Lonie J. LASH, et al., Plaintiffs and Appellants, v. LION PROPERTY CORPORATION, Defendant and Respondent.
This is an action for damages resulting from faulty construction of the common areas of a condominium project, brought by the homeowner's association and an individual homeowner against the original owner and developer of the project. The plaintiffs seek to appeal from the non-appealable order denying their motion under Code of Civil Procedure section 382 to certify the individual owner (Lash) as representative of the class of individual homeowners for their individual damages claims. Although we must dismiss the appeal,1 we treat the matter as a petition for writ of mandate and order the writ to issue directing the trial court to reverse its ruling because the error is apparent; prerogative writ review of class certification orders is customary and appropriate; and, we find such review to be in the interests of judicial efficiency and fairness to the litigants in this case. We publish this opinion mainly to articulate explicitly the criteria we perceive to be relevant in deciding to treat an incorrect appeal as an original proceeding.
The plaintiffs are The Woodlands, La Jolla, Homeowners Association (Association), a nonprofit corporation consisting of the individual owners of condominium units in the Woodlands project, and Lonie J. Lash (Lash), an individual owner. Defendant is Lion Property Corporation (Lion), the original owner and developer of the project.
The complaint filed by Lash and Association against Lion states eight causes of action: four by each party based on implied warranty breaches, strict liability, and negligence theories, alleging defective construction of the common areas of the project caused leakage problems. More specifically, it is averred the common areas lack adequate drainage and are not weather resistant, resulting in water infiltration through the decks, balconies, exterior bearing walls, roofs and retaining walls of the common area, as well as deterioration of the aluminum alloy in sliding glass door sills to a jelly-like aluminum hydrochloride. Also, failure to provide access doors to crawl spaces is claimed. No damages to the individual condominium units are described.
Lash brings the action individually and on behalf of all persons similarly situated, a class consisting of all individuals (except agents, employees or officers of Lion) who presently own an interest in one or more condominium units of the Woodlands project. The class totals approximately 191 persons, joinder of whom would be impractical. Lash is a typical owner of a condominium unit in the project. There are questions of fact and law common to each of the members of the class. Prosecution of separate actions by individual members would create a risk of inconsistent adjudications establishing incompatible standards of conduct for the defendants.
The motion for class certification, although failing to specify the precise relief desired, may reasonably be construed as requesting certification of the causes of action pleaded by Lash as class actions on behalf of the individual homeowners for damages to their units. The argument filed in support of the motion, like the complaint, identifies only damages to the common area (lack of adequate drainage and rain resistance). The declaration of Lash states “some of the owner's units have been more directly affected by the damage than have other owners' units, because of the proximity of the damaged common area to the particular unit.” During the hearing on the motion, Lash's attorney did argue the existence of individual damages caused by water coming into the units, such as personal property damage, mildewed carpets, water-soaked walls and roof.
Also in evidence on the motion was the Declaration of Covenants, Conditions and Restrictions (CCR's) for the Woodlands project. It provides each owner owns and must maintain his own individual unit, including interiors of balconies, patios, deck areas, garages, and windows, while the Association is responsible for repair and maintenance of the common areas, which are owned in common by all owners and which are defined as all portions of the project not located in any unit, including balconies, patios, decks, attics, crawl spaces, bearing walls, roofs, and similar features. The Association is responsible for repairs which would affect the structural integrity of any part of the common area.
This Matter Is Properly Reviewed by Writ of Mandate
We have decided to treat the ineffective appeal as an original mandate proceeding; for, extraordinary writ review of class certification orders is sufficiently frequent to indicate presumptive suitability of such matters for prerogative review. (See, e.g., Hogya v. Superior Court (1977) 75 Cal.App.3d 122, 132, 142 Cal.Rptr. 325; Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355, 134 Cal.Rptr. 338, 556 P.2d 750; Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 134 Cal.Rptr. 393, 556 P.2d 755; City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 115 Cal.Rptr. 797, 525 P.2d 701.) Those cases, however, began as verified original petitions for mandate review complying with California Rules of Court, rule 56, while here, the parties have only lodged a notice of appeal and filed appellate briefs. Some decisions have refused to treat such incorrect appeals as original proceedings (e.g., DeGrandchamp v. Texaco, Inc. (1979) 100 Cal.App.3d 424, 437, 160 Cal.Rptr. 899), while other cases have found “extraordinary circumstances” justified such treatment. (U. S. Financial v. Sullivan (1974) 37 Cal.App.3d 5, 12, 112 Cal.Rptr. 18 [stipulation]; Clovis Ready Mix Co. v. Aetna Freight Lines (1972) 25 Cal.App.3d 276, 281–282, 101 Cal.Rptr. 820 [stipulation]; Branham v. State Farm Mut. Auto. Ins. Co. (1975) 48 Cal.App.3d 27, 32–33, 121 Cal.Rptr. 304.)
