Hugo Robert Garcia vs Butterfly Lane Condominium Owners' Association et al
Hugo Robert Garcia vs Butterfly Lane Condominium Owners' Association et al
Case Number
25CV02983
Case Type
Hearing Date / Time
Fri, 12/12/2025 - 10:00
Nature of Proceedings
Demurrer and Motion to Strike
Tentative Ruling
For the reasons set forth below:
1. The demurrer of Butterfly Lane Condominium Owners’ Association, Laura Jean Nary, and Kevin Russell Nary, to plaintiff’s complaint is sustained in part and overruled in part as follows:
a. The demurrer to the first cause of action for breach of implied covenant of good faith and fair dealing, and the eighth cause of action for breach of contract, is sustained with leave to amend.
b. The demurrer to the second cause of action for breach of fiduciary duty, third cause of action for removal of directors, fourth cause of action for member’s derivative action, fifth cause of action for enforcement of governing documents, and seventh cause of action for nuisance, is overruled.
c. The demurrer to the ninth cause of action for conspiracy is sustained without leave to amend.
2. The motion to strike is taken off-calendar as moot.
3. Plaintiff Hugo Roberto Garcia shall file and serve his first amended complaint no later than January 9, 2026.
Background:
This action commenced on May 12, 2025, by the filing of the complaint by plaintiff Hugo Roberto Garcia, Individually and as Trustee of The Montecristo #1 Living Trust, UA Dated September 24, 2015 (Garcia), against defendants Butterfly Lane Condominium Owners’ Association (BLCOA), Laura Jean Nary (Mrs. Nary), Kevin Russell Nary (Mr. Nary) (collectively “the Narys”), Jefferey A. Beaumont a Professional Corporation dba Beaumont Tashjian (Beaumont), and Vanguard Planning, Inc. (Vanguard) for: (1) Breach of the Implied Covenant of Good Faith and Fair Dealing – as to BLCOA, Mrs. Nary, Mr. Nary, and Beaumont, (2) Breach of Fiduciary Duty – as to BLCOA, Mrs. Nary, and Mr. Nary, (3) Removal of Directors - as to BLCOA, Mrs. Nary, and Mr. Nary, (4) Member’s Derivative Action - as to BLCOA, Mrs. Nary, and Mr. Nary, (5) Enforcement of Governing Documents - as to BLCOA, Mrs. Nary, and Mr. Nary, (6) Professional Negligence – as to Beaumont and Vanguard, (7) Nuisance - as to BLCOA, Mrs. Nary, and Mr. Nary, (8) Breach of Contract - as to BLCOA, Mrs. Nary, and Mr. Nary, and (9) Conspiracy – as to Beaumont Mrs. Nary, and Mr. Nary.
As alleged in the complaint:
Garcia, at all relevant times, resided at 89 Butterfly Lane, County of Santa Barbara. (Compl., ¶ 1.) Mrs. and Mr. Nary, at all relevant times, owned property in the County of Santa Barbara. (Id. at ¶¶ 3, 4.)
On January 15, 1985, a Declaration of Covenants, Conditions, and Restrictions of Butterfly Lane Condominiums (CC&Rs) was recorded with the Santa Barbara County Recorder, creating and governing a common interest development over the real property involved in this action. (Compl., ¶ 8 & Exh. A.) The CC&Rs obligated BLCOA to be the management body for the association and to perform its duties “. . . for the benefit of the owners and for the maintenance and improvement of Butterfly Lane Condominiums.” (Id. at ¶ 9 & Exh. A.)
Garcia, Mrs. Nary and Mr. Nary were owners of units in BLCOA with one vote each. (Compl., ¶¶ 11, 12.)
Mrs. and Mr. Nary, “on behalf of themselves and BLCOA, did not act for the benefit of all the owners. The Narys wasted two and one-half years, and tens of thousands of dollars, to build a small extension of a privacy wall. In contrast they dropped their lethargy and were quite aggressive when it came to levying a $100,000 Special Assessment on Garcia, interfering with his loan approval, and foreclosing on his home.” (Compl., ¶ 10.)
