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The 1849 Condominiums Association v. Geoffrey Bruner and Does 1 Through 20

February 16, 2011

THE 1849 CONDOMINIUMS ASSOCIATION, INC., A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION,
PLAINTIFF,
v.
GEOFFREY BRUNER AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS. GEOFFREY BRUNER, COUNTERCLAIMANT,
v.
THE 1849 CONDOMINIUMS ) ASSOCIATION, INC., A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION; DOES 1 THROUGH 50 INCLUSIVE, AND ROE CORPORATIONS 1 THROUGH 50 INCLUSIVE, COUNTERDEFENDANTS. GEOFFREY BRUNER, THIRD-PARTY PLAINTIFF,
v.
BRAD NEUFELD, AND INDIVIDUAL; PHYLLIS GOTTLIEB, AN INDIVIDUAL; DEBBIE BEAN, AN INDIVIDUAL; JOE UNIS, AN INDIVIDUAL; MIKE
FLEISCHER, AN INDIVIDUAL; NORM KAUFMAN, AN INDIVIDUAL; CHERYL
WITHERILL, AN INDIVIDUAL; ROB WITHERILL, AN INDIVIDUAL; LANCE
LENZ, AN INDIVIDUAL; DOES 1 THROUGH 50 INCLUSIVE; AND ROE
CORPORATIONS 1 THROUGH 50 INCLUSIVE,
THIRD-PARTY DEFENDANTS.



ORDER GRANTING THIRD-PARTY DEFENDANTS‟ MOTION TO DISMISS

This matter comes before the Court on Third Party Defendants‟ 9

Brad Neufeld, Phyllis Gottlieb, Debbie Bean, Joe Unis, Mike Fleischer, Norm Kaufman, Cheryl Witherill and Rob Witherill‟s ("Third-Party Defendants") Motion to Dismiss (Doc. #40) Third-Party Plaintiff Geoffrey Bruner‟s ("Bruner‟s") First Amended Third Party Complaint ("FATPC") (Doc. #32). Bruner opposes the motion (Doc. #44). This matter was set for hearing on November 17, 2010, and ordered submitted on the briefs.*fn1 For the reasons set for below, the Motion to Dismiss is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

For all times relevant hereto, the Third-Party Defendants were officers, members and/or managers of the Association, a California non-profit mutual benefit corporation. The Association managed the 1849 Condominium project ("Project") in Mammoth Lakes, California. The Project is governed by a Declaration of Covenants, Conditions and Restrictions for the Project ("CC&R‟s"). The Association delegated the authority to supervise the Renovation Project to the Third Party Defendants. Bruner, a resident of Clark County,

Nevada, owns Unit No. 306 in the Condominium Project. 2

In December 2007, the Association, through the Third-Party 3

Defendants presented a proposed renovation project ("Renovation 4

Project") to the unit owners for their approval. The Renovation 5

Project was to include the remodel, repair, replacement, and/or 6 renovation of the Phase 1 and 2 buildings in the Condo Project. 7

The cost of the proposed Renovation Project and the special 8 assessment to the unit owners was $9,500,000 ("Special 9

Assessment"). The unit owners approved the Renovation Project and the associated Assessment. Since the approval of the Renovation Project, the Association and Third Party Defendants charged the unit owners the entire Special Assessment, but have not completed the project as promised. The Association and Third-Party Defendants allegedly failed to construct several components of the Renovation Project, unlawfully tabled, changed or removed several aspects of the project, and mismanaged the project. Bruner asserts the Association and Third-Party Defendants did not seek competing construction bids to reduce the overall cost of the project.

Furthermore, Bruner alleges the Renovation Project does not comply with the CC&R‟s. Portions of the Renovation Project are not within the scope of the Association and Third-Party Defendants‟ authority under the CC&R‟s. Additionally, the Association and Third-Party Defendants failed to properly allocate the Assessment among the unit owners in accordance with the CC&R‟s.

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. Bruner filed the Third-2

Party Complaint against the Third-Party Defendants, alleging 3 eighteen state law claims. The Court dismissed all the claims, 4 with leave to amend. Bruner now brings the FATPC, with nine claims 5 for relief: intentional misrepresentation, negligent 6 misrepresentation, declaratory relief, constructive fraud, breach 7 of fiduciary duty, negligence per se, negligence, attorney‟s fees 8 and indemnity. Bruner‟s FATPC seeks to hold each of the officers 9 and directors of the Association, along with its project manager, its maintenance manager and a member of its Remodel Committee, liable for each and all of the allegedly wrongful acts asserted in the FATPC. Third-Party Defendants argue that all nine claims should be dismissed, without further leave to amend.

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, ...


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