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KLEIN v. NYAMATHI, B228157. (2012)

Court: Court of Appeals of California Number: incaco20120125038 Visitors: 10
Filed: Jan. 25, 2012
Latest Update: Jan. 25, 2012
Summary: NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS COFFEE, J. Appellants Eswar Nyamathi and Adeline Nyamathi, individually and as trustees of the Nyamathi Family Trust, appeal from judgment after a jury found them liable for flood damage to their neighbors' property. The jury awarded just under $400,000 in damages to neighbors, respondents Michael M. Klein and Donna Lynn Klein, on nuisance, negligence, trespass and breach of contract theories, including $25,000 in punitive damages. The trial court aw
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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COFFEE, J.

Appellants Eswar Nyamathi and Adeline Nyamathi, individually and as trustees of the Nyamathi Family Trust, appeal from judgment after a jury found them liable for flood damage to their neighbors' property. The jury awarded just under $400,000 in damages to neighbors, respondents Michael M. Klein and Donna Lynn Klein, on nuisance, negligence, trespass and breach of contract theories, including $25,000 in punitive damages. The trial court awarded $552,655.75 in attorneys' fees and $63,595.83 in costs1 based on contractual fee provisions contained in governing covenants, conditions and restrictions (CC&Rs) and contained in a document signed by appellants entitled "Plan Submittal Acknowledgment" (PSA).

Appellants contend that there was no basis for the fee award because paragraph 14 of the CC&Rs did not apply to appellants' "unimproved" property and because the PSA document did not constitute a contract. We reject the contention because the fee award was independently supported by the jury's finding that appellants maintained a nuisance in violation of paragraph 11 of the CC&Rs. We also reject appellants' contention that the fee award was excessive. Accordingly, we affirm.

FACTUAL AND PROCEDURAL HISTORY

In March 2004, appellants bought a partially graded 30 plus acre property in the Bell Canyon housing development. Respondents lived on the adjacent, down-slope property. Appellants lived on another property in the same development.

The seller of appellants' property had deviated from grading plans that the County of Ventura (County) had approved. Appellants were aware of this fact before escrow closed.2 The deviations included unapproved driveway grading and failure to complete required drainage. A V-swale (or V-ditch) that ran parallel to respondents' property should have extended to the street but did not.

Shortly after appellants purchased the property, they met with the Bell Canyon Homeowner's Association (the HOA), with whom they discussed plans to correct the grading and to build a residence. The HOA told appellants that they would first need to obtain County approved as-built grading plans and submit a PSA to the HOA.

Appellants did not obtain County approved as-built grading plans, but did submit a PSA to the HOA on June 8, 2004. In the PSA (which later became the basis of a breach of contract claim) appellants sought approval of "final plans," "to complete the concrete V swale and pave the sloped driveways per Ventura County Request." Appellants represented that their plans complied with the Bell Canyon CC&Rs. The Bell Canyon CC&Rs (which became the basis for another breach of contract claim) required that property owners not maintain a nuisance (paragraph 11), and required them to "plant and water the slopes of their property, or otherwise maintain it in such a manner that erosion is prevented" (paragraph 14).

In the PSA, appellants agreed to "diligently complete the work provided for in final plans as approved by the Committee and any conditions to such approval." They also agreed to "assure that the roads and adjacent properties are protected from water runoff," among other things. Both the CC&Rs and the PSA contained fee provisions. The PSA is signed by appellants and is not signed by the HOA. The HOA responded to the PSA with a letter stating that "[a] current and accurate county-approved grading plan must be submitted for committee review and approval before any work may start."

For three years, appellants did nothing to obtain the required County approved as-built plans or to address the drainage problem, other than placing sandbags. In the fall of 2004, appellants' V-swale clogged and rainwater flooded respondents' property, including their bedroom. Respondent Michael Klein testified that he complained to the HOA and spoke to appellant Eswar Nyamathi, who viewed the damage, apologized, and said it would not happen again.

In 2006, appellants sold their home and retained an engineer to prepare as-built plans for the undeveloped property. Appellants first submitted as-built plans to the County on July 18, 2007, and the County approved them two weeks later. Appellants submitted the County approved as-built plans to the HOA on August 13, 2007.

The HOA initially rejected the plans because the matter had become inactive in the intervening three years, and a fee was necessary to reactivate it. The HOA also requested a copy of the plans for the proposed residence and required certified grading quantities so it could determine whether or not to charge the full fee-schedule grading deposit.

Meanwhile, on September 22, 2007, respondents' property flooded again during a heavy rain. Appellants' V-swale clogged, causing water to run into respondents' house. This time the damage was more severe. In response to the incident, the County issued a warning of non-compliance to appellants, stating "V-ditch at base of South Slope was not constructed per plan (plans show V-ditch extending to street); erosion control measures inadequate to prevent runoff onto neighbor's property.

On September 26, 2007, four days after the flood and after a meeting with appellants, the HOA accepted appellants' County approved grading plans and allowed expedited County-specified erosion control work on the property, including jute netting and hydro seeding, before receipt of plans for the proposed residence. The HOA also requested plans for a proposed drainage outlet or bubbler box at the termination of the V-swale.

