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  California's Leader in Community Association Law March 31, 2022
MELISSA WARD JOINS
ADAMS|STIRLING

We are pleased to announce that attorney Melissa Ward has joined our Firm.

Melissa is a graduate of Yale University where she earned a B.A. with Honors in History. This was followed by a law degree from Hastings College in San Francisco.

A former litigator in real estate, ADA/disability, and employment law disputes, Melissa translated her experience into over a decade of general counsel work with community associations.

Melissa is well-versed in amending complex governing documents, advising boards on compliance with applicable laws and regulations, risk management, rules enforcement, and contract review/drafting. In addition, she has significant experience advising boards of directors of condominium highrises, large-scale associations, and 55+ communities.

Melissa joins our Firm as a Partner and will help lead our team of attorneys working with clients throughout Northern California, with a concentration in the San Francisco Bay Area.

For information about having Melissa or any of our fine attorneys represent your association, contact us.

 
CAN THE PRESIDENT
VOTE TWICE?

QUESTION: We currently have six board members instead of seven. They voted on a motion but tied with 3 in favor and 3 against, with the president voting. The president said he could break the tie by voting again. Is this correct? Can the president vote twice? –Michelle S.

ANSWER: No, presidents cannot vote twice.
Being president does not convey extra voting privileges. Presidents get one vote like every other director. A tie vote means the motion failed. Once the board's empty seat is filled with another director, the matter can be brought up for reconsideration when seven directors are present.
 
ELECTION SIGNAGE
AND CANDIDATE STATEMENTS

QUESTION: In our election, we had problems with political signs being torn down repeatedly, one candidate statement was defamatory with no equal access provided to the other candidates, and our attorney was provided to us by the management company. Should we restart our election? –Anonymous

ANSWER: Bad behavior seems to pervade all levels of the political spectrum, whether it be local, state or national. People get too invested in the process and sometimes say and do inane things.

Signage. If signage or campaign literature is properly posted, the association can fine persons who tear them down. For more information, see Political Activities and Flyers.

Candidate Statements. When it comes to candidate statements, they should be limited to bios only. Candidate statements that advocate a position or campaign for votes should not be allowed. In addition to potentially defamatory statements that could lead to litigation, advocating a point of view opens the door to equal access by members who want their points of view distributed at the association's expense.

Legal Counsel. If the attorney supplied by the management company also represents the company, it creates potential conflicts of interest with dual representation of the company and the association. Boards should not hire lawyers who have the association's management company as a client. If the attorney is independent of the company, the board should interview legal counsel to make sure they are comfortable with the person who will be advising the board.

RECOMMENDATION: Potentially defamatory statements and tearing down signs may not be sufficient justification to restart the election. Your board should consult an attorney who is fully apprised of all the details. In addition, the board should amend the association's Election Rules to include guidelines on signage and candidate statements. Boards needing assistance can contact us.

 
IS THIS A
BOARD MEETING?

QUESTION: We have several areas with drainage issues. Our contractor asked board members to walk with him and observe the areas so he can explain his thoughts on remediation. If more than two members want to go, does this constitute a meeting? –Jesse H.

ANSWER: Yes, it qualifies as a meeting. Under the Davis-Stirling Open Meeting Act, board meetings are defined as a gathering of a quorum of directors at the same time and place to "hear, discuss, or deliberate upon any item of business that is within the authority of the board." (Civ. Code § 4090.)

RECOMMENDATION: To avoid problems, post the meeting and allow members to attend the walk-through. Keep in mind that homeowners don't have a right to pepper the contractor and board members with questions during the walk-through. Their legal rights are limited to observing. Even so, the board can allow some limited questions and comments if they believe it would be helpful.

 
IMPORTANCE OF
ACCURATE INSURANCE APPLICATIONS

A new case from the U.S. Court of Appeals for the Ninth Circuit illustrates the importance of being truthful when filling out insurance applications.

The Lake Lindero Homeowners Association purchased liability insurance from Atain Specialty Insurance Co. without disclosing the likelihood it would be sued. The insurance application asked for disclosure of any fact, circumstance, or situation that may result in a claim against the corporation or any of its directors or officers. The board knew of a situation that would likely result in litigation but the director who filled out and signed the application concealed it.

After Atain issued the policy, the association was sued and the board made a claim on the policy. Atain sued the association to rescind the policy. The trial court granted summary judgment in the carrier's favor because the board had concealed facts material to the carrier's decision to issue the policy. The association appealed.

The Ninth Circuit agreed with the trial court and held that Atain was entitled to rescind the policy with no further duty to defend or indemnify the association because the board failed to disclose that it would likely be sued. (Atain Specialty Insurance Company v. Lake Lindero Homeowners Association, No. 21-55319 (9th Cir. Feb. 7, 2022).)

 
 
PREPARING
MEETING MINUTES
 

Board and membership meeting minutes are important documents and serve as prima facie evidence of what occurred in meetings.

Next in
our series of 2-Minute Videos, we describe the Secretary's role in preparing and signing minutes. What level of detail should be in minutes? What if the Secretary did not attend the meeting — who should sign the minutes?

  Watch: HOA Meeting Minutes


 

Beautiful newsletter. Hope you are well. We like our HOA lawyer, but I know you are the best of the best… -D.C.

I think your Newsletter is great. Thank you ever so much for the information. -Jerry T.


 
Boards can contact us for friendly,
professional advice.


Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC
DISCLAIMER. Our newsletter provides commentary, not legal advice. Boards need to retain an attorney to review all the facts and give a legal opinion on the issues they face. We serve as corporate counsel to California associations only. Request a proposal to represent your association.

PAST NEWSLETTERS. Readers can find current and prior year newsletters posted here. Older newsletters are not posted since the information they contain can change over time with new statutes and case law. The website itself is kept updated with current information which can be found via the "Index" or through our website's internal "Google Search" feature.

I join Adrian in inviting you to contact us for your association's legal needs.

Hon. Lawrence W. Stirling, Senior Partner and author of the Davis-Stirling Act

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Reprinted from
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