HomeMy WebLinkAbout18 - Fletcher Residence Appeal Fritz Duda 21 Bay IslaO b
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CITY OF NEWPORT BEACH
COMMUNITY AND ECONOMIC DEVELOPMENT
PLANNING DEPARTMENT
3300 NEWPORT BOULEVARD
NEWPORT BEACH, CA 92658
(949) 644 -3200; FAX (949) 644 -3250
Hearing Date:
Agenda Item No.:
Staff Person:
REPORT TO THE MAYOR AND CITY COUNCIL
PROJECT: Fletcher Residence appeal (Fritz Duda, appellant)
#21 Bay Island
July 26, 1999
18
Eugenia Garcia
(949)644 -3208
PURPOSE OF
APPLICATION: An appeal of the decision of the Planning Commission which approved a
request to exceed the basic 24 foot height limit to the maximum 28 foot
height limit for a portion of the third floor of a new single family dwelling
to be constructed on Lot 21 of the Bay Island Club. Also approved was
Modification No. 4919 to permit various encroachments into the established
setbacks and building envelopes as depicted on the Building Site Map of
Use Permit No. 3618.
SUGGESTED
ACTION: Affirm, modify, or reverse the decision of the Planning Commission's
approval of:
• Request to exceed the basic height limit for Bay Island
• Modification Permit No. 4919
The Planning Commission held a public hearing on the proposed project on June 24, 1999 and
voted (6 ayes, 1 absent) to approve the project as submitted by the applicant, with a condition
requiring preservation of the elm tree if at all possible.
The decision of the Planning Commission was appealed to the City Council on July 8, 1999. The
basis for the appeal is that the proposed height of the structure is not compatible with the height and
scale of surrounding dwellings, nor is it consistent with the terms of the Bay Island Planned
Residential Development. Therefore, the development could be detrimental to Bay Island and its
residents. Additionally, the appeal challenges the need for encroachments into the required setback
areas because the lot is one of the largest on Bay Island.
Staffs complete analysis of the project is contained in the attached report to the Planning
Commission, and the Commission's discussion and decision may be found in the attached minutes
of their meeting. Staff and the Commission found that the proposed height is compatible and
consistent with adjacent and surrounding dwellings on Bay Island, because the portion of the house
proposed to exceed the 24 foot height limit is to be located adjacent to Lot #19, which is developed
at a similar height and scale.
Staff also found most of the requested encroachments to be consistent with
on Bay Island. Staff's recommendationwas to delete the first floor, 4 foot front enci
the IS foot front setback, because combining this encroachment with the covered p
and support posts would increase the potential to block the view to the Bay, 1
pedestrian bridge and Lot #22. The Planning Commission found that this encroachn
be detrimental because of the 60 foot setback from the bulkhead, and approved the
into the front yard setback.
Submitted by:
SHARONZ. WOOD
Assistant City Manager
Prepared by:
EUGENIA GARCIA
Associate Planner
Attachments: ellant application and supporting documentation
June 24, 1999 Planning Commission minutes
June 24, 1999 Planning Commission staff report
Letters received in opposition
on other lots
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Application No.
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P 110
?PLICATION T(
CITY OF NEWPORT BEACW ; r.=1 V;: D
Name of Appellant
or person filing: FRITZ DUDA
'22
Phond: (949 '� � �4900
Date of Planning Commission decision: JUNE 24 'is 99
Regarding application of DOUGLAS AND SALLY FLETCHER for
(Description of application filed with Planning Commission)
PROPOSAL TO ALLOW DWELLING TO EX( F.F.T) F.CTART.TSHF.T) RF.Trr4T T.TMTTATTAN
AND PROPOSED ENLARGEMENT OF THE ESTABLISHED BUILDING SITE TO ALLOW
"MAJOR STRUCTURE" AND "MINOR STRUCTURE" ENCROACHMENTS INTO ESTABLISHED
SETBACKS.
Reasons for Appeal:, SEE ATTACHED
T
KE H VAN KE �� / /�~ Date 'L
ign�tureofAppellant as ttorneys for Fritz Duda
FOR OFFICE USE ONLY
Date Appeal filed and Administ-adve Fee received: IQ—.
Hearing Date. An appeal shall be scheduled for a hearing before the City Council within thirty (30) days of the
filing of the appeal unless both applicant and appeliant or reviewing body consent to a later date (N8MC Sec.
20.95.050)
cc: Appellant
Planning (Furnish one set of mailing label for mailing)
File
60PEALS: Municipal Code Sec. 20.95.0408
Appeal Fee: $278 pursuant to Resolution No. 98-52 adopted on 7 -27 -98
(Deposit funds with Cashier in Account #2700 -5000)
1 ATTACHMENT "A" TO APPLICATION TO APPEAL DIIECISION
2 OF THE PLANNING COMMISSION
3
4 1. Introduction and Grounds for Reversal
5
6 Appellant requests a reversal of the Planning Commission's June 24, 1999 approval
7 ofproposals to exceed the established height limitation and to allow encroachments into required
8 setbacks on lot #21, Bay Island Track. Reversal of the building height proposal is sought on the
9 grounds that the proposal is not consistent with terms of Use Permit 3618 and is not compatible
10 or consistent with the height and scale of surrounding dwellings, and reversal of the
11 encroachment proposals is sought on the grounds that the proposal is not consistentwith terms
12 of Use Permit 3618 and will be detrimental to Bay Island and its residents. Moreover, the
13 encroachments into the required setbacks are unnecessary, especially the front yard
14 encroachment, insofar as the lot is large enough to build on, observing all required setbacks
15
16 2. Factual Background and Relevant Code Provisions
17
18 On November 24, 1997, the City of Newport Beach City Council Adopted Special Use
19 Permit No. 3618 (the "Use Permit ") which established land use and property regulations for the
20 Bay Island residential community. The Use Permit recognized the special character of Bay
21 Island and maintaining that special character requires that size limitations set forth in the Use
22 Permit be strictly enforced. The specific provisions at issue here are Sections 1.5.1, 1.5.5 and
23 2.1 which provide in pertinent part:
24
25 1.5.1 Setbacks and Encroachments.
26 A. "Major Structures" shall conform to setbacks and envelopes as
27 illustrated on Building Site Map dated 8 -15 -97 which defines the
28 buildable areas of these sites.
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B. "Minor Structures "..... Porches and decks, roofs, etc., to serve
floors above the main living floor shall be cantilevered and not
encroach more that 5' into the front yard (bayside) or more than 4'
into the rear yard (interior or "park side "). Roofs may encroach an
additional 2'.
1.5.5 Building Height.
Building heights shall be 24', using the measurement of height
defined in the Newport Beach Zoning Code, Chapter 20.65. This
may be increased to a maximum of 28' with the approval of the
Planning Commission if it is deemed compatible and consistent
with the height and scale of adjacent and surrounding dwellings.
2.1 ARCHITECTURAL DESIGN
It should be understood that zoning always describes the maximum
which may be permitted, or the maximum limits to which parts of
the structures may be built or encroach "not every part of the
structure or encroachment." Bay Island employs an architectural
committee in order to ensure that spirit of good design in
consideration to immediate neighbors and to all of Bay Island will
result in the design and construction of houses esthetically pleasing,
interesting relief to elevations, roofs and masses, resulting in
interesting transition of spaces as you enter the island at the bridge
or walk to other sites on the Island.
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The goal of these guidelines and the committee charge id with
architectural overview its to discourage maximum floor area or
volume to be built while permitting substantial floor area in order
to accommodate unique opportunities to include basement areas or
attic volumes in living space, and as much consistency as
reasonable for redevelopment of lots to enjoy the same'use as
existing ones.
Despite the specific language in the Use Permit limiting building height, limiting floor
area and volume, mandating construction of esthetically pleasing houses and discouraging
building up to and beyond the maximum limits; the Planning Commission, on June 24, 1999,
approved proposals for a planned residence at No. 21 Bay Island which exceed the basic height
limitations and provide for floor areas and volume which result in major and minor structure
encroachments into the required setbacks. The proposed structure would exceed the bas,
height limit by at least four feet. The proposed "Major Structure" encroachments would be (1)
four feet into the required fifteen foot front setback, (2) one foot into the required five foot east
sideyard setback, (3) two feet into the required seven foot west side yard setback and, (4) two
feet into the required eighteen foot rear setback. The proposed "Minor Structure" encroachments
for a covered porch overhang would extend two feet beyond the allowable seven foot
encroachment into the fifteen foot front setback.
If this residence is allowed to be built without reduction in height, floor area and volume,
it will be significantly larger in size and scale than any of the other homes around it and will
dwarf the surrounding houses. It will further block critical light and view corridors for its
adjacent neighbors and will result in a massive structure at the entrance to Bay Island, which will
block views of the entrance, the bridge and other areas of the Island.
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3. Proposed Increase In Height Limit
To the extent the increased height proposal is in excess of the twenty-eight foot maximum
limit, it should be denied as violating section 1.5.5 of the Use Permit. The lot at issue is sloping,
and in some portions of the lot. the building height will exceed twenty-eight feet.
To the extent that other portions of the dwelling will be at the twenty-eight foot
maximum, it still must be denied for failing to meet the "compatible and consistent" standard
set forth in Section 1.5.5. The height and scale of adjacent and surrounding dwellings are neither
compatible nor consistent with the excessive height and scale of the proposed structure.
4. Proposed Enlargement of Established Building Site.
The Planning Commission's approval of the proposed enlargement of building site #21
violates both the letter and the spirit of the Use Permit. The building site map attached to the
Use Permit establishes the buildable area for each dwelling on Bay Island and Section 1.5.1 of
the Use Permit states that "Major Structures" shall conform to these building sites and "Minor
Structures" shall not encroach more than the designated amounts. Despite this clear language
intended to limit the size of the building sites, the proposed encroachments would substantially
increase the size of building site No. 21. Such increases in the size of this building site would
also be in violation of the "Amended and Restated Bylaws of Bay Island Club" Section 8.9,
which provides in pertinent part:
All improvements where construction has been commenced by a
shareholder after January 1, 1998 shall ..... conform to the plans
and site map approved by the Board ... shall conform to all
applicable governmental codes including, but not limited to, Use
Permit 3618 .... and shall be located within the Building Site and
7966N663660.001\KFV 4.
1 appurtenant "minor structures encroachment area" delineated on the
2 Map.
3
4 Although Section 1.5.7 of the Use Permit does provide that modifications may be granted,
5 the Newport Beach Zoning Code, Chapter 20.93, Section 20.93.040 :requires that before
6 modifications are granted, findings be made that:
7
8 ... the establishment, maintenance or operation of the use'i of the
9 property or building will not, under the circumstances 'of the
10 particular case, be detrimental to the health, safety, peace, comfort
11 and general welfare of persons residing or working in the
12 neighborhood of such proposed use or be detrimental or injurious
13 to the property and improvements in the neighborhood or the
14 general welfare of the city, and further that the proposed
15 modification is consistent with the legislative intent of this code.
16
17 None of the proposed encroachments meet this standard because, as a whole, they are
18 detrimental and injurious to Bay Island and its residents. The encroachments will reduce the
19 space between the dwellings leading to a more crowded and cramped appearance. The
20 encroachments will also tend to block light, air and view corridors, especially at the entrance to
21 Bay Island and the bridge onto Bay Island.
22
23 As for the proposed front setback encroachments, even the Planning Commission's own
24 staff did not believe this standard was met and recommended denial of those proposals stating
25 in its report:
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27 The staff feels that the fifteen foot setback established for Lot No.
28 21, is appropriate in this case and that an encroachment into the
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fifteen feet with the living area has a direct result on the amount of
"minor structure" encroachment of the roof canopy. Because there
is a direct view to the bay from Lot No. 22 and the pedestrian foot
bridge, the four foot encroachment of the first floor, in addition to
the support posts and canopy above the encroachment, have a
greater potential to block the view.
The standard set forth in Section 20.93.040 is further not met by the proposed
encroachments because they will not be consistent with Section 2.1 of the Use Permit in that
they would encourage rather than discourage maximum use of floor area and volumes. Section
2.1 clearly sets forth the goal of discouraging maximum floor area and volume in order to
maintain consistency in the size of the buildings and to maintain the same use as existing ones.
The proposed "Major" and "Minor" structure encroachments, together with the maximum height
limitation approved by the Planning Commission, completely go against these goals and
guidelines by allowing a structure with approximately 4,300 square feet of space, which is
significantly larger than any of the surrounding homes. Allowing such a massive structure on
this landmark property at the entrance to Bay Island, adjacent to the bridge, will be detrimental
to the entire character of Bay Island.
5. Conclusion.
Accordingly, Appellant requests that the June 24, 1999 decision of the Planning
Commission approving the proposals for #21 Bay Island to increase the height limit and allow
both "Major" and "Minor" Structure encroachments be reversed and the proposals be denied.
Dated: July >�', 1999
By:
KEITH`
Attorneys s for for ell t FRITZ DUDA 9
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i.'FOR SECURITY AURROSES. THE BORDER OF THIS DOCUMENT GONTAINSI. MICRORRINTING 'p
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A LAIN CORPORATION Irvine. California 92612
COSTACCOUNT
18400 VON KARMAN AVE.. STE. 500 90.315211222
IRVINE, CA 92612 -1514 7/8/1999
(714) 474 -6900
PAY TO
ORDER OFE City of Newport Beach 'i $ "278.00
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City of Newport Beach
Planning Commission Minutes
June 24, 1999
INDEX
SUBJECT: BlockbusterVideo Sign (Mark Frank, contact person)
Item No. 1
3007 East Coast Highway
Modification Permit No.
(Continuedfrom April 22nd, May Wh, May 2(Yh and
4879
June 10rh)
• Modification Permit No. 4879
Request to permit the installation of a roof sign on a new parapet wall where
the Code limits roof signs to the location of a business that is precluded by the
effective use of a pole sign, ground sign or projecting sign.
The applicant has requested that this item be continued to the next Planning
Commission meeting on July 8th.
Motionwas made by Commissioner Gifford to continue this item.
Ayes: Tucker, Ashley, Selich, Gifford, Kranzley and Hoglund
Noes: None
Absent: Fuller
Abstain: None
Mt•
SUBJECT: Fletcher residence (Kurt Donal, applicant)
Item No. 2
•
21 Bay Island
Modification Permit
• Modification permit No. 4919
No. 4919
A request to exceed the basic 24 foot height limit to the maximum 28 foot
height limit for a portion of dwelling on the third floor of a new single family
dwelling to be constructed on Lot 21 of the Bay Island Club. Also requested is a
Modification to permit various encroachments into the established setbacks
and building envelopes as depicted on the Building Site Map of Use Permit No.
3618.
Public commentwas opened.
Kurt Donat, architect 503 32nd Street, spoke on behalf of the Fletchers. He
noted that this plan design started in October 1998 and satisfies the owners'
desires and addresses the concerns of the Bay Island Club. The island is
comprised of 24 residences that occupy this parcel of land. This design was
presented to and supported by the architectural review committee. They were
concerned as to what this structure would represent as the gateway to the
island as well as the architecture and scale. The height and setback issues as
defined by the PRD were addressed. Referring to an aerial of the island, he
noted the placement of the site. He noted the issue of a setback of the front
Property lines that is the bay front. Referring to a model, he noted that a four -
foot intrusion into the setback would not be significant. There are 60 feet from
the bulkhead to the building; there is substantial space and an existing hedge
2
City of Newport Beach
Planning Commission Minutes
June 24, 1999 INDEX
almost 8 feet tall that block the view from across the bay to the structure. This
project was submitted to the Bay Island Club for the review of the residents on
the Island and was approved. In closing, he asked that the Planning
Commission approve the application as submitted, as the requested
encroachments are minor.
Chairperson Selich noted that since the building envelopes are set by use
permit and the Bay Island Association, why (lid you go for the modifications
and not just adjust the building footprint through the Association and then
through the use permit with the City?
Mr. Donat answered that this is a unique lot and is the largest on Bay Island.
There are several easements that relate to this island that reduce the building
area of the lot. When the lot was created, as part of the Planned Residential
Development (PRD), the limits of buildable areas were an oversimplification to
the lot as it existed. The PRD plan indicates a seven -foot setback on the west
side, which was a setback created by the anticipation of the relocation of the
existing sewer for the island. Since this lot has evolved, the idea of sewer
relocation has been abandoned. The Bay Island Club has not yet revised the
plan that there is no longera seven-footeasement required on the west side of
the property. The south side of the property is an overlap situation as the design
evolved with Lot 22. This was felt to be a reasonable accommodation to
parcel 22.
Chairperson Selich asked about the ficus and elm trees, are they being
removed?
Mr. Donat answered that it may be possible to save both trees, depending on
the excavation done for the building footings.
Bill Flcker, Chairman of the Bay Island Architectural Committee, 417 301h Street.
He noted support of this application as presented this evening stating that the
design for this project was done with the guidance of the Committee. This
project is a 2,065 square foot project that fits on this lot and does not stretch the
building volume. This is a large lot that has a lot of property taken away by
various easements. This lot, prior to the PRD, had a twelve -foot setback in the
back that was increased to eighteen and is now at twenty feet. The plans
have been available to all people on the island for their review and comment.
Chairperson Selich asked about the modification of the buildable area. This is
an unusual situation in the City where this is a one lot subdivision with a
cooperative type of ownership. As part of the use permit it was the Bay Island
Club that defined these buildable area envelopes. Why wouldn't the
architectural committee and the Bay Island Club not modify the buildable area
to follow the footprint of the structure that is up so that the City is not dealing
with the modifications?
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Planning Commission Minutes
June 24, 1999
Mr. Ficker answered that when the PRD was done, it was done to
accommodate the houses that had porches, posts and the many different
silhouettes.. The footprints were made to accommodate as many of these
different types as possible. There are houses that are non - conforming and
there will be some cleaning up of the PRD as we proceed.
