All posts by Steve Tinnelly

Government Code Section 65852.26. Sale of Accessory Dwelling Units.

(a) A local agency shall allow an accessory dwelling unit to be sold or conveyed separately from the primary residence to a qualified buyer if all of the following apply:

(1) The accessory dwelling unit or the primary dwelling was built or developed by a qualified nonprofit corporation.

(2) There is an enforceable restriction on the use of the land pursuant to a recorded contract between the qualified buyer and the qualified nonprofit corporation that satisfies all of the requirements specified in paragraph (10) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.

(3) The property is held pursuant to a recorded tenancy in common agreement that includes all of the following:

(A) The agreement allocates to each qualified buyer an undivided, unequal interest in the property based on the size of the dwelling that each qualified buyer occupies.

(B) A repurchase option that requires the qualified buyer to first offer the qualified nonprofit corporation to buy the accessory dwelling unit or primary dwelling if the buyer desires to sell or convey the property.

(C) A requirement that the qualified buyer occupy the accessory dwelling unit or primary dwelling as the buyer’s principal residence.

(D) Affordability restrictions on the sale and conveyance of the accessory dwelling unit or primary dwelling that ensure the accessory dwelling unit and primary dwelling will be preserved for low-income housing for 45 years for owner-occupied housing units and will be sold or resold to a qualified buyer.

(E) If the tenancy in common agreement is recorded after December 31, 2021, it shall also include all of the following:

(i) Delineation of all areas of the property that are for the exclusive use of a cotenant. Each cotenant shall agree not to claim a right of occupancy to an area delineated for the exclusive use of another cotenant, provided that the latter cotenant’s obligations to each of the other cotenants have been satisfied.

(ii) Delineation of each cotenant’s responsibility for the costs of taxes, insurance, utilities, general maintenance and repair, improvements, and any other costs, obligations, or liabilities associated with the property. This delineation shall only be binding on the parties to the agreement, and shall not supersede or obviate the liability, whether joint and several or otherwise, of the parties for any cost, obligation, or liability associated with the property where such liability is otherwise established by law or by agreement with a third party.

(iii) Procedures for dispute resolution among the parties before resorting to legal action.

(4) A grant deed naming the grantor, grantee, and describing the property interests being transferred shall be recorded in the county in which the property is located. A Preliminary Change of Ownership Report shall be filed concurrently with this grant deed pursuant to Section 480.3 of the Revenue and Taxation Code.

(5) Notwithstanding subparagraph (A) of paragraph (2) of subdivision (f) of Section 65852.2, if requested by a utility providing service to the primary residence, the accessory dwelling unit has a separate water, sewer, or electrical connection to that utility.

(6) Nothing in this subdivision limits the ability of an accessory dwelling unit to be sold or otherwise conveyed separate from the primary residence as a condominium pursuant to an ordinance adopted under Section 65852.2.

(b) For purposes of this section, the following definitions apply:

(1) “Qualified buyer” means persons and families of low or moderate income, as that term is defined in Section 50093 of the Health and Safety Code.

(2) “Qualified nonprofit corporation” means a nonprofit corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has received a welfare exemption under Section 214.15 of the Revenue and Taxation Code for properties intended to be sold to low-income families who participate in a special no-interest loan program.

Virtual Meetings (Meetings Entirely by Teleconference)

Subject to certain requirements and limitations, the Open Meeting Act allows for HOA board meetings to be conducted via teleconference, where “teleconference” means that:

“…a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both.” (Civ. Code § 4090(b).)

A teleconference would thus encompass a web conference or similar technology that allows for directors to interact in real-time.

No Physical Location Required for Virtual Meetings
Where an open board meeting is to be held via teleconference, Civil Code Section 4090 generally requires the association to identify at least one physical location where members may attend and observe (listen to) the teleconference meeting, as well as address the board on during open forum.  (See “Teleconference Meetings.”)

Civil Code Section 4926 was added to the Davis-Stirling Act to dispense with this physical location requirement in order to facilitate conducting meetings entirely by teleconference (“virtual meetings”), subject to the additional requirements specified in Section 4926 (described below).

Virtual Meeting Requirements

Notice Requirements – The notice for a virtual meeting must include, in addition to other required content for meeting notices, all the following: (Civ. Code § 4926(a)(1).)

    • Clear technical instructions on how to participate by teleconference;
    • The telephone number and e-mail address of a person who can provide technical assistance with the teleconference process, both before and during the meeting; and
    • A reminder that a member may request individual delivery of meeting notices, with instructions how to do so.

Equal Participation Requirement – Every director and member must have the same ability to participate in the meeting that would exist if the meeting were held in person. (Civ. Code § 4926(a)(2).)

Roll Call Vote Requirement – Any vote of the directors at the meeting must be conducted by a roll call vote. (Civ. Code § 4926(a)(3).)

Option to Participate by Telephone Requirement – Any person who is entitled to participate in the meeting must be given the option of participating by telephone. (Civ. Code § 4926(a)(4).)

Not Permitted for Ballot Counting Meetings
A meeting at which ballots are counted and tabulated pursuant to Civil Code Section 5120 may not be conducted virtually (Civ. Code § 4926(b).) If an HOA wants to conduct this meeting by teleconference, it must specify a physical location as discussed above. (Civ. Code § 4090(b).)

Related Links

AB 648 Signed! Virtual HOA Meetings
-Published on HOA Lawyer Blog (October 2023)

Davis-stirling Act

Civil Code Section 4926. Meetings Entirely by Teleconference.

(a) Notwithstanding any other law or the association’s governing documents, a board meeting or meeting of the members may be conducted entirely by teleconference, without any physical location being held open for the attendance of any director or member, if all of the following conditions are satisfied:

(1) The notice for each meeting conducted under this section includes, in addition to other required content for meeting notices, all of the following:

(A) Clear technical instructions on how to participate by teleconference.

(B) The telephone number and electronic mail address of a person who can provide technical assistance with the teleconference process, both before and during the meeting.

(C) A reminder that a member may request individual delivery of meeting notices, with instructions on how to do so.

(2) Every director and member has the same ability to participate in the meeting that would exist if the meeting were held in person.

(3) Any vote of the directors shall be conducted by a roll call vote.

(4) Any person who is entitled to participate in the meeting shall be given the option of participating by telephone.

(b) Subdivision (a) does not apply to a meeting at which ballots are counted and tabulated pursuant to Section 5120.

Related Links

AB 648 Signed! Virtual HOA Meetings
-Published on HOA Lawyer Blog (October 2023)

LNSU #1, LLC v. Alta Del Mar Coastal Community Association

(2023) Nos. D080208, D081204

[Board meetings; E-mail Exchanges] E-mail discussions between HOA Board Members are not “meetings” within the definition of the Open Meeting Act.

James E. Friedhofer; Knottnerus & Associates, Wilfred Knottnerus and Mark B. Simpkins for Plaintiffs and Appellants.

Gordon & Rees, Craig J. Mariam, John B. Fraher, and Scott W. McCaskill for Defendant and Respondent.

OPINION

IRION, J.

Appellants LNSU #1 and LNSU #2, two homeowners in a common interest development managed by the Alta Del Mar Coastal Collection Community Association (the Association), appeal the judgment entered against them in their action against the Association for violations of the Common Interest Development Open Meeting Act (OMA; Civ. Code, § 4900 et seq.; subsequent undesignated section references are to this code). After a bench trial, the court rejected appellants’ claims that the Association violated the OMA when its board of directors took action in an executive session that it should have taken in a meeting open to all members, the board failed to prepare minutes concerning a second executive session, and certain directors discussed items of Association business via e-mails without giving all Association members notice and opportunity to participate in the discussions and without preparing related minutes. We affirm the judgment.

Appellants also appeal postjudgment orders denying their motion to strike or tax costs and granting the Association’s motion for attorney fees. The trial court awarded costs under a provision of the OMA authorizing such an award to a prevailing homeowners association in an action the court finds “to be frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)). The court awarded attorney fees under a provision of the Davis-Stirling Common Interest Development Act (Davis-Stirling Act; § 4000 et seq.) applicable to an action to enforce the governing documents of a homeowners association (§ 5975, subd. (c)). We conclude the Association is not entitled to attorney fees or costs, and reverse the challenged orders.

I.

BACKGROUND

A. Parties

The Association is the governing body of a common interest development in San Diego County that includes 10 homes. At most times pertinent to this appeal, the Association had a board of five directors, including Martin Mueller, Richard Pyke, Ponani Sukumar, Anthony Valeri, and Douglas Woelkers.

Appellants LNSU #1 and LNSU #2 are limited liability companies each of which owns a home in the Association. Sukumar is a manager of both entities. Sukumar sometimes sent Douglas Grimes as a proxy to attend Association board meetings. Grimes at some point became a manager of LNSU #2 and was elected to the Association’s board in June 2017.

B. E-mails Among Directors

From August 2016 through March 2017, Mueller, Pyke, Valeri, and Woelkers exchanged multiple e-mails concerning Association business. Several examples are summarized below.

  • On August 23, 2016, Valeri sent Mueller, Pyke, and Woelkers e-mails proposing items for the agenda for a board meeting on August 25, describing appellants’ plans to construct 10,000 square feet of underground living space on their lots, and suggesting imposition of a fine if the plans were not submitted to the board. Mueller responded with a question about another lot approximately 30 minutes later.
  • On August 26, 2016, Pyke responded to Valeri’s August 23 e-mails by asking, “Any reaction to our HOA meeting yesterday?” In a separate e-mail, Woelkers responded that he “sense[d] we are heading towards an acrimonious relationship with [Sukumar]” and would need to take “some kind of punitive action just to uphold the precedent of the rules of the [Association].”
  • On October 11, 2016, Mueller sent Pyke, Valeri, and Woelkers an e-mail about the landscaping plans for appellants’ lots to state his position appellants should not be granted an extension of time to submit their plans and agreed to a board meeting to address the issues.
  • On October 11, 2016, Valeri sent Mueller, Pyke, and Woelkers an e-mail concerning a hearing and potential imposition of a fine on another homeowner for violating the Association’s landscaping guidelines. Woelkers responded the following day to urge consistency in application of the rules regarding hearings and fines to all homeowners.
  • On January 30, 2017, Valeri sent Pyke, Mueller, and Woelkers an e-mail stating he had removed an item from the agenda for the February 1 board meeting and how he would “like to get [Grimes] out of everyone’s hair.” Mueller responded the following day that he could not attend the meeting.
  • On February 5, 2017, Valeri forwarded Mueller, Pyke, and Woelkers an e-mail he had received from Grimes accusing him (Valeri) of violating the Association’s governing documents and complaining of delays in approval of appellants’ landscaping plans. The following day, Pyke responded,” Blah blah blah!”; and Mueller responded, “We need to get rid of Douglas Grimes. He is not part of our community.”
  • On March 3, 2017, Valeri sent Mueller, Pyke, and Woelkers an e-mail about whether to have a hearing on appellants’ landscaping plans and whether to levy a fine. Valeri stated he would be having a call with an attorney on” how to handle this situation over the longer term.” Ten minutes later, Pyke responded, “I think maybe we let the fines slide since [appellants have] submitted plans.”

C. E-mails from Sukumar and Grimes

During the same period that Mueller, Pyke, Valeri, and Woelkers were exchanging e-mails with one another, Sukumar and Grimes sent the directors many e-mails about Association business. Some examples follow.

  • On September 26, 2016, Grimes sent all directors and two other individuals an e-mail to offer a meeting to discuss appellants’ landscaping plans without other members of the Association present.
  • On October 18, 2016, Grimes sent all directors an e-mail asking them to vote that the requirement of notice to neighbors of appellants’ landscaping plans had been satisfied.
  • On November 16 and 17, 2016, Grimes and Sukumar exchanged e-mails about the draft of an e-mail concerning board approval of appellants’ landscaping plans, which Grimes later sent to the directors.
  • On February 5, 2017, Grimes sent all directors an e-mail accusing Valeri, in his capacity as president of the Association, of having acted “contrary to the spirit and letter of the [Association’s] governing documents” and “interfered with Sukumar’s efforts to landscape [appellants’ lots] in complete accordance with the Design Guidelines.”
  • On February 19, 2017, Sukumar sent all other directors and Grimes an e-mail stating that, subject to two conditions, he approved Woelkers’s application to the board to replace a brow ditch with a buried pipe.
  • On February 24, 2017, Sukumar sent all other directors, Grimes, and two other individuals an e-mail complaining of delays in approval of appellants’ landscaping plans and requesting a board hearing be postponed and held at a neutral location.
  • On March 5, 2017, Sukumar sent all other directors, Grimes, and another individual an e-mail responding to modifications requested by Woelkers to the landscaping plans appellants had submitted.
  • On March 10, 2017, Sukumar sent all other directors, Grimes, and two other individuals an e-mail concerning the scheduling of a board meeting to discuss appellants’ landscaping plans.
  • On March 29, 2017, Sukumar sent all other directors and his attorney an e-mail complaining of the board’s failures to produce documents he had requested and requesting items be put on the agenda for an upcoming board meeting.

D. April 3, 2017 Board Meeting

The board met in executive session on April 3, 2017. Sukumar and all other directors except Mueller attended. They discussed appellants’ landscaping plans and voted 3-0 (Sukumar recused himself) to adopt the recommendations of the design review consultant to reject portions of the plans concerning driveway gates and walls. The directors voted 3-1 (Sukumar was in the minority) to retain legal counsel.

E. Prior Litigation

On July 17, 2017, appellants filed a complaint against the Association and its inspector of elections, Therese McLaughlin, to challenge the election of three directors held on June 22, 2017. Appellants alleged that although Grimes had received the third highest number of votes and was eligible to serve on the board because he was a manager of LNSU #2, McLaughlin erroneously determined Grimes was ineligible. While the action was pending, two of the three newly elected directors resigned, and McLaughlin reversed her position and decided Grimes had been validly elected to the board. Sukumar, who was still a director, and Grimes held a board meeting on October 17, 2017, from which Valeri, who was also still a director, was absent. At that meeting, Sukumar and Grimes appointed Girish Prasad, a manager of appellants, to the board. The newly constituted board later voted to oust Valeri as president of the Association, to install Grimes as president and chief financial officer, to install Sukumar as vice-president and secretary, and to look for replacement legal counsel. The trial court enjoined Prasad from serving on the board and stayed the board’s actions concerning appointment of officers and retention of new counsel. On appellants’ appeal, this court affirmed those orders. (LNSU #1 v. McLaughlin (Dec. 20, 2018, D073366) [nonpub. opn.].)

F. August 28, 2017 Board Meeting

On August 28, 2017, while the prior action was pending, the board met in executive session to discuss the litigation. No minutes were prepared for the meeting.

