Ziani Homeowners Ass'n v. Brookfield Ziani LLCAnnotate this Case
Movants-appellants Ali Fadavi, Shadi Ghazi, Pamela Bacha, Mary Roll, Jenna Pearce, Joe Pearce, Michael Ehsani, Robert Glass, and Rocheda Reid appealed an order denying their motion to intervene in the underlying lawsuit on the grounds it was not timely. Brookfield Ziani LLC (Brookfield) constructed a condominium development in Newport Coast. In July 2012, Ziani Homeowners Association (HOA) sued Brookfield and others, alleging construction defects, including plumbing defects. Movants were owners of individual units within the Condominium Development and were HOA members. The plumbing defect claims were the largest item (by cost of repair) in the lawsuit. The HOA complaint was brought in the name of the HOA. From the outset, the HOA board of directors and its attorney, Mr. Kaneda, represented to the individual unit owners, including Movants, that the HOA was pursuing the plumbing defect claims and would not settle unless and until it obtained full recovery to pay for the necessary repairs to the common areas and to the individual units. The HOA board and Mr. Kaneda told the individual unit owners they could file their own lawsuits, but discouraged them from doing so, because, they promised, the HOA and its counsel were bearing the expenses of the litigation and were vigorously pursuing all of the plumbing defect claims. The HOA eventually agreed to settle the lawsuit with Brookfield. At the one HOA board meeting, the individual unit owners were informed of the existence of the settlement, but not its terms. The HOA and its counsel refused to answer questions about the settlement, including questions about the plumbing defect claims. One HOA board member resigned in protest over the settlement. At a subsequent board meeting, Mr. Kaneda disclosed more terms of the settlement, which allegedly showed the settlement would leave the individual unit owners with some combination of out-of-pocket expenses for the plumbing repairs, a special HOA assessment, and depleted HOA reserves. In May 2014, Movants filed a motion to intervene (Motion) in the suit. Among the things Movants argued was that the HOA board and its counsel were no longer adequately representing Movants' interests due to the trickle of information they received about the settlement. Movants contended the trial court erred as a matter of law by ruling their Motion was untimely, based on the finding that almost two years had elapsed from the date “[t]he individual homeowners knew or should have known about this litigation on or about the date the complaint was filed, 7/13/12.” Movants argued the court should have determined the timeliness issue, based on the date they knew or should have known their interests in the litigation were not being adequately represented. The Court of Appeal agreed with Movants, and reversed the trial court's decision denying their Motion to intervene.