Mr. Terry Nimnick, 511 Orchid spoke at the request of Mr. and Mrs. Fritz Duda in
their absence. Mr. Nimnick noted that the Dudas sent a memo to the Planning
Commission which stated:
• that they are in agreementwith the encroachmenton the bayside
• the prescribed building area is unclear and some of the area did not
appearto be depicted on the plans submitted to the homeowners for their
review
• concernedwith the height and mass of the proposed residence
• revised plans have not been sent back to the other homeowners for their
additional review
• request story poles be erected to indicate the height and mass of the
building
Mr. Fred Turner, attorney representing Mr. and Mrs. Fritz Duda addressed the
. following:
• A map was incorporated with the approval of Use Permit 3618 which
specifically shows the foot print of any existing house would not be built
outside that foot print in the future, which is what this application is asking
for today.
• This permit needs to be modified and all of the residents need to be heard
on this issue.
Mr. Donat noted that the drawings submitted to the other homeowners, the
Board and the City of Newport Beach are all the same.
Public commentwas closed.
Commissioner Ashley stated that as there is a sixty -foot setback from the
bulkhead to the house as designed and presented to the Planning Commission,
a four -foot encroachment into the front yard setbackwill not be detrimental to
the health, safety, peace and general welfare of persons residing in the
general area. There is an advantage in having the living room extend forward
from the upper level by four feet because it will prevent a solid siding of mass
that would otherwise be seen and would not be architecturally attractive. Staff
has analyzed the entire matter satisfactorily.
Motion was made by Commissioner Ashley to approve Modification No. 4919
along with the findings and conditions of approval in Exhibit A accepting that
M 4
INDEX
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City of Newport Beach
Planning Commission Minutes
June 24, 1999
the encroachments into the setback areas both major and minor are
appropriate including the encroachment into the front yard setback; omit
bullet point three from those conditions. On Page 8, condition 2, the first floor
living area shall be permitted to encroach into the 15 -foot front yard setback
by a distance of 4 feet. A condition to preserve the elm tree will be added.
Ayes: Tucker, Ashley, Selich, Gifford, Gifford, KranAey and Hoglund
Noes: None
Absent: Fuller
Abstain: None
EXHIBIT "A"
FINDINGS AND CONDITIONS OF APPROVAL FOR
Modification Permit No. 4919
Findings,
1. The Land Use Element of the General Plan and the Local Coastal Program
Land Use Plan designate the site for "Single Family Detached" residential
use and the proposed development is consistent with this use and is
compafiblewith surrounding land uses.
2. This project has been reviewed, and it has been determined that it is
categorically exempt under Class 3 (New Construction or Conversion of
Small Structures) requirementsof the California Environmental Quality Act
3. The approval of Modification No. 4919 will not, under the circumstances of
the case be detrimental to the health, safety, peace, morals, comfort and
general welfare of persons residing or working in the neighborhood or be
detrimental or injurious to property or improvements in the neighborhood or
the general welfare of the City and is consistentwith the legislative intent of
Title 20 of this Code for the following reasons:
• The encroachments into the setback areas, both "Major" and "Minor'
are appropriate with the exception of the required 15 foot front yard
setback, because the side yard and rear encroachments are minor in
nature and similar to other setbacks on Bay Island.
The rear encroachment is located below grade, is single story, and
does not block views, air or light to adjoining residential properties.
• The proposed encroachments will not affect the flow of light and air to
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City of Newport Beach
Planning Commission Minutes
June 24, 1999
adjoining residential properties because there is a minimum of 8 feet
between the proposed dwelling and the dwellings on Lots # 19 and 20
to the west, and 21 feet between the proposed dwelling and the
dwelling located on Lot #22 to the east.
• The proposed fence located in the 15 foot front yard setback required
by the Uniform Building Code to protect a swimming pool on the
subject property and is located below the level of the pedestrian foot
bridgewhich will not impede views to the bay.
The Architectural Committee of the Bay Island Club has approved the
proposed development.
The design of the proposed improvements will not conflict with any
easements acquired by the public at large for access through or use of
property within the proposed development.
Conditions:
1. The development shall be in substantial conformance with the approved
site plan, floor plans and elevations except as noted in the following
conditions.
2. The first floor living area shall Pet be permitted to encroach into the 15 foot
front yard setback by a distance of four feet.
3. The elm freewill be preserved Nat all possible.
Ms. Temple asked for clarification of the intent of the vote. Is the intent of the
motion to omit condition nos. two and three and allow the roof overhang as
well as the setback encroachment for the building?
Chairperson Selich answered yes and the addition regarding the preservation
of the elm tree.
•••
INDEX
15
CITY OF NEWPORT BEACH
Hearing Date-
June 24, 1999
COMMUNITY AND ECONOMIC
Agenda Item No.:
2
0/ l� DEVELOPMENT
DEPARTMENT
PLANNING
Staff Person:
Eugenia Garcia
3300 NEWPORT BOULEVARD
9<IFOR�
NEWPORT BEACH, CA 92658
City Council Review:
644 -320
14 Da
(949) 644 -3200: FAX (949) 644 -3250
REPORT TO THE PLANNING COMMISSION
PROJECT: Fletcher Residence
#21 Bay Island
PURPOSE OF
APPLICATION: A request to exceed the basic 24 foot height limit to the maximum 28 foot
height limit for a portion of dwelling on the third floor of, a new single
family dwelling to be constructed on Lot 21 of the Bay Island Club. Also
requested is a Modification to permit various encroachments into the
established setbacks and building envelopes as depicted on the Building Site
Map of Use Permit No. 3618.
ACTION: Approve, modify or deny:
• Request to exceed the basic height limit for Bay Island
• Modification Permit No. 4919
LEGAL
DESCRIPTION: Lot 21, Bay Island Tract
ZONE: Multi - Family Residential (MFR) with a Planned
Residential Development (PRD) Overlay
OWNER: Douglas and Sally Fletcher
Points and Authority
• Conformance with the General Plan/Local Coastal Plan
The Land Use Element of the General Plan and Local Coastal Plan designates the site for
"Single Family Detached" uses. A single family residence is a permitted use within this
designation.
• Environmental Compliance (California Environmental Quality Act)
It has been determined that the project is categorically exempt under Class 3 (New
Construction or Conversion of Small Structures).
• Modification Permit procedures and requirements are set forth in Chapter, 20.93 of the
Municipal Code.
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Modification No. 4919
Miect Property and Sulroundinc, Land Use
Current Development:
The subject property is currently vacant and located on Bay Island which is developed
with 24 single family detached residential dwelling units or sites, a caretakers residence, a
tennis court, and open s ace.
To the north:
Newport Bay
To the east:
Newport Bay,
To the south:
Newport Bay, with single family and two family residential beyond
To the west:
Newport Bay
#21 Bay Island, Modification No. 4919
i low 24. 1999
Page 2
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BACKGROUND
On November 24, 1997, the City Council approved the Bay Island PRD, Use Permit No. 3618, to
establish land use and property development regulations for the Bay Island residential community.
The Bay Island community is a cooperative with multiple dwellings on a single parcel. For this
reason, a Planned Residential Development overlay was applied, and land use, and property
development regulations for existing and future development established by a Use Permit.
On November 6, 1997, the Planning Commission approved a request to exceed the basic height
limit for a portion of a new single family dwelling to be constructed on Lot #13 of the Bay Island
Club.
At its meeting of June 1, 1999, the Modifications Committee held a public hearing on the requested
encroachments into setbacks. The Committee was of the opinion that the Modification request
involves encroachments that contribute to the mass and scale of the proposed' single family
dwelling, as does the proposed increased height. Therefore, the Committee referred the request to
the Planning Commission for a decision.
F3XF31 MM
Proposed Height
The Bay Island PRD allows the basic height limit of twenty -four (24) feet to be exceeded up to the
maximum height limit of twenty -eight (28) feet) with the approval of the Planning Commission. In
order to exceed the basic height limit, the Planning Commission must find that', the project is
"compatible and consistent with the height and scale of adjacent and surrounding dwellings."
The request is to allow a portion of the roof of a proposed single family dwelling to exceed the
basic height limit up to the maximum height limit. The area of the roof in question is a third level
game room containing approximately 499 square feet of floor area: The midpoint of, the roof plane
of the third level is at twenty -eight (28) feet (see Sheet #A4 of the building plans), with a maximum
ridge height of 29 feet 9 inches.
Staff is of the opinion that the proposed dwelling is compatible and consistent with the height and
scale of the adjacent dwelling on Lot #19 because the third story portion of the proposed dwelling is
located adjacent to Lot #19, and that dwelling is similar in both height and scale. Additionally, the
portion of the roof of the proposed structure that conforms to the basic height limit is located
toward the front of the dwelling, is closer to Lot #20, and that dwelling is also similar in height to
the front portion of the proposed dwelling. The outlines of the profiles of both dwellings located on
Lot #19 and Lot #20 are depicted with dotted lines on elevation Sheet #A4 of the building plans.
Lot #22 is located across the pedestrian bridge (as shown on sheet #A1 of the building plans) and
is the only lot that lines up parallel to the subject property. As shown on sheet #A4, the area of
1 The measurement of height of structures in the Bay Island PRD is the same as that prescribed by the Zoning code.
In the case of a sloping roof, the measurement is the vertical distance between the grade and the midpoint of the roof
plane, provided no part of the roof extends more than five (S) feet above the height limit. In this case, the height is
measured at an elevation of 6.27 feet, because the site is located within a flood hazard area.
#21 Bay Island, Modification No. 4919
June 24, 1999
Page 3
/9
the additional height of the proposed structure is situated closer to the rear of the structure so to
not impede views to the bay from Lot #22. Additionally, the floor elevation of Lot #22 is 6 feet
above the finished floor elevation of the subject property, which results in both dwellings having
similar height and scale.
Proposed Modifications
As stated previously in this report, Bay Island consists of a single parcel. The PRD use pernrit
addresses established building sites and buildable areas for individual structures on the island.
The building sites and buildable areas are illustrated on the "Building Site Map" (attached), dated
August 15, 1997. The shaded areas depict "Minor Structures" encroachments and the dotted line
areas depict "Major Structure" buildable area. The Use Permit establishes floor area limits,
height of structures, parking requirements, and setbacks for both "Major" and "Minor" structures.
The Modification request for the proposed single family dwelling includes the following
encroachments:
"Maior Structure" Encroachments
• a 4 foot encroachment into the required 15 foot front yard with a portion of the first
floor living area,
• a 1 foot encroachment into the required 5 foot portion of the east side yard setback with
a comer of the dwelling,
• a 2 foot encroachment into the required 7 foot portion of the west side yard setback with
a portion of the dwelling, and
• a 2 foot encroachment into the required 18 foot rear yard setback with a portion of the
dwelling.
"Minor Structure" Encroachments
• a covered porch overhang that encroaches into the front yard 2 feet beyond the
permitted 7 feet, with two (2) support posts that encroach 6 feet 6 inches, where the use
permit limits roof overhangs to a 7 foot encroachment when cantilevered, and
• a solid pool protection fence located in the front yard that is 3 feet 6 inches solid with 3
feet of lattice on top on the east side of lot, and 4 feet solid with 3 feet of glass on top on
the west side of the lot, where the use permit limits minor structure encroachments such
as decks and railings to a maximum height of 42 inches above the main living floor.
• a 3 foot encroachment with a covered porch overhang and a 2 foot encroachment with a
support post into the required 6 foot portion of the east side yard setback.
• a 3 foot encroachment into the west side yard setback with a covered porch overhang
and a 2 foot encroachment with a support post into the required 7 foot portion of the
east side yard setback.
Buildable Area "Major" Encroachments
The dwelling is proposed to encroach 4 feet into the required 15 foot front yard setback with first
floor living area. Staff feels that the 15 foot setback that was established for Lot #21, is
appropriate in this case and that an encroachment into the 15 feet with the living area has a direct
#21 Bay Island. Modification No. 4919
June 24. 1999
Page 4
)a
result on the amount of "Minor Structure" encroachment of the roof canopy. Because there is a
direct view to the bay from Lot #22 and the pedestrian foot bridge, the 4 foot encroachment of
the first floor, in addition to the support posts and canopy above the encroachment, have a greater
potential to block the view.
The 1 foot east side yard encroachment is a corner of the first and second floor) living areas.
Because the property line is located at an angle to the proposed dwelling, the 1 foot
encroachment is minor in nature and no views are impeded.
The 2 foot west side yard encroachment is a minor pop -out of living area on the first floor and a
bookshelf on the second floor. Staff is of the opinion that the encroachment in this area is not a
problem, in that, the majority of side yard setbacks on the island are 4 feet.
The 2 foot rear yard encroachment is a portion of the first floor only. Staff feels that this
encroachment will not be detrimental to any views, light or air, since the grade level to the rear of
the subject property is higher and the portion that encroaches is partially below grade.
"Minor Structure" Encroachments
As previously stated, a covered porch overhang with support posts is proposed to encroach 2 feet
into the 15 foot front yard setback beyond the 7 feet permitted for "Minor structure's." Staff is of
the opinion that if the first floor was built to the setback line without an encroachment, that the
overhang would be located approximately 24 feet further back, and would not encroach into the
"Minor Structure" area beyond that which is permitted. Additionally, since the overhang is
located above the level of the first floor, there is a greater potential to block views, both private
and public.
The east and west side yard encroachments with the overhang and support post does not appear
to block views, but if the entire canopy were pulled back 2 -4 feet as stated above, it is possible
that these side yard encroachments would not occur.
The pool protection fence is located in the front yard where the grade is significantly lower than
the grade of the pedestrian foot bridge which is adjacent to and runs the length of the subject
property. Staff feels that the fence will not impede views and will satisfy the Buuilding Code
requirements for pool safety.
Specific Findings and Recommendations
In order to grant relief to an applicant through a modification permit, the Modifications
Committee or the Planning Commission on review or appeal of the decision of the Committee
shall find that the establishment, maintenance or operation of the use of the property or building
will not, under the circumstances of the particular case, be detrimental to the health, safety,
peace, comfort and general welfare of persons residing or working in the neighborhood of such
proposed use or be detrimental or injurious to property and improvements in the neighborhood or
the general welfare of the City, and further that the proposed modification is consistent with the
legislative intent of this Code.
#21 Bay Island. Modification No. 4919
June 24, 1999
Page 5
,
Staff is of the opinion that the proposed dwelling is compatible and consistent with the height
and scale of the adjacent dwellings and recommends that the Planning Commission approve the
request to exceed the basic height limit.
Staff has analyzed the encroachments into the setback areas, both "Major" and "Minor" and feels
that a finding can be made for the approval of the Modification request, with the exception of the
15 foot front yard setback. Staff feels that adequate space exists within the building area
established on the Building Site Map of Use Permit No. 3618 to construct a comparable size
dwelling without the encroachment into the front yard setback, where there is a greater potential
to block views, both private and public.
Since the Use Permit allow some flexibility for "Major" and "Minor" encroachment areas, the
Planning Commission may find that under the circumstances of this particular case, the request for
the encroachments is not detrimental to the health, safety, peace, comfort and general welfare of
persons residing or working in the neighborhood. Should the Planning Commission wish to
approve Modification No. 4919, the findings and conditions of approval set forth in the attached
Exhibit "A" are suggested.
Submitted by: Prepared by:
PATRICIA L. TEMPLE EUGENIA GARCIA
Planning Director Associate Planner
PJAAeA 41.e -
Attachments: Bay Island Building Site Map
Vicinity Map
Site Plan, Floor Plans and Elevations
#21 Bay Bland, Modification No. 4919
June 24, 1999
Page 6
I
EXHIBIT "A"
FINDINGS AND CONDITIONS OF APPROVAL FOR
Modification Permit No. 4919
Modification No. 4919
Findings:
1. The Land Use Element of the General Plan and the Local Coastal Program Land Use Plan
designate the site for "Single Family Detached" residential use and the proposed development is
consistent with this use and is compatible with surrounding land uses.
2. This project has been reviewed, and it has been determined that it is categorically) exempt under
Class 3 (New Construction or Conversion of Small Structures) requirements of the California
Environmental Quality Act
3. The approval of Modification No. 4919 will not, under the circumstances of the case be
detrimental to the health, safety, peace, morals, comfort and general welfare of persons residing
or working in the neighborhood or be detrimental or injurious to property or improvements in
the neighborhood or the general welfare of the City and is consistent with the legislative intent
of Title 20 of this Code for the following reasons:
• The encroachments into the setback areas, both "Major" and "Minor" are appropriate with
the exception of the required 15 foot front yard setback, because the side ,yard and rear
encroachments are minor in nature and similar to other setbacks on Bay Island.
• The rear encroachment is located below grade, is single story, and does not block views,
air or light to adjoining residential properties.
• A condition has been included to restrict the front of the first floor to the setback line which
will result in a smaller encroachment with the canopy overhang and support posts.
• The proposed encroachments will not affect the flow of light and air to adjoining residential
properties because there is a minimum of 8 feet between the proposed dwelling and the
dwellings on Lots #19 and 20 to the west, and 21 feet between the proposed dwelling and
the dwelling located on Lot #22 to the east.
• The proposed fence :located in the 15 foot front yard setback required by the Uniform
Building Code to protect a swimming pool on the subject property and is located below the
level of the pedestrian foot bridge which will not impede views to the bay.
• The Architectural Committee of the Bay Island Club has approved the proposed
development.
#21 Bay Island, Modification No. 4919
June 24, 1999
Page 7
11
19
• The design of the proposed improvements will not conflict with any easements acquired by
the public at large for access through or use of property within the proposed development.
. Conditions:
1. The development shall be in substantial conformance with the approved site plan, floor plans
and elevations except as noted in the following conditions.