Despite the CC&Rs’ requirement that monthly and special assessments be the same for each of the three units, BLCOA, Mrs. Nary, Mr. Nary, and Beaumont demanded that Garcia pay on-half of the special assessments Mrs. and Mr. Nary passed on September 18, 2024. (Compl., ¶ 14.)
Garcia and the Narys have been involved in a dispute, since at least 2019, because the Narys can outvote Garcia. (Compl., ¶ 16.) “The Narys effectively rule the association as dictators and Garcia has little recourse outside of litigation. Even litigation provides limited recourse because the Narys . . . can force Garcia to pay 1/3 of [BLCOA’s] legal costs. Garcia and his wife, who [are] Latinos, [have] been treated quite different[ly] [than] the prior owners and believe and herein allege that the behavior is consistent with racial discrimination.” (Ibid.)
On May 6, 2022, Garcia and BLCOA, and the Narys, settled a lawsuit between the parties, Case No. 20CV03042, and executed a Settlement Agreement and Mutual Release of All Claims (settlement agreement). (Compl., ¶ 19 & Exh. B.) The settlement agreement required sums to be paid, all of which were paid. (Id. at ¶ 20.) In exchange, BLCOA, under the direction of Mrs. and Mr. Nary, was to extend a six-foot privacy wall between the parties. (Ibid.)
Despite the settlement agreement calling for the privacy wall to be installed within 60-days, the privacy wall has still not been installed nearly three years later. (Compl., ¶ 23.) Despite the settlement agreement calling for map modification to be promptly created, the map modification has still not been created nearly three years later. (Id. at ¶ 24.) Despite the settlement agreement calling for revised CC&Rs to be promptly created and executed, the revision has still not been effectuated nearly three years later. (Id. at ¶ 25.)
After two and one-half years, with no progress, and tens of thousands of dollars spent, not only was there no privacy wall, map modification, or revised CC&Rs, Mrs. and Mr. Nary forced a $100,000.00 special assessment. (Id. at ¶ 26.) The $100,000.00 special assessment was merely to pay for estimated costs and Garcia assumes these costs will only increase. (Id. at ¶ 28.) Mrs. and Mr. Nary, through their attorney Beaumont, demanded that Garcia pay one-half of the special assessment, which is inconsistent with the CC&R and settlement agreement requirements that each unit contribute one-third. (Id. at ¶¶ 29, 30.)
Mrs. and Mr. Nary had also hired, and then fired, planning firm Vanguard, after paying Vanguard at least $10,000.00. (Compl., ¶ 27.)
Beaumont drafted the settlement agreement, advised BLCOA as to the special assessment, and is also going to be drafting the revised CC&Rs. (Compl., ¶ 30.)
Garcia refused to pay the $100,000.00 special assessment because the costs were unreasonable, Vanguard must have been negligent to have the process take so long, and Mrs. and Mr. Nary were negligent and unreasonable as the Board of Directors for BLCOA. (Compl., ¶ 33.)
In March 2025, Garcia was approved for a refinance loan on his unit, but during the escrow for the loan, Beaumont told the escrow officer that Garcia had failed to pay the $100,000.00 special assessment. (Compl., ¶ 34.) Beaumont caused an assessment lien to be recorded against Garcia’s property, preventing any refinancing to occur. (Ibid.) The assessment lien was for Garcia’s claimed one-half of the $100,000.00 special assessment and “collection costs” claimed to have been incurred by Beaumont. (Ibid.)
On April 28, 2025, Mrs. Nary, Mr. Nary, and Beaumont issued a meeting notice to vote on judicial foreclosure of the $100,000.00 special assessment lien. (Compl., ¶ 35.) The Narys and Beaumont were prepared to foreclose and sell Garcia’s home to force him to pay the improper assessment lien. (Ibid.)
