QUESTION: Because litigation matters are reserved for private executive session meetings, does the board have any liability if it informs the membership of litigation involving the association?

ANSWER: If done properly, there is no liability. The Court of Appeals dealt with this issue in Healy v. Tuscany Hills.

Summary of Case. In this 2006 case, homeowner Gloria Healy sued Tuscany Hills claiming the Association had defamed her when it informed the membership that her refusal to allow access through her property for weed abatement resulted in increased costs to the Association. Healy alleged she suffered loss of reputation, shame, mortification and hurt feelings in the amount of $250,000. She also sought punitive damages. The offending letter stated in part:

Dear Affected Tuscany Hills Member: . . . Please be advised that the [the Association is in litigation because it is performing] weed abatement at an additional cost to the Association, primarily because . . . ingress and egress . . . is being prohibited by the owner of 6 Villa Scencero.

Decision. Healy won her lawsuit at the trial level and the association appealed. The Court of Appeals reversed the lower court decision. The Court determined that the allegedly defamatory statements came within what is known as the "litigation privilege" when the letter expressly referred to litigation arising from Healy's refusal to allow ingress and egress for weed abatement.

Litigation Privilege. The litigation privilege is a type of immunity given to statements in connection to litigation. The protections are found in Civil Code §47(b) and Code Civ. Proc. §425.16 which are construed broadly to protect the right of litigants to the utmost freedom of access to the courts without the fear of being harassed subsequently by derivative tort actions. Thus, a communication is absolutely immune from any tort liability if it has some relation to judicial proceedings. Healy v. Tuscany Hills.

RECOMMENDATION: Members have an interest in knowing about litigation involving their association and boards should keep them informed. However before anything is released, legal counsel should review and approve the wording of the disclosure. In addition, disclosure is a board function, not the right of individual directors.