A letter circulating under the title “The Right Fight, The Wrong Battlefield” is correct about one thing: the Association Board is not San Diego County. Traffic studies, CEQA, fire-evacuation modeling, and the Major Use Permit belong at the County. Protect Rancho Santa Fe has already taken those issues to the County forums that can decide them.
Where that letter is wrong – and where the Board itself went wrong – is more fundamental. It treats a February 2025 resolution as if it were a substitute for the Protective Covenant (PC). It treats Fair Housing law as a trump card that requires the Board to approve a land use the recorded documents do not allow, and it treats the Board’s fiduciary duty as a duty to choose the lawsuit the Board thought it could survive, rather than a duty to apply and enforce the governing documents that bind every Building Site equally.
The Fiduciary Failure Came First
Let’s start with the duty the circulating letter invokes but does not apply. Directors of the Rancho Santa Fe Association are fiduciaries. Under the Davis-Stirling Act and California nonprofit-corporation law, they must act in good faith, after reasonable inquiry, and in the best interests of the Association and its members collectively. That duty is not a license to put litigation-risk management ahead of the fundamental requirement to enforce the recorded restrictions of our governing documents as written.
On February 11, 2025, the Board adopted Resolution 2025-102 after less than twelve minutes of public Board discussion regarding the largest commercial development ever proposed inside the Covenant. The only document produced for member examination was the resolution itself. Directors said, more than once, that they were not approving the project. However, the resolution they passed was a de facto approval that Silvergate’s proposed uses fit Class C, and Par. 2 of the resolution added an unprecedented blanket approval: “to the extent any proposed uses are not expressly listed in the PC, they are not substantially different than those already allowed in Use Class C.”
Director Phil Trubey stated the Board’s rationale in the open session that immediately preceded the vote (February 11, 2025 Special Board meeting video):
“Here at the board, we’re very cognizant of the fact that we’re kind of stuck between two potential lawsuits. … So what we’re trying to do on this board is to pick the action which is most legally defensible. … We’re trying to protect your money. Lawsuits are expensive. We want to win any potential lawsuit that comes our way. So that’s why we’ve chosen what we’ve done.”
Against the membership and for the developer.
Every “finding” in Resolution 2025-102 was an accommodation for the developer. None represented the interests of the membership – particularly the neighboring owners who border the Silvergate parcels. The resolution bypassed every well-established remedy in our governing documents for addressing a developer’s desired change modifications to use of their property, and it also wrongly subordinated the PC’s lawful authorities to CA Fair Housing accommodations. That sequence is not Covenant enforcement. It is our Board preparing to defend an anticipated lawsuit by the membership.
The resolution completely ignored Article I, Paragraph 1 of the Protective Covenant (“General Basic Restrictions”), and tortured the application of Paragraph 99, Residence Districts of Class C: no building shall be constructed to be used for any purpose other than those enumerated. The resolution was a litigation strategy: choose the path against a membership lawsuit and the treat that choice as if it were Covenant enforcement.
This approach fails any serious reading of fiduciary duty. The business judgment rule protects reasonable decisions made inside the Board’s authority after a genuine effort to apply the documents. A claim for negligent discharge of duties is subject to the business judgment rule. A claim for breach of fiduciary duty is not. Skipping the land-use restriction the Board was elected to enforce, or treating Fair Housing as a repeal of Class C, is not a protected business judgment. “Choosing the most legally defensible path” is not prudence. It is a breach of fiduciary duty.
The Resolution Functioned as a Bypass
Resolution 2025-102 did not resolve an ambiguity in the Protective Covenant. It declared the threshold land-use questions settled without answering them, then invited every later reviewer – Art Jury, staff, County, and now a circulating letter – to treat that declaration as a legal fact.
Let’s look at what the resolution actually did and didn’t do.
Par. 1 of Resolution 2025-102 declared the proposed uses “consistent with the uses set forth in Use Class C.” Par. 2 of the resolution added that unlisted uses were “not substantively different” from uses already allowed and thereby gave Silvergate wide latitude to build what it wants. Par. 3 of the resolution then said that uses “integral to senior living and/or memory care are likely entitled to a reasonable accommodation … regardless of whether they comply with Use Class C (or any other Use Class),” and that no separate determination or request was even necessary. Par. 4 of the resolution limited the findings to “Use Class compliance.” That is the question the Board was required to decide by applying the recorded documents, not by corrupting them.