G. Current Litigation

  1. Pleadings

Appellants commenced the present action against the Association on June 28, 2018, by filing a complaint alleging violations of the OMA. Specifically, appellants alleged the Association violated the OMA by conducting board meetings and taking action on Association business via e-mails without providing all homeowners notices and agendas in advance of the meetings, without allowing all homeowners to participate, and without making minutes available to homeowners. (See §§ 4910, subd. (a), 4920, subds. (a), (d), 4925, 4930, subd. (a), 4950, subd. (a).) Appellants further alleged the board held executive sessions on matters that should have been the subject of meetings open to all members, and did not note the general nature of the matters discussed in the executive sessions in the minutes of the next board meeting that was open to all homeowners. (See § 4935, subds. (a), (e).) Appellants sought a declaration that the Association had violated the OMA, an injunction requiring compliance, civil penalties, costs, and attorney fees. (See § 4955.)

The Association answered the complaint with a general denial and many affirmative defenses. As its 17th affirmative defense, the Association alleged “all the claims against [it] are barred, in whole or in part, by the doctrine of unclean hands.”

  1. Pretrial Proceedings

In discovery, the Association provided a response to appellants’ request for admissions that Valeri verified. The Association admitted directors had exchanged e-mails on matters of Association business and the exchanges violated several provisions of the OMA. In response to a request asking the Association to admit it had no facts to support its affirmative defense of unclean hands, the Association responded with certain objections and then stated: “Admit that [the Association] does not contend that the allegations regarding the [OMA] violations identified in [appellants’] Supplemental Response to Special Interrogatories, Set One as [the Association] understands them are barred by the doctrine of unclean hands. Otherwise denied. Discovery and investigation are ongoing.”

The Association filed a motion for summary judgment or, in the alternative, summary adjudication on the grounds there was no actual controversy that would warrant declaratory relief, because the Association did not contest that at most 10 OMA violations had occurred; there was no need for injunctive relief, because the latest violation alleged by appellants had occurred more than two years earlier and there was no evidence of continuing violations; and the court could determine the number of violations and set the amount of civil penalties, if any. The court ruled appellants had not met their burden to establish the threat of future harm, summarily adjudicated the cause of action for injunctive relief against them, and otherwise denied the motion.

  1. Trial

The case proceeded to a bench trial on appellants’ claims for declaratory relief and civil penalties. In a joint trial readiness report, the parties identified as the legal issues in dispute: (1) whether the e-mails identified by appellants constituted OMA violations; (2) the number of OMA violations each e-mail constituted; (3) whether the two executive sessions identified by appellants violated the OMA; (4) the number of OMA violations that each executive session constituted; and (5) the number and amount of statutory penalties, if any, to which appellants were entitled.

In their trial brief, appellants argued the e-mails the directors had exchanged concerning appellants’ landscaping plans and other Association business violated the OMA because no notices or agendas for the meetings were given to all members of the Association, not all members were allowed to attend and to speak at the meetings, and no minutes were prepared for the meetings. They argued the April 3, 2017 executive session of the board violated the OMA because the board took action on landscaping plans it should have considered in a meeting open to all members, and the August 28, 2017 executive session violated the OMA because the board prepared no minutes describing what was discussed in the session. Appellants also argued the Association’s defense of unclean hands was groundless because they were given no notice of what the allegedly unclean acts were or who allegedly committed them. Appellants asked the trial court to assess 638 civil penalties of $500 each and to award them costs and attorney fees.

In its trial brief, the Association conceded the e-mails were sent but contended the directors did not know at the time they sent them that they could be violating the OMA, and argued that because appellants’ managers (Sukumar and Grimes) had sent similar e-mails during the same period, appellants were “inequitably seek[ing] relief against the Association for the exact same conduct they engaged in.” The Association stated the April 3, 2017 board meeting “arguably” violated the OMA, because the board discussed appellants’ landscaping plans in an executive session rather than in a meeting open to all members, but pointed out Sukumar and Grimes attended the meeting and were allowed to participate. The Association conceded the failure to prepare minutes for the August 28, 2017 executive session violated the OMA, but argued appellants should not be rewarded because it was their unlawful attempt to take over the board (which was the subject of the prior action) that prevented the preparation of minutes. The Association urged the trial court to deny appellants’ claims for relief.

On the first day of trial, the court granted the Association’s unopposed request to take judicial notice of the record in the prior action arising out of the June 22, 2017 election of directors to the Association’s board. The court then heard opening statements from counsel and testimony from Woelkers. Valeri, Grimes, and Sukumar testified the following day. In overruling an objection to a question asking Sukumar whether certain e-mails violated the OMA, the court stated “it’s going to be up to the [c]ourt what constitutes a meeting” under the statute. The court admitted the e-mails described in parts I.B. and I.C., ante, and other documents. The trial court denied appellants’ motion to strike all evidence regarding the Association’s affirmative defense of unclean hands. After the close of evidence, the court asked counsel, “Is there any law on whether an e-mail constitutes a meeting?” Counsel agreed it was a novel issue on which the court would be making new law.

On the third and final day of trial, the court heard closing arguments from counsel. During appellants’ argument, the court asked counsel whether certain e-mail exchanges were board meetings within the meaning of the OMA. Appellants’ counsel answered the exchanges were meetings if the directors discussed “specifics” or offered an “opinion” about a proposed board action, but not if they discussed putting a matter on the agenda or scheduling a meeting. In its closing argument, the Association argued the exchanges were not board meetings within the meaning of the OMA, because the directors were not in the same place at the same time when they exchanged the e-mails and took no action on Association business in them.

After hearing closing arguments, the trial court ordered the parties to submit proposed statements of decision for its review. In their statement, appellants proposed that the court conclude the e-mail exchanges among directors constituted meetings under the OMA and cited statutory and case law purportedly supporting that conclusion. The Association proposed in its statement that the trial court reach the opposite conclusion and cited statutes, cases, and legislative history purportedly supporting that conclusion.

  1. Trial Court’s Decision and Judgment

After issuing a tentative decision in favor of the Association and considering appellants’ objections thereto, the trial court issued a final statement of decision that largely adopted the Association’s proposed statement. The court ruled the April 3, 2017 executive session of the board substantially complied with the OMA because appellants’ representatives (Sukumar and Grimes) participated in the session. The court ruled appellants’ unclean hands in unlawfully attempting to take over the board caused the failure of the preparation of minutes generally noting what had been discussed at the executive session held on August 28, 2017, and barred appellants from obtaining relief for that failure. The court ruled the e-mail exchanges among directors of which appellants complained were not board meetings under the OMA, and appellants’ unclean hands in sending similar e-mails to directors barred them from obtaining any relief based on the exchanges. The trial court entered a judgment that appellants take nothing from the Association.

  1. Postjudgment Motions

a. Appellants’ Motion to Strike or Tax Costs

The Association filed a memorandum of costs totaling $8,874.61 for filing and motion fees; deposition costs; service of process fees; court reporter fees; models, enlargements, and photocopies of exhibits; electronic filing or service fees; and other costs. Attached to the memorandum were invoices and receipts for the various claimed costs.

Appellants filed a motion to strike or tax costs. They argued the Association could not recover any costs, because the provision governing costs in actions under the OMA allows a homeowners association to recover costs against a homeowner only if the court finds the action “to be frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)), and their action did not fit that description. Appellants also argued the court reporter fees ($1,960.00) were not recoverable, because the parties had agreed to share those costs; and the “[o]ther” costs ($735.18) were insufficiently documented.

In opposition to appellants’ motion, the Association argued that as the prevailing party it was entitled to recover costs. The Association claimed it was entitled to costs as “the prevailing party” “[i]n an action to enforce [its] governing documents” (§ 5975, subd. (c)), because appellants alleged in their complaint that they had made requests under the Association’s governing documents, those requests underlay their claims for relief, and they recovered nothing in the action. The Association also claimed it was entitled to costs because appellants’ action was “unreasonable” and “without foundation” (§ 4955, subd. (b)) in light of their unclean hands in sending e-mails of the type they alleged violated the OMA and their steadfast resistance to the Association’s efforts to end the litigation, as evidenced by their rejection of a settlement offer,[1] opposition to the motion for summary judgment in which the Association conceded 10 OMA violations, and changing position on how many OMA violations occurred. Based on appellants’ failure to accept the settlement offer, the Association argued it was entitled to recover its postoffer costs. (See Code Civ. Proc., § 998, subd. (c)(1).) The Association finally contended the court reporter fees it had claimed were allowable as costs, and the “other” costs it had claimed were for fees for virtual hearings held during the COVID-19 pandemic.

In reply, appellants argued the statute governing costs was section 4955, subdivision (b), not section 5975, subdivision (c), because their action was to enforce the OMA, not the Association’s governing documents. Appellants further argued the Association could recover no costs, because the action was not frivolous. They also argued the unavailability of costs under section 4955, subdivision (b) rendered the cost-shifting provisions of Code of Civil Procedure section 998 inapplicable.

b. Association’s Motion for Attorney Fees

The Association moved for an award of $409,282.50 in attorney fees. It sought fees under the same statutes and for the same reasons as it sought costs.

Appellants opposed the motion. They argued the controlling statute was section 4955, subdivision (b), which they claimed under no circumstances authorizes an award of attorney fees to a prevailing homeowners association in a homeowner’s action for violation of the OMA. Appellants also argued the amount of fees the Association had requested was unreasonable.

In reply, the Association repeated and expanded on points it had made in its initial motion papers, and argued the fees it had requested were reasonably incurred.

c. Trial Court’s Orders

The trial court denied appellants’ motion to strike or tax costs. It ruled that section 4955, subdivision (b) authorized the Association’s recovery of costs, because appellants'”pursuit of litigation was unreasonable at multiple stages. . . . Among other reasons, [appellants] pursued the litigation despite unclean hands and rejected a reasonable settlement offer.” The court awarded all claimed costs.

The trial court granted the Association’s motion for attorney fees in part. It ruled fees were recoverable under section 5975, subdivision (c), because the Association had prevailed in an action in which “the complaint asserted requests under [the Association’s] governing documents” and “sought to enforce [the] governing documents.” The court further ruled that “although not necessary for an award of fees under . . . section 5975(c), the court has already found that [appellants’] litigation was unreasonable. [Citation.] Accordingly, [the Association] is entitled to its reasonable fees from the date of its [Code of Civil Procedure s]ection 998 offer.” After consulting with the parties and considering the record, the trial court awarded the Association $348,306 in attorney fees.

The trial court amended the judgment to add the awards of attorney fees and costs.

II.

DISCUSSION

A. Appeal of Judgment

Appellants attack the judgment on several grounds. They contend the trial court erred by interpreting “board meeting” as used in the OMA not to include the e-mail exchanges among directors, and the Association’s failure to assert that interpretation before trial precluded its assertion after trial under principles of waiver or judicial estoppel. Appellants argue that undisputed facts showed the Association violated the OMA by considering their landscaping plans at the April 3, 2017 executive session, rather than at a meeting open to all homeowners, and by failing to note what was discussed at the August 28, 2017 executive session in the minutes of the next board meeting open to all homeowners. Appellants contend the defense of unclean hands does not bar their claims for OMA violations based on the directors’ e-mail exchanges. They ask us to reverse the judgment and to remand the matter for a new trial.

  1. Appealability and Standard of Review

The trial court’s judgment finally disposed of the parties’ dispute and is appealable. (Code Civ. Proc., § 904.1, subd. (a)(1); UAP-Columbus JV 326132 v. Nesbitt (1991) 234 Cal.App.3d 1028, 1034-1035.) On appeal from a judgment based on a statement of decision after a bench trial, we review questions of law de novo and the trial court’s findings of fact for substantial evidence. (Gajanan Inc. v. City and County of San Francisco (2022) 77 Cal.App.5th 780, 791-792; Aljabban v. Fontana Indoor Swap Meet, Inc. (2020) 54 Cal.App.5th 482, 496.)

  1. OMA Violations Based on Board’s Executive Sessions

We first address appellants’ claims of error regarding the two executive sessions of the Association’s board. The OMA limits the matters a homeowners association board may consider in an executive session to “litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of [past-due] assessments.” (§ 4935, subd. (a).) “Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.” (Id., subd. (e).) Appellants contend undisputed facts showed the Association violated these statutes by discussing their landscaping plans at the April 3, 2017 executive session and by failing to prepare the required minutes concerning the topics discussed at the August 28, 2017 executive session. We conclude appellants forfeited these claims of error.

In their opening brief, appellants expend little effort on discussing the April 3, 2017 executive session. The pertinent portion of the statement of facts describes matters the board discussed and voted on, and states Sukumar and Grimes attended but Grimes was not allowed to speak. As purported record support, appellants cite a trial exhibit (“TE 21, pp. 1-23”) that is not included in their appendices. In the corresponding portion of the legal argument, appellants say the trial court “appeared to conclude” the Association violated the OMA by discussing appellants’ landscaping plans in an executive session rather than in a meeting open to all members, and then go on to argue “the [c]ourt was prohibited from excusing the violation under the facts of the case” as “a mere `technical error’ or [`]immaterial omission'” because other homeowners were excluded and Grimes was not allowed to speak. This portion of the brief contains no citation to the record or legal authority and no reference to the substantial compliance doctrine on which the trial court relied in its statement of decision to conclude there was no OMA violation.

Such a factually and legally unsupported claim of error does not satisfy appellants’ burden on appeal. We presume the trial court’s judgment is correct, and to overcome that presumption appellants must affirmatively establish prejudicial error by providing an adequate record, citing to the record, and presenting a persuasive argument with citations to supportive legal authorities. (Cal. Rules of Court, rule 8.204(a)(1)(B), (C); Jameson v. Desta (2018) 5 Cal.5th 594, 609; Lee v. Kim (2019) 41 Cal.App.5th 705, 721 (Lee); Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246.) It is not our role as an appellate court independently to review the record for error and to construct arguments for appellants that would require reversal of the judgment. (United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153; Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852 (Benach).) Rather, where, as here, the appellants’ opening brief makes contentions unsupported by proper record citations or cogent legal arguments, we may treat the contentions as forfeited. (E.g., County of Sacramento v. Singh (2021) 65 Cal.App.5th 858, 861; Lee, at p. 721.) Although in their reply brief appellants discussed the substantial compliance doctrine on which the trial court based its ruling and cited one case concerning the doctrine, that discussion comes too late. An appellant may not put off to its reply brief the presentation of a legal argument supporting a claim of error asserted in its opening brief, for to do so would unfairly deprive the respondent of the ability to rebut the argument. (Bitner v. Department of Corrections & Rehabilitation (2023) 87 Cal.App.5th 1048, 1065, fn. 3 (Bitner); Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277-278.) We thus conclude appellants forfeited their claim of error concerning the April 3, 2017 executive session. (Bitner, at pp. 1065-1066; Benach, at p. 852 & fn. 10.)

