Court of Appeal Affirms Homeowners Association Board Rights in Published Decision

August 1, 2008

Kenneth H. Moreno and Scott J. Loeding successfully defended a homeowners association ("HOA") in a case involving the HOA Board’s decision to permit homeowners to utilize common area attic space for storage. After obtaining summary judgment at the Trial Court level, Murchison & Cumming prevailed on appeal in the published decision in Havery v. The Landing Homeowners Association (2008) 162 Cal.App.4th 809.

Murchison & Cumming recovered over $170,000 in attorneys’ fees and costs on behalf of the homeowners association and it’s insurance carrier.

For many years, homeowners on the top floor of a condominium complex used adjacent vacant attic space to store Christmas decorations and the like. This attic space was designated as common area pursuant to the HOA plans.

After a controversy erupted concerning the top floor homeowners’ use of the common area attic space, the HOA Board of Directors after an exhaustive investigation granted the top floor homeowners the limited right to use the common area attic space for storage pursuant to the terms of the CC&R’s which provided that the Board had the right to allow an owner to exlusively us portions of the common area provided that such portions were nominal in area, adjacent to the owner’s unit, and did not unreasonably interfere with the other owners’ use and enjoyment.

Plaintiff, the former president of the HOA Board, filed a lawsuit against the homeowners asociation and individual homeowners for breach of fiduciary duty, trespass and numerous other causes of action, including a request for punitive damages and attorneys’ fees. Murchison & Cumming filed a Motion for Summary

Judgment contending that the Board’s decision to allow use of the common area attic space for storage purposes was entitled to judicial deference under the California Supreme Court’s decision in Lamden v. La Jolla Shores Clubdominium HOA (1999) 21 Cal.4th 249. The Trial court agreed that the Board’s decision was entitled to judicial deference and greanted the Motion for Summary Judgment. The trial court also determined that the homeowners association was entitled to the full amount of requested attorneys’ fees and costs of approximately $130,000.

Unwilling to give up the fight over the use of vacant attic space, Plaintiff appealed to the Fourth District Court of Appeals in San Diego. On April 4, 2008 the Court of Appeals affirmed the judgment in favor of the homeowners association in a published decision declaring the granting the right to use the common area attic for storage was within the Board’s authority; that the Board of Directors acted upon reasonable investigation, in good faith and with regard for the interests of the community; and that there was no conflict of interest by the Board in authorizing the use of the attic space.

Murchison & Cumming thereafter recovered an additional $30,000 in attorneys’ fees and costs from the Plaintiff.