Opinion
Rehearing Granted March 29, 1988.
Previously published at 199 Cal.App.3d 111
Michael Kaye, San Diego, for plaintiffs and appellants.
Christopher Welsh, Marilyn Moriarty, Martha L. McGill, San Diego, and Coppo & Cosgrove, Del Mar, for defendants and respondents.
WIENER, Acting Presiding Justice.
Plaintiffs Samuel and Aline Kaye appeal a judgment of dismissal based on the five-year rule of Code of Civil Procedure section 583.310 and separately an order denying their motion to certify a defendant class of members of a condominium homeowners association. Consistent with the Legislature's directive that we liberally interpret exceptions to the five-year statute, we reverse the judgment of dismissal on the ground it was "impracticable" within the meaning of section 583.340 for the Kayes to proceed to trial while a writ petition which successfully challenged the trial court's summary adjudication of issues was pending in this court. At the same time, we reject several other arguments raised by the Kayes on issues made appealable by the dismissal judgment.
On the class certification appeal, we conclude there was no need for the trial court to order certification of a defendant class. The vicarious liability of individual members of a condominium homeowners association--on which the Kayes base their assertion of a need for class certification--is an issue which will arise, if at all, when the Kayes are successful in their action against the homeowners association. For reasons we shall explain, we believe the question of whether to certify a defendant class of association members may properly be deferred until such time as the actual need for such a class is established.
FACTUAL AND PROCEDURAL BACKGROUND
Factual Allegations
Plaintiffs Samuel and Aline Kaye own a condominium unit in the Mount La Jolla condominium development. Mount La Jolla consists of 234 contiguous condominium units. According to the covenants, conditions and restrictions (CC & Rs) which apply to the development, the individual unit owners have exclusive ownership of a "dwelling space" which is bounded by the "interior surfaces of the perimeter walls, floors, ceilings, windows and doors ..." of their unit. The CC & Rs specifically provide, "The following are not part of the units: bearing walls, columns, floors, roofs, foundations, central heating and other central services, pipes, ducts, flues, chutes, conduits, wires and other utility installations, wherever located, except their outlets when located within the units." With the exception of each unit's "dwelling space", each homeowner owns an undivided common fractional interest in the Mount La Jolla complex, which means virtually all of the physical substance of the development consists of jointly owned "common areas".
To maintain and repair these common areas, the CC & Rs created the Mount La Jolla Homeowners Association (the Association). The Association is run by a board of governors elected by the homeowners. Individual unit owners have no authority to arrange for or make repairs to the common areas. This function is exclusively reserved to the board of governors. In 1977 the Kayes first noticed a crack in the concrete slab floor of the garage of their unit. When minor repair measures failed and the crack reappeared, the Kayes reported the problem to the board of governors. The board hired an engineering firm to inspect the Kayes' unit and four other condominiums which had experienced a similar problem. When the engineering report recommended soil testing to discover the exact cause of the subsidence problem, the board rejected the recommendation, dismissed the firm and hired a new engineer.
Over the next four years, the board together with its new engineer adopted tactics of inordinate delay, deception and intransigence with respect to the subsidence problem in an effort to postpone or avoid paying the substantial sums necessary to make adequate repairs. In early 1980, the Kayes offered to pay the costs of soil testing. Not only did the board refuse the offer, but it expressly forbade the Kayes from contracting for a soil study on their own.
In the meantime, the condition of the Kayes' unit continued to deteriorate. Cracks appeared in the walls and floor slabs. The walls buckled and bowed to the point that doors would no longer open and close. One end of the unit had sunk nearly three inches lower than the other end.
The soils study recommended in the first engineering report was finally performed under board authorization in the summer of 1981. The study revealed the condominium had been constructed on deep earthfill and that soil preparation defects were the likely cause of the subsidence problem. Even so, the Association proved unresponsive and this lawsuit was filed in November 1981 against the Association and 14 individuals who served on the board of governors during the relevant period (the director defendants). As late as March 1982 the Association's Construction Committee rejected its own engineers' recommendations regarding repairs as "an unnecessary and extreme measure of correction." Nonetheless, by the end of 1983, the Association had expended about $88,000 to make repairs to the Kayes' unit and there is evidence those repairs may be inadequate. The Kayes now seek recovery for diminution in the market value of their unit, lost rents and profits, emotional distress, miscellaneous expenses and punitive damages.
