HIGH COUNTRY VILLAS MANAGEMENT CORPORATION v. SARNOWSKY

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Court of Appeal, Fourth District, Division 1, California.

HIGH COUNTRY VILLAS MANAGEMENT CORPORATION, Plaintiff and Appellant, v. Manley SARNOWSKY et al., Defendants and Appellants.

No. D014631.

Decided: December 03, 1992

Feist, Vetter, Knauf and Loy, and John M. Hansen, for plaintiff and appellant. Schulman & Schulman and Elizabeth Schulman for defendants and appellants.

Plaintiff High Country Villas Management Corporation appeals from a summary judgment dismissing its complaint against defendants Manley and Linda Sarnowsky and from the court's later award of $12,500 attorney's fees to the Sarnowskys.   The Sarnowskys cross-appeal seeking additional attorney's fees.   We reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

High Country is a 115 unit condominium project located in Encinitas, California.   The Sarnowskys own 1972 Ursina Place, a unit within unit 7 of Villa Park, a part of the condominium project.   The Sarnowskys bought the unit before January 1, 1985.   At all times relevant to this litigation the Sarnowskys leased their unit to Josephine Frie, a woman in her 70's and her 35 year old son.

In January 1987 High Country amended the declaration of covenants, conditions and restrictions (CC & R's) declaring the project a senior citizen housing development as defined by Civil Code section 51.3.1  The amended CC & R's required at least one person living in a dwelling to be 55 years old and any other person to be at least 45 years old or provide primary economic or physical support for the older person living within the dwelling.

Under the impression that one of the occupants of the Sarnowskys' unit did not come within the requirements of the CC & R's, High Country wrote to the Sarnowskys stating they were in violation of the age restrictions.   Mr. Sarnowsky replied that “to my knowledge, my tenant is in compliance to the High Country Villas residency requirements.”

An exchange of letters then ensued.   For our purposes Mr. Sarnowsky's April 14, 1989 letter is significant.   Sarnowsky stated that since “we ․ owned the property on January 1, 1985, therefore we have the right to continue to reside in, occupy or use the property without restrictions imposed pursuant to Civil Code Section 51.3.   We interpret this right to use the property as our right to rent that property to whomever we see fit irrespective of whether or not any of those renters are senior citizens as defined in the Civil Code Section 51.3.” 2

The written communications exacerbated the dispute between the parties, rather than resolving it, ultimately resulting in High Country filing this action seeking injunctive and declaratory relief.   In the course of discovery, High Country learned Josephine Frie was older than 55 and concluded a “reasonable argument” existed that Christopher Frie provided a level of support to his mother which could be deemed “primary economic support.”   High Country dismissed without prejudice their cause of action against the Fries and their request for injunctive relief.   They did not dismiss their complaint for declaratory relief against the Sarnowskys.

High Country's cause of action for declaratory relief against the Sarnowskys alleged there was an actual controversy concerning the Sarnowskys' right to lease their unit to persons under age 55.   The court determined that because there was no “actual controversy” the Sarnowskys were entitled to summary judgment and accordingly dismissed the complaint.

In High Country's later motion to strike the Sarnowskys' request for attorney's fees and to tax costs, the court awarded the Sarnowskys $12,500.   The court did not award counsel fees for services rendered for the Fries as they had been voluntarily dismissed from the action.

DISCUSSION

JUSTICIABLE CONTROVERSY

 The threshold question is whether the court correctly decided that this action did not present an actual controversy requiring a decision on the merits.

