Opinion
D074677
05-08-2020
BV PARTNERS, LLC, Plaintiff, Cross-defendant and Appellant, v. OCEAN WINDOWS OWNERS ASSOCIATION, INC., Defendant, Cross-complainant and Respondent.
Seltzer Caplan McMahon Vitek, Michael G. Nardi, Neal P. Panish, Arezoo Jamshidi and Scott W. Perlin for Plaintiff, Cross-defendant and Appellants. Green Bryant & French, Elizabeth A. French; Williams Iagmin, Jon R. Williams for Defendant, Cross-complainant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2016-00015110-CU-OR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Ronald L. Styn, Judge. Affirmed. Seltzer Caplan McMahon Vitek, Michael G. Nardi, Neal P. Panish, Arezoo Jamshidi and Scott W. Perlin for Plaintiff, Cross-defendant and Appellants. Green Bryant & French, Elizabeth A. French; Williams Iagmin, Jon R. Williams for Defendant, Cross-complainant and Respondent.
BV Partners, LLC appeals the grant of a license to Ocean Windows Owners Association, Inc. to landscape and perform general maintenance on land owned by BV Partners. We conclude the trial court did not abuse its discretion in granting the license, and we accordingly affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Ocean Windows condominium complex sits on a hillside overlooking the old Del Mar Train Station. The train station property runs eastward up the hill until it meets common area lots belonging to the condominium complex. There is a chain link fence on the slope that would seem to mark a break between properties, but it does not; the train station property continues east of the fence. What the parties have termed the "disputed area" lies between the fence and the condominium property. It is used as common space and has a winding footpath that leads downhill toward the beach, providing convenient access for the public, Ocean Windows residents and guests from the nearby Hotel L'Auberge.
The Ocean Windows Owner's Association was formed in 1973. There is some evidence it began landscaping the disputed area as early as 1975. At that time, the train station (which was built in 1885) was still operative and was owned by the Santa Fe Railway Company. Santa Fe sold the station to Catellus Properties in 1992, which in turn sold it to BV Partners in 2011. Beginning in 1995, trains no longer stopped at the station. The L'Auberge Hotel was built around 1989. That same year, the hotel, Ocean Windows, and a third party (not involved in this case) entered into an agreement to reconfigure ownership and responsibilities for certain lots within their collective properties, which were all part of the Del Mar Square Subdivision. Ocean Windows conveyed two lots to the hotel for expansion purposes. In return, the hotel agreed to pay the bulk of Ocean Windows's landscaping costs and took on responsibility for landscaping the "railroad property," which included the disputed area, "for so long as the owner of such property does not object to such maintenance." In early 1992, Ocean Windows and the hotel agreed to transfer responsibility for landscaping the railroad property back to Ocean Windows, with the hotel continuing to reimburse most of the cost.
BV Partners was familiar with the property before its purchase in 2011 because Catellus began leasing the train station to Del Mar Train Partners (DMTP) in 2000. The three members of BV Partners are also members of DMTP (which is still the tenant at the station).
From at least 1992 until 2015, Ocean Windows landscaped the disputed area and enjoyed a harmonious relationship with the various owners of the train station. Around 2000, there was some conversation between DMTP (the tenant managing the property at the time) and Ocean Windows about the latter's landscaping activities. They agreed Ocean Windows could continue routine maintenance (mowing, trimming and weeding) in the disputed area at its discretion but would need permission to change "anything vertical."
Then in 2015, Ocean Windows unilaterally removed a cluster of acacia trees. The trees had grown together, making maintenance difficult and providing unintended cover for "nefarious activities" on the property. BV Partners quickly complained and asserted it would need to approve any replacement. Ocean Windows apologized and assured BV Partners it would make things right by replacing the trees with something comparable. Instead, while the two entities were still discussing suitable replacement vegetation, Ocean Windows installed ground cover.
This incident spawned the present lawsuit. BV Partners sued for quiet title and declaratory relief. Ocean Windows countersued, asking for a prescriptive easement or an irrevocable license to maintain the landscaping. By stipulation, the parties agreed that BV Partners holds legal title to the disputed area. Ocean Windows's claims were then litigated at a bench trial.
