Hoang v. Arrowhead Woods Architectural Committee CA4/1 ( 2022 )

Filed 8/18/22 Hoang v. Arrowhead Woods Architectural Committee CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
KEVIN HOANG et al., D079410
Plaintiffs and Appellants,
v. (Super. Ct. No. CIVDS1821729)
ARROWHEAD WOODS
ARCHITECTURAL COMMITTEE
INC.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Bernardino
County, Thomas S. Garza, Judge. Affirmed.
William M. Crosby for Plaintiffs and Appellants.
Law Offices of John G. Wurm and John G. Wurm for Defendant and
Respondent.
A 1965 deed to a Lake Arrowhead residential property prohibits the
owner from cutting down “any living tree” unless first approved by an
architectural committee (Committee). The primary issue in this case is
whether this restriction is, as plaintiff-homeowners contend, unenforceable
under the Marketable Record Title Act (Act) (Civil Code,1 § 880.020 et seq.).
Disagreeing with plaintiffs, the trial court determined that the tree-cutting
restriction was enforceable under an exception in the Act for equitable
servitudes.
We affirm the judgment, although on different grounds. The tree-
cutting restriction is not enforceable by a “ ‘[p]ower of termination’ ”—that is,
a power reserved in the grantor to terminate the fee simple estate if the
restriction is violated. (§ 885.010, subd. (a)(1).) Because there is no other
statutory basis for applying the Act to this case, it does not matter whether
the restriction is an equitable servitude. Whatever it is, by its own terms it is
not enforceable by a power of termination. And that means the Act simply
does not apply. After also rejecting Homeowners’ claims that (1) the
restriction is invalid under the rule against perpetuities, and (2) the
Committee lacked authority to enforce it, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Surrounded by the San Bernardino National Forest, the community of
Lake Arrowhead describes itself as a “stunningly beautiful” mountain
1 Undesignated statutory references are to the Civil Code.
2
resort.2 It began 100 years ago, when in 1922 Robert G. Lester conveyed
(among other parcels) “lots 1 to 95” of “Tract Number 53” to Title Insurance
and Trust Company (Trust Company).
For reasons perhaps lost to history, the deed reserved in Lester “[a]ll
the trees, and all the roots, branches and parts thereof, growing on or that
may hereafter grow, stand or be upon any part of said Lot[s] . . . .” On the
same day by separate deed, Lester conveyed the trees, roots, and branches to
Arrowhead Mutual Service Company (Mutual Service). So somewhat
curiously, for the next 43 years the lots and the trees that grew on them had
different owners.
In 1965, as part of a settlement of unrelated litigation, Mutual Service
quitclaimed “to the respective record owners of the land” all of its “right, title
and interest in and to all of the trees and all of the roots, branches and parts
thereof . . . .” But this deed contained a restriction that prohibited the
landowner-grantees from engaging in unapproved tree cutting:
“PROVIDED, however, that the Grantees . . . will not cut
down, remove or alter any living tree unless first approved
by an Architectural Committee appointed by the Grantor
herein, its successors or assigns.”3
In 2007, Kevin Hoang and Nhung Tran (collectively, Homeowners)
purchased Lot 84 in Tract 53, a piece of residential property about a mile
from the lake. The preliminary title report disclosed the 1922 conveyance by
Lester to Mutual Service, excepting from coverage:
2 (Lake Arrowhead, In the Alps of Southern California
[as of Aug. 17, 2022], archived at
.)
3 This restriction was intended to increase property values in the entire
area by preserving “the forest.”
3
“Covenants regarding all the trees and all the roots,
branches, etc., specifically conveyed by Robert G. Lester to
the Arrowhead Mutual Service Company . . . by Deed
recorded August 9, 1922 . . . .”
Their purchase agreement also disclosed the 1965 restriction:
“Arrowhead Woods Architectural Committee
(“AWAC”): Buyer is advised and hereby acknowledges
that most properties located within . . . Arrowhead Woods
are subject to and fall under the jurisdiction of the AWAC.
