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Favorable Appellate Decision in Homeowners Association Case

June 23, 2011

James S. Williams successfully argued an appeal on behalf of a homeowners association (HOA), its management company, as well as past and current HOA Board members. A homeowner had sued, claiming that an election enacting amended covenants, conditions, and restrictions (CC&Rs) was invalid, that the CC&Rs were amended for improper purposes and that the amended CC&Rs could not be used as a basis for HOA assessment-collection proceedings against her. She alleged that the HOA’s attempt to collect assessments from her under the allegedly invalid CC&Rs violated the Davis-Stirling Common Interest Development Act and state and federal fair debt collection law, among other laws. She also claimed that the HOA failed to maintain fire breaks and landscaping in the common area. The homeowner sought money damages as well as a declaration that the amended CC&Rs were invalid, an injunction, an accounting and numerous other forms of equitable relief.

Litigants are not entitled to a jury trial of equitable claims, such as those for an injunction or an accounting. In California, when a lawsuit presents both legal and equitable claims, equitable claims are generally to be tried first without a jury. Only if unresolved factual issues remain after the equitable phase of the trial is a second “legal” phase tried with a jury. This was the procedure requested by the defense and adopted by the trial court in this case.

At the end of the equitable phase of the trial, the judge ruled for the defense on all claims, held that there were no factual issues remaining to be tried before a jury and entered judgment for the defendants.

The homeowner appealed, claiming, among other things, that she had been denied her Constitutional right to a trial by jury with respect to her legal claims and that the judgment should be reversed. The Court of Appeal disagreed and affirmed the judgment in full.