Filed 9/23/16 1101 Dove Street v. 1101 Dove Street Owners’ Assn. CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE


1101 DOVE STREET,

     Plaintiff and Appellant,                                          G051250

         v.                                                            (Super. Ct. No. 30-2012-00599543)

1101 DOVE STREET OWNERS’                                               OPINION
ASSOCIATION,

     Defendant and Respondent.



                   Appeal from a judgment of the Superior Court of Orange County,
Peter J. Wilson, Judge. Affirmed.
                   Bidna & Keys, Richard D. Keys and Howard M. Bidna for Plaintiff and
Appellant.
                   Hatton, Petrie & Stackler, Arthur R. Petrie II and John A. McMahon for
Defendant and Respondent.
                                             *               *               *
                                       INTRODUCTION
              A business condominium owner erects a sign advertising its own business
in the condominium complex’s common area. The condominium owner sues the
condominium owners association, seeking declaratory relief that it has the right to
maintain the sign where it is. The trial court, after a bench trial, enters judgment in favor
of the owners association. On appeal, we affirm.
              The agreement for the purchase of the business condominium did not give
the condominium owner the right to place the sign in the common area without the prior
approval of the owners association and its architectural review committee. Nothing in the
covenants, conditions, and restrictions applicable to the complex created a license,
easement, or other right in the condominium owner to erect the sign. The owners
association’s failure to object to the sign before it was put up is not an approval of the
sign because the condominium owner never provided the owners association with the
specifics of the sign’s size, orientation, location, or other elements.
                    STATEMENT OF FACTS AND PROCEDURAL HISTORY
              In 2006 and 2007, Dove Street Condos Inc. (the Developer) developed an
office condominium project on Dove Street in Newport Beach. A declaration of
covenants, conditions, and restrictions and grant of easements applicable to the property
(the CC&R’s) was recorded by the Developer on July 30, 2007. In September 2007, the
1101 Dove Street Owners’ Association (the Association) was formed to manage the
common interest development. (Civ. Code, former § 1363; see Civ. Code, § 6750.)
              In November 2007, the law firm of Garrett & Heaton, LLP, entered into a
written purchase agreement with the Developer to buy two units in the building for
$1,807,200. (Thomas Garrett and Richard Heaton were the partners of Garrett & Heaton,
LLP.) Garrett & Heaton, LLP, assigned its interest in the agreement to 1101 Dove Street,
a California general partnership (the Partnership). The Partnership negotiated signage
rights as part of its deal; an addendum to the agreement reads, in relevant part: “Seller to

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install signage for Buyer [(the Partnership)] in compliance with all applicable
governmental ordinances provided Seller to exercise best efforts to maximize the size
permitted, at Buyer’s expense.” Before escrow closed, there were no discussions about
the type of sign the Partnership would have.
              There are two types of outdoor signs discussed in this case: eyebrow signs,
which are affixed to the outside of the building near the roofline, and monument signs,
which are free-standing signs mounted on concrete pads, separate from the building.
              Escrow closed in May 2008. Throughout the time between the execution of
the purchase agreement and the close of escrow, the Partnership discussed the use of an
eyebrow sign with the Developer and a sign contractor. On June 5, 2008, the Partnership
made its first direct reference to specifically wanting a monument sign. On June 11, the
Partnership submitted a request for approval of the artwork for the monument sign to the
Developer. On June 13, the Developer asked the Partnership for clarification because the
Developer thought the Partnership was interested in an eyebrow sign. The Partnership
did not respond in writing to the June 13 request, but one of its partners testified that he
had talked with the Developer about it.
              On December 2, 2008, the Partnership wrote a letter resubmitting the
June 11 request for a monument sign to the new property manager. The property
manager replied that the architectural review committee was looking into what signage
was permitted and would grant or deny the Partnership’s request for a monument sign
once the criteria were determined. The Partnership never received anything saying yes or
no to the proposed monument sign request. The Partnership admitted it never submitted
anything to the architectural review committee, the Association’s board, or the property
manager, which showed the proposed location, dimensions, or orientation of the sign.
              The Partnership knew it needed approval from the Association’s
architectural review committee before erecting any signs, as evidenced by a
November 2009 e-mail in which Garrett wrote: “Let’s all talk asap. Why are we paying

