DD 2/20/07 Condo unit owners generally cannot recover from fellow owners in tort based upon CC&R's, but if they do, and lose, attorney's fees may be payable.

Daily Development for Tuesday, February 20, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
dirt@umkc.edu

CONDOMINIUMS; LIABILITY OF UNIT OWNER TO FELLOW UNIT OWNERS; ATTORNEY’S FEES: Where owner of condominium unit is sued for damages to neighboring condominium owner based upon duties established in the CC&R’s for the condominium relating to pet management, in general the CC&R duties will not be held to establish a private right of action, and the prevailing party in such action is entitled to attorney fees. Chee v Amanda Goldt Prop. Mgmt. 143 CA4th 1360, 50 CR3d 40 (2006)

Chee, a resident and owner of a condominium unit, was injured when Kiymaz's dog jumped on her and caused her to fall. Kiymaz rented a neighboring condominium from Brown, who had hired a leasing agent (Goldt) to find a tenant and collect rents.

Chee sued Brown, Goldt, the homeowners association, Kiymaz, and others. As against Brown, the complaint alleged causes of action for premises liability, negligence, and nuisance.

Relevant to this discussion, Chee also claimed Brown was vicariously liable for Kiymaz's acts and had breached a contract. Both of these latter claims were premised on the condominium's CC&Rs. Chee sought a declaration that, under the CC&Rs, Brown was liable for Kiymaz's negligent acts and contracted to indemnify Chee for any losses suffered as a result of his tenant's actions.

In support of both the tort and contract theories, Chee relied primarily upon language in the CC&R’s providing that an "owner may delegate his right of enjoyment to the common area to ... tenants [and such] owner is fully responsible for all acts or omissions of his delegates " (italics added). She also relied on the provision that states "[a]n owner of any pet shall assure that such pet is restrained at all times it is upon the common areas, that such pet does no waste to common areas or other Units, and that such pet causes no unreasonable noise or other disturbances within the Project ." Plaintiff contended that this language language meant that an owner who leases his or her unit may be held vicariously liable for any act or omission of his tenant that results in personal injury to another homeowner, including the failure of the tenant to control her pet. She further contended that these provisions constituted a contract whereby each owner agreed to indemnify any other homeow

ner for loss caused by his tenant's negligence in handling a pet, or to act as a surety or guarantor in the event that the tenant does not compensate the injured homeowner.

The trial court granted Brown and Goldt summary judgment and awarded Brown and Association attorney fees on the breach of contract and declaratory relief actions under CC §1354. The court of appeal affirmed.

The premises liability and negligence claims against Brown were based on the general principle that one is responsible for an injury caused by want of ordinary care in the management of his or her property (CC §1714(a)). The general duty of care owed by a landowner is attenuated when the premises are let because the landlord is not in possession and usually lacks the right to control the tenant and the tenant's use of the property. Accordingly, a landlord does not owe a duty of care to protect a third party from a tenant's dog unless, unlike this case, the landlord has actual knowledge of the dog's dangerous propensities and the ability to prevent the harm. Landlords of residential property have no duty to inspect the premises for the purpose of discovering the existence of a tenant's dangerous animal. Portillo v Aiassa27 CA4th 1128, 32 CR2d 755 (1994) , expressly limited the imposition of a duty to inspect to a commercial landlord who leases property for a purpose involving the a

dmission of the public, distinguishing between guard dogs in public places and residential family pets.

Generally, a landlord is not liable for a nuisance created by a tenant after the premises are let. No triable issue of fact existed here as to the limited exceptions to the general rule when the landlord participates in the wrongful act by authorizing or permitting it to be done, fails to conduct a reasonable inspection of the premises before renewing a lease, or knows about the hazard and is able to prevent the harm.

The causes of action seeking to impose vicarious liability on Brown for injuries caused by Kiymaz and her dog and for breach of contract based on the CC&Rs failed as a matter of law. The negligence of a tenant cannot be imputed to the landlord. The doctrine of nondelegable duty is a form of vicarious liability and does not create a duty when, as here, none would otherwise exist. Nor was there reason to extend the legal effects of CC&Rs - private recorded restrictions on the use of property - to expand established law defining the duty of care and relationships for which vicarious liability is imposed.

Assuming arguendo that CC&Rs could create a contractual obligation between individual homeowners, the court declined to read a sweeping deviation from established common law into the CC&Rs absent language expressly specifying that owners assume tort liability to other owners for the acts and omissions of their tenants causing personal injury, and that such owners agree to indemnify members for any injuries caused by the act or omission of a tenant, or agree to act as surety or guarantor for a tenant's obligation to compensate another homeowner for personal injuries.

As prevailing parties, Brown and Association were entitled to attorney fees incurred in defense of the declaratory relief and breach of contract claims under former CC §1354(f) (now CC §1354(c)). As required by §1354, both causes of action sought to enforce the rights and obligations of the parties under the governing documents of a common interest development, specifically the CC&Rs. By seeking damages as well as a declaration of rights, Chee unequivocally sought to enforce her rights under the CC&Rs based on the judicial declaration she sought. Chee sought damages for the alleged breach of a contractual obligation whose source was the CC&Rs; an action for damages arising out of a breach of contract is an action to enforce the contract.

Reporter’ s Comment: Personal injury attorneys should learn from this case to be careful about stretching their imaginations too far-they can bite back, like a biting dog. This would have been a run-of-the-mill “tenant dogbite” case but for plaintiff's counsel's creative use of the condominium's CC&Rs as a way to impose liability on deeper pockets. A landlord is liable for the bites inflicted by a tenant's dog only if it has actual knowledge that the dog is dangerous; attorneys for this victim sought to find some way around the ignorance defense in the CC&Rs. Had those restrictions been interpreted to make all condominium owners vicariously (i.e., strictly) liable for their tenants' negligent acts, the defense of lack of knowledge would have been swept away.

Normally, one wants a personal injury attorney who can come up with innovative theories, especially in an otherwise losing case, because there is usually no harm in trying. But when the novel doctrine implicates CC&Rs-which contain attorney fee provisions-less resourcefulness may be safer. The demand for attorney fees by a successful defendant does not need to be made in advance of the outcome and can spring up to surprise a defeated plaintiff already grieving over the disappearance of a hoped-for recovery. (I wonder whether this client's attorneys had warned her that this could happen.) As far as warnings go, it should be obvious that all defense counsel in this particular case had better advise their clients that they will be in serious trouble if the dog bites another neighbor, because their lack of knowledge defense no longer exists. We are not told what kind of lease was involved or what kind of powers the lease gave the landlord in cases of known dangerous dogs, but that had

better now be looked into by all concerned.

The Reporter for this item was Roger Bernhardt, writing in the California CEB Real Property Reporter - reprinted with permission. The editor has heavily edited Roger’s report, and is responsible for any deficiencies.

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