Lauriedale Associates, Ltd. v. Wilson

In Lauriedale Associates, Ltd. v. Wilson (1992) 7 Cal.App.4th 1439, a homeowners association filed an action against a developer for construction defects. The developer responded by filing cross-complaints for equitable indemnity against over 700 persons who were, or had been, unit owners, alleging that it was the owners, and not the developer, who had misused the property and thus caused damage to the common areas. One unit owner demurred, and the demurrer was sustained without leave to amend. The Court of Appeal affirmed because both factors articulated in Jaffe were present. (Lauriedale, supra, 7 Cal.App.4th at pp. 1442-1443.) First, the relationship between the plaintiff homeowners association and the individual property owners in Lauriedale made them essentially one and the same party, which led the court to hold that the affirmative defense of comparative negligence would be sufficient to protect the defendants' rights to have fault apportioned. The panel in Lauriedale was concerned that allowing a cross-complaint for equitable indemnity against the unit owners would "jeopardize the special relationship between the Association and its members, one characterized as fiduciary in nature." (Lauriedale, supra, 7 Cal.App.4th at p. 1445.) Also, "to the extent the developers can prove the affirmative defense asserted in their answer, the Association's recovery will be diminished under principles of comparative negligence." (Id. at p. 1444.)