The court rejected the easement claim but granted Ocean Windows a license to landscape the disputed property subject to certain conditions and limitations. "Provided Ocean Windows timely restored the [acacia tree area] . . . Ocean Windows shall have a license within the [d]isputed [a]rea to maintain . . . the landscaping, including mowing, weeding, irrigation, . . . trimming, and maintaining the lighting for so long as justice and equity require as set forth below. This license is limited to maintaining the existing landscaping at approximately the same height as presently exists in order to preserve existing views." The judgment goes on to specify Ocean Windows needs permission from BV Partners before removing any trees or changing the height of anything exceeding six feet. It prohibits BV Partners from unreasonably withholding consent. And if BV Partners chooses to develop any land in the disputed area, the license will terminate as to the developed section.
The court's statement of decision included the following factual findings in support of the judgment: (1) There was no evidence that Catellus or BV Partners ever objected to Ocean Windows landscaping the disputed area; (2) BV Partners was on notice of the landscaping from at least 2000, and its predecessor Catellus had notice dating back to 1992; (3) Prior to 2015, there were never objections about the way Ocean Windows landscaped (with one exception in 2014 involving a sumac tree outside the disputed area); (4) Ocean Windows's conduct in the acacia tree incident went beyond the scope of any express or implied agreement, but was not intended to violate its license; (5) It would be inequitable to find Ocean Windows forfeited the license due to the acacia tree incident; (6) Ocean Windows's activities on the disputed area over at least 25 years constituted a significant and substantial expenditure that supports the license claim, irrespective of the reimbursement arrangement with the hotel; and (7) "any agreement, express or implied, by BV and its predecessors in interest to allow Ocean Windows to maintain the landscaping was not intended to forfeit its right to access the property or its right to develop the property."
DISCUSSION
In this appeal, BV Partners challenges as improper the trial court's grant of a limited irrevocable landscaping license to Ocean Windows, arguing that (1) the grant of the license exceeded the court's equitable powers, (2) Ocean Windows has unclean hands and should be barred from any equitable relief, and (3) if Ocean Windows is entitled to a license, its terms are limited by the 1989 agreement with the hotel which reflected only a fully revocable license. To the contrary, however, we conclude the court properly exercised its broad equitable powers in recognizing the license and that all the underlying findings it made were supported by the evidence.
1. Applicable Legal Principles
A license is a privilege that allows a party to use the land of another. (Emerson v. Bergin (1888) 76 Cal. 197, 201.) It transforms activity that would otherwise be a trespass into legal conduct by creating an access privilege. (Richardson v. Franc (2015) 233 Cal.App.4th 744, 758-759 (Richardson).) Unlike an easement, a license does not create an interest in real property; it is not assignable and does not run with the land. (Shaw v. Caldwell (1911) 16 Cal.App. 1, 8; Gravelly Ford Canal Co. v. Pope & Talbot Land Co. (1918) 36 Cal.App. 717, 737; 12 Witkin, Summary of Cal. Law (11th ed. 2019), Real Property, § 443.)
An implied license can arise "where the owner of land, with full knowledge of the facts, tacitly permits another to repeatedly do acts upon the land" without objection. (Gravelly Ford Canal Co. v. Pope & Talbot Land Co. (1918) 36 Cal.App. 717, 737.) Generally, a license may be revoked by the licensor at any time. But it can become irrevocable for "so long a time as the nature of it calls for" when the licensee "has expended money, or its equivalent in labor, in the execution of the license." (Cooke v. Ramponi (1952) 38 Cal.2d 282, 286 (Cooke).) These expenditures must be "substantial." (Richardson, supra, 233 Cal.App.4that p. 755.)
BV Partners would have us import additional elements into an irrevocable license claim, such as reliance on a license of infinite duration. But caselaw is clear—where a licensee shows substantial expenditure, the lower court can grant an irrevocable license if it deems this remedy equitable under the circumstances. (Richardson, supra, 233 Cal.App.4th at p. 753.)
An irrevocable license is a remedy based in equity and reviewed for an abuse of discretion. (Richardson, supra, 233 Cal.App.4th at p. 751.) " 'Under that standard, we resolve all evidentiary conflicts in favor of the judgment and determine whether the trial court's decision "falls within the permissible range of options set by the legal criteria." ' " (Ibid.) We only interfere with the trial court's discretionary decisions when there is clear abuse of discretion. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
2. The Basis for an Irrevocable License
BV Partners argues the trial court's grant of a license falls outside the range of legally permissible options. Specifically, it maintains the court's reliance on Richardson and Cooke was misguided, and in violation of "the fundamental principles of law" articulated in Harrison v. Welch (2004) 116 Cal.App.4th 1084, 1092-1093 (Harrison). Appellant reads the first cases too narrowly and the last too broadly.
