[00:00:03] Speaker 00:
whenever you're ready, Counselor.

[00:00:04] Speaker 00:
Good morning, Your Honors.

[00:00:06] Speaker 00:
May it please the Court, Joseph Klapich for the Appellant Morning Star, and I'd like to reserve two minutes for rebuttal.

[00:00:13] Speaker 00:
Let me start with the focus letter, although I do want to note that it relates solely to the cross appeal, and so those are issues that are less important to my client, so I'm going to try to pivot.

[00:00:24] Speaker 04:
Could you tell us, begin by telling us what the current state of the situation is?

[00:00:30] Speaker 04:
I don't even have an understanding.

[00:00:32] Speaker 04:
What is going on in the ground?

[00:00:35] Speaker 00:
The current situation was there were some post-judgment motions and pleadings that were filed.

[00:00:43] Speaker 00:
There was an effort to modify the injunction which was

[00:00:45] Speaker 00:
denied in large part, but the time was slightly extended.

[00:00:49] Speaker 04:
But on the ground, have they already taken down this building?

[00:00:53] Speaker 00:
No.

[00:00:55] Speaker 04:
This second story?

[00:00:56] Speaker 00:
Yes.

[00:00:56] Speaker 04:
Do they plan to take down the second story?

[00:00:59] Speaker 04:
Are they committed to taking down the second story?

[00:01:01] Speaker 04:
What's happening?

[00:01:02] Speaker 00:
So there have been plans that have been submitted.

[00:01:04] Speaker 00:
There's been claims that those plans don't satisfy the injunction.

[00:01:09] Speaker 00:
There's been a motion to hold in contempt.

[00:01:12] Speaker 00:
And then the trial judge put everything on hold pending the resolution of this appeal.

[00:01:17] Speaker 02:
So let me ask you vis-a-vis the focus order.

[00:01:21] Speaker 02:
So I'm looking at an opposition by Morningstar to the ex-party motion where it says,

[00:01:30] Speaker 02:
No one has ever asserted and the permanent injunction does not require removal of walls and ceiling.

[00:01:38] Speaker 02:
It only requires removal of the second story bedroom floor.

[00:01:42] Speaker 02:
Is that your current position?

[00:01:44] Speaker 00:
That is correct.

[00:01:45] Speaker 02:
So if we modified or if we asked if per the focus order if we did something consistent with that, you would be fine with that.

[00:01:57] Speaker 00:
Well, our position is that the removal of the internal floor between the garage in the bedroom complies with part 2 of the injunction.

[00:02:06] Speaker 00:
So long as the entire floor is removed and the garage is less than 18 feet and I think that's already embodied in the.

[00:02:14] Speaker 00:
Definition of the second story improvements in in paragraph one of part two whether it is or not you've answered my question Yes, but that we don't dispute that if you remove the floor it would qualify for that so there would be Something some one thing that's under 18 feet correct got it, right?

[00:02:35] Speaker 00:
And so then to move to the first, that really answers the second focus question.

[00:02:41] Speaker 00:
The first focus question is whether the district court, whether the ruling abuses its discretion.

[00:02:49] Speaker 00:
And our answer to that is no.

[00:02:51] Speaker 00:
Our position is it doesn't require them to do more than is necessary to bring the residents into compliance with the one story restriction.

[00:02:59] Speaker 00:
and if I'm interpreting the court's ruling correctly you are sort of identifying paragraph three and there's two restrictions in paragraph three.

[00:03:08] Speaker 00:
The first one says you can't basically fill up the area underneath the bedroom to create an artificially high foundation and turn the second story bedroom into a quote first story bedroom that way and that was

[00:03:23] Speaker 00:
included in the judgment because there had been suggestions by Cantor Shone, which you can see at pages 40 and 42 and 43 of the further excerpts of record, that that's what they were hoping to do.

[00:03:39] Speaker 00:
And the judge says, no, no, no, no, a 10 foot high foundation and then perching a bedroom on top of that would violate the story restriction.

[00:03:51] Speaker 00:
The second part was the provision in paragraph three that provides that the entire floor must be removed.

[00:03:58] Speaker 00:
And our position, or the reason why that was included was that it was an anticipation of the attempt by Cantrashone subsequently to retain the second story improvements through a partial floor that they called a mezzanine.

[00:04:13] Speaker 00:
And our position is, and I'll state it very briefly so I can move on to what my client's most concerned about, is that the district court's ruling on that is consistent with California law.

[00:04:25] Speaker 00:
If you look at the Bieber case, 138 Cal app, page 360, it defines a mezzanine as, quote, a story of diminished height introduced between two higher stories.