On May 5, 2025, the day of the meeting to vote on foreclosure, Beaumont was informed that Garcia would pay the amounts demanded, on the assessment lien, under protest pursuant to Civil Code section 5730. (Compl., ¶ 36.)
Garcia, as a member of BLCOA, contends that BLCOA should pursue legal against the Narys, Beaumont, and Vanguard. (Compl., ¶ 40.)
On June 4, 2025, Garcia dismissed Vanguard as a defendant, without prejudice.
On July 18, 2025, Beaumont filed a special motion to strike complaint pursuant to Code of Civil Procedure section 425.16 (Anti-SLAPP), arguing that this action, as against Beaumont, is based on a protected activity and that Garcia cannot establish a probability of prevailing on the merits.
On September 29, 2025, Garcia filed his opposition to the Anti-SLAPP motion, arguing that that claims against Beaumont do not arise out of protected activity and that Garcia has a probability of prevailing on the merits of his claims against Beaumont.
Beaumont’s special motion to strike was granted on October 10, 2025.
On August 6, 2025, BLCOA and the Narys, while they were all represented by the same counsel, filed a demurrer to Garcia’s complaint, as well as motion to strike several portions of the complaint.
The demurrer and the motion to strike were timely served on Garcia’s counsel. Garcia had not filed opposition or any other response to the demurrer or motion to strike portions of the complaint.
Analysis:
Even if a demurrer or motion is unopposed, the moving party must still meet their burden.
(1) Demurrer
“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds:
“(a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading.
“(b) The person who filed the pleading does not have the legal capacity to sue.
“(c) There is another action pending between the same parties on the same cause of action.
“(d) There is a defect or misjoinder of parties.
“(e) The pleading does not state facts sufficient to constitute a cause of action.
“(f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible.
“(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.
“(h) No certificate was filed as required by Section 411.35.” (Code Civ. Proc., § 430.10.)
“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).)
“[A] court must treat a demurrer as admitting all material facts properly pleaded, it does not, however, assume the truth of contentions, deductions or conclusions of law.” (Travelers Indem. Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 358, citing Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)
“If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer. “ ‘[W]e are not limited to plaintiffs’ theory of recovery in testing the sufficiency of their complaint against a demurrer, but instead must determine if the factual allegations of the complaint are adequate to state a cause of action under any legal theory. The courts of this state have . . . long since departed from holding a plaintiff strictly to the ‘form of action’ he has pleaded and instead have adopted the more flexible approach of examining the facts alleged to determine if a demurrer should be sustained.’ ” [Citations.]” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38-39.)
“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)
A demurrer searches for defects in the allegations of the pleading. “A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.” (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879.)
As noted, the demurrer is a joint demurrer on behalf of BLCOA and the Narys. “[W]here a demurrer is joint it must be overruled if the complaint states a cause of action against any of the defendants.” (Polderman v. C. G. Hokanson Co. (1958) 157 Cal.App.2d 28, 31.)
By way of the Notice of Demurrer, BLCOA and the Narys claim to demur to the following causes of actions:
First Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing;
Second Cause of Action for Breach of Fiduciary Duty;
Third Cause of Action for Removal of Directors;
Fourth Cause of Action for Member’s Derivative Action;
Fifth Cause of Action for Enforcement of Governing Documents;
Sixth Cause of Action for Nuisance;
Seventh Cause of Action for Breach of Contract; and
Ninth Cause of Action for Conspiracy.
However, there appears to be typographical errors in the Notice. The Sixth Cause of Action is for Professional Negligence and is not alleged against BLCOA or the Narys, the Seventh Cause of Action is for Nuisance, and the Eighth Cause of Action is for Breach of Contract. Below, the causes of action will be addressed as designated in the complaint.
First Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing:
Moving defendants’ first argument is that “the bad faith claim fails to allege facts sufficient to sustain a cause of action.” (Demurrer, p. 3, l. 27.) [Note: It is clear that the moving defendants are referring to the first cause of action. However, although closely related, Breach of the Implied Covenant and Good Faith and Fair Dealing and “bad faith” are not necessarily identical claims. See, for example, Reid v. Mercury Ins. Co. (2013) 220 Cal.App.4th 262, 272-273.] The essence of the argument is that typically Breach of Implied Covenant of Good Faith and Fair Dealing claims are typically only actionable in the insurance context where an insurer denied benefits of which its insured was entitled, and that neither BLCOA nor the Narys owed Garcia a fiduciary duty.
As to the moving defendants, Garcia alleges under the first cause of action:
“The Settlement Agreement is a valid and enforceable contract between Garcia, BLCOA, and the Narys.” (Compl., ¶ 46.)
“Garcia did all, or substantially all of the significant things that the contract required him to do, or those things were excused.” (Compl., ¶ 47.)
“The Narys, on their own behalf and as the controlling directors of BLCOA, failed to modify the map, revised the CC&Rs, or build the privacy wall in the times prescribed in the Settlement Agreement.” (Compl., ¶ 48.)
“By failing to do so, the Narys, on their own behalf and as the controlling directors of BLCOA, did not act fairly and in good faith. They caused an inappropriate and unfair amount to be assessed on Garcia, they caused the sixty (60) day project to drag on for three (3) years and counting, they used the Settlement Agreement to exact excessive costs on Garcia, and unfairly issued an assessment lien and threaten foreclosure as coercion.” (Compl., ¶ 49.)
“Garcia’s claim against the Narys for the Breach of the Implied Covenant of Good Faith and Fair Dealing (as to the Settlement Agreement) sounds in tort because of the special relationship – a fiduciary relationship as members of the board of directors – between the Narys and Garcia. The independent duty (independent of their duties under the Settlement Agreement) as directors in a nonprofit mutual benefit corporation with Garcia as a member justifies tort recovery.” (Compl., ¶ 55.)
“Implied in every contract is a covenant of good faith and fair dealing. The implied covenant prevents one side from unfairly frustrating the other’s right to receive the benefits of the agreement actually made. [Citation.] The covenant does not impose substantive terms beyond those of the contract. [Citation.] A plaintiff claiming breach must allege the defendant’s wrongful conduct was contrary to the contract’s purpose and the parties’ legitimate expectations.” (Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 156.)
As noted above, the way the cause of action is worded, it appears that Garcia is seeking tort damages for the breach of the implied covenant of good faith and fair dealing rather than contract damages.
“Because the covenant is a contract term, in most cases compensation for its breach is limited to contract rather than tort remedies.” (Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 400.)
Garcia’s complaint does not reasonably infer that the first cause of action falls under any exception to the general rule that it is limited to the breach of contract action. Likewise, there are no facts alleged that would impose any special relationship between Garcia and the Narys. Given that Garcia is requesting punitive damages in conjunction with the cause of action, it is likely that is why he is trying to frame it as a tort.
The demurrer to the first cause of action will be sustained. Although the court has reservations regarding Garcia’s ability to amend the cause of action to state sufficient facts to constitute a viable cause of action as a tort claim, Garcia will be given leave to amend.
Second Cause of Action for Breach of Fiduciary Duty:
The moving parties argue that the second cause of action suffers from a defect or misjoinder of parties and fails to allege facts sufficient to constitute a cause of action.
Under the second cause of action, Garcia alleges:
“ Defendants, BLCOA, Mrs. Nary, and Mr. Nary owe Plaintiff the fiduciary duties of due care and undivided loyalty.” (Compl., ¶ 60.)
“Defendants, BLCOA, Mrs. Nary, and Mr. Nary breached its duty of care by failing to make reasonable inquiry into the building of the privacy wall, modification of the map, revising the CC&Rs, the issuance of the $100,000 Special Assessment, and the coercive use of the assessment lien.” (Compl., ¶ 61.)
“Defendants, BLCOA, Mrs. Nary, and Mr. Nary breached their duty of care by failing to hire competent individuals to advise them as to the building of the privacy wall, modification of the map, revising the CC&Rs, the issuance of the $100,000 Special Assessment, and the coercive use of the assessment lien.” (Compl., ¶ 62.)
