Filed 10/14/14




                            CERTIFIED FOR PUBLICATION

             IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FOURTH APPELLATE DISTRICT

                                     DIVISION THREE


HUNTINGTON CONTINENTAL
TOWNHOUSE ASSOCIATION, INC.,
                                                    G049624
    Plaintiff and Respondent,
                                                    (Super. Ct. No. 30-2011-00466754)
        v.
                                                    OPINION
JOSEPH A. MINER, Individually and as
Trustee, etc.,

    Defendant and Appellant.



                 Appeal from a judgment of the Superior Court of Orange County,
Robert H. Gallivan, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief
Justice pursuant to art. VI, § 6 of the Cal. Const.) Reversed and remanded.
                 Sam Walker for Defendant and Appellant.
                 Barbara Jones for AARP as Amicus Curiae on behalf of Defendant and
Appellant.
                 Noah Zinner for Housing and Economic Rights Advocates as Amicus
Curiae on behalf of Defendant and Appellant.
              Kent Qian for National Housing Law Project as Amicus Curiae on behalf of
Defendant and Appellant.
              Feldsott & Lee, Stanley Feldsott and Jacqueline Pagano for Plaintiff and
Respondent.
              Law Offices of Tom Fier and Tom Fier as Amicus Curiae on behalf of
Plaintiff and Respondent.
              Larry Rothman & Associates and Larry Rothman as Amicus Curiae on
behalf of Plaintiff and Respondent.
              SwedelsonGottlieb and Joan Lewis-Heard for ALS Lien Services as
Amicus Curiae on behalf of Plaintiff and Respondent.
                                  *          *           *
                                      INTRODUCTION
              The Orange County Superior Court, after a decision by the appellate
division (Huntington Continental Town House Assn., Inc. v. Miner (2014) 222
Cal.App.4th Supp. 13 (Huntington Continental)), certified this case for transfer to this
court pursuant to rule 8.1005(a)(1) of the California Rules of Court to address a single
question. The question is whether a homeowners association is required by the
Davis-Stirling Common Interest Development Act (Civ. Code, § 4000 et seq.) (the
Davis-Stirling Act) to accept partial payments from an owner of a separate interest, who
is delinquent in paying his or her assessments, after a lien has been recorded against the
owner’s separate interest to secure payment of delinquent assessments and other charges.
We ordered the case transferred to this court for hearing and decision.
              We agree with the decision of the appellate division of the superior court in
Huntington Continental, and hold that under Civil Code section 5655, subdivision (a)
(section 5655(a)), a homeowners association (an association) must accept a partial
payment made by an owner of a separate interest in a common interest development and
must apply that payment in the order prescribed by statute. The obligation to accept

                                             2
partial payments continues after a lien has been recorded against an owner’s separate
interest for collection of delinquent assessments. The remedies available to an
association under Civil Code section 5720 depend upon the amount and the age of the
balance of delinquent assessments following application of the partial payment.


                            FACTS AND PROCEDURAL HISTORY
              Joseph A. Miner, as trustee of The JM Trust, Dated January 1, 2005 (the
Trust), owns a separate interest in a common interest development subject to the
management of the Huntington Continental Townhouse Association, Inc. (HCTA), which
                                                                    1
is an association within the meaning of Civil Code section 4080. HCTA charges owners
of separate interests regular assessments, which are due on the first day of each month.
              For nearly every month from 2003 to the beginning of 2009, Miner timely
paid HCTA assessments for the Trust’s separate interest. He failed to pay the assessment
due on April 1, 2009, and, thereafter, the Trust was delinquent in paying assessments. On
October 13, 2010, HCTA sent a letter to the Trust, notifying it that assessments were
delinquent in the amount of $3,864.96. Receiving no response to the letter, HCTA’s
board of directors adopted a resolution to record a lien against the Trust’s separate
interest for the delinquent assessments. A lien in the amount of $4,827.81 was recorded
on January 7, 2011. Of that amount, $4,136 was for unpaid assessments and the rest was
for late charges, interest, collection costs, and a returned check fee.
              Four days after the lien was recorded, HCTA sent a notice to the Trust that
the matter would be forwarded to legal counsel if the entire balance of the account was
not paid within 30 days. On January 25, 2011, HCTA’s board of directors adopted a
resolution to foreclose the delinquent assessment lien. Two months later, HCTA’s
attorneys, Feldsott & Lee (Feldsott), sent a letter to the Trust, notifying it of HCTA’s
 1
    “‘Association’ means a nonprofit corporation or unincorporated association created
for the purpose of managing a common interest development.” (Civ. Code, § 4080.)