[00:04:38] Speaker 03:
So Bieber- Just to make sure, your position is they couldn't just remove

[00:04:43] Speaker 03:
you know, three-quarters of the floor and put in a ladder and essentially have some kind of loft structure.

[00:04:48] Speaker 03:
They can't, you know, it just has to be one big empty space with no division, internal division, but they could otherwise leave the roof and exterior walls completely intact as long as they're not essentially gaming the system on the inside.

[00:05:02] Speaker 00:
Correct.

[00:05:03] Speaker 00:
That's our position.

[00:05:04] Speaker 03:
And then read the district court's order as consistent with that interpretation, that the district court's order is not actually requiring them to remove

[00:05:13] Speaker 03:
the second higher exterior walls and roof and lower them so long as they can do that.

[00:05:21] Speaker 00:
They can have an 18 foot tall garage if they want.

[00:05:24] Speaker 03:
18 foot tall garage as long as there's really no way that they could put a bed somewhere in the middle of the nine feet high or raise the floor of the garage and turn it into a bedroom.

[00:05:39] Speaker 03:
Okay, they can hang it from the ceiling.

[00:05:41] Speaker 00:
Yes.

[00:05:44] Speaker 00:
Anyway.

[00:05:44] Speaker 00:
So we're all in agreement with that.

[00:05:46] Speaker 00:
So let me then switch to Morningstar's appeal.

[00:05:49] Speaker 00:
And I really want to focus first on the restrictive covenant relating to the fences, barriers, and landscaping.

[00:05:55] Speaker 00:
And our position is the district court just misinterpreted this restrictive covenant.

[00:05:59] Speaker 00:
And the grammar is dispositive here.

[00:06:03] Speaker 00:
The words fence, barrier, and landscaping are the subject of the sentence of the restrictive covenant.

[00:06:09] Speaker 00:
The verbs may be constructed, placed, or maintained.

[00:06:13] Speaker 00:
That's the predicate, the verbs of that sentence in the Restrictive Covenant.

[00:06:16] Speaker 00:
The two Romanettes, which I've referred to as the geographic restriction phrases, they're adverbial prepositional phrases.

[00:06:24] Speaker 00:
They modify the verbs by answering the question of where the construction may take place.

[00:06:30] Speaker 00:
So now we turn to this last clause, which is really the focus of the interpretation.

[00:06:36] Speaker 00:
And that last which clause, which I've called the height restriction clause, that's an adjectival relative clause.

[00:06:46] Speaker 00:
That starts with which, which is.

[00:06:49] Speaker 00:
And that modifies the three subject nouns.

[00:06:53] Speaker 00:
So we're going back to this which clause is modifying the fencing, the barrier, or the landscaping.

[00:06:59] Speaker 00:
It's not purporting to modify the geographic restriction phrases that come before.

[00:07:05] Speaker 00:
It's going back to the front.

[00:07:06] Speaker 00:
And it may be a way to, I mean, I know this is going back to grammar school, but if you were to diagram this sentence, you would create your little line

[00:07:15] Speaker 00:
right, and then you'd have your subject, fences, barrier, landscaping, and then you'd have a little dotted line underneath that subject, and you'd have your, your adjectival relative clause, right, immediately beneath that.

[00:07:29] Speaker 04:
That seems to be supported by the fact that the word on is there before one and two.

[00:07:35] Speaker 04:
So it's on one and on two, and then you're back to the clause modifying the fence barrier or landscape.

[00:07:44] Speaker 00:
Correct.

[00:07:45] Speaker 00:
And so it's now going back to refer to the fences and barriers.

[00:07:48] Speaker 00:
And I think the grammar here is critical because the series qualifier canon is actually referred to as the rule of grammar.

[00:07:55] Speaker 00:
The entire purpose of this rule is to identify what words a clause or phrase modifies so that we can aid in interpreting that.

[00:08:04] Speaker 00:
And that's the Stepnowsky case that talks about that.

[00:08:07] Speaker 00:
And I really would encourage the court to look at the hypothetical rule 12f that we put on page 13 of our third brief, because I think it really illustrates the point.

[00:08:18] Speaker 00:
This restrictive covenant is kind of an unfamiliar context.

[00:08:21] Speaker 00:
But if we look at this procedural rule, it's sort of a more familiar context.

[00:08:25] Speaker 00:
It's the exact same structure as the restrictive covenant.

[00:08:29] Speaker 00:
If you said this hypothetical rule

[00:08:32] Speaker 00:
A judgment, order, or decree striking an insufficient defense from a pleading may be issued by the court, colon, Romanet 1, on its own, semicolon, or Romanet 2, on motion made by a party before responding to the pleading, comma, which shall be immediately appealable.

[00:08:51] Speaker 00:
The ordinary reading of that, the natural reading of that hypothetical rule, is that the immediately appealable clause applies to any judgment order or decree, regardless of whether it's issued by the court, on its own, or on a party's motion.

