Quinn v. Bay Harbor Inv. Props.

1

LAWRENCE D. QUINN, et al., Plaintiffs and Appellants, v. BAY HARBOR INVESTMENT PROPERTIES, LLC, et al., Defendants and Respondents.

B312947

California Court of Appeals, Second District, First Division

August 1, 2023

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County Super. Ct. No. BC666284, Steven J. Kleifield, Judge.

DiJulio Law Group, R. David DiJulio, and Tiffany Hyatt Krog for Plaintiffs and Appellants.

Law Offices of Craig D. Weinstein and Craig Weinstein for Defendants and Respondents Kenneth Lorenzo and Kevin Lorenzo.

CHANEY, J.

Appellants Lawrence D. Quinn and Olivia Saunders (Quinn/Saunders) each own real property on Thelma Avenue in Los Angeles. Respondents Kenneth Lorenzo and Kevin Lorenzo (the Lorenzos) own real property on Eastern Avenue (the Eastern Property) which they purchased from respondent Bay Harbor Investment Properties (Bay Harbor). Quinn/Saunders' properties abut the Eastern Property. In 2017, Quinn/Saunders sued Bay Harbor and the Lorenzos, claiming that an allegedly faulty retaining wall located on the Eastern Property had caused cracking in Quinn/Saunders' properties.^[1] After a seven-day bench trial the trial court found in favor of Bay Harbor and the Lorenzos and against Quinn/Saunders.

On appeal, Quinn/Saunders contend that, because their properties were being continuously damaged by the ongoing refusal of Bay Harbor and the Lorenzos to repair the retaining wall, the trial court erred (1) in failing to apply section 366 of the Restatement Second of Torts (Section 366); and (2) in finding Bay Harbor and the Lorenzos could not be liable for nuisance or negligence solely because they were not involved with the construction of the retaining wall. We hold that the trial court did not err in not applying Section 366 but did err in determining that Bay Harbor and the Lorenzos could not be liable for nuisance and negligence. We therefore vacate the judgment and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Lawsuit

In June 2017, Quinn/Saunders filed a complaint. They declined to include that complaint in the appellate record, but we can discern the gist of the litigation from the parties' trial briefs (which are in the appellate record).

Quinn/Saunders contended in their trial brief that they owned real properties located on Thelma Avenue, and that the Eastern Property was owned by Bay Harbor from July 2016 to July 2017, and by the Lorenzos thereafter. The western end of Quinn/Saunders' properties abut the eastern end of the Eastern Property. Quinn/Saunders claimed that, in "late 2016," a retaining wall on the Eastern Property began to crack because Bay Harbor failed to maintain it. Appellants alleged Bay Harbor also "destroyed the top portion" of the retaining wall. Quinn/Saunders contended the failure to maintain the wall and the removal of the top portion of the wall "caused a subsidence of the earth and soil on" Quinn/Saunders' properties, "as well as the cracking and settlement of the improvements thereon." Appellants stated they had alleged causes of action for "(1) Damages and Permanent Injunction (Removal of Lateral Support), (2) Private Nuisance and (3) Negligence." For the second and third causes of action, Quinn/Saunders alleged they were suffering "ongoing damages" from the respondents' failure to repair the retaining wall.

Bay Harbor's trial brief claimed that the retaining wall- located in the backyard of the Eastern Property-was in existence when Bay Harbor purchased the Eastern Property. Bay Harbor disagreed with Quinn/Saunders' contention that the wall needed to be replaced, citing a Los Angeles city inspector who had inspected the wall and "concluded that the wall was in good condition and therefore did not need to be replaced, or repaired." Bay Harbor also disputed appellants' claim that its removal of cinder blocks from the top of the retaining wall caused any soil subsidence, and further insisted it had only removed cinder blocks from the portion of the wall abutting Saunders's property-the blocks on top of the wall abutting Quinn's property had fallen off before Bay Harbor purchased the Eastern Property. Bay Harbor further contended the city of Los Angeles had ordered it to remove the cinder blocks. Bay Harbor believed the primary cause of the damage to Quinn/Saunders' properties was the failure to properly grade and compact soil that was added to their properties, which occurred long before Bay Harbor purchased the Eastern Property. Bay Harbor also claimed that any "tilting" of the retaining wall occurred before it purchased the Eastern Property in July 2016, and was not caused by Bay Harbor.