“Defendants, BLCOA, Mrs. Nary, and Mr. Nary breached their duty of care by failing to make reasonable decisions based on information to the building of the privacy wall, modification of the map, revising the CC&Rs, the issuance of the $100,000 Special Assessment, and the coercive use of the assessment lien.” (Compl., ¶ 63.)
“Defendants, BLCOA, Mrs. Nary, and Mr. Nary breached their duty of care by failing to maintain financial reserves for the building of the privacy wall, modification of the map, revising the CC&Rs.” (Compl., ¶ 64.)
The moving parties’ argument regarding defect in parties is:
“Plaintiff failed to join the Narys as volunteer directors. The claim is defective on the face of the Complaint as the Narys have been joined solely in their individual capacity as record owners of units in the condominium project; not in their capacity as volunteer directors. The Complaint predicates fiduciary liability on alleged acts and omissions performed in their capacity as volunteer directors. (Complaint, ¶¶ 60-65 [e.g., failure to maintain reserves, failure to record RMM, failure to amend CC&Rs, improper special assessment, improper use of assessment lien). Joinder of the Narys in their capacity as volunteer directors is, therefore, necessary as in the absence of joinder the fiduciary duty claim suffers from a nonjoinder-defect.” (Demurrer, p. 6, ll. 7-14.)
Although only sued in their individual capacities, the complaint identifies the Narys as directors of BLCOA in several paragraphs, including paragraphs Nos. 33, 40, 48, 49, 55, 69, 71, 78, 83, 118, and 119. The moving defendants have failed to provide any authority that shows a necessity of the Narys being joined as “volunteer directors.”
“To maintain a tort claim against a director in his or her personal capacity, a plaintiff must first show that the director specifically authorized, directed or participated in the allegedly tortious conduct [citation]; or that although they specifically knew or reasonably should have known that some hazardous condition or activity under their control could injure plaintiff, they negligently failed to take or order appropriate action to avoid the harm [citations.].” (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 508.)
Here it appears from the face of the complaint that it is proper to allege the cause of action against the Narys in their individual capacities.
The moving parties’ second argument regarding the second cause of action failing to allege facts sufficient to state a cause of action consists of several subparts that do not implicate any defect that appears on the face of the complaint. Rather, the arguments are directed to the merits of Garcia’s claims. As noted above, on demurrer, the court is solely concerned with defects that appear on the face of the complaint and not what must eventually be proven at trial.
To the extent that the moving parties argue that there is no duty: “A homeowners association has a fiduciary relationship with its members-at least with respect to dealing with the homeowner’s unit.” (Ostayan v. Nordhoff Townhomes Homeowners Assn., Inc. (2003) 110 Cal.App.4th 120, 126.)
The moving parties have failed to meet their burden on demurrer to the second cause of action. As such, the demurrer to the second cause of action will be overruled.
Third Cause of Action for Removal of Directors
The moving parties argue that third cause of action for removal of directors suffers a defect or misjoinder of parties and fails to allege facts sufficient to constitute a cause of action.
The moving parties’ argument regarding nonjoinder of indispensable defendant again claims that Garcia must join the Narys as volunteer directors of BLCOA, and that the failure to join them as directors deprives the court of the power to grant complete relief.
Under the third cause of action, Garcia alleges:
“Mrs. Nary and Mr. Nary’s oppressive conduct, alleged herein, is a gross abuse of their authority and discretion as board members.” (Compl., ¶ 70.)
“Garcia request[s], as preliminary relief by way of injunctive order, that the Narys be removed from their positions on the Board of Directors of BLCOA for the pendency of this action.” (Compl., ¶ 71.)
“Garcia request[s], as preliminary relief by way of injunctive order, that the Narys be prohibited from using BCLOA funds for counsel for BCLOA in order to ensure that Garcia is not forced to pay any of BCLOA’s or the Narys’ legal costs for this action prior to its disposition.” (Compl., ¶ 72.)