                                              3
intent to initiate foreclosure proceedings. The letter stated the total amount of
delinquency was $6,197.11, of which $5,434.11 was for delinquent assessments and the
rest was for attorney fees, costs, release of lien fee, and “file set up” fees.
                On April 13, 2011, HCTA filed a limited jurisdiction complaint against the
Trust and Miner, as trustee, asserting causes of action for account stated (first cause of
action), open book account (second cause of action), and foreclosure of assessment lien
(third cause of action). (Later, an amendment to the complaint named Miner as a
defendant in his individual capacity.) Soon after the complaint was filed, Miner
requested and received from Feldsott an itemized statement of the sums due for
delinquent assessments and other fees. According to the itemized statement, the total due
as of May 2, 2011 was $8,012.58, of which $5,923.58 was for delinquent assessments
through May 31, 2011.
                On May 6, 2011, Miner sent an e-mail to HCTA, proposing a payment plan
under which the Trust would make monthly payments of $1,500 to $2,000. He sent a
$2,000 check to HCTA, which accepted it. Feldsott drafted a payment plan agreement
calling for an initial payment of $2,000 followed by monthly payments of $1,500. The
agreement was sent to the Trust, but Miner never signed it. The Trust thereafter made
two payments totaling $1,500.
                On October 17, 2011, Feldsott notified Miner that the Trust had failed to
make the September and October payments under the payment plan agreement and
failure to make those payments or reinstate the plan within 10 days would lead to its
cancellation.
                On several occasions, Miner requested a line-item accounting from the
HCTA. On November 15 and December 12, 2011, Miner tendered the regular monthly
assessments of $188. On December 16, Feldsott returned the checks on the ground it was
“unable to accept partial payments.” Three days later, Feldsott provided Miner a



                                               4
statement of delinquent assessments and fees, according to which the total due was
$6,418.47.
              Miner mailed a cashier’s check for $3,500, dated December 29, 2011, to the
home address of the HCTA president. On January 3, 2012, the HCTA president told
Miner he would have Feldsott apply the $3,500 payment to the Trust’s account and have
the HCTA provide the Trust with an updated accounting. In a letter dated January 5,
2012, Feldsott informed Miner the $3,500 check was being returned because “[o]ur office
is unable to accept partial payments without first establishing a payment plan approved
by the Board of Directors.” This letter included an account statement reflecting a total of
$9,226.13 in charges, $3,568 in payments (not including the returned check for $3,500),
and a balance of $5,658.13. On February 15, 2012, Feldsott sent a new account statement
showing a total due of $6,837.68.
              After a bench trial, the trial court found the Trust owed HCTA $5,715.39 as
of September 2012, and HCTA had complied with the relevant statutory requirements to
foreclose its lien. The judgment awarded HCTA damages of $5,715.93 on the first and
second causes of action and ordered foreclosure of its lien under the third cause of action.
The Trust and Miner timely filed a notice of appeal.
              The superior court appellate division, in a unanimous opinion authored by
Judge Griffin, reversed the judgment as to the third cause of action and reversed and
remanded as to the first and second causes of action. (Huntington Continental, supra,
222 Cal.App.4th at pp. Supp. 17, 18.) The appellate division concluded the
Davis-Stirling Act compelled HCTA to accept the $3,500 check even though it
constituted a partial payment of the total amount owed on the account. (Huntington
Continental, supra, at pp. Supp. 15, 17.) Under the Davis-Stirling Act, an association
may not seek to collect through judicial or nonjudicial foreclosure delinquent assessments
in an amount less than $1,800. (Civ. Code, § 5720, subd. (b) (section 5720(b).) If HCTA
had accepted the $3,500 check when tendered in December 2011, the total amount of

