Court of Appeal affirms damages and fee awards in favor of real estate developers and rejects neighboring homeowners association’s million-dollar counterclaim.

GMSR’s clients acquired four parcels of land and began developing residential homesites—a process that requires frequent pre-development visits by multiple contractors.  Because the land was not adjacent to public streets, the developers and their visitors accessed it by driving through a guarded gate and then following private roads owned and managed by a neighboring homeowners association.  The easements describing these access rights were well documented and recorded, and the developers freely visited their land for more than a decade.

Years later, new association directors opposed the development. When GMSR’s clients approached the gate and requested entry, the association’s guards refused.  The developers sued to quiet title to their easements and sought damages for development delays and costs incurred due to the association’s roadblocks.   The trial court determined that the access denials were wrongful and awarded the developers more than $2.4 million in damages and attorney’s fees.   The Court of Appeal affirmed the damages and fee awards, holding that the association’s conduct breached its own Covenants, Conditions, and Restrictions and other contracts between the parties.  The Court also rejected the association’s counterclaim seeking payment of a $1 million development-related fee, holding that the preconditions for that payment were not yet satisfied.

Millennium-Diamond Road Partners, LLC v. Diamond Bar Country Estates Association (Sept. 24, 2019, B285539) 2019 WL 4635158, as modified (Sept. 25, 2019) [Second District, Division 3] [nonpublished]

California Court of Appeal Opinion – View Document