Waterfront Cmty. Ass'n
PLC Waterfront LLC

This case is not covered by Casetext's citator
G054235 (Cal. Ct. App. Sep. 7, 2018)



THE WATERFRONT COMMUNITY ASSOCIATION, Plaintiff and Appellant, v. PLC WATERFRONT LLC, et al., Defendants and Respondents.

Williams Iagmin and Jon R. Williams for Plaintiff and Appellant. Lucas & Haverkamp Law Firm, Albert E. Haverkamp and Patricia Jo Custer for Defendants and Respondents. Newmeyer & Dillion, John A. O'Hara, Alan H. Packer, Michael B. McClellan, Jeffrey R. Brower and Jack M. Rubin for California Building Industry Association as Amicus Curiae on behalf of Defendants and of Respondents.


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2015-00800516) OPINION Appeal from a judgment of the Superior Court of Orange County, Kim Garlin Dunning, Judge. Affirmed. Williams Iagmin and Jon R. Williams for Plaintiff and Appellant. Lucas & Haverkamp Law Firm, Albert E. Haverkamp and Patricia Jo Custer for Defendants and Respondents. Newmeyer & Dillion, John A. O'Hara, Alan H. Packer, Michael B. McClellan, Jeffrey R. Brower and Jack M. Rubin for California Building Industry Association as Amicus Curiae on behalf of Defendants and of Respondents.

* * *

The Waterfront Community Association (the Association) appeals from the trial court's entry of judgment after granting summary judgment based on the statute of limitations in favor of PLC Waterfront LLC and Christopher Homes, Inc. (collectively, defendants) on the Association's construction defect claims under the Right to Repair Act (hereafter sometimes the "RRA" or the "Act"). (Civ. Code, § 895 et seq.; all further statutory references are to this code unless noted.) As we explain, the Association's bid for categorical tolling of the Act's 10-year statute of limitations during a builder or developer's initial control of a community association is without merit, and we therefore affirm the judgment.


On July 24, 2015, the Association filed its complaint against defendants as co-developers with William Lyon Homes, Inc. (WL Homes) of the Waterfront Project, a residential community in Huntington Beach consisting of 184 "[h]igh end production homes." The complaint alleged a cause of action under the Right to Repair Act for "Violation of Residential Building Standards," and an exhibit to the complaint provided a lengthy "preliminary list of violations of construction standards" (capitalization omitted), including subheadings for, among other areas, roofing, decks, balconies, doors, stairs, and windows. The complaint's chief alleged "Actionable Violations under . . . §§ 896 and 897" in these areas involved "[w]ater . . . entering the building envelope." (Capitalization adjusted.) The Association's complaint sought recovery for damages to community common areas, separate property interests "integrally related" to those areas, and separate interest areas the Association was required to maintain or repair.

WL Homes did not join in defendants' summary judgment motion and is not a party to the appeal; it appears a stay was entered early in the litigation as to proceedings against WL Homes. --------

Following defendants' answer denying liability and several interim case management conferences in which they noted the Act's 10-year limitations period, the defendants filed a motion for summary judgment asserting they completed construction of homes and common areas in their portion of the Waterfront Project between May 2004 and April 2005. Defendants sought summary judgment because those dates preceded the July 2015 complaint by more than 10 years.

The Association in its opposition did not dispute the completion dates, but asserted that the Waterfront Project developers, which included defendants' representatives, controlled the Association's board of directors from its inception in June 2003 through the completion dates of each phase of construction, including defendants' lots between 2004 and April 2005, and into August 2005, when "an independent majority of homeowners finally took control of the Association's Board of Directors for the first time." Before then, according to the Association's separate statement of facts, the five positions on the Association's board had been filled by appointees who were also executives for defendants or co-defendant WL Homes.

The Association contended defendants' control of its board of directors necessarily tolled the statute of limitations during the period of control, precluding summary judgment. The Association sought a continuance to depose current and former directors to gather "evidence concerning the nature, extent and duration of Defendants' control of the Waterfront HOA Board of Directors." In their reply, defendants did not dispute any facts the Association proffered, including their control of the original directors until the homeowner board was later elected.