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for the sign until we know whether we can put it up—meaning until we have a permit and
architectural committee approval?” While Heaton was the president of the Association’s
board of directors, Attorney Daniel Nordberg was hired to provide a legal opinion letter,
in which he opined that the Partnership had the right to erect a monument sign. The
Partnership was aware of objections to the monument sign from other owners, and tried,
over a period of several months, to get their agreement.
              During the Memorial Day weekend in May 2011, the Partnership caused
the monument sign to be installed, at a cost of $12,000. The next day, a board member
instructed the property manager to cover the sign and to contact legal counsel regarding
legal options for the Association. Heaton, however, ordered the property manager not to
cover the sign and not to seek legal advice from any attorney other than Nordberg. In
July 2012, a new board of directors for the Association hired new counsel, which drafted
a letter to the Partnership, advising that the Partnership had violated the CC&R’s and the
law, and threatening to remove the monument sign.
              In September 2012, the Partnership filed a complaint seeking a declaration
that it was entitled to maintain the sign. Following a bench trial, the court issued an oral
statement of its intended decision in favor of the Association, and against the Partnership.
The Partnership requested a statement of decision, and filed objections to the proposed
statement of decision submitted by the Association. The trial court issued a statement of
decision and entered judgment in favor of the Association.


                                        DISCUSSION
                                              I.
                                   STANDARD OF REVIEW
              The trial court’s factual findings are subject to review for substantial
evidence. Questions of law and interpretations of written agreements are reviewed
de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 800-801.)

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                                             II.
 DO THE CC&R’S AND THE PURCHASE AGREEMENT GIVE THE PARTNERSHIP THE RIGHT TO
  ERECT A MONUMENT SIGN IN THE COMMON AREA OF THE ASSOCIATION’S PROPERTY?

              The Partnership contends that the purchase agreement, read in conjunction
with the CC&R’s, gave it the right to erect the monument sign. The purchase agreement
obligated the Developer to install the largest possible sign, at the Partnership’s expense,
in compliance with city ordinances: “Seller to install signage for Buyer in compliance
with all applicable governmental ordinances provided Seller to exercise best efforts to
maximize the size permitted, at Buyer’s expense.” That agreement did not create any
license, easement, or other right in the Partnership to have any particular sign installed in
the Association’s common area.
              The CC&R’s create restrictions on the condominium owners’ ability to
erect signs anywhere on the property. Those restrictions do not apply to the Developer
with regard to signs used “in connection with the original construction and sale of the
Units.”1


              1
                 Section 8.7 of the CC&R’s provides: “Signs. Each individual Owner
shall be responsible for the cost of erecting and maintaining any and all identification
signs as provided for herein. The location, size and style of signs within the Project are a
matter of paramount importance in the development of a first-class office complex.
Therefore, no signs, posters, displays or other advertising devices of any character shall
be erected or maintained on, or shown or displayed from, the Units without the consent
and approval of the City and of the Architectural Committee and a determination thereby
of conformity with standards to be established by the Architectural Committee.
Notwithstanding anything herein to the contrary, no sign of any kind shall be displayed
on any portion of the Project except such sign or signs which strictly conform to the
regulations of the City, as amended or supplemented from time to time. The Board, at its
election, may summarily cause all unauthorized signs to be removed and destroyed, or, at
the expense of the offending Owner to be brought into conformity with this Declaration
and any sign standards adopted hereunder. This Section 8.7 shall not apply to any signs
used by Declarant or its agents in connection with the original construction and sale of
the Units.”

