Ekstrom v. Marquesa at Monarch Beach Homeowner’s Association (2008) 168 Cal.App.4th 1111.
Homeowners victorious over Homeowners Association (HOA)
In this matter, a group of homeowners’ ocean views were blocked by their neighbors’ palm trees. The homeowners association (“HOA”) refused to enforce the covenants, conditions, and restrictions (“CC&Rs”) that required that the trees be trimmed. The homeowners sued the HOA to comply with the CC&Rs and enforce the tree trimming. At trial, the homeowners were victorious and obtained an injunction ordering the HOA to trim the trees. The HOA appealed the judgment and the homeowners then retained Mr. Lewis to ensure that their hard fought trial victory would stand up on appeal. The HOA argued that 1) the HOA’s decisions were entitled to deference and insulated from any review by the courts; 2) the trial court’s order was vague; and 3) the homeowners were required to sue every tree owner in addition to the HOA to obtain any relief. The Court of Appeal rejected each of the HOA’s arguments and the homeowners’ injunction against the HOA was affirmed.
The Ekstrom decision confirmed that a doctrine similar to the “Business Judgment Rule” applies to HOA decisions but that the HOA must plead the doctrine as an affirmative defense or its waived at trial.