An action for declaratory relief is authorized by Code of Civil Procedure section 1060 which provides in part:

“Any person ․ who desires a declaration of his rights or duties with respect to another ․ may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action in the superior court․”

 “A complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the parties under a written instrument or with respect to property and requests that the rights and duties of the parties be adjudged by the court.  [Citations.]  If these requirements are met and no basis for declining declaratory relief appears, the court should declare the rights of the parties whether or not the facts alleged establish that the plaintiff is entitled to favorable declaration.”  (Wellenkamp v. Bank of America (1978) 21 Cal.3d 943, 947, 148 Cal.Rptr. 379, 582 P.2d 970;  Cardellini v. Casey (1986) 181 Cal.App.3d 389, 395, 226 Cal.Rptr. 659.)   At the pleading stage, a complaint is broadly construed to allow declaratory relief prior to the breach of a legal obligation.  (Newby v. Alto Riviera Apartments (1976) 60 Cal.App.3d 288, 303, 131 Cal.Rptr. 547.)

 The standard for granting declaratory relief is similar to the concept of ripeness.   The allegation must show that either an actual, present or probable future controversy exists relating to the legal rights and duties of the parties, coupled with a request that those rights and duties be adjudged by the court.  (Sherwyn v. Department of Social Services (1985) 173 Cal.App.3d 52, 58, 218 Cal.Rptr. 778.)   The controversy must be “one which admits of definitive and conclusive relief by judgment within the field of judicial administration, as distinguished from an advisory opinion upon a particular or hypothetical state of facts.   The judgment must decree, not suggest, what the parties may or may not do.”  (Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110, 117, 109 Cal.Rptr. 799, 514 P.2d 111.)

 Although declaratory judgments necessarily deal with present rights, the “present right” may be the right to have judicial assurance that certain liabilities will be avoided in the future.  (Southern Counties Gas Co. v. Ventura Pipeline Constr. Co. (1971) 19 Cal.App.3d 372, 381, 96 Cal.Rptr. 825.)   Similarly, judicial determination is appropriate if the present adjudication serves as a guide for the plaintiff's future conduct in order to preserve his legal rights.

Guided by the foregoing, we hold that a controversy does exist which admits of definitive and conclusive judicial relief.   The controversy is not whether the Fries are in compliance, but rather the applicability of the age restriction.   The April 14, 1989, letter written by Mr. Sarnowsky unequivocally stating the age restriction did not apply to him and, more importantly, the diligence and expense expended by both parties in pursuing this litigation, furnish compelling reasons why declaratory relief should be made available.   High Country has a right to resolve the issues relating to the present dispute.   This court is convinced that the antagonism between the two parties is genuine and the court's judgment will operate as a final determination of the issues involved as well as guide the parties in their future course of conduct.

 Furthermore, homeowner associations play an increasingly important role in our community.   In recognition of the increasingly important role, courts have recognized that such associations owe a fiduciary duty to their members.   (See Raven's Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783, 799, 171 Cal.Rptr. 334.)   Homeowners' associations must exercise their authority to ensure the regulation and enforcement of the CC & R's.   Moreover, homeowners need to know their rights and, in this case, the applicability of the age restriction for homeowners prior to 1985.   For these reasons, we conclude the facts of this case present an actual controversy ripe for judicial relief.3

ATTORNEY'S FEES

 In light of our reversal of the trial court's judgment, the Sarnowskys are no longer the prevailing parties and thus we reverse the award of attorney's fees.

In their appellate briefs, the parties sharply disagreed as to the court's authority to award attorney's fees in this case and the source of any such authority.   For guidance to the trial court, our review of the pertinent statutes leads us to conclude an award of attorney's fees in this case is governed by Civil Code section 1354 which provides:  “in any action to enforce [the covenants and restrictions] the prevailing party shall be awarded reasonable attorney's fees and costs.”  (See Harbor View Hills Community Assn. v. Torley (1992) 5 Cal.App.4th 343, 7 Cal.Rptr.2d 96.)

SARNOWSKYS' CROSS–APPEAL

 The Sarnowskys' arguments in their cross-appeal requesting additional attorney's fees are no longer relevant in light of our reversal of the judgment and the fact they are no longer the prevailing parties.   However, their request for attorneys fees for services rendered on behalf of the Fries must still be resolved if they prevail at trial.   Accordingly, we provide the following guidance to the court regarding the Sarnowskys' right to recover for the services their counsel rendered for the Fries.

