Yu v. Broadway Hollywood HOA. (March 22, 2023).

This is an unpublished decision which trail and appeal was litigated by Stephen M. Levine of the Judge Law Firm. The Association is a mixed-use condominium, in which the Association had a duty to provide valet service to residence, businesses and business customers, but not residents' guests. The homeowners challenged the valet fees imposed on her customers claiming the Association had no right to charge fees for a fundamental property right. The Court held that the valet parking fees imposed on the business residents' customers were reasonable and enforceable because: (1) Civil Code §5600 does not prohibit HOAs from imposing fees on third parties; and (2) the revenue generated by the valet fee did not necessarily exceed the Association's parking cost since it was applied toward the following year's parking budget.

MANAGER TAKEAWAY: When imposing fees for rental of community facilities (such as pools, clubhouses, parking lost), managers must look at the costs involved in operating and cleaning the facilities and they must be reasonably related to the revenue generated.

Fairly-Haze v. Whitesails Cmty. Ass'n. 2d Civ. No. B311574.

This is an unpublished decision but is important with respect to accommodating a request for disabled parking. In this case, an owner had two parking spaces in an underground parking structure. He was handicapped and requested a space close to the elevator. The association did not have authority to reassign parking spaces because they were all deeded. To accommodate the owner, the board offered him exclusive use of a space outside the garage in exchange for one of his other spaces. The owner felt that this was insufficient, and he sued. The court ruled in favor of the association.

MANAGER TAKEAWAY: The regulations enacted under the Americans With Disabilities Act only require that an association grant a “reasonable accommodation” to a disabled person with regard to the disabled person’s ability to use common area elements. In this case, the accommodation was not “reasonable” because the association didn’t have the legal ability to grant it. Important to this case is the fact that in considering any request for a reasonable accommodation from a disabled person, the association can offer a different accommodation to the one requested, and the offer of an alternative will be taken into consideration in any court challenge of the matter. This ability to offer an alternative is especially important where a disabled person asks for theaccommodation of a “service animal,” for example, if the service animal proposed is one with known dangerous propensities, another breed may be offered instead.

North Coast Village Condominium Assn. v. Phillips (202) 94 Cal.App.5th 866.

This case involves workplace violence restraining orders in the context of a homeowners association. North Coast Village Condominium Association (“Association”) filed a workplace violence restraining order in support of its board president, Neil Anderson, and 46 other employees and board members seeking to restrain resident, defendant-appellant Nancy Phillips. At the conclusion of a three-day hearing, the trial court denied the Association’s request for a restraining order. The Court voluntarily awarded the Board President Anderson a civil harassment restraining order pursuant to Code of Civil Procedure section 527.6 against Defendant resident Phillips “in the interest of judicial efficiency and conforming pleadings to proof.” In so doing, it impliedly amended the pleadings to add Anderson as a party. Phillips appealed, requesting that the Court of Appeal reverse the order granting the civil harassment restraining order and enter judgment dismissing all restraining orders with prejudice. The Association filed a cross-appeal seeking reversal of the order denying the workplace violence restraining order. The Association also requested that the Court reverse and remand with instructions to enter a restraining order that included the stay away orders. The Court of Appeals concluded the trial court erred in interpreting and applying section 527.8. The order was reversed, and the case remanded for further proceedings.

MANAGER TAKEAWAY: This case is significant in that it clarifies that an association may file for a restraining order for individuals other than itself. This will greatly expand the ability of associations to file restraining orders against homeowners that cross over the line from being merely annoying to engage in the legal definition of harassment, stalking, and threats of violence. Managers should advise their Boards to consult with association attorneys in instances where homeowners are endlessly sending one email after another to management or Board members, which may constitute legal harassment or stalking, particularly if there is a threat included in such messages. Any threats of violence should be taken seriously, and immediately referred to legal counsel.

Takiguchi v. Venetian Condominiums Maintenance Corp. (2023) 90 Cal.App.5th 880.