[00:09:04] Speaker 04:
Well, I actually think this, your version may be clearer than the other one, but...

[00:09:09] Speaker 00:
Yeah, and so what I was trying to do is that this restrictive covenant is identical in its grammatical structure, and it should be given the identical construction as we would give that hypothetical rule.

[00:09:24] Speaker 00:
And I would know that this case is controlled by Pritchett, which addresses a very similarly worded statute.

[00:09:31] Speaker 04:
It has a lot of little extra preposition.

[00:09:36] Speaker 04:
The whole motive analysis is that someone got out of control.

[00:09:43] Speaker 04:
And where you began is correct.

[00:09:45] Speaker 04:
We went to grammar school and we ought to be able to read the sentence.

[00:09:49] Speaker 00:
Right.

[00:09:50] Speaker 00:
And then what the court in Pritchett says is that comma means everything.

[00:09:53] Speaker 00:
And it reminded me a little bit of that.

[00:09:56] Speaker 04:
I'm not even sure it does mean everything.

[00:09:58] Speaker 04:
I don't think that would matter if the witch wasn't there and the comma wasn't there.

[00:10:01] Speaker 00:
Right, the absence of the comma.

[00:10:04] Speaker 04:
The absence of the comma might not matter either, given the structure of the sentence.

[00:10:08] Speaker 00:
Potentially.

[00:10:09] Speaker 00:
But I think in Pritchett, what the court is saying, and what Scalia and Garner cite Pritchett for, is this is how you apply this series qualifier canon.

[00:10:20] Speaker 00:
And I cited the court to the language in Stepnosky.

[00:10:23] Speaker 04:
What I object to is the use of the word canon.

[00:10:25] Speaker 04:
It's English grammar.

[00:10:27] Speaker 00:
Correct.

[00:10:28] Speaker 00:
It's English grammar.

[00:10:30] Speaker 00:
And then I think even apart from the English grammar, there are three practical considerations that wake very strongly in favor of Morningstar's interpretation.

[00:10:41] Speaker 00:
The first of those is that the district court

[00:10:44] Speaker 00:
interpretation creates this internal inconsistency within the restrictive covenant because you have this overlapping 750 square foot piece of the property that fits in both Romanettes right so if under the district court's interpretation Romanette one forbids offense but then Romanette two allows offense and how can you forbid and allow offense on the exact same property that doesn't make sense and then the second

[00:11:10] Speaker 00:
The second point here would be that the district court's interpretation would frustrate the expressly stated purpose of the restrictive covenants.

[00:11:17] Speaker 00:
By their own terms, the restrictive covenants are supposed to protect the privacy and the benefit of Lot 17, and it's hard to see how removing this fence would protect anyone's privacy.

[00:11:28] Speaker 00:
As they say, good fences make good neighbors.

[00:11:31] Speaker 00:
And then the third point I would say is that the district court's interpretation... The one thing I didn't understand about it is that it's an excess of two feet.

[00:11:38] Speaker 04:
Two feet isn't going to protect anybody.

[00:11:40] Speaker 04:
It's privacy very much.

[00:11:41] Speaker 00:
I'm sorry, I couldn't quite hear you.

[00:11:42] Speaker 04:
Two feet isn't going to protect anybody's privacy very much.

[00:11:47] Speaker 04:
Oh, no, it's two feet.

[00:11:49] Speaker 00:
The properties are at different elevations.

[00:11:52] Speaker 00:
So it's two feet above the foundation of lot 16, which is at a slightly higher elevation.

[00:11:58] Speaker 00:
So it's not a two-foot fence.

[00:12:00] Speaker 00:
It would be a fence that would go up no more than two feet above the foundation of the neighborhood.

[00:12:05] Speaker 04:
And there are also city regulations.

[00:12:08] Speaker 00:
Correct.

[00:12:09] Speaker 00:
There might also be city regulations.

[00:12:12] Speaker 00:
And then the last point is just the absurd results.

[00:12:16] Speaker 00:
The district court's interpretation creates this demilitarized zone between the two properties, and that's not in anyone's benefit.

[00:12:22] Speaker 00:
It would also, if taken literally, require removing a retaining wall, which is also not in anybody's benefit.

[00:12:30] Speaker 00:
Let me just finally very briefly address the observation deck.

[00:12:34] Speaker 00:
Our position on this is when you turn a ceiling into a floor, you've got a second story.

[00:12:40] Speaker 00:
That's especially true, whereas here you're interpreting a restrictive covenant that's designed to protect privacy.

[00:12:46] Speaker 00:
And I think the district court mistakenly interpreted this restrictive covenant because there's two key

[00:12:51] Speaker 00:
language points here that the district court misinterpreted.