Procedural History
In their original complaint, the Kayes sought to allege among others a cause of action against the Association and its constituent homeowners for failing to provide lateral and subjacent support for their condominium unit. The Association successfully demurred to that cause of action in May 1982.
The Kayes sought to sue the individual homeowners on a vicarious liability theory as a defendant class. (See post, pp. 21-29.)
A trial date on the remaining causes of action was set for November 6, 1986, about two weeks before the five-year anniversary of the filing of the Kayes' complaint. On August 13, 1986, the Association and the 14 defendant directors moved for summary adjudication of issues seeking to eliminate the Kayes' claims for punitive damages. The original hearing date of September 23 was continued twice until October 17, on both occasions apparently at the Kayes' request. At the hearing, defendants' motion was taken under submission. Further argument was heard on October 24 at which time the court granted the defendants' motion, eliminating all punitive damage claims.
On November 6, the Kayes told the trial court they had elected not to go to trial on that date but instead were seeking a stay and extraordinary writ review of the summary adjudication order in this court. In response, the trial judge took the case off calendar. The Kayes filed their writ petition later that same day. No stay issued. On Friday November 21, the last business day before the five-year anniversary, this court in a nine page opinion issued a peremptory writ of mandate reversing the summary adjudication of issues as to the On November 25, 1986, the Kayes filed a motion in the superior court to specially set the case for trial. In the papers supporting that motion, the Kayes argued that the five-year statute had been tolled on a variety of theories. Defendants responded that the five-year statute had run and no exceptions were applicable. The trial court agreed with defendants and dismissed the action.
DISCUSSION
Five-Year Statute
Code of Civil Procedure section 583.310 establishes the general rule that a civil action must be brought to trial within five years or it will be dismissed. (See also § 583.360.) The rule is subject to several specific statutory exceptions including an exclusion from the five-year period of any time during which "[b]ringing the action to trial, ... was impossible, impracticable, or futile." (§ 583.340, subd. (c); see generally Christin v. Superior Court (1937) 9 Cal.2d 526, 533, 71 P.2d 205.) The Law Revision Commission Comment to this section indicates the exceptions "must be interpreted liberally, consistent with the policy favoring trial on the merits." (16 West's Ann.Code Civ.Proc. (1988 pocket supp.) § 583.340, p. 47.) In determining whether it was "impossible, impracticable, or futile" to bring the action to trial for some portion of the five-year period, the court must consider "all the circumstances in the individual case, including the acts and conduct of the parties and the nature of the proceedings themselves. [Citations.] The critical factor in applying these exceptions to a given factual situation is whether the plaintiff exercised reasonable diligence in prosecuting his or her case. [p] ... Neither the courts nor litigants have any legitimate interest in preventing a resolution of the lawsuit on the merits if, through plaintiff's exercise of reasonable diligence, the goals of [the five-year statute] have been met." (Moran v. Superior Court (1983) 35 Cal.3d 229, 238, 197 Cal.Rptr. 546, 673 P.2d 216.) The question before us is whether it was "impracticable" within the meaning of section 583.340 for the Kayes to bring their action to trial during the pendency of the writ proceeding challenging the summary elimination of their punitive damage claims.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
In Christin v. Superior Court, supra, 9 Cal.2d 526, 71 P.2d 205, the California Supreme Court established the rule that an interlocutory appeal may toll the running of the five-year statute, even if the trial court technically retains jurisdiction to try the matter, if it would be impracticable to proceed to trial pending resolution of the appeal. Earlier in the Christin case, the plaintiff had successfully appealed the trial court's granting of a motion for change of venue. More than five years had passed since the filing of the complaint when the Supreme Court was asked to review the propriety of the trial court's denial of defendant's motion to dismiss. Upholding the trial court, the Supreme Court held the five-year period was tolled for the time during which the venue appeal had been pending. "The purpose of the statute is plain: to prevent avoidable delay for too long a period. It is not designed arbitrarily to close the proceeding at all events in five years,...." (9 Cal.2d at p. 532, 71 P.2d 205; see also Rose v. Knapp (1951) 38 Cal.2d 114, 117, 237 P.2d 981.) Responding to the defendant's argument that plaintiff could have proceeded to trial in the new venue location while concurrently prosecuting his appeal, the Supreme Court stated, "Modern cases recognize as a defense not only objective impossibility in the true sense, but also impracticability due to excessive and unreasonable