We reach the same conclusion on appellants’ claim of error regarding the August 28, 2017 executive session. In their opening brief, appellants barely discuss that session in the statement of facts or the legal argument. Appellants quote the meeting agenda and as purported support cite a trial exhibit (“TE 102”) that is not in their appendices. In the legal argument, appellants contend a new trial should be granted because undisputed evidence established the board’s secretary was tasked with preparing the minutes, and no evidence showed any of their managers ever lawfully held that position. Appellants do not reference the trial court’s ruling that the required minutes for the August 28, 2017 executive session were not prepared because of their unlawful attempt to take over the board and that their resultant unclean hands barred their claim that the Association’s failure to prepare the minutes violated the OMA. Appellants cite the statute they alleged was violated, but no other legal authority. They do not explain why, as a factual or legal matter, the conduct on which the trial court relied does not bar their claim. Appellants expand on their argument in their reply brief, but still cite no legal authority to support their contentions. This claim of error has thus been forfeited. (Bitner, supra, 87 Cal.App.5th at pp. 1065-1066 & fn. 3; Lee, supra, 41 Cal.App.5th at p. 721; Benach, supra, 149 Cal.App.4th at p. 852 & fn. 10.)

  1. OMA Violations Based on Directors’ E-mail Exchanges

We next consider appellants’ claim that the trial court erred by concluding the directors’ e-mail exchanges did not constitute board meetings within the meaning of the OMA. Appellants contend a series of e-mails among directors on a matter of Association business, such as those of which they complain, fits within the definition of “board meeting” in section 4090, subdivision (a), and the Association should be barred from asserting a contrary position because it did not do so until after the close of evidence at trial. We are not persuaded.

a. Waiver or Estoppel

We first address appellants’ contention that the Association’s litigation conduct bars it from arguing the directors’ e-mail exchanges were not board meetings within the meaning of the OMA. Appellants correctly point out that in a verified response to their request for admissions, the Association admitted the e-mails violated several provisions of the OMA, and in its summary judgment motion, the Association did not contest some of the e-mails constituted board meetings that violated the OMA. (See pt. I.G.2., ante.) Appellants also correctly point out that not until closing arguments did the Association contend the e-mails did not meet the statutory definition of a board meeting. (See pt. I.G.3., ante.) A “litigant cannot be permitted to blow hot and cold in this manner” if “[s]uch a strategy subjects the opposing party to unwarranted surprise” (A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 566) or “would prejudice his or her opponent” (Garcia v. Roberts (2009) 173 Cal.App.4th 900, 913).

Here, however, the Association’s change of position did not unfairly surprise or prejudice appellants. They could not rely on any admissions the Association had made in the summary judgment motion, because such admissions were only for the purpose of the motion and did not estop the Association, as the unsuccessful moving party on the claims for declaratory relief and civil penalties, from taking a contrary position at trial. (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 747-749; see Filtzer v. Ernst (2022) 79 Cal.App.5th 579, 587 [judicial estoppel requires party to be estopped to have successfully asserted position it later abandoned].) Nor could appellants rely on the Association’s response to their request for admissions. During trial, the court considered whether to allow appellants to put on evidence of OMA violations not identified in discovery and the Association to put on evidence of unclean hands not disclosed in discovery. Appellants suggested the court either “allow everybody to put in whatever they want at this time, regardless of what the responses were before,” or “exclude both.” The court ruled the parties would not be bound by their discovery responses and “allow[ed] all that evidence to come in.” Having invited and benefited from that ruling, appellants may not now seek to hold the Association to its discovery responses. (See § 3521 [“He who takes the benefit must bear the burden.”]; Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1685 [party forfeits right to attack on appeal procedure it agreed to at trial].)

Moreover, the record shows appellants were aware before and during trial that the key legal issue to be decided by the court was whether the e-mail exchanges of which they complained constituted board meetings under the OMA. In their joint trial readiness report, the parties identified as the first legal issue in dispute, “Whether the Emails identified by plaintiffs constitute OMA violations.” During trial, the court told the parties “it’s going to be up to the [c]ourt what constitutes a meeting” under the statute. The parties presented their competing views on the issue orally during closing arguments and in writing in their proposed statements of decision. The court was not bound by the Association’s earlier concessions that the e-mails constituted meetings under the OMA. “No litigant, of course, can effectively `abandon’ the correct reading of a statute; [the court] must independently determine the best interpretation . . . regardless of what the parties argue.” (Spanish Speaking Citizens’ Foundation, Inc. v. Low (2000) 85 Cal.App.4th 1179, 1230; see Evid. Code, § 310, subd. (a) [court must decide all questions of law, including construction of statute]; County of Madera v. Superior Court (1974) 39 Cal.App.3d 665, 668 [“proper interpretation of statutory language is a question of law for the court”].)

Because the issue of whether the directors’ e-mail exchanges constituted board meetings under the OMA was a legal one for the court to decide, appellants’ complaint that the Association’s change of position at the end of trial prejudicially prevented them from obtaining and presenting pertinent evidence lacks merit. Specifically, appellants claim that “[h]ad [the Association’s] switch of argument taken place earlier, [they] could have cross-examined both Valeri and Woelkers on the involved directors’ understandings and motivations at the time.” Such matters, however, are irrelevant to the question of statutory interpretation the trial court had to decide. (See Evid. Code, § 310, subd. (a) [construction of statute is question of law for court]; City of Rocklin v. Legacy Family Adventures-Rocklin, LLC (2022) 86 Cal.App.5th 713, 728 [“It is the role of the judge to decide purely legal issues.”]; Maia v. Security Lumber & Concrete Co. (1958) 160 Cal.App.2d 16, 21 [witness’s understanding of statute is inadmissible because “[c]ourts are bound by the statute, not by individual opinions of its interpretation”].) Appellants also claim the issue of whether an e-mail exchange constitutes a board meeting under the OMA may depend on factors that are in part factual (e.g., whether the e-mails functioned as in-person meetings, or whether directors had continuous access to e-mails and the ability to reply in a reasonable time), and they could have explored such factors more fully in discovery and at trial had they known earlier the Association was contesting the issue. Such exploration was unnecessary, because the trial court admitted into evidence all the e-mail exchanges appellants claimed violated the OMA and therefore had the information it needed to decide whether they constituted board meetings within the meaning of the OMA. (See, e.g., Estate of Madison (1945) 26 Cal.2d 453, 456 [“The construction of a statute and its applicability to a given situation are matters of law to be determined by the court.”]; accord, In re Marriage of Martin (2019) 32 Cal.App.5th 1195, 1199.)

b. Whether E-mail Exchanges Were Board Meetings

We now turn to the dispositive question of statutory interpretation: Were the directors’ e-mail exchanges that appellants claim violated the OMA “board meetings” under the statute? We review the trial court’s interpretation of the statute de novo. (Segal v. ASICS America Corp. (2022) 12 Cal.5th 651, 658; Royals v. Lu (2022) 81 Cal.App.5th 328, 344.) We begin by examining the language of the statute, giving that language its usual and ordinary meaning and adopting a construction that is consistent with the apparent legislative intent. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1232-1233; Yu v. Superior Court (2020) 56 Cal.App.5th 636, 644.)

The OMA is part of the Davis-Stirling Act, which defines “board meeting” as “either of the following:

“(a) A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board.

“(b) A teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the association and otherwise complies with the requirements of this act. Except for a meeting that will be held solely in executive session or conducted under Section 5450 [which pertains to meetings during a state of disaster or emergency], the notice of the teleconference meeting shall identify at least one physical location so that members of the association may attend, and at least one director or a person designated by the board shall be present at that location. Participation by directors in a teleconference meeting constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board.” (§ 4090.)

The Davis-Stirling Act defines “board” as “the board of directors of the association” (§ 4085) and “item of business” as “any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board” (§ 4155).

Appellants rely solely on subdivision (a) of section 4090 for their claim that the directors’ e-mail exchanges constituted board meetings that violated the OMA. They contend “[t]he usual and ordinary meaning of the phrase `congregation, at the same time and place’ encompasses a `virtual’ assembly by means of email,” because, they say, e-mail allows all directors to communicate with one another simultaneously on items of board business in the same place, namely, cyberspace. We reject this construction of the statutory language as inconsistent with its usual and ordinary meaning.

To determine the usual and ordinary meanings of words used in a statute, courts consider the dictionary definitions of those words. (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122; Turo Inc. v. Superior Court (2022) 80 Cal.App.5th 517, 521.) We have consulted three dictionaries available at the time the Legislature enacted the OMA to determine the meaning of the phrase “congregation, at the same time and place.” (§ 4090, subd. (a), as enacted by Stats. 2012, ch. 180, § 2.) Two define “congregation” as “an assembly of persons: gathering.” (Webster’s 3d New Internat. Dict. (2002), p. 478; Merriam-Webster’s Collegiate Dict. (11th ed. 2003) p. 262.) An “assembly” is defined as “a company of persons collected together in one place usu. for some common purpose (as deliberation and legislation, worship, or entertainment)” (Webster’s, p. 131), and a “gathering” as “a coming together of people in a group (as for social, religious, or political purposes)” (id., p. 940). A third dictionary defines “congregation” similarly as “a gathered or assembled body; assemblage” (Random House Unabridged Dict. (2d ed. 1987) p. 430), and “assemblage” as “a group of persons . . . gathered” (id., p. 125). That dictionary defines “place” as “a space, area, or spot, set apart or used for a particular purpose: a place of worship; a place of entertainment.” (Id., p. 1478.) The other two define “place” as “a building or locality used for a special purpose,” and offer as examples “<~ of amusement>,” “<~ of worship>,” “,” and “.” (Webster’s, p. 1727; Merriam-Webster’s, p. 946.)

From these definitions and examples, we conclude a “board meeting,” as defined by section 4090, subdivision (a), means a gathering of a quorum of the directors of a board of a homeowners association at the same time and in the same physical location for the purpose of transacting any matter of association business that is within the board’s purview. By using the word “congregation,” the Legislature intended the directors come together for a common purpose. By specifying the congregation be “at the same time and place,” the Legislature intended the directors simultaneously come together in one location so that they can “hear, discuss, or deliberate upon any item of business that is within the authority of the board.” (Ibid.) Although the definitions of “congregation” in the dictionaries cited in the preceding paragraph say nothing explicit about physical location, the examples in those dictionaries ordinarily involve gatherings of persons in one location for a particular purpose—for deliberation and legislation (e.g., the U.S. Capitol), for religious worship (e.g., a church or temple), or for social engagement or entertainment (e.g., a night club or theater). Every example of a “place” in those dictionaries is a physical location—a building, a place of worship (e.g., a church or temple), a place of amusement or entertainment (e.g., a theater or stadium), a place of education (e.g., an elementary school or college), or a fine eating place (a café or restaurant). We think it is clear from the words chosen that in enacting section 4090, subdivision (a) the Legislature had in mind the traditional board meeting of a homeowners association, i.e., one where the directors gather in the same room with homeowners to talk about and to act on matters of association business. Hence, by sending e-mails to one another through cyberspace, often hours or days apart and from different homes and offices, the Association’s directors did not simultaneously gather in one location to transact board business, and therefore they did not conduct a “board meeting” within the meaning of section 4090, subdivision (a).[2]

In urging us to construe section 4090, subdivision (a) to include e-mail exchanges among the directors of a board of a homeowners association on matters of association business, appellants argue that “[l]egally, a `[b]oard [m]eeting’ under [the] OMA is capable of being conducted via electronic transmissions.” We agree a board meeting conducted by electronic means is permitted by the OMA, but not by virtue of section 4090, subdivision (a). Subdivision (b) of section 4090 defines “board meeting” as “[a] teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both.” In this type of meeting, “[p]articipation by directors . . . constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board.” (Ibid.) The e-mail exchanges at issue in this case do not qualify as such a board meeting, however, because they did not allow the participating directors “to hear one another.” (Ibid.) In any event, appellants have expressly disavowed reliance on section 4090, subdivision (b).

Appellants also rely on section 4910, subdivision (b) as support for their contention that a series of e-mails among directors can satisfy the “same time and place” requirement of section 4090, subdivision (a). Section 4910, subdivision (b) prohibits the board from conducting a board meeting “via a series of electronic transmissions, including, but not limited to, electronic mail,” except “as a method of conducting an emergency board meeting” to which all directors consent in writing. An emergency board meeting may be called “if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice” four days before the meeting. (§ 4923; see § 4920, subds. (a), (b)(1).) Appellants argue an emergency board meeting by e-mail would not be possible unless that type of meeting were a subset of the type defined by section 4090, subdivision (a). We are not persuaded.

Section 4910, subdivision (a) states, “The board shall not take action on any item of business outside of a board meeting.” As noted above, the statute goes on to prohibit the board from conducting a meeting by a series of e-mails unless there is an emergency and all directors give written consent. (§ 4910, subd. (b).) Considering these subdivisions together, as we must (Smith v. LoanMe, Inc. (2021) 11 Cal.5th 183, 190), we read them as authorizing the board, in an emergency as defined by section 4923, to dispense with notice to homeowners and to conduct a meeting and take action on a matter of association business via a series of e-mails or other electronic transmissions, provided all directors give written consent to that procedure. There would have been no need to add these specific provisions if, as appellants argue, an exchange of e-mails among directors on a matter of association business already qualified as a board meeting under section 4090, subdivision (a). We must avoid an interpretation that would make a statutory provision redundant and interpret the provision in a way that gives it independent meaning and enables it to perform a useful function. (Plantier v. Ramona Municipal Water Dist. (2019) 7 Cal.5th 372, 385-386; Garcia v. McCutchen (1997) 16 Cal.4th 469, 476.) We therefore read section 4910, subdivision (b) as specifying a third method, in addition to and different from those defined by section 4090, by which the board may conduct a meeting and take action on a matter of homeowners association business, and which may be used only in an emergency as defined by section 4923. It is not a subset of the type of board meeting defined by section 4090, subdivision (a), by which the board may take action on association business matters in nonemergency situations.

Appellants contend “Corporations Code section 7211 . . . also supports the interpretation that the Legislature in general believes a board meeting is capable of being conducted by email.”[3] To confirm that belief, however, we need not look beyond the OMA. By expressly authorizing the board of a homeowners association to hold a meeting and take action by a series of e-mails when there is an emergency and all directors consent in writing to proceed that way (§ 4910, subd. (b)(2)), the Legislature obviously believed a board meeting was capable of being conducted via e-mail. The enactment of a separate provision to authorize that type of board meeting shows, contrary to appellants’ position, that the Legislature did not believe that type of meeting fell within the scope of section 4090, subdivision (a).

Apparently anticipating we might reject their arguments based on the text of the OMA, appellants advise against “exclusive and myopic reliance on statutory language,” and urge consideration of “the overriding purpose of [the] OMA.” That purpose, they say without any analysis or citation of authority, is to permit “all [homeowners association] members [to] have access to the [b]oard’s discussions and action on official [association] business.” Appellants argue their interpretation of section 4090, subdivision (a) as including the directors’ e-mail exchanges at issue in this case furthers that purpose, but an interpretation that excludes them frustrates that purpose by allowing a board to make all decisions on association business via private e-mail exchanges and later hold a meeting as “mere theatre” to confirm the decisions. We disagree.

