Justia Real Estate & Property Law Opinion Summaries

The case concerns a challenge to the validity of Measure C, a citizens’ initiative placed on the ballot by the City of San Diego for the March 2020 election. Measure C proposed an increase in the city’s transient occupancy tax, with revenues earmarked for homelessness programs, street repairs, and convention center improvements. The measure also authorized the City to issue bonds repaid from the new tax revenues. Measure C received 65.24 percent of the vote, and the city council subsequently passed resolutions declaring the measure approved and authorizing the issuance of related bonds.After the election, Alliance San Diego and other plaintiffs filed actions challenging the City’s resolution declaring Measure C had passed, arguing it was invalid. The City responded with a validation complaint seeking judicial confirmation of the validity of Measure C and the related bond resolutions. California Taxpayers Action Network (CTAN) and other opponents answered, contending that Measure C required a two-thirds vote and was not a bona fide citizens’ initiative. The Superior Court of San Diego County initially granted a motion for judgment on the pleadings, finding that a two-thirds vote was required, and entered judgment against the City. On appeal, the California Court of Appeal, Fourth Appellate District, Division One, reversed and remanded for further proceedings to determine whether Measure C was a bona fide citizens’ initiative.On remand, the trial court conducted a bench trial and rejected CTAN’s arguments, finding that it had subject matter jurisdiction, the case was ripe, the special fund doctrine exempted the bonds from the two-thirds vote requirement, and Measure C was a bona fide citizens’ initiative requiring only a simple majority vote. The California Court of Appeal affirmed the trial court’s judgment, holding that Measure C and the related bond resolutions were valid, and that the trial court properly excluded certain hearsay evidence. View "Alliance San Diego v. California Taxpayers Action Network" on Justia Law

Doug Ridley and Sherry Shen owned a condominium unit in a Santa Clara complex managed by a homeowners’ association (HOA). In April 2018, flooding occurred in the crawlspace beneath their unit, which was a common area under the HOA’s control. Initial investigations suggested the water originated from an undestroyed well, but the HOA delayed meaningful repairs for over 19 months, during which the unit suffered extensive damage, including mold and termite infestation. The HOA repeatedly ignored expert recommendations and shifted its position, ultimately failing to properly investigate or remediate the source of the water and related damage.The homeowners filed suit in the Santa Clara County Superior Court against the HOA and its president, Steve Moritz, alleging breach of the covenants, conditions, and restrictions (CCRs), negligence, nuisance, and other claims. After a lengthy bench trial, the court found in favor of the homeowners on all claims, awarded damages for restoration, lost rent, and emotional distress, and issued an injunction requiring the HOA to complete specified repairs and compensate the homeowners until the work was finished. The court also found the HOA’s conduct grossly negligent and awarded punitive damages.The Court of Appeal of the State of California, Sixth Appellate District, reviewed the case. It affirmed the trial court’s finding that the HOA breached its duties under the CCRs by failing to reasonably investigate and timely repair the common area damage. The appellate court held that substantial evidence supported the trial court’s findings, rejected the HOA’s defenses under the business judgment rule, rule of judicial deference, and the CCRs’ exculpatory clause, and concluded the HOA’s conduct constituted gross negligence. The injunction order was affirmed, and the homeowners were awarded costs on appeal. View "Ridley v. Rancho Palma Grande Homeowners Assn." on Justia Law

Several utility companies operating in California, including in Ventura County, challenged the property tax rates applied to their state-assessed utility property. They argued that the method used to calculate the debt service component of their property tax rate resulted in a higher rate than that applied to locally assessed, nonutility property (referred to as “common property”). The utilities claimed this disparity violated section 19 of article XIII of the California Constitution, which states that utility property “shall be subject to taxation to the same extent and in the same manner as other property.”The utilities filed suit in the Ventura County Superior Court against the County of Ventura and the California State Board of Equalization, seeking partial refunds for property taxes paid between 2018 and 2023. The County demurred, relying on recent appellate decisions that had rejected similar claims. The parties stipulated that the decision in County of Santa Clara v. Superior Court was binding for purposes of this case, and the trial court sustained the demurrer, entering judgment in favor of the County and the Board.On appeal, the California Court of Appeal, Second Appellate District, Division Six, reviewed the case de novo. The court affirmed the trial court’s judgment, holding that article XIII, section 19 does not require that utility property be taxed at the same or a comparable rate as nonutility property. Instead, the provision is an enabling clause that allows utility property to be subject to property taxation, but does not mandate rate equivalence. The court also found that the general uniformity requirement in article XIII, section 1 does not override the Legislature’s authority to implement reasonable distinctions in tax treatment for utility property. The judgment in favor of the County and the Board was affirmed. View "Pacific Bell Telephone Co. v. County of Ventura" on Justia Law