difficulty or expense. [Citations.] [p] Counsel for plaintiff, in prosecuting his appeal from the void order, and in taking no steps toward a futile trial ... acted reasonably and with due regard to the interests of his client and Later cases have expanded on the "impracticability" exception in different contexts. In General Motors Corp. v. Superior Court, supra, 65 Cal.2d 88, 52 Cal.Rptr. 460, 416 P.2d 492, plaintiffs sued the defendant for personal injuries sustained in an automobile accident. One of the plaintiffs died three years later and her heirs filed a wrongful death action against the defendant alleging her death was the result of her earlier injuries. The heirs then successfully sought consolidation of the two lawsuits. Preparation for trial of the consolidated cases continued for two more years until the defendant moved to dismiss the personal injury action because it had not been brought to trial within five years. The Supreme Court rejected defendant's argument, holding it was "impracticable" for the plaintiff to have proceeded to trial on the personal injury action before the wrongful death action was ready to be tried. The court noted that the evidence in the two cases would be substantially similar if not identical and the value to be served by a trial within five years of the personal injury action did not exceed the cost of two duplicative trials: "Th[e] same issue is central to both the personal injury action and the wrongful death action, and to insist that the relevant evidence be duplicated at two separate trials would exacerbate the already substantial burdens of the litigation." ( Id. at p. 96, 52 Cal.Rptr. 460, 416 P.2d 492.)
Similar reasoning was applied in Brunzell Constr. Co. v. Wagner (1970) 2 Cal.3d 545, 86 Cal.Rptr. 297, 468 P.2d 553, in which the plaintiff sued two severable groups of defendants in a contract dispute. Procedural disputes with one group of defendants including three interlocutory appeals consumed the better part of five years and plaintiff did not seek to proceed to trial separately against the second group of defendants. The Supreme Court reversed the trial court's judgment of dismissal as to the second group of defendants, holding that "the bare fact of severability does not preclude the application of the 'impracticable and futile' exceptions as that doctrine has been consistently interpreted by this court." ( Id. at p. 548, 86 Cal.Rptr. 297, 468 P.2d 553.) "In many situations in which it is impossible or impracticable to proceed against one codefendant it may be impracticable, in terms of the burden both to the parties and to judicial administrations as a whole, to proceed against other defendants in a separate suit. To require a plaintiff to sever causes of action against multiple defendants whenever it becomes impossible or impracticable to proceed against one defendant within the five-year period would be to require unproductive duplication of effort, compel the incurrence of excessive expense, and generally undermine all the policies served by modern theories of consolidation in a substantial number of cases." (Id. at pp. 553-554, 86 Cal.Rptr. 297, 468 P.2d 553.) In determining whether the impracticability exception applied in such circumstances, the Supreme Court directed trial courts to consider "a great variety of factors, including, among others, the expense, complexity, and quantity of the evidentiary duplication that severance would entail, the potential problems that inconsistent judicial determinations would produce, and the degree of hardship or prejudice to the defendants occasioned by the delay." ( Id. at p. 554, 86 Cal.Rptr. 297, 468 P.2d 553, fns. omitted.)
The rationale of General Motors and Brunzell was applied to extend the impracticability exception in Stella v. Great Western Sav. & Loan Assn. (1970) 13 Cal.App.3d 732, 91 Cal.Rptr. 771. There, the Court of Appeal held plaintiffs were excused from bringing their action to trial within five years while they awaited the resolution of the appeal in a related case which eventually settled a significant common legal issue. The court concluded, "Plaintiffs' The principles outlined above support the conclusion that the Kayes acted reasonably in deferring trial of the case until their writ petition on the punitive damage issue had been resolved and it was therefore "impracticable" within the liberal meaning of section 583.340 to bring the matter to trial within the five-year period. While section 598 would appear to allow for bifurcation of a punitive damages issue, which may be the functional equivalent in this case of a severance of consolidated cases in General Motors or a severance of parties in Brunzell, those cases make clear that a court must consider practical issues beyond the technical ability to conduct a separate trial. The record here suggests a separate trial of the punitive damage issue would require presentation of evidence already introduced in an earlier trial devoted to compensatory damages. This conclusion is supported by the very reason for our issuing the peremptory writ in the first place: our implied but necessary determination that the Kayes' remedy by way of appeal was inadequate. A separate trial on the punitive damage issue would have been unnecessarily duplicative and wasteful.
