Impairment of the Right to Counsel in Community Association Disputes

February 10, 2020 Stan

Introduction

Prior to 2013, there was uncertainty as to whether a community association could exclude a property owner’s counsel from attending a meeting of the board of directors, a committee meeting (such as an architectural committee, fine committee, or rules committee), or from participating in an internal dispute resolution on behalf of the owner pursuant to Civil Code sections 5900-5920.

Some associations took the position that, since associations were private organizations, participation was limited to owners, precluding the owner’s attorney from attending these events. Other associations acknowledged cases such as Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 468, 475 (2000) and Cabrera v. Alam, 197 Cal. App. 4th 1077, 1087 (2011), which hold that an association is, in effect, a “quasi government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government,” and therefore an owner’s counsel may attend association meetings.

Still other associations took a middle ground, allowing the owner’s attorney to attend some but not all of these meetings. For example, an association might allow an owner’s attorney to attend a board meeting, but not a committee meeting. Another association might allow an owner’s attorney to attend a board meeting or a committee meeting, but not participate in internal dispute resolution. In 2013, the status quo changed with the decision of SB Liberty, LLC v. Isla Verde Ass’n, Inc., 217 Cal. App. 4th 272 (2013).

The SB Liberty Case

In SB Liberty, a homeowner became involved in a dispute with the association over the association’s disapproval of the owner’s architectural plans for renovating the owner’s residence. The owner provided its attorney with a special power of attorney, which gave the attorney the right to attend and participate in the board’s meetings on its behalf as fully and to all intents and purposes as principals might do if personally present. SB Liberty, 217 Cal. App. 4th at 277. The special power of attorney was signed by the owner, recorded with the County Recorder, and provided to the association. The owner’s attorney then notified the association of intent to attend the next board meeting. The association refused to allow the owner’s attorney to attend the meeting.

The owner filed a complaint against the association seeking, among other things, a mandatory injunction to allow the owner’s attorney to attend board meetings. The trial court denied the motion for preliminary injunction, and the court of appeal affirmed. Id. at 274-75. The court of appeal held that only members of the association were entitled to attend the board of directors meetings. Id. at 281. Since the owner’s attorney was not a member of the association, the owner’s attorney was not entitled to attend or participate in the board of directors meetings. Id. As to the special power of attorney, the court of appeal held that an owner is not permitted to transfer membership rights to another person, including the right to attend or participate in meetings of the board of directors. Id. at 283-84. The court of appeal also held that a board of directors has the authority to determine how to conduct its meetings, and is authorized to prevent a non-member from attending and participating in those meetings. Id. at 284. Finally, the court of appeal held that the association’s refusal to allow the owner’s attorney to attend the meeting did not cause the owner any great or irreparable harm because there was no showing that such exclusion interfered with the owner’s First Amendment or membership rights. Id.

Now, based on SB Liberty, associations have the authority to prevent an owner’s attorney from attending or participating in matters before the association. This would include board of directors meetings, committee meetings, and internal dispute resolution meetings.

Suggestions for Reform

The California legislature should enact legislation to overrule SB Liberty by a new statute specifically stating that an owner in an association may designate an attorney to attend and participate in meetings before the board of directors or committees of the association, or internal dispute resolution proceedings.

Absent legislative reform, the only other alternative may be another court case that presents different facts or legal arguments than those in SB Liberty. This could be a situation where the owner is not physically, intellectually, or emotionally able to present his or her case to the board of directors. A different legal argument may be based on the association’s impairment of the owner’s right to counsel in civil disputes.

Finally, footnote 11 in SB Liberty may provide some relief to a homeowner who desires to have counsel represent him or her in association meetings. In SB Liberty, the plaintiff was a limited liability company (“LLC”) and its manager was one of the property owners. Footnote 11 suggests that there may be a different result if a manager of the LLC was the owner’s attorney:

We express no opinion regarding the issue-which is not presented here-of whether an attorney appointed by an LLC member of the Association as the LLC’s manager would have the right to appear at the open sessions of the Board’s meetings on behalf of the LLC as its representative. It is undisputed that attorney Lepiscopo was not a member or manager of SB Liberty.

Id. at 285 n.11.

Conclusion

It is well established that even in civil disputes, a person has a “fundamental” and “important” right to counsel of one’s choice. Taheri Law Group v. Evans, 160 Cal. App. 4th 482, 491 (2008). In SB Liberty, the court’s decision appears to impair this right. SB Liberty should not continue to be the law in California.

Copyrighted and printed with the permission of Orange County Lawyer