At the subsequent hearing, while acknowledging the period that defendants controlled the Association's original board of directors was relatively short—as little as five months—the Association raised the possibility of developers "insulat[ing] themselves from liabilities by maintaining control of homeowners associations during the entirety of the statutory period." Observing "it's pretty much a thankless job" and "not what they're in the business of doing," the trial court found it unlikely "developers . . . want to be in the business of running homeowners associations," but also found the hypothetical unwarranted under the facts, noting, "I would rather deal with the facts that we've got, which is that you had . . . nine years and seven months . . . to file a lawsuit, because ten years is a very long statute of limitations." The Association argued the Legislature intended plaintiffs to have the full 10-year period stated in the Act, while defendants countered that nothing in the statutory language suggested equitable tolling for board control.

The trial court also observed that even assuming the existence of a "captive" board, those board members presumably still would owe fiduciary duties to the homeowners, but then "you're talking about a completely different kind of lawsuit" against the board members. Defendants concurred, "It would be a breach of fiduciary duty lawsuit. It might be a fraud lawsuit," but argued "that's not what we have here." Defendants noted "the Plaintiffs have not anywhere pled that" in "the five months at issue that the builder board members became aware of construction defects and swept them under the rug or ignored them or did anything else." Continuing, defendants argued, "There's no—there's no facts raised in the opposition to that effect. They've relied solely on the fact that the control existed for those five months as their sole basis."

At the close of the hearing, the trial court denied the continuance request, granted defendants' summary judgment motion, and subsequently entered judgment. The Association now appeals.


The Association contends the trial court erred in granting summary judgment because defendants' undisputed control of the Association's board at its inception requires tolling the applicable 10-year statute of limitations (§ 941, subd. (a)) for a corresponding period, rendering the Association's complaint timely. As we explain, the Association's claim of a categorical tolling period for builder board control is inconsistent with section 941 as argued by the parties here.

1. Governing Summary Judgment and Standard of Review Principles

"'"The purpose of a summary judgment proceeding is to permit a party to show that material factual claims . . . need not be tried because they are not in dispute."'" (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 888 (Carlsen); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar) [summary judgment "cut[s] through the parties' pleadings . . . to determine whether . . . trial is in fact necessary"].)

"A defendant moving for summary judgment bears the initial burden to show the plaintiff's action has no merit. [Citation.] The defendant can meet that burden by either showing the plaintiff cannot establish one or more elements of his or her cause of action or there is a complete defense to the claim." (Carlsen, supra, 227 Cal.App.4th at p. 889; Code Civ. Proc., § 437c, subd. (p)(2).) "The expiration of the applicable statute of limitations is one such complete defense." (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 965.) "The statute of limitations operates in an action as an affirmative defense." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396.)

A defendant seeking summary judgment based on an affirmative defense must show the undisputed facts support the defense. (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.) If the defendant fails to establish the necessary elements of a defense, the motion must be denied regardless of whether the plaintiff presented any evidence in opposition. (Ibid.) But if the defendant meets its initial burden, the burden shifts to the plaintiff to present evidence establishing a triable issue of material fact concerning at least one element of the affirmative defense. (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 290.)

We review a grant of summary judgment de novo. (Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 848.) The trial court's stated reasons for granting summary judgment are not binding on us because we review the court's ruling, not its rationale. (Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1144.) "'"[I]n practical effect, we assume the role of a trial court and apply the same rules and standards that govern a trial court's determination of a motion for summary [judgment]."'" (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 631.)

"[Although] resolution of the statute of limitations issue is normally a question of fact, where the uncontradicted facts . . . are susceptible of only one legitimate inference, summary judgment is proper." (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.) While a plaintiff bears the burden of proof at trial to demonstrate the applicable statute of limitations has been tolled, the party moving for summary judgment bears the burden of demonstrating the absence of a triable issue of fact upon which the plaintiff has the burden of proof. (Segura v. Brundage (1979) 91 Cal.App.3d 19, 28-29; see Kahn v. East Side Union High School Dist.(2003) 31 Cal.4th 990, 1003 ["burden of persuasion remains with the party moving for summary judgment"].)

Appellate courts must limit their review to issues specifically raised by the appellant's briefs. (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6 (Reyes).) This principle applies to our review of summary judgment proceedings. "Although our review of a summary judgment is de novo, it is limited to issues which have been adequately raised and supported in plaintiffs' brief." (Ibid.)