The dismissal of the appeal in DeGrandchamp, supra, appears superficially to rest on the technical insufficiency of the appellate briefs as an original petition in proper form. That formalistic approach gives undue importance to procedural technicalities readily overlooked in other contexts. We find it more persuasive to focus on the presence or absence of justification in such a case for prerogative writ review. The relevant factors (see, e.g., Hogya v. Superior Court, supra,) include the existence of effective alternative remedies; the likelihood of error; the magnitude of imminent harm; the overall gain or loss in judicial efficiency if early review is granted; and the suitability of the particular order for appellate resolution, depending often on whether the issues are mainly legal or factual. These are the factors normally weighed in determining whether to grant writ review of an early law and motion ruling. (See also Babb v. Superior Court (1971) 3 Cal.3d 841, 850, 92 Cal.Rptr. 179, 479 P.2d 379 et seq.; Coulter v. Superior Court (1978) 21 Cal.3d 144, 148, 145 Cal.Rptr. 534, 577 P.2d 669.)
The decision in DeGrandchamp, supra, does not necessarily stand for a general rule against treating all incorrect appeals as writ procedures. It is possible to regard it as an individual rejection of a petition for writ review because of insufficient justification. Involved there was an appeal from a partial summary judgment, a kind of ruling not frequently reviewed by pretrial writ. (See Whitney's at the Beach v. Superior Court (1970) 3 Cal.App.3d 258, 262–263, 83 Cal.Rptr. 237.) Nor is it surprising that the opinion did not discuss in any detail the factors influencing it not to accept the matter for original review, when one remembers that whenever a Court of Appeal summarily denies a petition it may do so without giving any reasons at all. (See, e.g., Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979) 24 Cal.3d 335, 350–351, 156 Cal.Rptr. 1, 595 P.2d 579.) It is unrealistic to expect any already overburdened appellate court to give more reasons for rejection when the matter began in the wrong form, as an incorrect appeal, than if it had begun correctly as an original writ petition. In short, the summary rejection of the original review option should not misdirect our attention away from the underlying substantive reasons to grant or deny discretionary prerogative writ treatment.
Here, we have decided to review this order denying class certification by writ of mandate because pretrial review of this kind of order is customary; the identity of the parties should most efficiently be established as soon as possible; the issues we must resolve are mainly legal rather than factual; and the parties have already briefed the merits of the case. Finally, in our view the trial court ruling is clearly erroneous. These reasons make pretrial writ review expeditious and just. To deny such review would merely postpone reaching the merits until the drafting of a formal petition for writ of mandate, an act which would serve no useful purpose.2
The Trial Court Erred in Denying Class Certification
The question of class certification lies within the trial court's discretion, the issue on appeal being abuse of that discretion (assuming proper criteria were used). (Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355, 361, 134 Cal.Rptr. 388, 556 P.2d 750.) The plaintiff has the burden of demonstrating an ascertainable class and a well-defined community of interest in the questions of law and fact involved. (Raven's Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783, 795, 171 Cal.Rptr. 334.) The fact individual damages may vary, standing alone, is insufficient basis to refuse to certify a class; the issue is the predominance of common questions (such as the issue of liability) making a class action efficient and appropriate. (Salton City etc. Owners Assn. v. M. Penn Phillips Co. (1977) 75 Cal.App.3d 184, 188, 141 Cal.Rptr. 895; see Vasquez v. Superior Court, supra, 4 Cal.3d 800, 815, 94 Cal.Rptr. 796, 484 P.2d 964.)