                                             5
unpaid assessments would have been less than $1,800. Therefore, the appellate division
held HCTA could not pursue foreclosure of the assessment lien. (Huntington
Continental, supra, at p. Supp. 17.)
                 At trial, HCTA’s counsel had conceded that “had that $3500 payment been
applied to the account, the remaining balance would have been $760 and change.” Based
on exhibits presented at trial, the appellate division of the superior court prepared an
accounting of assessments only. (Huntington Continental, supra, 222 Cal.App.4th at
p. Supp. 16, fn. 1.) According to that accounting, attached as an appendix to the appellate
division’s opinion, as of December 1, 2011, the total amount of unpaid assessments was
$2,704 and as of September 1, 2012, the total amount of unpaid assessments was $4,441.
(Id. at pp. Supp. 19, 20.) Feldsott’s statement of account, dated December 19, 2011,
showed total delinquent assessments of $7,264.57 and payment of $3,000 from funds
held in trust.
                                          DISCUSSION
                                                I.
                                  Standard of Review and
                            Principles of Statutory Interpretation
                 General standards of appellate review apply to appeals transferred from the
superior court appellate division for decision in the Court of Appeal. (People v. Disandro
(2010) 186 Cal.App.4th 593, 599.) In resolving the issue certified to this court by the
superior court, we must interpret provisions of the Davis-Stirling Act. We review issues
of statutory interpretation de novo. (Kavanaugh v. West Sonoma County Union High
School Dist. (2003) 29 Cal.4th 911, 916.)
                 The fundamental task of statutory interpretation is to ascertain the
Legislature’s intent to effectuate the statute’s purpose. (Smith v. Superior Court (2006)
39 Cal.4th 77, 83.) In ascertaining the Legislature’s intent, we first consider the language
of the statute itself, giving the words used their ordinary meaning. (Ibid.) The statutory


                                                6
language must be construed in the context of the statute as a whole and the overall
statutory scheme, giving significance to every word, phrase, sentence, and part of the
statute. (Ibid.)
               If the statutory language is unambiguous, the plain meaning controls and
consideration of extrinsic sources to determine the Legislature’s intent is unnecessary.
(Kavanaugh v. West Sonoma County Union High School Dist., supra, 29 Cal.4th at
p. 919.) “When the words are susceptible to more than one reasonable interpretation, we
consider a variety of extrinsic aids, including the statutory context and the circumstances
of the statute’s enactment, in determining legislative intent.” (Levy v. Superior Court
(1995) 10 Cal.4th 578, 582.) We read the statute as a whole to harmonize and give effect
to all parts. (Ste. Marie v. Riverside County Regional Park & Open-Space Dist. (2009)
46 Cal.4th 282, 289.)
                                             II.

                      Relevant Provisions of the Davis-Stirling Act
               The Davis-Stirling Act is codified as part 5 of division 4 of the Civil Code.
Articles 1, 2, and 3 of chapter 8 of part 5 of division 4 of the Civil Code (Civ. Code,
§§ 5650-5740) set forth comprehensive rules, restrictions, and procedures for imposing,
paying, collecting, and enforcing regular and special assessments.
               The Davis-Stirling Act requires an association to levy regular and special
assessments “sufficient to perform its obligations under the governing documents and this
act.” (Civ. Code, § 5600, subd. (a).) Article 2 of chapter 8 of part 5 of division 4 of the
Civil Code addresses payment and delinquency in payment of assessments. Civil Code
section 5650, subdivision (a) (section 5650(a)) states: “A regular or special assessment
and any late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if
any, and interest, if any, as determined in accordance with subdivision (b), shall be a debt
of the owner of the separate interest at the time the assessment or other sums are levied.”



                                              7
              Civil Code section 5655 addresses allocation of payments against the debt.
Section 5655(a) states: “Any payments made by the owner of a separate interest toward a
debt described in subdivision (a) of Section 5650 shall first be applied to the assessments
owed, and, only after the assessments owed are paid in full shall the payments be applied
to the fees and costs of collection, attorney’s fees, late charges, or interest.” (Italics
added.) This section does not state an association has the discretion to decline to follow
the procedure set forth in the statute.
              Under Civil Code section 5675, the amount of the assessment, “plus any
costs of collection, late charges, and interest assessed in accordance with subdivision (b)
of Section 5650,” becomes a lien on the owner of record’s separate interest in the
common interest development once the association causes to be recorded a notice of
delinquent assessment setting forth certain required information (Civ. Code, § 5675,
subd. (a)), together with an itemized statement of charges (id., § 5675, subd. (b)). The
board of an association may, by majority vote in an open meeting, decide to record a lien
for delinquent assessments. (Id., § 5673.)
              Before recording the lien, an association must provide the owner of record
notice that includes the information set forth in subdivisions (a) through (f) of Civil Code
section 5660, including the right to request a meeting with the board to request a payment
plan under Civil Code section 5665. (Civ. Code, § 5660.) Payment plans do not impede
an association’s ability to record a lien on the owner’s separate interest (id., § 5665,
subd. (d)), and, “[i]n the event of a default on any payment plan, the association may
resume its efforts to collect the delinquent assessments from the time prior to entering
into the payment plan” (id., § 5665, subd. (e)).
              If an association and an owner of a separate interest dispute the validity of a
charge or sum levied by the association, the owner may pay the disputed amount,
including collection costs, and, in addition to pursuing alternative dispute resolution, may