Statutory interpretation is a matter of law for our de novo review. (Land Partners, LLC v. County of Orange (2018) 19 Cal.App.5th 741, 745; Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, 102 (Liberty Mutual), disapproved on another ground in McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 258 (McMillin Albany).) 2. Equitable Tolling and Principles for Its Application; Lantzy v. Centex Homes

The parties agree the Association's complaint is timely if equitable tolling applied during the period builder representatives controlled the Association's board of directors upon its formation until homeowners took their board seats. ""'Tolling, strictly speaking, is concerned with the point at which the limitations period begins to run and with the circumstances in which the running of the limitations period may be suspended.'"" (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383 (Lantzy).) "[T]he effect of equitable tolling is that the limitations period stops running during the tolling event, and begins to run again only when the tolling event has concluded. As a consequence, the tolled interval, no matter when it took place, is tacked onto the end of the limitations period, thus extending the deadline for suit . . . ." (Id. at pp. 370-371, original italics.)

Lantzy involved a related, but distinct, 10-year construction defects statute of limitations enacted in 1971 and codified in Code of Civil Procedure section 337.15 (hereafter section 337.15). The issue Lantzy resolved was whether a builder or developer defendant's promises or attempts to repair alleged defects tolled the limitations period. As relevant here, Lantzy explained, "A broad tolling-for-repairs rule would contravene the Legislature's clear intent, at the time it adopted section 337.15, to ensure a generous but firm cutoff date for latent-defect suits. Moreover, the extraordinary length of the limitations period set forth in section 337.15 weighs strongly against the need for such a tolling rule as a matter of fair procedure." (Lantzy, supra, 31 Cal.4th at p. 367.)

Though Lantzy did not interpret section 941—the limitations period at issue here—the Supreme Court in Lantzy set out guideposts for assessing equitable tolling claims. Most obviously, tolling does not apply where the Legislature has expressly precluded it. (Lantzy, supra, 31 Cal.4th at p. 371 [noting limitations statutes that provided their respective periods "'shall not be tolled or extended for any reason' except as specified" and "'in no event' be tolled except as specified"].) Tolling is also barred when it "contravenes clear legislative policy." (Ibid. [citing precedent where "tolling would violate policy of uniform federal statute of limitations" for lawsuits alleging labor contract violations].)

Lantzy also observed that "tolling should not apply if it is 'inconsistent with the text of the relevant statute."' (Lantzy, supra, 31 Cal.4th at p. 371.) For example, where federal law limited securities fraud actions to one year from the date of discovery, or three years from the violation, the United States Supreme Court found the three-year period operated as an "outside" limit not subject to tolling. (Lampf, Pleva, Lipkind, et al. v. Gilbertson (1991) 501 U.S. 350, 363.) The high court similarly found a 12-year limitations period for quiet title actions, beginning only upon discovery, effectively provided for equitable tolling and no further tolling was warranted. (United States v. Beggerly (1998) 524 U.S. 38, 48.)

Where not barred explicitly or implicitly by the Legislature, equitable tolling operates as a "judge-made doctrine" that requires a balancing of harms. (Lantzy, supra, 31 Cal.4th at p. 370.) "'As with other general equitable principles, application of the equitable tolling doctrine requires a balancing of the injustice to the plaintiff occasioned by the bar of his claim against the effect upon the important public interest or policy expressed by the . . . limitations statute.'" (Id. at p. 371.)

3. Section 941

A. Right to Repair Act

We now turn to section 941, which codified the Legislature's general 10-year statute of limitations for causes of action under the RRA. (Civ. Code, § 895 et seq.) Adding a new title to the Civil Code governing real property (Stats. 2002, ch. 722 (S.B. 800), § 3), the RRA "'comprehensively revises the law applicable to construction defect litigation for individual residential units' within its coverage." (McMillan Albany, supra, 4 Cal.5th at p. 250; see § 938 [title applies "only to new residential units" sold in or after 2003].)

