## Facts

- A homeowner bought a unit in a common-interest development governed by CC&Rs requiring interiors be kept “clean, sanitary and attractive,” while reserving to owners the right to decorate and furnish interiors as they wished.
- The purchase was financed through a VA installment land-sale arrangement in which the VA held record title as security.
- The homeowners association asserted the homeowner’s interior clutter created a fire hazard and demanded detailed changes inside the home, including directions about items in the bedroom and what reading material could remain near the bed.
- Local housing and fire officials inspected and found no fire hazard indoors or outdoors.
- The association sued the homeowner and the VA to enforce the CC&Rs.
- The homeowner filed a cross-complaint against the association for invasion of privacy and related tort and contract theories based on the association’s efforts to control his personal belongings and obtain access to his home.
- The association separately sought declaratory relief that the VA, as record title holder, was an “owner” under the CC&Rs responsible for compliance and related obligations.
- The CC&R enforcement claims against the homeowner were later settled, but the homeowner’s cross-complaint proceeded to a bifurcated jury trial on liability and damages.

## Issues

1. Whether the VA, holding record title only as security under a VA financing arrangement, was an “owner” under the CC&Rs and responsible for compliance and related association obligations.
2. Whether the trial court lawfully granted a new trial after a jury found the association liable, where the court’s stated basis was disagreement with the jury’s evaluation of reasonableness.
3. Whether the evidence supported the jury’s finding that the association acted unreasonably by attempting to dictate the placement and quantity of nonhazardous personal property inside a private residence under a general interior-maintenance covenant.

## Decision

- The Court of Appeal affirmed the declaratory judgment for the VA, holding the VA was not the legal owner for CC&R purposes and was not responsible for CC&R compliance.
- The Court of Appeal granted the homeowner’s writ petition and set aside the order granting a new trial.
- The court treated the new-trial order as a de facto judgment notwithstanding the verdict and held it could not stand on the stated rationale.
- The jury’s liability verdict for the homeowner was reinstated, and the matter was remanded for further proceedings on damages.

## Legal Principles

- A governmental entity holding record title solely as security under a financing arrangement may be treated as a secured title holder rather than an “owner” obligated under residential CC&Rs.
- A general CC&R covenant requiring an interior be maintained in a clean and attractive condition does not authorize an association to micromanage the quantity or placement of nonhazardous personal belongings inside a private residence.
- A trial court may not use a new-trial order to nullify a jury verdict simply because the judge disagrees with the jury’s assessment of reasonableness; an order functioning as a JNOV must satisfy the standards and limits applicable to JNOV.
- When official inspections find no safety hazard, an association’s demands to control private, nonhazardous interior possessions may support a finding of unreasonable conduct and liability on privacy- and contract-based theories.

## Conclusion

The court held that the VA’s record title under a financing arrangement did not make it an “owner” responsible under the CC&Rs, and it restored a jury’s liability verdict against a homeowners association by rejecting a new-trial order that improperly substituted the judge’s view of reasonableness for the jury’s.


Fountain Valley Chateau Blanc Homeowner’s Ass’n v. Dep’t of Veterans Affairs, 67 Cal. App. 4th 743 (Ct. App. 1998)