Question: My homeowner association board acts with impunity because, the members say, they "can." The reason the board gave me for its untenable actions was that "a person serving on an HOA board cannot be sued." Is that so?
Answer: There is no law in California that prevents an association's board of directors, the association or even its employees and vendors from being sued in any court. Whether or not such lawsuits are justified is decided by the court.
The board cannot act with impunity merely because members believe they "can," and efforts to do so usually result in the board's removal or a lawsuit.
All titleholders need to be vigilant in documenting their board's actions and comparing those actions with what is required or permitted by the Davis-Stirling Act, Civil Code sections 1350-1378, or the association's governing documents, covenants, conditions and restrictions (CC&Rs), bylaws and rules and regulations. When the board does something it is not permitted to do or does not do something it is required to do, there may be a basis for a lawsuit. Such violations should be presented at an open meeting during the speaker's forum, making sure they are documented in the minutes.
Titleholders must take care when bringing legal actions. In most instances, to be able to recover attorney's fees, the lawsuit must allege and prove a violation of the governing documents or some other area of law that specifically allows for recovery of attorney's fees. Additionally, the plaintiff probably will be responsible for paying his or her own attorney's fees up front whereas the board probably will be defended by the association's insurance company, which typically hires and pays for attorneys to defend such actions. But the insurance company might later demand that it be reimbursed the money it spent on defending the board's actions.
Boards are warned that having insurance in place does not justify unlawful actions or omissions, nor does it act as a blank check for reckless and willful behavior. Board members' actions beyond the scope of what they are legally permitted to do may mean the insurance coverage will not extend to them and they will not be covered in the event of a lawsuit.
If individual members of the board engage in acts that cause harm to others, they can be sued by whoever they have harmed. In those cases, it is also likely that the association's insurance policy will not cover them, and they may be compelled to pay for their own lawyers and for any damages adjudicated against them.
The late Stephen Glassman, an attorney specializing in corporate and business law, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or email@example.com.