2. The first floor living area shall not encroach into the 15 foot front yard setback.
3. The covered porch overhang shall be located a minimum of 8 feet from the front property line
the front support posts shall be located a minimum of 10 feet 6 inches from the front property
line.
#21 Bay Wand. Modification No. 4919
June 24. 1999
page 8
0?3
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Rcal Estate Investment 9ers • Developers
One Galleria Tower
13355 Noel Road, LB 3
Suite 1315
Dallas, TX 75240 -6603
94
FAX
FAX (9772) 2) 9 9991 -5184
3471 Via Lido
Suite 207
Newt rt Beach, CA 92663 -3929
(949) 723 -7100
FAX (949) 723 -1141
•
June 1, 1999
City of Newport Beach
Modification Committee
City Hall
3300 Newport Blvd.
Newport Beach, California
RE: MODIFICATION No. 4919
Ladies & Gentlemen:
RECEIVED BY
PLANNING DEPARTkIENT
CITY QF N-WP'.7 r r.A.'H
AM JUN 0 7 1999 PM
71819110111112111213141516
We reside at No. 17 Bay Island. Our view to the ocean and the light available to the
gardens and common green will be impacted by this residence. In accordance with the
. notification received, we have had an opportunity to make a preliminary review of
those plans referred to in your notice. We have the following concerns and comments:
The size and bulk of the residence on this relatively small building pad at the
entrance to Bay Island compromises the scale and substantially exceeds the
size and bulk of the residence formerly situated on this lot. The residence
constitutes some 4400 square feet in a three -story configuration. We do not
believe the size and scale of this residence (which replaces the demolished
cottage) is in keeping with the scale that is appropriate on this small lot. The
residence could be reduced in size which would eliminate the need for the
i.,odiflicafio.i requesic:i.
• We object to the height of the residence in that it infringes upon established
view and light corridors. The majority of the residence is at the same grade
elevation as the adjacent two -story residence to the west. We believe a height
consistent with that residence would permit more appropriate light and views
to the ocean from established residences on the island.
• The plan proposes a small swimming pool and wall outside of the established
building envelope for this lot. We believe construction of this kind of
improvement on common area is inconsistent with the established entitlements
of shareholders with regard to the use, enjoyment and esthetics of the common
area element of Bay Island.
as
Notwithstanding the prior approval of the Bay Island architectural committee, I trust
the committee will address these issues in a manner that will provide an independent
review of the proposed plans for this residence.
We believe the residence is architecturally attractive and can easily be adapted to this
small building parcel by slightly reducing the size and eliminating the third story
element.
Very tru yours,
- E�
ritz L. Duda
0
-?%
Real Estate Investment r lers • Developers
3471 Via Lido
Suite 207
Newport Beach, CA 92663 -3929
(949) 723 -7100
FAX (949) 723 -1141
One Galleria Tower
13355 Noel Road, LB 3
Suite 1315
Dallas, TX 75240 -6603
(972) 934 -2244
IN FAX (972) 991 -5184
CITY OF NEWPORT BEACH
Planning Commission
3300 Newport Blvd.
Newport Beach, California 92663
RE: Agenda Item No. 2 — 21 Bay Island
Ladies & Gentlemen:
June 7, 1999
RECEIVED BY
PLANNING DEPARTA1ENT
CITY OF NE14rP "T L -, :H
AM JUN 0 8 1999 PM
?18191101xa11112111 ?13141518
i
We note that there are matters scheduled with respect to proposed encroachment
permits before the Modification Committee on June 8s' at 3:00 P.M. We believe all of
the subject matter should be considered by the Planning Commission as opposed to a
piecemeal evaluation by the Modification Committee along with a separate request to
the Planning Commission regarding the height limit matter.
I am enclosing a copy of our letter to the Modification Committee. Given the short
notice for evaluation and study, we would request that the Planning Commission
continue this matter for at least two (2) weeks so that all issues regarding the proposed
encroachments and height of the proposed residence may be considered.
Very truly yours,
Fritz t
FLD:sj
Enclosure
a?7
0
COUNCIL AGEN?A
acs �qa
SUPPLEMENTAL STATEMENT OF APPELLANT FRITZ DUDA
IN OXjO�JTJO�TI , TO APPLICATION OF DOUGLAS AND SALLY FLE7
AND REQUEST TO EXCEED BASIC 24 FOOT HEIGHT LIMIT FOR A
N>+ VV SINGLE iFAl1$ILY DWELLING TO BE CONSTRUCTED ON LOT 21
OF THE BAY ISLAND CLUB
Appellant is informed by the Chairman of the Planning Commission that the Planning
Commission overruled its staff recommendation and approved this Application based on the
approval of the building plans for Lot 21 by the Bay Island Club Board of Directors (the
"Board "). This Supplemental Statement is to inform the City Council that the Board's
approval of these plans was beyond the authority granted to the Board in violation of the
Bay Island Club's Amended and Restated Bylaws (the "Bylaws ")
The Bylaws do not give the Board any authority to approve construction of a new
residence outside of the Building Sites designated on the Map dated August 15, 1997 (the
dashed line and shaded minor encroachment area), attached to the Bylaws and also attached
to the Use Permit No. 3618 for Bay Island. The Bylaws at Section 8.9 require that all new
residence construction shall be located within the designated Building Site. The Bylaws state
specifically:
79840853650.001
All improvements where construction has been commenced by
a shareholder after January 1, 1998 shall not encroach on any
other shareholder's lot, shall conform to the plans and site map
approved by the Board in accordance with Section 8.8 above,
shall conform to all applicable building codes including, but not
limited to, Use Permit No. 3618, as adopted by the City Council
of the City of Newport Beach on November 24, 1997, and shall
be located within the Building Site and appurtenant "minor
structures encroachment area" delineated on the Mau.
(Emphasis added.)
A copy of the Bylaws is attached hereto as Exhibit "A."
The Board lacked authority to approve plans not authorized by the Bylaws, which
form a contract between the corporation and the shareholders. Casady v. Modern Metal
Spinning & Mfg. Co. (1961) 188 Cal.App.2d 728, 732. Moreover, the actions of the Board
in approving plans which substantially exceed the designated Building Site on four sides was
a breach of the Board's fiduciary duties to its shareholders. Posey v. Leavitt (1991) 229
Cal.App.3d 1236, 28 Cal.Rptr. 556. Based on this breach of fiduciary duty, Appellant has
demanded that the Board immediately rescind its approval of plans for Lot 21 and require
revised plans that do not exceed the designated Building Site. A copy of that demand is
attached hereto as Exhibit `B."
79800\853650.001 2
0
0
Appellant respectfully requests that in considering this Appeal, the City Council give
no weight to the Board's approval of the Applicant's plans because that approval was in
excess of the Board's authority.
Dated: July 21, 1999 By:
79840853650.001
3
TURNER AND
KEITH VAN DYKf/
Attorneys for Appellant Fritz Duda
EXHIBIT "A"
0
6/98
INDEX
AMENDED AND RESTATED BYLAWS
OF
BAY ISLAND CLUB
ARTICLE 1: PRINCIPAL PLACE OF BUSINESS: PRINCIPAL Page 1
PURPOSE OF THE CORPORATIOION
Section 1.1 Principal Place of Business Page 1
Section
1.2
Principal Purpose of Corporation
Page 1
ARTICLE
2:
SHAREHOLDERS
Page 2
Section
2.1
Building Sites
Page 2
Section
2.2
Voting: Division of Shares
Page 3
Section
2.3
Place of Shareholders' Meetings
Page 3
Section
2.4
Annual Meetings
Page 3
Section
2.5
Special Meetings
Page 3
Section 2.6 Notice of Regular Meetings Page 3
• Section 2.7 Manner of Giving Notice; Affidavit Page 3
of Notice
Section
2.8
Quorum
Page
4
Section
2.9
Adjourned Meeting
and Notice Thereof
Page
4
Section
2.10
Voting
Page
4
Section
2.11
Waiver of Notice or
Consent
Page
4
Section
2.12
Shareholder Action
by Written
Page
4
Consent Without a
Meeting
Section
2.13
Record Date for Shareholder
Notice,
Page
5
Voting and Giving
Consents
Section
2.14
Proxies
Page
5
ARTICLE
3r
DIRECTORS
Page
5
Section 3.1 Powers Page 5
Section 3.2 Shareholder's Failure to Abide by Page 7
Rules, Bylaws, or Pay Charges or
Fees
Section
3.3
Assessability of Shares
Page
8
Section
3.4
Number and Qualification of
Page
11
Section
3.11
Directors
Page
12
Section
3.5
Election and Term of Directors
Page
11
Section
3.6
Vacancies
Page
12
Section 3.7 Place of Meetings and Telephonic Page 12
Meetings
Section 3.8 Annual Meeting Page 12
Section
3.9
Quorum
Page
12
Section
3.10
Adjournment
Page
12
Section
3.11
Action Without Meeting
Page
12
Section
3.12
Fees and Compensation of Directors
Page
13
Section
3.13
Removal of Director without Cause
Page
13
by Shareholders
ARTICLE
4:
COMMITTEES
Page
13
Section
4.1
Committees of the Corporation
Page
13
Section
4.2
Nominating Committee
Page
14
ARTICLE
5:
OFFICERS
Page
14
Section
5.1
Officers
Page
14
Section
5.2
Election of Officers
Page
14
Section
5.3
Removal and Resignation of Officers
Page
15
Section
5.4
Vacancies in Offices
Page
15
Section
5.5
President
Page
15
Section
5.6
Vice President
Page
15
Section
5.7
Secretary
Page
15
Section
5.8
Chief Financial Officer
Page
16
ARTICLE
6:
INDEMNIFICATION OF DIRECTORS,
Page
16
OFFICERS, EMPLOYEES, AND OTHER AGENTS
Section
6.1
Agents, Proceedings and Expenses
Page
16
r�
LJ
11
0
Section 6.2 Actions Other than by the
Corporation
Section 6.3 Actions by the Corporation
Section 6.4 Successful Defense by Agent
Section 6.5 Required Approval
Section 6.6 Advance of Expenses
Section 6.7 Other Contractual Rights
ARTICLE 7: TRANSFERS AND LEASES
Section 7.1 Transfers, Directors' Consent and
Acceptance of Bylaws and Rules
Section 7.2 Transfer Fee
Section 7.3 Exceptions to Requirement for
Directors' Consent and /or Transfer
Fee
Section 7.4 Leases
ARTICLE 8: USE OF BAY ISLAND, CONSTRUCTION
Section 8.1 Compliance with Bylaws and Rules
Section 8.2 Residential Uses
Section 8.3 Construction Type
Section 8.4 Construction Periods
Section 8.5 Piers and Slips
Section 8.6 Boats
Section 8.7 Construction Fee
Section 8.8 Approval of Site Plan, Topographic
Map and Construction Plans
Section 8.9 Construction Requirements
ARTICLE 9: GENERAL CORPORATE MATTERS
Section 9.1 Checks, Drafts, Evidences of
Indebtedness
Page 16
Page 17
Page 17
Page 17
Page 18
Page 18
Page 18
Page 18
Page 18
Page 20
Page 21
Page 22
Page 22
Page 22
Page 22
Page 22
Page 23
Page 23
Page 23
Page 24
Page 25
Page 25
Page 25
Section
9.2
Corporate Contracts and Instruments;
Page
26
Section
10.4
How Executed
Page
27
Section
9.3
Certificates for Shares
Page
26
Section
9.4
Lost Certificates
Page
26
Section
9.5
Legal Action
Page
26
ARTICLE
10:
RECORDS AND REPORTS
Page
26
Section
10.1
Maintenance and Inspection of Share
Page
26
Register
Section 10.2 Maintenance and Inspection of Bylaws Page 27
Section 10.3 Maintenance and Inspection of Other Page 27
0
r�
LJ
Corporate Records
Section
10.4
Annual Report to Shareholders
Page
27
ARTICLE
11:
AMENDMENTS
Page
27
ARTICLE
12:
ARBITRATION
Page
27
Section
12.1
Binding Arbitration of Disputes
Page
27
Section
12.2
Effectiveness of Article 12
Page
28
0
r�
LJ
AMENDED AND RESTATED BYLAWS
or
(A California Non- Profit Corporation)
Section 1.1 Principal Place of Business. The Corpora-
tion's principal place of business shall be the Bay Island home of
the Corporation's President, until and unless changed by the Board
of Directors.
Section 1.2 Principal Purpnge of Corso a 'on.
(a) The primary business purpose of the Corporation
shall be to operate the common area facilities of Bay Island and,
in so doing, the Corporation shall maintain the highest standards
so as not to impair the value thereof. More specifically, the
Corporation and its Board of Directors shall construct, maintain
and operate adequate, safe and sanitary common area facilities,
including but not limited to any roads and bridges required to
provide access to Bay Island and improvements situated thereon and
a "sea wall" to protect Bay Island, such improvements and the
occupants thereof from damage and harm.
(b) All rental, maintenance charges and other
revenues received by the Corporation shall be invested on a
reasonable and prudent basis for the purposes of facilitating the
accomplishment of the business objectives of the Corporation at the
lowest possible operational costs, to assure that'the Corporation
is adequately capitalized and to assure the providers of goods and
services required to be purchased or engaged by the Corporation in
the course of accomplishing its business purposes that the Corpora-
tion will have sufficient funds to tender required deposits and to
otherwise pay for such goods and services on a timely basis when
and as required.
'(c) The Corporation shall operate Bay Island as a
cooperative and, in so doing, shall pay or allow a rebate or
rebates of all or portions of any assessments made upon each as
the Board of Directors may determine from time to time after paying
or providing for the payment of all obligations and expenses of
. Bylaws - 04/30/98
operating Bay Island and the establishment and maintenance of
suitable reserves. Such obligations and expenses shall include all
obligations and expenses arising out of or in connection with th
construction, ownership, maintenance and operation of the lands,
buildings and other improvements on the premises owned by the
corporation, including but not limited to taxes, assessments for
taxes, water charges, electrical charges, sewer charges and
assessments, insurance premiums, other operating expenses, profes-
sional fees, salaries and wages of employees, costs of improve-
ments, additions, alterations, replacements, repairs, interest of
mortgage indebtedness, mortgage amortization payments, discharges
of liens against Bay Island and eliminating any deficit for any
prior period, the creation of any reserve funds deemed to be
necessary by the Board of Directors for obsolescence, bad debts or
contingent losses or expenses. Moreover, the Board of Directors
may include any liabilities or items of expense which have accrued
or become payable in a prior year as well as any sums which the
Board of Directors deems necessary or prudent to establish and
maintain as.a reserve against liabilities or expenses whether then
accrued or anticipated to accrue thereafter. Any such rebates
shall be paid or allowed to the shareholders in the same ratio as
the total number of shares held by each shareholder bears to the
total of shares outstanding during the period with respect to which
such rebates are allowed and paid; provided, however, that any
rebates are payable to the shareholder of record at the time the
rebate is paid, and the transfer of a share in the Corporation
carries with it any possible entitlement to future rebates.
(d) Each shareholder shall be required to pay annual*
assessments or maintenance charges in such amounts as the Board of
Directors may determine each year based on the operating experience
of the Corporation for the preceding year. Each shareholder shall
pay such annual assessment or maintenance charges in monthly or
such other installments as the Board of Directors may determine
from time to time.
Section 2.1 Building_ Sites, The owner or owners of a
share denoting ownership in the Corporation are herein referred to
as a "shareholder ". A shareholder, together with the shareholder's
spouse, children, grandchildren and other invitees as permitted by
these bylaws, shall be entitled to the sole and exclusive use and
enjoyment of: (i) the lot which corresponds to the shareholder's
share as recorded on that certain map of Bay Island prepared by. Ron
Martin and Assoc., Inc., File No. 65101PDL.dwg, dated August 15,
1997, attached hereto as Exhibit "A" (the "Map ") ; (ii) the building
site and appurtenant minor structures encroachment rights relating
to such lot (the "Building Site ") as delineated on the Map; and
(iii) the improvements now and hereafter situated on the lot and
Bylaws - 04/30/98 2 •
Building Site, and any boat slip appurtenant thereto. No more than
one Building Site shall be permitted in connection with any share.
Section 2.2 Voting: Division of Shares. Each share
shall be entitled to one vote. No share may be divided into
fractions or held jointly by more than one person or entity, except
that a share may be owned jointly by spouses and /or family share-
holders and grandchildren, provided that the co- owners shall select
a single representative from among themselves to act on their
behalf for all purposes under these bylaws, including, but not
limited to, voting their share.
Section 2.3 Place of Shareholders, Meetings. Meetings
of shareholders shall be held at the Corporation's principal place
of business or other location identified by the Board of Directors.
Section 2.4 Annual Meetings. An annual meeting of
shareholders shall be held on the third Saturday of August of each
year at 4:00 o'clock P.M. At the annual meeting, Directors shall
be elected from the slate of nominees obtained in accordance with
these bylaws, and any other proper business may be transacted.
Section 2.5 Special Meetings.
(a) A special meeting of the shareholders may be called
at any time by a majority of the Board of Directors, the President
or by no less than seven (7) Shareholders.
(b) If a special meeting is called by any person other
than the Board of Directors or the President, the request shall be
in writing, shall specify the time of the meeting and the general
nature of the business proposed to be transacted, and shall be
delivered personally or sent by certified mail to the President,
the Vice President or the Secretary of the Corporation. The
officer receiving such request shall cause notice to be promptly
given to the shareholders entitled to vote in accordance with the
provisions hereof so that a meeting will be held not less than
thirty-five-(35) nor more than sixty (60) days after the receipt of
the request. If the appropriate notice is not given within twenty
(20) days after receipt of the request, the shareholder requesting
the meeting may give such notice.