                                               8
commence a small claims action to recoup the disputed amount paid. (Civ. Code, § 5658,
subd. (a).)
              Article 3 of chapter 8 of part 5 of division 4 of the Civil Code concerns
collection of assessments and enforcement of liens. Under Civil Code section 5700,
subdivision (a), a lien created by Civil Code section 5675 may be enforced “in any
manner permitted by law,” including judicial or nonjudicial foreclosure, after the
expiration of 30 days following the recordation of the lien. (Civ. Code, § 5700,
subd. (a).) The decision to initiate foreclosure of a lien for delinquent assessments must
be made by a majority vote of the board of directors of an association in an executive
session (id., § 5705, subd. (c)), and must be preceded by an offer to the owner to
participate in dispute resolution (id., § 5705, subd. (b)).
              In the event an association’s board decides to pursue nonjudicial
foreclosure, “[a]ny sale by the trustee shall be conducted in accordance with
Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in
mortgages and deeds of trust.” (Civ. Code, § 5710, subd. (a).)
              Particularly significant to this case is Civil Code section 5720, which places
limits on foreclosure. Relevant parts of section 5720(b) state: “An association that seeks
to collect delinquent regular or special assessments of an amount less than one thousand
eight hundred dollars ($1,800), not including any accelerated assessments, late charges,
fees and costs of collection, attorney’s fees, or interest, may not collect that debt through
judicial or nonjudicial foreclosure, but may attempt to collect or secure that debt in any of
the following ways . . . .”
              Section 5720(b) identifies three ways to collect or secure delinquent
assessments in an amount less than $1,800. The first is “a civil action in small claims
court . . . .” (§ 5720(b)(1).) The second is “[b]y recording a lien on the owner’s separate
interest upon which the association may not foreclose until the amount of the delinquent
assessments secured by the lien, exclusive of any accelerated assessments, late charges,

                                               9
fees and costs of collection, attorney’s fees, or interest, equals or exceeds one thousand
eight hundred dollars ($1,800) or the assessments secured by the lien are more than 12
months delinquent.” (§ 5720(b)(2).) The third is “[a]ny other manner provided by law,
except for judicial or nonjudicial foreclosure.” (§ 5720(b)(3).)
              The limitation on foreclosure of assessment liens for amounts under $1,800
does not apply to “[a]ssessments secured by a lien that are more than 12 months
delinquent.” (Civ. Code, § 5720, subd. (c)(1).) (HCTA does not contend the assessments
secured by its lien were more than 12 months delinquent at the time the Trust tendered
the $3,500 check.)
                                            III.

               An Association Must Accept a Partial Payment Made by
                    an Owner of a Separate Interest After a Lien
                               Has Been Recorded.
              Two statutes within the Davis-Stirling Act, section 5655(a) and Civil Code
section 5720, are the focus of our analysis and central to our holding an association must
accept a partial payment. Another, Civil Code section 5710, also warrants additional
discussion.
A. Section 5655(a)
              Section 5655(a) states: “Any payments made by the owner of a separate
interest toward a debt described in subdivision (a) of Section 5650 shall first be applied to
the assessments owed, and, only after the assessments owed are paid in full shall the
payments be applied to the fees and costs of collection, attorney’s fees, late charges, or
interest.” Two issues arise in interpreting section 5655(a). First, does it permit an owner
to make a partial payment, that is, a payment which does not cover the owner’s entire
debt under section 5650(a)? Second, does section 5655(a) require an association to
accept a partial payment?




