Fountain Valley Chateau Blanc Homeowner’s Ass'n v. Dep’t of Veterans Affairs

Robert Cunningham (defendant) purchased a home subject to the covenants, conditions, and restrictions (CC&Rs) of the Fountain Valley Chateau Blanc Homeowner’s Association (Fountain Valley) (plaintiff). The CC&Rs included the obligation to maintain the interiors of the residential units in a clean, sanitary, and attractive condition, but reserved to the owners the right to decorate and furnish the interiors as they pleased. Cunningham purchased his home with the help of the United States Department of Veteran Affairs (the department) (defendant), which took title to the land under a land-sale installment contract. Fountain Valley complained about the paper, books, appliances, bookshelves, and other items on Cunningham’s land and inside his house. Fountain Valley threatened Cunningham with litigation if he did not let them inspect the property and remove his belongings. After Cunningham removed some of his belongings, Fountain Valley decided he had not removed enough and filed suit against Cunningham and the department. Subsequently, housing code and fire inspectors found no hazardous conditions on Cunningham’s property. Nevertheless, Fountain Valley sent Cunningham a letter demanding that he clear his bed of paper and books; remove paper, boxes, and books from the floors of his home; and get rid of old clothes. Cunningham, who had been representing himself, retained an attorney and filed a cross-complaint. In his cross-complaint, Cunningham alleged Fountain Valley had violated his right of privacy and committed trespass, negligence, and breach of contract using the threat of litigation to gain access to his home and force him to throw out personal belongings. Fountain Valley’s complaint was settled in August 1996. Cunningham’s cross-complaint was bifurcated into liability and damages portions. During the liability portion, the jury found Fountain Valley had acted unreasonably. The trial judge granted Fountain Valley’s motion for a new trial, stating he believed Fountain Valley had behaved reasonably.