Sumner Hill Homeowners' Ass'n, Inc. v. RIO Mesa Holdings, LLC, No. F058617.

CourtCalifornia Court of Appeals
Writing for the CourtKANE
Citation205 Cal.App.4th 999,141 Cal.Rptr.3d 109
PartiesSUMNER HILL HOMEOWNERS' ASSOCIATION, INC., et al., Plaintiffs and Appellants, v. RIO MESA HOLDINGS, LLC, et al., Defendants and Appellants.
Decision Date18 July 2012
Docket NumberNo. F058617.

205 Cal.App.4th 999
141 Cal.Rptr.3d 109

SUMNER HILL HOMEOWNERS' ASSOCIATION, INC., et al., Plaintiffs and Appellants,
RIO MESA HOLDINGS, LLC, et al., Defendants and Appellants.

No. F058617.

Court of Appeal, Fifth District, California.

May 2, 2012.
As Modified on Denial of Rehearing May 30, 2012.

Certified for Partial Publication.
Review Denied July 18, 2012.

[141 Cal.Rptr.3d 113]Dowling, Aaron & Keeler, Fresno, Lynne Thaxter Brown; Law Offices of Walter W. Whelan, Fresno, Walter W. Whelan and Brian D. Whelan for Plaintiffs and Appellants Sumner Hill Homeowners' Association, Inc., Michael Seng, Jim Hutton, Lelon Forlines, Rosa Forlines, Susan Early and John McGuckin; Robert J. Rosati, Fresno, for Plaintiff and Appellant David Kaye.

McKenna, Long & Aldridge, San Diego, Charles A. Bird, Gerald M. Murphy, Antony D. Nash and Joshua M. Heinlein for Defendants and Appellants.

Smiland & Chester, William M. Smiland, Theodore Chester, Los Angeles; McCormick, Barstow, Sheppard, Wayte & Carruth and Marshall C. Whitney, Fresno, for Sumner Peck Ranch, Inc. as Amici Curiae on behalf of Defendants and Appellants.

Douglas W. Nelson, County Counsel, for County of Madera as Amici Curiae on behalf of Defendants and Appellants.



[205 Cal.App.4th 1003]

For over two decades, homeowners at Sumner Hill, an isolated subdivision on bluffs overlooking the San Joaquin River, experienced the privacy of living in a remote, rural location within the confines of a security gate. They also enjoyed unrestricted access to the San Joaquin River on a dirt road within the subdivision known as Killkelly Road. Because Killkelly Road was inside the gated residential area, river access by that route was available to Sumner Hill homeowners but not the general public. The homeowners believed these amenities—a private gated community and unrestricted river access—were part of what they purchased when they bought their lots in the subdivision. Eventually, however, the trajectory of future development reached that area and the homeowners' status quo was challenged. A developer, Rio Mesa Holdings, LLC, purchased the surrounding land and announced plans for a large-scale suburban development that would include public access to the San Joaquin River directly through the Sumner Hill subdivision using Killkelly Road. The same party also installed a gate restricting the homeowners' access to Killkelly Road. These events precipitated[141 Cal.Rptr.3d 114]the present litigation. A complaint was filed by several individual homeowners 1 and the Sumner Hill Homeowners' Association, Inc. (collectively plaintiffs) against Rio Mesa Holdings, LLC and Tesoro Viejo, Inc. (collectively defendants). Plaintiffs sought a judicial determination of their alleged right to maintain Sumner Hill as a private, gated subdivision and to have unrestricted use of Killkelly Road for access to the San Joaquin River. Plaintiffs also sought damages for alleged slander of title and related tort causes of action. Defendants cross-complained, claiming that the public had a right of access to the river from Killkelly Road and consequently the subdivision map would have to be reformed or amended to specifically provide for such access.

The various issues raised by the pleadings included: Did plaintiffs have a right to maintain a private gated subdivision from which the public could be excluded? Who owned Killkelly Road and other roads in the subdivision? Did plaintiffs possess easement rights to use Killkelly Road for access to the river? Should a public access route to the river through the subdivision have

[205 Cal.App.4th 1004]

been expressly provided for on the final subdivision map approved by the County, pursuant to Government Code section 66478.1 et seq.? 2

The trial court resolved the main issues in plaintiffs' favor by determining the private (nonpublic) character of the gated residential area, confirming plaintiffs' easement rights to use Killkelly Road and denying defendants' claim of public access to the river. Thereafter, a jury heard the tort causes of action and awarded damages to plaintiffs for slander of title and nuisance, including punitive damages. Defendants filed this appeal from the judgment and plaintiffs cross-appealed as to certain issues. Between them, the parties challenge almost every outcome below. We conclude that with a few significant exceptions (e.g., road ownership and certain development restrictions imposed on defendants), the results obtained in the trial court were correct and/or did not constitute an abuse of discretion. In short, our disposition will be to affirm the judgment in part and to overrule it in part.

