Friday, May 20, 2016

Just Specific Enough...

Almanor Lakeside Villas Owners Assoc. v. Carson, No. H041030 (D6 Apr. 19, 2016).

This is a dispute between some property owners and their HOA. Which, true to form, means the case looks pretty ugly. The substance is specific to HOA cases, but there is an interesting issue regarding the role of a trial court’s statement of decision in deciding a bench trial. 

On that issue, Owners appeal the court’s rejection of a contract claim based on a finding that the suffered no damages. In response, the HOA argues that Owners waived their right to appeal the issue by failing to challenge the trial court’s statement of decision in a timely and proper manner.

The statement of decision process—which is addressed by Code of Civil Procedure §§ 632, 634 and Rule of Court 3.1590—is a little particular. Like many things in California procedure, it was ginned up a long time ago with a good goal in mind—ensuring that the trial court makes factual findings on the key issues in dispute. The way it accomplishes that goal is to monkey with the presumption generally applicable on appeal that a trial court found all facts essential to the judgment. In practice, it can get a little confusing.

The process starts by the trial court announcing a tentative decision. There’s no formal requirements for the contents of the tentative. It just needs to be on the record or in a written order and served on the parties. Cal. R. Ct. 3.1590(a). Then—although the trial court sometimes can act on its own, see Cal. R. Ct. 3.1590(c)(1)-(4)—it is generally up to one of the parties to ask for a formal statement of decision within ten days of the tentative. See § 632. The request needs to specify the controverted issues on which a statement is requested. Id. If nobody makes a request, on appeal, all facts essential to the decision are presumed to have been found by the trial court.

On the other hand, if a party requests that the statement address an issue, and if the trial court declines to address the issue or the statement is ambiguous on it, the presumption that the trial court found facts in favor of the judgment on that issue does not apply. § 634. To invoke that rule, however, the aggrieved party needs to bring the omission or ambiguity to the attention of the trial court before judgment or on a new trial or JNOV motion. Id. Rule of Court 3.1590(g) further provides that such an objection needs to be raised within 15 days. Cal. R. Ct. 3.1590(g). And as the Supreme Court has explained, a failure to bring defects to the trial court’s attention after the statement has issued waives any right to complain about defects in the statement, because the presumption of correctness applies. See In re Marriage of Arceneaux, 51 Cal. 3d 1130 (1990).

Here, citing Arceneaux, the HOA claims that the Owners failed to preserve the issue for appeal because they didn’t object under § 634 to the court’s statement of decision finding that they suffered no damages. But that misses the point because the trial court here actually made a specific, unambiguous finding on the lack of damages. So, although that finding is entitled to a presumption of correctness to the extent that it entails findings on sub-facts or evidence that support it, it can’t be said that there was some omission or ambiguity obliging the Owners to further object to preserve a right to appeal.

That all said, the Owners here never requested that the court make more detailed findings on their specific theory of damages. So, to the extent that the court’s no-damages finding rested on an implicit rejection of the Owners’ theory, that trial court implicit findings would be presumed for the purposes of the appeal.

The court goes on to uphold the trial court’s no damages finding as supported by substantial evidence, and to affirm a fee award under the Davis-Stirling Act.


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