Cohen v. Kite Hill Community Assn

In Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, the CC&R's set forth standards for fence design, but provided the homeowners association with discretion to decide whether to approve a particular fence. (Cohen, supra, 142 Cal.App.3d at pp. 646-647.) The CC&R's also provided the Association " 'shall (not) be liable in damages . . . to any Owner of property affected by this CC&R's by reason of mistake in judgment, negligence or nonfeasance arising out of or in connection with the approval or disapproval of . . . any such plans or specifications.' " (Id. at p. 650.) One homeowner nonetheless sued the Association seeking damages and injunctive relief seeking to compel the Association to take steps to force another homeowner to comply with fence standards set forth in the CC&R's. (Id. at p. 647.) Reversing a demurrer, the reviewing court held that to the extent the exculpatory provisions in the CC&R's precluded the owners from asserting that the homeowners association acted in bad faith and in an arbitrary manner, the provisions were unenforceable as a matter of public policy. (Id. at pp. 654-655.) The court reasoned: "The law views with disfavor attempts to secure insulation from one's own negligence or wilful misconduct," and "this public policy applies with added force when the exculpatory provision purports to immunize persons charged with a fiduciary duty from the consequences of betraying their trusts." (Id. at p. 654.)