This case involves an election and whether members present can be counted towards a quorum if they do not submit ballots. Venetian Condominiums Maintenance Corporation was a condominium project with 368 condominium units in the University Town Center area of San Diego. Ali Ghorbanzadeh owned 18 units at the Venetian. He was elected to Venetian’s board of directors in 2008. In 2009, Ghorbanzadeh appointed his son Sean Gorban to the board. They controlled the three-member board continuously from 2009 through at least 2021. Guy Takiguchi was elected as the third director in 2015. From 2009 to 2021, the board repeatedly failed to hold annual elections, either due to the absence of a quorum or for other reasons. Ghorbanzadeh’s seat was up for re-election at the 2020 annual meeting, and there were two other candidates for the seat, including candidate Nishime. The Ballot Box, Inc. contracted as the Venetian's inspector of elections, declaring there was no quorum for the meeting because Ballot Box had only received 166 ballots, and the quorum was 188. Candidate Nishime participated in the January 20, 2021, meeting remotely by computer and took multiple screenshots of the participants. Nishime was able to identify eight members who were present (representing 37 units). Had those units been counted with written ballots, there would have been a quorum of 203 present at the meeting. The eight participating members who represented units for which no ballot had been submitted included Ghorbanzadeh (representing 18 units), his son Sean Gorban (representing one unit), his other son Brian Gorban (representing three units), and an ally of Ghorbanzadeh’s who was also running for the director’s seat (representing one unit). An allegation asserted Ghorbanzadeh and his allies did not submit their ballots “in a deliberate and tactical effort to not reach quorum so they could remain in power another year or two.” Venetian submitted no evidence refuting this accusation. The Court of Appeal concluded the trial court properly ordered Venetian to hold a meeting for the purpose of counting the 166 written ballots cast for its January 20, 2021, annual member meeting and election. Substantial evidence supported the trial court’s finding that there was a quorum present for that meeting. By adjourning the meeting based on the purported absence of a quorum, Venetian failed to conduct the scheduled meeting or cover the noticed agenda items, which included counting the ballots and determining the results. [The conclusion and importance of the case is that a remedy exists if the corporation holds a meeting and a vote but refuses to count the ballots because of its incorrect view that the corporation’s quorum requirements weren’t met. In short, a board must hold annual meetings and properly count ballots and persons present for quorum purposes.

MANAGER TAKEAWAY: This case reminds us that a quorum is determined not just by the number of ballots received, but is determined by the number of persons present, in person, by ballot and by proxy. In this case, the inspector of election simply made a mistake by not counting the persons physically present in determining the quorum. Managers probably already know about the quorum rule stated here, but a refresher of what counts for a quorum is never unhelpful.

River's Side at Washington Sq. Homeowners Assn. v. Superior Court (2023) 88 Cal.App.5 th. 1209.

This case concerns the ability of an Association to sue a developer on behalf of its homeowners. Plaintiff River’s Side at Washington Square Homeowners Association (“Association”) was established to manage a development consisting of 25 residential units and common areas. It sued Defendants River’s Side LLC et al. for construction defects in the residential units. Defendants attacked six of the seven causes of action asserted against them, arguing that the Association lacked standing to sue on behalf of its members for defects in residential units that it did not own and had no obligation to repair. The Association alleged it had standing to bring this action on behalf of its members pursuant to the California  Civil Code, however the trail court disagreed and granted the demurrer without leave to amend, holding that the Association lacked standing under Civil Code sections 945 and 5980, and that Code of Civil Procedure section 382 was inapplicable. Because the order sustaining the demurrer left one cause of action remaining, it was not immediately appealable, so the Association challenged the order by petition for writ of mandate. The Court of Appeal concluded that the Association did have standing to bring claims for damages to the common areas, and that the Association at least nominally alleged such damages. The Court further concluded that the Association might have standing to bring claims for damages to the residential units that sound in contract or fraud if it could meet the requirements for bringing a representative action pursuant to Code of Civil Procedure section 382. The Court also determined that the Association should have been granted leave to amend to cure any standing defect. The Court thus granted the petition for mandamus relief and directed the trial court to reverse its order granting the demurrer. This case provides HOAs a pathway to file on behalf of their homeowners without those homeowners actually being a party to a lawsuit.

MANAGER TAKEAWAY: This is a complex treatment of a question that is usually answered by reference to existing law. Under existing law (Civil Code section 5980), an association has standing to sue for damage to individual units if those damages “relate to” the common area or there is damage to an individual unit that the association is obligation to repair or maintain. This rule would normally apply to many construction defect cases. However, in any construction defect case, the manager should advise his or her Board to hire a qualified and expert construction defect lawyer, who will consider the issue presented by this case as well as existing law, and decide what is the legally correct thing to do.