By January 2008, appellants had not corrected the drainage problems. Respondents' property was again flooded when the V-swale clogged and overran. Dirt and debris killed respondents' koi fish. Respondents filed this action one month later.

Respondents initially sued appellants for (1) nuisance, (2) negligence, (3) trespass, and (4) injunctive relief.3 Each cause of action was based on common allegations that appellants had failed to abate the improper driveway grading and the V-swale, failed to maintain proper erosion control, and failed to prevent excessive storm water from flowing onto respondents' property, causing flood damage to respondents' property.

Respondents tried the case to the jury on the nuisance, negligence and trespass theories, but at the close of their evidence sought leave to amend to add two causes of action for breach of contract based on the PSA and the CC&Rs. The court granted leave over appellants' objection.

Respondents' amended complaint added two causes of action for breach of contract: (1) breach of the PSA, which respondents alleged included a contractual promise to diligently complete the V-swale and driveways, to maintain their property free of excess debris and to assure that adjacent properties were protected from water run-off; and (2) breach of paragraphs 11 and 14 of the CC&Rs, requiring, respectively, that property owners not maintain a nuisance and that they "plant and water the slopes of their property, or otherwise maintain it in such a manner that erosion is prevented."

In the oral request for leave to amend, respondents' counsel had not mentioned paragraph 11 of the CC&Rs.4 Appellants answered the amended complaint without objecting to the scope of the amendment. They did not object to inclusion of paragraph 11 in the jury instructions or the special verdict form. They raise the issue for the first time in their reply brief on appeal.

With respect to breach of contract based on the CC&Rs, the trial court instructed the jury that the CC&Rs constituted a contract enforceable by respondents. With respect to the PSA, it instructed the jury to decide whether the PSA constituted a contract intended to benefit respondents.5

The jury found for respondents on all theories. It also found by clear and convincing evidence that appellants acted intentionally or recklessly with respect to the trespass and nuisance. The jury awarded economic damages in the amount requested ($178,836.96), damages for emotional distress in the amount requested ($190,000), and, in a bifurcated proceeding, punitive damages in the amount of $25,000 based on malicious trespass and nuisance. The trial court granted injunctive relief regarding erosion control after further evidentiary hearing. The court denied a motion for a new trial.

The court granted respondents' post-trial motion for attorneys' fees and costs, based on breach of the CC&Rs and the PSA. The court awarded fees and costs in the amounts requested, which included all work performed on behalf of respondents in the action. Respondents' motion for fees was supported by a declaration of counsel and itemized billing records. Appellants opposed on the ground that the fees were not recoverable because they were incurred before the amendment and in connection with the non-contractual causes of action for nuisance, negligence and trespass. Appellants did not object to the reasonableness of any particular work performed, the hourly rates, or the amount of time spent on any activity.

DISCUSSION

The Existence of a Contract Authorizing Attorney Fees

Appellants contend that neither the CC&Rs nor the PSA constituted a valid contractual basis for the fee award. We conclude that appellants' maintenance of a nuisance in violation of paragraph 11 the CC&Rs entitled respondents to fees as a matter of right under the Davis-Stirling Common Interest Development Act (Civ. Code, § 1350 et seq.) and the express terms of the CC&Rs. We also conclude that all fees were recoverable because the issues of proof were common to all causes of action. We do not reach the issue of whether the erosion control provision of paragraph 14 also applied to appellant's "unimproved" property, or the issue of whether the circumstances surrounding submission of the PSA were sufficient to support the jury's finding that it constituted a contract enforceable by respondents, because violation of paragraph 11 of the CC&Rs provided a sufficient basis for the entire fee award.

Appellants do not argue that the trial court abused its discretion when it granted leave to amend the pleadings to add the CC&R and PSA causes of action to conform to proof. We nevertheless observe that the decision was well within the court's discretion because the amendments sought recovery on the same set facts that were pled in the original complaint. (Code Civ. Proc., § 473, subd. (a); Smeltzley v. Nicholson Mfg. Co. (1977) 18 Cal.3d 932, 937-938.)

Violation of the CC&Rs as a Basis for the Fee Award

The court instructed the jury that the CC&Rs "are contracts between the members and homeowners of the HOA and can be enforced by each member such as [respondents]." The court instructed the jury that respondents claimed both breach of paragraph 11 for "creat[ing] a nuisance" and breach of paragraph 14 for failing to "plant, water, or otherwise maintain the slopes of the property . . . in such a manner that erosion was prevented." In the special verdict form, the jury found that appellants were "obligated to perform the provisions of the [CC&Rs]" and "failed to perform or violat[ed] provision 11 or 14."

We independently review the trial court's determination that the CC&Rs created a contract, enforceable by respondents, and find no error. The question of whether a contract exists and the interpretation of its terms is a question of law when there is no conflicting evidence. (Parstons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866.) The trial court correctly decided, as a matter of law, that the CC&Rs constituted a contract between the members of the HOA, enforceable by respondents because the provisions of the CC&Rs are, by their terms and under the Davis-Stirling Common Interest Development Act, enforceable by the owner of any lot in the development. (Civ. Code, § 1354.)