Approval must first be obtained from AWAC before . . . new
construction, remodeling, re-roofing, tree trimming and/or
removal, exterior painting . . . .”4 (Italics added.)
In 2015, Homeowners removed two cedar trees from their property
without first obtaining the Committee’s approval. Each tree was about 20
inches in diameter, and together they were valued at nearly $17,000.5 For
trees that size, the Committee’s bylaws provide a $10,000 fine per tree for
unauthorized removal.
Ultimately, the Committee reduced the fine to $9,770 for both trees.
When Homeowners refused to pay it, the Committee further reduced it to
$5,000 in a small claims action alleging “[i]llegal tree cutting on
property . . . .” Homeowners cross-complained, seeking $10,000 for “[i]llegally
impos[ing] fines, fees[,] [and] damages,” trespass, and harassment.
4 Homeowners testified that their real estate agent assured them the
tree-cutting restriction did not apply because their home was built in 1927
and the restriction applied only to newer construction.
5 Homeowners claimed the trees were dead, but photographs of cut
branches showed green foliage.
4
The small claims court ruled in the Committee’s favor on its complaint
and against Homeowners on their cross-complaint. On appeal to the superior
court, Homeowners lost again. They paid the $5,000 judgment.6
In 2018, Homeowners filed a first amended complaint (Complaint)
against the Committee alleging six causes of action. The gravamen of the
first five (violation of the Act, quiet title, slander of title, fraud, declaratory
relief) is that the tree-removal restriction is unenforceable under the Act.7
At trial, Homeowners also asserted the Committee lacked authority to
enforce the restriction because it was assigned those rights by a corporate
entity that had been dissolved years earlier.
By stipulation, trial was bifurcated into a bench trial on the issues
involving the Act and bylaws, to be followed by a jury trial (if necessary) on
the remaining claims. In a statement of decision, the court ruled in the
Committee’s favor, determining (1) the Act did not bar enforcement of the
restriction because it was an equitable servitude ; and (2) under Corporations
Code section 2010, Mutual Service validly conveyed its rights to the
Committee, even though it had been dissolved years earlier. The court
entered judgment in the Committee’s favor on the first, fifth, and sixth causes
of action, and dismissed the remaining causes of action as “moot.”
6 Despite the final judgment on the merits (involving the same parties,
issues, and trees), the trial court declined to apply claim or issue preclusion.
On appeal, the Committee contends the trial court should have applied
“[c]ollateral [e]stoppel.” It is unnecessary to address that point since we
affirm on other grounds.
7 The sixth cause of action seeks declaratory relief that the tree-removal
restriction is unenforceable because of alleged voting irregularities in
adopting the Committee’s bylaws. In closing argument, however,
Homeowners acknowledged they had “been enlightened on that point,” by the
evidence at trial and abandoned that claim.
5
DISCUSSION
A. The Tree-Removal Restriction is Not Subject to the Marketable Record Title
Act
1. The Marketable Record Title Act: Basic Principles
In California, real property is “a basic resource” that the Legislature
has declared should be “freely alienable and marketable to the extent
practicable” to encourage its full use. (§ 880.020, subd. (a)(1).) Toward that
end, in 1982 the Act was adopted “ ‘to simplify and facilitate real property
title transactions by enabling persons to determine the status and security of
recorded real property titles from an examination of recent records.’ ” (Robin
v. Crowell (2020) 55 Cal.App.5th 727, 749.) It “operates like a statute of
repose” by imposing outside time limits on the enforceability of certain
interests in real property.8 (See Aviel v. Ng (2008) 161 Cal.App.4th 809, 817,
fn. 4.)
The Act creates a recordation requirement for specific interests:
mortgages and deeds of trust (§ 882.020), unexercised options (§ 884.010),
powers of termination (§ 885.010), unperformed contracts for the sale of real
property (§ 886.010), mineral rights (§ 883.110), and easements (§ 887.010).
