Facts

Sometime in the 1990s, the City of Huntington Beach granted Delaware II permission to convert Brisas del Mar, an apartment complex, to condominiums. The project was approved on the condition that a certain number of the units would be reserved for low-to-moderate income housing. Defendant Shon Lee purchased unit B-13, one of those designated units.

PLAINTIFF'S CONTENTIONS:
The city claimed Lee had violated the Affordability Covenant by purchasing his unit without pre-qualifying as a "moderate income" buyer, and that the Affordability Covenant need not be reformed for it to be enforceable and the action was timely filed.

DEFENDANT'S CONTENTIONS:
Defendant claimed the Affordability Covenant, which was recorded without a sufficient description of the property affected, if not reformed, is unenforceable and does not impart constructive notice of the restriction. The law of the case made on a prior appeal required this result. The only way the affordability covenant could be enforced as to Lee is to reform it so that the legal description becomes part of the recorded Affordability Covenant. Defendants also claimed the reformation is barred by the statute of limitations. Defendant argued that the statute of limitations for reformation lapsed before the city initiated the lawsuit.

Defendant Lee further claimed that he was a bona fide purchaser who took without notice and therefore reformation was unavailable as to him.

Result

The trial court entered judgment quieting title in favor of defendant Lee. The court also held that the City of Huntington Beach could not enforce the Affordability Covenant against Lee's condominium unit. Judgment was entered for defendant Lee, and he was awarded attorney fees in the amount of $151,164.

Other Information

FILING DATE: Dec. 7, 2009.