Here, the issue before the trial court was whether variable damages to the individual units precluded certification of the individual homeowners' claims as a class action.3 Also, there is the question whether the individual homeowner, rather than the Association, is a suitable class representative. We think certification of the homeowner was appropriate.
The right of organizations (such as Association) to sue as representative of all the individual member/owners for damages to areas owned in common is well established by recent precedent. (See Salton City etc. Owners Assn. v. M. Penn Phillips Co., supra, 75 Cal.App.3d 184, 141 Cal.Rptr. 895; Residents of Beverly Glen, Inc. v. City of Los Angeles (1973) 34 Cal.App.3d 117, 109 Cal.Rptr. 724; Raven's Cove Townhomes, Inc. v. Knuppe Development Co., supra, 114 Cal.App.3d 783, 171 Cal.Rptr. 334; Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 907, 176 Cal.Rptr. 886; see also Code Civ.Proc. § 374 re common areas.) We said in Del Mar, supra : “[b]ecause damage to the common areas, such as walkways and stairs, affect all the unit owners, it is not only logical that the common questions of law and fact be resolved in one proceeding, but it is judicially economical and cost beneficial to do so.” (123 Cal.App.3d at p. 907, 176 Cal.Rptr. 886.)
There is apparently no such specific precedent regarding the right of an individual homeowner to represent the class of homeowners to recover individual damages. Nevertheless, the same principles apply; it is equally judicially economical and cost beneficial to consolidate the individual claims, at the liability phase, when that liability turns on the common question of faulty construction of the common areas of the project. The decision in Raven's Cove Townhomes, Inc. v. Knuppe Development Co., supra, 114 Cal.App.3d 783, 796, 171 Cal.Rptr. 334 concludes the Association has standing to sue as representative of the individual homeowners for individual damages, without eliminating or ruling out the possibility an individual homeowner might also assume that role.
Defendant seeks to rely on such cases as City of San Jose v. Superior Court, supra, 12 Cal.3d 447, 115 Cal.Rptr. 797, 525 P.2d 701, finding variability of individual damages a barrier to class action certification. There, individual homeowners were not permitted to sue as a class for property damages resulting from proximity to San Jose Municipal Airport. That case is unlike the faulty construction/planned development situation which we have here. The gist of this action is proving faulty construction of the common areas, an endeavor which will consume most of the trial time and effort, and will then be followed, if successful, by ascertainment of individual damages, in procedures which could appropriately be severed if such action appears suitable. In San Jose, by contrast, the plaintiffs had nothing in common. Operation of the airport being established, all that remained to be shown was how each home was affected, in terms of its physical relationship to the flight patterns and its peculiar value characteristics based on comparable sales data and other things.
The decision in Raven's Cove, supra, states the policy to liberally permit representative actions against developers for faulty construction or other derelictions relating to multi-unit housing. Otherwise, the costs of prosecution of the case are not a common expense, and the individual difficulties of the owners in obtaining redress are greatly augmented. (Raven's Cove, supra, 114 Cal.App.3d at p. 792, 171 Cal.Rptr. 334, quoting Hyatt and Rhoads, Concepts of Liability in the Development and Administration of Condominium and Homeowners' Associations (1976) 12 Wake Forest L.Rev. 915, 975.) These policies are reiterated in Del Mar, supra, 123 Cal.App.3d 898, 176 Cal.Rptr. 886, and apply here as well. Also, a group of more than 150 individuals was regarded as large enough to warrant class certification in Occidental Land, Inc. v. Superior Court, supra, 18 Cal.3d 355, 364, fn. 7, 134 Cal.Rptr. 388, 556 P.2d 570). Here we have 191 individuals.
Had plaintiffs chosen the Association rather than Lash as the representative of the individual claimants, this case would have been simpler to decide in light of the developed precedent. However, we find nothing in that precedent or elsewhere to preclude the choice of an individual instead of the Association to represent the homeowners. If an issue had been made of Lash's authority to prosecute the action in a representative capacity, that might be a reason to deny class certification, particularly in light of the absence of specific allegation of that authority. However, no party raised that issue here or below. We conclude the authority exists, the choice has been made, and it is not precluded by any law. Further, as stated, the relevant precedent and policy requires class certification here, at least through the liability stage.
