14859 Moorpark Homeowner's Assn. v. Vrt Corp.

These consolidated appeals involve the purported conveyance of a condominium complex, including the common areas, to a third party developer without obtaining a judicial partition pursuant to Civil Code section 1359. The matter comes to us to review the granting of a preliminary injunction to restrain the holder of the deeds of trust which encumber the individual units from foreclosing, and the denial of a preliminary injunction to restrain the third party developer from performing purported prophylactic demolition on the complex. We conclude that compliance with section 1359 is essential to establish the legitimacy of the conveyance of the complex and that neither judicial nor nonjudicial partition can undermine the security interest of the tmst deed holder.

Factual and Procedural Background

On January 17, 1994, the Northridge earthquake seriously damaged the 36-unit condominium complex at 14859 Moorpark Street in Sherman Oaks (hereafter the complex). The complex’s declaration of establishment of covenants, conditions and restrictions (hereafter CC&R’s) provide that if the insurance proceeds available to repair the complex’s common areas fall below 85 percent of the…