Ruffier v. Volcano Hills Road Maintenance Association

Summary

The California Court of Appeal held that a homeowners association’s July 2019 increase of annual assessments from $200 to $1,000 per parcel was void under the Davis-Stirling Common Interest Development Act. Because the association neither complied with applicable budget-reporting requirements nor obtained approval from a majority of a quorum of members, the court reversed and remanded for entry of a declaratory judgment invalidating the increase. The court declined to address plaintiffs’ request for refunds because monetary relief was not sought in the complaint.

Holdings

1. A common-interest-development board may not impose an annual regular-assessment increase without either complying with the specified requirements of Civil Code section 5300 or obtaining approval from a majority of a quorum of members. Because neither occurred, the Association's July 2019 increase from $200 to $1,000 was void and invalid under the Act.
2. The Association's general duty to levy assessments sufficient to perform its obligations does not override the specific limitations in section 5605, and the asserted unreasonableness or elimination of the $200 governing-document limit did not eliminate the statutory approval and reporting requirements.
3. A member may bring a civil action for declaratory relief to enforce the Davis-Stirling Common Interest Development Act or the Association's governing documents in an assessment dispute.
4. The court declined to consider the Association's argument that the assessment increase was authorized by the emergency exception in section 5610 because the argument was not raised in the trial court and involved factual questions.
5. The appellate court would not decide whether plaintiffs were entitled to a refund because they did not seek monetary damages in their trial-court complaint.

Questions Presented

1. Whether the Association's July 2019 increase of the regular annual assessment from $200 to $1,000 was valid under California Civil Code section 5605 when the board did not comply with section 5300 and did not obtain approval from a majority of a quorum of members.
2. Whether the Association's general obligation to levy assessments sufficient to perform its duties, or the asserted unreasonableness of the $200 limit, authorized the assessment increase despite noncompliance with section 5605.
3. Whether members may bring a civil action for declaratory relief to challenge an assessment increase under the Davis-Stirling Common Interest Development Act.
4. Whether the Association could rely on the emergency exception in section 5610 for the first time on appeal.
5. Whether plaintiffs could obtain a refund of excess fees when their trial-court pleading sought only declaratory relief.

Disposition

reversed_and_remanded