[00:12:55] Speaker 00:
The first is that this restrictive covenant dealing with the observation deck, it uses the word improvement, right?

[00:13:03] Speaker 00:
Not building, not structure, right?

[00:13:05] Speaker 00:
An improvement can be something like a waterslide

[00:13:09] Speaker 00:
or a basketball hoop that's affixed to the top of a first-floor-y structure, right?

[00:13:15] Speaker 00:
You don't have to have a roof on an improvement.

[00:13:18] Speaker 00:
So it's a very broad term that's covered by this restrictive covenant, and the district court's interpretation saying, well, if you don't have a roof, you don't have another story, it misses the point of this very broad language.

[00:13:28] Speaker 04:
I thought the opposing argument to you was that greater than one story... Correct.

[00:13:33] Speaker 04:
...is different and higher than one story.

[00:13:36] Speaker 00:
Well, no, it's not quite that.

[00:13:38] Speaker 00:
The argument, and this is the second piece of language that the district court misinterpreted, the district court interpreted language that says no improvement greater than one story as if it prohibited improvements less than two stories.

[00:13:56] Speaker 00:
And there's a difference between greater than one story and less than two stories, right?

[00:14:01] Speaker 00:
What the district court said is, if you don't have a roof, you don't have a second story.

[00:14:04] Speaker 00:
But that's not what it says.

[00:14:05] Speaker 00:
It doesn't say less than two stories.

[00:14:07] Speaker 00:
It says greater than one story.

[00:14:10] Speaker 00:
So any improvement that's on top of that story, the first story, is greater than one story.

[00:14:17] Speaker 00:
Literally any improvement?

[00:14:19] Speaker 00:
Well, we might have.

[00:14:21] Speaker 00:
Like, I know they don't have these, well, like a satellite dish.

[00:14:25] Speaker 00:
We might fight about whether there's a de minimis or something like that, but that would violate the plain language.

[00:14:31] Speaker 02:
Your view, again, satellite dish.

[00:14:33] Speaker 00:
We're not fighting over a satellite dish.

[00:14:34] Speaker 02:
No, I understand that, but if they still had TV antennas, which I guess they don't, but talking about the language here, anything,

[00:14:46] Speaker 00:
I would hold to that interpretation, but I would say to qualify that, that what we're talking about here is not a satellite dish.

[00:14:55] Speaker 00:
We're talking about an observation deck for a restrictive covenant that's designed to protect privacy, right?

[00:15:01] Speaker 00:
So it's designed, the whole point of the story restriction is to prevent them from looking over into your yard, and their point is we're going to, this allows us to put a

[00:15:12] Speaker 00:
a second story observation deck.

[00:15:14] Speaker 00:
And I think there's maybe this, I'd use this last kind of point to just sort of illustrate, as I just say, a way of illustrating it, a thought exercise, if you will, right?

[00:15:26] Speaker 00:
If your honors were to go out to the property and you wanted to get to the observation deck and you stepped into an elevator to get to the observation deck, would you push the button one or would you push the button two?

[00:15:41] Speaker 00:
Right?

[00:15:42] Speaker 04:
I think I'd probably push the button observation deck.

[00:15:45] Speaker 00:
Well, you'd have to push the button too because the observation deck is above the first floor.

[00:15:51] Speaker 00:
What they've done is they've turned the ceiling of the first floor into a floor for another structure.

[00:15:58] Speaker 00:
And it's not a meaningless structure.

[00:16:00] Speaker 04:
I'm sure I know the answer to this given the behavior in this case.

[00:16:04] Speaker 04:
But have you talked to our mediators and is there any sense in...

[00:16:08] Speaker 04:
Have you talked to our mediators?

[00:16:11] Speaker 04:
Have the parties gone through our very able mediation program?

[00:16:18] Speaker 04:
I understand the case isn't exactly about money, but it is about

[00:16:24] Speaker 04:
private parties' interests.

[00:16:27] Speaker 00:
I have to be careful what I say, but what I will say is we did do a mediation.

[00:16:31] Speaker 00:
We've worked with the mediation program before, with the Ninth Circuit's mediation program.

[00:16:36] Speaker 00:
It was wonderful.

[00:16:39] Speaker 00:
We had a mediator's proposal.

[00:16:41] Speaker 00:
We thought we had a resolution, and then we didn't.

[00:16:44] Speaker 00:
And so that's why we're here.

[00:16:47] Speaker 02:
All right.

[00:16:48] Speaker 02:
Thank you, counsel.

[00:16:57] Speaker 01:
Good morning, Your Honors.

[00:16:58] Speaker 01:
Jeremy Rosen of Horvitz and Levy for the Cantor Shone Family Trust.