Turning to the balancing of the other factors identified in Brunzell, inconsistent judicial determinations quite clearly is not a problem where a severance of parties is not involved. On the question of prejudice as a result of the delay, defendants here have alleged no prejudice nor can we independently discern any from the record.
Defendants suggest that proceeding to trial was not impracticable because the Kayes could have tried the case and pursued their writ petition simultaneously, relying on this court to resolve the writ issue before the close of the evidence to enable them to present any additional evidence and argue the issue to the jury. Putting aside the practical limitations on counsel's ability to both prepare for trial and pursue a writ petition, this argument ignores the fact that the presence or absence of the punitive damage issue might significantly affect the structure of the Kayes' evidentiary presentation. In any event, the impracticability of proceeding to trial must be evaluated as of the time the Kayes' counsel made his decision to give up his trial date and pursue the writ. We do not think section 583.340 requires counsel to speculate on how quickly the Court of Appeal will decide a writ petition and whether it will issue a stay.
In this sense, an attorney who decides not to proceed to trial may act at his peril. If he is correct and his writ petition is ultimately deemed meritorious, his decision to forego trial effectively results in the same situation as if a stay had issued to prevent a trial. On the other hand, if the writ petition is denied, it may be later determined that it was not impracticable to proceed to trial because the remedy at law was adequate.
Defendants also argue the time constraints faced by the Kayes were a product of their own making because they had twice arranged to have the hearing on the summary adjudication motion continued. The fact that the Kayes took advantage of legitimate procedures to seek short continuances--one granted by the court and one stipulated to by the defendants--cannot in our view be held against them.
Finally, defendants suggest the Kayes cannot be afforded relief because they took no action on the Monday following the issuance of our writ opinion to request that the superior court specially set the case for trial on that day. The prospects for success of such a request aside (see Civ.Code, § 3532), the Law Revision Commission Comment to section 583.340 states that "the time within which an action must be brought to trial is tolled for the period of the excuse, regardless whether a reasonable time remained at the end of the period of the excuse to bring the action to trial." (16 West's Ann.Code Civ.Proc. (1988 pocket supp.) § 583.340, p. 47.)
In ruling it was required to dismiss the case, the trial court was apparently concerned that this court had not issued a stay
Accordingly, we conclude the trial court improperly dismissed the case because, by virtue of the tolling provisions of section 583.340, the five-year period had not run when the court ordered the case dismissed. Following issuance of the remittitur in this case, the trial court shall set a new trial date consistent with the provisions of section 583.350.
Cause of Action for Subjacent and Lateral Support
The Kayes contend the court prejudicially erred in sustaining defendants' demurrer without leave to amend their third cause of action seeking damages for the deprivation of subjacent and lateral support. The Kayes frankly admit there is no exact California precedent on the theory of liability which they wish to establish. They also point out they are disclaiming any reliance on Civil Code section 832 which statutorily defines the lateral and subjacent support to which each coterminous owner is entitled. In spite of these seeming obstacles, the Kayes exhort us to create a new rule which would impose liability on a condominium association and its homeowner members for their failure to provide lateral and subjacent support in the condominium common areas. The Kayes' exhortations are grounded on their concerns that lacking additional sources of recovery the individual condominium homeowner will be denied redress because of limitations periods barring recovery against negligent developers and builders and the likelihood of shrinking insurance coverage. In overstating the problem the Kayes ignore the organizational format of condominium ownership and the respective rights and duties established by the CC & Rs.