The Act erected a standards-based framework governing residential construction defect litigation, granting homeowners "statutory rights in cases where construction defects caused economic damage." (Liberty Mutual, supra, 219 Cal.App.4th at p. 104; accord, McMillan Albany, supra, 4 Cal.5th at pp. 249, 251.) For the benefit of homeowners, builders, and insurers alike (Liberty Mutual, at p. 103), the Act sets out express construction standards in seven residential home "systems," including systems related to "water issues," "structural issues," "soil issues," "fire protection issues," "plumbing and sewer issues," "electrical system issues," and a catch-all "other areas of construction." (§ 896, subds. (a)-(g).) For example, the first standard under "water issues" specifies in section 896, subdivision (a)(1), that "[a] door shall not allow unintended water to pass beyond, around, or through the door or its designed or actual moisture barriers, if any," and section 895, subdivision (c), provides a statutory definition for "Actual moisture barrier."

More generally, Liberty Mutual explained "[a] key specified goal of the Act was to abrogate the holding of Aas v. Superior Court" (2000) 24 Cal.4th 627 (Aas). (Liberty Mutual, supra, 219 Cal.App.4th at p. 103.) There, the Supreme Court had "held that construction defects in residential properties, in the absence of actual property damage, were not actionable in tort." (Ibid.) The Act's legislative history reveals the Legislature's intent "'to address the perceived inequity of the Aas decision and give homeowners the ability to have specified defects in the construction of their homes corrected before the defects cause actual harm or damage.'" (Id. at p. 104.) Accordingly, section 942 provides that "to make a claim for violation of the standards set forth in Chapter 2 (commencing with Section 896), a homeowner need only demonstrate, in accordance with the applicable evidentiary standard, that the home does not meet the applicable standard, subject to the affirmative defenses set forth in Section 945.5. No further showing of causation or damages is required . . . , provided that the violation arises out of, pertains to, or is related to, the original construction."

As Liberty Mutual observed, the Legislature specified shorter limitation periods than section 941's general 10-year period for some home component systems, e.g., '"Plumbing and sewer systems shall be installed to operate properly and shall not materially impair the use of the structure by its inhabitants. However, no action may be brought for a violation of this subdivision more than four years after close of escrow."' (Liberty Mutual, supra, 219 Cal.App.4th at p. 102, fn. 1, see § 896, subd. (e).) The parties agree only the 10-year limitations period is at issue here as the basis for defendants' summary judgment motion.

B. Statutory Text

With this background in mind, we examine section 941's 10-year limitations period. "The goal of statutory construction is to ascertain and effectuate the intent of the Legislature. . . .'"Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent."'" (Pacific Gas & Electric Co. v. County of Stanislaus (1997) 16 Cal.4th 1143, 1152, citations omitted.) "Ordinarily," however, "the words of the statute provide the most reliable indication of legislative intent." (Ibid.; see also Dalton v. Easy Bay Mun. Utility Dist. (1993) 18 Cal.App.4th 1566, 1571 (Dalton) [courts must "'"give effect to statutes 'according to the usual, ordinary import of the language employed in framing them'"'"].)

Section 941 includes five subdivisions; the first commences with a clause that echoes those recognized in Lantzy as restricting equitable tolling to grounds specified in the statutory scheme. (Lantzy, supra, 31 Cal.4th at p. 371.) In full, subdivision (a) provides: "Except as specifically set forth in this title, no action may be brought to recover under this title more than 10 years after substantial completion of the improvement but not later than the date of recordation of a valid notice of completion." Defendants' summary judgment motion asserted "[a]ll construction work" on the relevant homes "was substantially complete between May of 2004 and April of 2005," which the Association did not dispute. It is also undisputed the Association filed its complaint more than 10 years later, on July 24, 2015.

Subdivision (b) of section 941 is not pertinent to our analysis, as it merely defines an "action" to include indemnity actions, and the Association does not rely on subdivision (c) except to cite it for the first time on appeal as a potential basis for the trial court to grant its continuance request, which we address below. For our purposes here, subdivision (c) creates a rule that section 941's limitations period does not apply at all to—and therefore may not be invoked by—a plaintiff's predecessors who controlled or possessed the property if, "at the time," a "deficiency" provided "proximate cause" for a claim cognizable under the Act or for bringing an action. Specifically, subdivision (c) states: "The limitation prescribed by this section may not be asserted by way of defense by any person in actual possession or the control, as owner, tenant or otherwise, of such an improvement, at the time any deficiency in the improvement constitutes the proximate cause for which it is proposed to make a claim or bring an action." (§ 941, subd. (c).)