After the owners of a residential property in a common interest development defaulted on their homeowners association (HOA) assessments, the HOA, through its agent Delphi Law Group, LLP, initiated a nonjudicial foreclosure sale. Bird Rock Home Mortgage, LLC was the highest bidder at the initial auction and paid the bid amount. However, Delphi did not immediately transfer the deed, instead extending the bidding period under Civil Code section 2924m. During this extended period, Breaking Ground, LP submitted a higher bid and ultimately received the trustee’s deed to the property.The Superior Court of San Diego County presided over the dispute that followed. Bird Rock sued Breaking Ground, Microcredit Loan Fund, Inc., and Delphi, seeking declaratory relief and to quiet title, arguing that section 2924m did not apply to nonjudicial foreclosure sales enforcing liens for unpaid HOA assessments. Delphi filed a cross-complaint in interpleader regarding the rights to the property and sale proceeds. The case proceeded to a bench trial based on stipulated facts and briefs, with the central issue being whether section 2924m’s extended bidding period applied to this type of foreclosure sale.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the trial court’s judgment de novo. The appellate court held that section 2924m does apply to nonjudicial foreclosure sales enforcing liens for unpaid HOA assessments when the governing declaration creates a contractual lien with a power of sale, qualifying as a “mortgage” under the relevant statutory scheme. The court affirmed the trial court’s judgment, upholding the validity of the sale and deed to Breaking Ground, denying Bird Rock’s claims, and ordering distribution of the sale proceeds. The judgment was affirmed, and costs were awarded to the respondents. View "Bird Rock Home Mortgage v. Breaking Ground" on Justia Law

A charter city in California was required by state law to update its housing element—a component of its general plan addressing housing needs—by October 15, 2021. The city submitted a draft housing element to the California Department of Housing and Community Development (HCD), which found the draft would comply with state law if adopted. However, the city refused to adopt the revised housing element, citing concerns about environmental impacts and the number of affordable housing units required. The city also filed a federal lawsuit challenging the constitutionality of the Housing Element Law, which was ultimately dismissed for lack of standing.The People of California, represented by the Attorney General and the HCD, filed a petition for writ of mandate in the Orange County Superior Court, later transferred to the San Diego County Superior Court, seeking to compel the city to adopt a compliant housing element. The Kennedy Commission, an affordable housing advocacy group, intervened. The trial court granted the State’s petition for writ of mandate, finding the city had a ministerial duty to adopt a compliant housing element, but the court’s order did not include a 120-day compliance deadline or provisional remedies limiting the city’s permitting and zoning authority, as requested by the State. The court also stayed further proceedings due to pending appeals and unresolved cross-petitions.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the case. It held that Article 14 of Chapter 3 of Division 1 of Title 7 of the Government Code, which includes the 120-day compliance deadline and provisional remedies, applies to enforcement actions against charter cities. The court directed the trial court to vacate its prior order and issue a new order including the required compliance deadline and provisional remedies, and to lift its stay and expeditiously resolve remaining issues. The court declined to order entry of final judgment while other pleadings remained unresolved. View "Kennedy Commission v. Superior. Ct." on Justia Law

A group of plaintiffs, who are successors to a 1968 lease for 2,400 acres of undeveloped coastal land in San Luis Obispo County, challenged the lessor’s assertion that their lease was limited to 51 years under California Civil Code section 717, which restricts leases of land for “agricultural purposes” to a maximum of 51 years. The property, known as Wild Cherry Canyon, had historically been used for cattle grazing, but the plaintiffs argued that the primary purpose of the lease was not agricultural, but rather estate planning, development, and, in practice, minimal cattle grazing for wildfire prevention.The Superior Court of San Luis Obispo County conducted a bench trial and issued a detailed statement of decision. The court found that the lease was for agricultural purposes, specifically to continue the property’s existing use for cattle grazing, and that this use fell within the meaning of “agricultural purposes” under section 717. As a result, the court ruled that the lease expired after 51 years, in December 2019, and entered judgment in favor of the lessor, Eureka Energy Company, quieting title in its favor and rejecting the plaintiffs’ claims for declaratory relief and to quiet title to their leasehold interest.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case and reversed the trial court’s judgment. The appellate court held that while “agricultural purposes” in section 717 can include cattle grazing, the minimal grazing conducted here—primarily for wildfire suppression and not as a commercial agricultural activity—did not constitute an “agricultural purpose” within the meaning of the statute. Therefore, the 51-year lease limitation did not apply, and the plaintiffs’ lease was not subject to forfeiture on that basis. The appellate court ordered that judgment be entered in favor of the plaintiffs. View "Pacho Limited Partnership v. Eureka Energy Co." on Justia Law

Several general law cities in California challenged the constitutionality of a state law, Senate Bill No. 9 (SB 9), which requires local agencies to ministerially approve two-unit housing projects and urban lot splits in single-family residential zones. The cities argued that SB 9 usurps their authority over local land use and zoning, imposes a uniform approach that disregards local needs and conditions, and is not reasonably related to its stated goal of ensuring access to affordable housing, as it does not mandate affordability for new units.The Superior Court of Los Angeles County reviewed the cities’ complaint and the state’s motion for judgment on the pleadings and demurrer. The trial court concluded that, as general law cities, the plaintiffs could not invoke the municipal affairs doctrine under article XI, section 5 of the California Constitution, which provides certain protections only to charter cities. The court also found that the cities failed to identify any constitutional provision that SB 9 violated and determined there was no reasonable likelihood that the complaint could be amended to state a viable cause of action. Judgment was entered in favor of the state, and the cities appealed.The California Court of Appeal, Second Appellate District, Division Four, affirmed the trial court’s judgment. The appellate court held that general law cities are not protected by the municipal affairs doctrine and must yield to conflicting state law. The court further found that the cities did not identify a constitutional right that SB 9 violated and failed to show that the statute was unconstitutional on its face or as applied. The court also concluded that the trial court did not abuse its discretion in denying leave to amend the complaint, as no viable claim could be stated. View "City of Rancho Palos Verdes v. State" on Justia Law