To discern the purpose of the OMA, we look to its words as the most reliable indicator of legislative intent and consider them in the context of the statute as a whole. (Hoffmann v. Young (2022) 13 Cal.5th 1257, 1266; Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, 1184; Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 811.) The first substantive provision of the OMA states, “The board shall not take action on any item of business outside of a board meeting.” (§ 4910, subd. (a).) With exceptions for emergency board meetings (§ 4923) and executive sessions (§ 4935), subsequent OMA provisions provide for input of homeowners in board actions by requiring homeowners be given at least four days’ notice of a board meeting (§ 4920, subd. (a)), the notice contain the meeting agenda (§ 4920, subd. (d)), homeowners be allowed to attend and speak at the meeting, (§ 4925), the board not discuss or take action on any item of business not on the agenda (§ 4930, subd. (a)), and minutes of the meeting be made available to homeowners within 30 days (§ 4950, subd. (a)). In short, the OMA “mandate[s] open governance meetings, with notice, agenda and minutes requirements, and strictly limit[s] closed executive sessions.” (Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th 468, 475 (Damon).) These various requirements make clear the purpose of the OMA is to ensure members of a homeowners association are informed about and have input into the actions to be taken by the association’s board of directors on matters affecting the community in which they live. (See Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 416, 417 (Golden Eagle) [board’s “possess[ion of] broad powers to affect large numbers of individuals through [its] decisions and actions” requires “[h]olding open meetings and taking account of various opinions among community members” before acting on items of association business].)

Our interpretation of section 4090, subdivision (a) as not including the e-mail exchanges of which appellants complain does not frustrate the purpose of the OMA. Section 4090, subdivision (a) defines one method by which the board of directors of a homeowners association may act consistently with the purpose of the OMA, namely, by holding an in-person meeting where homeowners have an opportunity to voice their opinions on items of association business, and then voting on what actions to take on the items. By discussing items of Association business in e-mails (e.g., whether to approve appellants’ landscaping plans and whether to fine another homeowner), the directors did nothing contrary to the purpose of the OMA, because they took no action on those items in the e-mails. Although the OMA prohibits the board from acting on items of Association business outside a board meeting (§ 4910, subd. (a)), it does not prohibit the board from discussing the items outside a meeting. Had the Legislature intended to prohibit such discussions, it knew how to do so. In the Ralph M. Brown Act (Gov. Code, § 54950 et seq.), an open meeting law that governs public agencies and the provisions of which “parallel” those of the OMA (Damon, supra, 85 Cal.App.4th at p. 475), the Legislature provided: “A majority of the members of a legislative body shall not, outside a meeting authorized by this chapter, use a series of communications of any kind, directly or through intermediaries, to discuss, deliberate, or take action on any item of business that is within the subject matter jurisdiction of the legislative body” (Gov. Code, § 54952.2, subd. (b)(1)). Interpreting section 4090, subdivision (a) to include the e-mail exchanges at issue in this case, as appellants would have us do, would effectively add to the OMA a similar provision prohibiting directors from discussing items of association business except at a board meeting. We refuse to adopt an interpretation of a statute that would require insertion of language the Legislature knew how to include but did not include. (Code Civ. Proc., § 1858; Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 545; Yao v. Superior Court (2002) 104 Cal.App.4th 327, 332-333.)

In sum, we conclude “board meeting,” as defined by section 4090, subdivision (a), is an in-person gathering of a quorum of the directors of a homeowners association at the same time and in the same physical location for the purpose of talking about and taking action on items of association business. E-mail exchanges among directors on those items that occur before a board meeting and in which no action is taken on the items, such as those at issue in this case, do not constitute board meetings within the meaning of that provision. The trial court therefore correctly rejected appellants’ claims that the e-mail exchanges were board meetings that violated the OMA.

  1. Unclean Hands Defense

Appellants’ last challenge to the judgment is to the trial court’s ruling that their “unclean hands” in sending the directors e-mails on matters of Association business barred them from pursuing claims that the Association violated the OMA when the directors exchanged similar e-mails among themselves. Appellants contend the doctrine of unclean hands is not available as a defense to a claim for violation of the OMA; the doctrine does not apply to the undisputed facts of this case; and principles of waiver, abandonment, or estoppel preclude the Association from asserting the defense. Because we have rejected appellants’ contention that the e-mail exchanges on which they based their claims constituted board meetings to which the notice, agenda, homeowner participation, and minutes requirements of the OMA apply, their claims the Association violated the OMA by not complying with those requirements fail as a matter of law. We therefore need not, and do not, decide whether the trial court correctly applied the unclean hands doctrine to bar the claims.

B. Appeal of Postjudgment Orders

Appellants also attack the trial court’s postjudgment orders denying their motion to strike or tax costs and granting the Association’s motion for attorney fees. They contend the trial court erred by awarding attorney fees under section 5975, subdivision (c), because that section applies to actions to enforce the governing documents of a homeowners association, not to an action like theirs that seeks relief for violations of the OMA. Rather, appellants argue, the statute that applies to their action is section 4955, subdivision (b), which never allows a homeowners association to recover attorney fees from a homeowner. Appellants further contend attorney fees were not recoverable under Code of Civil Procedure section 998, because that statute does not provide an independent basis to award fees, and the settlement offer the Association made under the statute was invalid for requiring a general release. As to costs, appellants contend the trial court relied on the correct statute (i.e., § 4955, subd. (b)), but erred by finding their action was “unreasonable” and therefore justified an award to the Association. They also contend the court abused its discretion by awarding the court reporter fees and “other” costs sought by the Association. Appellants ask us to reverse the challenged orders.

  1. Appealability and Standard of Review

“A postjudgment order which awards or denies costs or attorney’s fees is separately appealable.” (Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688, 693; see Code Civ. Proc., § 904.1, subd. (a)(2) [postjudgment order is appealable]; DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43 [postjudgment order awarding attorney fees is appealable]; Jimenez v. City of Oxnard (1982) 134 Cal.App.3d 856, 858, fn. 3 [postjudgment order denying motion to tax costs is appealable].) We review the trial court’s determination on whether the statutory criteria for an award of costs or attorney fees have been met de novo, and its determination on the amount of costs or fees for abuse of discretion. (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751; McGuigan v. City of San Diego (2010) 183 Cal.App.4th 610, 622-623.) Whether an action is “frivolous,” “unreasonable,” or “without foundation” under a statute authorizing an award of costs or attorney fees in such an action presents a question of law we review de novo where, as here, the pertinent facts are not in dispute. (Rudisill v. California Coastal Com. (2019) 35 Cal.App.5th 1062, 1070; Smith v. Selma Community Hospital (2010) 188 Cal.App.4th 1, 31-33 (Smith).)

  1. Attorney Fees

We first consider the court’s award of attorney fees to the Association. Each party to an action must pay its own attorney fees unless a statute or contract requires the opposing party to pay them. (Code Civ. Proc., § 1021; Tract 19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142; Srouy v. San Diego Unified School Dist. (2022) 75 Cal.App.5th 548, 558-559.) No contractual attorney fee provision is at issue here. The Association therefore may recover its attorney fees from appellants only if a statute authorizes recovery. The Association contends that because appellants’ action was, at least in part, an action to enforce the governing documents of the Association and it prevailed in the action, the trial court properly awarded fees under section 5975, subdivision (c). Appellants counter that they sued not to enforce the Association’s governing documents but to enforce the OMA, which does not authorize an award of attorney fees to the Association. As we shall explain, appellants are correct.

The governing documents of a homeowners association are enforceable in a civil action by a homeowner or by the association. (§ 5975, subds. (a), (b).) The Davis-Stirling Act defines “governing documents” as “the declaration and any other documents, such as bylaws, operating rules, articles of incorporation, or articles of association, which govern the operation of the common interest development or association.” (§ 4150.) The “declaration” is the document that “contain[s] [the] legal description of the common interest development”; states whether “the common interest development is a community apartment project, condominium project, planned development, stock cooperative, or combination thereof”; and “set[s] forth the name of the association and the restrictions on the use or enjoyment of any portion of the common interest development that are intended to be enforceable equitable servitudes.” (§§ 4135, 4250, subd. (a).) “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.” (§ 5975, subd. (c).) An award of attorney fees to the prevailing party is mandatory in such an enforcement action. (Champir, LLC v. Fairbanks Ranch Assn. (2021) 66 Cal.App.5th 583, 590; Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 263; Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1039.)

To determine whether appellants sought by their action to enforce the Association’s governing documents, and therefore were liable for attorney fees because they failed to do so, we examine the allegations of their complaint. (See Gause v. Pacific Gas & Electric Co. (1923) 60 Cal.App. 360, 367 [“the nature of the action must be determined from the allegations of the complaint”]; Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, 65-66 [reviewing allegations of complaint to determine nature of action for limitations purposes].) The only express reference to the governing documents in the complaint is in a paragraph describing the Association as “a nonprofit mutual benefit association existing by and under the laws of the State of California, and . . . governed by the Davis-Stirling Act, the California Corporations Code, and the Association’s governing documents, including, without limitation, its Covenants, Conditions and Restrictions (`CC&R’s’), its Articles, its By-Laws, and its Community Election Rules as published in the [Association’s] Community Handbook. The foregoing are collectively referred to herein as the `Governing Laws and Rules.'” Later in the complaint appellants alluded to the governing documents by alleging they had repeatedly requested minutes of all board meetings from the Association “in accordance with the Governing Laws and Rules.” The complaint nowhere mentions section 5975; the charging allegations neither cite nor quote any provision of any governing document; the prayer for relief does not ask the court to enforce any provision of the governing documents; and no governing document or part thereof is attached to the complaint. We would expect to find such content in the complaint had appellants sought enforcement of the Association’s governing documents under section 5975. Its absence shows this case is not that type of enforcement action.

The content of the complaint instead shows appellants sued the Association for allegedly violating the OMA. The complaint is labeled one for “VIOLATIONS OF COMMON INTEREST DEVELOPMENT OPEN MEETING ACT [Civil Code §§ 4900, et seq.].” Its first paragraph states that appellants “seek[ ] declaratory and equitable relief, and statutory penalties against [the Association] for violations of the [OMA].” The charging allegations of the complaint quote many provisions of the OMA, and then go on to state facts showing how the Association violated those provisions. In particular, the paragraphs referencing the “Governing Laws and Rules,” which as noted include the governing statutes and documents, alleged the Association’s failure to provide the board meeting minutes as requested by appellants violated the OMA, not the governing documents. Appellants prayed for a judgment declaring the Association violated the OMA and specifying the number of violations; an injunction requiring the Association to comply with the OMA; and civil penalties, costs, and attorney fees as provided in the OMA. (See § 4955.) Hence, appellants’ action was plainly one to enforce the OMA, not the Association’s governing documents. (See Black’s Law Dict. (11th ed. 2019) p. 668 [defining “enforce” as “[t]o give force or effect to (a law, etc.); to compel obedience to”].)

In urging us to reach a contrary conclusion, the Association points to appellants’ participation in alternative dispute resolution as statutorily required before filing an “enforcement action,” certification of such participation in the complaint, and litigation of “enforcement issues” at trial as indicators that their action was one to enforce the governing documents. We are not persuaded.

The alternative dispute resolution requirements of the Davis-Stirling Act apply not only to actions to enforce the governing documents of a homeowners association, but also to actions to enforce the OMA. (§§ 5925, subd. (b) [defining “enforcement action”], 5930, subd. (a) [requiring alternative dispute resolution before filing enforcement action], 5950, subd. (a) [requiring party commencing enforcement action to file certificate regarding alternative dispute resolution efforts].) Appellants’ compliance with those requirements did not transform their action to enforce the OMA into one to enforce the governing documents.

Nor did such a transformation occur as a result of appellants’ litigation tactics. The questioning of the Association’s directors at trial about appellants’ landscaping plans, on which the Association relies for its characterization of the action, did not involve any governing document and was designed to show the Association violated the OMA when directors discussed matters in executive session that should have been discussed in a session open to all homeowners and conducted board meetings via private e-mails. Moreover, in determining the nature of the action, we find it significant that none of the governing documents were introduced at trial and that the trial court made no mention of them in its statement of decision. The court described the action as one alleging violations of the OMA and determined no such violations had occurred. The record thus shows the parties litigated and the court decided claims under OMA, not claims under the Association’s governing documents.

Because appellants sought to enforce the OMA, the provision of the OMA concerning costs and attorney fees governs the award in this case. (See Department of Forestry & Fire Protection v. LeBrock (2002) 96 Cal.App.4th 1137, 1141 [attorney fees must be “specifically authorized” by applicable statute]; Covenant Mutual Ins. Co. v. Young (1986) 179 Cal.App.3d 318, 321 [same].) Under that provision, “[a] member who prevails in a civil action to enforce the member’s rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs. . . . A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) Construing the identically worded predecessor version (former § 1363.09, subd. (b)), the Court of Appeal concluded it authorizes the award of ordinary costs to a prevailing association in an action that is frivolous, unreasonable, or without foundation, but it does not authorize an award of attorney fees to the association in such an action. (That v. Alders Maintenance Assn. (2012) 206 Cal.App.4th 1419, 1427-1430; accord, Retzloff v. Moulton Parkway Residents’ Assn., No. One (2017) 14 Cal.App.5th 742, 748-749 (Retzloff).) Under this authority, the Association could not recover attorney fees from appellants.[4]

In sum, the trial court erred by characterizing appellants’ action as one to enforce the Association’s governing documents and awarding the Association attorney fees under section 5975, subdivision (c). As we have explained, appellants sought to enforce the OMA, which does not allow the Association to recover attorney fees from appellants. We therefore reverse the order granting the Association’s motion for attorney fees.

  1. Costs

We now turn to the trial court’s award of costs to the Association. A homeowners association that prevails in an action alleging violations of the OMA “shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) In opposition to appellants’ motion to strike or tax costs, the Association argued the action was unreasonable and without foundation because appellants had unclean hands that barred the action, rejected a settlement offer “which included everything [they] were seeking,” opposed the motion for summary judgment even though the Association was willing to concede limited liability to end the litigation, and kept on changing the number of OMA violations for which they sought civil penalties. The trial court found appellants'”pursuit of litigation was unreasonable at multiple stages” based on their unclean hands and rejection of a reasonable settlement offer, and denied their motion to strike or tax costs. The court erred in so doing, as we explain below.

