(originally published in Winter 2005)

Rancho Santa Fe Association v. Dolan-King (Dolan-King II) (2004) 115 Cal.App.4th 28.

When disputes arise regarding an individual owner’s architectural improvement application to make modifications to his/her residence, quite often the primary issue of the dispute involves the application of the association’s architectural guidelines to that individual owner. For the most part, architectural guidelines are unrecorded documents. When a homeowner disagrees with the subjective, aesthetic decision of an architectural governing body, owners often target these unrecorded documents and claim they are not valid or unenforceable. In Rancho Santa Fe Association v. Dolan-King (2004) 115 Cal.App.4th 28 (“Dolan-King II”), the California Court of Appeal reaffirmed the standard it first promulgated in Rancho Santa Fe Association v. Dolan-King (“Dolan-King I”) for determining the validity and enforceability of unrecorded architectural guidelines. Under this standard, the court determines whether unrecorded guidelines are reasonable in light of the effect of the guidelines on the project as a whole, not merely on the individual owners.

In Dolan-King II, the defendant homeowner, Dolan-King, failed to obtain Association approval for a wrought iron fence she constructed around the perimeter of her property. The Association sent Dolan-King a letter informing her the fence violated the Association’s Covenants, and that she could either seek a permit or tear down the fence. When she failed to do either, the Association sent her a hearing notice to determine whether to revoke her privileges to use Association facilities and impose a $500 assessment. At the Board hearing, both actions were taken. The Association then brought suit against Dolan-King to force her to seek the proper permits or remove the fence. The Association also sought attorney fees. Ultimately, the Association prevailed at trial.

On appeal, Dolan-King argued she was not required to obtain prior approval pursuant to a provision in the Association’s Covenants allowing owners to proceed with “minor construction” without formally submitting plans and specifications to the Association, subject to the continuing jurisdiction of the Association to hear complaints against the minor construction. The Association countered, however, that a section of the Association’s regulatory code provided all fences and walls, except for wood pasture rail fences, constituted “major construction” for purposes of the Covenant. The issue before the court boiled down to whether the regulation constituted a de facto amendment to the Covenant or simply defined a term in the Covenant. If the court determined the regulation modified, changed or amended the Covenant, it would be ineffective, as it was not approved by the homeowners.

The Court of Appeal began its analysis of this issue by determining the validity of the regulation. Dolan-King argued the regulation was invalid as a de facto amendment. The court rejected this argument, stating that it focused upon her subjective beliefs as a homeowner while failing to account for the “well-accepted power of an association operating under the land use covenant to clarify and define its terms, so long as it is operating within the straight reasonableness standard.” The court held that the Covenant provision referring to minor construction had not been substantively modified, amended or changed by the regulation. It also determined that the Covenant section was properly subject to objective clarification of its terms, since they were not defined in the document. Finally, the court held that based on the Association’s reserved power to hear, try and determine complaints about any construction, it was not unreasonable for the Board to enact regulations seeking to define such terms as “minor construction” in order to give homeowners notice of readily discoverable, objective standards for interpreting the Covenant.

In the alternative, Dolan-King argued that even assuming the regulation was valid, it was unreasonable as applied to her. Specifically, she asserted the Association failed to follow its own procedures and treated her unfairly in comparison to another homeowner. In support of her argument, Dolan-King pointed to the fact that the Association proceeded to enforce the regulation against her even though it was not properly triggered by the filing of a homeowner complaint. The court determined, however, that the trial court could reasonably conclude the Association manager’s violation letter constituted a “complaint” for the purpose of the Covenant.

Dolan-King also offered evidence that the Association failed to expressly invoke the disputed provision of the Covenant when it notified her of the hearing to revoke her privileges and impose the $500 assessment. The court determined this fact was not dispositive since Dolan-King was already on notice that the stated basis of the proposed action was noncompliance with the construction provision of the Covenant. Ultimately, the court held that “Dolan-King failed to make any convincing showing that the Association’s dealings with her in 1999 . . . were measurably unfair when compared to the Association’s dealings in 2001 with another homeowner . . .”

The Court of Appeal also upheld the trial court’s award of attorney fees to the Association despite Dolan-King’s contention that the award would have a chilling effect on legitimate opposition to the Association’s business practices. The court determined Dolan-King did not present an adequate record to assess error in this regard.