Again, the Narys are sued in their individual capacities for actions, or omissions, that they are alleged to have taken. The moving parties fail to provide any authority that suggests that complete relief cannot be granted because the Narys are named in their individual capacities rather than as “directors” of BLCOA.
The second argument moving defendants make is that the cause of action is not pled with the requisite particularity as required. The court disagrees. The cause of action incorporates the paragraphs that precede it and, as set forth in the background section above, Garcia pleads specifically regarding the alleged actions of the Narys, including the how, when, where, to whom, and by what means the acts took place.
The moving defendants’ final argument regarding the third cause of action for removal of directors is that the business judgment rule bars the claim. The argument consists of what amounts to an affirmative defense.
“The business judgment rule is a judicial policy of deference to the business judgment of corporate directors in the exercise of their broad discretion in making corporate decisions. [Citation.] “ ‘The rule is based on the premise that those to whom the management of a business organization has been entrusted, and not the courts, are best able to judge whether a particular act or transaction is helpful to the conduct of the organization’s affairs or expedient for the attainment of its purposes. [Citations.] The rule establishes a presumption that directors’ decisions are based on sound business judgment, and it prohibits courts from interfering in business decisions made by the directors in good faith and in the absence of a conflict of interest.’ ” [Citation.] An exception to this presumption exists in circumstances which inherently raise an inference of conflict of interest. [Citation.] The business judgment rule does not shield actions taken without reasonable inquiry, with improper motives, or as a result of a conflict of interest. [Citation.]” (Everest Investors 8 v. McNeil Partners (2003) 114 Cal.App.4th 411, 429–430.)
The allegations of the complaint are that the Narys did not act in good faith and that the Narys acted with improper motive. These contradictory claims are matters of proof for the trier of fact and are not amenable to demurrer. As such, the demurrer to the third cause of action will be overruled.
Fourth Cause of Action for Member’s Derivative Action
The moving parties argue that fourth cause of action for member’s derivative action suffers a defect or misjoinder of parties and fails to allege facts sufficient to constitute a cause of action.
As above, the moving defendants’ first argument is that the cause of action fails for failure to name the Narys in their capacity as directors. The argument fails for the same reasons discussed above. The Narys have been named individually and they are described as directors of BLCOA in several portions of the complaint. Defendants have not produced any authority that requires Garcia to name the Narys as directors in the caption of the complaint. They, having been named individually, are parties to the action.
The second argument made by the moving defendants is that the cause of action fails because Garcia failed to properly allege the cause of action because “a viable derivative claim must allege the plaintiff made a demand on the board for desired action or specific allegations as to each director explaining why a demand would be futile.” (Demurrer, p. 11, ll. 15-17.)
Garcia alleges:
“Garcia, through counsel, complained that the Beaumont Tashjian’s costs were unreasonable, that Vanguard must have been negligent to have the process take this long, and complained about negligent and unreasonable performance by the Narys as the Board of Directors in causing a small privacy wall extension to take three (3) years and costs an excessive amount of money. These complaints were issued via e-mail communications between counsel over the course of several months between July 2024 and April 2025.” (Compl., ¶ 78.)
“Garcia demanded of Beaumont Tashjian, as to what he could do to ‘ “. . . prevent another $100,000 assessment, today, tomorrow, or any other time of the Narys choosing?” ’ Beaumont Tashjian ignored Garcia’s plea to be protected from a future special assessment, and all his other requests and concerns.” (Compl., ¶ 79.)
“Garcia has provided sufficient notice alleging negligence against the Narys, Beaumont Tashjian and Vanguard. Beaumont Tashjian, on its own behalf and on behalf of the Narys and BLCOA, responded with a seven (7) page letter detailing, among other things, that there neither any wrongdoing by BLCOA or the Narys nor were there any ‘ “negligently rendered services” ’ by Vanguard.” (Compl., ¶ 80.)
As can be seen from the language above, the moving defendants are incorrect. Garcia does allege that he made a demand on the board for desired action.
