You Have Been Sued for Non-Compliance?!

Small Claims Courts have new authority to judge your conduct, scrutinize statutory compliance and to punish violators. At the same time you are learning the ins and outs of compliance, keep in mind that a disgruntled owner can have a judge second-guessing your actions within weeks of filing a complaint in Small Claims Court. Will you be ready to explain yourself when you are accused of wrong doing? As you go about the process of complying with the new laws, you should also consider creating a paper trail that can be used to explain and defend you actions.

Small Claims Court jurisdiction has been significantly expanded to include statutory non-compliance with voting and records access laws.

Civil Code §1363.09. Civil Action for Violation of Election Procedures:
1363.09(a) A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by an association of which he or she is a member, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues. Upon a finding that the election procedures of this article, or the adoption of and adherence to rules provided by Article 4 (commencing with Section 1357.100) of Chapter 2, were not followed, a court may void any results of the election.

1363.09(b) A member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney's fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation. (Emphasis added)

1363.09(c) A cause of action under Section 1363.03 with respect to access to association resources by a candidate or member advocating a point of view, the receipt of a ballot by a member, or the counting, tabulation, or reporting of, or access to, ballots for inspection and review after tabulation maybe brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court.

1365.2(f) A member of an association may bring an action to enforce the member's right to inspect and copy the association records. If a court finds that the association unreasonably withheld access to the association records, the court shall award the member reasonable costs and expenses, including reasonable attorney's fees, and may assess a civil penalty of up to five hundred dollars ($500) for the denial of each separate written request. A cause of action under this section may be brought in small claims court if the amount of the demand does not exceed the jurisdiction of that court. A prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation. (Emphasis added)
 

Note that each of the above provisions contains “one-way” language. If the court finds that the Association unreasonably withheld access to records, the court SHALL award costs and expenses, including attorney fees and may assess fines up to $500. Conversely the court MAY award costs to the prevailing association costs if the court finds the action was frivolous, unreasonable or without foundation. There is no parity here.

Small Claims Courts do have the ability to give the Association a second chance (but don't count on it). Code of Civil Procedure §116.220(b) provides: “... The court may issue a conditional judgment. The court shall retain jurisdiction until full payment and performance of any judgment or order.” This means that a Small Claims Judge can, for example, order certain documents to be produced by a specific date or a fine will be imposed.

Before There's Trouble

To support the Association's efforts to "do the right thing," establish practices and procedures now and follow through consistently:

  • Calendar deadlines!
  • Document what you do and when you do it (for example, adoption of policies; form responses to owner requests, etc)
  • Use Proof of Service by Mail (to keep track of what was sent to whom and when)
  • As you exchange letters and other communications with an unhappy or demanding owner, keep in mind that the ultimate audience for your response may be the Judge.

The Small Claims Experience

Should you find yourself in a position of being served with a Small Claims lawsuit, here are some tips for preparation and presentation:

  • If you are representing the Association, be prepared with the Authorization to Appear form: SC-109 . This will enable an individual (director, manager or employee) to speak on behalf of the Association. Copy the blank form and fill it in by hand or use the web based form and fill the information in online, then print it.
  • Prepare a Statement summarizing the Association's position, including authorities and copies of relevant documents. Be sure to bring extra copies of your documentation with you (one package for the Judge, one package for the owner, and don't forget your own copy).
  • Generally speaking, the plaintiff/complaining owner will present his case first and the defendant/Association goes second. You will need to respond to the owner's points. It is usually preferable to keep any facts and/or documents in chronological order.
  • Arrive early so you can observe cases tried before yours. It will help you get acclimated and learn the style and preferences of the Judge.

The Right to Appeal

Only the defendant may appeal the judgment. Filing an appeal of the small claims judgment must be done within 30 calendar days of the date of the decision or if the decision is mailed, within 30 days of the clerk mailing the Notice of Entry of Judgment. On appeal, there is an entirely new trial with a different Judge. The good news is that you may get a Judge willing to spend more time listening and reviewing the law. The bad news is that if the Association loses again, this Judge will also consider costs, fees and fines. You should consult with the Association's attorney before deciding whether nor not to appeal.


Glenn Youngling is the founder of the Youngling Law Firm. His practice includes a sizeable number of common interest developments. His firm is a member of ECHO.

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