Arron and Arthur Benedetti, along with the Estate of Willie Benedetti, challenged a provision in Marin County’s amended local coastal program (LCP) that allows owners of certain farmland to build additional residential units only if they record a restrictive covenant. This covenant requires the owner of the new units to be actively and directly engaged in agriculture, either through direct involvement in commercial agriculture or by leasing the property to a commercial agricultural producer. The Benedettis, who inherited farmland and sought to build a second residence, argued that this provision was facially unconstitutional, claiming it violated the nexus and proportionality requirements established in Nollan v. California Coastal Commission and Dolan v. City of Tigard, and infringed upon their substantive due process rights by compelling them to work in a specific occupation.The Marin County Superior Court initially ruled that the Benedettis could not bring a facial takings challenge under Nollan/Dolan and, applying rational basis review, denied their petition and complaint based on their due process theory. The trial court sustained a demurrer to one cause of action and denied relief on the others, leading to the Benedettis’ appeal.The California Court of Appeal, First Appellate District, Division Four, reviewed the case. The appellate court held that, contrary to the trial court’s conclusion, the Benedettis could raise a facial Nollan/Dolan claim. However, the court found that the restrictive covenant requirement had a sufficient nexus and rough proportionality to the county’s interest in preserving agricultural land and did not violate substantive due process. The court applied rational basis review and determined the provision was reasonably related to a legitimate legislative goal. The judgment of the Marin County Superior Court was affirmed. View "Benedetti v. County of Marin" on Justia Law

A developer purchased a property in Alameda that had previously been used by the U.S. Navy and Coast Guard as housing for military personnel and their families. The property, containing about 150 residential units, was vacant and in disrepair for over a decade before the developer acquired it in 2018. The developer extensively renovated the units and related infrastructure, spending significant sums, and obtained a new certificate of occupancy from the City in 2020. The developer then began renting the units to the general public.After the renovations, a dispute arose regarding whether the renovated units were subject to the City of Alameda’s Rent Control Ordinance. The City’s Rent Program Director determined that the units were not exempt from local rent control under the Costa-Hawkins Rental Housing Act, reasoning that the property had been used for residential purposes prior to the issuance of the new certificate of occupancy. An administrative hearing officer upheld this determination. The developer challenged this decision in the Superior Court of Alameda County, which ruled in favor of the developer, finding that the exemption applied and that the renovated property qualified as new residential housing stock.The California Court of Appeal, First Appellate District, Division Four, reviewed the case. The court held that under the Costa-Hawkins Act, as interpreted by prior decisions such as NCR Properties, LLC v. City of Berkeley and Burien, LLC v. Wiley, the exemption from local rent control for properties with a certificate of occupancy issued after February 1, 1995, does not apply if the property had prior residential use. The court concluded that the extensive renovations and the period of vacancy did not transform the property into new housing for purposes of the exemption. The judgment of the trial court was reversed, and the case was remanded for further proceedings. View "CP VI Admirals Cove, LLC v. City of Alameda" on Justia Law

An elderly plaintiff with significant disabilities inherited her home and, facing a tax sale due to unpaid property taxes, responded to a flyer offering help. She met with the defendant, who had her sign documents that transferred ownership of her home to him, allegedly under the pretense of providing a loan. The documents did not provide for any payment to the plaintiff, only that the defendant would pay the back taxes. The plaintiff later attempted to cancel the transaction, believing it had been voided when the defendant returned her documents and she received no loan. Several years later, the defendant served her with an eviction notice, prompting her to file suit alleging fraud, undue influence, financial elder abuse, and other claims, seeking cancellation of the transfer and damages.The case was heard in the Superior Court of Los Angeles County. The defendant, representing himself, filed an answer and a cross-complaint, asserting that he had purchased the property and that the plaintiff had lived rent-free for years. The litigation was marked by extensive discovery disputes, with the plaintiff filing nine motions to compel and for sanctions due to the defendant’s repeated failures to provide timely and adequate discovery responses, appear for depositions, and pay court-ordered sanctions. The court issued incremental sanctions, including monetary and issue sanctions, before ultimately imposing terminating sanctions by striking the defendant’s answer and cross-complaint, leading to a default judgment in favor of the plaintiff.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. It held that the trial court did not abuse its discretion in imposing terminating sanctions after the defendant’s persistent and willful noncompliance with discovery orders. The court also found that the plaintiff’s complaint provided sufficient notice of damages, and that the award of damages and attorney fees was supported by substantial evidence. The judgment of the trial court was affirmed in all respects. View "Atlas v. Davidyan" on Justia Law