## Facts

- South Peak is a planned community in Laguna Niguel with 63 lots governed by recorded CC&Rs.
- Peak Investments and homeowners Norman and Rita Lesman owned Lot 43 and sought to correct what they claimed was a clerical mistake in the CC&Rs’ setback exhibit for that lot.
- A 1986 CC&R amendment listed Lot 43’s minimum sideline setback as “20-7” (a total minimum sideline setback of 20 feet and 7 feet minimum on each side).
- A later 1990 amendment retyped the exhibit and changed Lot 43’s sideline setback from “20-7” to “25-7,” while the stated purpose of that amendment concerned building height changes.
- The attorney who drafted the 1990 amendment later advised the association’s board that the “25-7” setback for Lot 43 appeared to be an inadvertent typographical error and provided a proposed corrective amendment returning it to “20-7,” but the board declined to execute the correction.
- In 2004, the Lesmans pursued an amendment through the homeowners. Under the CC&Rs, amending the declaration required approval by two-thirds of all lot owners (42 of 63).
- At a homeowners’ meeting, 32 votes were cast in person or by proxy: 21 in favor and 11 against. The proposal failed under the CC&Rs because it did not receive 42 affirmative votes.
- The plaintiffs petitioned the superior court under Civil Code § 1356 (Davis–Stirling Common Interest Development Act) to reduce the CC&Rs’ approval percentage and to confirm the amendment as approved.
- The trial court granted the petition, reasoning that § 1356’s requirement was satisfied because more than 50% of those who actually voted supported the amendment (21 of 32), and it also found the amendment reasonable.
- The association appealed, arguing that § 1356 requires affirmative votes from owners holding more than 50% of the association’s total voting power, not merely a majority of votes cast at the meeting.

## Issues

1. Under Civil Code § 1356, does the prerequisite that “owners having more than 50 percent of the votes” voted for a CC&R amendment mean more than 50% of all association votes, or more than 50% of the votes cast at the meeting?
2. If the statute requires a majority of all association votes, did the trial court err by reducing the CC&Rs’ two-thirds requirement and confirming the amendment based on 21 affirmative votes out of 63 owners?

## Decision

- The Court of Appeal held that Civil Code § 1356 requires approval by owners holding more than 50% of the association’s total votes before a court may reduce the CC&Rs’ higher approval threshold.
- Because only 21 of 63 owners voted in favor, the statutory prerequisite was not met.
- The order granting the § 1356 petition was reversed.
- Having resolved the case on the voting requirement, the court did not reach the association’s argument that the amendment was unreasonable.

## Legal Principles

- When statutory language is unqualified, courts apply its ordinary meaning; “owners having more than 50 percent of the votes” in § 1356 refers to the association’s total voting power, not merely ballots cast at a meeting.
- Reading a provision alongside related statutes can confirm meaning; where the Legislature intends a “votes cast at a meeting” standard, it can say so expressly, and the absence of that phrasing in § 1356 indicates a different rule.
- Civil Code § 1356 provides a limited mechanism for judicial relief from supermajority CC&R amendment requirements, but it does not allow a court to validate an amendment that lacks support from a simple majority of the entire membership.

## Conclusion

Peak Investments v. South Peak Homeowners Association, Inc. reversed a superior court order that had reduced CC&R amendment voting requirements under Civil Code § 1356 based on a majority of votes cast, holding instead that § 1356 demands affirmative votes from owners holding more than 50% of the association’s total voting power before any judicial reduction of a higher CC&R threshold may occur.


Peak Investments v. South Peak Homeowners Association, Inc., 44 Cal. Rptr. 3d 892 (2006)