                                             10
              On the first issue, the plain language of section 5655(a) unambiguously
permits partial payments. The Davis-Stirling Act permits an association to impose late
charges, reasonable fees and costs of collection, reasonable attorney fees, if any, and
interest on delinquent assessments. (§ 5650(a).) By creating an order of allocation,
section 5655(a), in effect, recognizes a payment might not cover the full amount of the
delinquency and other charges.
              On the second issue, the plain language of section 5655(a) requires an
association to accept an owner’s partial payment. Section 5655(a) does not refer to any
payment made by the owner and accepted by an association. Instead, section 5655(a)
states, “[a]ny payments made by the owner” toward a debt described in section 5650(a)
“shall” (italics added) be applied in the order set forth. Use of the word “shall” connotes
a mandatory act. “Under ‘well-settled principle[s] of statutory construction,’ we
‘ordinarily’ construe the word ‘may’ as permissive and the word ‘shall’ as mandatory,
‘particularly’ when a single statute uses both terms.” (Tarrant Bell Property, LLC v.
Superior Court (2011) 51 Cal.4th 538, 542.) In Diamond v. Superior Court (2013) 217
Cal.App.4th 1172, 1189-1190, the court concluded the word “shall” in the Davis-Stirling
Act, Civil Code former section 1367.1, subdivision (d), created a mandatory obligation to
serve an owner of a separate interest with notice of delinquent assessment. Under the
statutory language of section 5655(a), if an owner of a separate interest makes any
payment, the association cannot reject it, but is required to (“shall”) apply that payment to
the debt in the statutory order of allocation. Quite simply, an association does not have
the discretion to refuse to follow the statute’s mandate.
              Nothing in the Davis-Stirling Act provides that the rights and duties under
section 5655(a) end when an association takes action to record a lien. Although
section 5655(a) is in article 2 of chapter 8 of part 5 of division 4 of the Civil Code,
entitled “Assessment Payment and Delinquency,” and not in article 3, entitled
“Assessment Collection,” the headings in the Davis-Stirling Act “do not in any manner

                                              11
affect the scope, meaning, or intent of this act” (Civ. Code, § 4005). In the order of
allocation, section 5655(a) includes “costs of collection” and “attorney fees,” thereby
recognizing an owner can make a partial payment after an association has commenced
measures, such as recording a lien, to collect the delinquency.
              HCTA argues partial payments under section 5655(a) are permitted only
when made pursuant to a payment plan under Civil Code section 5665. By its terms,
section 5655(a) is not limited to payments made pursuant to a payment plan. To the
contrary, section 5655(a) refers to payments “toward a debt described in subdivision (a)
of Section 5650,” which describes a debt as “[a] regular or special assessment and any
late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if any,
and interest, if any” (§ 5650(a)). In a similar vein, HCTA asserts, “[i]f an association
were required to accept partial payments at the whim of a delinquent homeowner, then
there would be no reason for the [Davis-Stirling] Act to include various provisions
relating to payment plans.” There are very good reasons for payment plans under
section 5665(a), notwithstanding an association’s obligation to accept partial payments.
To the owner of a separate interest, a payment plan might reduce the monthly assessment
obligation to an affordable amount, thereby avoiding further delinquency, reducing or
eliminating late fees, and preventing the amount secured by the lien from increasing. To
an association, the payment plan provides an income stream without having to undertake
collection procedures.
              HCTA argues that permitting partial payments under section 5655(a) would
be inconsistent with Civil Code section 5658, subdivision (a), which provides, “[i]f a
dispute exists between the owner of a separate interest and the association regarding any
disputed charge or sum levied by the association . . . , the owner of the separate interest
may, in addition to pursuing dispute resolution . . . , pay under protest the disputed
amount and all other amounts levied . . . , and commence an action in small claims
court.” If the owner disputes a charge, HCTA asserts, “[t]he remedy is to pay all

