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July 2011

San Diego Legal Team Prevails After Trial on Efforts to Derail a $20 Million Sale of Real Property

San Diego Partner Charles Berwanger, Senior Counsel Jill Raffee and Senior Paralegal Joni Etue prevailed at trial on behalf of Warner Springs Ranchowners Association.  The Association was subject to conditions, covenants & restrictions ("CC&Rs") which required that 66 2/3% of its members approve any proposed sale of the ranch.  After obtaining the required 66 2/3% approval of its members over the course of a 9-month assent process, the board of directors entered into a Purchase and Sale Agreement which provided for the sale of the Ranch to The Pala Band of Mission Indians for $20.5 million. 

The plaintiff sued alleging causes of action for declaratory relief, injunctive relief and breach of fiduciary duty.  He sought to prevent the sale of the Ranch contending that its board had failed to comply with statutory procedures governing the assent process; that the board had failed to obtain the highest and best price for the property; and that it did not have the requisite 66 2/3% approval to sell the ranch.

In its statement of decision, the Court found that plaintiff had failed to sustain his burden of proof on his claims that the Association had breached the CC&Rs, or its fiduciary duties.  The Court found the testimony of plaintiff's expert witness on the issue of any alleged improprieties in the assent process "unpersuasive."  The Court denied plaintiff any relief on his complaint, and found in favor of the Association on its cross-complaint which sought a declaration that it had complied with the CC&R's relating to the pending sale of the Ranch, and that there were no grounds to enjoin the sale.

Because the action requested a declaration of the rights and duties of the respective parties under the CC&Rs, the Association is entitled to reasonable attorney's fees as the prevailing party.

Charles V. Berwanger