High Country argues the Sarnowskys cannot recover attorney's fees for the services provided to the Fries because they were voluntarily dismissed and are therefore prohibited from doing so under section 1717.   Section 1717 defines “prevailing party” stating, “Where an action has been voluntarily dismissed ․, there shall be no prevailing party.”   The Sarnowskys contend that because section 1354 is a statute specifically directed to actions to enforce the CC & R's in condominium projects and because the drafters of the provision chose not to include an express prohibition against awarding attorney's fees to voluntarily dismissed parties, the Legislature must have intended section 1717's prohibition would not apply.   The question presented is how section 1354 should be applied in light of the voluntary dismissal provision of section 1717.   To resolve this issue, we must look to the general rules of statutory construction.

Where the Legislature enacts a statute, we must presume it did so with cognizance of existing statutes in the same subject area.  (Brusso v. Running Springs Country Club, Inc. (1991) 228 Cal.App.3d 92, 101, 278 Cal.Rptr. 758.)  “In the absence of any express repeal or amendment, [a] new provision is presumed in accord with the legislative policy embodied in those prior statutes.   Thus, they all should be construed together”.  (Ibid;  2A Sutherland, Statutory Construction (5th ed. 1992) § 51.02, p. 121, fns. omitted.)   Further, when two statutes relate to the same subject matter, both are to be construed to give effect to every provision in all of them.   Statutes covering the same subject are construed to be in harmony if reasonably possible.  (Id. at p. 122, 278 Cal.Rptr. 758.)

There is nothing in the text or legislative history of section 1354 suggesting the Legislature intended section 1717's definition of prevailing party was to be inapplicable.   By deciding not to define “prevailing party” in section 1354, the drafters aware of 1717's definition of “prevailing party”, must have intended section 1717's definition to apply.

Brusso v. Running Springs Country Club, Inc. (1991) 228 Cal.App.3d 92, 278 Cal.Rptr. 758 involved circumstances similar to this case.   Harmonizing attorney's fees provisions of Corporations Code section 800 and Civil Code section 1717, Brusso held that because the statutes were not mutually exclusive, section 1717 should “fill in the gap left by [Corporations Code] section 800․”  (Id. at pp. 100–103, 278 Cal.Rptr. 758.)   We believe the “gap” in section 1354 should be “filled in” in the same manner.

Our decision is also based on our conclusion that had the Legislature wanted the “prevailing party” to be defined differently than its definition in section 1717, subdivision (b)(2) it could easily have done so.   Having failed to do so, and consistent with precedent and the rules governing statutory construction, we hold section 1354 must be interpreted consistent with section 1717(b)(2).

Because the Fries were voluntarily dismissed, Sarnowskys' counsel cannot recover for the professional services rendered on their behalf.

DISPOSITION

Judgment reversed for further proceedings consistent with this opinion.   Sarnowskys to bear all costs for these appeals.

FOOTNOTES

1.   All statutory references are to the Civil Code unless otherwise specified.Section 51.3, subdivision (c)(3) provides in part:“ ‘Senior citizen housing development’ means a residential development consisting of at least 150 dwelling units in a standard metropolitan statistical area or at least 35 dwelling units in any other area which is developed for, or substantially rehabilitated or renovated for, senior citizens․”

2.   Sarnowsky was relying on that part of section 51.3 which provides:“Any person who has the right to reside in, occupy, or use the housing or an unimproved lot subject to this section on January 1, 1985, shall not be deprived of the right to continue that residency, occupancy, or use as the result of the enactment of this section.”

3.   The parties have not briefed the pertinent issues relating to the applicability of Civil Code section 51.3 and we therefore do not resolve the underlying dispute.

WIENER, Acting Presiding Justice.

TODD and HUFFMAN, JJ., concur.