Neither the OMA nor any published opinion defines “frivolous,” “unreasonable,” or “without foundation” as those terms are used in section 4955, subdivision (b). Such terms, however, are used in other cost-shifting statutes that courts have construed. For example, in Smith, supra, 188 Cal.App.4th 1, the Court of Appeal construed Business and Professions Code section 809.9, which authorizes an award of costs and attorney fees to the prevailing party “if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith.” The Court of Appeal adopted the view that “a matter is frivolous if any reasonable attorney would agree it is completely without merit in the sense that it lacks legal grounds, lacks an evidentiary showing, or involves an unreasonable delay.” (Smith, at p. 33, italics added; see Retzloff, supra, 14 Cal.App.5th at pp. 752-753 [adopting same definition for “frivolous” as used in § 5235, subd. (c)].) The Court of Appeal held an action is “without foundation” if there is no direct or circumstantial evidence supporting the plaintiff’s factual assertions, or if there is no statute, regulation, case law, or other legal authority supporting the plaintiff’s legal contentions. (Smith, at pp. 30-31.) For the term “unreasonable,” the Court of Appeal adopted the “any-reasonable-attorney standard,” which asks “whether any reasonable attorney would have thought the claim tenable” based on “the facts known to the plaintiff when [it] filed or maintained the action.” (Id. at p. 32.)[5] The terms “frivolous,” “unreasonable,” and “without foundation” partially overlap, since to determine whether an action may be described by any one of them requires the court to assess the grounds underlying the plaintiff’s factual or legal positions and the reasoning process linking those grounds to the ultimate conclusions advocated by the plaintiff. (Smith, at p. 33.) To decide whether appellants’ action qualifies as any of the quoted terms, we shall apply the Smith court’s definitions.

We first consider whether appellants’ unclean hands made their prosecution of the action “unreasonable,” as the Association urged and the trial court found. The trial court’s ruling that the unclean hands doctrine barred the action does not necessarily lead to the conclusion that the “`”action must have been unreasonable or without foundation.”‘” (Pollock, supra, 11 Cal.5th at p. 951 [cautioning against such “`”hindsight bias”‘” when awarding costs].) We need not delve deeply into the unclean hands doctrine, nor decide definitively whether the trial court correctly applied the doctrine, to decide whether appellants’ action was “unreasonable” within the meaning of section 4955, subdivision (b). The applicability of the unclean hands doctrine to appellants’ action was sufficiently debatable that a reasonable attorney could have concluded the doctrine did not bar the action.

To decide whether to apply the unclean hands doctrine, which prevents a plaintiff from profiting from its own inequitable conduct in a transaction by barring relief on a directly related cause of action (DD Hair Lounge, LLC v. State Farm General Ins. Co. (2018) 20 Cal.App.5th 1238, 1246; Camp v. Jeffer, Mangels, Butler & Marmaro (1995) 35 Cal.App.4th 620, 638-639), one factor courts consider is analogous case law (Jay Bharat Developers, Inc. v. Minidis (2008) 167 Cal.App.4th 437, 445-446; Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1060). This court and others have held the unclean hands doctrine cannot be applied to defeat claims under statutes designed to protect one class of persons from the activities of another. (See, e.g., East West Bank v. Rio School Dist. (2015) 235 Cal.App.4th 742, 752; Mendoza v. Ruesga (2008) 169 Cal.App.4th 270, 279; Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 544.) The OMA may qualify as that type of statute in that it protects homeowners by prohibiting the board of directors of the homeowners association from holding secret meetings at which it takes action on matters directly affecting the homeowners and their community. (See §§ 4910, subd. (a), 4925; Golden Eagle, supra, 19 Cal.App.5th at p. 416; Damon, supra, 85 Cal.App.4th at p. 475.) It was therefore at least arguable under existing case law that as a matter of law the unclean hands doctrine did not bar appellants’ claims for violations of the OMA. (See East West Bank, at p. 752 [unclean hands doctrine did not apply as a matter of law when no analogous case law supported application]; Smith, supra, 188 Cal.App.4th at p. 41 [position is arguable when consistent with language in some cases].) Because a reasonable attorney could have concluded the claims were not barred, appellants’ decision to pursue them was not “unreasonable” (or “frivolous” or “without foundation”) within the meaning of section 4955, subdivision (b). (Smith, at pp. 30-33 [defining quoted terms].)

We next consider whether appellants’ rejection of the Association’s settlement offer (see fn. 1, ante) shows their continued pursuit of the action was “unreasonable” (§ 4955, subd. (b)), as the trial court found. Again, we must resist the distorting effect of “`”hindsight bias”‘” and not conclude that decision “`”must have been unreasonable or without foundation”‘” simply because appellants recovered nothing at trial when they could have settled for $25,000.01 plus costs and attorney fees. (Pollock, supra, 11 Cal.5th at p. 951.) Rejection of a reasonable settlement offer (i.e., one within the range of reasonably possible trial results) may indicate bad faith (i.e., unreasonable litigation conduct). (Covert v. FCA USA, LLC (2022) 73 Cal.App.5th 821, 834 (Covert); Pinto v. Farmers Ins. Exchange (2021) 61 Cal.App.5th 676, 688.) Any assessment of the reasonableness of the offer must take into account the information known or available to the parties at the time of the offer. (Covert, at p. 834; Arno v. Helinet Corp. (2005) 130 Cal.App.4th 1019, 1025.)

When the Association made its offer, there was no case law on whether e-mail exchanges of the type of which appellants complained constituted board meetings in violation of the OMA, and if so, how many violations occurred in the exchanges. The parties’ positions on those issues varied all the way through the end of trial. The amount of civil penalties, if any, appellants were likely to recover was thus uncertain. Moreover, civil penalties were not the only remedy appellants sought; they also requested declaratory and injunctive relief. The Association did not agree to any such relief in the settlement offer, which therefore did not “include[ ] everything [a]ppellants were seeking,” as the Association erroneously asserts. To the contrary, the offer required appellants to release their claims for declaratory and injunctive relief, as well as any other claims “that could have been asserted by [appellants] in relation to the allegations of the Complaint.” “Requiring resolution of potential unfiled claims not encompassed by the pending action renders the offer incapable of valuation.” (Ignacio v. Caracciolo (2016) 2 Cal.App.5th 81, 87.)

Given the difficulty in valuation and the uncertainty in the law, it is unclear whether the Association’s settlement offer was “`within the “range of reasonably possible results” at trial.'” (Covert, supra, 73 Cal.App.5th at p. 834.) We thus cannot say that no reasonable attorney would have rejected the offer, so that to have done so was “unreasonable” (or “frivolous” or “without foundation”) within the meaning of section 4955, subdivision (b). (Smith, supra, 188 Cal.App.4th at pp. 30-33 [defining quoted terms].)

The Association offers grounds in addition to those relied on by the trial court to affirm the award of costs. It argues appellants’ action was “frivolous, unreasonable, or without foundation” (§ 4955, subd. (b)) because appellants: (1) failed to produce any evidence to support their claim for injunctive relief, which was summarily adjudicated against them; (2) opposed the Association’s attempt to resolve the matter by motion for summary judgment by conceding liability for 10 civil penalties; and (3) kept on changing their position on the number of OMA violations to prolong the litigation and to deplete the Association’s resources. We are not persuaded.

We disagree with the Association’s contention that the adverse summary adjudication ruling shows appellants’ request for injunctive relief was “unreasonable and without foundation.” In opposition to the Association’s motion for summary judgment/adjudication, appellants presented evidence the Association had failed to produce minutes for certain board meetings, and argued the failure violated the OMA and warranted injunctive relief. The OMA requires the production of minutes of board meetings and authorizes injunctive relief. (§§ 4950, subd. (a), 4955, subd. (a).) Although the trial court ruled against appellants on the ground they had not met their burden to establish the threat of future harm (see, e.g., Connerly v. Schwarzenegger (2007) 146 Cal.App.4th 739, 751 [“Without a threat of present or future injury, no injunction can lie.”]), their request for injunctive relief was not so lacking in legal or evidentiary support that no reasonable attorney would have pursued it. (See Smith, supra, 188 Cal.App.4th at pp. 30-33 [discussing meanings of “unreasonable” and “without foundation”].)

We also disagree that appellants’ refusal to accept the number of civil penalties the Association was willing to concede to resolve the case by summary judgment and their later changes in position on the number of penalties they were seeking justify the award of costs. The trial court denied the summary judgment motion on the grounds that appellants had raised triable issues of fact on the number of OMA violations for which a penalty could be imposed and the OMA was ambiguous on whether a separate penalty could be awarded to each appellant for each violation. That denial precludes a finding that no reasonable attorney would have thought appellants’ position tenable. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 824; Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150, 183-185.) After denial of the summary judgment motion, the parties continued to litigate the case on the assumption the directors’ e-mail exchanges challenged in the complaint violated the OMA. Not until the end of trial, in response to questioning by the court, did the Association take the position the exchanges were not board meetings within the meaning of the OMA. Given the parties’ shared erroneous assumption, the number of e-mails involved, and the lack of case law on point, appellants’ changing position on the number of violations subject to a civil penalty was not so lacking in factual or legal support that it was “frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b); see Smith, supra, 188 Cal.App.4th at pp. 30-33 [defining quoted terms].)

The Association also argues it is entitled to recover costs under Code of Civil Procedure section 998, subdivision (c)(1), which requires a plaintiff that rejects a defendant’s settlement offer and does not obtain a more favorable judgment to pay the defendant’s postoffer costs. We disagree. The cost-shifting provisions of that statute do not apply when a more specific cost-shifting statute applies to the claims at issue. (Cruz v. Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, 240-241; Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (2018) 19 Cal.App.5th 525, 551-553.) Under the OMA, “[a] prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.” (§ 4955, subd. (b).) Because we have determined appellants’ action does not meet that description, the Association is not entitled to costs.

In sum, we conclude the OMA precluded the Association from recovering any costs from appellants. We therefore need not, and do not, decide whether the particular items appellants have challenged (i.e., court reporter fees and “other” costs) were recoverable. We reverse the order denying appellants’ motion to strike or tax costs, and direct the trial court on remand to deny all costs and strike the amended judgment awarding costs.

III.

DISPOSITION

The judgment is affirmed. The order denying appellants’ motion to strike or tax costs is reversed. The order granting the Association’s motion for attorney fees is reversed. The matter is remanded to the trial court with directions: (1) to vacate the order denying appellants’ motion to strike or tax costs, and to enter a new order granting the motion and denying all costs; (2) to vacate the order granting the Association’s motion for attorney fees, and to enter a new order denying the motion; and (3) to strike the amended judgment. In the interest of justice, the parties shall bear their own costs on appeal.

McCONNELL, P. J. and DATO, J., concurs.


[1] On October 10, 2019, the Association offered, “[i]n full settlement, release and dismissal of the Complaint . . ., including the settlement of all claims asserted or that could have been asserted by [appellants] in relation to the allegations of the Complaint,” to pay appellants $25,000.01 and their “reasonable attorney’s fees and taxable costs” incurred in the action up to the date of the offer. The offer stated it was an offer to compromise under Code of Civil Procedure section 998 and was “subject to the terms and conditions” of the statute. Under the statute, “[i]f an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment . . ., the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.” (Code Civ. Proc., § 998, subd. (c)(1).) Such costs include attorney fees when authorized by contract or statute. (Id., § 1033.5, subd. (a)(10).) Appellants allowed the Association’s offer to lapse.

[2] If, as appellants contend, cyberspace qualifies as a “place” within the meaning of section 4090, subdivision (a), because the directors “met” there “to exchange ideas and opinions on [Association] items of business” by sending e-mails to one another, it is unclear how the Association could have discharged its obligation under the OMA to “give notice of the time and place of a board meeting at least four days before the meeting.” (§ 4920, subd. (a).) Appellants provide no answer in their briefs.

[3] As pertinent to appellants’ contention, the cited statute authorizes a director of a corporation to participate in a board meeting “through use of electronic transmission by and to the corporation, other than conference telephone and electronic video screen communication,” provided the director “can communicate with all of the other directors concurrently” and “is provided the means of participating in all matters before the board, including, without limitation, the capacity to propose, or to interpose an objection to, a specific action to be taken by the corporation.” (Corp. Code, § 7211, subd. (a)(6).) This statute does not apply to meetings of the board of directors of a homeowners association. The OMA provides, “Notwithstanding Section 7211 of the Corporations Code,” the board “shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail,” except for an emergency board meeting. (§ 4910, subd. (b).) The use of the “notwithstanding” phrase expresses a legislative intent to have the OMA provision override the Corporations Code provision that would otherwise apply. (Ni v. Slocum (2011) 196 Cal.App.4th 1636, 1647.)

[4] In the trial court, the Association sought attorney fees under section 4955, subdivision (b), on the ground appellants’ action was “unreasonable” and “without foundation.” The court did not award fees on that ground, which the Association has abandoned on appeal. The court did, however, limit the award to fees the Association incurred after appellants rejected the Code of Civil Procedure section 998 settlement offer (see fn. 1, ante), apparently because the court found appellants’ continued litigation thereafter was “unreasonable.” Code of Civil Procedure “section 998 does not grant greater rights to attorney’s fees than those provided by the underlying statute,” but “merely expands the group of those who are treated as prevailing parties and who therefore may be entitled to attorney’s fees as prevailing parties under the relevant statute.” (Mangano v. Verity, Inc. (2008) 167 Cal.App.4th 944, 951; see Ford Motor Credit Co. v. Hunsberger (2008) 163 Cal.App.4th 1526, 1532 [Code Civ. Proc., § 998 “does not independently create a statutory right to attorney fees”].) Because the relevant statute (§ 4955, subd. (b)) gave the Association no right to recover attorney fees from appellants, Code of Civil Procedure section 998 did not authorize the fee-shifting ordered by the court.

[5] We reject appellants’ contention that costs could be awarded to the Association only if the trial court found the entire action was unreasonable when it was filed. Our Supreme Court has held that when a defendant may recover costs for defending a “`frivolous, unreasonable, or groundless'” action, recovery is available if “the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.” (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 101, 115, italics added; accord, Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11 Cal.5th 918, 951 (Pollock).) As the Smith court implicitly recognized, an action that was not unreasonable when filed may become so later if factual discoveries or legal developments make the action untenable, because the court must “analyz[e] the facts known to the plaintiff when he or she filed or maintained the action” to determine whether it was unreasonable. (Smith, supra, 188 Cal.App.4th at p. 32, italics added; cf. Zamos v. Stroud (2004) 32 Cal.4th 958, 970 [“continuing to prosecute a lawsuit discovered to lack probable cause” is unreasonable and subjects attorney to liability for malicious prosecution].

Related Links

Email Discussions Between HOA Board Members are not “Meetings”
-Published on HOA Lawyer Blog (September 2023)

Civil Code Section 1719. Check for Insufficient Funds.