Richardson involved a dispute between neighbors over an easement with a road that ran through the Franc's property, providing access to the Richardson's home. Although their easement authorized only access and utility use, the Richardsons and their predecessors cultivated the land on either side of the road over a 20-year period—installing irrigation and lighting and maintaining landscaping without objection from the owners (the Francs and their predecessors). (Richardson, supra, 233 Cal.App.4th at p. 748.) When the Francs did object, the Richardsons sought and obtained an irrevocable license "to maintain and improve landscaping, irrigation, and lighting within the . . . easement." (Id. at p. 750.) Relying on Cooke, supra, 38 Cal.2d 282, the First Appellate District upheld the decision, noting there was ample evidence to conclude an implicit irrevocable license arose from 20 years of improvements and substantial expenditures without any objection. (Richardson, at p. 756.)
Richardson is apt here for many reasons, including the parallel decades of investment by the licensee with the acquiescence of the property owner. As in Richardson, Ocean Windows invested at least 20 years landscaping and improving the disputed property without objection. At trial, "the evidence was uncontroverted that [Ocean Windows] had been maintaining the property since long before 1992." BV Partners and its predecessors in interest knew about these activities and assented verbally to continued landscaping in 2000. The evidence supports the court's finding that BV Partners and its predecessor had notice since 1992. With one exception where Ocean Windows trimmed a sumac bush outside the disputed area too aggressively, BV Partners did not object to the way the landscaping was carried out until the acacia tree incident.
Richardson also provides guidance to our review of the court's finding that the expenditures by Ocean Windows were substantial. In Richardson, no specific amount of expenditures was calculated, but testimony established the Richardsons and their predecessors incurred regular expenses for water use, hiring landscapers and gardeners, and replacing plants and irrigation parts in addition to their own labor. (Id. at 756.) This case is remarkably similar. Over a 25-year period, Ocean Windows incurred costs for labor, water use, replacing plants, and all the hardware associated with the lighting and irrigation systems. The evidence supports a finding that these expenditures were significant and substantial.
Another case where expenditures did not support such a finding illustrates its propriety here. In Shoen v. Zacarias (2019) 33 Cal.App.5th 1112, Zacarias set up a patio on a flat area in her lawn that she erroneously believed was her property. Most of the square footage actually belonged to her neighbor. She discovered this and continued her use even after new neighbors objected. Zacarias made some initial investments to flatten the patch, bought patio furniture, ran electricity to the patio, and maintained the area in the course of maintaining her whole lawn. (Id. at pp. 1115-1116.) The trial court awarded her an irrevocable license. (Id. at p. 1118.) In overturning the judgment, the appellate court reasoned that the lower court accepted overinclusive estimates—both mathematically and temporally—of the costs and the evidence did not support a finding of substantial expenditures. (Id. at pp. 1121-1122.) Here, there were no errors in the estimates of costs to Ocean Windows, and the trial court explicitly found that even the most conservative estimate of expenditures was substantial and significant.
One difference that distinguishes Ocean Windows's investment from other cases is its unique reimbursement agreement with the hotel. The trial court considered this and found the source of the funds irrelevant to the license claim since Ocean Windows was responsible for the landscaping, made expenditures that were not always timely reimbursed, and transferred two high-value lots to the hotel as a part of their agreement. The evidence supports this finding.
BV Partners interprets Harrison, supra, 116 Cal.App.4th 1084, to preclude the license remedy in this case, arguing that the license improperly prohibits the owner from determining how to use its own property. This is a hyperbolic reading of both Harrison and the terms of the license. In Harrison, Welch built a woodshed and carried out landscaping on her neighbor's land. She sought, and was denied, an easement to continue her exclusive use of the area. (Id. at pp. 1087-1089, 1090.) Harrison thus stands for the proposition that an exclusive easement may not be granted in a dispute between neighbors where the easement would preclude the title-holding party from using a portion of their land. (Id. at p. 1094.)
"Welch herself acknowledges that '[i]f [the shed] is to continue in existence, [she] must be granted an exclusive right to use the land lying under it.' Under [applicable caselaw], however, Welch cannot be granted an easement that effectively excludes the Harrisons from any use of that portion of their property on which the woodshed stands." (Harrison, supra, 116 Cal.App.4th at p. 1093.)
