The Friday Flyer, May 23, 2008 - Article: Corporate counsel provides disclosure of selected litigation matters

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Corporate counsel provides disclosure of selected litigation matters

     At the Annual Meeting on May 15, Corporate Counsel Peter Racobs provided the following disclosure to the Canyon Lake Property Owners Association.
     The Board of Directors determined certain claims made against the Association in various pending matters may be material to the interests of the Association’s members. This memorandum advises the Members of the existence of these claims. This memorandum does not disclose cases brought against the Association that are considered minor (typically, small-claims or limited-jurisdiction matters).
     It also does not disclose cases brought by the Association (typically, assessment and covenant-enforcement actions) unless significant cross claims have been advanced against the Association. The lawsuits reported on herein, as well as other lawsuits in which the Association is a party, are a matter of public record available for review at the courthouse where the case is venued.

Pending matters
     Aragon vs. Canyon Lake Property Owners Association, et al. (Riverside County Superior Court Case No. RIC 448204). In a Complaint filed in April 2006, Mr. Aragon challenged the enforceability of the Association’s restrictions on operation of motorcycles and alleged unspecified damages from the Association’s enforcement of its motorcycle restrictions.
     In a First Amended Complaint served on the Association in July, 2006, Mr. Aragon expanded the scope of the lawsuit to include allegations that the Lake leased by the Association from EVMWD should be open to the public. On September 15, 2006, the Riverside County Superior Court ruled that the judgment in a prior lawsuit filed in the 1990s, in which the Association successfully upheld the motorcycle prohibition against the same legal challenges, barred Mr. Aragon’s suit regarding the CC&Rs’ motorcycle provision.
     In a Second Amended Complaint served on the Association in September,2006, Mr. Aragon made his allegations that the Lake should be open to the public in the context of causes of action alleging the Association misrepresented that the Lake was not open to the public. On February 15, 2007, the Riverside County Superior Court summarily adjudicated these misrepresentation claims in favor of the Association. The Superior Court found the Association had not misrepresented the private nature of the Association’s Lake rights.
     Three causes of action (for false imprisonment, infliction of emotional distress and racial discrimination) remain. The Association denies all of Mr. Aragon’s claims. The Association’s insurers have accepted the defense of the Association subject to reservations of rights. No trial date has been set.
     O’Grady aka Bright vs. Canyon Lake Property Owners Association (U.S. District Court, Central District, Case No. CV 07-08351). Ms. Bright is a former Association employee. She filed a complaint against the Association with the Equal Employment Opportunity Commission (EEOC). The EEOC declined to file suit but gave Ms. Bright the opportunity to file her own suit. In her Complaint filed December 27, 2007, Ms. Bright alleges a hostile work environment, employment discrimination, unlawful retaliation and defamation. The Association denies all Ms. Bright’s claims. The Association’s insurer is providing the Association a defense in the matter subject to a reservation of rights. The parties are engaged in the discovery process.
     Bolanos vs. Canyon Lake Property Owners Association, et al. (former Los Angeles County Superior Court Case No. BC 358584, current Riverside County Superior Court Case No. RIC 468434). In a Complaint filed September 15, 2006, Mr. Bolanos, a non-Member of the Association, asserts that the Lake is open to the public. Mr. Bolanos also named the Elsinore Valley Municipal Water District (the Association’s landlord and the fee owner of the Lake), the State Water Resources Board, the County of Riverside, the City of Canyon Lake and Barton Protective Services as defendants. The Association’s insurers have accepted the defense of the Association subject to reservations of rights.
     In addition to seeking declaratory relief and injunctive relief regarding various claims Mr. Bolanos advances related to the alleged rights of the public to use the Lake, the Complaint seeks monetary damages (compensatory and punitive) on behalf of Mr. Bolanos for alleged violations of his civil rights and an alleged false arrest of the plaintiff. The Association denies all the plaintiff’s claims.
     On January 9, 2007, Los Angeles County Superior Court Judge Mel Red Recana granted the motion jointly brought by all defendants, except the State of California, to change venue in the above-entitled action to Riverside County Superior Court.
     A motion by plaintiff to change venue out of Riverside County was denied by the Superior Court on June 11, 2007. Demurrers by all defendants other than the State Water Board were denied on June 25, 2007; the State’s demurrer was sustained in part, but the plaintiff elected not to amend his Complaint.
     On May 8, 2008, the plaintiff voluntarily dismissed the State Water Board from the case.
     On June 6, 2008, the plaintiff has scheduled his motion for summary adjudication which is focused on the allegations in the plaintiff’s suit that the Lake should be open to the public as a matter of law. The “summary adjudication” sought by plaintiff seeks a pretrial order finding public Lake use rights. The Association is vigorously opposing that motion. No trial date has been set.
     Orr vs. Canyon Lake Property Owners Association, et al. (Riverside County Superior Court Case No. RIC 483653). In a Complaint filed October 22, 2007, plaintiff Orr alleges she was injured in a 2005 trip-and-fall accident on the Association’s private street. The Complaint asserts theories of premises liability and negligence against the Association. The Association denies these claims. The Association is being defended by its insurer. No trial date has been set.

Resolved matters
     Request for Prevailing Wage Determination (Southern California Labor/Management Operating Engineers Contract Compliance Committee; California Department of Industrial Relations PW Case No. 2005-025). See story on Page A-1.