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Villa Milano Homeowners Association v. Il Davorge11/6/2000
isputes, alternative dispute resolution is not mandatory. Perhaps most significant in the context before us is the fact that the Legislature has not seen fit to even encourage alternative dispute resolution with respect to CC&R;s disputes involving claims in excess of $5,000. Civil Code section 1354 itself, then, does not lend support to Il Davorge's assertion that mandatory arbitration is favored in this situation.
IV. CONCLUSION
The applicable provision of the Villa Milano CC&R;s constitutes a written agreement to arbitrate within the meaning of Code of Civil Procedure section 1281.2. However, that agreement to arbitrate is unconscionable and therefore unenforceable (Civ. Code, ยง 1670.5, subd. (a)) to the extent it applies to construction and design defect claims. We do not address whether an arbitration provision contained in CC&R;s would be unconscionable were a different type of claim at issue -- for example a dispute over a homeowners association's right to control the kind of improvements made to a home or a disagreement about whether a homeowners association could compel a homeowner to remove a boat from his or her driveway. Whether the application of an arbitration clause would be substantively unconscionable in such other circumstances is not before us. However, it is easy to conceive of many contexts in which an arbitration clause in CC&R;s would not circumvent statutory protections, violate public policy, or otherwise pose issues of substantive unconscionability. In fact, we observe that Civil Code section 1354, subdivisions (b) through (d), encourages alternative dispute resolution with respect to certain disputes related to the enforcement of CC&R;s.
Our holding is very narrow. It speaks only to the enforcement of a CC&R;s provision compelling binding arbitration of construction and design defects claims against the developer who drafted, signed and recorded the CC&R;s. It is not intended to cast doubt upon the enforceability of CC&R;s in general. To the contrary, CC&R;s "should be enforced unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the use of affected land that far outweighs any benefit." (Nahrstedt v. Lakeside Village Condominium Assn., supra, 8 Cal.4th at p. 382.) Moreover, "recorded CC&R;s are the primary means of achieving the stability and predictability so essential to the success of a [common interest] development." (Ibid.) The presumption of validity afforded to recorded CC&R;s "provides substantial assurance to prospective condominium purchasers that they may rely with confidence on the promises embodied in the . . . CC&R;s." (Id. at p. 383.)
CC&R;s are beneficial forms of governance and the homeowners associations that enforce them provide valuable services. Indeed, the homeowners associations function almost "as a second municipal government, regulating many aspects of [the homeowners'] daily lives." (Chantiles v. Lake Forest II Master Homeowners Assn., supra, 37 Cal.App.4th at p. 922; accord, Duffey v. Superior Court (1992) 3 Cal.App.4th 425, 434.) "`" pon analysis of the association's functions, one clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government. As a `mini-government,' the association provides to its members, in almost every case, utility services, road maintenance, street and common area lighting, and refuse removal. In many cases, it also provides security services and various forms of communication within the community. There is, moreover, a clear analogy to the municipal police and public safety functions. . . ."' [Citation.]" (Ch
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