We interpret the Kayes' argument as requiring a condominium association and its individual members to indemnify any individual homeowner for any reduction in value to an individual unit caused by damage. Essentially they assert a concept of strict liability. Under this theory the association and individual members would not only have the duty to repair as required by the CC & Rs, but the responsibility to reimburse an individual homeowner for the diminution in value of such unit regardless if the repairs had been made or the success of such repairs. For several reasons we are unwilling to accept this broad rule of recovery.
Initially we fail to understand why the Kayes believe they can assert causes of action for damages against the Association on a theory that they were denied the right to engage in self-help to repair the affected portions of the common area near their unit, but nonetheless believe they should be able to impose liability against their co-owners who labored under the same restriction. Obviously the Kayes' fellow co-owners have no greater rights than the Kayes. It would be manifestly unfair to permit the Kayes to impose liability on co-owners who were equally powerless to use self-help to repair the common areas. The democratic process of condominium ownership contained in the CC & Rs did not create a unique class consisting solely of the Kayes. And if the economic burden the Kayes wish to impose is somehow tied to the collective failure of the homeowners to vote for more responsible members to be governors of the Association, they seek an economic sanction which has no relationship We also find it difficult to understand why we should accept the Kayes' invitation and involve ourselves in the intellectual maze consisting of the English common law of subjacent and lateral support and the statutory scheme provided by Civil Code section 1350 et seq. adopted in 1985 in order to create a new rule of liability when the existing causes of action seem to accomplish the same goal. The Kayes seek the same amount of damages in their second cause of action for breach of fiduciary duty, breach of covenant and the constructive taking of a property interest as they do in their third cause of action. In these circumstances there is little reason to create a new rule when the present remedies are adequate. Moreover the frustration which the Kayes manifest because the homeowner association and its individual members did not act in a reasonable manner is directed solely to the failure of such persons to perform their responsibilities in accordance with the CC & Rs. Thus both conceptually and factually, the third cause of action duplicates other causes of action.
We reject the Kayes' argument for an additional, perhaps more fundamental, reason. In attempting to transfer the economic loss caused by the reduction in value of their condominium to all the condominium homeowners on a pro rata basis, the Kayes overlook the bargain which they made at the time they acquired their unit. That bargain contemplated a harmonious group living arrangement subject to the rights and duties outlined in the CC & Rs. The CC & Rs require the governing body to repair common areas. There is nothing in the CC & Rs about a "forced buy," i.e., requiring individual homeowners to reimburse an individual homeowner for the diminution in value of a unit in addition to the cost of repair. Placing dual costs on individual homeowners, i.e., the cost of repair plus consequential damages is not only contrary to the bargain but creates a potentially open-ended financial burden on condominium ownership.
The drafters of the CC & Rs here anticipated difficulties might arise with reference to the association's duty to repair under certain circumstances. They expressly provided if repairs were not made for three years following damage to a material part of the project that an individual homeowner would be entitled to commence a partition action. They also provided that partition could be commenced if three-fourths or more of the project had been destroyed and condominium owners holding more than 50 percent of the common areas were opposed to repair or restoration of the project. These provisions limit the remedies of an individual homeowner so that the economic responsibilities of the association could be fairly gauged. Although there may be uncertainties associated with projecting the costs of repair, there is a greater likelihood of accuracy in doing so than if future costs included a contingency for consequential damages including a unit's reduction in value. Restricting the individual homeowner to recovery for the cost of repairs also avoids the risk of requiring the Association to pay for unaccrued damages since the homeowner would not have suffered any damages for reduction in the unit's value until that unit was sold. We therefore reject the Kayes' desire to engraft the common law rule of liability for failure to provide lateral and subjacent support to condominium ownership. The Kayes have adequate redress under the terms of the bargain made and other aggrieved condominium owners have similar rights in addition to the rights now prescribed by statute. (Civ.Code, § 1350 et seq.)