Section 941's fourth subdivision addresses "[s]ections 337.15 and 337.1 of the Code of Civil Procedure," which state the applicable limitations periods for suits based on, respectively, latent and patent construction defects in nonresidential or other structures not covered under the RRA. (§ 941, subd. (d).) Subdivision (d) specifies that those other statutory sections and their respective limitations periods "do not apply to actions under this title."

Section 941 does not include section 337.15's express anti-tolling language stating, "Nothing in this section shall be construed as extending the period prescribed by the laws of this state for bringing any action." (Code Civ. Proc., § 337.15, subd. (d), italics added.) Lantzy relied on this language in reaching its holding that pending repairs or promises of repair do not toll section 337.15's 10-year limitations period. (Lantzy, supra, 31 Cal.4th at p. 369.)

Instead, section 941 in its final subpart, subdivision (e), expressly recognizes tolling may apply. Unfortunately, it does so in a manner Lantzy aptly described as "cryptic." (Lantzy, supra, 31 Cal.4th at p. 382, fn. 16.) There, the Supreme Court interpreted section 337.15, not section 941, but cited the latter as "demonstrat[ing] . . . that the Legislature knows how to toll the statute of limitations for repairs when it wishes to do so." (Lantzy, at p. 382, fn. 16.)

Specifically, section 941, subdivision (e), provides in relevant part: "Existing statutory and decisional law regarding tolling of the statute of limitations shall apply to the time periods for filing an action or making a claim under this title, except that repairs made pursuant to" the RRA's required prelitigation mediation process generally "do not extend the period." (Italics added.) The bar against extensions due to repair itself has an exception, and subdivision (e) provides other repair-pertinent details for calculating the limitations period. Because the Association does not assert that those efforts operated to extend section 941's limitations period, we do not address the repair aspects of subdivision (e), except to note they demonstrate the Legislature can precisely specify the running and tolling triggers for a limitation period when it so intends.

The Legislature's vague reference in subdivision (e) to "[e]xisting statutory and decisional law regarding tolling" is indeed cryptic. Lantzy merely noted that in interpreting section 337.15, as argued by the parties there, "[w]e need not and do not decide" whether it "is subject to the several separate statutes that specify when certain limitations periods will be tolled." (Lantzy, supra, 31 Cal.4th at p. 383, fn. 17, original italics.) Because the Association does not rely on these or other statutory tolling provisions, we similarly do not address their potential applicability, turning instead to the decisional law the Association invokes. (Cf. Reyes, supra, 65 Cal.App.4th at p. 466, fn. 6 [appellate review of summary judgment limited to issues "raised and supported"].)

4. No Categorical Tolling for Prior Periods of Builder or Developer HOA Control

The Association relies on two cases to support its assertion that the five months defendants' representatives controlled the Association's board upon its initial formation, before new homeowner representatives were elected, necessarily tolls the statute of limitations. (See El Escorial Owners' Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337 (El Escorial); Valenzuela v. Superior Court (1992) 3 Cal.App.4th 1499 (Valenzuela).) Even leaving aside that El Escorial was not "[e]xisting . . . decisional law" (§ 941, subd. (e)) at the time the RRA took effect in 2003, these cases do not support the Association's categorical tolling claim when viewed in light of the RRA's terms.

El Escorial involved a condominium conversion where the builder, Investec, formed a homeowners association as it completed construction, controlling the "daily operations of the association" for an undisclosed period until unit owners "assumed the management of the condominium association" (known as Escorial) in 1995 and "'assumed voting control' of the board" a year later. (El Escorial, supra, 154 Cal.App.4th at p. 1344.) The statute of limitations varied between three and four years from discovery of construction defects (id. at p. 1356), and the subcontractor defendants there asserted the limitations period began to run "when the Investec entities knew of the defects" (id. at p. 1357), arguing that because "Investec controlled the association at that time" (id. at p. 1356), "their knowledge is imputed to Escorial" once it assumed control of the association. (Id. at p. 1357.)

The reviewing court rejected the argument, observing that imputing knowledge of the defects to the association in those circumstances "would allow developers to insulate themselves from liability by controlling the projects until the limitations periods expire. The homeowners who would later take control without knowledge of the defects would have no remedy." Consequently, the court found the trial court properly declined the requested imputation of knowledge. (El Escorial, supra, 154 Cal.App.4th at p. 1357.) The Association argues El Escorial stands for the proposition that builder or developer control of an association categorically tolls a limitations statute for the corresponding period.