[00:17:03] Speaker 01:
I don't know if I'm entitled to a short rebuttal, given that we have our appeal as well.

[00:17:09] Speaker 01:
If I could get two minutes for that, I'd appreciate it.

[00:17:12] Speaker 01:
If not, I understand.

[00:17:13] Speaker 03:
I'd like to just... Two minutes covers both, but you can talk about whatever you want.

[00:17:19] Speaker 01:
Thank you, Your Honor.

[00:17:20] Speaker 01:
I'd like to just start with the mediation question.

[00:17:23] Speaker 01:
It's, as my friend pointed out, there was an earlier mediation.

[00:17:27] Speaker 01:
It did not resolve.

[00:17:30] Speaker 01:
I can represent that we would like the opportunity to have another shot at going to the mediation program.

[00:17:36] Speaker 04:
Unless you may be informed by the arguments.

[00:17:38] Speaker 02:
Yes.

[00:17:39] Speaker 02:
So if there was a... I guess what I would say and my colleagues may differ, but if both parties would like another shot at this, they should inform us.

[00:17:50] Speaker 01:
Very well.

[00:17:51] Speaker 01:
I will talk to counsel after the argument, and if we can reach an agreement to mediate, we will certainly let the panel know and go to the good offices of the Ninth Circuit Mediation Program.

[00:18:05] Speaker 01:
I'd like to start with one of the last comments

[00:18:09] Speaker 01:
My friend on the other side made where he referred to a, quote, second story observation deck, unquote.

[00:18:16] Speaker 01:
And this is consistent with page 45 of their opening brief on the merits where they make the point, quote, that the ordinary meaning of a story does not require

[00:18:30] Speaker 01:
that a structure have both a floor and a ceiling.

[00:18:34] Speaker 01:
And this is an important argument that they make because it contradicts, of course, what the district court found here, which is that the meaning of a story has a fixed and clear and unambiguous meaning of

[00:18:48] Speaker 01:
of a structure that has both a floor and a ceiling.

[00:18:51] Speaker 04:
Yes, but as we're talking about that argument issue now, the statutes doesn't say anything about stories with regard to what can't be built.

[00:18:59] Speaker 04:
It says no improvements of any kind.

[00:19:02] Speaker 04:
So it doesn't matter whether the deck is a story.

[00:19:06] Speaker 04:
It matters whether it's an improvement of any kind that otherwise comes within the provision.

[00:19:11] Speaker 01:
Well, it has to be greater than one story, which I think implicit in that would be another story, unless you get... Why is it implicit in that?

[00:19:20] Speaker 04:
Well, then you get to, I think... Simply higher than one story.

[00:19:24] Speaker 01:
Well, except it doesn't say higher.

[00:19:26] Speaker 01:
And I think then you would get to an absurd reading, as Judge Bennett pointed out, that it would bar satellite dish, it would bar, as we pointed out in our briefing... Well, that's not so absurd.

[00:19:35] Speaker 04:
I mean, it may be that this is what they meant, or maybe negotiable, but what's absurd about it?

[00:19:41] Speaker 01:
Well, I think, though, that this is now your question, I think, is getting into that it is not clear on its face exactly what it means, and especially in light of the California law, as evidenced by their Supreme Court's decision in the Thomas Drayage case, where the California Supreme Court

[00:20:01] Speaker 01:
admittedly at odds with how federal courts and other states look to contract interpretation made it very clear that in California they do not believe that words have fixed meaning and that extrinsic evidence must always be introduced to be able to determine whether there's some specialized or unique meaning that the parties or the community give to.

[00:20:25] Speaker 04:
Of what?

[00:20:25] Speaker 04:
Of the story?

[00:20:26] Speaker 04:
The question of what's the story?

[00:20:27] Speaker 01:
Yes.

[00:20:28] Speaker 04:
But that's not the question here.

[00:20:30] Speaker 04:
Because we know that the restriction doesn't only apply to additional stories, it applies to no improvements of any kind.

[00:20:38] Speaker 04:
So the key language is greater than, it's not story.

[00:20:43] Speaker 01:
Well, except if as the extrinsic evidence showed in this case that the district court did not consider because it relied solely on the California Court of Appeal King decision,

[00:21:00] Speaker 01:
that one story means just 18 feet.

[00:21:04] Speaker 01:
So if that is the understanding of the community of a specialized meaning for story, then anything under 18 feet is just one story, so necessarily the bedroom cannot be an improvement greater than one story.

[00:21:21] Speaker 01:
And that's where the ambiguity comes in.

[00:21:24] Speaker 04:
Are we talking about the bedroom or the deck?

[00:21:27] Speaker 01:
Well, both.