Amendment of the Punitive Damage Allegations
The Kayes attempt to challenge the portion of our writ opinion on the punitive damage question, suggesting we resolved the case against them as to 9 of the 14 director defendants based on their failure to allege facts showing "oppression, fraud or malice" sufficient to satisfy the requisites of Civil Code section 3294. They argue our opinion incorrectly failed to grant Law of the case to one side , the Kayes writ petition challenged the trial court's summary adjudication of issues under section 437c, subdivision (f). In support of their motion, the defendant directors submitted declarations denying they acted in a manner which would support the award of punitive damages. This obligated the Kayes to respond with a factual presentation sufficient to demonstrate there existed an issue of material fact to be resolved at trial. We determined the Kayes' presentation was sufficient to warrant denial of the motion with respect to the Association and five of the director defendants. While it is true our opinion referred at times to allegations contained in the pleadings, we also repeatedly mentioned that the declarations created factual conflicts which needed to be resolved by a trier of fact. Accordingly, amendment of the pleadings would not be appropriate.
The Kayes appropriately point out that while the law-of-the-case doctrine would normally apply to preclude their raising this issue, our decision to make our opinion final immediately effectively precluded their arguing this issue in a petition for rehearing.
Defendant Class Certification
The Kayes' complaint attempts to plead a portion of their case as a class action--not on behalf of a group as in the normal class action situation but rather against a group, i.e., a defendant class action. (See generally In re Gap Stores Securities Litigation (N.D.Cal.1978) 79 F.R.D. 283, 1 Newberg on Class Action (2d ed. 1985) § 4.45 et seq.; Notes, Defendant Class Actions (1978) 91 Harv.L.Rev. 630.) The Kayes seek to include all members of the Mount La Jolla Homeowners Association in a no opt-out defendant class which they assert is vicariously liable for the actions of the board of governors of the Association. They argue a defendant class action is necessary for several reasons. They point to Corporations Code section 24002, which provides that a judgment against an unincorporated association may not be satisfied by resort to the individual assets of a member of the association unless that member is made a party to the action in his individual capacity. They also claim an absolute right to join any and all members of the Association as defendants under section 388, subdivision (b) and assert that a defendant class action is the only practical means of accomplishing such a result.
Subdivision (b) of section 388 provides as follows:
On January 6, 1986, the trial court denied the Kayes' motion for certification of a defendant class. Because an order denying class certification is generally an appealable order (see Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23), the Kayes took an immediate appeal. When the Kayes filed their notice of appeal in Case No. D006162 from the judgment of dismissal based on the five-year statute, the class certification appeal was pending in this court. We ordered the two appeals consolidated for hearing and disposition.
The parties spend the better part of their briefs discussing the vicarious liability issue, which both seem to agree will ultimately determine the Kayes' success against the individual homeowners. Beyond that, however, they approach the issue from markedly different perspectives. The Association contends if a court can determine as a matter of law that individual Mount La Jolla members cannot be vicariously liable for the actions of the board of governors, a defendant class should not be certified because common classwide issues will not predominate in the lawsuit. (See generally Richmond, supra, 29 Cal.3d at p. 470, 174 Cal.Rptr. 515, 629 P.2d 23; Lazar
The Kayes respond that the question of whether individual owners can be vicariously liable is an issue going to the merits of the lawsuit which cannot be inquired into during the class certification process under the rule of Eisen v. Carlisle & Jacquelin (1974) 417 U.S. 156, 177-178, 94 S.Ct. 2140, 2152-2153, 40 L.Ed.2d 732. (Accord Home Sav. & Loan Assn. v. Superior Court (1974) 42 Cal.App.3d 1006, 1013, 117 Cal.Rptr. 485.) They argue the vicarious liability question is one which can and must be resolved on a classwide basis and suggest a motion for summary judgment or judgment on the pleadings following class certification and notice is the proper means of adjudicating this issue. The Kayes admit class certification would not be proper if their argument with respect to vicarious liability were a frivolous one. To refute this suggestion, they point to Davert v. Larson (1985) 163 Cal.App.3d 407, 412, 209 Cal.Rptr. 445 which holds that "tenants in common of real property who delegate the control and management of the property to a separate legal entity should not be immunized from liability to third parties for tortuous conduct." Significantly, Davert relies on a Texas Supreme Court decision, Dutcher v. Owens (Tex.1983) 647 S.W.2d 948, 39 A.L.R.4th 92, which upheld a judgment in a defendant class action brought by condominium tenants (the Owens) against their landlord (Dutcher) and other members of the condominium homeowners association to recover for personal property destroyed by a fire which began in the common areas and spread to the Owens' unit. Dutcher held that the individual owners were vicariously liable for their pro rata share of the judgment, rejecting an argument for joint and several liability. California commentators have read Davert and dicta in White v. Cox, supra, 17 Cal.App.3d at pages 830-831, footnote 3, 95 Cal.Rptr. 259 to indicate that members of homeowners associations will be vicariously liable for common area torts, at least to the extent of their pro rata ownership of the condominium development's common areas. (See, e.g., 1 Hanna, California Condominium Handbook 2d (1986) § 15.7, p. 491; 4 Miller & Starr, Current Law of California Real Estate (Supp.1987) § 24:82, p. 229; 11 Hagman & Maxwell, California Real Estate Law and Practice (1987 rev.) § 385.91, p. 385-67.)