As a general rule, these interests expire within a stated time period. For
example, mortgages and deeds of trust expire 10 years after the due date of
the debt, if ascertainable from the record, or if not so ascertainable, 60 years
8 A statute of limitations normally sets the time within which
proceedings must be commenced once a cause of action accrues, whereas
a statute of repose limits the time within which an action may be
brought and is not related to accrual. A statute of repose thus is
harsher than a statute of limitations because it terminates a right of
action after a specified period of time, irrespective of accrual or even
notice that a legal right has been invaded. (See McCann v. Foster
Wheeler LLC (2010) 48 Cal.4th 68, 78, fn. 2.)
6
after the date of recording. (§ 882.020.) Powers of termination expire 30
years after the instrument creating the power is recorded.9 (§ 885.030.)
These statutory periods may be extended, however, if the person claiming the
interest timely records a “Notice of Intent To Preserve Interest” (Notice) in
“substantially” the form provided in section 880.340. (See generally, 4 Miller
and Starr, California Real Estate (4th ed. 2022) § 10:68.)
2. The Tree-Cutting Restriction Is Not Enforceable by a Power of
Termination
In this case, Homeowners contend the tree-cutting restriction is subject
to the Act because it is enforceable by a power of termination. Because the
30-year period under the Act was not extended, they claim the restriction
expired no later than 1995 (30 years after the 1965 deed containing the
restriction). If the restriction is not enforceable by termination, the Act
simply does not apply in this case.
A power of termination is defined as “the power to terminate a fee
simple estate in real property to enforce a restriction in the form of a
condition subsequent to which the fee simple estate is subject.” (§ 885.010,
subd. (a)(1).) Courts do not, however, imply a power of termination. Because
the power to terminate involves a potential forfeiture of the transferred
interest, “ ‘[t]here must be language used which is so clear as to leave no
doubt but that the grantor intended that an estate upon condition subsequent
should be created—language which ex proprio vigore [of its own force]
imports such a condition.’ ” (Savanna School District of Orange County v.
McLeod (1955) 137 Cal.App.2d 491, 494; see also Sanders v. East Bay Mun.
9 Exceptions for a power conditioned on continued production of oil and
gas or other minerals, and to separately owned fixtures removable at
expiration of a lease, are not involved in this case. (See § 885.015.)
7
Utility Dist. (1993) 16 Cal.App.4th 125, 130 [“no provision in a deed relied on
to create a condition subsequent will be so interpreted if the language of the
provision will bear any other reasonable construction”].)
There are only two possible sources for a power of termination
applicable to the tree-cutting restriction: (1) the 1922 deed from Lester
transferring Lot 53 (among others) to the Trust Company; and (2) the 1965
deed by which Mutual Service quitclaimed its interest in the trees to the
owners of the respective lots, including the owners of Lot 53.10
We start with the 1922 deed, by which Lester conveyed lots in Tract 53
to Trust Company, but withheld the trees from the conveyance. As to the
property conveyed, Lester imposed 15 restrictions. These included, for
10 In their supplemental brief and again at oral argument, Homeowners
took inconsistent positions on whether any other deed contains a power of
termination. Initially in supplemental briefing, they conceded that the only
possible sources for a power of termination are the above-mentioned 1922 and
1965 deeds. Yet elsewhere in the same brief, they also claimed a power of
termination with regard to tree cutting is in a November 24, 1932 deed. That
1932 deed (exhibit 59) is not mentioned in any of the principal briefs. Nor
does it appear to even include Lot 84 in Tract 53:
In any event, the 1932 deed excepts from the conveyance “all the trees and
the roots, branches and parts thereof . . . .” Thus, like the 1922 deed, it could
not contain a power of termination with respect to tree cutting restrictions
because the grantor retained the estate in the trees. At oral argument,
Homeowners’ counsel also asserted the tree cutting restriction was contained
in a fee simple determinable estate. That contention is also untenable. (See
discussion post at fn. 14.)
8
example, that the property be used only for residential purposes, must
contain certain plumbing fixtures, and cannot accumulate garbage.
