Emergency Defined. An "emergency" is defined as "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" to the membership. (Civ. Code §4923; Civ Code §4930(d)(1).)
Calling an Emergency Meeting. An emergency meeting of the board may be called by the president or by any two members of the board other than the president. (Civ. Code §4923.) Email discussion of director availability for the meeting as well as the date and time for the meeting is allowed. Scheduling discussions are not deemed "board meetings" and do not violate the Davis-Stirling Act.
- Notice to Members. Posting a membership notice and an agenda is not necessary since the meeting, by its nature, is unexpected and immediate.
- Fiduciary Duty. In an emergency where immediate board action is required, if a director does not have a legitimate reason for refusing to waive the 48-hour notice to directors required by Corporations Code §7211(a)(3), that director may be in breach of his/her fiduciary duties.
Form of Meeting. Emergency meetings may be held by any of the following methods:
- In Person. Directors can gather together at a physical location and convene a meeting to address the emergency.
- Telephone-Video Conference. The board can meet by teleconference or video conference. (Civ. Code §4090(b).) Once a quorum is present, emergency action can be approved by a majority of directors present.
- Email. Email may be used as a method of conducting an emergency meeting, provided all members of the board consent in writing. The written consent or consents must be filed with the minutes of the board meeting. (Civ. Code §4910(b)(2).) There is disagreement in the legal community whether emergency decisions via email must also be unanimous. Some argue that unanimous consent only applies to the decision that an emergency exists. Others argue that the unanimous consent also extends to any decisions related to the emergency.
Recommendation: The conservative approach is to have unanimous consent to hold an emergency meeting by email and unanimous consent regarding any decisions made via email. However, meeting the requirement may not be possible if one or more directors are unavailable. To avoid the problem, boards can hold an emergency meeting in person or via conference call. Doing so does not require written consent. As with regular meetings, it only requires a quorum of directors to conduct business and decisions are by a majority of directors attending the meeting once quorum has been established.
Minutes. Minutes of the emergency need to be taken. If the meeting was an executive session, the meeting must be generally noted in the next open session board meeting. For example, the Board met in executive session on [date] to discuss potential litigation.
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