(a)

(1) Notwithstanding any penal sanctions that may apply, any person who passes a check on insufficient funds shall be liable to the payee for the amount of the check and a service charge payable to the payee for an amount not to exceed twenty-five dollars ($25) for the first check passed on insufficient funds and an amount not to exceed thirty-five dollars ($35) for each subsequent check to that payee passed on insufficient funds.

(2) Notwithstanding any penal sanctions that may apply, any person who passes a check on insufficient funds shall be liable to the payee for damages equal to treble the amount of the check if a written demand for payment is mailed by certified mail to the person who had passed a check on insufficient funds and the written demand informs this person of (A) the provisions of this section, (B) the amount of the check, and (C) the amount of the service charge payable to the payee. The person who had passed a check on insufficient funds shall have 30 days from the date the written demand was mailed to pay the amount of the check, the amount of the service charge payable to the payee, and the costs to mail the written demand for payment. If this person fails to pay in full the amount of the check, the service charge payable to the payee, and the costs to mail the written demand within this period, this person shall then be liable instead for the amount of the check, minus any partial payments made toward the amount of the check or the service charge within 30 days of the written demand, and damages equal to treble that amount, which shall not be less than one hundred dollars ($100) nor more than one thousand five hundred dollars ($1,500). When a person becomes liable for treble damages for a check that is the subject of a written demand, that person shall no longer be liable for any service charge for that check and any costs to mail the written demand.

(3) Notwithstanding paragraphs (1) and (2), a person shall not be liable for the service charge, costs to mail the written demand, or treble damages if he or she stops payment in order to resolve a good faith dispute with the payee. The payee is entitled to the service charge, costs to mail the written demand, or treble damages only upon proving by clear and convincing evidence that there was no good faith dispute, as defined in subdivision (b).

(4) Notwithstanding paragraph (1), a person shall not be liable under that paragraph for the service charge if, at any time, he or she presents the payee with written confirmation by his or her financial institution that the check was returned to the payee by the financial institution due to an error on the part of the financial institution.

(5) Notwithstanding paragraph (1), a person shall not be liable under that paragraph for the service charge if the person presents the payee with written confirmation that his or her account had insufficient funds as a result of a delay in the regularly scheduled transfer of, or the posting of, a direct deposit of a social security or government benefit assistance payment.

(6) As used in this subdivision, to “pass a check on insufficient funds” means to make, utter, draw, or deliver any check, draft, or order for the payment of money upon any bank, depository, person, firm, or corporation that refuses to honor the check, draft, or order for any of the following reasons:

(A) Lack of funds or credit in the account to pay the check.

(B) The person who wrote the check does not have an account with the drawee.

(C) The person who wrote the check instructed the drawee to stop payment on the check.

(b) For purposes of this section, in the case of a stop payment, the existence of a “good faith dispute” shall be determined by the trier of fact. A “good faith dispute” is one in which the court finds that the drawer had a reasonable belief of his or her legal entitlement to withhold payment. Grounds for the entitlement include, but are not limited to, the following: services were not rendered, goods were not delivered, goods or services purchased are faulty, not as promised, or otherwise unsatisfactory, or there was an overcharge.

(c) In the case of a stop payment, the notice to the drawer required by this section shall be in substantially the following form:

NOTICE
To: (name of drawer)

(name of payee) is the payee of a check you wrote for $ (amount).The check was not paid because you stopped payment, and the payee demands payment. You may have a good faith dispute as to whether you owe the full amount. If you do not have a good faith dispute with the payee and fail to pay the payee the full amount of the check in cash, a service charge of an amount not to exceed twenty-five dollars ($25) for the first check passed on insufficient funds and an amount not to exceed thirty-five dollars ($35) for each subsequent check passed on insufficient funds, and the costs to mail this notice within 30 days after this notice was mailed, you could be sued and held responsible to pay at least both of the following:

 (1) The amount of the check.
(2) Damages of at least one hundred dollars ($100) or, if higher, three times the amount of the check up to one thousand five hundred dollars ($1,500).
If the court determines that you do have a good faith dispute with the payee, you will not have to pay the service charge, treble damages, or mailing cost. If you stopped payment because you have a good faith dispute with the payee, you should try to work out your dispute with the payee. You can contact the payee at:
_____ (name of payee) _____
_____ (street address) _____
_____ (telephone number) _____
You may wish to contact a lawyer to discuss your legal rights and responsibilities.
(name of sender of notice)

(d) In the case of a stop payment, a court may not award damages or costs under this section unless the court receives into evidence a copy of the written demand that, in that case, shall have been sent to the drawer and a signed certified mail receipt showing delivery, or attempted delivery if refused, of the written demand to the drawer’s last known address.

(e) A cause of action under this section may be brought in small claims court by the original payee, if it does not exceed the jurisdiction of that court, or in any other appropriate court. The payee shall, in order to recover damages because the drawer instructed the drawee to stop payment, show to the satisfaction of the trier of fact that there was a reasonable effort on the part of the payee to reconcile and resolve the dispute prior to pursuing the dispute through the courts.

(f) A cause of action under this section may be brought by a holder of the check or an assignee of the payee. A proceeding under this section is a limited civil case. However, if the assignee is acting on behalf of the payee, for a flat fee or a percentage fee, the assignee may not charge the payee a greater flat fee or percentage fee for that portion of the amount collected that represents treble damages than is charged the payee for collecting the face amount of the check, draft, or order. This subdivision shall not apply to an action brought in small claims court.

(g) Notwithstanding subdivision (a), if the payee is the court, the written demand for payment described in subdivision (a) may be mailed to the drawer by the court clerk. Notwithstanding subdivision (d), in the case of a stop payment where the demand is mailed by the court clerk, a court may not award damages or costs pursuant to subdivision (d), unless the court receives into evidence a copy of the written demand, and a certificate of mailing by the court clerk in the form provided for in subdivision (4) of Section 1013a of the Code of Civil Procedure for service in civil actions. For purposes of this subdivision, in courts where a single court clerk serves more than one court, the clerk shall be deemed the court clerk of each court.

(h) The requirements of this section in regard to remedies are mandatory upon a court.

(i) The assignee of the payee or a holder of the check may demand, recover, or enforce the service charge, damages, and costs specified in this section to the same extent as the original payee.

(j)

(1) A drawer is liable for damages and costs only if all of the requirements of this section have been satisfied.

(2) The drawer shall in no event be liable more than once under this section on each check for a service charge, damages, or costs.

(k) Nothing in this section is intended to condition, curtail, or otherwise prejudice the rights, claims, remedies, and defenses under Division 3 (commencing with Section 3101) of the Commercial Code of a drawer, payee, assignee, or holder, including a holder in due course as defined in Section 3302 of the Commercial Code, in connection with the enforcement of this section.

Lake Lindero Homeowners Association, Inc. v. Barone

(2023) 89 Cal.App.5th 834

[Board Recall; Court Determination of Validity] Corporations Code section 7616 may be used by a court to validate the result of an election to recall an HOA’s Board.

Christopher T. Barone, in pro. per., for Defendant and Appellant.
Kulik Gottesman Siegel & Ware, Thomas M. Ware II and Justin Nash for Plaintiffs and Respondents.

OPINION

EGERTON, J. —

Defendant Christopher T. Barone appeals an order under Corporations Code section 7616 confirming the validity of an election removing the former board of the Lake Lindero Homeowners Association, Inc. (the Association), and electing a new board of directors.[1] Barone makes 838*838 two principal contentions: (1) the election was not valid because it contravened the Association’s bylaws and statutory provision governing board recall elections, and (2) section 7616 did not authorize plaintiffs’ action or the trial court’s order validating the recall election.[2] We reject both contentions and affirm.

839*839 FACTS AND PROCEDURAL HISTORY

Consistent with our standard of review for factual questions, we state the evidence in the light most favorable to the trial court’s factual findings, indulging all reasonable inferences in support of the court’s order.[3] (Ryland Mews Homeowners Assn. v. Munoz (2015) 234 Cal.App.4th 705, 712 [184 Cal.Rptr.3d 163].)

  1. The Recall and Full Board Election

The Association is a California nonprofit corporation charged with operating the Lake Lindero development—a 459-lot common interest development and golf community located in Agoura Hills. The Association common areas include a golf course, driving range, tennis courts, pool, restaurant, pro shop, and a lake.

Membership in the Association is appurtenant to ownership of a lot within the development. The Association is governed by a five-member uncompensated board of directors. Since 2018, Lordon Management Company has provided professional management services to the Association.

Barone is a member of the Association and former member of its board of directors. In December 2018, he resigned his board position and accepted paid employment as the Association’s chief executive officer (CEO).

On September 5, 2019, board member Michael Allan was served with a petition signed by more than 5 percent of the Association’s members calling for a special meeting to recall the entire board of directors and elect a new board if the recall was successful. At the time, the other board members, including Allan, were Michael Umann, Dave DiNapoli, Paul Bromley, and Hal Siegel. Allan advised all the board members and Lordon Management of the petition. He hand-delivered the original petition to Lordon Management the next day.

The board did not fix a time for the special meeting or give notice of the meeting to the Association’s members within 20 days of receiving the petition, as is required under section 7511, subdivision (c).[4] When the 20-day 840*840 statutory period expired, Allan, in his capacity as one of the petitioners, sent notice of the special meeting to the Association’s 459 members.

The notice stated the purpose of the special meeting was to hold a vote on the removal of the entire board and, in the event of a recall, an election of the new board. Due to an error on the e-mail address listed for candidacy submissions, Allan sent a new notice listing the date of the meeting as December 19, 2019.

Due to the full board’s inaction, the petitioners also took it upon themselves to conduct the election.[5] As part of that process, Allan, on behalf of the petitioners, contracted with the League of Women Voters (LWV), a non-partisan entity with no stake in the outcome of the election, to retain an inspector of elections. Judy Murphy of the LWV was ultimately appointed inspector of elections for the December 2019 recall.

In its customary role as an inspector of elections, the LWV receives and tallies ballots, but does not mail out election materials. Accordingly, the petitioners prepared the election materials, stuffed the ballot envelopes, and mailed ballots out to the homeowners at the petitioners’ individual expense.

The LWV conducted the election meeting on December 19, 2019. Murphy, in her role as inspector of elections, announced a quorum was not present, as the LWV had not received in excess of 50 percent of the votes of the membership (the minimum participation required to constitute a quorum under the Association’s bylaws).[6] Following Murphy’s announcement, a majority of the members present at the meeting voted to adjourn the meeting to December 23, 2019.[7]

At the December 23, 2019 meeting, Murphy determined the required quorum of 25 percent of the membership (115 of the 459 members) had been 841*841 met. (See fn. 7, ante.) Of the 190 ballots received, Murphy counted 156 votes in favor of recalling the entire board.

Having determined the recall passed, the LWV proceeded to certify the election of the new board: Allan; Harriet Cohen; Siegel; Umann; and Bromley. Lordon Management mailed notice of the election results to the membership.

On December 31, 2019, the new board of directors eliminated Barone’s CEO position.

  1. The Complaint

On January 21, 2020, plaintiffs (the Association, Allan, and Cohen) filed this action against Barone and current and former board members Umann, Bromley, and DiNapoli, asserting two causes of action for declaratory relief under section 7616 and common law nuisance.

The complaint alleged defendants had refused to “recognize the validity of the recall” and continued to assert that “the prior Board remains in power and that Defendant Barone remains the putative `CEO’ of the Association.” It further alleged defendants were “engaged in extensive efforts to hinder the new Board of Directors from conducting the affairs of the Association.”

As relevant to this appeal, plaintiffs prayed for a declaration under section 7616 that the December 2019 election recalling the Association’s board of directors was valid; that the Association’s board of directors consists of Allan, Bromley, Cohen, Siegel, and Umann; and that “Barone is not the CEO of the Association and not its authorized agent.”

  1. The Statement of Decision

On May 4, 2020, after an 11-day bench trial, the court filed a final statement of decision and order declaring, among other things: The December 23, 2019 full board recall election was valid; Allan, Bromley, Cohen, Siegel, and Umann “are (and have been since [December 23, 2019])” the Association’s directors; and the “former CEO Christopher Barone has no authority (and has had no authority since the date of his termination) to act on behalf of the [Association] … unless granted by the current board.”

The court found: The petitioners properly presented the petition for full board recall to the former board; the former board unreasonably violated its duties under the Association’s bylaws and governing statutory law to set a special meeting on the recall election after receipt of the petition; the 842*842 petitioners properly conducted the recall election when the former board failed to do so; the LWV properly executed its duties as inspector of elections and did not prejudice or demonstrate bias against any interested party; and the election was conducted in accordance with the Association’s bylaws and governing statutory law, including provisions prescribing a majority vote and quorum requirements. In making these findings, the court determined defense witnesses testifying to alleged bias or improprieties in the petition and voting process were “not credible.”

As relevant to this appeal, the trial court determined, as a legal matter, that a provision in the Association’s bylaws requiring a “vote of the majority of the votes held by the entire membership” to remove the entire board or an individual director was legally invalid and “unenforceable.” The court concluded this provision conflicted with and was displaced by statutes specifying that, for a nonprofit mutual benefit corporation of 50 or more members (like the Association), only the majority of the votes represented and voting at a duly held meeting at which a quorum is present was needed to remove a director. (See §§ 7222, subd. (a)(2), 5034, 7151, subd. (e).)

On May 22, 2020, plaintiffs voluntarily dismissed their remaining cause of action for nuisance. On May 28, 2020, Barone filed this appeal.[8]

DISCUSSION

  1. The Appeal Is Not Moot: Material Questions Remain Regarding the Construction of the Bylaws and Statutes Governing the Vote Required To Remove the Association’s Board of Directors

As a threshold matter, plaintiffs contend this appeal should be dismissed as moot because reversal of the challenged order will not grant Barone effective relief now that subsequent board elections have taken place since the trial court’s order. We disagree.

Because the duty of every judicial tribunal is “`”`to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions … [,] [i]t necessarily follows that when … an event occurs which renders it impossible for [the] court, if it should decide the case in favor of [the appellant], to grant him any effectual relief whatever, the court will not proceed to a formal judgment….’ [Citations.]” [Citation.] The pivotal question in determining if a case is moot is therefore whether the court can grant the [appellant] any effectual relief. [Citations.] If events have made such relief impracticable, the controversy has become “overripe” and is 843*843 therefore moot. [Citations.] [¶] … When events render a case moot, the court, whether trial or appellate, should generally dismiss it.'” (Parkford Owners for a Better Community v. County of Placer (2020) 54 Cal.App.5th 714, 722 [268 Cal.Rptr.3d 653].)