At the outset, we briefly highlight two publishable issues. The first such issue is whether, for purposes of the right of public access, the section of the San Joaquin River under consideration is a public (i.e., navigable) waterway. Although we stop short of deciding that issue here, our discussion will shed light on a significant uncertainty that exists in the law of navigability in cases such as this. The second publishable issue before us relates to the cause of action for slander of title. The particular question is whether a slander of title cause of action may be maintained if the only pecuniary damages proven by plaintiffs are the attorney fees incurred to clear the slandered title. We conclude that such damages are sufficient, without the need to prove other pecuniary harm, at [141 Cal.Rptr.3d 115]least where (as here) the slander of title was by means of a recorded instrument.

Creation of the Sumner Hill Subdivision

Carolyn Peck (Peck) and her late husband, Sumner Peck, owned a considerable swath of agricultural land in Madera County (the County) between Highway 41 and the San Joaquin River off of Road 204. The property was known as Peck Ranch. 3 During the events relevant to this appeal, Peck Ranch was owned and operated by a family owned company known as Sumner–Peck

[205 Cal.App.4th 1005]

Ranch, Inc. (Sumner–Peck).4 In the 1980's, Peck wanted to subdivide a portion of Peck Ranch to create a tract of custom residential lots on hills above the surrounding farmland and near the river. A specific development proposal was made by Sumner–Peck to the County.

The County had concerns with the proposal for a residential development in that location.5 First, it was recognized that there could be an adverse impact on nearby cattle-grazing operations, with a particular issue of pet dogs harassing cattle. Second, the site was remote from law enforcement support and the County was concerned about the cost of responding to that site when its law enforcement resources were already stretched thin.

In 1983, the County approved the proposed subdivision, known as Sumner Hill. As a condition for approval, the County required Sumner–Peck to install a security gate and a perimeter fence around the subdivision, which measures were imposed to keep homeowners' dogs away from nearby cattle and to minimize the need for law enforcement to travel to the subdivision's remote location. Madera County Service Area No. 16 was established for the purpose of providing necessary services to the proposed subdivision. A final subdivision map for Sumner Hill was recorded in 1984. An amended final subdivision map (the Amended Map) was approved and recorded in 1985.

The Amended Map for Sumner Hill created a tract of 49 custom residential lots on approximately 160 acres (the 49–Lot area) surrounded by several “Outlots” of varying sizes (lettered as Outlots A through J), a road system, and other appurtenant facilities providing the infrastructure of the subdivision. The 49–Lot area was bordered on the west by Outlots A and B, which comprise approximately 500 acres of agricultural or open land.6 On its eastern side, the 49–Lot area is separated from the San Joaquin River by Outlots C and D, which comprise approximately 50 acres of steeply sloped land accessible from Killkelly Road. The Amended Map reflected that all the roads within the Sumner Hill subdivision were dedicated as public roads.7 Killarney Drive was the main road in the subdivision and provided access to the 49–Lot area from Road 204. Several small cul-de-sacs [141 Cal.Rptr.3d 116]branched off of Killarney Drive. Killkelly Road, which also branched off of Killarney Drive, traversed down a steep hill to the San Joaquin River. The Amended Map showed Killkelly Road in solid lines as it crossed over Outlot C, then in

[205 Cal.App.4th 1006]

broken lines as it continued to the river over Outlot D, where a 60–foot easement for ingress and egress was indicated.

As developed, Killarney Drive and the cul-de-sacs were paved, while Killkelly Road remained a dirt road. Before sales of the individual lots commenced, a security gate was installed at the front entrance to the subdivision at Killarney Drive, and a fence was installed around the perimeter of the 49–Lot area. The security gate required a pass code to enter.

Marketing of the Residential Lots at Sumner Hill

In 1984, the Department of Real Estate issued a Final Subdivision Public Report (referred to as “the white paper”). Among other information, the white paper notified potential purchasers of the uses of the Outlots at that time. For example, it stated that Outlots A through D were agricultural and/or open space, while Outlots F through J were agricultural but also contained facilities used by Sumner Hill lot owners, such as water wells, tanks and wastewater treatment. According to the white paper, the Outlots were not for sale and Sumner–Peck would continue to own fee title to them. It explained that although “Certain of the Outlots ... will contain some facilities (for example water wells and the leachfield) which will be operated and maintained by the Madera County Service Area Number 16,” fee title to the Outlots remained in Sumner–Peck. Indeed, the white paper observed that, at that time, “Vast amounts of the Outlots ......

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