdivision (h). [Citations.]" (Cooksey v. Alexakis, supra, 123 Cal.App.4th at p. 254.)

Here, a continuance was not mandated because defendants failed to provide the required affidavit or identify any facts they sought to obtain that were necessary to oppose the motion. Nevertheless, under such circumstances the court has discretion to determine whether the party requesting the continuance has established good cause for the court to grant it. (Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 716.) In "the absence of an affidavit that requires a continuance under section 437c, subdivision (h), we review the trial court's denial of appellant's request for a continuance for abuse of discretion." (Cooksey v. Alexakis, supra, 123 Cal.App.4th at p. 254.) No abuse of discretion has been shown.

Defendants sought a continuance only "in the event that the court feels that the[ir] documents are not in a satisfactory form, [in which case, they] respectfully request[ed] a 45[-]day extension to enable them to find an affordable attorney to prepare the documents." In other words, they wanted a continuance to hire an attorney if the court was going to rule against them. But they cite no authority requiring a court to grant a continuance contingent upon an adverse ruling. Defendants have thus forfeited that contention. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.)

Unlike the case defendants cite, Parkview Villas Assn., Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, which did not address continuances and instead held a trial court abused its discretion in granting summary judgment based on a defective separate statement (id. at p. 1201), the court here did not deny the continuance solely on procedural grounds. Although it determined defendants' opposition was procedurally defective, the court also found it was substantively deficient in that defendants failed to rebut plaintiff's entitlement to summary judgment. Defendants' continuance request did not point to anything that would have affected the court's ruling on the merits. No showing was made that facts essential to opposing the motion existed, nor any explanation given as to why defendants believed such facts existed or why additional time was needed to obtain them.

Defendants maintain "unavailability of counsel" constitutes good cause, relying on Lerma v. County of Orange, supra, 120 Cal.App.4th 709. In Lerma, a panel of this court concluded the trial court abused its discretion in denying a request for a continuance of a motion for summary judgment because the plaintiffs' counsel was admitted to the hospital to have surgery to remove his cancerous bladder the day the motion was served and did not learn about the motion until his release from the hospital two days before the opposition was due. He then filed a request for a continuance along with a timely, albeit perfunctory, opposition to the motion addressing the merits.

Here, in contrast, defendants substituted their attorney out of the action in September 2009. Although plaintiff filed and served its summary judgment motion in October 2009, defendants waited until December to attempt to find "an affordable law firm to prepare the documents" but were unable to because of the holidays. The hearing on the motion was not held until January 2010, at which time defendants were still self-represented. Defendant had more than two months to prepare their opposition and sufficient time to hire an attorney had they wished to do so.

Finally, defendants argue the court "`misled'" them "to believe that they would be given an opportunity" "to obtain counsel to file a procedurally and substantively proper opposition brief and separate statement . . . ." The court never said that. At the hearing, when defendants requested an extension to hire an attorney if the format of their opposition was going to work against them, the court stated, "Well, it's a little late to be doing that" and that it would "let [them] know if [it found] [their] format acceptable," which it later did in its minute order granting summary judgment. Nothing in the colloquy suggests the court promised them the chance to hire an attorney to file a new opposition.

In their reply brief, defendants argue they attached an expert witness declaration to their ex parte application filed after the grant of summary judgment. They assert their failure to present the additional evidence until after the court granted summary judgment "is explained, and excused, by the fact that the judge misled [them] to believe he would consider their request for a continuance to obtain counsel and submit a proper opposition . . . ." The claim lacks merit as we have already concluded the court did not mislead them by its statement it would let them know if their opposition was acceptable.

2. Triable Issues

a. Section 10.14

Defendants assert the court erred in determining section 10.14 of the CC&R's banned short-term rental of their property. They argue the section is ambiguous because plaintiff cited an ordinance in its moving papers to define the phrase "hotel or transient purposes" and adopted "a brand new rule in August 2007 in order to expressly prohibit short-term rentals of 30 days or less." They also attempted to present evidence from an expert witness on the interpretation of the CC&R's after summary judgment was granted, but the court refused to consider it.

But as we explained in our prior opinion, the interpretation of a written instrument like the CC&R's presents a question of law for the court where, as here, it does not turn on the credibility of extrinsic evidence. Applying a de novo review, we concluded "section 10.14 bans the rental of residential lots to provide `accommodations, means, and services' on a weekend, weekly, and similar `short-time' periods" and that "defendants' alleged conduct would be prohibited under section 10.14 even under the definitions offered by [them] . . . ."

