Authors: Shani O. Zakay, Esq. and Mellania Safarian
Recently, the California Court of Appeals released an unpublished decision, entitling a merchant builder to use recreational facilities and services, absent a membership card, and in exchange for paying the mandatory monthly membership and club charges. Mohamed v. Anatolia Units 1, 2 and 4 Master Association, 2014 WL 2871577 (2014).
In 2009, Mohamed purchased 106 vacant lots in Anatolia. He subsequently developed four of those lots and used them as rental properties, while the remaining 102 lots remained undeveloped. As the owner of the 102 vacant lots, Mohamed was assessed $86 in club charges each month for each lot, which according to the CC&R’s is a mandatory requirement for membership in the club and for the right to use the facilities and amenities of the club. Mohamed requested that the association issue him club membership cards for each of the 102 vacant lots he owns, but the association refused. As a result of this refusal, in January 2012, Mohamed commenced this action.
At trial, the association asserted that the CC&R’s do not give Mohamed the right to a club membership card for each of his 102 vacant lots, unless someone is residing in the lot. The association, however, conceded Mohamed’s right to use the club. Mohamed asserted that the association’s refusal to issue him a membership card for each of his vacant lots is tantamount to refusing him access to the club. Since the 102 lots were vacant and undeveloped, the court entered a judgment of dismissal in favor of the association and Mohamed appealed.
The Court of Appeals found that the CC&R’s mention nothing about membership cards, and although the rules do contain provisions stating that a membership card is necessary to use the club, the court agreed with the association that those provisions were not intended to apply to merchant builders, like Mohamed. The rules connect membership cards with occupancy, thus a merchant builder who owns unoccupied lots would not be entitled to membership cards. However, all owners are entitled to use the club in exchange for paying mandatory monthly club charges and merchant builders, like Mohamed, are considered owners. Thus, the court held that Mohamed is not entitled to membership cards, but the CC&R’s unequivocally establish the right of non-occupant merchant builders, like Mohamed, to use the club.
Although the case is unpublished, its precedential value is considerable since it demonstrates how courts are willing to interpret written instruments in a way that gives effect to all provisions; adopting constructions which make the contract reasonable, fair and just. A merchant builder cannot obtain numerous membership cards for vacant lots he/she owns but may nonetheless acquire access to recreational facilities and services offered by the association, so long as the merchant builder pays his monthly club charges and dues.