The resolution never applied Article I, Par.1 of the Protective Covenant as a land-use rule. The Covenant draws a hard line between dwellings and institutions. Class C is an exclusive list of residential uses: apartment house, multiple dwelling, two-family dwelling, boarding house, lodging house, and the other dwelling types named in the text. Par. 1 separately prohibits institutional uses of specified kinds. Class K is the district the Covenant set aside for hospitals and institutions – and even that district restates the same institutional limits. The Association’s authority to interpret the Covenant is the authority to apply that map. It is not the authority to move an institutional use onto the Class C list by calling it “similar to” a dormitory or boarding house.
The memory-care building is the land-use problem. It is not a dwelling on the Class C list. It is sized, staffed, licensed, and operated as a group-care institution of 28 to 48 dedicated suites – depending on whether the Art Jury allows a second floor. California HOA law treats a care home of six or fewer residents as residential. If it is larger than six rooms, the use is group care – institutional, not an apartment house. Resolution 2025 102 treated it as “similar to” a Class C dwelling and never applied the Covenant prohibition of certain institutions.
The power to interpret is not the power to modify or amend. The Covenant gives the Association and the Art Jury power to interpret and enforce its provisions. (California law applies the plain-meaning rule: if document language is clear and explicit, the plain meaning applies and the Board cannot rewrite it under the guise of interpretation.) It does not give the Board power to rewrite the closed list of Class C uses or to set aside a basic land-use restriction by a “similarity” finding. The correct path to modify Class C land use is Protective Covenant, Par. 165 and Chapter 80, not Resolution 2025-102. The correct path to modify Article I, Par. 1 of the Protective Covenant – a basic restriction – is Covenant Paragraph 164. Neither correct path was taken.
The same resolution treated Block M as if it were a standalone Class C district. It is not. The original maps and Covenant Acceptance No. 33769 (July 14, 1930) restricted these parcels under both Class C and Class L. Ignoring the second classification for the largest project ever proposed inside the Covenant is not a narrow zoning clarification. It is a change in the intensity and character the documents actually recorded. Consistently throughout its history, the Association has defined Block M, a residence district of Class C and business and public use district of Class L, as an area of low-density: one dwelling per 2.86 acres.
Two of the project’s original four parcels sat outside the Covenant. The Art Jury’s own minutes conditioned continuing review on annexation of those parcels. Annexation would have given members a vote. The annexation requirement was dropped. The project shrank onto the two Covenant parcels. The vote never happened (Unsurprisingly, the application to the County contains all four parcels.)
That is why the circulating letter can now say “the Board already found it consistent; unwinding it would be arbitrary.” That specious argument is available only because the Board declined to apply Article I, Paragraph 1 of the Protective Covenant as a land use restriction, declined to apply dual classification, failed to apply the density restriction that it must apply to every property in the Covenant, declined to send a Class C modification through Covenant Paragraph 165 and Chapter 80, declined to send a modification of Article I, Paragraph 1 through Covenant Paragraph 164, and treated Fair Housing as if it erased Class C.
A Foregone Sequence of Events, Not an Open Application of the Covenant
The 12-minute February 11, 2025 discussion before the resolution passed – recorded on the Special Board meeting video and reflected in the approved minutes – had the sound of a decision already made, because it was. Directors repeated that they were only deciding classification, not approving the project. They then directed the Art Jury to review Silvergate as a Class C residential project. Classification was the gate. Once that gate opened, the rest of the Association process was treated as a sequence, not as an open question.
Three months later that presupposition was put in writing. On May 10, 2025, then-President Courtney LeBeau sent an email about Silvergate that did two things no fiduciary decision-maker should do.
First, it misstated the law. The email asserted that “two different legal counsels” had advised that “Silvergate will have a very strong case due to the CA fair housing law which takes precedence over anything in our PC,” and that if Silvergate succeeded in litigation “all rules are off and they can build whatever they want.” That is not the law. Fair-housing statutes require a reasonable accommodation so a person with a disability can use housing the documents otherwise allow. They do not compel a private covenant community to authorize an institutional use the recorded restrictions forbid. They do not extinguish the Protective Covenant. Health & Safety Code § 1569.85’s residential-use safe harbor applies only to facilities of six or fewer persons. Silvergate’s memory-care component greatly exceeds that threshold.