Plaintiffs did not file a written motion to dismiss with supporting affidavits and evidence establishing subsequent elections have in fact occurred that render this appeal moot. (See, e.g., American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 557 [49 Cal.Rptr.2d 686] [respondent should “have made a formal, written motion for dismissal of the appeal, which, because it would have been based on matters not appearing in the appellate record, would have required the submission of affidavits or other supporting evidence”].)[9] Be that as it may, even if we assume there have been subsequent board elections since December 2019—as seems practically certain given the requirement for annual elections in the Association’s bylaws—we still cannot consider this appeal moot. The challenged order grants declaratory relief embracing a disputed judicial construction of the bylaws and statutes governing the vote required to remove a director from the Association’s board. Under these circumstances, “the general rule governing mootness becomes subject to the case-recognized qualification that an appeal will not be dismissed where, despite the happening of the subsequent event, there remain material questions for the court’s determination.” (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541 [63 Cal.Rptr. 21, 432 P.2d 717] (Eye Dog Foundation).)

Eye Dog Foundation is instructive. In that case, the plaintiff sought injunctive relief and a declaratory judgment to invalidate provisions of the Business and Professions Code covering “the subject `Guide Dogs for the Blind,'” the enforcement of which had led to the suspension of the plaintiff’s business license to train seeing eye dogs. (Eye Dog Foundation, supra, 67 Cal.2d at p. 540.) Several months after the trial court entered a judgment upholding all but one section of the challenged provisions, the regulatory state board formally reinstated the plaintiff’s license after the plaintiff took action to comply with the challenged statutes. (Id. at pp. 540-541.) Recognizing that the pending appeal could no longer result in effective relief enjoining 844*844 enforcement of the challenged statutes, our Supreme Court nonetheless held the appeal was not moot because the plaintiff “not only sought injunctive but declaratory relief, to wit, a declaratory judgment that the subject legislation is unconstitutional on its face and as applied to plaintiff’s operation,” such that there “remain[ed] material questions for the court’s determination” on appeal. (Id. at p. 541.) As our high court explained, an exception to the general mootness doctrine “has been applied to actions for declaratory relief” in such circumstances “upon the ground that the court must do complete justice once jurisdiction has been assumed [citation], and the relief thus granted may encompass future and contingent legal rights.” (Ibid.)

Even if we accept plaintiffs’ contention that we can neither reinstate the former board, nor restore Barone to his CEO position, this does not render the appeal moot. Regardless of the board’s current composition, Barone’s appeal presents a material question for this court’s determination encompassing his future and contingent legal rights under the Association’s bylaws and the statutes governing the recall of its board of directors. As in Eye Dog Foundation, our reversal of the trial court’s declaratory relief order would grant Barone effective relief by embracing his construction of the relevant bylaws and statutory provisions, which remain enforceable against him and the rest of the Association’s current membership for future recall elections. (Eye Dog Foundation, supra, 67 Cal.2d at p. 541, fn. 2 [“`while it has been said that the declaratory judgment acts necessarily deal with the present rights, the “present right” contemplated is the right to have immediate judicial assurance that advantages will be enjoyed or liabilities escaped in the future'”].) This material question warrants disposition on the merits.

  1. The Trial Court Correctly Determined the Former Board Was Validly Recalled Under the Association’s Bylaws and Statutory Law

Barone contends the trial court improperly disregarded a provision of the Association’s bylaws requiring a majority vote of the “entire membership” to remove the board or an individual director from office. In the alternative, he argues the recall was not valid because the relevant special meeting did not achieve a quorum. We conclude the trial court correctly construed the bylaws and governing statutes.

Barone’s contentions challenge the trial court’s application of the bylaws and statutes to essentially undisputed facts. The contentions are therefore subject to our de novo review. (Roybal v. Governing Bd. of Salinas City Elementary School Dist. (2008) 159 Cal.App.4th 1143, 1148 [72 Cal.Rptr.3d 146].) Likewise, insofar as the contentions concern the trial court’s construction of the Association’s bylaws and our state’s governing statutes, these issues too are subject to our de novo review. (See ibid.; PV Little Italy, supra, 210 Cal.App.4th at pp. 144-145.)

845*845 It is undisputed that the recall election was approved by a vote of 156 in favor of recalling the entire board, with 190 ballots received out of 459 total membership votes. Barone contends this was insufficient to approve the recall under article VI, section 3 of the Association’s bylaws, which provides: “The entire Board of Directors or any individual Director may be removed from office with or without cause at any time by a vote of the majority of the votes held by the entire membership of record at any regular or special meeting of members.” (Italics added.) Because a majority of the 459 votes held by the entire membership of record is 230 votes, Barone contends the trial court erred in declaring the recall election valid.

The trial court rejected this contention based on a collection of interconnected statutes that effectively prohibit a nonprofit mutual benefit corporation with 50 or more members from requiring more than “a majority of the votes represented and voting at a duly held meeting at which a quorum is present” to remove a director from the corporation’s board. (§ 5034; see §§ 7222, subd. (a)(2), 7151, subd. (e).)

Section 7222 expressly governs the recall of directors serving on the board of a nonprofit mutual benefit corporation. The statute provides, in relevant part: “[A]ny or all directors may be removed without cause if: [¶] (1) In a corporation with fewer than 50 members, the removal is approved by a majority of all members (Section 5033). [¶] (2) In a corporation with 50 or more members, the removal is approved by the members (Section 5034).” (§ 7222, subd. (a).) Under its plain terms, the statute permits a corporation with fewer than 50 members to require the approval of “a majority of all members” (as specified in the Association’s bylaws); however, for a corporation with 50 or more members (like the Association), the statute dictates that the removal need only be “approved by the members” as that phrase is defined in section 5034.

Section 5034 provides: “`Approval by (or approval of) the members’ means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or written ballot … or by the affirmative vote or written ballot of such greater proportion, including all of the votes of the memberships of any class, unit, or grouping of members as may be provided in the bylaws (subdivision (e) of Section 5151, subdivision (e) of Section 7151, or subdivision (e) of Section 9151) or in Part 2, Part 3, Part 4 or Part 5 for all or any specified member action.” (Italics added.) The statute’s reference to subdivision (e) of section 7151 is critical because, while section 5034 permits a nonprofit mutual benefit corporation to require a greater proportion of votes in its bylaws, section 7151, subdivision (e) expressly withdraws this authorization for a vote to remove a director from the corporation’s board.

846*846 Section 7151, subdivision (e) provides: “The bylaws may require, for any or all corporate actions (except as provided in paragraphs (1) and (2) of subdivision (a) of Section 7222 …) the vote of a larger proportion of, or all of, the members or the members of any class, unit, or grouping of members or the vote of a larger proportion of, or all of, the directors, than is otherwise required by this part.”

Because section 7151, subdivision (e) expressly prohibits a nonprofit mutual benefit corporation with 50 or more members (like the Association) from requiring a greater proportion of votes than is specified in section 7222, subdivision (a)(2) for the removal of a director, the trial court correctly concluded article VI, section 3 of the Association’s bylaws could not be enforced to invalidate the recall election. And, because section 7222, subdivision (a)(2) requires only “approv[al] by the members” as defined in section 5034 to remove a director (§ 7222, subd. (a)(2)), the trial court correctly concluded the recall was valid if approved “by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present.” (§ 5034.)

Notwithstanding the foregoing, Barone contends there were insufficient votes cast in the recall election to represent a quorum under the Association’s bylaws. The relevant bylaws provision states: “The presence at any meeting, in person or by proxy, of members entitled to cast in excess of 50 percent (50%) of the votes of the membership, shall constitute a quorum for any action …. If, however, such quorum shall not be present or represented at any meeting, the members present either in person or by proxy, may without notice other than announcement at the meeting, adjourn the meeting to a time not less than forty-eight (48) hours nor more than thirty (30) days from the time the original meeting was called, at which meeting twenty-five percent (25%) of the votes of the membership shall constitute a quorum.”

The evidence at trial proved that, following the inspector of election’s announcement that a quorum was not present at the December 19, 2019 meeting, a majority of the members present voted to adjourn the meeting to December 23, 2019, in accordance with the foregoing provision of the bylaws. The evidence further proved that, at the December 23, 2019 meeting, the inspector of elections had received 190 ballots, exceeding the required 25 percent of the votes of the membership (115 of the total 459 votes) needed to constitute a quorum at that meeting.

Barone does not dispute the foregoing facts. Rather, he argues the 25 percent quorum provision in the Association’s bylaws “conflict[s]” with sections 7222 and 5034, which, he emphasizes, “contain[] no language about a `reduced quorum.'” Contrary to Barone’s premise, neither section 5034 nor 847*847 section 7222 governs minimum quorum requirements for a nonprofit mutual benefit corporation. The relevant statute is section 7512.

Section 7512, subdivision (a) provides: “One-third of the voting power, represented in person or by proxy, shall constitute a quorum at a meeting of members, but, subject to subdivisions (b) and (c), a bylaw may set a different quorum.” (Italics added.) Subdivision (b) stipulates that “[w]here a bylaw authorizes a corporation to conduct a meeting with a quorum of less than one-third of the voting power, then the only matters that may be voted upon … by less than one-third of the voting power are matters notice of the general nature of which was given.”[10]

Consistent with section 7512, the Association’s bylaws authorized a quorum of 25 percent of the voting power after an adjournment. (See § 7512, subd. (a).)[11] And, the record proves the matter voted upon at the meeting— the recall of the board and election of a new board in the event the recall was successful—was disclosed in the original meeting notice. (§ 7512, subd. (b).) The trial court correctly determined the December 2019 vote validly recalled the former board under the Association’s bylaws and governing statutory law.

  1. Section 7616 Authorized the Order Validating the December 2019 Recall Election

Barone contends section 7616 authorizes a claim to validate an election only—”not a recall.” He emphasizes there is “nothing” in the statute expressly addressing “a recall or removal of directors,” and he argues it is a “decisive issue” that “there cannot be an election absent a successful recall” under the Association’s bylaws. Additionally, Barone argues he is not a proper defendant under the statute.

Barone’s arguments raise questions of statutory interpretation subject to our independent de novo review. (Committee to Save the Beverly Highlands Homes Assn. v. Beverly Highlands Homes Assn. (2001) 92 Cal.App.4th 1247, 848*848 1261 [112 Cal.Rptr.2d 732].) “In the construction of statutes, the primary goal of the court is to ascertain and give effect to the intent of the Legislature. [Citations.] The court looks first to the language of the statute; if clear and unambiguous, the court will give effect to its plain meaning.” (Id. at p. 1265.) “The words used should be given their usual, ordinary meanings and, if possible, each word and phrase should be given significance. [Citations.] The words used `must be construed in context, and statutes must be harmonized, both internally and with each other, to the extent possible.'” (Ibid.)

Contrary to Barone’s narrow reading of section 7616, we find the statutory text evidences a clear legislative intent to confer broad authority on the trial court in determining the validity of a board election. Under section 7616, subdivision (a), “[u]pon the filing of an action therefor by any director or member or by any person who had the right to vote in the election at issue, the superior court of the proper county shall determine the validity of any election or appointment of any director of any corporation.” Critically, while this directive does not expressly refer to a recall election (as Barone emphasizes), subdivision (d) of the statute authorizes “[t]he court, consistent with the provisions of [the statutes governing nonprofit mutual benefit corporations] and in conformity with the articles and bylaws to the extent feasible, [to] determine the person entitled to the office of director … and [to] direct such other relief as may be just and proper.” (§ 7616, subd. (d), italics added.)

In Kaplan v. Fairway Oaks Homeowners Assn. (2002) 98 Cal.App.4th 715 [120 Cal.Rptr.2d 158] (Kaplan), the reviewing court considered whether an action under section 7616 properly encompassed the plaintiffs’ claim that the challenged election violated their right to vote by proxy, such that the plaintiffs were entitled to prevailing party attorney fees under Civil Code former section 1354 for enforcing the association’s bylaws.[12] (Kaplan, at pp. 717-718.) The Kaplan court acknowledged that section 7616 “does not create any substantive rights … to vote by proxy,” but recognized the statute was nonetheless broad enough to provide a “procedural vehicle” to adjudicate an action “to enforce the members’ proxy and cumulative voting rights under the bylaws.” (Kaplan, at pp. 719, 720.)

We similarly conclude the language of section 7616 is broad enough to provide a procedural vehicle for vindicating plaintiffs’ recall rights under the Association’s bylaws, even absent an express reference to recall elections in the statute’s text. Article VI, section 3 of the bylaws authorizes a recall of the entire board of directors and makes the election of a new board part and 849*849 parcel of the recall process: “The entire Board of Directors or any individual Director may be removed from office with or without cause at any time by a vote … at any regular or special meeting of members duly called, and a successor or successors may then and there be elected to fill the vacancy or vacancies thus created.[13] (Italics added.) In adjudicating plaintiffs’ claim under section 7616 to enforce this provision of the bylaws, the statute not only unambiguously directed the trial court to “determine the validity of [the new board’s] election” (§ 7616, subd. (a)), but also authorized the court, “in conformity with the [recall provision of the] bylaws …, [to] determine the person entitled to the office of director … and [to] direct such other relief as may be just and proper” (id., subd. (d)). Because the trial court could not determine the validity of the election or “the person entitled to the office of director” without adjudicating the validity of the underlying recall election, it was “just and proper” for the court to enter an order under section 7616 confirming the recall election was valid. (§ 7616, subd. (d); see Kaplan, supra, 98 Cal.App.4th at p. 721.)

For much the same reason, we reject Barone’s argument that he was not a proper defendant in this action. Section 7616, subdivision (c) directs the superior court, “[u]pon the filing of the complaint, and before any further proceedings are had” to “enter an order fixing a date for the hearing … and requiring notice of the date for the hearing and a copy of the complaint to be served upon the corporation and upon the person whose purported election or appointment is questioned and upon any person (other than the plaintiff) whom the plaintiff alleges to have been elected or appointed.” (Italics added.) Barone contends this provision establishes the parties who may be named as defendants under section 7616, and, because he was neither elected nor appointed in the December 2019 election, he argues he could not be sued under the statute.[14] We disagree.

As we have said and as the trial court correctly recognized, section 7616, subdivision (d) authorizes the court to “direct such other relief as may be just and proper” in connection with confirming the validity of a board election. Here, the complaint alleged Barone, in his role as CEO and with the sanction of a majority of the former board, was engaged in frustrating the 850*850 new board’s efforts to fulfill its duties under the Association’s bylaws. Having confirmed the validity of the new board’s election, the statute plainly authorized the trial court to enter an order confirming Barone had no authority to act on behalf of the Association, as was “just and proper” under the Association’s bylaws. (§ 7616, subd. (d).) Plaintiffs properly named Barone as a defendant in their section 7616 claim.[15]

DISPOSITION

The order is affirmed. Plaintiffs the Lake Lindero Homeowners Association, Inc., Michael Allan, and Harriet Cohen are entitled to their costs.

Edmon, P. J., and Lavin, J., concurred.


[1] Statutory references are to the Corporations Code, unless otherwise designated.

