Committee to Save the Beverly Highlands Homes Association v. Beverly Highlands Homes Association

The Beverly Highlands Homes Association (the association) (defendant) was a mutual-benefit nonprofit corporation whose members were the owners of four buildable lots in the Beverly Highlands in Los Angeles. The Beverly Highlands Declaration of Restrictions (the declaration), which was recorded in 1952, included use restrictions applicable to property within the Beverly Highlands. One such restriction applied to the four lots and limited their use to open areas for planting, natural growth, and vegetation. The declaration further provided that the association was responsible for any planting and maintenance of the lots until the lots might be dedicated to the public for park use. In 1997 the association’s board of directors (the board) (defendant) sent ballots to the association members to vote on an amendment to the declaration to preserve members’ property views, which would require the association to own real property within the Beverly Highlands and thereby become subject to California’s Davis-Stirling Act, which regulated common-interest developments. The vote was 40-16 in opposition. Later that year, the association sent another ballot asking members to vote to dissolve the association, and 129 of 205 eligible votes were received, with 94 votes in favor of dissolution and 35 votes against it. The board unanimously approved the dissolution. Dissenting association members sued the association, the board, and its members to enjoin the alleged wrongful dissolution. The trial court concluded that the Beverly Highlands development was a common-interest development within the meaning of the Davis-Stirling Act, which required 100 percent member approval to dissolve the association. The association appealed, arguing that it was not a common-interest development within the meaning of the Davis-Stirling Act and, therefore, its dissolution was governed by a different provision of state law, which was satisfied.