Second, the same email described the project’s future in the declarative: Silvergate “is going back to the Art Jury,” “they will then put up story poles,” “then off to the County,” “And then permitting.” Those are statements of what will happen, not of what might happen after an open application of the Covenant. The email simultaneously insisted the Board must remain “unbiased.” Treating clearance as expected while claiming neutrality is prejudgment. Fifteen months later the same officer, again serving as Board President, listed “Misinformation” as a strategic challenge and urged members to rely on Association-issued materials – without any public correction of the May 2025 legal error or the presupposed sequence.
The circulating letter now treats that sequence as if it were a legal fact the Board is forbidden to revisit. It was not then, and is not now, a legal fact. It was a choice to treat approval of the use as a fait accompli and to leave the Covenant’s mandatory modification procedures unused.
What the Circulating Letter Gets Wrong – and What It Leaves Out
The circulating letter spends its force on petition zip codes, County traffic studies, and a predicted AmeriCare lawsuit. It never grapples with the documents the Board was required to apply.
Protect Rancho Santa Fe is a Covenant-member organization. Its officers and directors are Association members. Its legal arguments are Covenant arguments: permitted land uses, unit size, setbacks, modification procedure, dual classification, and equal enforcement. Neighbors outside the Covenant have every right to speak at the County, but their signatures do not vote at the Association. That has never been in dispute. The Board is entitled to ask how many petition signatures belong to members of record. It is also obligated to apply the Protective Covenant whether the member opposition is 5 or 500. Headcount does not change the Board’s requirement to apply Article I, Paragraph 1 of the Protective Covenant, Regulatory Code § 43.0301, Covenant Paragraph 164, Covenant Paragraph 165, or Chapter 80. The documents do not become optional because a faction prefers a different reading, and they do not become optional because some supporters live outside the Covenant.
The letter warns that if the Board applies the Covenant to Silvergate’s institutional component, AmeriCare could sue for a fair-housing violation, and that a denial after Resolution 2025-102 would be arbitrary. Resolution 2025-102 planted the same idea in Paragraph 3. That reading is wrong as a matter of law.
Federal and California fair-housing laws protect people in protected classes from discrimination in the sale or rental of housing. They require a reasonable accommodation when one is needed so a person with a disability can use and enjoy a dwelling the documents otherwise allow. They do not dictate land-use classifications. They do not add a new use to Class C. They do not require a private covenant community to approve an institutional campus the recorded restrictions forbid. And they do not authorize our Board to skip the Protective Covenant’s own modification procedures.
The distinction is straightforward. An apartment house on this site, built to Class C and to the Regulatory Code, is housing. Fair-housing law would protect qualified residents of that housing. A group-care institution of 28 to 48 dedicated suites – sized, staffed, and licensed as an institution rather than as a dwelling – is a land-use decision. California itself draws that line. A “reasonable accommodation” is also not a project wide rezoning. It is a case-by-case adjustment so a particular person can live in housing that is already permitted. It is not a license to place an institutional building on a Class C and Class L site, ignore unit-size standards, or declare that compliance with Class C no longer matters. If the Board’s theory were correct, any applicant could attach a protected-class label to a forbidden intensity and the Covenant would yield. That is not the law, and it is not how this Association treats any other member.
Applying a neutral, pre-existing use restriction to the building type – the same restriction that would apply to any other institutional proposal – is not discrimination. Treating Fair Housing as a Covenant override is.
The letter also leaves out the record the Board itself created. Courts reviewing CC&Rs construe them as a matter of law. Interpretation under Paragraph 180 is the authority to resolve genuine uncertainty. It is not the authority to expand a closed list, ignore a dual classification, or skip Chapter 80. Rancho Santa Fe precedents – Ticor Title (1986), Dolan-King (2000), Rababy (2009) – limit interpretive power where it overrides specific restrictions or bypasses owner protections. The February 11, 2025 meeting video and approved minutes, Resolution 2025-102’s catch-all and Fair Housing paragraph, the dropped annexation vote, and the May 10, 2025 LeBeau email treating clearance as expected are the record of how that limit was crossed. The circulating letter never mentions them.