[00:21:28] Speaker 01:
Probably about the DEC.

[00:21:30] Speaker 01:
Okay.

[00:21:31] Speaker 01:
Well, for the DEC, the district court actually did the proper analysis and actually considered the extrinsic evidence.

[00:21:40] Speaker 01:
If you look at the district court's order on the rooftop DEC, the court, this is at

[00:21:53] Speaker 01:
Well, for the rooftop deck, the district court at page ER 34 considered the extrinsic evidence of the International Building Code, which has been adopted in California, which finds that sort of enclosures that are

[00:22:12] Speaker 01:
less than 48 inches above the surface do not count as sort of an additional story.

[00:22:19] Speaker 01:
And, you know, that's consistent with the Malibu Code, which was testified to by the Malibu City Planner in this case, where they do not consider a rooftop deck to be, you know, a story.

[00:22:33] Speaker 01:
And so it is therefore not greater than one story to have a rooftop deck.

[00:22:38] Speaker 01:
And so here, I think, you know, the District Court did

[00:22:41] Speaker 01:
properly consider the extrinsic evidence to interpret what was permitted and what was not permitted, whereas for the fundamental question on the bedroom, the district court just accepted the King decision and found that there was clear and unambiguous meaning to a story, even though the King decision made very clear

[00:23:05] Speaker 01:
that in that particular case from 1961 which of course predates the Thomas Drayage decision and therefore may not be good law to begin with but in King the Court of Appeals said none of the parties are ascribing any special meaning to story so we just default to what we think is the clear and unambiguous meaning of the story whereas here there was substantial extrinsic evidence provided that within Malibu in particular

[00:23:34] Speaker 01:
particular within this particular subdivision, one story is a term of art meaning 18 feet.

[00:23:43] Speaker 04:
But this particular clause

[00:23:46] Speaker 04:
has both the 18 feet and the story, greater than one story.

[00:23:50] Speaker 04:
So, doesn't the second become superfluous if you read it that way?

[00:23:54] Speaker 01:
No, because if you, as we point out in our briefs, the 18 feet is above, it's 18 feet above the grade of Lot 16, whereas the greater than one story is in any event having nothing to do with the grade.

[00:24:10] Speaker 01:
So, depending, the grades are at different levels,

[00:24:14] Speaker 01:
what this is saying is that you can either be depending on the property's slope so you can be no more than 18 feet above the grade but also even if you're below the grade you can only be one story which is also understood to be 18 feet so depending on where you are and these provisions are put in before anyone knew where homes or anything were going to be built on the respective properties

[00:24:40] Speaker 01:
So they are two separate provisions that could lead to different ultimate... Why don't I address the landscaping provision and also the question that was in the focus order.

[00:24:52] Speaker 01:
Yes, so in terms of the focus letter, given this circuit's general requirements that an injunction be no broader than necessary, I would submit that the only thing that should be in the injunction is basically the first two lines of the injunction.

[00:25:10] Speaker 01:
If you're looking at page four of the excerpt of record, where it says the parties are permanently enjoined and shall

[00:25:18] Speaker 01:
Immediately cease any and all occupancy habitation and use of any and all improvements greater than one story on lot 16 That is all that Morningstar is Permitted they are allowed to the extent that I you don't think There's a permission to direct what exactly has to be changed

[00:25:38] Speaker 01:
No, because then you you run into sort of the California law which talks about how you have to balance the benefit and burdens of restrictions, but that's okay and I understand your argument and and I would just submit that there are many different ways that one could and

[00:26:03] Speaker 01:
You know to the extent that the district court is correct that one story means a floor and a ceiling.

[00:26:09] Speaker 01:
There are many ways that one can comply with the one story definition that the district court had and it's.

[00:26:17] Speaker 01:
And Morningstar has no right to determine how their neighbor complies with the covenant, just like they would.

[00:26:26] Speaker 02:
A court in equity has the right to take into consideration and furnish in awarding equitable relief what the parties have done up to the point of the injunction, right?

[00:26:37] Speaker 01:
well the court certainly has the power to determine that the current structure violates the covenant and has a right if there's a violation to order compliance uh... and and has the right to oversee uh... the compliance efforts but i don't believe i think it goes further than necessary to micromanage how the compliance can be done because there can be

[00:27:01] Speaker 02:
You know, there can be many ways to... I'm not sure, given the history of this, I would describe the district court's order putting aside the issue and the focus order as micromanaging as opposed to wanting to see that the district court has a requirement of where we are at A and where we need to go to to B and doing the, in the district court's view, the most equitable thing to get there.

[00:27:24] Speaker 01:
Well, I guess I would just point out that there's a disparity, and part of it was that the district court asked the winning side for each part of the injunction to prepare the draft injunction and maybe

[00:27:42] Speaker 01:
We're faulted for being fairer in how we presented it.

