CEBULAR v. COOPER ARMS HOMEOWNERS ASSOCIATION
Filed 8/21/06
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
| JOHN CEBULAR, Plaintiff, Appellant, and Respondent, v. COOPER ARMS HOMEOWNERS ASSOCIATION, Defendant, Respondent, and Appellant. | B182555 (Los Angeles County Super. Ct. No. NC035208) |
APPEAL from an order of the Superior Court of Los Angeles County, Roy L. Paul, Judge. Affirmed in part; reversed and remanded in part.
Crandall, Wade & Lowe, and Matthew F. Batezel for Plaintiff, Appellant, and Respondent.
Haight Brown & Bonesteel, Bruce Cleeland, Rita Gunasekaran, and Maureen Haight Gee for Defendant, Respondent, and Appellant.
I. introduction
For nearly three quarters of a century, the Cooper Arms, a historic and beautiful 12-story apartment building in Long Beach, was a stock cooperative. The cooperative operated as a corporation. Unit owners in the stock cooperative owned shares in the corporation. Some residents owned more shares than others. When issues about the management and upkeep of the Cooper Arms arose, the stockholders would vote. And as with any corporation, the more shares a person owned, the greater her or his vote mattered. Speaking hypothetically, if a stockholder owned 25 percent of the shares, then that person's vote counted for 25 percent of the votes.
In 1995, 75 percent of members of the cooperative decided to convert the property to condominiums. In doing so, the shares in the cooperative were converted to votes per unit. Some condominium unit owners could cast as few as 19 votes. Others could cast as many as 85 votes. As when the building was a cooperative, the more shares a owner held, the greater the impact of his or her vote on condominium issues. However, just as the votes are unequal--so too are the common area and other assessments. An owner with more votes pays a pro rata greater share of common area and other assessments. In other words, when a condominium owner has more votes, she or he assumes the expensive obligation to pay a greater pro rata contribution for common area and other assessments. The trial court ruled this methodology for distributing votes and imposing common area and other assessments was lawful and that is what this appeal is largely about.
Plaintiff, John E. Cebular, a condominium unit owner, appeals from a judgment entered in favor of defendant, Cooper Arms Homeowners Association, after a court trial based on the parties' trial briefs and several exhibits. Among other things, the trial court ruled that the declaration of covenants, conditions, and restrictions (the declaration) and bylaws did not violate the Davis-Stirling Common Interest Development Act (Civ. Code,[1] § 1350 et seq.) (the act) and our Supreme Court's decision in Nahrstedt v. Lakeside Village Condominium Association, Inc. (1994) 8 Cal.4th 361, 380-389, even though members are not equally assessed for maintenance of common area facilities. In the published part of the opinion, we address the trial court's rulings concerning assessments and voting rights and membership in the homeowners association. Other issues will be resolved in the unpublished portion of the opinion. We affirm the trial court's rulings as to the legality of the voting and assessment methodology. We reverse the attorney fee award. We remand for recalculation of the attorney fees.
II. Background
A. The Declaration
The Cooper Arms is a 12-story building containing 159 units. Built in 1925, the Cooper Arms was originally organized as a stock cooperative in which each unit owner bought shares of a corporation. The cooperative was created with the execution of a trust agreement, which assigned to each unit an inseparable fractional beneficial interest. The number of shares was established by the trust agreement and the owners paid a specified amount for the shares that they received at $100 par value. The Cooper Arms was identified as a historical landmark in 1979. Documents offered by the parties, established that, in 1995, the members were given instructions on voting to convert the building to condominium units. The vote to convert required 75 percent of the owners but not 75 percent of the shares. The voters were informed that regular and special assessments would be distributed in the same proportion as the percentage of shares held in trust for each beneficiary.
On August 22, 1995, the owner of the building, Sharp Homeowners Association Management, Inc., executed a â€