Section 2.6 Notice of Regular Meetings. Any notice of
a regular meeting of shareholders shall be sent or otherwise given
not less than twenty (20) nor more than forty (40) days before the
date of the meeting being noticed. Such notice shall specify the
place, date and hour of the meeting and those matters which the
Board of Directors intends to present for action by the.sharehold-
ers at the time of the giving of such notice.
Section 2.7 Manner of Giving Notice, Affidavit of
Notice. Notice of any meeting of shareholders shall be delivered
Bylaws - 04/30/98
personally or sent by first -class mail, postage prepaid, and
addressed to each shareholder at the address of such shareholde
appearing on the books of the Corporation or more recently given b
the shareholder to the Corporation for the purpose of notice.
Notice shall be deemed to have been given at the time when deliv-
ered personally or deposited in the mail.
Section 2.8 ouorum. The presence in person or by proxy
of the holders of a majority of the shares entitled to vote at the
meeting of shareholders shall constitute a quorum for the transac-
tion of business. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to transact
business until adjournment, notwithstanding the withdrawal or
departure of a number of shareholders that results in less than a
quorum remaining, so long as any action taken (other than adjourn-
ment) is approved by at least a majority of the shares required to
constitute a quorum.
section 2 -9 AQ10urnea Meeting and Notice Thereof. Any
shareholders' meeting, either annual or special, and whether or not
a quorum is present, may be adjourned from time to time by the vote
of a majority of the shares represented at such meeting, either in
person or by proxy, but in the absence of a quorum, no other
business may be transacted at such meeting, except as provided in
Section 2.8.
Section 2.10 voting. The shareholders entitled to vote
at any meeting of shareholders shall be determined in accordance
with the provisions of Section 2.13. If a quorum is present, the
affirmative vote of a majority of the shares represented at the
meeting and entitled to vote on any matter (other than the election
of Directors) shall be the act of the shareholders unless the vote
of a greater number is required by the California Corporations Code
(the "Code ") or the Articles of Incorporation.
Section 2.11 Waiver of Notice or Consent. Attendance of
a person at a meeting shall constitute a waiver of notice of such
meeting unless such person objects to the transaction of any
business at the beginning of the meeting because the meeting has
not been lawfully called or convened. However, attendance at a
meeting shall not be deemed to constitute a waiver of any right to
object to the consideration of matters required by the Code to be
included in the notice of the meeting by the Code but not so
included if such objection is expressly made at the meeting.
Section 2.12 qharehn1LJL=r Action by Written Consent
Without a Meetin a. Any action which maybe taken at any annual or
special meeting of shareholders may be taken without a meeting and
without prior notice if written consents setting forth the action
so taken are signed by all shareholders. All such consents shall
be filed with the Secretary of the Corporation and shall be
maintained in the corporate records.
Bylaws - 04/30/98 4 .
Section 2.13 Record Date for ShareholrlAr No Vo i
and Giving Consents,
(a) For purposes of determining the shareholders
entitled to notice of any meeting, or to vote on, or to give
consent to a corporate action without a meeting, the Board of
Directors may fix, in advance, a record date which shall be fifteen
(15) calendar days prior to the mailing date of shareholders -
notices of the meeting and in any such case only those persons who
are shareholders at the close of business on the date so fixed
shall be entitled to notice and to vote or to give consents, as the
case may be, notwithstanding any transfer of any shares on the
books of the Corporation after the record date fixed as aforesaid.
date:
(b) If the Board of Directors does not so fix a record
(1) the record date for determining shareholders
entitled to notice of, or to vote at,, a meeting of sharehold-
ers shall be the day next preceding the day on which notice
is given or, if notice is waived, the day next preceding the
day on which the meeting is held; and
(2) the record date for determining shareholders
entitled to give consent to corporate action in writing
without a meeting, (A) when no prior action of the Board has
been taken, shall be the day on which the first written
consent is given, or (B) when prior action of the Board has
been taken, shall be the day on which the Board adopts the
resolution relating thereto.
Section 2.14 Proxies. Every shareholder entitled to
vote shall have the right to do so by signed, written proxy valid
only for the meeting or meetings expressly identified by the
shareholder in the proxy; provided, however, that no such proxy
shall be valid after the expiration of eleven (11) months from the
date of such proxy unless otherwise provided therein, subject to a
maximum term of three years from the date of execution. Any
written proxy may be revoked upon written notice to the Corpora-
tion's Secretary and signed by the shareholder granting the proxy.
(a) Subject to the provisions of the Code and any
limitations in the Articles of Incorporation and these bylaws, the
business affairs of 'the Corporation shall be managed and all
corporate powers shall be exercised by or under the direction of
the Board of Directors in accordance with these bylaws.
Bylaws - 04/30/98 5
(b) Without prejudice to such general powers, but
subject to the same limitations, the Board of Directors shall have
the power and authority to:
(1) select and remove all officers, agents, and
employees of the Corporation, prescribe such powers and
duties for them as are not inconsistent with law, the Arti-
cles of Incorporation or these bylaws, fix their compensa-
tion, and require from them a bond for faithful service;
(2) change the principal business office in the
State of California from one location within Orange or Los
Angeles County to another; adopt, make and use a corporate
seal; prescribe the forms of certificates of stock; and alter
the form of such seal and of such certificates;
(3) borrow money and incur indebtedness for the
benefit of the Corporation and /or its property (and execute
any agreements and other instruments in connection therewith)
in amounts, in the aggregate, up to Twenty -Five Thousand
Dollars and No Cents ($25,000.00), or, in cases of emergency,
up to One Hundred Thousand Dollars and No Cents
($100,000.00), provided that the shareholders are apprised of
the Board's authorization to increase corporate borrowing'in
the event of an emergency in excess of Twenty -Five Thousand
Dollars ($25,000.00) within thirty (30) days after adoption
of the pertinent resolution. By "emergency" is meant any
casualty including, without limitation, a fire, an earth-
quake, tidal damage or a seawall or bridge collapse;
(4) adopt rules and regulations related to the
maintenance, clean -up, aesthetics and common enjoyment and
use of Say Island and to the construction, remodeling, main-
tenance and appearance of all improvements on the Building
Sites. Any rule or regulation proposed for adoption by the
Board shall first be disseminated among all shareholders in
accordance with Section 2.7 above at least thirty (30) days
prior to its proposed effective date for- comment and /or
objection, and the Board's decision shall be final and bind-
ing, except in cases where the Board receives written objec-
tions from a majority of the shareholders, in which event the
Board of Directors shall be prohibited from adopting the
subject rule;
(5) adopt rules, and regulations related to the
architectural and structural appearance and construction of
all future improvements (including, without limitation,
residences, piers and slips) and landscaping on Bay Island,
including, without. limitation, rules concerning set -backs
from each of the boundary lines of a property, building
heights and other design and planning issues,to ensure safe,
aesthetically compatible and harmonious design, development
Bylaws - 04/30/98 6 10
and appearance of Bay Island, consideration for shareholders
owning adjoining Building Sites, and enjoyment of Bay Island
as a whole by its shareholders. Any rule proposed for adop-
tion by the Board shall first be disseminated among all
shareholders in accordance with Section 2.7 above at least
thirty (30) days prior to its proposed effective date for
comment and /or objection, and the Board's decision shall be
final and binding, except in cases where the Board receives
written objections from a majority of the shareholders, in
which event the Board shall be prohibited from adopting the
subject rule; in this regard the Board is authorized to set
such fees as it deems necessary to defray any costs to the
Corporation of implementing any adopted rule;
(6) hire such architects, consultants, and other
experts as the Board deems necessary or advisable to promul-
gate rules as authorized herein;
(7) assess fees against a shareholder in connec-
tion with his or her construction of future improvements in
amounts reasonably necessary to defray the Corporation's
expenses in carrying out the Board's authority under these
bylaws and its rules, provided that any amounts in excess of
such expenses shall be refunded to the shareholder;
(8) create a reserve fund in an amount to be
determined by the Board of Directors for the anticipated
costs associated with substantial capital improvements and /or
repairs; and
(9) charge each shareholder, on a periodic basis
determined by the Board of Directors, with a proportionate
portion of the Corporation's recurring expenses, including
but not limited to common area expenses and property taxes.
GPCtion 3.2 Shareholder's Failure to Abide by Rules.
Bylaws, or Pay Charges or Fees. The Board of Directors is empow-
ered to enforce any rules promulgated and in effect or any of these
bylaws, or to enforce payment of any charge or fee owed by a
shareholder, in accordance with this subsection. In the case of an
alleged violation of a rule or bylaw, the Board shall notify each
offending shareholder of the nature of the alleged violation and
set a hearing, at which the shareholder is allowed to be present to
respond to the matter, on a date not more than thirty (30) nor less
than ten (10) days following the date of the notice.. The notice
shall be served on the shareholder either personally or by first
class, registered mail. The Board shall then render its decision
not more than thirty (30) days after the hearing or any continua-
tion thereof. In the .event that the 'Board concludes. that a
violation of a rule or a bylaw exists, the shareholder shall have
not less than fifteen (15) days to cure said violation after notice
thereof. If the shareholder fails to completely cure the viola-
Bylaws - 04/30/98 7
tion, or satisfy the Board that the shareholder is working dili-
gently to cure the violation if it is not capable of cure within
said period, or in the event a shareholder is delinquent in payment 1W
of a charge or fee, the Board is authorized to take any lawful
action as it determines, including (a) any appropriate judicial
action, (b) any action permitted it under these bylaws, or (c)
contracting with a clean -up crew or other third party to take
remedial action on the shareholder's Building Site, at the share-
holder's cost. In the event of any such judicial action, the
Corporation shall be entitled to recover its reasonable attorney
fees incurred in such action, in addition to any other recovery
awarded by the court.
(a) The Board of Directors is hereby authorized from
time to time to levy and collect assessments on all of the shares
of the Corporation as they may in their discretion deem advisable
provided that the shares are assessed equally and each share may
not be assessed more than $50,000.00 in any consecutive twelve (12)
month period unless a majority of the shareholders so approve.
(b) Every levy of an assessment must: (1) specify the
amount of the levy; and (2) fix a date on which the assessment is
due and payable.
(c) At least thirty (30) days before an assessment is
payable, the Secretary of the Corporation must give notice thereof
in substantially the following form:
Notice is
Directors on
assessment of
($ ) per share upon the shares of the Corpora-
tion payable to The due
date for payment on the assessment is
Failure to pay the assessment
risks the imposition of a penalty of five percent (5W)
of the amount of the assessment and the sale of the
shareholder's share or shares.
(Name of Shareholder]
Bay Island Club
No. , Bay Island
Newport Beach, CA
hereby given to you that the Board of
has levied an
(d) The notice must be served personally on each
shareholder and, where a share is owned by more than one person,
the representative of the multiple owners (as stipulated by the
owners in accordance with § 2:2 above) or, alternatively, in lieu
of personal service, the notice may be mailed to each such share-
holder and representative addressed to the last address of the •
Bylaws - 04/30/98 8
shareholder and representative appearing on the books of the
Corporation or given by the shareholder and the representative to
the Corporation for the purpose of notice.
(e) The assessment is a lien on the shares assessed from
the time of the issuance of the notice of assessment by the Board
of Directors in accordance with this Section 3.3. Unless otherwise
provided by law, a transfer of the shares on the books of the
Corporation after the lien of an assessment has attached is a
waiver of the lien unless a conspicuous legend is placed on the
face of any certificate issued on such transfer setting forth the
information required to be contained in the notice of assessment as
set forth above. Such legend must be removed if the assessment on
the shares evidenced by the certificate is paid or if the shares
are sold to pay the assessment or forfeited for nonpayment.
(f) The Secretary shall promptly notify, in accordance
with the foregoing, any shareholder whose assessment is not
received by the due date fixed in the notice of assessment that his
or her assessment has not been received and that it must be
received within thirty (30) days of the date of the service of the
Secretary's notice made in accordance with this subpart (f). In
addition, the same notice shall state that a penalty of five
percent (5 %) is also due with the payment. If a shareholder's
payment is not received by the expiration of such thirty (30) days,
the Secretary 'shall promptly again notify, in accordance with the
foregoing, the shareholder that his assessment has not been
received and that it must be received, together with the penalty,
within (30) days of the date of the second notice or the share-
holder's share will be sold on a date fixed in the discretion of
the Board of Directors but which is not less than fifteen (15) days
thereafter.
(g) The date of sale of delinquent shares fixed by the
Board of Directors shall be not less than fifteen (15) days after
expiration of the thirty (30) days from the second notice described
in subpart (f) above and may be extended from time to time for not
more than thirty (30) days at a time by order of the Board of
Directors entered on the records of the Corporation, or when the
sale is restrained by order of a court.
(h) A shareholder may redeem his share or shares by
paying the delinquent assessment and the penalty at any time, if
paid in full, prior to the sale of his share or shares.
(i) At the place and time appointed in the notice of .
levy, any officer or an agent of the Corporation must, unless
otherwise ordered by the Board of Directors, sell or cause to be
sold to the highest bidder the del inquent 'shareholder I s. share or
shares for cash, subject to the approval of the Board of Directors
as hereinafter set forth, The highest bidder is the person
offering at the sale to pay the assessment and penalty, as well as
Bylaws - 04/30/98 9
the highest price for the shareholder's share or shares. The
Corporation is not, however, permitted to accept an offer for a
fraction of a share.
(j) if no bidder offers to pay the amount due on the
share, together with the five percent (5 %) penalty provided in the
notice of the levy of the assessment, the share shall be forfeited
to the Corporation in satisfaction of the assessment and penalty.
(k) After the sale or forfeiture of shares as herein
provided, the shareholder must surrender the certificate for such
shares to the Corporation for cancellation. This duty may be
enforced by court order or decree and the holder or owner shall be
liable to the Corporation for damages for failure to surrender the
certificate for cancellation or demand without good cause or
excuse. Any certificate not so surrendered forthwith becomes null
and void and ceases to be evidence of the right or title of the
holder or any transferee to the shares purporting to be represented
thereby, and neither the Corporation nor the purchaser of the
shares incurs any liability thereon to any such transferee. The
purchaser of shares at a delinquency sale, whenever made, is
entitled to the issue of a new certificate representing the shares
so purchased.
(1) The certificate of the Secretary or of an Assistant
Secretary of the Corporation is prima facie evidence of the time
and place of sale and any postponement of it, of the quantity and
particular description of the shares sold, to whom, for what price, 0
and of the fact of payment of the purchase money. The certificate
must be filed in the office of the Corporation. Copies of the
certificate, certified by the Secretary of the Corporation, are
prima facie evidence of the facts stated in the certificate.
(m) No action by a delinquent shareholder shall be
maintained to recover shares to be sold or sold for delinquent
assessments on the ground of irregularity in the assessment,
irregularity or defect of the notice of sale, or defect or irregu-
larity in the sale, unless the party seeking to maintain the action
first pays or tenders to the Corporation, or to the party holding
the share sold, the sum for which the share was sold, together with
all subsequent assessments which may have been paid thereon and
interest on such sums from the time they were paid. No such action
shall be maintained unless it is commenced by the filing of a
complaint and the issuing of a summons thereon within six (6)
months after the sale was made.
(n) In addition to the remedy for collection of an
assessment as provided herein, the Corporation may, without causing
the delinquent shares to be sold or forfeited, enforce any assess-
ment against the shareholder by judicial action, provided that the
Articles of Incorporation have been amended by unanimous approval
of the shareholders to adopt such remedy. A statement of the
Bylaws - 04/30/98 10
availability of such remedy must appear on the face of any share
certificate issued for such shares. Such a remedy may provide that
the shareholder shall be liable, in addition to the delinquent
assessment, for the Corporation's attorneys fees incurred in such
action and for interest on the delinquent amount at the lower of
10% per annum or the highest rate of interest allowed by law.
(o) Notwithstanding anything to the contrary above, no
sale shall be deemed final until and unless the Board of Directors
approves the purchaser of the share or shares. The Board shall act
to approve or disapprove the purchaser within thirty (30) calendar
days of the sale; if it disapproves the purchaser, a new sale shall
be conducted in accordance with subparts (i) at sea. above within
thirty (30) calendar days after such disapproval until a sale
results in the purchase of the share or shares by a purchaser
acceptable to the Board of Directors.
(p) In the event that a shareholder sells his share or
shares while an assessment is outstanding and unpaid, prior to
enforcement action having been completed by the Corporation, the
outstanding assessment(s) and penalties must be paid in full at the
time of sale, which payment shall be in addition to any transfer
fee due the Corporation.
Section 3.4 Number and Oualification of Di o S. The
authorized number of Directors shall be five (5). Each director,
as a condition to holding office, shall either be a shareholder,
the spouse of a shareholder, or the son or daughter of a share-
holder, or the son -in -law or daughter -in -law of a shareholder, or
the beneficiary of a trust where a share is held in trust, and at
least twenty -one (21) years old. If a director no longer qualifies
under any of the foregoing conditions, he or she shall be disquali-
fied from holding office and his or her office declared vacant by
the Board.
Section 3.5 Election and Term of Directors. Directors
shall be elected at each annual meeting of the shareholders. Each
director's 'term shall be two (2) years, with two of the five
Directors elected every other year and three of the five Directors
elected in the intervening years. Each Director elected to fill a
vacancy shall hold office for the duration of the term of the
Director whose office he or she has been elected to fill. After an
election (or subsequent elections as explained below) the nominees
accumulating the highest number of votes down to the number of
vacancies to be filled shall be deemed elected. to the Board of
Directors. In the event there is only one vacancy to fill, the
nominee accumulating the highest number of votes shall be deemed
elected. In the event of a tie among nominees down to.the lowest
order to be elected to fill a vacancy, another election shall
immediately be held among the shareholders, with only those tied
nominees eligible for election. If necessary, consecutive elec-
tions shall be held until one of such nominees receives the higher
0 - Bylaws - 04/30/98 11
(or highest) number of votes. By way of illustration only using an
election to fill three vacancies as an example, the nominees
receiving the first, second, and third highest vote totals shall be
deemed elected; if the two nominees receiving the highest totals
are tied, then they, together with the nominee receiving the next
highest total, shall be deemed elected; if four (or more) nominees
receive the highest total votes, then all of them - and no other
nominees - shall participate in another election until the tie is
broken and only three nominees end up with the highest vote totals;
if there are two or more nominees who tie with the third highest
vote total then each of these nominees - and no others -shall
participate in another election until the tie is broken.