[00:27:45] Speaker 01:
But the injunction against Morningstar, I think, is more appropriate.

[00:27:49] Speaker 01:
It both, it just simply says, you know, there needs to be compliance with the provision.

[00:27:55] Speaker 01:
And the requirement is to, within 60 days, submit a proposal to the city and then to make every effort to get that proposal accepted.

[00:28:05] Speaker 04:
Whereas... Is there currently, from your client, a pending provision?

[00:28:12] Speaker 04:
a pending proposal with the city.

[00:28:15] Speaker 01:
Yes, and that was, as had been in some of the post, in some of the motion practice that council alluded to, there had to be monthly reports to the district court and my clients had made a proposal to the city.

[00:28:35] Speaker 01:
I believe it has still not been.

[00:28:36] Speaker 04:
And that proposal is to take down the second story entirely, is that right?

[00:28:42] Speaker 01:
Believe it it was because that was the requirement that the district court gave if there are multiple other ways that the injunctions are still challenging the injunction and the proposal was not a not a Settlement proposal, but simply a compliance with the injunction.

[00:29:01] Speaker 04:
Yes, so it doesn't matter what it is I

[00:29:04] Speaker 04:
Correct.

[00:29:05] Speaker 04:
Who would change it if the injunction were lifted?

[00:29:06] Speaker 01:
I think, well, if the injunction were lifted or modified, and I do believe the injunction should be modified, well, I think the entire injunction should be reversed because for a new trial where the district court considers the extrinsic evidence, or at least

[00:29:20] Speaker 01:
It may not need to be a new trial, just a new hearing.

[00:29:23] Speaker 01:
It was a bench trial.

[00:29:24] Speaker 01:
The extrinsic evidence is out there.

[00:29:26] Speaker 02:
I think Judge Berzon had also asked you to address your view of the Section 2 grammar issue.

[00:29:32] Speaker 01:
Right.

[00:29:32] Speaker 01:
Yes, please.

[00:29:33] Speaker 01:
Oh, yes.

[00:29:34] Speaker 01:
So on the grammar issue, again, I think here, you know, the cases that they cite regarding sort of the series... What kind of cases?

[00:29:42] Speaker 04:
Let's just read the language, okay?

[00:29:45] Speaker 04:
You know, from scratch.

[00:29:48] Speaker 04:
It says that it has to be, it may be constructed, placed, or maintained on one and two, right?

[00:29:54] Speaker 04:
So now we're done with the on.

[00:29:56] Speaker 04:
And then it says, which is, which has to be referring back to the fence barrier or landscaping.

[00:30:02] Speaker 04:
What else could it be referring to?

[00:30:04] Speaker 01:
Well, I think that the critical difference here, and this is what the district court seized on, is that unlike every other case involving sort of this grammatical interpretation, which does not involve either the two Romanettes or, and more importantly, the semicolon.

[00:30:20] Speaker 04:
But the two Romanettes are about a sub-issue, which is where, right?

[00:30:23] Speaker 04:
And that's clear.

[00:30:24] Speaker 04:
And the word on makes clear that that's what it is.

[00:30:27] Speaker 04:
And it's now over with.

[00:30:28] Speaker 04:
You know where.

[00:30:29] Speaker 04:
On one or two.

[00:30:30] Speaker 04:
Now we're back to what?

[00:30:33] Speaker 04:
Which is?

[00:30:35] Speaker 01:
Well, except which is, what does that refer to?

[00:30:39] Speaker 01:
And I think where you have two parts separated by a semicolon, generally the semicolon, my recollection from grammar school is that a semicolon sort of separates the two

[00:30:53] Speaker 01:
things on either side of the semicolon.

[00:30:55] Speaker 01:
So if there is a clause that is modifying something that occurs on the other side of the semicolon, it modifies everything up into going back to the semicolon.

[00:31:04] Speaker 01:
It doesn't jump across the semicolon to get to the other side.

[00:31:08] Speaker 01:
Your view is which is doesn't go back pre-semicolon.

[00:31:12] Speaker 01:
Correct.

[00:31:13] Speaker 02:
Which is is only relevant to post-semicolon.

[00:31:16] Speaker 04:
So then what is which is modifying?

[00:31:18] Speaker 04:
An area?

[00:31:20] Speaker 04:
What's the reference to which is?

[00:31:23] Speaker 04:
On your theory, it has to be area.

[00:31:27] Speaker 04:
That doesn't make any sense.

[00:31:28] Speaker 04:
It's incoherent.

[00:31:30] Speaker 03:
If I understand your argument correctly, you're saying there's absolutely no fence barrier or landscaping permitted in area one.