There was no conflicting evidence regarding the interpretation of paragraph 11 of the CC&Rs, which unambiguously applies to all properties in the development without restriction. Paragraph 11, entitled "Nuisance," provides in relevant part, "No noxious or offensive activities shall be carried on, in or upon any part of subject property, nor shall anything be done thereon which may be or may become an annoyance or nuisance to the neighborhood." (Italics added.) "Subject property" is defined on the first page of the CC&Rs to include the entire development. Appellants do not contend otherwise.

Appellants addressed paragraph 11 for the first time in their reply brief, arguing that its inclusion in the amended complaint exceeded the scope of leave to amend. They forfeited any objection to the scope of amendment because they did not object in the trial court. (Barnes v. McKendry (1968) 200 Cal.App.2d 671, 676. We will not consider new issues raised for the first time in a reply brief. (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 766.) Moreover, appellants forfeited any objection to the scope of the amendment because they did not raise it in the trial court.

In an action to enforce CC&Rs, the prevailing party is entitled to recover fees as a matter of right. (Civ. Code, § 1354, subd. (c).) Thus, the jury's finding that appellants maintained a nuisance in violation of paragraph 11 was a sufficient for the fee award. The only discretionary determination for the court was the reasonableness and amount. (Chapala Management Corp. v. Stanton (2010) 186 Cal.App.4th 1532, 1546.)

The Amount of Attorney Fees and Costs Awarded

Appellants contend that the fee award was excessive because it included work performed on the tort causes of action. Appellants point out that most of the work was complete before the contract causes of action were added mid-trial, and that the award includes work performed from the inception of the case.

We review the amount of a fee award for abuse of discretion. (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 832.) The prevailing party in an action to enforce CC&Rs is only entitled to those fees that are incurred on the enforcement claim. (Salawy v. Ocean Towers Housing Towers Corp. (2004) 121 Cal.App.4th 664, 667.) Generally, fees must be apportioned between those claims for which fees are recoverable and those claims for which fees are not recoverable. (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130.) But under the "common issue" exception, "[a]ttorney's fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed." (Ibid.)

Here, the trial court did not abuse its discretion when it determined that each of respondents' legal theories was based on the same conduct, same facts, and same evidence as the other. From inception of the litigation, respondents claimed that appellants were negligent, trespassed, and maintained a nuisance because they did not maintain their property in a manner that would avoid flooding their neighbors. The added claim that this nuisance violated paragraph 11 of the CC&Rs was based entirely on the same facts. It was proven with the same trial testimony and documentary evidence that had already been introduced at trial and developed in discovery. Allocation was neither required nor possible. As the prevailing party, respondents were entitled to recover all expenses incurred in litigating these common issues. (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 577-578.)

DISPOSITION

The judgment is affirmed. Respondents are awarded their costs on appeal.

GILBERT, P.J. and PERREN, J., concurs.

FootNotes


1. For simplicity, we refer to this as the "fee award," although it also included costs not otherwise recoverable. (Code Civ. Proc., §1033.5, subd. (b).)
2. While escrow was pending in 2004, the Bell Canyon Homeowner's Association (HOA) notified appellants in writing that the property was an "incomplete and expired construction project" where certain items "are to be addressed: [¶] . . . [¶] Drainage is incomplete and inconsistent with approved plans[,] [¶] . . . [¶] Erosion control has not been installed[,] [¶] Unapproved grading[,] [¶] . . . [¶] Construction not complete in accordance with plan approved by the [HOA's] Architectural Committee[.]" The seller disclosed to appellants in writing the fact that the property has "significant defects/malfunctions" and "flooding, drainage or grading problems."
3. Additional causes of action against the HOA were resolved before trial.
4. Respondents sought leave to amend to add a cause of action for "breach of the CC&Rs." Counsel discussed paragraphs 28 and 14 of the CC&Rs, but clarified, "my cause of action would just be for breach of the CC&Rs," and "for purposes of amendment right now, all I want to do is to add a cause of action for breach of the CC&Rs for failure to maintain proper erosion control, take steps to prevent erosion, and that would be covered right now under the evidence under paragraph 14." The court read paragraph 14 and agreed it was applicable.
5. With respect to the PSA contract cause of action, the court instructed the jury that respondents claimed "that [appellants], entered into a contract on June 8th, 2004 (contract) for extending the V-ditch to the street and to keep their property at 109 Buckskin Road and all adjoining properties free of excess debris and to assure that the roads and adjacent properties were protected from water runoff," and that appellants admitted they executed and signed the PSA. It instructed the jury on the law with respect to contract formation, intended beneficiaries, breach, and damages. With respect to formation, it instructed the jury to consider all of the circumstances to determine the parties' intent, and that respondents were required to prove "[o]ne, that the contract terms were clear enough that the parties could understand what each was required to do; two, that the parties agreed to give each other something of value; and three, that the parties agreed to the terms of the contract. [¶] When you examine whether the parties agreed to the terms of the contract, ask yourself if under the circumstances a reasonable person would conclude from the words and conduct of each party that there was an agreement. You may not consider the party's hidden intentions."
Source:  Leagle

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