The 1922 deed includes an express power of termination:
“[U]pon any breach . . . of any of the conditions, restrictions
and/or reservations herein contained . . . [,] the premises
directly affected by such breach . . . shall forthwith revert
to the Grantor, or his successors . . . , who shall have the
right of immediate re-entry and possession.”
But by definition, a power of termination—forfeiture—operates only as a
condition on the grantee’s estate. If the grantee engages in the prohibited
conduct, the conveyed real estate interest reverts to the grantor. (§ 885.010,
subd. (a)(1).) As Homeowners’ concede, the power of termination contained in
the 1922 deed could not apply to Lester’s retained interest in the trees
because he was the grantor. And it did not restrict the actions of the grantee
because Trust Company had no interest in the trees. Lester retained them,
then transferred them to a separate owner, Mutual Service.11
Unlike the 1922 deed, the 1965 quitclaim deed from Mutual Service
makes no reference to any power of termination. Although it was the 1965
deed that created the restriction on cutting trees without approval of the
Committee, nothing in the deed even hints that the homeowner grantee will
forfeit any real estate interest by cutting a tree without advance approval.
Given the absence of any language that would create a power of termination,
and we conclude that as a matter of law the 1965 deed does not permit
11 Homeowners’ expert, Lawrence Lacombe, agreed that under the 1922
deed, “[T]itle to the property ran to title insurance and trust company, but
the trees did not.” He also conceded that “since title of the trees didn’t pass,”
any restriction regarding the tress in that deed “wouldn’t apply.” Thus, we
understand Lacombe’s testimony about the 1922 deed to be consistent with
our conclusion that it does not contain a power of termination with respect to
the trees.
9
enforcement of the tree removal restriction by termination of the owner’s
interest in the property.12
Seeking to persuade the trial court otherwise, Homeowners presented
“expert” testimony from a title insurance underwriter, Lawrence Lacombe.
Focusing on the 1965 deed, Lacombe testified that the Act “abolishes
restrictions and conditions” and “converts them to power of termination.”13
From this premise, he opined that the tree-removal restriction in the 1965
deed had become a power of termination by Legislative fiat. On appeal,
Homeowners continue to embrace this theory.
We reject this claim for several reasons. First and foremost, with
exceptions not applicable here, expert testimony on the law is inadmissible.
It is not the proper function of an expert to instruct the court on the law. It is
the judge’s role to determine what the applicable law is. (N.G. v. County of
San Diego (2020) 59 Cal.App.5th 63, 77; Downer v. Bramet (1984) 152
Cal.App.3d 837, 842.)14 Yet over objection, the trial court allowed Lacombe
to testify “these things we used to call [CC&R’s] were technically powers of
termination in California under that Act of 1982.”
12 It is solely a judicial function to interpret a written instrument,
including a deed, unless the interpretation turns upon the credibility of
extrinsic evidence. (See City of Manhattan Beach v. Superior Court (1996) 13
Cal.4th 232, 238.)
13 Although Lacombe did not cite the statute, he was apparently referring
to section 885.020 which provides: “Fees simple determinable and
possibilities of reverter are abolished. Every estate that would be at common
law a fee simple determinable is deemed to be a fee simple subject to a
restriction in the form of a condition subsequent. Every interest that would
be at common law a possibility of reverter is deemed to be and is enforceable
as a power of termination.”
14 Moreover, Lacombe is not a lawyer and does not hold a law degree.
10
More significantly, the Act did not abolish CC&R’s, nor did it transform
them into powers of termination. What the Act abolished was a common law
restraint on alienation called a fee simple determinable and possibility of
reverter. A fee simple determinable is an estate that expires upon occurrence
of a stated event. (McDougall v. Palo Alto Unified School Dist. (1963) 212
Cal.App.2d 422, 431.) A possibility of reverter is the name of the future
interest held by the grantor after conveying a fee simple determinable.
(Severns v. Union Pac. R.R. Co. (2002) 101 Cal.App.4th 1209, 1219, fn. 6.)