Our decision on the issue constitutes law of the case. "That doctrine provides that where an appellate court states in its opinion a principle of law necessary to its decision, the principle becomes the law of the case for later proceedings, including appeals. [Citation.] The general rule is that the doctrine applies only to issues which were both presented and determined in a prior appeal. [Citation.] `Where the particular point was essential to the decision, and the appellate judgment could not have been rendered without its determination, a necessary conclusion in support of the judgment is that it was determined. With respect to such a point, the appellate decision is law of the case even though the point was not raised by counsel or expressly mentioned.' [Citation.]" (Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 841.)

Citing Bovard, defendants contend our prior opinion was not law of the case because the issues in this appeal were not "essential" to the earlier decision and that a preliminary injunction ruling is not a determination of the merits, unlike a summary judgment ruling. But where a court reviewing an order granting a preliminary injunction "reach[es] the merits `of any . . . legal questions . . .' [citation] . . . then of course its ruling on that issue of law may become `law of the case.' [Citation.]" (Crespin v. Coye (1994) 27 Cal.App.4th 700, 708.) The issue regarding section 10.14 of the CC&R's was necessary to our prior decision and the law of the case doctrine applies.

b. New Rule

Defendants contend a triable issue of fact remains regarding the validity of the addendum adopted in August 2007 imposing restrictions on short-term rentals of less than 30 days. They assert "the `new rule'" was invalid because their summary adjudication motion on the cross-complaint argued a "short-term lease restriction . . . could only be added as an amendment to the CC&R's, which would require compliance with the super-majority amendment approval process set forth in [s]ection 16.5 of the CC&R's . . . or a motion under Civil Code section 1356." According to defendants, plaintiff "tendered absolutely no evidence on that issue to show that it complied with [s]ection 16.5 of the CC&R's in adopting the `new' restriction . . . ." But they have forfeited that argument for purposes of this appeal by not including the argument in their opposition to plaintiff's motion for summary judgment. (California Restaurant Management Systems v. City of San Diego (2011) ___ Cal.App.4th ___ [2011 WL 2138093, p. 6, fn. 7] ["When an argument is not asserted below in opposition to a motion for summary judgment, it is deemed waived and will not be considered for the first time on appeal to reverse an order granting summary judgment"].)

Moreover, we decided in the prior appeal "the addendum was not a new use restriction, a more restrictive rule or regulation, or an amendment to the CC&R's. Rather, the addendum merely clarified the use restriction contained in section 10.14." (Monarch Point Homeowners Association v. Arditi, supra, G040668, p. 7.) Because this was essential to our opinion, it constitutes law of the case.

c. Breach of CC&R's and Nuisance

Defendants argue Scott Arditi's declaration in opposition to the motion for preliminary injunction "effectively contradicted" plaintiff's evidence and created triable issues of fact as to the causes of action for breach of the CC&R's and nuisance. But he admitted in that declaration to short-term rentals of the property, including a day, a few days, and a week. Additionally, he conceded in his deposition that he would have continued renting the property for weekly periods or less if the preliminary injunction had not issued. As we have concluded, the CC&R's prohibit such short-term rentals. Section 16.1(b) of the CC&R's provides, "The result of every act or omission whereby any of the covenants contained in the [CC&R's] are violated . . . is hereby declared to be and constitutes a nuisance . . . ." Under that section, defendants' admitted breaches of the CC&R's gave rise to nuisance liability. (See Woodridge Escondido Property Owners Assn v. Nielsen (2005) 130 Cal.App.4th 559, 570-571; Cutujian v. Benedict Hills Estate Assn. (1996) 41 Cal.App.4th 1379, 1389-1390.) In light of that, Arditi's denial of "appreciable noise, trash, or other interference" was immaterial and did not create a triable issue of material fact as those facts are not essential to the judgment. (Riverside County Community Facilities Dist. v. Bainbridge 17 (1999) 77 Cal.App.4th 644, 653 ["To be `material' for purposes of a summary judgment proceeding, a fact must . . . be essential to the judgment in some way"].)

3. Attorney Fees

Defendants' only contention with respect to the order awarding attorney fees is that it should be reversed if the judgments are reversed. Because we affirm the judgments we also affirm the award of attorney fees.

DISPOSITION

The judgments are affirmed. Plaintiffs are entitled to costs on appeal.

WE CONCUR:

O'LEARY, J.

IKOLA, J.


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