230 Cal. App. 4th 590
Cal. Ct. App.2014Background
- Miner, as trustee of The JM Trust, owns a separate interest in Huntington Continental Townhouse Association, Inc. (HCTA).
- HCTA delinquency arose after April 1, 2009, leading to a lien recorded January 7, 2011 for about $4,827.81, with portions for late charges and fees.
- A December 2011 attempt by Miner to pay $3,500 was rejected by Feldsott as a partial payment and not approved via a plan, despite ongoing attempts at accounting and payment proposals.
- Evidence at trial showed various interim payments and accounting statements; the balance fluctuated, and two months later HCTA stated $6,837.68 due.
- The trial court awarded damages on the first two causes of action and ordered foreclosure on the lien; the superior court appellate division reversed as to foreclosure, citing Davis–Stirling Act constraints.
- This court reversed, holding that Civil Code §5655(a) requires accepting partial payments toward the debt and applying them in the statutorily prescribed order, preventing foreclosure when the balance falls under $1,800.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must an association accept partial payments after a lien is recorded? | Miner argues the Act requires acceptance of partial payments. | HCTA contends partial payments may be declined absent a payment plan. | Yes; mandatory to accept partial payments after a lien is recorded. |
| Does section 5655(a) permit partial payments and require applying them first to assessments? | Partial payments are permitted and must be applied to assessments first. | Partial payments are optional or may be constrained by plan processes. | Partial payments are permitted and must be applied to assessments first. |
| Does a partial payment reducing delinquency below $1,800 bar foreclosure under §5720(b)? | Reducing the balance should prevent foreclosure under §5720(b). | Foreclosure remedies remain available with other tools; partials may be managed by plans. | Reducing to below $1,800 prevents foreclosure under §5720(b). |
| Does §5710 require consideration of partial payments in foreclosure contexts (judicial vs. nonjudicial)? | Partial payments should be considered across foreclosure types. | Foreclosure processes are governed by separate sales provisions and may differ by method. | 5655(a) and 5720(b) apply to both judicial and nonjudicial foreclosure. |
Key Cases Cited
- Huntington Continental Town House Assn., Inc. v. Miner, 222 Cal.App.4th Supp. 13 (Cal. Ct. App. 2014) (certified for public publication; intermediate ruling on Davis-Stirling Act context)
- Diamond v. Superior Court, 217 Cal.App.4th 1172 (Cal. Ct. App. 2013) (legislative history basis for §5720; protection of homeowner equity)
- Kavanaugh v. West Sonoma County Union High School Dist., 29 Cal.4th 911 (Cal. 2003) (statutory interpretation; plain meaning controls when unambiguous)
- Smith v. Superior Court, 39 Cal.4th 77 (Cal. 2006) (methods for ascertaining legislative intent; context of statutory language)
- Tarrant Bell Property, LLC v. Superior Court, 51 Cal.4th 538 (Cal. 2011) (shall vs may; mandatory application of statutes)