For example, if the grantor conveys an estate to last for an indefinite time,
measured not in lives or years, but in terms of use (e.g., so long as the
property is used as a hospital), and provides the estate ends automatically
when the land is no longer used for that purpose, the estate created in the
grantee is a fee simple determinable. The reversionary interest—the
possibility that the land will come back to the grantor if and when the
specified situation no longer exists—is the possibility of reverter. The Act
simplifies the law by making “every interest that would be at common law a
possibility of reverter” enforceable as “a power of termination.” (§ 885.020.)15
Nevertheless, the trial court apparently credited Lacombe’s testimony
on the applicable law. The statement of decision concluded that the tree-
cutting restriction was a power of termination that expired. At the same
time, however, the court articulated its own theory as to why the Act did not
15 At oral argument, Homeowners’ counsel ultimately conceded the deeds
do not contain a “possibility of reverter” with respect to tree cutting, yet at
the same time claimed there was a “fee simple determinable.” But counsel
was unable to point to language in any of the deeds that would create a fee
simple determinable with respect to unauthorized tree removal. Indeed,
agreeing that the grantor did not retain a possibility of reverter impliedly
concedes the grantee did not receive a fee simple determinable.
11
compel a ruling in favor of Homeowners.16 It reasoned that because the
Committee “never sought reversion of title,” but instead imposed monetary
fines, it was appropriate to “treat the tree trimming and tree removal of [sic]
an equitable servitude.” Then, citing section 885.060, subdivision (c), which
exempts equitable servitudes from the Act, the judge rejected Homeowners’
claim.17
Because the superior court’s ruling was based on the equitable
servitude exception to the Act, much of the parties’ initial briefing assumed
(as did the trial court) that the Act applied, and focused on whether the
restriction was an equitable servitude. At our request, the parties filed
supplemental briefs addressing (1) whether the restriction was enforceable by
a power of termination within the meaning of the Act, and (2) if not, whether
the judgment should be affirmed on those grounds instead.
Generally, an appellate court reviews the correctness of the trial court’s
judgment and not its reasons. “[W]e will affirm the trial court’s ruling on any
theory established by the record.” (Baskin v. Hughes Realty, Inc. (2018) 25
Cal.App.5th 184, 208, fn. 16.) This rule applies even if the statement of
16 Objecting to the statement of decision, Homeowners noted, “Not only
did [the Committee] not mention ‘equitable servitudes’ as an affirmative
defense in its Answer, but there was no mention of this term throughout the
trial . . . .” Indeed, “equitable servitude” does not appear in the nearly 500-
page trial transcript until defense counsel’s closing argument, where it is
ironically mistranscribed as “inequitable servitudes.” In any event, even the
Committee acknowledges the issue was not litigated, stating in its appellate
brief it “did not have an opportunity to present evidence or make a record
that the recorded deed restrictions were equitable servitudes . . . .”
17 If the restriction for which a power of termination has expired “is also
an equitable servitude alternatively enforceable by injunction” it remains
enforceable by injunction “and any other available remedies,” but not by a
power of termination. (§ 885.060, subd. (c).)
12
decision reveals the legal basis for the ruling was incorrect and lacks findings
related to the correct theory, “provided that the record unequivocally
establishes the requisite facts.” (Ibid.) Applying these principles here, the
trial court’s ruling that the tree-cutting restriction is not made unenforceable
by the Act is correct because (1) no deed created a power of termination with
respect to the tree-cutting restriction, and (2) a power of termination was the
only arguable basis for application of the Act. Accordingly, the ruling must
be affirmed notwithstanding that it was based on different grounds.
B. The Tree Cutting Restriction Is Not Made Unenforceable by the Rule
Against Perpetuities.
In their supplemental brief, Homeowners alternatively contend the tree
cutting restriction is unenforceable because it violates the Rule Against
Perpetuities (the Rule). They assert that because the tree restrictions “are
without any specified time limits,” they are “de facto invalid as not vesting”
within the meaning of the Rule, as codified in Probate Code section 21205.18
At oral argument, counsel conceded this issue was not raised in the trial
court, the opening brief, or even in the reply. He candidly conceded that it is
also outside the scope of the issues we requested the parties to address in
supplemental briefs.