Section 3.6 Vacancies. Vacancies in the Board of
Directors may be filled by a vote of the majority of the remaining
Directors, though less than a quorum, or by a sole remaining
Director, except that a vacancy created by the removal of a
Director by the vote or written consent of the shareholders or by
court order may be filled only by the approval of the shareholders
voting at a duly held meeting at which a quorum is present, or by
the unanimous written consent of all shareholders entitled to vote
for the election of Directors.
Section 1.7 plarp c
Meetings. Meetings of the Board of
Bay Island home of the President of
agreed upon by all of the Directo
tion's President or two (2) or more
held by telephone conference.
)f Meetings and T 1 nhonic
Directors shall be held at the
the Corporation or other place
rs when called by the Corpora -
Directors. Any meeting may be
Section 3.8 Annual Meetingz. Immediately following each
annual meeting of shareholders, the Board of Directors shall hold
a regular meeting for purposes of considering organizational
matters, any desired election of officers and the transaction of
other business. Notice of such meeting shall not be required.
Section 3.9 ouorum. A majority of the authorized number
of Directors shall constitute a quorum. Every act or decision done
or made by a majority of the Directors present at a meeting duly
held at which a quorum is present shall be regarded as the act of
the Board of Directors. A meeting at which a quorum is initially
present may continue to transact business, notwithstanding the
withdrawal or departure of Directors, if any action taken is
approved by at least a majority of the required quorum for such
meeting.
.ge 'on 1.10 Adjournment'. A majority of the Directors
present, whether or not constituting a quorum, may adjourn any
meeting to another time and place.
Section 3.11 Action Without Meeting. Any action
required or permitted to be taken by the Board of Directors may be
Bylaws - 04/30/98 12 0
LI
taken without a meeting if all shareholders of the Board, individu-
ally or collectively consent, in writing, to such action, Such
action by written consent shall have the same force and effect as
a unanimous vote of the Board of Directors, Such written consent
or consents shall be filed with the minutes of the proceedings of
the Board.
Section 3.12 Fees and Compensation of Dir rnrs,
Directors and shareholders of committees may receive such compensa-
tion, if any, for their services and reimbursement of such expenses
as may be fixed or determined by resolution of the Board of
Directors.
Section 3.13 Removal of Director Without Cause by
Shareholders. Any director may be removed, with or without cause,
if such removal is approved by a majority of all shareholders,
Section 4.1 Committees of the Corporation. The Board of
Directors may, by resolution adopted by a majority of the autho-
rized number of Directors, designate one or more committees, each
consisting of two (2) or more Directors and one (1) or mgre
shareholders who are not Directors, to serve at the pleasure of the
Board. The authority of any such committee shall be to report to
the Board with respect to the subject matter of the committee, with
any action by the Corporation on such matter to be taken only by
the Directors in accordance with these bylaws. No committee shall
have any authority to take any of the following actions:
(a) the approval of any action which, under the Code,
also requires shareholders' approval;
(b) the filling of vacancies on the Board of Directors
or in any committee;
(c) the fixing of compensation of the Directors for
serving on the Board or on any committee;
(d) the amendment or repeal of bylaws or the adoption of
new bylaws;
(e) the amendment or repeal of any resolution of the
Board of Directors which, by its express terms, is not so amendable
or repealable; or
(f) the appointment of any other committees of the Board
of Directors or the shareholders thereof.
0 Bylaws - 04/30/98 13
(a) Not less than thirty (30) days before the next
shareholders' annual meeting or a special election of shareholders
called to fill a vacancy on the Board in accordance with Section
3.6 above, the Board of Directors shall appoint a committee of
three (3) shareholders who are not then Directors to serve on the
Corporation's Nominating Committee to administer nominations of
shareholders for election to the Board of Directors.
(b) Any shareholder may be nominated for election to the
Board of Directors provided the Nominating Committee receives a
petition signed by at least three shareholders nominating such
shareholder (not including the proposed nominee). The Committee
shall take any measures reasonably required to verify the signa-
tures on the petition. Only current shareholders may be nominated
to the Board of Directors.
(c) In addition to nominations obtained as above, the
Nominating Committee shall nominate no less than the number of
shareholders equal to the number of Directors' vacancies to be
filled at the forthcoming meeting less the number of nominees
presented in accordance with subpart (b) above. At least two of
the three Nominating Committee persons must vote affirmatively eor
a shareholder for that shareholder to qualify for nomination. The
Committee's nominations, together with any nominee put forth in
accordance with subpart (b) above shall be disseminated to all
shareholders prior to the shareholders' meeting.
(d) Notwithstanding anything to the contrary above,
nominations to the office of Director may also be made from the
floor at the time of the shareholders' meeting to elect Directors,
provided each such nomination is seconded by at least two (2)
shareholders.
Section 5.1 Officers, The officers of the Corporation
shall be a President, a Vice - President (in the discretion of the
Board of Directors), and a Chief Financial Officer, each of whom
shall be a shareholder, and a Secretary. The same person may serve
in two or more officer positions. The Corporation may also have,
at the discretion of the Board of Directors, such other officers as
maybe appointed in accordance with the provisions of Section 5.3.
Each officer, with the exception of the Secretary, shall be a
shareholder of the Board of Directors.
Section 5.2 Election of Officers.. The officers of the
Corporation shall be chosen by the Board of Directors, and each
shall serve at the pleasure of the Board, subject to the rights, if
any, of an officer under any contract of employment.
Sylaw9 - 04/30/98 14 0
Section 5.3 Removal and Resignation of Officers,
(a) Subject to the rights, if any, of an officer under
any contract of employment, any officer may be removed, either with
or without cause, by the Board of Directors, at any regular or
special meeting thereof, or, except in case of an officer chosen by
the Board of Directors, by any officer upon whom such power of
removal may be conferred by the Board of Directors.
(b) Any officer may resign at any time by giving written
notice to the Corporation.
Section 5.4 Vacancies in offices. A vacancy in any
office because of death, resignation, removal, disqualification or
any other cause shall be filled in the manner prescribed in these
bylaws for regular appointments to such office.
Section 5.5 President. The President shall be the
general manager and chief executive officer of the Corporation and
shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and the
officers of the Corporation. He shall preside at all meetings ,of
the shareholders and at all meetings of the Board of Directors. He
shall have the general powers and duties of management usually
vested in the office of President of a Corporation, and shall have
such other powers and duties as may be prescribed by the Board of
Directors or the bylaws.
Section 5.6 Vice President. In the absence or disabil-
ity of the President, the Vice President, if any, shall perform all
the duties of the President, and when so acting shall have all the
powers of, and be subject to all the restrictions upon, the
President. The Vice President shall have such other powers and
perform such other duties as from time to time may be prescribed
for him /her by' the Board of Directors or the bylaws, or the
President.
(a) The Secretary shall keep or cause to be kept at the
Secretary's offices, or such other place as the Board of Directors
may designate, a book of.minutes of all meetings and actions of
Directors, of the committees, and of the shareholders, with the
time and place of holding, whether regular or special, and,. if
special, how authorized, the notice. thereof given, the names of
those present at Directors' and committee meetings, the number of
shares present or represented at shareholders' meetings, and the
proceedings thereof.
(b) The Secretary shall keep or cause to be kept at the
Secretary's offices a share register, or a duplicate share regis-
Bylaws - 04/30/98 15
ter, showing the names of all shareholders and their addresses, the
number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation,
(c) The Secretary shall give, or cause to be given,
notice of all meetings of the shareholders and of the Board of
Directors required by the bylaws.
(d) The Secretary shall keep and maintain, or cause to
be kept and maintained, adequate and correct books and records of
accounts of the properties and business transactions of the
Corporation.
The Chief Financial Officer shall cause to be deposited
all moneys and other valuables in the name and to the credit of the
Corporation with such depositories as may be designated by the
Board of Directors. He shall cause the funds of the Corporation to
be disbursed as he may be properly directed from time to time,
shall render to the President and Directors, whenever they request
it, an account of all of his transactions as Chief Financ }al
Officer and of the financial condition of the Corporation, and
shall have other powers and perform such other duties as may be
prescribed by the Board of Directors or the bylaws.
u ' • 1 �P • M. �Y
Section 6.1 Aaents. Proceedingts and Expenses. For the
purposes of this Article, "agent" means any person who is or was a
Director, officer, employee, or other agent of this Corporation, or
was a director, officer, employee, or agent of a foreign or
domestic Corporation which was a predecessor Corporation of this
Corporation or of another enterprise at the request of such
predecessor Corporation; "proceeding" means any threatened, pending
or completed action or proceeding, whether civil, criminal,
administrative, or investigative; and "expenses" includes, without
limitation, attorneys' fees and any expenses of establishing a
right to indemnification.
Section 6.2 Actions Other than by the Coloration. This
Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any proceeding (other than an
action by or in the right of this Corporation, an action brought
under Section 5233 of the Code or an action by the Attorney General
for any breach of duty) by reason of the fact that such person is
or was an agent of this Corporation, against expenses, judgments,
fines, settlements and other amounts actually. and reasonably
incurred in connection with such proceeding, if that person acted
Bylaws -- 04/30/98 16
in good faith and in a manner that person reasonably believed to be
in the best interests of this Corporation, and, in the case of a
criminal proceeding, had no reasonable cause to believe the conduct
of that person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction, or upon a plea of nnIn
contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best
interests of this Corporation or that the person had reasonable
cause to believe that the person's conduct was unlawful.
Section 6.3 Actions by t-btm ro pnration. This Corpora-
tion shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or
completed action by or in the right of this Corporation to procure
a judgment in its favor, an action brought under Section 5233 of
the Code or an action by the Attorney General for any breach of
duty, by reason of the fact that person is or was an agent of this
Corporation, against expenses actually and reasonably incurred by
that person in connection with the defense or settlement of that
action if that person acted in good faith, in a manner that person
believed to be in the best interests of this Corporation and its
shareholders. No indemnification shall be made under this Section
6.3 for any of the following: .
(a) in respect of any claim, issue or matter as to which
that person shall have been adjudged to be liable to this Corpora -
tion in the performance of that person's duty to this Corporation
and its shareholders, unless and only to the extent that the court
in which that action was brought shall determine upon application
that, in view of all the circumstances of the case, that person is
fairly and reasonably entitled to indemnity for expenses and then
only to the extent that the court shall determine;
(b) of amounts paid in settling or otherwise disposing
of a pending action without court approval; or
(c) of expenses incurred in defending a pending action
which is settled or otherwise disposed of without court approval
unless such action concerns assets held in charitable trust and is
settled with the approval of the Attorney General.
Sec ion 6.4 Su -,-,ful Defence by Agent. To the extent
that an agent of this Corporation has been successful on the merits
in defense of any proceeding referred to in Section 6.2 or Section
6.3 of this Article 6, or in defense of any claim, issue, or matter
therein, the agent shall be indemnified against expenses actually
and reasonably incurred by the agent in connection therewith.
Section 6.5 Required Approval. Except as provided in
Section 6.4 of this Article, any indemnification under this Article
Bylaws - 04/30/98 17
shall be made after approval of the Directors, the shareholders or
any court as required by California law.
Section 6.6 Advance of Hxnenses. Expenses incurred in le
defending any proceeding may be advanced by this Corporation.
Section 6.7 Other Contractual Rights. No provision to
indemnify the Directors or officers for the defense of any proceed-
ing, regardless of where provided, shall be valid unless consistent
with this section.
tance of Bylaws and Rules. Any transfer, assignment or sale of a
share, or any interest therein, shall be subject boeh to the
consent of a majority of the Board of Directors and the trans-
feree's written acceptance of the bylaws of the Corporation and any
existing rules enacted by the Board. Any transfer, assignment or
sale of a share, or any interest therein, without such consent by
the Board and the transferee's acceptance of the bylaws and rules
shall be automatically void and of no force or effect, without any
action required on the part of the Corporation or the Board. The
Board shall act to give or withhold its consent to the transferee
within thirty (30) days of notice to it of the transfer or intended
transfer. In the event that a share, or any interest therein, is
to be transferred to a church or other charitable entit, for
philanthropic and /or estate - planning purposes, or to a lender%upon
foreclosure or other realization upon a share held as security, or
otherwise to a transferee that does not intend to use and occupy
the residence for single family residential purposes, the trans-
feree must, as a condition to issuance of a share, agree to any
reasonable limitations (in addition to those otherwise applicable
generally to shareholders) that the Board of Director may impose
upon the use and occupancy of the residence during the period such
transferee holds the share, and further agree with the Board of
Directors upon a plan for the holding and disposition of such
share; which plan will encompass a specified holding period of not
to exceed eighteen (18) months and a commitment to thereafter
undertake, and diligently pursue to completion, the marketing and
sale of such share to a transferee who intends to use and occupy
the residence for single family purposes.
Section 7.2 'transfer Fee. Upon the sale of a share in
the Corporation, as a condition to the issuance of a share certifi-
cate to a new owner, a transfer fee is payable.to the Corporation
as follows%
(a) If the share is sold within twelve (12) months of
acquisition thereof by the selling shareholder, a transfer fee of
six percent (W of the gross sales price, such transfer fee
Bylaws - 04/30/98 18 0
declining thereafter by one percent (1 %) for each additional twelve
(12) months that the share has been held to a minimum of one
percent (1 %). The Board of Directors shall have the right, but not
the obligation, to reduce the transfer fee otherwise payable where
the Board of Directors determines, in its sole and absolute
discretion, that severe illness and /or severe physical disability,
death, or divorce of a shareholder has required the bona fide sale
of a share to an unrelated third party earlier than would otherwise
have been the case; in such event, the amount of any adjustment
shall be in the sole discretion of the Board except that in no
event shall any transfer of a share in the Corporation (except as
otherwise provided in these bylaws) be subject to a transfer fee of
less than one percent (1%) of the gross purchase price.
(b) A foreclosure, deed in lieu of foreclosure or like
transaction whereby a bona fide financial institution lender who
made -an arm's length loan to a shareholder realizes upon a share
that was collateral for such loan shall be subject to a transfer
fee payable at the time the share is transferred on the books of
-the Corporation to a transferee other than the bona fide financial
institution lender, as follows: one percent (1%) of the gross sale
price if the transfer occurs concurrently with the foreclosure or
other realization upon the share as security for the loan or within
one twelve (12) calendar months thereafter, such transfer fee
increasing thereafter by one percent (1 %) of the gross sales price
for each additional twelve (12) months that the share has been held
to a maximum of six percent (6 %) of the gross sales price.
a(c) Sale of a share by a shareholder that is a church or
other charitable organization shall be subject to a transfer fee
payable at the time the share is transferred on the books of the
Corporation to a transferee other than such church or other
charitable organization, as follows: one percent (1%) of the gross
sale price if the transfer within twelve (12) calendar months of
acquisition, such transfer fee increasing thereafter by one percent
(1 %) of the gross sale price for each additional twelve (12) months
that the share has been held to a maximum of six percent (0) of
the gross sale price.
(d) A foreclosure, deed in lieu of foreclosure or like
transaction whereby a former shareholder that has sold a share and
received a note secured by the share sold as part of the purchase
price realizes upon such share shall be subject to a transfer fee
payable at the time the share is transferred on the books of the
Corporation to a transferee other than such former shareholder,
computed pursuant to the formula in subparagraph (a) above, with
such foreclosing shareholder being treated as if the foreclosed
share had been acquired as of the date such foreclosing former
shareholder originally became a shareholder of Bay Island Club.
0 Bylaws - 04/30/98 19
L_oncent anaior lranscer ree.
(a) Notwithstanding anything to the contrary herein, any
shareholder may transfer his or her share to an inter vivos trust
established by such shareholder, provided that the trust is
established for the benefit of the trustor, and /or his or her
spouse, and /or the lineal descendants by birth or adoption of the
shareholder or the shareholder's spouse, without first obtaining
the Directors' consent or assessment of the transfer fee.
(b) Notwithstanding anything to the contrary herein, a
shareholder's share (or an interest therein) may be transferred
upon his or her death by will, by trust, by intestate succession,
or otherwise, without the need for the Directors' consent or
assessment of the transfer fee, provided the transfer is to the
shareholder's spouse or the lineal descendants by birth or adoption
of the shareholder or the shareholder's spouse.
(c) Notwithstanding anything to the contrary herein, a
shareholder may transfer his or her share any time during his or
her lifetime to the shareholder's spouse or the lineal descendants
by birth or adoption of the shareholder or the shareholder's
spouse, without the Directors' consent or assessment of the
transfer fee.
(d) Notwithstanding anything to the contrary herein, no
transfer fee is payable at the time a bona fide financial institu�
tion lender accepts a share as security for a bona fide arm's
length loan, and the Board of Directors shall not unreasonably
withhold its consent in connection with the pledging of a share as
security for a loan to a shareholder from a bona fide financial
institution lender. A transfer fee shall not be payable upon
foreclosure or other realization upon a share held by a bona fide
financial institution lender as security for a bona fide loan to a
shareholder in circumstances where the bona fide financial institu-
tion lender is the acquirer of the share as "real estate owned," as
that term is commonly utilized in the real estate lending industry,
and the Board of Directors shall not unreasonably withhold its
consent to the transfer of the shareholder's share on the books of
the Corporation to the bona fide financial institution lender,
provided that the Corporation is furnished with such undertakings
as the Board of Directors may reasonably require to assure the
Corporation that the bona fide financial institution lender has
properly acquired the share. Disposition of a pledged share upon
foreclosure or in other situations where the bona fide financial
institution lender to the shareholder is not the acquirer shall-be
subject to the consent of the Board of Directors, the payment of
the transfer fee provided herein above, and such undertakings as
the Board of Directors may reasonably require to assure the
Corporation that the buyer has properly acquired the share.
