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1849 Condominiums Association, Inc. v. Bruner

June 18, 2010

THE 1849 CONDOMINIUMS ASSOCIATION, INC., A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION, PLAINTIFF,
v.
GEOFFREY BRUNER AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANT.
GEOFFREY BRUNER AND DOES 1 THROUGH 20, INCLUSIVE, COUNTERCLAIMANT,
v.
THE 1849 CONDOMINIUMS ASSOCIATION, INC., A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION, COUNTERDEFENDANT.



ORDER GRANTING COUNTERDEFENDANT'S MOTION TO DISMISS

This matter comes before the Court on Counterdefendant The 1849 Condominiums Association, Inc.‟s ("Association‟s") Motion to Dismiss Counterclaimant Geoffrey Bruner‟s ("Bruner‟s") Counterclaim ("Counterclaim") pursuant to Federal Rule of Civil Procedure 12(b)(6). Bruner opposes the motion.*fn1

For the reasons stated below, the Association‟s Motion to Dismiss is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

For all times relevant hereto, the Association, a California non-profit mutual benefit corporation, was an owners association managing the 1849 Condominium project ("Condo Project") in Mammoth Lakes, California. Counterclaim ¶ 1. The Condo Project is governed by a Declaration of Covenants, Conditions and Restrictions for the Condo Project ("CC&R‟s"). Id. Bruner, a resident of Clark County, Nevada, owns Unit No. 306 in the Condo Project. Id. ¶ 2.

In December 2007, the Association presented a proposed renovation project ("Renovation Project") to the unit owners for their approval. Id. ¶ 4. The Renovation Project was to include the remodel, repair, replacement, and/or renovation of the Phase 1 and 2 buildings in the Condo Project. Id. ¶ 6. The cost of the proposed Renovation Project and the special assessment to the unit owners was $9,500,000 ("Assessment"). Id. ¶ 7. The unit owners approved the Renovation Project and the associated special assessment. Id. ¶ 8.

Since the approval of the Renovation Project, the Association charged the entire Assessment, but has not completed the Renovation Project as promised. Id. ¶ 9. The Association has allegedly failed to construct several components of the Renovation Project, unlawfully tabled, changed or removed several aspects of the project, and mismanaged the project. Id. Bruner asserts the Association did not seek competing construction bids to reduce the overall cost of the Renovation Project. Id. ¶¶ 12-13.

Furthermore, Bruner alleges the Renovation Project does not comply with the CC&R‟s. Id. ¶ 10. Portions of the Renovation Project are not within the scope of the Association‟s authority under the CC&R‟s. Id. Additionally, the Association purportedly failed to properly allocate the Assessment among the unit owners in accordance with the CC&R‟s and the Association‟s own governing documents. Id. ¶ 11.

The Association filed a Complaint ("Complaint") in Mono County Superior Court on October 22, 2009 (Case No. 16857), alleging Bruner failed to pay common area assessments. On November 30, 2009, the action was removed to this Court based on diversity of citizenship pursuant to 28 U.S.C. § 1332. On December 15, 2009, Bruner filed the Counterclaim against the Association, alleging sixteen state law claims.

II. OPINION

A. Legal Standard

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is appropriate where the plaintiff fails to state a claim supportable by a cognizable legal theory. Balistreri v. Pacifica Police Dep‟t, 901 F.2d 696, 699 (9th Cir. 1990).

Upon granting a motion to dismiss for failure to state a claim, the court has discretion to allow leave to amend the complaint pursuant to Federal Rule of Civil Procedure 15(a).

"Absent prejudice, or a strong showing of any [other relevant] factor[], there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . that the complaint could not be saved by amendment." Id.

B. First, Second, Third and Fourth Claims

Bruner alleges four claims based on contract principles:

Violation of Governing Documents, Selective Enforcement and/or Abandonment of Governing Documents, Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing. The Association argues that these claims should be dismissed because there is no contract, and even if there is a contract, the Counterclaim fails to explain which provisions were violated.

Condominium law allows a homeowner to sue the association for damages and an injunction to compel the association to enforce the provisions of the declaration. Posey v. Leavitt, 229 Cal. App. 3d 1236, 1246 (1991) (citations omitted). "The covenants and restrictions in the declaration shall be enforceable equitable servitudes...[that] may be enforced by any owner of a separate interest, or by the association, or by both." Cal. Civ. Code ยง 1354(a). These agreements ...


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