The Committee asserts it is “entirely improper” to raise this issue “for
the first time only weeks before oral argument and with no opportunity to
develop a record or make a proper argument.” Although we tend to agree,
Homeowners’ counsel accurately notes that because the Rule “is one of public
18 Probate Code section 21205 provides: “A nonvested property interest is
invalid unless one of the following conditions is satisfied: (a) When the
interest is created, it is certain to vest or terminate no later than 21 years
after the death of an individual then alive[;] [or] (b) The interest either vests
or terminates within 90 years after its creation.”
13
policy” involving a question of law, courts have considered it even when
raised for the first time on appeal. (See Wong v. Di Grazia (1963) 60 Cal.2d
525, 532, fn. 9; Woodward Park Homeowners Assn., Inc. v. City of Fresno
(2007) 150 Cal.App.4th 683, 714.) In those cases, however, the parties had a
fair opportunity to present their positions and the matter was fully briefed.
In Wong, for example, although the question arose for the first time at oral
argument in the Court of Appeal, the issue was “fully argued” in the Supreme
Court. (Wong, at p. 532, fn. 9.) And in Woodward Park, the appellate court
raised the issue itself in a request for supplemental briefs. (Woodward Park,
at p. 714.) In contrast here, we did not ask the parties to brief the issue, and
the arguments are not fully developed.19
Ultimately, it is left to the reviewing court’s discretion whether a party
will be permitted to raise a new theory for the first time on appeal. (Sea &
Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 423.)
Under the circumstances, we are inclined to consider the point forfeited. (See
People v. Price (2017) 8 Cal.App.5th 409, 450, fn. 21 [argument beyond the
scope of issues on which supplemental briefing was sought and also not
raised in opening brief is forfeited].)
But even setting aside forfeiture, Homeowners’ argument fails. The
rule against perpetuities “relates only to future interests in property, the
vesting of which is to be postponed beyond the allotted time.” (Dallapi v.
19 For example, Probate Code section 21225, subdivision (a) excludes
certain nondonative transfers from the statutory rule. The Law Revision
Commission comment states this is because “[t]he rule against perpetuities is
an inappropriate instrument of social policy to use as a control on such
arrangements. The period of the rule—a life in being plus 21 years—is
suitable for donative transfers only.” (Recommendations Relating to Uniform
Statutory Rule Against Perpetuities (Sept. 1990) 20 Cal. Law Revision Com.
Rep. (1990) p. 2532.) Although this exclusion arguably might apply in this
case, the supplemental briefs do not discuss it.
14
Campbell (1941) 45 Cal.App.2d 541, 544.) Under the Rule, a provision that
may cause an estate to commence in the future is invalid if, as a result, it
may commence more than 21 years after a life or lives in being. (Ibid; see
Prob. Code, § 21202.) In simple language, the rule against perpetuities is a
rule against remote vesting. It applies only to nonvested interests in real
property. (Prob. Code, § 21205; Dallapi, at p. 546 [“The rule . . . only applies
to future interests in property, and is not concerned with such interests which
are vested”].)
Here, the Rule does not apply because the case involves a restriction on
the use of Homeowners’ land, not a delay in vesting. (See McKinnon v.
Neugent (Ga. 1969) 167 S.E.2d 593, 594 [“the rule against perpetuities . . .
deals with estates in land and the vesting of estates, and does not relate to
covenants restricting the land to certain uses. Thus, the restrictive
covenants purporting to run for 25 years do not violate the rule against
perpetuities and are not invalid for that reason”]; see also Cornett v. Houston
(Tex.Civ.App. 1966) 404 S.W.2d 602, 605 [rule against perpetuities applies
only to remotely vesting estates and not to restrictive covenants].) Therefore,
even if the perpetuities argument were properly before us, we would reject it.