We do not read El Escorial so broadly. There, the claim of imputed knowledge was premised on the developer knowing about the alleged defects. Similarly, in Valenzuela, a developer allegedly knew of defects in a property, but sold it to the developer's agent, who then resold it to the plaintiff, creating a chain of ownership the developer invoked to impute the agent's knowledge of defects to the plaintiff, thereby placing the plaintiff's lawsuit outside the limitations period. (Valenzuela, supra, 3 Cal.App.4th at p. 1503.) The developer relied on precedent restricting developer liability based on the rationale that "[i]f a prior owner knows about defects and fails to sue the developer or inform the current owner, the current owner is not unduly restricted if allowed to sue only the prior owner for concealing the defects." (Ibid.) Valenzuela rejected the developer's attempt to avoid liability by injecting the agent into the ownership chain, explaining that "[t]o rule otherwise" would encourage similar tactics "to sweep the problems under the rug, and to resell the properties to unsuspecting purchasers." (Ibid.)

Contrary to the Association's claim, neither El Escorial nor Valenzuela adopted a blanket tolling rationale. Instead, both cases rejected the attempt to impute knowledge of a developer or its agent to the successor association or homeowner. We do not decide the issue, which is not before us, but section 941, subdivision (c), arguably incorporates a similar principle rejecting imputation. As noted, that subdivision precludes "any person" from asserting section 941's limitations period when that person was "in actual possession or . . . control" of the property "at the time" an alleged "deficiency in the improvement" provided "proximate cause" to make a claim. (§ 941, subd. (c).)

Proximate cause to make a claim suggests knowledge of the claim. But here, as the trial court noted both in its tentative and final orders granting defendants' summary judgment motion, Waterfront "d[id] not argue section 941, subdivision (c) applies." Specifically, in opposing summary judgment, the Association did not invoke section 941, subdivision (c), or otherwise allege defendants or their agents had knowledge of any alleged defects when they controlled the association. Likewise, the Association does not suggest on appeal that the trial court erred in finding it had not raised subdivision (c) as a basis to oppose summary judgment. In any event, in our independent review, we do not see in that subdivision any support for the Association's claim of categorical tolling while a builder or developer controls an HOA. Instead of triggering automatic tolling during prior ownership or control by "any person," the Legislature tied subdivision (c)'s disabling of any limitations defense to preexisting (i.e., "at the time") "proximate cause" to make a claim. We must give effect to the words the Legislature chose, and we therefore reject the Association's categorical tolling claim.

By analogy, the adverse domination tolling principle for captive corporate boards similarly takes effect only with notice. California law recognizes the adverse domination doctrine in derivative actions to recover corporate assets. (See, e.g., San Leandro Canning Co., Inc. v. Perillo (1931) 211 Cal. 482, 487 (San Leandro); Smith v. Superior Court (1990) 217 Cal.App.3d 950, 954; Admiralty Fund v. Peerless Ins. Co. (1983) 143 Cal.App.3d 379, 387; Beal v. Smith (1920) 46 Cal.App. 271, 279 (Beal).) As Beal explained, when "the corporation and its board of directors [a]re wholly under the domination of those who committed the original fraud[,] the corporation is deemed to be in same position as an incompetent person or a minor without legal capacity . . . , and during such period of incapacity the statute of limitations does not run." (Beal, at p. 279.)

Although adverse domination tolling is "a well-settled principle of law" (San Leandro, supra, 211 Cal. at p. 487), nothing suggests it dispenses with the demand requirement for derivative actions. Specifically, as a prerequisite to filing a derivative action, the shareholder plaintiffs must plead they urged the corporation's board of directors to take action and it refused or, alternatively, that it would have been futile to make the request because of, among other reasons, interested or compromised directors. (Charter Township of Clinton Police and Fire Retirement System v. Martin (2013) 219 Cal.App.4th 924, 934-935.) This notice prerequisite before tolling applies in the adverse domination context—accomplished either directly by the suing shareholders' notice or implicitly in the alleged corporate wrongdoers necessarily being aware of their looting or other wrongful actions—is analogous to how section 941, subdivision (c), operates. That is, subdivision (c) nullifies a statute of limitations defense only when the person attempting to assert the defense earlier had knowledge of a potential construction defect—and therefore "proximate cause" to make a claim—and failed to act on that knowledge.