Bylaws - 04/30/98 20 .10
(e) Notwithstanding anything to the contrary herein, no
transfer fee is payable upon foreclosure or other realization upon
a share held by a former shareholder as security for a purchase
money loan made to the buyer of such shareholder's share in
circumstances where the former shareholder is the acquirer of the
share, and the Board of Directors shall not unreasonably withhold
its consent to the transfer of the shareholder's share on the books
of the Corporation to the former shareholder, provided that the
Corporation is furnished with such undertakings as the Board of
Directors may reasonably require to assure the Corporation that the
former shareholder has properly reacquired the share. Disposition
of a pledged share upon foreclosure or in other situations where
the former shareholder is not the acquirer shall be subject to the
consent of the Board of Directors, the payment of the transfer fee
provided herein above, and such undertakings as the Board of
Directors may reasonably require to assure the Corporation that the
buyer has properly acquired the share.
(f) Notwithstanding anything to the contrary herein, no
transfer fee is payable at the time a share is transferred to a
church or other charitable entity, and the Board of Directors shall
not unreasonable withhold or delay its consent in connection with
such transfers. Disposition of the share by the church or other
charitable entity shall be subject to the consent of the Board of
Directors and the payment of the transfer fee provided herein.
(g) In any situation involving the transfer of a share,
. the transferee shall bear any costs to the Corporation to effect
the transfer on the corporate records, including the issuance of a
replacement certificate. The Board of Directors may assess a
transfer fee in the amount that it deems applicable, or withhold
its consent to a transfer, in any situation where the Board of
Directors, in its sole discretion, determines that a transaction
has been structured with the intent to evade payment of the
appropriate transfer fee.
(a) Not less than thirty (30) calendar days prior to the
effective date of a lease 'of a shareholder's residence at Bay
Island, or any portion thereof, or the date on which a tenant will
take possession of the residence, whichever is earlier, the
shareholder shall supply the President or the Secretary of the
Corporation, or any shareholder of the Corporation's Board of
Directors, with a copy of the completed lease and, to the extent
not reflected on the lease, the following information: the name and
address of the proposed tenant, the proposed rental, the term of
the lease, and financial and other background information- requested
by the Board of Directors.
(b) Upon receipt of the information described in subpart
(a) above, the Board of Directors shall either approve or disap-
Bylaws - 04/30/98 21
prove the proposed lease within ten (10) calendar days thereafter.
As part of its approval of the lease, the Board of Directors may
impose such conditions and terms, including a fee payable to the
Corporation by the shareholder in an amount not less than 10% and
not more than 30% of each periodic rental, payable at the same time
each such rental is payable to the shareholder, within its sole and
absolute discretion, and such terms and conditions shall be deemed
a permanent part of the lease.
(c) Any attempted lease in violation of this Section
shall be automatically void and of no force or effect.
Section 8.1 Compliance with Bylaws and Rules. Each
shareholder shall abide by all bylaws and any rules put into effect
by the Board of Directors pursuant to these bylaws. Further, each
shareholder.shall be responsible for assuring that any invitee of
the shareholder complies with these bylaws and any rules promul-
gated by the Board of Directors.
(a) All shareholders and their invitees shall observe
the right to quiet enjoyment of Bay Island by every other share-
holder.
(b) Each home shall be occupied by a single family unit*
only and any permanent guest if such guest is approved by the
majority vote of the Board of Directors, plus any assistants
necessitated for medical reasons and housekeeping personnel
approved by the majority vote of the Board of Directors.
Section 8.3 Construction Tyne. Only one single family
residence shall be constructed on any shareholder's lot.
Section.8.4 Construction Periods. No construction shall
take place on a shareholder's lot from June 15 to and including
September 15 in any year; if such construction does occur the Board
of Directors shall be entitled to assess a fee, payable to the
Corporation, to compensate the Corporation for the disruption
caused by such construction in an amount within its absolute
discretion, except where the Board finds that the construction was
necessitated by an emergency. Nevertheless, it is acknowledged
that the remedy at law for any breach by a shareholder of this
Section will in some cases be inadequate and that the Corporation
shall be entitled to injunctive relief in addition to any other
remedy it may have against a shareholder by reason of a breach of
this Section. The Board shall notify the shareholder of the fee in
writing, and the shareholder shall then have fifteen (15) days to
request a hearing before the Board on the matter, in which event
Bylaws - 04/30/98 22 0
the Board shall set a hearing date not less than fifteen (15) nor
more than forty -five (45) days after the request. The share-
holder's failure to request a hearing within said period shall
render the fee final and binding. within fifteen (15) days after
the hearing, the Board shall notify the shareholder of its decision
as to whether the fee will be confirmed (in its entirety or
partially) or rescinded. If the Board confirms the fee, the
decision shall be final and binding, and the fee determined by the
Board due and payable to the Corporation immediately. when paid,
the fee shall be used for corporate purposes within the discretion
of the Board, Finally, notwithstanding anything to the contrary
above, the Board may permit construction to occur prior to July 1
or immediately following Labor Day in any year without assessing a
fee in accordance with the foregoing, if it finds that such
construction will not be disruptive to the shareholders.
Section 8.5 Piers and Slips. No shareholder shall allow
any pier or slip appurtenant to the shareholder's lot to be used
except by a shareholder or a shareholder's guest, provided that the
Board's approval of the use of a slip by a guest other than a
relative of a shareholder must first be obtained if such use
extends or will extend beyond forty -eight (48) consecutive hours.
It is acknowledged that the remedy at law for any breach by a
shareholder of this Section will be inadequate and that the
Corporation shall be entitled to injunctive relief in addition to
any other remedy it may have against a shareholder by reason of a
breach of this Section. Further, the Board shall have the right to
have the offending boat removed and stored at the shareholder's
expense.
(a) No member shall allow any person to live on a boat
docked at the slip appurtenant to the member's Building Site
without the approval of the board of Directors, No approval shall
be necessary for members or relatives of members provided they live
on board less than ninety -six (96) consecutive hours. It is
acknowledged that the remedy at law for any breach by a shareholder
of this subpart (a) will be inadequate and that the Corporation
shall be entitled to injunctive relief in addition. to any other
remedy it may have against a shareholder by reason of a breach of
this Section.
(b) The Board of Directors may elect to have any
unsightly and unkempt boat removed from a slip to a location of the
Board's choice, at the expense of the shareholder to whose lot the
slip is appurtenant, Such action shall be taken only after thirty
(30) days written notice to the owner.
Section 8.7 Construction Fee. Anyone becoming a
shareholder after May 1, 1991 (other than the shareholder's spouse
or the lineal descendants by birth or adoption of the shareholder
or the shareholder's spouse) and performing a construction project
on his or her lot at a cost of $10,000.00 or more shall pay to the
Bylaws - 04/30/98 23
Corporation, within thirty (30) days of commencement of construc-
tion, a fee equal to five percent (5 %) of the cost of such con-
struction, subject to a maximum fee of $50,000.00. The "cost of
construction" shall be the amount quoted on construction permit
applications pertaining to the construction, which amount shall be
corroborated by the shareholder at the Board's request, or such
other amount as the Board concludes is a more accurate calculation
of the construction costs. Each shareholder shall cooperate with
the Board in fixing the amount of construction costs. The Board
shall notify the shareholder of the assessment in writing, and the
shareholder shall then have fifteen (15) days to request a hearing
before the Board on the matter, in which event the Board shall set
a hearing date not less than fifteen (15) nor more than forty -five
(45) days after the request. The shareholder's failure to request
a hearing within said period shall render the assessment final and
binding. within fifteen (15) days after the hearing, the Board
shall notify the shareholder of its decision as to whether the
assessment will be confirmed (in its entirety or partially) or
rescinded. If the Board confirms the assessment, the decision
shall be final and binding, and the assessment determined by the
Board due and payable to the Corporation immediately. When paid,
the fee shall be used for corporate purposes within the discretion
of the Board.
Section 8.8 Anproval of Site Plan. Topographic Map and
Construction Plans. After approval by the Architectural Committee
as outlined in Bay Island rules, and not less than forty (40)
calendar days before beginning construction, a shareholder shall
have a certified site plan and topographic map of his or her lot
prepared and shall submit the plan and map, together with one copy
of all construction plans, to the Board of Directors for consider-
ation by the Board and any shareholder; in addition the shareholder
shall send copies of all construction plans to the shareholders
occupying the residences on both contiguous sides of the site. The
Board shall then have twenty (20) calendar days to receive comments
from all shareholders and to approve or disapprove the map and
plans. If the Board finds that it has inadequate information to
approve the map and plans, or if it disapproves the map and plans
in any respect, it shall promptly so notify the shareholder, who
shall then be entitled to submit additional information or alterna-
tive plans to shareholders and to the Board in accordance with the
foregoing. Upon receiving such additional information or alterna-
tive plans, the Board shall act within twenty (20) calendar days to
approve or disapprove the plans; the Board and the shareholder
shall continue in accordance with the foregoing until the Board has
fully approved the site map and all plans. In all events the
Board, in considering the proposed construction, shall attempt to
approve only construction which is of a quality and appearance
commensurate with existing improvements on Bay Island. Consider-
ation of submission made by or on behalf of a non - shareholder (such
as, for example, a prospective purchaser of a share whose contem-
plated purchase is contingent upon plan approval by the Board of
Bylaws - 04/30/98 24 0
Directors) is deemed automatically to contain an undertaking by
such non - shareholder individual(s) to be bound by Article 12 of
these bylaws in the event of any dispute, with the same force and
effect as if such submission had been made by and for the exclusive
benefit of a shareholder.
Section 8.9 Construction Requirements.
All improvements where construction has been commenced by
a shareholder after January 1, 1998 shall not encroach on any other
shareholder's lot, shall conform to the plans and site map approved
by the Board in accordance with Section 8.8 above, shall conform to
all applicable governmental building codes including, but not
limited to, Use Permit 3618, as adopted by the City Council of the
City of Newport Beach on November 24, 1997 (the "Use Permit ") , and
ghall be located within the Building Site and appurtenant "minor
stc ezn;r
—u -r-s oachment_area" delineated on the Map. Nonconforming
improvements in existence on January 1, 1998 may continue to be
utilized, including any improvements which are constructed outside
the shareholder's applicable Building Site and appurtenant "minor
structures encroachment area "; provided, however, that in the event
of substantial remodeling or renovation of an existing residence,
or the construction of an entirely new residence, all improvements
not in compliance with the restrictions of the Use Permit, or
located outside the shareholder's applicable Building Site and
appurtenant "minor structures encroachment area ", or otherwise not
in compliance with these bylaws must be removed. The determination
of what constitutes "substantial" remodeling or renovation shall be
in the sole discretion of the Board of Directors but, in general,
remodeling or renovation of a residence to a degree which expands
the size of an existing residence and /or meaningfully extends the
useful economic life of the residence, or which involves the
offending improvements, will be considered "substantial," requiring
the shareholder to bring improvements on his or her lot into full
compliance. It shall be the additional responsibility of the
shareholder, and his or her contractor and subcontractors undertak-
ing any construction, to obtain appropriate permits from the
appropriate governmental agency or department, to keep the public
streets and sidewalks clear of building materials and vehicles,
except for limited periods of unloading and temporary authorized
storage, and to promote and maintain cordial relations with the
other shareholders, and adjoining Island Avenue properties.
Drafts
All checks, drafts or other orders for payment of money, notes or
other evidences of indebtedness, issued in the name of or payable
to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, is determined by
resolution of the Board of Directors.
0 Bylaws - 04/30/98 25
How Execute d. The Board of Directors, except as otherwise provided
in these bylaws, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the
name of and on behalf of the Corporation, and such authority may be
general or confined to specific instances; and, unless so autho-
rized or ratified by the Board of Directors or within the agency
power of an officer, no officer; agent or employee shall have any
power or authority to bind the Corporation by any contract or
engagement, to pledge its credit or to render it liable for any
purpose or for any amount.
Section 9.3 Certificates for Shares. A single share
certificate shall be issued in the name of a shareholder or names
of the shareholders where the share is owned by more than one
person, as appropriate. All certificates shall be signed in the
name of the Corporation by the President and by the Secretary,
certifying the number of shares and the class or series of shares
owned by the shareholder.
Section 9.4 Lost certificates. Except as hereinafter
provided in this Section 9.4, no new certificate for shares shall
be issued in lieu of an old certificate unless the old certificate
is surrendered to the Corporation and canceled at the same time as
such issuance. The Board of Directors may, if any share certifi-
cate or certificate for any other security is lost, stolen or
destroyed, authorize the issuance of a new certificate in lieu
thereof, upon such terms and conditions as the Board may require,
including provision for indemnification of the Corporation secured
by a bond or other adequate security sufficient to protect the
Corporation against any claim that may be made against it, includ-
ing any expense or liability, on account of the alleged loss, theft
or destruction of such certificate or the issuance of such new
certificate. .
Section 9.5 Legal Action. The Board pursuant to these
bylaws may authorize the institution of legal action by the
Corporation'for the collection of assessments or'fees or for any
violation of these bylaws or rules promulgated by the Board. In
addition, if the Board retains legal counsel in connection with
collecting any such assessment or fee or for such violation, the
Corporation shall be entitled to recover from the shareholder its
expenses and attorney's fees arising therefrom, whether or not
legal action is instituted.
Section 10.1 Maintenance and Inspection of Share
Register. The Corporation shall keep at the offices of the
Secretary of the Corporation a record of its shareholders, giving
Bylaws - 04/30/98 26
the names and addresses of all shareholders and the number and
• class of shares held by each shareholder.
section 10.2 Maintenance and Inspection of Bylaws. The
Corporation shall keep at the offices of the Secretary of the
Corporation the original or a copy of these bylaws, with any
amendments to date, which shall be open to inspection by any
shareholder upon the written demand of any such shareholder at all
reasonable times during usual business hours.
Section 10.3 Maintenance and Inqppction of Other
CoRorate Records. The accounting books and records and minutes of
meetings of the shareholders and the Board of Directors and any
committee or committees of the Corporation shall be kept at such
place or places designated by the Board of Directors, or, in the
absence of such designation, at the office of the Secretary of the
Corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form
or in any other form capable of being converted into written form.
Such minutes and accounting books and records shall be open to
inspection upon the written demand of any shareholder or holder of
a voting. trust certificate, at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's
interests as a shareholder or as the holder of a voting trust
certificate. Sgch inspection may be made in person or by an agent
or attorney, and shall include the right to copy and make extracts.
The foregoing rights of inspection shall extend to the records of
. each subsidiary Corporation of the Corporation.
Section 10.4 Annual Report of Shareholders. Each year
the Corporation shall issue to each shareholder the financial
report, if any, to which he or she is entitled under Section 8321
of the Code.
New bylaws may be adopted or these bylaws may be amended
or repealed only by the approval of the majority of the sharehold-
ers.
Section 12.n1 Binding Arbitration of jaU a, A 1 1
claims, disputes, or causes of action . arising out of,.or related
to, the Bylaws or Articles of incorporation of Bay island Club, as
amended to date, any meetings or other proceedings of shareholders
or directors of. the Corporation (including the minutes thereof) , or
any acts or omissions of any officer or director of the Corporation
in his or her capacity as such, shall be resolved by submission to
binding arbitration in Orange County, California, before a retired
. Bylaws - 04/30/98 27
neutral judge or justice. If the parties to the dispute are
unable to agree on a retired judge or justice, each party will name
one retired neutral judge or justice and the two named persons
will select a neutral judge or justice who will act as the sole
arbitrator. The parties shall be entitled to take discovery in
accordance with the provisions of the California Code of Civil
Procedure, but either party may request that the arbitrator limit
the amount of scope or such discovery, and in determining whether
to do so, the arbitrator shall balance the need for the discovery
against the parties' mutual desire to resolve disputes expedi-
tiously and inexpensively.
Section 12.02 Effectiveness of Article 12. This Article
12 shall be applicable to all claims, disputes or causes of action,
whether arising before or after adoption of this Article 12, with
the sole exception of claims, disputes or causes of action, if any,
possessed by parties that ceased to be shareholders of the Corpora-
tion prior to its adoption.
Bylaws - 04/30/98 28
0
EXHIBIT "B"
•
TURNER AND REYNOLDS
A LAW CORPORATION
ATTORNEYS AT LAW •
18400 VON HARMAN AVE.. SUITE 500
IRVINE. CALIFORNIA 92612 -1514
(9491474-6900
FAX: 474.6907
July 20, 1999
HAND DELIVERED
Mr. Robert Emett, President
THE BAY ISLAND CLUB
25 Bay Island
Newport Beach, CA 92661
Dear Mr. Emett:
As you are aware, this office represents Fritz Duda in connection with The Bay Island
Club Board of Directors approval of building plans for construction of a new residence at
Lot No. 21. 0
That approval was in violation of the Amended and Restated Bylaws of The Bay
Island Club, as well as the Ground Rules of The Bay Island Club. Section 3.1(a) of the
Bylaws provides, in pertinent part that "... all corporate powers shall be exercised by or
under the direction of the Board of Directors in accordance with these Bylaws."