According to the Lorenzos' trial brief, they purchased the Eastern Property from Bay Harbor in July 2017. The Lorenzos disclaimed responsibility for any damages resulting from the failing wall because they had done nothing to cause the wall to fail.

B. Trial and Judgment

A seven-day court trial began on December 3, 2019, continued through December 6, 2019, resumed one year later on December 14, 2020, and concluded on December 18, 2020. Because no court reporter was present at any portion of the trial, there is no transcript of the trial proceedings.

On December 28, 2020, the court issued a minute order setting forth its tentative decision. The court found Quinn/Saunders had "pursued two theories regarding the wall. First, they claimed that the original cement retaining wall was in disrepair and should have been replaced. Second, they claimed that Defendant Bay Harbor removed the cinder blocks from on top of the wall, thereby lessening the support and causing movement of the structures above, leading to the cracking."

As to the first theory, the court found the wall did not need to be replaced. It cited to the testimony of the "qualified, credible, and unbiased" Los Angeles city inspector, who "did an extensive examination and consulted with other City inspectors" about the wall and concluded that although the wall was" 'cracked and clearly aging, . . . it was largely the same as when it was originally permitted over 70 years ago'" and the city" 'could not determine that it must be replaced or rebuilt.' "

As to the second theory, the court cited the inspector's conclusion that the" 'top courses of block on top of the original wall were clearly added later, had failed and were removed as they should have been.'" The court added that it did not believe that Bay Harbor had removed any cinder blocks abutting Quinn's property. As to the cinder blocks abutting Saunders's property, the court found that those blocks were "loose and not shoring up anything." The court concluded that appellants' theory that removing the cinder blocks had caused the damage was "factually unsupported."

The court noted that Quinn/Saunders' expert witness had attributed the cracking on their properties to" 'long-term rotation'" of the retaining wall and the removal of the cinder blocks. The court reiterated there was no evidence to support the cinder-block-removal theory. As to the long-term rotation theory, the court noted Bay Harbor and the Lorenzos were not "responsible for 'long-term rotation' of the wall. These properties were developed in the late 40's and early 50's. Bay Harbor owned the Eastern property for one year. There is no evidence that anything they did or did not do contributed to 'long-term rotation' of the wall and damage to Plaintiffs' property." The court concluded that "[t]he factual predicates to Plaintiffs' theories were not proved."

The court continued: "Much expert testimony was presented concerning the causes of the cracking on Plaintiffs' properties. Plaintiffs' theory was presented above. Defendant's [sic] expert testimony was to the effect that the cracking was due to settling of the structures over the course of many years due to the inadequate grading and compression of the soil in the construction process. Due to the failure of proof on the facts it is unnecessary to reach the issues regarding causation. The Court did, however, find Mr. Farrell's testimony and report to be convincing."^[2]

The court noted that Bay Harbor had owned the Eastern Property from July 2016 to July 2017, when it sold the property to the Lorenzos, and "[t]o the extent anything was done or not done before either Defendant took possession of the property, Defendants bear no legal responsibility for it." The court analogized to Lee v. Takao Building Development Co. (1985) 175 Cal.App.3d 565 (Lee), quoting its holding that" 'a landowner who took title and possession after the occurrence of the act causing the removal of the lateral support, and uncontrovertedly did not participate in the act that resulted in the removal of the support, is not responsible in damages.' "

The minute order ended by saying that "[p]ursuant to CRC 3.1590(c)(4), this tentative decision will become the statement of decision unless, within 10 days after service of this tentative decision, a party specifies those principal controverted issues as to which the party is requesting a statement of decision or makes proposals not included in the tentative decision."^[3] The minute order was served on appellants on December 28, 2020.

On February 8, 2021, the court issued a judgment in favor of Bay Harbor and the Lorenzos and against Quinn/Saunders, in which it noted no party had timely specified controverted issues as to which the party was requesting a statement of decision or made proposals not included in the tentative decision, and therefore the tentative decision had become the statement of decision.^[4] Appellants timely appealed.

DISCUSSION

"When a statement of decision does not resolve a controverted issue, or if the statement is...