[00:31:40] Speaker 03:
One, correct.

[00:31:43] Speaker 03:
Area to there can be a fence barrier landscaping so long as it's not The long as it satisfies the witches clause correct, and that's why they have two separate That's how the district court read this right.

[00:31:58] Speaker 03:
There's the alternate reading which is No fence or barrier in either one or two that Satisfied as long unless it satisfies the witches clause let's say

[00:32:11] Speaker 03:
semi-colons and commas are ambiguous here, why doesn't the general rule that in the face of ambiguity, we would favor free use of property and let them keep the ficus trees alive?

[00:32:27] Speaker 01:
Well, a couple of things.

[00:32:28] Speaker 01:
One is the, I think,

[00:32:32] Speaker 01:
You have to review for clear error.

[00:32:34] Speaker 01:
I think of the district courts interpretation, and I think the district court interpreted Interpretation makes a clear error contract interpretation is usually a legal question

[00:32:44] Speaker 01:
I think that's a fair point.

[00:32:47] Speaker 01:
But I think that the district court in looking at it and in hearing all of the testimony regarding sort of the purpose of the fencing and the like, I think made the reasonable grammatical interpretation also, and I see my time is up, but just briefly, and I forget which of your honors made this point, but I think it's a very important one.

[00:33:11] Speaker 01:
Even under the Morningstar's interpretation, it's a very de minimis, it would be a very de minimis hedge or fence.

[00:33:19] Speaker 01:
It's not just the fence, it's these very tall trees that were planted.

[00:33:24] Speaker 04:
All right, well that's fine, and maybe then we'll have to cut something down, but I still want to know which refers to one, to your theory.

[00:33:30] Speaker 01:
I think it is modifying that the no fence barrier landscaping in the area

[00:33:38] Speaker 03:
Area 2 and area described in area 2.

[00:33:41] Speaker 01:
Yes, not in area 1.

[00:33:43] Speaker 01:
All right.

[00:33:44] Speaker 01:
Thank you council.

[00:33:45] Speaker 01:
Thank you

[00:33:57] Speaker 00:
Your Honor, I do want to correct one, I think, inadvertent misstatement of the record.

[00:34:02] Speaker 00:
My understanding is that... I'm sorry, was there no time left?

[00:34:06] Speaker 00:
All right, we'll give you a minute.

[00:34:07] Speaker 00:
One minute, okay.

[00:34:08] Speaker 00:
I do want to correct a misstatement of the record.

[00:34:10] Speaker 00:
I do not believe the Cantor Shones have submitted any proposal to date that removes the entire internal floor in the garage all by itself.

[00:34:20] Speaker 00:
Our understanding is that that only requires getting a demolition permit, which is fairly easy to get.

[00:34:25] Speaker 00:
And then if I just might make the point this is responding to your honor's question There's a lot of CCNRs that prohibit satellite dishes.

[00:34:35] Speaker 00:
It's not an uncommon provision.

[00:34:37] Speaker 00:
It may seem harsh but

[00:34:38] Speaker 00:
But it happens, and I think here the key language here is greater than one story.

[00:34:45] Speaker 00:
You don't obviously have to address the satellite dish issue because I think the observation deck has 42-inch walls all around it.

[00:34:52] Speaker 00:
It has a bench, a seating bench that's a fixture built into the ceiling.

[00:34:56] Speaker 00:
So I think you can sort of sidestep that, but the idea that it's somehow, oh, that's really harsh.

[00:35:02] Speaker 00:
It has to be wrong.

[00:35:04] Speaker 00:
There are, you know, there are common restrictions that do that.

[00:35:08] Speaker 03:
They had just built a one-story house from the get-go.

[00:35:15] Speaker 03:
They couldn't just go put some chairs on their roof and sit up there.

[00:35:24] Speaker 00:
Well, they certainly couldn't do it as an improvement, right?

[00:35:27] Speaker 00:
An improvement is a fence with railing, a seated bench.

[00:35:32] Speaker 03:
From context, it seems like they're talking about improvement could be the whole house, right?

[00:35:37] Speaker 00:
Oh, no, no.

[00:35:38] Speaker 00:
An improvement is a broader term, right?

[00:35:43] Speaker 00:
An improvement could include a lot of things.

[00:35:45] Speaker 03:
That's why you're relying on Section 3 to just say even the whole structure is

[00:35:50] Speaker 00:
Violative well if it has two stories a structure is clearly an improvement, right?

[00:35:55] Speaker 02:
But there are things short of an entire structure and short of an entire floor that constitute an improvement all right We thank counsel for their arguments the case just argued is submitted and with that we are adjourned for the day Thank you

[00:36:22] Speaker 04:
This court for this session stands adjourned.