We recognize that both Davert and Dutcher involve suits by third parties seeking to impose vicarious liability on individual members of an association. However, in White v. Cox (1971) 17 Cal.App.3d 824, 95 Cal.Rptr. 259, the court held that a member of a condominium homeowners association may sue the association for damages arising out of the improper maintenance of common areas in the condominium project. Mount La Jolla does not appear to argue that homeowners association members should be vicariously liable to third parties but not to other members damaged by tortious acts of the association governing board and in any event provides no authority in support of such a distinction.
Given the unique facts of this case, however, we have concluded we need not resolve this interesting legal question nor need we order the certification of a defendant class at this time. Our conclusion is based on several interrelated factors.
The Kayes concede any liability of the individual homeowners sought to be joined as class members is vicarious and derivative of the Association's liability; that is, potential class members will not be required to pay unless the Association is
These typical concerns, however, are inapplicable to this case for at least two reasons. First, the Kayes are seeking certification of a no opt-out defendant class, a relatively common phenomenon in federal cases in which defendant classes are certified pursuant to Federal Rule of Civil Procedure 23(b)(1) and (b)(2). (See generally 1 Newberg on Class Actions, supra, §§ 4.62-4.64, pp. 406-412.) If the Kayes are correct that a no opt-out class is appropriate here--an issue not briefed by the parties and one we do not decide--the prospect of one-way intervention disappears.
But even if a no opt-out class were not appropriate, the unique circumstances of this case eliminate the prospect of one-way intervention. As we earlier observed, section 1908, subdivision (b) allows for the application of collateral estoppel against a party who controlled prior litigation "in cooperation with others,...." (See generally 7 Witkin, Cal.Procedure (3d ed. 1985) § 295, p. 733.) Thus, if the Kayes were to succeed in holding the Association liable, a potential class member faced with determining whether to opt out of a defendant class would never obtain the benefits of one-way intervention. If he elects to opt out, he will be collaterally estopped to relitigate the issues determined against the Association in this action to the same extent as if he had remained a member of the defendant class.
For these reasons we see no impediment to deferring the decision whether to certify a defendant class of Association members. The primary purpose of the class action device is to simplify litigation, not complicate it. It may be there will come a time in this case that certification of a defendant class would obviate the need for joinder of For future guidance of the trial court, we emphasize on this record we perceive no barrier to certification of a defendant class of Association members if at some later point the court proposes to enter a judgment against the Association and there is any possibility such judgment cannot be satisfied by the Association or through resort to its assets. At such point in time, the court should entertain a renewed motion for class certification and, in the absence of additional facts, certify a defendant class of Association members with the Association as the class representative. (See Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 907-908, 176 Cal.Rptr. 886.) Thereafter, following notice to the class, the court should consider the legal question whether members of the class may be held vicariously liable.
Accordingly, the order of the superior court denying class certification is affirmed without prejudice to a renewed motion by the Kayes if it becomes necessary.
DISPOSITION
The judgment of dismissal is reversed. The order denying certification of a defendant class is affirmed. The parties shall bear their own costs for this appeal.
Retired Presiding Justice of the Court of Appeal, sitting under assignment by the Chairperson of the Judicial Council.
"Any member of ... [an] unincorporated association may be joined as a party in an action against the unincorporated association. If service of process is made on such member as an individual, whether or not he is also served as a person upon whom service is made on behalf of the unincorporated association, a judgment against him based on his personal liability may be obtained in the action, whether such liability be joint, joint and several, or several."