Later Procedural Developments
After completion of the record on appeal, the parties informed us of the filing of a first amended complaint in the trial court and the overruling of a demurrer thereto. Defendant contends these developments require dismissal of the matter or, alternatively, give greater support to the trial court's ruling. We disagree.
The new complaint is identical in its first eight causes of action to the eight causes in the complaint which we have before us. Two causes were added identifying individual deficiencies in the units, such as that the patios, decks, and balconies are defective in not being stable and swaying. Defendant complains such defects necessarily vary, since, for example, not all owners have balconies, and also, the ruling on a new complaint moots any rulings on the earlier pleading.
First, the issue of class certification does not turn on the quantum of alleged deficiencies. If new deficiencies show greater variability of damages, that fact may require later decertification. A class action at the liability phase remains appropriate. Second, the addition of causes does not change the original complaint, still preserved in the new pleading, and therefore does not interfere with our appellate jurisdiction over the ruling on the motion, under Code of Civil Procedure section 916 or otherwise. The ruling on the demurrer to the second complaint did not depend in any way on the class certification issue.
Let a peremptory writ of mandate issue commanding the trial court to grant plaintiff Lash the status of representative of the class of individual homeowners in their claims for damages to their individual units. The appeal from the order denying such certification is dismissed. Plaintiffs shall have costs in this proceeding.
I respectfully dissent. The appeal should be dismissed without further action by this court at this time. The Supreme Court has specifically held an appeal under the circumstances herein “would violate the rule that an appeal may be taken only from a final judgment” and thus “an appeal may not be taken from a judgment which disposes of less than all the causes of action between the parties.” (Vasquez v. Superior Court (1971) 4 Cal.3d 800, 806, 94 Cal.Rptr. 796, 484 P.2d 964.) The majority, by treating this ineffective appeal as an original mandate proceeding, violate the final judgment rule and do not require necessity to establish extraordinary grounds for the issuance of a writ of mandate.
The case of DeGrandchamp v. Texaco, Inc. (1979) 100 Cal.App.3d 424, 160 Cal.Rptr. 899, attempted to be distinguished by the majority, specifically points out that all the cases relied on by the majority herein have upheld the court's power, under extraordinary circumstances, to accept a stipulation of the parties to treat an appeal as a petition for writ of mandate. The parties herein have not stipulated, and respondent requests dismissal of the appeal also on the ground that a first amended complaint has been filed after the trial court's refusal to order class certification. Just like in DeGrandchamp, supra, at page 437, 160 Cal.Rptr. 899, we have no verified petition to the effect that, should jurisdiction of this appeal not be taken, it will be next to impossible for appellant to go through a trial of this matter merely to perfect appellate jurisdiction.
The acceptance of unauthorized appeals without the formalities required for a writ of mandate not only violates the “final judgment rule” but inundates this court with piecemeal appeals.
1. The order denying class certification is not appealable because it disposes of less than all the causes of action between the parties and is therefore not a final judgment within the meaning of Code Civ.Proc. § 904.1. (Vasquez v. Superior Court (1971) 4 Cal.3d 800, 806, 94 Cal.Rptr. 796, 484 P.2d 964.) Accordingly, that appeal is dismissed.
2. As noted in U. S. Financial v. Sullivan (1974) 37 Cal.App.3d 5, 12, fn. 6, 112 Cal.Rptr. 18, the designation of parties in the appeal are unsuitable for the writ (appellants should be petitioners, respondent should be a real party in interest), and also the superior court is not designated as a respondent. These facts are unimportant because, as in U. S. Financial, supra, the respondent court would only be a nominal party and would not appear. We will refer to the parties as plaintiffs and defendant or by their names to avoid undue confusion.
3. The allegations do not actually describe specific variable damages to individual units, but it is clear from the argument that such damages are to be claimed, all resulting from the defective waterproofing in the common areas permitting leakage into individual units.
WIENER, Acting Presiding Judge.
WORK, J., concurs.