The demurrer to the fourth cause of action will be overruled.
Fifth Cause of Action for Enforcement of Governing Documents
Moving defendants argue that the cause of action for enforcement of governing documents fails because of the business judgment rule. This argument fails for the same reasons given above as applicable to the third cause of action.
The demurrer to the fifth cause of action will be overruled.
Seventh Cause of Action for Nuisance
Moving defendants argue that the cause of action for nuisance fails because Garcia fails to allege that defendants “engaged in conduct that was indecent or offensive to the senses, substantial or unreasonable conduct that caused actual or significant damage, or conduct that breached an independent legal duty.” (Demurrer, p. 13, ll. 19-22.)
By way of his complaint, Garcia alleges:
“BLCOA’s, by and through the Narys control of BLCOA, conduct in failing to build the privacy wall in a timely manner, delaying the project, harassing Garcia by way of unlawful special assessments and foreclosure threats, has interfered with the enjoyment and use of his property at 89 Butterfly Lane. He has had to live under the constant threat and apprehension of his own neighbors, who have unlimited control over his property and have a history of using that control for coercive ends. This interference is completely unreasonable and oppressive.” (Compl., ¶ 113.)
“The unreasonable interference caused by BLCOA and the Narys has harmed Garcia in that his property value has decreased, he has been made to pay a wrongful assessment, he lost a loan he should have received resulting in much higher interest costs, and he has incurred legal costs.”
“A nuisance is “ ‘[a]nything which is injurious to health . . . or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property.’ ” (Civil Code, § 3479.)” (City of Pasadena v. Superior Court (2014) 228 Cal.App.4th 1228, 1236.)
“A nuisance may be both public and private, but to proceed on a private nuisance theory the plaintiff must prove an injury specifically referable to the use and enjoyment of his or her land.” (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51, 122.)
The allegations of the complaint are sufficient to overcome demurrer. The demurrer to the seventh cause of action will be overruled.
Eighth Cause of Action for Breach of Contract
Moving defendants argue that the breach of contract cause of action fails because there are no specific allegations that explain how any of Garcia’s duties under the settlement agreement were excused due to conduct attributable to defendants. (Demurrer, p. 14, ll. 13-16.) Specifically, defendants argue that the settlement agreement has an express requirement to engage in prelitigation mediation. Defendants also argue that Garcia does not adequately address the Code of Civil Procedure section 664.6 enforcement provision, or his failure to timely tender sums he was obligated to pay to BLCOA.
“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
“ ‘[E]xcuses must be pleaded specifically.’ ” (Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1388.)
Relevant to defendants’ argument, Garcia pleads: “Garcia did all, or substantially all of the significant things that the Settlement Agreement required him to do, or those things were excused.” (Compl., ¶ 117.)
Here, Garcia’s allegations are unclear and lack the required specificity. Either Garcia performed all of his duties under the contract, or he did not. If he did fully perform his obligations under the settlement agreement, he should so state. If he did not, Garcia must plead specific facts as to why his performance was excused.
The demurrer to the eighth cause of action for breach of contract will be sustained with leave to amend.
Ninth Cause of Action for Conspiracy
Moving defendants argue that the ninth cause of action for conspiracy fails because an attorney cannot conspire with his or her client when acting within the scope of the attorney-client relationship without an independent financial interest. (Demurrer, p. 14, ll. 18-20.)
“The elements of liability under conspiracy are: (1) formation and operation of the conspiracy; (2) wrongful conduct in furtherance of the conspiracy; and (3) damages arising from the wrongful conduct.” (Spencer v. Mowat (2020) 46 Cal.App.5th 1024, 1037.)
Garcia’s conspiracy claims center on the Narys’ relationship with Beaumont. Garcia alleges:
“Beaumont Tashjian was aware of the Narys breach of the implied covenant of good faith as it pertains to the Settlement Agreement, the wrongful assessment to be imposed, threats to foreclose on the assessment lien.” (Compl., ¶ 124.)