                                             12
amounts in full, under protest, and to file a small claims suit or otherwise pursue
resolution of the disputed sums.” Section 5658, subdivision (a) applies only when an
owner disputes the validity or amount of a charge or sum, which is different from just not
paying it. The Trust is not disputing any of the assessments or fees and, by not invoking
the procedure of section 5658, subdivision (a), has forfeited any such claim. In other
words, the Trust is not disputing it owes the assessments levied, but contends its tender of
$3,500 reduced the balance of assessments owed to an amount lower than the threshold
for HCTA to foreclose its lien.
B. Section 5720(b)
              Section 5720(b) prohibits an association from foreclosing a lien when the
amount of delinquent assessments alone is less than $1,800. In this case, if HCTA had
accepted the Trust’s check for $3,500, then the amount of delinquent assessments would
have been less than $1,800 and, under section 5720(b), HCTA would not have been able
to pursue foreclosure to collect the debt.
              Civil code section 5720 was added by statute in 2005 as Civil Code former
section 1367.4. (Diamond v. Superior Court, supra, 217 Cal.App.4th at p. 1190.) The
purpose of former section 1367.4 was to protect the interest of an owner who has failed to
timely pay an assessment levied by an association. (Diamond v. Superior Court, supra,
at pp. 1190-1191.) “In 2005, the Senate Judiciary Committee’s bill analysis stated: ‘This
bill protects owners’ equity in their homes when they fail to pay relatively small
assessments to their common interest development associations.’” (Id. at p. 1190.) “The
Assembly Committee on Judiciary similarly stated: ‘This bill goes to the heart of home
owner rights, touching upon the key issue of when, if ever, a homeowners’ association
should have the right to force the sale of a member’s home when the home owner falls
behind on paying overdue assessments or dues. . . . [¶] . . . [This bill] [s]eeks to protect a
condominium owner’s property and equity when he or she misses payment on relatively



                                              13
small assessments imposed by their common interest development . . . association.’”
(Ibid.)
                Requiring an association to accept a partial payment reducing the amount
of delinquent assessments to less than $1,800 is consistent with this stated legislative
policy of protecting owners from losing their home equity over small amounts of
delinquent assessments. Permitting an association to reject a partial payment could lead
to the very situation the Legislature sought to avoid: foreclosure and loss of the owner’s
equity in the home when the owner is delinquent in paying assessments in an amount
under $1,800.
                We disagree with the assertion made by HCTA and the amici curiae
appearing on its behalf that requiring an association to accept partial payments will
“seriously impede” an association’s ability to collect assessments. We recognize
assessments are both necessary to the functioning of an association and required by the
Davis-Stirling Act to be in an amount sufficient to perform an association’s obligations
under the governing documents and the Davis-Stirling Act. (Civ. Code, § 5600,
subd. (a); see Park Place Estates Homeowners Assn. v. Naber (1994) 29 Cal.App.4th
427, 431-432 [associations “must assess fees on the individual owners in order to
maintain the complexes”].)
                An association has remedies, however, when the amount of delinquent
assessments falls below $1,800. Section 5720(b) identifies three ways to collect or
secure delinquent assessments in an amount less than $1,800 as well as to collect
additional fees, collection costs, and interest: (1) “a civil action in small claims court
. . . .”; (2) “recording a lien on the owner’s separate interest . . . .”; and (3) “[a]ny other
manner provided by law, except for judicial or nonjudicial foreclosure.” (§ 5720(b)(1),
(2) & (3).) Thus, in the situation presented by this case, an association would be able to
maintain a lien on the owner’s separate interest and could pursue a small claims action to
recover the debt. Although the lien could not be foreclosed until the conditions of

                                               14
section 5720(b)(2) had been met, the lien itself is a powerful coercion mechanism; for
instance, the lien would have to be satisfied to permit the sale of the home. Further, an
association may foreclose a lien securing assessments in any amount that are more than
12 months delinquent. (Civ. Code, § 5720, subd. (c)(1).)
              HCTA and the amici curiae appearing on its behalf assert that requiring an
association to accept partial payments bringing the amount of delinquent assessments to
less than $1,800 would permit delinquent owners to abuse the system by accepting the
benefits of living in a common interest development at the expense of the other owners.
It is possible for a situation to arise in which a clever and unscrupulous owner would be
able to dodge foreclosure of a lien by making partial payments designed to bring the
delinquent assessments under $1,800 in amount and less than 12 months in age. As we
read the Davis-Stirling Act, the Legislature engaged in a balancing process and chose to
accept that risk in order to protect owners from foreclosure and the loss of equity in their
homes when the delinquent assessments are under $1,800 or less than 12 months
delinquent. And, as we have explained, section 5720(b) grants an association various
remedies to collect the debt.
C. Civil Code Section 5710
              In the event the board of an association decides to pursue nonjudicial
foreclosure, “[a]ny sale by the trustee shall be conducted in accordance with
Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in
mortgages and deeds of trust.” (Civ. Code, § 5710, subd. (a).) Under Civil Code
section 2924c, subdivision (a)(1), the trustor or mortgagor may reinstate a loan once
foreclosure proceedings have begun by paying the entire amount due—including
principal, interest, taxes, assessments, and costs incurred in enforcing the obligation—at
any time before entry of the decree of foreclosure.
              HCTA argues, based on Civil Code section 5710, subdivision (a), that Civil
Code section 2924c, subdivision (a)(1) applies to nonjudicial assessment lien

