Daily Development for
Monday, April 13, 1996

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

SERVITUDES; REMEDIES; STATUTE OF LIMITATIONS: Statute of Limitations on suits alleging Association's failure to perform maintenance responsibilities runs from time that unit owner makes demand that Association perform a specified maintenance task; and, in any event, conditions resulting from Association's failure to maintain constitute continuing nuisance as to which relief is always available as to current injuries, notwithstanding running of Statute on prior damages. Cutujian v. Benedict Hills Estates Ass'n, 49 Cal. Rptr. 2d 169 (Cal. App. 1996)

The Declaration required that the Association in this hillside residential subdivision maintain the slopes and drainage ditches both in the common areas and on individual lots. Apparently the subdivision was not "built out" immediately, but rather individual owners bought lots on which they built over time. The Declaration was recorded in 1976, and at the time the story of this case began in 1988, ninety percent of the lots had been developed.

Owner acquired the lot in question in and planned to build a home there. Owner noted that there was considerable "slumpage" in the slopes on the site, and that these interfered with his building plans. While the lot was still in escrow, owner demanded that the Association repair the slopes. The Association did not refuse to do so, but did not propose a repair plan that was satisfactory to owner. Ultimately, owner brought a lawsuit for damages for the failure of the Association to meet its maintenance responsibilities. The trial court dismissed the complaint on the basis of the running of the Statute of Limitations. According to the Association, apparently, the cause of action accrued to the prior landowner when the slumpage first occurred and the Association did not immediately repair it.

On appeal: held: reversed: The cause of action as to particular damages runs from the time that the owner demands repairs, and the unrepaired condition constitutes a continuing nuisance, so that, in any event, landowner can sue at any time for any damages currently being sustained, such as depreciation in land value or cost of correction.

The court noted that few modern cases have considered the question of the running of the Statute of Limitations on covenants running with the land. It cited three positions appearing in the older cases: (1) statute commences upon actual demand for performance; (2) statute commences upon demand for performance, but demand must be made within a reasonable time; (3) the duty is continuous, so that a new cause of action arises from day to day.

The court discussed precedent cases dealing with a covenant to build a road, in which the courts had held that the statute of limitations for breach of the covenant began to run only when the promissee demanded that the road be built. It noted that the Declaration in this case required that the repairs be made "when necessary or appropriate," presumably suggesting that there might not even be a breach of the covenant until the affected landowner complained. But its final ruling did not rely upon the "necessary or appropriate" language of the covenant, but simply held that the statute ran from demand of performance.

The court went on to make the entire above exercise moot as to most damages claims, since it also holds that the Association's unperformed duty would constitute a continuing nuisance for which a new cause of action arises "from day to day." Note that the definition of nuisance here does not depend upon the Association making some inappropriate use of its own land, but rather, through breach of duty, interfering with the "free use and enjoyment" of the lot owner's land. Nuisances that are not abatable, the court notes, establish fixed causes of action, but abatable nuisances provide for continuing liability.

Comment: The editor concurs in general with the result in this case, but the rule the court develops does present some conceptual difficulties in application.

When observable damages are sufferred as a consequence of a breach of duty, the Statute of Limitations ought to start to run, even where the party sufferring the damage has made no demand. Where, for example, there is a clear injury resulting from an association's breach of a maintenance duty, such as a collapse of a deck due to a slumping slope, it is hard to conclude that the Statute of Limitations as to injuries directly related to the deck collapse, such as the cost of deck repair, does not begin to run until the landowner demands repair of the slope.

What if there is slumpage on raw land, and the landowner, rather than demanding that the Association repair, fixes the slumpage? Assuming the landowner has a right to recover the cost of repair, would not the Statute begin to run from the time the landowner incurred that cost?

We should note that typically an Association with a duty to maintain slopes and drains, as in this case, would also have a duty of reasonable inspection to identify when repairs are necessary. It need not be notified to know when it has failed to meet its duty.

In the case at hand, the court could have resolved the problem by reading more into the "necessary and appropriate" language of the contract requirement, and concluded that notice was appropriate in this special case. But the court instead made a blanket ruling as to covenants that seems strained.

It is true that, where a particular condition on the land is not causing anyone any concern, since no one is trying to build on the land, it seems unfair for the statute to begin to run. But can't that kind of concern be addressed by saying that an unrepaired condition constitutes a continuing nuisance - the "second prong" of the court's opinion here? Is it also necessary to say that the Statute doesn't commence running until demand? The continuing nuisance concept covers most legitimate claims. The "point of injury" rule seems appropriate as to most others. To what claims does the "demand" rule apply?

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