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              The CC&R’s also provide that there is no restriction on the Developer’s
right to construct improvements on the property.2 That right may be assigned by the
Developer to a successor in interest.3 Using these provisions of the CC&R’s, the
Partnership argues that the Developer, through the purchase agreement, assigned to the
Partnership its right to build a sign in the common area. This argument fails for at least


              2
                  Section 7.1 of the CC&R’s provides: “Construction and Modification.
Nothing in the Restrictions limits, and no Owner or the Association may do anything to
interfere with, the right of Declarant to (a) subdivide or resubdivide any portion of the
Property, (b) complete or modify Improvements to and on the Common Property or any
portion of the Property owned solely or partially by Declarant, (c) alter the foregoing or
its construction plans and designs, (d) modify its development plan for the Property,
including without limitation creating Units and constructing Improvements of larger or
smaller sizes, values, or of different types, or (e) construct such additional Improvements
as Declarant deems advisable in the course of development of the Property so long as any
Condominium in the Project remains unsold. Declarant’s rights hereunder include, but
are not limited to, the right to install and maintain such structures, displays, signs,
billboards, flags and sales offices as may be reasonably necessary to conduct Declarant’s
business of completing the work and disposing of the Condominiums by sale, resale,
lease or otherwise. Each Owner, by accepting a deed to a Condominium, hereby
acknowledges that Declarant’s activities may temporarily or permanently constitute an
inconvenience or nuisance to the Owners, and hereby consents to such impairment,
inconvenience or nuisance. This Declaration does not limit Declarant’s right, at any time
prior to acquisition of title to a Condominium in the Project by a purchaser from
Declarant, to establish on that Condominium additional licenses, easements, reservations
and rights-of-way to itself, to utility companies, or to others as may be reasonably
necessary to the Property’s proper development and disposal. . . . Declarant need not seek
or obtain Architectural Committee approval of any Improvement Declarant constructs or
places on any portion of the Property.”
                  At the time the Developer allegedly granted to the Partnership the right to
erect its monument sign, there were unsold units in the complex.
               3
                  Section 7 .2 of the CC&R’s provides: “Successors and Amendment.
Declarant may assign its rights under the Restrictions to any successor in interest to any
portion of Declarant’s interest in any portion of the Property by a written assignment.
Notwithstanding any other provision of this Declaration, no amendment may be made to
this Article VII without the prior written approval of Declarant. Each Owner hereby
grants, upon acceptance of its deed to its Unit, an irrevocable, special power of attorney
to Declarant to execute and Record all documents and maps necessary to allow Declarant
to exercise its rights under this Article.”

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two basic reasons. First, section 1.18 of the CC&R’s defines “successor” as “a Person
who acquires either [the Developer] corporation or substantially all of such corporation’s
assets, or who merges with either [the Developer] corporation, by sale, merger, reverse
merger, consolidation, sale of stock or assets, operation of law or otherwise.” Thus, the
purchase agreement did not make the Partnership a successor of the Developer. (If it did,
all condominium owners would be successors of the Developer for various provisions
within the CC&R’s.)
              Second, section 7.2 of the CC&R’s requires a written assignment of the
Developer’s right to construct improvements. The addendum to the purchase agreement
regarding the right to erect a sign does not serve as a written assignment.
              For the following reasons, we also reject the Partnership’s argument that
the Association should be deemed to have approved the monument sign because it did not
reject the request or request additional information within 45 days after the Partnership
submitted its request.
              Section 4.2 of the CC&R’s, which addresses review of plans by the
architectural review committee, provides, in relevant part: “The Committee shall
consider and act upon all plans and specifications submitted for its approval under this
Declaration and perform such other duties as the Board assigns to it . . . . No
construction, installation or alteration of an Improvement in the Property may be
commenced or maintained until the plans and specifications therefore showing the nature,
kind, shape, height, width, color, materials and location thereof have been submitted to
and approved in writing by the Committee. . . . [The Developer] and any Person to whom
[the Developer] may assign all or a portion of its exemption hereunder need not seek or
obtain Architectural Committee approval of any Improvements constructed on the
Property by [the Developer] or such Person. [¶] . . . The Committee shall transmit its
decision and the reasons therefore to the Applicant . . . within forty-five (45) days after
the Committee receives all required materials. Any application submitted pursuant to this