Barone noticed an appeal from a “Judgment after court trial” entered on May 4, 2020. The record, including the register of actions, does not reflect the entry of a judgment on May 4, 2020, or any other date. Rather, on May 4, 2020, the trial court entered an order and final statement of decision confirming the validity of the board election under section 7616. Although that order disposed of only one of plaintiffs’ two causes of action, plaintiffs subsequently dismissed their remaining claim on May 22, 2020. Because the court’s May 4, 2020 order and plaintiffs’ voluntary dismissal collectively have “all the earmarks of a final judgment,” Barone properly took this appeal on May 28, 2020. (Estate of Miramontes-Najera (2004) 118 Cal.App.4th 750, 755 [13 Cal.Rptr.3d 240]; see Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 304 [63 Cal.Rptr.2d 74, 935 P.2d 781] [a judgment is final “`”when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined”‘”]; PV Little Italy, LLC v. MetroWork Condominium Assn. (2012) 210 Cal.App.4th 132, 144 [148 Cal.Rptr.3d 168] (PV Little Italy) [order invalidating corporate election under § 7616 appealable where “order appealed from accomplished that goal, and neither party has indicated that anything more of substance remains to be done in the litigation, except entry of judgment”].)

[2] Barone commits several pages of his opening brief to challenging the trial court’s credibility determinations. It is settled that “`”[c]onflicts and even testimony [that] is subject to justifiable suspicion do not justify the reversal of a judgment, for it is the exclusive province of the trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends.”‘” (People v. Penunuri (2018) 5 Cal.5th 126, 142 [233 Cal.Rptr.3d 324, 418 P.3d 263], italics added, quoting People v. Zamudio (2008) 43 Cal.4th 327, 357 [75 Cal.Rptr.3d 289, 181 P.3d 105].) We thus disregard all contentions challenging the trial court’s credibility determinations as insufficient to support reversal of the order.

Barone makes other contentions that do not warrant meaningful discussion. These include that the trial court refused to consider an earlier ruling in an unrelated case involving an Association recall election; that the board election violated procedures pertaining to the election of public officials under the Elections Code; that the court refused to admit 500 pages of exhibits submitted after the pretrial deadline and after plaintiffs rested their case; that the court refused to compel testimony from the Association’s attorney after Barone failed to make an offer of proof; that the Association’s attorney violated the Rules of Professional Conduct by his presence at the election; that the court disregarded conflicting evidence about which parties sent and received election materials; and that several procedural violations (such as the failure to sign a case management form) occurred during pretrial proceedings. Among other shortcomings, Barone fails to support these scattershot claims with a reasoned argument or citation to relevant legal authorities, and he categorically fails to address, let alone satisfy, his burden to demonstrate a miscarriage of justice occurred. (See Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1069 [232 Cal.Rptr. 528, 728 P.2d 1163] [An appellant “must also show that the error was prejudicial [citation] and resulted in a `miscarriage of justice'”—i.e., that “`”it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.”‘”].) Because the opening brief fails to fulfill these fundamental requirements of appellate process, we deem all these contentions waived. (People v. Stanley (1995) 10 Cal.4th 764, 793 [42 Cal.Rptr.2d 543, 897 P.2d 481] [“`[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.'”].)

We likewise deem forfeited arguments Barone makes for the first time in his reply brief, including his claim (without citation to the record) that the trial court purportedly interfered with a contract Barone had with his legal counsel. (Varjabedian v. City of Madera (1977) 20 Cal.3d 285, 295, fn. 11 [142 Cal.Rptr. 429, 572 P.2d 43] [“Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.”].)

[3] Barone filed a motion to augment the record with documents that were not filed or lodged in the trial court. The motion is denied. (See Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [58 Cal.Rptr.2d 899, 926 P.2d 1085] [“Augmentation does not function to supplement the record with materials not before the trial court.”]; Cal. Rules of Court, rule 8.155(a)(1).)

[4] Section 7511, subdivision (c) provides, “Upon request in writing to the corporation … by any person (other than the board) entitled to call a special meeting of members, the officer forthwith shall cause notice to be given to the members entitled to vote that a meeting will be held at a time fixed by the board not less than 35 nor more than 90 days after the receipt of the request…. If the notice is not given within 20 days after receipt of the request, the persons entitled to call the meeting may give the notice or the superior court of the proper county shall summarily order the giving of the notice, after notice to the corporation giving it an opportunity to be heard.”

[5] Evidence elicited at trial showed Barone, ostensibly speaking for a majority of the board, had instructed Lordon Management, which normally would have assisted with an Association election, to “do nothing until legal counsel and/or the board advises differently.”

[6] As of December 19, 2019, the LWV had received a total of 182 sealed ballot envelopes of a possible 459 (39.6 percent).

[7] As we will discuss, the Association’s bylaws provide that if a quorum is not present, “the members present either in person or by proxy, may without notice other than announcement at the meeting, adjourn the meeting to a time not less than forty-eight (48) hours nor more than thirty (30) days from the time the original meeting was called, at which meeting twenty-five percent (25%) of the votes of the membership shall constitute a quorum.”

[8] The other defendants did not appeal and are not parties to this appeal.

[9] Plaintiffs filed a request for judicial notice of a grant deed showing Umann conveyed his interest in one lot in the development on July 30, 2020. (Evid. Code, §§ 452, subd. (c), 459, subd. (a); see Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194 [147 Cal.Rptr.3d 41].) While we grant that request, we cannot accept, as plaintiffs assert, that the grant deed proves Umann could not have maintained his position on the board after the conveyance. Significantly, the Association’s bylaws contemplate that a member may own multiple lots, such that a member is “entitled to one vote for each Lot in which they hold the interest required for membership.” (Italics added.) Because we have no evidence to establish how many lots Umann owned when he conveyed the subject lot, the grant deed is insufficient to prove he is no longer a member of the Association entitled to serve on its board of directors.

[10] Section 7512, subdivision (c) authorizes members to “continue to transact business until adjournment notwithstanding the withdrawal of enough members to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the members required to constitute a quorum.”

[11] The Association’s bylaws also comply with regulations pertaining to quorum requirements promulgated by the Department of Real Estate for common interest developments like Lake Lindero. In particular, section 2792.17, subdivision (e)(2) of title 10 of the California Code of Regulations provides: “In the absence of a quorum at a members’ meeting a majority of those present in person or by proxy may adjourn the meeting to another time, but may not transact any other business…. The quorum for an adjourned meeting may be set by the governing instruments at a percentage less than that prescribed for the regular meeting, but it shall not be less than 25 percent of the total voting power of the Association.” (Italics added.)

[12] Civil Code former section 1354, subdivision (f) then provided for an award of prevailing party attorney fees in an action “`to enforce the governing documents.'” (Kaplan, supra, 98 Cal.App.4th at p. 718, italics omitted.)

[13] As discussed in part 2, ante, while this provision of the bylaws requires “a vote of the majority of the votes held by the entire membership of record,” that part of the provision violates section 7151, subdivision (e) and thus is displaced by the vote requirement in section 7222, subdivision (a)(2) for the removal of directors from a nonprofit mutual benefit corporation with 50 or more members.

[14] Barone also suggests the Association is not a proper plaintiff in this action, emphasizing that section 7616, subdivision (c) requires service of the complaint upon “the corporation.” However, as plaintiffs correctly argue, Barone fails to demonstrate how this purported error resulted in prejudice, given that Cohen and Allan (each a “member” and “person who had the right to vote in the election”) undisputedly had standing under the statute. (§ 7616, subd. (a).)

[15] Barone has moved for sanctions against plaintiffs’ counsel and the trial court. With respect to the lower court, he appears to argue the court reporter failed to provide him with electronic transcripts of the reported proceedings. (See Cal. Rules of Court, rule 8.23 [authorizing sanctions for failure of a court reporter to perform a duty imposed by statute or these rules].) Barone relies upon rule 8.144, which specifies the format requirements that apply “to clerks’ and reporters’ transcripts delivered in electronic form and in paper form.” (Id., rule 8.144(b)(1), italics added.) As the rule’s reference to “paper form” suggests, there is no mandate that the reporter deliver an electronic transcript—a paper form is also acceptable. (Ibid.; see also id., rule 8.130 [specifying general requirements for delivery of reporter’s transcript].) Thus, Barone has not demonstrated sanctions are warranted under rule 8.23.

Barone’s motion for sanctions against plaintiffs’ counsel appears to relate largely to events that occurred before the underlying action or in connection with plaintiffs’ efforts to enforce the terms of the challenged order, neither of which is properly before this court on a motion for appellate sanctions. (See Cal. Rules of Court, rule 8.276(a) [specifying grounds for appellate sanctions].) To the extent his motion raises issues relevant to the appeal, it simply repeats arguments that Barone made in his principal briefs, which we have rejected. Moreover, as plaintiffs correctly argue, nothing in the relevant rule authorizes appellate sanctions against a respondent for defending an appeal. (See ibid.) The motion for sanctions is denied.

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-Published on HOA Lawyer Blog (July, 2023)

SB-477 (Committee on Housing) Accessory Dwelling Units

Would reorganize the various statutes relating to Accessory Dwelling Units into one chapter of the Government Code.

Current Status: Chaptered

FindHOALaw Quick Summary:

Existing law provides for the creation by local ordinance, or by ministerial approval if a local agency has not adopted an ordinance, of accessory dwelling units to allow single-family or multifamily dwelling residential use. Existing law also provides for the creation of junior accessory dwelling units by local ordinance, or, if a local agency has not adopted an ordinance, by ministerial approval.
This bill would make nonsubstantive changes and reorganize various provisions relating to the creation and regulation of accessory dwelling units and junior accessory dwelling units into Government Code Sections 66310-66341 and would make related nonsubstantive conforming changes.
This bill would declare that it is to take effect immediately as an urgency statute.
View more info on SB 477
from the California Legislature's website

Related Links

California Legislature Further Limits a HOA’s Right to Restrict Rentals - Published on HOA Lawyer Blog (September 2020) Request for Installation of Accessory Dwelling Units - Published on HOA Lawyer Blog (March 2021) SB 9 Signed! Statewide Re-zoning of Single-Family Neighborhoods & Urban Parcel Splits - Published on HOA Lawyer Blog (September 2021)

Annual Notice & Solicitation of Member Contact Information

Civil Code section 4041 requires every member (every homeowner within the HOA) to provide the HOA each year with information specifying the member’s preferred delivery method for receiving notices from the HOA, the member’s alternate/secondary delivery method for receiving such notices, as well as information relating to the occupancy and development status of the member’s property.  Section 4041 requires the HOA to solicit these notices from its members on an annual basis, and during specified timeframes. These requirements are discussed further, below.

Required Annual Notice of Contact Information by Members
On an annual basis, each member must provide the association with written notice of all the following:

  • The member’s preferred delivery method for receiving notices from the association. This must include the option of the member receiving notices at a valid mailing address, or at a valid email address, or both. (Civ. Code § 4041(a)(1).)
  • An alternate or secondary delivery method for receiving notices from the association. This must include the option of the member receiving notices at a valid mailing address, or at a valid email address, or both. (Civ. Code § 4041(a)(2).)
  • The name, mailing address and available email address of the member’s legal representative, if the member has one. This would include any person with a power of attorney for the member or who can be contacted in the event of the member’s extended absence. (Civ. Code § 4041(a)(3).)
  • The occupancy and development status of the member’s property. This must specify whether the member’s property is occupied by the member (whether it is “owner-occupied”), whether the member’s property is being rented out, whether the member’s property is developed but vacant, or whether the member’s property is undeveloped land. (Civ. Code § 4041(a)(3).)

Additional Requirements Pertaining to Email Delivery. Section 4041 defines a “valid email address” as “one that, after a notice is sent, does not result in a bounce or other error notification indicating failure of the message.”  If an association delivers a notice to a member’s email address which proves to no longer be a “valid email address”, the association must resend the notice to an alternative mailing or email address specified by the member. (Civ. Code §§ 4041(e); 4040.)

Failure of Member to Provide Annual Notice of Contact Information. In the event the member fails to provide the required annual notice of contact information to the association described above, then the association is required to use the last mailing address requested in writing by the member to deliver notices.  If the member has never issued a written request to use a specific mailing address, then the association must use the member’s property address within the association’s development for delivery of notices. (Civ. Code § 4041(c).)

Required Solicitation of Member Contact Information by Association
An association is required to solicit the annual notice of member contact information from each member on an annual basis. The solicitation must include both of the following: (Civ. Code § 4041(b)(2).)

  • A statement that the member is not required to provide an email address to the association; and
  • A simple method for the member to inform the association in writing that the member wishes to change their preferred delivery method for receiving notices.

Requirement to Update Records Prior to Annual Disclosures. The information obtained from members in response to the association’s solicitation of their contact information must be entered into the association’s books and records at least thirty (30) days prior to distributing the association’s annual budget report and annual policy statement. (Civ. Code § 4041(b)(1).)

AB-1101 (Flora) Building standards: exterior elevated elements: inspection.

Would allow termite inspectors with 5 years’ experience to conduct inspections of balconies and other exterior elevated elements.

Current Status: Dead

FindHOALaw Quick Summary:

Existing law governs the management and operation of common interest developments. The act requires the board of an association of a condominium project to cause a visual inspection to be conducted, at least every 9 years, of the exterior elevated elements for which the association has maintenance or repair responsibility. Existing law requires the inspection to be conducted by a licensed structural engineer or architect.
This bill would amend Civil Code Section 5551 to additionally authorize a Branch 3 registered company registered with the Structural Pest Control Board with a minimum of 5 years of experience to conduct the inspection.
View more info on AB 1101
from the California Legislature's website

Related Links

SB 326 Signed! Balconies, Branches, and Builder Defect Actions - Published on HOA Lawyer Blog (October 2019)

AB-1764 (Committee on Housing and Community Development) Housing Omnibus.

Would require an association that has adopted candidate disqualifications to also require the same director disqualifications in its election rules.

Current Status: Chaptered

FindHOALaw Quick Summary:

Existing law authorizes an association to impose certain qualification requirements on a nominee for a board seat, including requiring a nominee to have been a member for at least one year, and disqualifying a nominee for a past criminal conviction that would, if the nominee were elected, either prevent the association from purchasing certain required insurance or terminate the association’s existing required insurance coverage.

This bill would amend Civil Code Section 5105 to provide that an association that disqualifies a nominee would be required in its election rules to require a director to comply with the same requirements.

Under existing law, if there are not more qualified candidates than vacancies, an association is authorized to consider the candidates elected by acclamation if the association permits all candidates to run if nominated. However, an association is authorized to disqualify a nominee who has served the maximum number of terms or sequential terms allowed by the association.

This bill would amend Civil Code Section 5103 and 5105 to require an association to disqualify that nominee. Under the bill, a director who ceases to be a member of the association would be disqualified from continuing to serve as a director.

**AB 1764 was signed in to law on October 11, 2023 and takes effect January 1, 2024.

View more info on AB 1764
from the California Legislature's website