C. The Committee Was Properly Assigned the Right to Enforce the
Restriction
As a third asserted basis for reversal, Homeowners contend there was
no substantial evidence to support the trial court’s finding that the
Committee had “authority” to impose the tree-removal restriction. As we
understand it, the argument is based on two deeds. The first is the 1922
deed, where Lester retained not only ownership of the trees, but also the
“right to remove any of said trees whenever, in the opinion of said Grantor
[i.e., Lester] or his successor in interest, removal of any tree . . . is necessary
15
for the improvement of the landscape, for the protection or reasonable use of
improvements and/or buildings . . . .” The second is the 1965 deed where
Mutual Service quitclaimed to the lot owners “all of Grantor’s right, title, and
interest in and to all of the trees,” but also imposed the tree-cutting
restriction. Putting both of these deeds together, Homeowners contend that
“[s]ince Lester had reserved to himself” the power to restrict tree cutting in
the 1922 grant deed, Mutual Service lacked the power to transfer any such
restrictions [to the Committee] in the 1965 deed. More simply, the argument
is that Mutual Service never held the right to restrict tree cutting, and it
could not convey to the Committee that which it did not have.
This argument fails because it does not consider other conveyances.20
Homeowners ignore the other 1922 deed—the one from Lester to Mutual
Service where Lester conveyed his interest to “all the trees . . . together with
the right to remove any of said trees whenever, in the opinion of said
Arrowhead Mutual Service Company, its successor, or assigns, the removal of
any tree, or trees, is necessary for the improvement of the landscape, for the
protection or reasonable use of improvements and/or buildings . . . .” Thus,
contrary to Homeowners’ contention, Lester did convey his once-retained
right to control tree-cutting. He conveyed it in 1922 to Mutual Service and
its successors or assigns. Homeowners also overlook the 1986 deed in which
Mutual Service quitclaimed its rights to Arrowhead Lake Association, as well
20 The argument may also be forfeited because it does not appear to have
been raised in the trial court, which may also explain why the trial court did
not address it in the statement of decision. Nevertheless, since the
Committee does not assert forfeiture, and it involves a pure question of law
on undisputed facts, we consider the point, even for the first time on appeal.
16
as the 1990 quitclaim deed from Arrowhead Lake Association to the
Committee.21
In a related argument, Homeowners assert there is no evidence that an
architectural committee “as mandated by the 1965 quitclaim deed, existed
between 1965 and 1989 to administer” the tree-cutting restrictions. Once
again, this appears to be new argument; there is nothing about it in the
statement of decision. In any event, it is not persuasive. The 1965 deed did
not “mandate” the creation of an architectural committee. It simply provided
that one may be appointed by Mutual Service or its “successors or assigns” in
the future. That happened when the Committee acquired its rights to enforce
the tree-cutting restriction in 1990, some 17 years before Homeowners
bought their Lake Arrowhead property.
21 In the trial court, Homeowners also asserted that because Mutual
Service was dissolved in 1978, it lacked the capacity in 1986 to assign its
rights to enforce tree-cutting restrictions to the Arrowhead Lake Association.
The trial court rejected that argument because under Corporations Code
section 2010, even after dissolution a corporation retains the ability to assign
its rights in its assets. Homeowners have expressly abandoned that issue on
appeal, asserting in their opening brief, “Appellants do not contest the right
of [Mutual Service], if it had possessed restrictions, to quitclaim same, even
years after its dissolution pursuant to Corporations Code, 2010.” In any
event, even if not abandoned, we would reject it. A corporate dissolution is
best understood not as a corporation’s death, but merely as its retirement
from active business. (Penasquitos, Inc. v. Superior Court (1991) 53 Cal.3d
1180, 1190.) Corporations Code section 2010, subdivision (c) provides that a
dissolved corporation has the authority to collect and distribute assets
discovered after the date of dissolution so long as it is part of the winding up
process.
17
DISPOSITION
The judgment is affirmed. Respondent is entitled to costs on appeal.
DATO, J.
WE CONCUR:
IRION, Acting P. J.
BUCHANAN, J.
18