The Bylaws clearly limit the power of the Board of Directors. Section 8.9 of the
Bylaws states that construction of "an entirely new residence" after January 1, 1998, in
addition to the restrictions of the Use Permit, "... shall be located within the Building Site
and appurtenant `minor structures encroachment area' delineated on the Map."
The definition of Building Site found in the Bylaws refers to the Map dated August
15, 1997, attached to the Bylaws. The Building Site is delineated on the Map by the dashed
line. Section 8.9 requires the removal of all improvements located outside the applicable
Building Site.
In addition, the Bylaws, at Section 3.1(b)(5), provides that the Board, subject to the
limitations in the Bylaws, has the power and authority to issue rules and regulations relating
to architectural and structural appearance and construction of future improvements.
Pursuant to that provision of the Bylaws, the Board of Directors approved The Bay Island
July 20, 1999
Page 2
Club's zoning/procedures and design guidelines, which all applicants for new buildings
must abide by. Section 1.5.1 of those guidelines states specifically:
"Set Backs and Encroachments A. 'Major structures' shall conform to set
backs and envelopes as illustrated on building site map dated 8 -15 -97 which
defines the buildable areas of the sites. B. 'Minor Structures' such as sun
shades, decks, railings, stairs, etc., may encroach into the area illustrated with
a maximum railing height of 42" above the main living floor. Porches and
decks, roofs, etc., to serve floors above the main living floor shall be
cantilevered and shall not encroach more than 5' into the front yard (Bayside)
or more than 4' into the rear years (interior or 'part' side)."
Despite being provided with the building plans for Lot No. 21, which included
"major structures" not in conformance with the buildable area limits and envelopes
illustrated on the Map, and "minor structures" which do not conform to the allowable,,,
encroachment, the Board approved those plans. The "major structure" encroachments
proposed are on all four sides of the proposed structure and represent a substantial increase
in the size of Lot No. 21's buildable area at the expense of the other shareholders. The
approval by the Board was beyond its authority granted by the Bylaws.
Surprisingly, a representative of the Board appeared at the Planning Commission to
argue on behalf of the owner of Lot No. 21, and represented that The Bay Island Club had
approved the plans for Lot No. 21. Since the approval by the Board was beyond the
authority of the Board, thus a void act, this constitutes a blatant misrepresentation to the
City of Newport Beach, which should be corrected.
The Members of the Board of Directors owe a fiduciary duty to the shareholders to
take no action in violation of the Bylaws. Posey vs. Leavitt (1991) 229 Cal.App.3d 1236;
28 Cal. Rptr. 556. (Individual Board Members have personal liability for allowing
homeowner to build in common area). The Board's approval of the plans for Lot No. 21
was a violation of the fiduciary duties owed by Board Members to the shareholders. Such
action, in violation of the Bylaws and design guidelines, exposed the Board and its
Members to liability to the shareholders. The Board has, in effect, allowed Lot No. 21 to
build in what amounts to the common area, which is subject to the use and enjoyment of all
shareholders. The Board must take immediate action to rectify this situation.
On behalf of Mr. Duda, and other Shareholders who have voiced concern over the
Board's failure to uphold the Corporation's Bylaws and the design guidelines, we demand
that the Board immediately rescind its approval of the Lot No. 21 building plan, notify the
July 30, 1999
Page 3
City of Newport Beach of the rescission, and require a revised plan that does not exceed the
building limit lines and meets the letter along with the spirit of the Bylaws and design
guidelines. We further urge you to immediately inform the City ofNewport Beach that The
Bay Island Club's Board has withdrawn its "approval" of the plans as proposed. Failure
to rescind this approval will only aggravate the damages to my client and the other
shareholders and expose members of the Board to personal liability.
My client had requested the appeal hearing set for June 26, 1999, be continued to
meet and attempt to work the problem out as friendly neighbors. Unfortunately, that offer
was refused.
I would respectfully request that you consult with the attorney for the Corporation
before continuing on this course of action. I will be pleased to discuss this matter with you
or your counsel.
Very t i1 yours,,/
FET:Imr
cc: Fritz Duda
E. TURNER .
0
"RECEIVED AFTER AGENDA
PRINTED:" _AW �• &,
BAY ISLAND CLUB
Incorporated 1903
The attached petition representing 23 of a possible 24 Bay Island Club homeowners is in
support of the decisions made by the Bay Island Club Architectural Committee and
Board of Directors in approving the Fletcher house plans, which were approved 7 - 0 by
the Newport Beach Planning Commission.
Respectfully submitted,
46 a
Robert L. Emett
President
Paul Lamas, CPA • 150 Paularino Avenue, Ste. 142 • Costa Mesa, CA 92626
BAY ISLAND CLUB
Incorporated 1903
The undersigned, being an owner of a home on Bay Island, hereby acknowledges that
they have received a copy of the letter dated July 7, 1999, addressed to all Bay Island residents
regarding Lot 21 from Dritz Duda and the letter responding thereto from the Board of Directors
signet[ by Bob Lntntett.
I further understand that the Pletcher house plaits have been approved by the Board after
a full review by the Architectural Committee. F,ach of the signatures below is intended to
confirm and ratify the decision made on our behalf by the Board of Directors.
Owners of
Owners of Lot 2
Owners of Lot 3
Owners of Lot 4
Owncrs of Lot 5
Owners of Lot 6
Owners of Lot 7
O"vner:e of Lot 3
Owners of Lot 9
YYY"
Owners of Lot 10
Owners of 11
Owners of Lot 12
Owners of Lot 13
019ners of Lot 14
Owners of Lot IS
Owne,fs of Lot 16
Owners of Lot 17
Owners of Lot 18
'Otivners of Lot 1
O7vncrs o of 20
Owners of Lot 21
Owners of Lot 22
Owncrs of Lot 25
izaig -
Owners of Lot 26
Jul -22 -99 04:45P Cannery Village Realty 949 673 3451 P.01
F EI)
BAY ISLAND CLUB
Incorporated 1943
Tho undersigned, being an owner of a horse on Bay Island, hereby acknowledges that
they have received a copy of Qtc letter dated July 7, 1999, Addressed to all Bay Island residents
regarding Lot 21 from Fritz Uudn and the letter responding thereto from the Board of Directors
signed by Bob'r.mmett.
I further understand that the hlctcher house plans have becu approved by the Board after
a fu)) review by rho Arehitectuml Conmtitteo, Rich of the signatures below is intended to
confirm and ratify the decision made on our behalf by the Board of Directors.
C'
Owncrs of Lot 1
Owners of Lot 2
,&& , /i /%.
Owners of Lot 4
Owners of Lot S ^W
Owners ofLot 6
Owners of Lot 7
Owners of r,ot 8
Owners of Lot 9
Owneri of Lot 14
Owners of Lo( 1l
Owners of Lot 12
Owners of Lot 13
Owners of Lot 14
Ouyers of Lot 15
C •Mii e!A
Ownefs of Lot 16
JUL -28 -99 12:55 FROM.CEJA CORPORATION ID =9184961925 PAGE 2/3
n yvr_ 1.u1 . (14 urn 11D1 NW, L.S ly`l3 Ub:11HM P2
BAY ISLAND CLUB
Incorporated 1903
The undcrsigaed, being an owner of a homo on Bay Island, hereby acknowledges that
they have received a copy of the Iettor dated July 7, 1999, addressed to all Bay Island residents
regarding I.ot 21 from Fritz Duda and the letter responding therein from tho Board of Directors
signed by Bob 1:mmett.
I further under WA that ft Fletcher house plans have been approved by the Board after
a full royiew by tho Architectural Connnittm. Each of the signaturas below is intended to
confirm and ratify the decision made on our behalf by file Board of Directors.
Owners of Lot 4
Owners of tot 5
Owners of Lot 6
l-
Own= of Lot 7
192N=6 dint
Dwncrs of Lot 9
F
Dwners ofLot I0
Uwlrers o 1
owners of Lot 12
W _.0
G
41-Z� CC .
Owners of Lot 15
Ownds of Lot 16
#Z
JUL. - 'ill -?'� 1 :0a r Fh? I �_. -H e r i r.3 9797^84012 N, 01
BAY ISLAND CLUB
Incorporated 1903
Tha undersigned, being an owner of a home on Bay Island, hereby tzeknowledges that
they have received a copy of tl:c letter datod July 7, 1999, addressed to alt Bay Island t•esldents
regarding I.ot 21 from Fritz Duda aad the !otter rasfonding thereW tiom t110 90ard of Dirncla»
signed by Bob Lmmett.
I further undonla.A tha: lho Fletcher house plans have been approved by the Board after
a full roview by the Architectural Committcc. Fnch of the signataras below is intmndoe to
confirm and re.t:fy dte d<cisinn made or, our behalf by the BOW of Director >.
Owners of hot 1
Uwn"-S 00Ff t 2
//G40c V "
Owners of Lot 3 '
Others of Lot 4
Ow'ncrs of L w 9
_ _Y 0'4L
Owners of Lot 10
Owners 0f Lot 1I
Ovyners of Lot 12
•ners of Lot S Owners of Lot 13
Ownari Or Lot 6
pw•nrrs of I.ot R
Owners of Lot 14
Owners of Lo
Owners of LOt 15
d.mr7a
Owneft of Lot 16 '��
atNl tlr:xerox ieiecopier muzu i r —zz —vo I !.Diem 1 ,
1 oil VIV IVIIIA L
R I L . EMETT TEL ; 714 -673 -1517 Jul 21 99 1040 N0.006 P.02
BAY ISLAND CLUB
Incorporated 1903
Tho undorslgned, bean$g an owner of a homo on IIay Island, hereby poknowledges that
they have received a oopy of (Ito Iottor dated My 7, 1999, addressed to all Bay Island residents
mpardintt Lot 21 t?om Vrltz Duda and the letter responding thereto from the Board of bireetors
signed by Bob 13nnnett.
I thrther understand that tho Pletcher housepians have been approved by the Board after
a AW reviow by tho Aroltltoeturat Committee) Baoh of the signatures below is intended to
confirm and ratify tho decision made on our bshalf by Elie Hoard of Dirootors,
Owners of Lot 1
... .r..wn r.n+.w
wnors of fat 2
Ownors of Lot 4
r.�ruw.rw ..1x wA'M•..•� —...
Owncrs•otrLot S
Oi,Innrs o!'L tr-
Owners of Lot 7
Owners of Lot 8
ww nc of Lot 9
-< 4•
Owners of Lot 10
c�
Owners of 11
Owasrs of Lot 12
��4�
Owners of Lot 13
Oftork of Lot 14
xmere t � e
�,-M 1774
Ownds of Lot M
V
.1UL -19 -99 MON 0949 AM GRESHAM SAVAGE FAX NO, 909 888 2120 P. 02
FFtrhl PHONE NO. : 714 673 1151 AM. 19 19,39 69:27raM P2
BAY ISLAND CLUB
Incorporated 1903
The undersigned, being an owner of a home on Day Island, hereby acknowledges that
they have n:ceivcd a copy or the letter dared July 7, 1999, addressed to all Aay lslruld residents
regarding Lot 21 from Fritz Duda and the letter responding thereto from tho Board of Directors
sdgned by nob 1:mmett.
1 further understand that tl:c 17lotehcr house plans have been approved by the Board after
a full review by the Architectural Committco, Hach of the signatures below is intended to
confirm and ratify the decision made on our behalf by the Board of Directors,
Owners of Lot 1~ Owners of 'Lot 9
nwncrs Ti Lot 2
Owners of Lot 3 , ^
Uwncrs of Lot 4
Owners of Lot 5
Owners of Lot 6 ✓�
Owners of Lot f
Owners of Lot S
Owners of Lot 10 '
Owners of Lot I1
Owners of Lot 12
Owners of Lot 13
Owners of Lot 14
Owncrs of Lot 15
404 " l! -
Owoefs of Lot 16
FROM STIQERS INVESTMENTMENT COMPANY FAX NO. : 1 626
795 9324 Jul. 21
1999 10:57A1 P3
FROM PHDNE 140.
714 673 1151
AUG.
26 1599 P,R: 4,Am P'.
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PAR h'0. 509 885
?14 673 1155
21[0
AUG.
19 1959 9;, 7Gas P3
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n
THE FICKER GROUP CONSULTING • PLANNING
URBAN PLANNING
ENVIRONMENTAL PLANNING
WILLIAM P. FICKER, AIA • NCARB 'RECEIVED AFTER AGENDA ARCHITECTURE
PRINTED:" �W!'d 14k-lq
Date: July 26, 1999
To: The Mayor and Members of the City Council
From: William P. Ficker, A.I.A.
Chairman, Architectural Committee, Bay Island Club
RE: Fletcher Residence - Bay Island
The Bay Island Club has asked that I address some of the Appellant's statements
in the appeal and miscellaneous supplements, etc.
The following is an Executive Summary of the attached material.
1. There is confusion here by the appellant between "Building Site" and
"Buildable Area ". "Buildable Area" is designated by a dashed line, and is
clearly designated on the attached PRD Map.
2. Buildable area has = been increased, and all major structures except two
decorative columns are within the site. Section 1.5.7 of the PRD anticipated
this.
3. Nothing was done to increase volume or floor area. The structure is 4.400
sq. ft. and the allowable is 5.160 sq. ft. The volume is likewise
proportionately smaller. Building "site" is 4.757 sg.ft.
4. a. The house will = exceed 28' and is the same height as the Higson
(Lot 19) and Stiver (Lot 22) residences and presents a two -story
elevation to the bridge.
b. The structure isn't "massive" and will not block views.
c. Light and view are not an issue. This house has an abundance of open
space around it. Even a 7' side yard to the west.
417 THIRTIETH STREET • NEWPORT BEACH. CA 92663 • PHONE (714) 675 -9628 • FAX (714) 675 -9638
ALLOWABLE
LOT NO. BUILDABLE MAXIMUM AREA OF HOUSE - SF
AREA S.F. Prior to Presently Permitted
IFoomdntl__ 11/27/97 Since 11127197
1
2,080
6,240
5,200
2
1,880
5,640
4,700
3
1,860
51550
4,620
4
2,080
6,240
5,200
5
2,060
6,180
5,150
6
2,080
6,240
5,200
7
2,090
6,270
5,220
8
2,440
7,320
6,100
9
2,460
7,380
6,150
10
2,470
7,410
6,170
11
2,490
7,470
6,220
12
3,200
9,600
8,000
13
1,860
5,580
4,650
14
2,170
6,510
5,425
15
2,130
6,390
5,325
16
1.800
5.400
4,500
17
1,800
5,400
4.500
18
1,800
5,400
4,500
i9
1, ° °0
5,670
4,725
20
2,275
5,320
5,690
21
2,065
61190
5,160
22
2,290
6,870
5,720
23
N/A
--- - - --
-- - - - ---
24
NIA
-- -- - - --
-- ---- --
25
3,390
10,182
8,475
26
2,260
6,780
5,650
NOTE: PRO (Planned Residential Development) for Bay island was established
by the City of Newport Use Permit 3618 (11- Z4 -97).
TO O• .. _i I 111,
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4
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NOTE E:
1. SITES I TNRU 21 AND 25 AND 26
1 / / ARE FOR ONE SINGLE FAMILY RESIDENCE
EACH.
2. FRONT YARD - BAYSIDE
J. REAR YARD - INTERIOR OR PARKSWE
/ /. AREAS OF "MINOR STRUCTURES"
/ ENCROACHMENT
/ 5. AREA Of MAJOR STRf/CTUR£S BUILDABLE _
/ AREA
6. SITE BOUNDARY
7. U.S. BULKHEAD LINE
/
Response to "Supplement Statement" of
Appellant Fritz Duda - 7/21/99
1. There is confusion here by the Appellant between "Building Site"
and "Buildable Area ".
2. It is clearly designated on the attached PRD Map.
3. All major structures are within the "site" boundary.
4. The buildable area was = increased and only minor extensions were
permitted due to reduction in other areas to better articulate the design.
i
COU CIL AGENDA
N0. s a (- L99
SUPPLEMENTAL STATEMENT OF APPELLANT FRITZ DUDA
"` ^`'" OF THE BAY ISLAND CLUB
Appellant is informed by the Chairman of the Planning Commission that the Planning
Commission overruled its staff recommendation and approved this Application based on the
approval of the building plans for Lot 21 by the Bay Island Club Board of Directors (the
"Board "). This Supplemental Statement is to inform the City Council that the Board's
approval of these plans was beyond the authority granted to the Board in violation of the
Bay Island Club's Amended and Restated Bylaws (the "Bylaws ").
The Bylaws do not give the Board any authority to approve construction of a new
residence outside of the Building Sites designated on the Map dated August 15, 1997 (the
dashed line and shaded minor encroachment area), attached to the Bylaws and also attached
to the Use Permit No. 3618 for Bay Island. The Bylaws at Section 8.9 require that all new
residence construction shall be located within the designated Building Site. The Bylaws state
specifically:
79640MS0450.001
All improvements where construction has been commenced by
a shareholder after January 1, 1998 shall not encroach on any
1
other shareholder's lot, shall conform to the plans and site map
approved by the Board in accordance with Section 8.8 above,
shall conform to all applicable building codes including, but not
limited to, Use Permit No. 3618, as adopted by the City Council
of the City of Newport Beach on November-24, 1997, and shall
be located within the Building Site and appurtenant "minor
structures encroachment area" delineated on the Map.
(Emphasis added.)
A copy of the Bylaws is attached hereto as Exhibit "A."
The Board lacked authority to approve plans not authorized by the Bylaws, which
form a contract between the corporation and the shareholders. Casadv v. Modem Metal
Spinning & Mfg. Co. (1961) 188 Cal.App.2d 728, 732. Moreover, the actions of the Board
in approving plans which substantially exceed the designated Building Site on four sides was
a breach of the Board's fiduciary duties to its shareholders. Posey v. Leavitt (1991) 229
Cal.App.3d 1236, 28 Ca1.Rptr. 556. Based on this breach of fiduciary duty, Appellant has
demanded that the Board immediately rescind its approval of plans for Lot 21 and require
revised plans that do not exceed the designated Building Site. A copy of that demand is
attached hereto as Exhibit `B."