                                             15
foreclosures, requires payment in full to forestall foreclosure, and permits an association
to decline partial payments after foreclosure has been initiated. Further, HCTA argues,
an association’s right to decline partial payments must extend to judicial foreclosures,
otherwise, as an unintended consequence, “[a]ssociations wishing to recover the fees and
costs incurred in foreclosure would turn to private sale, which would undermine the
objectives of the [Davis-Stirling] Act as well as the public interest served by promoting
judicial foreclosures.”
              Civil Code section 5710, subdivision (a) states, in plain language, that
“[a]ny sale by the trustee” (italics added) shall be conducted in accordance with the Civil
Code sections applicable to the exercise of powers of sale in mortgages and deed of trust.
In this case, HCTA pursued judicial foreclosure. The unintended consequence foretold
by HCTA suggests not that the Legislature intended for an association to be able to
decline partial payments. Instead, the Legislature intended for section 5655(a), requiring
an association to accept partial payments, and section 5720(b), limiting foreclosure, to
apply to both judicial and nonjudicial foreclosure and to prevail to the extent of any
conflict with Civil Code section 2924c, subdivision (a)(1).
D. Policy Arguments
              The parties and, in particular, the amici curiae raise policy considerations
that are not based on statutory language. HCTA and the amici curiae appearing on its
behalf assert the Trust is not a struggling homeowner but owns the home as an
investment, and Miner made a calculated decision not to pay assessments. Amici curiae
AARP, Housing and Economic Rights Advocates, and National Housing Law Project
argue that “use of foreclosure as an enforcement tool on those having difficulty paying
homeowner assessments can be both unjust and extremely damaging” and “[t]he
consequences of foreclosure are particularly severe for older homeowners.”
              The code sections of the Davis-Stirling Act dealing with assessment
payments, delinquency, and assessment collection (Civ. Code, §§ 5650-5740) use the

                                             16
word “owner” or the term “owner of a separate interest” and do not distinguish between
owners who occupy their separate interests and owners who do not. Nor do those code
sections make any distinctions in treatment based on an owner’s age or wealth.
Foreclosure of a lien is recognized by the Davis-Stirling Act as a legitimate means by
which an association may seek to collect delinquent assessments, fees, charges, collection
costs, and interest. The issues presented to us are a matter of statutory interpretation, and
our task has been only to discern the Legislature’s intent through application of accepted
principles of statutory construction.
                                             IV.
                                         Conclusion
              After considering the language of section 5655(a) and its context within the
Davis-Stirling Act, we conclude an association must accept a partial payment made by an
owner of a separate interest in a common interest development toward a debt described in
section 5650(a) and must apply that payment first to assessments owed. That
requirement continues after recordation of a lien pursuant to Civil Code sections 5673
and 5675.
              Accordingly, in this case, HCTA was required to accept the Trust’s check
for $3,500 when tendered in December 2011. Had HCTA accepted the check and applied
it in the order prescribed by section 5655(a), the amount of delinquent assessments would
have been less than $1,800. HCTA does not contend the assessments secured by its lien
were more than 12 months delinquent at the time the Trust tendered the $3,500 check.
Thus, under section 5720(b), HCTA could not pursue judicial foreclosure of the lien, and
the trial court erred by issuing a decree of foreclosure.
              The superior court appellate division’s opinion also addressed the
sufficiency of the evidence to support the damages awarded under the first and second
causes of action. (Huntington Continental, supra, 222 Cal.App.4th at p. Supp. 17.) The
matter was not certified and transferred to this court to address that issue and, therefore,

                                              17
we decline to do so, and decline to address any other issues raised in the appellate briefs.
(See Cal. Rules of Court, rule 8.1012(e).)


                                       DISPOSITION
              The judgment of the trial court is reversed as to the third cause of action
and the matter is remanded with directions to enter judgment on that cause of action in
favor of appellant. The judgment of the trial court as to the first and second causes of
action is reversed and the matter is remanded in accordance with the judgment of the
appellate division of the superior court. Appellant shall recover costs incurred on appeal.




                                                  FYBEL, J.

WE CONCUR:



RYLAARSDAM, ACTING P. J.



THOMPSON, J.




                                             18