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Section 4.2 shall be deemed approved unless the Committee transmits written disapproval
or a request for additional information or materials to the Applicant within forty-five (45)
days after the date the Committee receives all required materials.”
              It is undisputed that the request provided by the Partnership to the
Developer, and later copied to the property manager, did not show “the nature, kind,
shape, height, width, color, materials and location” of the proposed monument sign.
Therefore, the request did not contain “all required materials,” and the 45-day approval
period never started.
              As explained, ante, the Partnership is not a successor of the Developer for
purposes of the Developer’s exemption under section 4.2 of the CC&R’s.
                                              III.
       DID THE ASSOCIATION LACK STANDING TO OBJECT TO THE MONUMENT SIGN?
              The Partnership argues that the Association did not have standing to object
to the monument sign because one of the first members of the Association’s board, John
Fitzgibbon, had signed the purchase agreement on behalf of the Developer. Standing is
generally a concept reserved for deciding whether the plaintiff is the real party in interest.
“The purpose of a standing requirement is to ensure that the courts will decide only actual
controversies between parties with a sufficient interest in the subject matter of the dispute
to press their case with vigor. [Citations.] This purpose is met when, as here, plaintiffs
possess standing to have the underlying controversy adjudicated and the desired relief
granted after a trial on the merits.” (Common Cause v. Board of Supervisors (1989) 49
Cal.3d 432, 439-440.)
              This argument is really an argument that the Association should be imputed
to have the same knowledge that the Developer had regarding the signage rights allegedly
granted to the Partnership in the purchase agreement. The Partnership fails to establish
that this issue was before the trial court. It does not appear in the list of controverted
issues, nor is it addressed in the Partnership’s trial brief. And the Partnership’s appellate

                                               8
briefs do not provide any citation to the reporter’s transcript showing where the issue was
discussed, or what evidence was presented on it.
              The Association was properly organized as a nonprofit mutual benefit
corporation. The Partnership has not offered any proof that it is not a separate and
distinct entity from the Developer.
                                             IV.
        IS THE ASSOCIATION ESTOPPED FROM OBJECTING TO THE MONUMENT SIGN?
              The Partnership argues that the Association was equitably estopped from
objecting to the monument sign. “Whenever a party has, by his own statement or
conduct, intentionally and deliberately led another to believe a particular thing true and to
act upon such belief, he is not, in any litigation arising out of such statement or conduct,
permitted to contradict it.” (Evid. Code, § 623.) Whether there is an estoppel is a
question of fact; “normally it must be pleaded, either as a part of the cause of action or as
a defense.” (13 Witkin, Summary of Cal. Law (10th ed. 2005) Equity, § 191, p. 529.)
              The Association argues that the Partnership failed to plead equitable
estoppel. We disagree. The Partnership’s complaint alleged that, in reliance on the
purchase agreement, the statements of the Association’s counsel, and the Association’s
failure to object to the Partnership’s stated intention to build the monument sign, it spent
its own money to erect the monument sign. The application of the estoppel doctrine was
discussed in the Partnership’s trial brief, and was raised as a controverted issue before
trial. The authorities do not require that estoppel be alleged as a separate cause of action;
it must be “pleaded in the complaint with sufficient accuracy to disclose facts relied
upon.” (Chalmers v. County of Los Angeles (1985) 175 Cal.App.3d 461, 467.) The issue
was properly and sufficiently raised by the Partnership. (Compare Transport Ins. Co. v.
TIG Ins. Co. (2012) 202 Cal.App.4th 984, 1013 [equitable estoppel theory not advanced
where complaints did not plead any facts regarding estoppel or identify any statement of



                                              9
fact by the defendants that the plaintiff reasonably relied on, and where the issue was not
mentioned in the trial brief].)
              The trial court found that “no conduct by the Association gives rise to an
estoppel here.” This finding is supported by substantial evidence. At the time the
monument sign was erected, the Partnership knew the Association’s board and
architectural review committee had both refused to approve the sign, and that other
owners in the complex were strongly opposed to it. To the extent the attorney’s letters
led the Partnership to believe the Partnership had the right to build the sign, the lack of
approval by the board or the architectural review committee and the active, vocal
opposition by the Association’s members would refute the elements of an estoppel. In
this context, the letter from the Association’s legal counsel, Nordberg, is insufficient to
create an estoppel against the Association.


                                        DISPOSITION
              The judgment is affirmed. Respondent to recover costs on appeal.




                                                   FYBEL, J.

WE CONCUR:



BEDSWORTH, ACTING P. J.



MOORE, J.




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