We also note that the Legislature elsewhere in the RRA effectively provided for tolling based on a builder's control of an association, but did not do so for section 941's 10-year limitations period. Section 896 provides shorter limitations periods for claims regarding some home components (e.g., § 896, subds. (e) & (f) [plumbing, sewer, and electrical systems: 4 years], subd. (g)(7) [irrigation systems: 1 year], (g)(10) [paint and stains: 5 years], (g)(12) & (14) [landscaping and dryer ducts: 2 years]), and provides that those periods run from "close of escrow." (Ibid.) But in defining close of escrow, the Legislature expressly stated: "With respect to claims by an association . . . 'close of escrow' means the date of substantial completion, as defined in Section 337.15 of the Code of Civil Procedure, or the date the builder relinquishes control over the association's ability to decide whether to initiate a claim under this title, whichever is later." (§ 895, subd. (e), italics added.)

We must construe the various parts of a statutory enactment in harmony, considering each clause or section in the context of others and the whole. (Dalton, supra, 18 Cal.App.4th at p. 1571.) Because the Legislature in the RRA expressly contemplated delaying the commencement of limitations periods for builder control of an association, and included that delayed trigger for the periods defined in sections 895 and 896—but omitted it in section 941—there is no merit to the Association's claim of categorical tolling of section 941's 10-year period during any period in which the builders' representatives controlled its board. (See Breslin v. City and County of San Francisco (2007) 146 Cal.App.4th 1064, 1079 [in construing legislative action, courts may neither "omit what has been inserted" nor "insert what has been omitted"].) Because the undisputed evidence showed the 10-year period had expired and automatic tolling was the only legal basis the Association argued in opposing summary judgment, the trial court did not err in granting the defendants' summary judgment motion.

5. Continuance

In the alternative, the Association argues the trial court erred in denying its request for a continuance to conduct discovery. The Association asserts continuing the matter to allow plaintiffs to depose defendants' executives who served on the Association's board was essential to "the central issue of whether the defendant-developers' control over the Association's Board of Directors was sufficient to support equitable tolling . . . ." We review the trial court's ruling on a continuance request for abuse of discretion. (Hamilton v. Orange County Sherriff's Dept. (2017) 8 Cal.App.5th 759, 765.) Because defendants nowhere in their summary judgment motion or reply disputed the Association's factual claim of developer board control at the homeowner association's inception, we cannot say the court abused its discretion in denying a continuance to take depositions concerning an undisputed issue.

On appeal, the Association argues for the first time that a continuance was necessary for further discovery because "subdivision (c) of section 941 provides [an] independent ground for prohibiting its 10-year limitations period from being asserted as a defense . . . ." (Italics omitted.) The Association argues "absent the opportunity to conduct . . . discovery in the first place, it was error for the trial court to preclude sufficient consideration of facts which may support the application of the additional express tolling provisions found at section 941, subd[ivision] (c)."

We are not persuaded. The Association does not explain why it could not have earlier conducted the discovery now claimed essential, when almost a year passed between filing its complaint and its summary judgment opposition. As defendants note, the stipulated stay the Association entered into with another defendant (WL Homes) did not apply to them. In any event, the Association made no mention of subdivision (c) in its request for a continuance, suggesting only that its requested "above-referenced depositions will reveal evidence concerning the nature, extent, and duration of Defendants' control" of the board, an undisputed issue since defendants conceded complete control during the relevant time period. In considering whether the trial court erred in denying a continuance, the reviewing court "looks to the circumstances of each case, '"particularly in the reasons presented to the trial judge at the time the request [was] denied."'" (People v. Courts (1985) 37 Cal.3d 784, 791.) It is axiomatic that a trial court "d[oes] not err 'in failing to conduct an analysis it was not asked to conduct.'" (Laboratory Specialists Internat., Inc. v. Shimadzu Scientific Instruments, Inc. (2017) 17 Cal.App.5th 755, 764.) Because the Association did not seek a continuance for discovery relating to section 941, subdivision (c), we cannot now say the trial court erred in failing to grant a continuance on that basis.


The judgment is affirmed. Defendants are entitled to recover their appellate costs.