The Rules the Board Applies to Everyone Else
Regulatory Code § 43.0301 requires not less than 1,750 square feet of enclosed living space in each multifamily unit. Fifty-two of the proposed apartments are 1,440 square feet. On October 8, 2024, the Art Jury itself directed that a variance must be sought or the units redesigned. That requirement was later dropped from the public record without a noticed variance under Regulatory Code § 1.24. It was only after consultants from Ekard Smith & Associates – retained by Protect Rancho Santa Fe – identified the shortfall, and after Protect Rancho Santa Fe formally asked the Art Jury to halt further processing until a variance or redesign occurred, that the variance requirement was put back on the record. That occurred after conceptual review had already been advanced (March 2026) and plan review approved (August 25, 2026) – nearly two years after the Art Jury first directed that a variance “must be sought.”
When Covenant members wanted a dog park at Osuna Ranch, the Board required surrounding-owner consent forms. That effort failed because the neighbors did not consent. When a homeowner needs a variance, notice goes to owners within the prescribed distance and the Board is supposed to apply the Code. Silvergate is the largest development ever considered inside the Covenant. It received a similarity finding, a skipped Article I, Paragraph 1 land-use analysis, a Fair Housing override theory, a disappeared unit-size requirement, and dual zoning treated as optional. That is not equal application of our governing documents.
What Equal Treatment Actually Looks Like
No one is asking the Board to decide level of traffic service on Via de la Valle or to substitute itself for CEQA. Those are County questions, and they should stay there.
What the Board is being asked to do is the land-use work it left unfinished:
- Apply Article I, Paragraph 1 of the Protective Covenant as a land-use prohibition and require the institutional wing to come out, or put that prohibition to the owners for modification under Covenant Paragraph 164. Any modification of Class C must go to the owners under Covenant Paragraph 165 and Chapter 80. A resolution is none of those things.
- Stop treating “Fair Housing” as authority to approve a use Class C does not list.
- Apply Class L as well as Class C, or process a proper change in classification.
- Require every multifamily unit to meet § 43.0301, or process a variance with notice to owners within 500 feet – the same notice any other member would receive.
- Withdraw Resolution 2025-102. Stop treating it as a substitute for the recorded restrictions.
This is not a demand that the Board “fall on its sword.” Rather, it is a demand that Silvergate be held to the same rules as the member who wants a fence, a guest house, a dog park, or a lot-line adjustment.
Placing the Risk and Blame Where They Belong
The circulating letter treats the possibility of a Silvergate lawsuit as if it would be Protect Rancho Santa Fe’s fault for asking the Board to unwind Resolution 2025-102. The reality is that the Board created that exposure when it substituted a resolution for the Covenant’s own, well-established procedures.
If the Association is sued and found to have been in the wrong, the fault will not lie with members who asked the Board to use the paths already written into the Protective Covenant. It will lie with a Board that substituted an errant resolution for those paths. That same resolution misstated the reach of Fair Housing law and gave Silvergate wide latitude under a novel “not substantively different” standard, which sets a dangerous precedent for every future project on Class C land.
The circulating letter says the Board’s fiduciary duty includes “not exposing the Association to a lawsuit it would likely lose.” The lawsuit risk the letter fears was created when the Board chose legal defensibility over its responsibility to equally apply and enforce our governing documents and then treated that choice as final. One of the foundational reasons Protect Rancho Santa Fe came into existence was to ensure that the Board and the Art Jury do their respective jobs by applying our governing documents thoroughly, correctly, and equally. The legal risk, if any, of a lawsuit from Silvergate was created when those jobs were neglected, done incorrectly, or left unfinished. It was not created by members insisting that our governing documents be applied consistently and fairly to all members of the Association.
The Covenant exists so that density, use, and character are not rewritten project by project for the applicant with a legal team ready to sue. If those rules bind a homeowner on La Gracia, they bind a 148- to 168-unit rental campus on Calzada del Bosque. That is the only equality that matters here. The membership is entitled to it and should insist on it.
On behalf of the Board of Directors,
Russ Penniman
President of the Board
Protect Rancho Santa Fe
Source Documents and Video
The documents and video cited in this letter are collected in one folder: Open the source packet.
- RSFA Board of Directors, Resolution 2025-102 (February 11, 2025)
- February 11, 2025 Special Board meeting video (public discussion of Resolution 2025-102)
- Transcript of the February 11, 2025 Board discussion before passage of Resolution 2025-102
- Email from Courtney LeBeau, subject “Silvergate” (May 10, 2025, 2:03 p.m. PDT)
- Letter from Gail MacLeod, Director of Covenant Administration, to Helen Smith, re Portion Lot 1, Block M, APN 268-180-19 (June 12, 1986)
