Can individual HO sue former HOA board of directors in small claims court for breach of fiduciary duty?

Asked over 2 years ago - San Clemente, CA

Former board voted to bring lawsuit against homeowner for violation of view obstruction policy, namely, they wanted homeowner to remove 3 palm trees. The view obstruction was minimal. The case went to court and HOA lost because it did not follow its own view obstruction policy in that it did not consider the cost to the homeowner for removal of the trees. After two years of litigation, attorney fees owed to defendant attorney are $50,000 (reduced from $275,000 by court) and $200,000 to HOA attorney. Case should never have been brought, and by taking the offensive the HOA took us from a position of insurance coverage to no insurance coverage. Special assessment vote barely passed, and now each HO must pay $2,000. Can I as individual HO sue former board for the $2,000 I must pay?

Attorney answers (1)

  1. Frank Wei-Hong Chen

    Contributor Level 20

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    Lawyer agrees

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    Answered . Yes, but generally speaking, small claims court cases wouldn't be suitable to handle cases which involve a lot of background presentation. Keep in mind that most small claims trials only last 5 minutes.

    Moreover, the directors of the HOA board are generally protected by the "business judgment rule". See California Corporations Code §7231(c) as well as the California Supreme Court's decision in Lamden v. La Jolla Shores Clubdominium (1999) 21 Cal.4th 249.

    In California, homeowners have a duty to pay their HOA dues and special assessments. California Civil Code §1367.1(a) provides as follows:

    "A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney's fees, if any, and interest, if any, as determined in accordance with Section 1366, shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied."

    Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is... more

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