Here, in contrast, the court has granted Ocean Windows a license to maintain the disputed area so as to preserve the status quo. Ocean Windows does not claim, nor was it granted, exclusive entry or use of any portion of the disputed area. It does not even possess an unfettered license to landscape; any activities beyond routine maintenance require Ocean Windows to obtain consent from BV Partners. And the license does not prevent BV Partners from making further use of its land. It is free to develop the disputed area, and if it chooses to exercise that right the license terminates.
3. Ocean Windows's Unclean Hands
BV Partners suggests that, even if a license could be found in this case, it should be denied to Ocean Windows because it has unclean hands, citing Ocean Windows's unilateral removal of the acacia trees and installation of ground cover. But we find no support for the proposition that alleged misconduct removes the trial court's discretion to evaluate the intent and severity of that conduct in light of the case as a whole. In fact, the law is just the opposite. (See Lovett v. Carrasco (1998) 63 Cal.App.4th 48, 55 ["Whether the unclean hands doctrine applies in a particular case is within the trial court's sound discretion."]; see Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 446-447 ["The defense of unclean hands does not apply in every instance where the plaintiff has committed some misconduct in connection with the matter in controversy, but applies only where it would be inequitable to grant the plaintiff any relief."]; see Republic Molding Corp. v. B.W. Photo Utilities (9th Cir. 1963) 319 F.2d 347, 350 ["[T]he court must weigh the substance of the right asserted by plaintiff against the transgression which, it is contended, serves to foreclose that right. The relative extent of each party's wrong upon the other . . . should be taken into account, and an equitable balance struck."].)
Here, the trial court struck an equitable balance in determining it would be unfair "to have Ocean Windows forfeit its license, which is has complied with for over 25 years, by this one event (cutting down the acacia and failing to restore it)." We find no abuse of discretion in the trial court's decision to grant Ocean Windows the license contingent on Ocean Windows "restoring the area where the acacia was growing" to its former condition. This arrangement remedied the harm done to BV Partners without harshly penalizing Ocean Windows for its error in judgment.
4. The Significance of the 1989 Agreement
BV Partners' remaining contentions stem from its position that any license Ocean Windows claims to possess derives from and is limited by its 1989 agreement with the hotel. Under BV Partners' reading of that agreement, Ocean Windows recognized that the owner of the railroad property could revoke the landscaping license at any time. BV Partners takes this to mean it necessarily and permanently retained the right to freely revoke throughout the decades.
In a similar vein and relying on these early interactions between Ocean Windows and the hotel, BV Partners also suggests that any license Ocean Windows once possessed was destroyed by what it contends were unlawful attempts to assign the license to and from the hotel. As we explain, the license recognized by the trial court arose from the conduct of the parties after 1992. --------
We read the 1989 agreement in a different light. Neither BV Partners nor its predecessors are a party to the agreement. At best, it is a document that reflects the understanding of certain interested parties at one point in time, but it does not preclude the evolution of that understanding to incorporate different terms in the future. And because later events indicate that a different understanding developed between BV Partners and Ocean Windows, it is appropriate to look to those events to find an implied (or even explicit) license wholly apart from what may have existed at the time of the 1989 agreement. This is precisely what the trial court did. As previously noted, the court's statement of decision recognized that BV Partners and its predecessors had notice of the landscaping since at least 1992 and even discussed the parameters of ongoing maintenance with Ocean Windows in 2000. The court properly found that a conditional, irrevocable license arose from these events, not from the 1989 agreement.
5. Conclusion
The lower court possesses "great latitude" within its equitable power " ' "to award substantial justice according to the requirements of the varying complications that may be presented to them for adjudication." ' " (Richardson, supra, 233 Cal.App.4th at p. 757.) The remedy fashioned here is carefully crafted to achieve substantial justice between the parties. It preserves the status quo that existed for decades preceding the lawsuit, restores BV Partners to its original position prior to the acacia tree incident, and declines to make more of the latter than it actually was—an isolated disruption in an otherwise functional arrangement between neighbors. At the same time, it preserves and protects the rights of the property owner as time passes and circumstances change. We see no reason or basis to disturb the trial court's sound exercise of its discretion on the unique facts and circumstances of this case.
DISPOSITION
The judgment is affirmed. Ocean Windows is entitled to costs on appeal.
DATO, J. WE CONCUR: BENKE, Acting P. J. HALLER, J.