7994MB57650.001 2
Y
Appellant respectfully requests that in considering this Appeal, the City Council give
no weight to the Board's approval of the Applicant's plans because that approval was in
excess of the Board's authority.
Dated: July 21, 1999 By:
79940M536S0.001
3
MIlP *qt mm 17:i�1
KEITH VAN DYI£d;/
Attorneys for Appellant Fritz Duda
Response to Duda Appeal - 7121199
2A. Building to the maximum limits was discouraged.
These encroachments were all considered in order to provide a house of
better design articulation and massing in order to provide better open spaces
in relation to Lots 19 and 20. Buildable area was not increased. Section
1.5.7 of the PRD Anticipated this.
a. It is the same height as the Higson (Lot 19) and Stiver (Lot 22)
residences and presents a two -story elevation to the bridge.
b. The structure isn't "massive" and will not block views.
C. Light and view is not an issue.
This house has an abudance of open space around it. Even a
7' side yard to the west.
3A. This is flatly incorrect.
The lot is sloping but the house will not exceed 28'.
3B. The house is no taller than the Stiver or Higson house.
Only a small area of the mass - 500 sq.ft. of floor area is
in question here.
4B. No comment - merely quoting.
4C. No comment.
4D. Nothing in the approved plan violates any of these conditions.
4E. Not worthy of comment.
4F. Planning staff voiced an opinion and we and the commission respectfully
disagreed - this is not unusual.
4G. Nothing was done to increase volume or floor area. The structure is
4.400 sq. ft. and the allowable is 5,160 sq.ft. The volume is likewise
proportionately smaller.
The building "site" is 4.757 sq.ft.
CITY OF NEWPORT BEACCEC� --1V D
TION TO APPEAL DECISION OF THE PLANING COMMISSII
Application No.
Name of Appellant :. _,'r•.
or person filing: FRITZ DUDA _ Phone: ( 949 ' 4' 4' -44900
Address: C/O TURNER AND_Q7.VNOLDC 18400 VON K RMAN AVE 850n TPUTNF rA Q9612
Date of Planning Commission decision: JUNE 24 19 99
Regard' ?ng application cf. DOUGLAS AND SALLY FLETCHER for
(Description of application filed with Planning Commission)
PROPOSAL TO ALLOW DWELLING TO EXCEED ESTABLISHED HEIGHT LIMITATION
AND PROPOSED ENLARGEMENT OF THE ESTABLISHED BUILDING SITE TO ALLOW
"MAJOR STRUCTURE" AND "MINOR STRUCTURE" ENCROACHMENTS INTO ESTABLISHED
SETBACKS.
Reasons for Appeal: SEE ATTACHEn -
KE /H VAN KE iC�/111
Date
igndtureofAppellant as ttorneys for Fritz Duda
FOR OFFICE USE ONLY
Data Appeal filed and Administrative Fee received: .19
Hearing Date. An appeal shall be scheduled for a heating before the City Co-uncil within thirty (30) days of the
filing of the appeal unless both applicant and appeliant or reviewing body consent to a later date (NBMC Sec.
20.95.050)
a: Appellant
Pianning (Ftlmbh one set of rnalring lanes for meBing)
File
APPEALS: Municipal Code Sec- 20.95.0408
Appeal Fee: $278 pursuant to Resolution No. 98-52 adopted on 7 -27 -98
Meposit furds with Cashier in Account #2700 -5000)
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ATTACHMENT "A" TO APPLICATION TO APPEAL DECISION
OF THE PLANNING COMMISSION
1. Introduction and Grounds for Reversal
Appellant requests a reversal of the Planning Commission's June 24, 1999 approval
of proposals to exceed the established height limitation and to allow encroachments into required
setbacks on lot #21, Bay Island Track. Reversal of the building height proposal is sought on the
grounds that the proposal is not consistent with terms of Use Permit 3618 and is not compatible
or consistent with the height and scale of surrounding dwellings, and reversal of the
encroachment proposals is sought on the grounds that the proposal is not consistent with terms
of Use Permit 3618 and will be detrimental to Bay Island and its residents. Moreover, the
encroachments into the required setbacks are unnecessary, especially the front yard
encroachment, insofar as the lot is large enough to build on, observing all required setbacks.
2. Factual Background and Relevant Code Provisions
On November 24, 1997, the City of Newport Beach City Council Adopted Special Use
Permit No. 3618 (the "Use Permit") which established land use and property regulations for the
Bay Island residential community. The Use Permit recognized the special character of Bay
Island and maintaining that special character requires that size limitations set forth in the Use
Permit be strictly enforced. The specific provisions at issue here are Sections 1.5.1, 1.5.5 and
2.1 which provide in pertinent part:
1.5.1 Setbacks and Encroachments.
A. ":Major Structures" shall conform to setbacks and envelopes as
illustrated on Building Site Map dated 8 -15 -97 which defines the
buildable areas of these sites.
7963\853650.001VCFV l
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9
10
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16
17'
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B. "Minor Structures "..... Porches and decks, roofs, etc., to serve
floors above the main living floor shall be cantilevered and not
encroach more that 5' into the front yard (bayside) or more than 4'
into the rear yard (interior or "park side "). Roofs may encroach an
additional 2'.
1.5.5 Building Heivht.
Building heights shall be 24', using the measurement of height
defined in the Newport Beach Zoning Code, Chapter 20.65. This
may be increased to a maximum of 28' with the approval of the
Planning Commission if it is deemed compatible and consistent
with the height and scale of adjacent and surrounding dwellings.
2.1 ARCHITECTURAL DESIGN
It should be understood that zoning always describes the maximum
which may be permitted, or the maximum limits to which parts of
the structures may be built or encroach "not every part of the
structure or encroachment." Bay Island employs an architectural
committee in order to ensure that spirit of good design in
consideration to immediate neighbors and to all of Bay Island will
result in the design and construction of houses esthetically pleasing,
interesting relief to elevations, roofs and masses, resulting in
interesting transition of spaces as you enter the island at the bridge
or walk to other sites on the Island.
I ///
I ///
79663%S3650.001W.FV 2
2A
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171
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The goal of these guidelines and the committee charged with
architectural overview is to discourage maximum floor area or
volume to be built while permitting substantial floor area in order
to accommodate unique opportunities to include basement areas or
attic volumes in living space, and as much consistency as
reasonable for redevelopment of lots to enjoy the same use as
existing ones.
Despite the specific language in the Use Permit limiting building height, limiting floor
area and volume, mandating construction of esthetically pleasing houses and discouraging
building up to and beyond the maximum limits; the Planning Commission, on June 24, 1999,
approved proposals for a planned residence at No. 21 Bay Island which exceed the basic height
limitations and provide for floor areas and volume which result in major and minor structure
encroachments into the required setbacks. The proposed structure would exceed the basic
height limit by at least four feet. The proposed "Major Structure" encroachments would be (1)
four feet into the required fifteen foot front setback, (2) one foot into the required five foot east
sideyard setback, (3) two feet into the required seven foot west side yard setback and, (4) two
feet into the required eighteen foot rear setback. The proposed "Minor Structure" encroachments
for a covered porch overhang would extend two feet beyond the allowable seven foot
encroachment into the fifteen foot front setback.
If this residence is allowed to be built without reduction in height, floor area and volume,
it will be significantly larger in size and scale than any of the other homes around it and will
dwarf the surrounding houses. It will further block critical light and view corridors for its
adjacent neighbors and will result in a massive structure at the entrance to Bay Island, which will
block views of the entrance, the bridge and other areas of the Island.
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3. Proposed Increase In Height Limit
To the extent the increased height proposal is in excess of the twenty-eight foot maximum
limit, it should be denied as violating section 1.5.5 of the Use Permit. The lot at issue is sloping,
and in some portions of the lot the building height will exceed twenty-eight feet.
To the extent that other portions of the dwelling will be at the twenty-eight foot
I maximum, it still must be denied for failing to meet the "compatible and consistent" standard
set forth in Section 1.5.5. The height and scale of adjacent and surrounding dwellings are neither
compatible nor consistent with the excessive height and scale of the proposed structure.
4. Proposed Enlargement of Established Building Site.
The Planning Commission's approval of the proposed enlargement of building site #21
violates both the letter and the spirit of the Use Permit. The building site map attached to the
Use Permit establishes the buildable area for each dwelling on Bay Island and Section 1.5.1 of
the Use Permit states that "Major Structures" shall conform to these building sites and "Minor
Structures" shall not encroach more than the designated amounts. Despite this clear language
intended to limit the size of the building sites, the proposed encroachments would substantially
increase the size of building site No. 21. Such increases in the size of this building site would
also be in violation of the "Amended and Restated Bylaws of Bay Island Club" Section 8.9,
which provides in pertinent part:
All improvements where construction has been commenced by a
shareholder after January 1, 1998 shall ..... conform to the plans
and site map approved by the Board ... shall conform to all
applicable governmental codes including, but not limited to, Use
Permit 3618 .... and shall be located within the Building Site and
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appurtenant "minor structures encroachment area" delineated on the
Map.
Although Section 1.5.7 of the Use Permit does provide that modifications may be granted,
the Newport Beach Zoning Code, Chapter 20.93, Section 20.93.040 requires that before
modifications are granted, findings be made that:
... the establishment, maintenance or operation of the use of the
property or building will not, under the circumstances of the
particular case, be detrimental to the health, safety, peace, comfort
and general welfare of persons residing or working in the
neighborhood of such proposed use or be detrimental or injurious
to the property and improvements in the neighborhood or the
general welfare of the city, and further that the proposed
modification is consistent with the legislative intent of this code.
None of the proposed encroachments meet this standard because, as a whole, they are
detrimental and injurious to Bay Island and its residents. The encroachments will reduce the
space between the dwellings leading to a more crowded and cramped appearance. The
encroachments will also tend to block light, air and view corridors, especially at the entrance to
Bay Island and the bridge onto Bay Island.
As for the proposed front setback encroachments, even the Planning Commission's own
staff did not believe this standard was met and recommended denial of those proposals stating
in its report:
The staff feels that the fifteen foot setback established for Lot No.
21, is appropriate in this case and that an encroachment into the
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fifteen feet with the living area has a direct result on the amount of
"minor structure" encroachment of the roof canopy. Because there
is a direct view to the bay from Lot No. 22 and the pedestrian foot
bridge, the four foot encroachment of the first floor, in addition to
the support posts and canopy above the encroachment, have a
greater potential to block the view.
The standard set forth in Section 20.93.040 is further not met by the proposed
encroachments because they will not be consistent with Section 2.1 of the Use Permit in that
they would encourage rather than discourage maximum use of floor area and volumes. Section
2.1 clearly sets forth the goal of discouraging maximum floor area and volume in order to
maintain consistency in the size of the buildings and to maintain the same use as existing ones.
The proposed "Major" and "Minor" structure encroachments, together with the maximum height
limitation approved by the Planning Commission, completely go against these goals and
guidelines by allowing a structure with approximately 4,300 square feet of space, which is
significantly larger than any of the surrounding homes. Allowing such a massive structure on
this landmark property at the entrance to Bay Island, adjacent to the bridge, will be detrimental
to the entire character of Bay Island.
5. Conclusion.
Accordingly, Appellant requests that the June 24, 1999 decision of the Planning
Commission approving the proposals for #21 Bay Island to increase the height limit and allow
both "Major" and "Minor" Structure encroachments be reversed and the proposals be denied.
1 Dated: July "i', 1999
By:
Attomeys for tell t FRITZ DUDA
7%651655650.001W.FV 6
a TT e!'NMENT "A"
COMMENTS: Letter of 7120/99
From: F. E. Tumer - Duda Attorney
To: Bob Emett
The following comments are referenced to each paragraph which have been
numbered on the Turner letter.
1. No comment.
2. No comment.
3. Everything is within the "building site". Only some fencing is encroaching
beyond the "minor structure encroachment area ".
4. This is incorrect - the building site is delineated by solid lines, the
"buildable area" is delineated by dashed lines.
5. No comment - this was done.
6. Only two decorative columns are in the "minor structure" area. These
seem reasonable.
Section 1.5.7 of the PRD states "Modifications and variances to the
property development regulations established by the PRD use permit or the
Zoning Code may be granted under the provisions of Chapter 20.93 and
20.91 respectively of the Newport Beach Zoning Code."
(The above is normal throughout any city or homeowners groups.)
7. This is incorrect. The encroachments do not represent any increase in
buildable area.
8. No comment.
9. Only construction in common area is a fence and two decorative columns.
10. No comment - unaware of other shareholders' concerns.
TURNER AND REYNOLDS
A LAW CORPORATION
ATTORNEYS AT LAW
16400 VON KARMAN AVE.. SUITE 500
IRVINE. CALIFORNIA 92612 -1514
1949) 474 -6900
FA%t 474 -6907
July 20, 1999
HAND DELIVERED
Mr. Robert Emett, President
THE BAY ISLAIND CLUB
25 Bay Island
Newport Beach, CA 92661
Dear Mr. Emett:
As you are aware, this office represents Fritz Duda in connection with The Bay Island
Club Board of Directors approval of building plans for construction of a new residence at
Lot No. 21.
That approval was in violation of the Amended and Restated Bylaws of The Bay
Island Club, as well as the Ground Rules of The Bav Island Club. Section 3.1(a) of the
2 Bylaws provides, in pertinent part that "... all corporate powers shall be exercised by or
under the direction of the Board of Directors in accordance with these Bylaws."
The Bviaws clearly limit the power of the Board of Directors. Section 3.9 of the
3 Bylaws states that construction of "an entirely new residence' after January 1, 1993, in
addition to the restrictions of the Use Permit, "... shaii be located within the Building Site
and appurtenant 'minor structures encroachment area' delineated on the `dap."
The definition of Building Site found in the Bylaws refers to the Map dated August
15, 1997, attached to the Bylaws. The Building Site is delineated on the elan by the dashed
line. Section 8.9 requires the removal of all improvements located outside the applicable
Building Site.
In addition, the Bylaws, at Section 3.1(b)(5), provides that the Board, subject to the
limitations in the Bylaws, has the power and authority to issue rules and regulations relating
5 to architectural and structural appearance and construction of future improvements.
Pursuant to that provision of the Bylaws, the Board of Directors approved The Bay Island
July 20. 1999
Page 2
Club's zoninJprocedures and design guidelines, which all applicants for new buildings
must abide by. Section 1.5.1 of those guidelines states specifically:
"Set Backs and Encroachments A. 'Major structures' shall conform to set
backs and envelopes as illustrated on building site map dated 5 -15 -97 which
4 defines the buildable areas of the Sites. B. 'Minor Structures' such as sun
shades, decks, railings. stairs, etc.; may encroach into the area illustrated with
a maximum railing height of 12" above the main living floor. Porches and
decks, roofs; etc., to serve floors above the main living floor shall be
cantilevered and shall not encroach more than S into the front yard (Bayside)
or more than 4' into the rear years (interior or -part' side)."
Despite being provided with the building plans for Lot No. 21. which included
"major structures" not in conformance with the buildable area limits and envelopes
iilustrated on the Map, and "minor structures" which do not conform to the allowable
encroachment, the Board approved those plans. The "major structure" encroachments
proposed are on all four sides of the proposed structure and represent a substantial increase
in the size of Lot No. 21's buildable area at the expense of the other shareholders. The
approval by the Board was beyond its authority granted by the Bylaws.
Surprisingly, a representative of the Board appeared at the Planning Commission to
argue on behalf of the owner of Lot No. =1, and represented that The Bay Island Club had
gapproved the plans for Lot No. 21. Since the approval by the Board was beyond the
uthoriry of the Board, thus a void act. this constitutes a blatant misre- resentation to :he
C:y of Newport Beach. -•yhich should be corrected.
The Members of the Board of Directors owe a fiduciary dury to the shareholders to
ke no action In vt l aC I O: OT l e B" la'" o. n V,C: .'J. L eaylti (1991) 220 .a ct.i pp ;d 1_, v;
=3 Cal. Rptr.:56. (Individual Board Members have personal liability for allowing
omeowner to build in common area). The Board's approval of the pians for Lot No. 21
%vas a violation of the fiduciary duties owed by Board Members to the shareholders. Such
action, in violation of the Bylaws and design guidelines. exposed the Board and its
'•[embers to liabiiiry to the shareholders. The Board has, in effect. allowed Lot No. 21 to
build in what amounts to the common area, which is subject to the use and enjoyment of ail
shareholders. The Board must take immediate action to rectify this situation.
On behalf of Mr. Duda. and other Shareholders who have voiced concern over the
Board's failure to uphold the Corporations Bylaws and the design guidelines, we demand
10
that the Board immediately rescind its approval of the Lot No. 2 i building plan, notify the
July 20, 1999
Page 3
City ofNewport Beach of the rescission, and require a revised plan that does not exceed the
building limit lines and meets the letter along with the spirit of the Bylaws and design
guidelines. We further urge you to immediately inform the City of Newport Beach that The
Bay Island Club's Board has withdrawn its "approval" of the plans as proposed. Failure
to rescind this approval will only aggravate the damages to my client and the other
shareholders and expose members of the Board to personal liability.
f' My client had requested the appeal hearing set for June 26, 1999, be continued to
meet and attempt to work the problem out as friendly neighbors. Unfortunately, that offer
was refused.
I would respectfully request that you consult with the attorney for the Corporation
12 before continuing on this course of action. I will be pleased to discuss this matter with you
or your counsel. A
Very talk yours,
E. TURNER
FET:Imr
cc: Fritz Duda