Procedural Posture

Plaintiff employer sought review of a decision of the Superior Court of the City and County of San Francisco (California), which awarded a judgment in favor of defendant surety. The employer had set forth the action to recover on an indemnity bond that was issued by the surety to cover dishonesty by the employer's cashier and bookkeeper.

Overview: Status update on the recent Court case of a microsystems engineer

In the employer's application for the bond of indemnity, he was asked at what intervals his books and accounts would be examined and audited. The employer responded that an examination would be done daily by him. The employer's application for the bond also contained a declaration that the answers and representations were true and that they were held to form the basis of the contract under the proposed bond. During an absence of four days by the employer, his cashier absconded and carried away money. The court upheld the decision because it was apparent that the employer committed a breach of the contract of indemnity by omitting for a period of four days to verify the accounts and moneys on hand in the custody of his employee. The questions and answers from the employer's written application became a part of the bond or policy of indemnity. The employer's failure to substantially comply with the terms of the bond discharged the surety from liability.

Outcome

The court affirmed the decision.

Procedural Posture

Appellant residential-community homeowner built a fence without permits or compliance with the unrecorded regulatory criteria of appellee association, and the association sued to enforce the protective covenant. A jury found that the fence was "major construction" and had to be removed. The Superior Court of San Diego County, California, directed a partial verdict on the validity of the regulations and awarded attorney fees. The owner appealed.

Overview: 

The recorded covenant allowed an owner to proceed with what she definitely thought was "minor construction" without submitting plans, and the owner argued that her wrought iron fence was minor construction. The association informed her, however, that it was "major" construction, relying on its unrecorded regulatory code, which provided that all fences and walls were "major construction," except certain split-rail fences. The owner asserted that the covenant protected an owner's right to act based on a subjective belief and that the code modified the covenant without a necessary vote of homeowners. The court disagreed, finding that the code permissibly defined the terms "major" and "minor" construction, reasonably referring, based on their historical nature in the area, to split rail fences as minor but defining other types of fencing as major. The court also found that: (1) there was no traffic and safety exception to the requirement that a permit be obtained for other than minor construction; (3) the owner could not complain about the form of relief, as she objected to an alternative form; and (4) attorney fees had to be upheld because the owner did not provide an adequate record.

Outcome

The court affirmed the decision of the trial court, with costs on appeal to the association.