“Beaumont Tashjian, through its advice or lack thereof, agreed and acted in concert with the Narys and intended the violation of the implied covenant of good faith as it pertains to the Settlement Agreement, the wrongful assessment to be imposed, threats to foreclose on the assessment lien.” (Compl., ¶ 125.)
“Beaumont Tashjian had an independent duty to avoid harming Garcia by way of professional negligence (misinterpreting the Settlement Agreement, negligently advising the privacy wall project and negligently advising the imposition of the assessment, lien and threats of foreclosure) and gained by way of increasing their own fees at Garcia’s expense.” (Compl., ¶ 126.)
“Beaumont Tashjian’s acts in advising oppressive conduct, breaches of good faith, and negligent advice go beyond the performance of any professional duty and involve a conspiracy to violate a legal duty in furtherance of Beaumont Tashjian’s financial gain, by way of incurring additional legal fees that Garcia would be indirectly responsible for.” (Compl., ¶ 127.)
As noted, Beaumont’s special motion to strike was granted and Beaumont is no longer a party to this action. Even if Beaumont was still a party to this action, the cause of action would be subject to demurrer.
“(a) No cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action. The court may allow the filing of a pleading claiming liability based upon such a civil conspiracy following the filing of a verified petition therefor accompanied by the proposed pleading and supporting affidavits stating the facts upon which the liability is based. The court shall order service of the petition upon the party against whom the action is proposed to be filed and permit that party to submit opposing affidavits prior to making its determination. The filing of the petition, proposed pleading, and accompanying affidavits shall toll the running of any applicable statute of limitations until the final determination of the matter, which ruling, if favorable to the petitioning party, shall permit the proposed pleading to be filed.
“(b) Failure to obtain a court order where required by subdivision (a) shall be a defense to any action for civil conspiracy filed in violation thereof. The defense shall be raised by the attorney charged with civil conspiracy upon that attorney’s first appearance by demurrer, motion to strike, or such other motion or application as may be appropriate. Failure to timely raise the defense shall constitute a waiver thereof.
“(c) This section shall not apply to a cause of action against an attorney for a civil conspiracy with his or her client, where (1) the attorney has an independent legal duty to the plaintiff, or (2) the attorney’s acts go beyond the performance of a professional duty to serve the client and involve a conspiracy to violate a legal duty in furtherance of the attorney’s financial gain.” (Civ. Code, § 1714.10, subds. (a)-(c).)
“The purpose of section 1714.10 is to discourage frivolous claims that an attorney conspired with his or her client to harm another. Therefore, rather than requiring the attorney to defeat the claim by showing it is legally meritless, the plaintiff must make a prima facie showing before being allowed to assert the claim. [Citation.] “(Klotz v. Milbank, Tweed, Hadley & McCloy (2015) 238 Cal.App.4th 1339, 1350.)
As alleged, the complaint fails to state a cause of action for civil conspiracy. The demurrer to the ninth cause of action will be sustained. As there is no reasonable probability that the cause of action can be amended to state a viable cause of action for conspiracy, the demurrer will be sustained without leave to amend.
(2) Motion to Strike
Defendants move to strike several portions of Garcia’s complaint; mainly those pertaining to punitive damages and phrases such as “bad faith and oppressive conduct,“ and “unreasonable.”
“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “Irrelevant matter” includes a “demand for judgment requesting relief not supported by the allegations of the complaint.” (Code Civ. Proc., § 431.10, subds. (b)(3), (c).) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)
“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.)
“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)
Many of the allegations that moving defendants seek to have stricken are simply Garcia’s characterizations of the actions and would not be stricken. To the extent that defendants seek to have the punitive damages allegations, and prayer for relief, stricken, because the demurrer to the complaint is being partially sustained, the motion to strike is, at this point, moot. The court will note, however, without making a ruling at this time, that based on the remaining causes of action and allegations, it does not appear that punitive damages would be recoverable in this case.
The motion to strike will be taken off-calendar as moot.