Weekly Law Resume - August 1, 2013: Homeowners Associations – Equal Access Requirements For Elections

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Paul Wittenberg et al. v. Beachwalk Homeowners Association
Court of Appeal, Fourth District (June 26, 2013)

California Civil Code sections 1363.03(a)(1) and (a)(2) require that in an election, homeowners associations provide equal access to “any candidates or member advocating a point of view” and equal access to common area meeting space, respectively. This case considers whether these provisions apply when a board of directors uses its own media to endorse a viewpoint, as well as when there are multiple elections on the same issue.

The Beachwalk Homeowners Association (“HOA”) consists of homeowners in a 453 unit community in Huntington Beach, CA. The Covenants, Conditions, and Restrictions (“CC&R’s”) of the HOA required that any alterations to common areas of the community that cost more than $1,000 required approval of at least two-thirds of the voting members. In October, 2010, members of the HOA sued the Board of Directors, alleging that the Board had removed a swimming pool without obtaining the required two-thirds vote and that the Board was threatening to remove two more swimming pools. In November, 2010, a preliminary injunction was granted that prevented the Board from removing any swimming pools without the required two-thirds vote.

Instead of instituting an election to obtain the two-thirds vote to remove the remaining swimming pools, the Board attempted to amend the CC&R’s to increase the dollar threshold for triggering a vote, and to reduce the number of votes required for approval of expenditures. The Board sent a ballot and cover letter announcing the election, scheduled for December, 2010. The cover letter contained language supporting the Board’s position that the CC&R’s were overbroad and needed amendment. Also accompanying the letter was a one-page attachment entitled the “Case for amending the CC&Rs.” The Board specifically decided not to include any opposition material with this mailing.

Soon after this, an HOA member requested the use of the clubhouse for a “town hall meeting” supporting other candidates for the Board who opposed amending the CC&R’s. The member paid a $200 cleaning deposit, but believed he did not have to pay the usual $90 rental fee for the clubhouse because of the equal access provision of Section 1363.03(a)(2). However, the member was notified by the community manager that the Board had rejected the request to use the clubhouse for free, and the member subsequently paid the $90 fee.

At the December, 2010 election, there were insufficient votes cast, so the Board scheduled another election for April, 2011 and again sent ballots and voting material to all members, including a two-page letter nearly identical to the letter sent before the previous election supporting the Board’s position. Additionally, in a February, 2011 issue of the HOA newsletter, the Board included a section arguing in support of amending the CC&R’s. The content of the HOA newsletter was entirely drafted by the Board each month, and the Board refused the request of a member who wished to write a section opposed to the amendment.

At around the same time, another member opposed to the amendment requested the use of an outside common area for the purposes of a political rally. The request was denied by the Board with the Board giving no reason for the denial.

As with the December, 2010 election, there were not enough votes cast at the April, 2011 election. The Board extended the voting another week, and ultimately met its target goal of votes cast and of required “yes” votes and petitioned the Court for amendment of the CC&R’s. Two homeowners filed suit seeking to invalidate the election based on alleged violation of fair access rules under the Davis-Stirling Act. The trial court found in favor of the defendant HOA, holding that: (1) the HOA’s election rules were in compliance with section 1363.03; (2) the equal-access requirement concerning points of view contained in section 1363.03(a)(1) was inapplicable based on the clear language of the statute; and (3) there was no violation of the free access to common areas required under section 1363.03(a)(2). The plaintiffs appealed the second and third of the court’s rulings.

On Appeal, the Court of Appeal reversed, finding that the Association had violated Civil Code Sections 1363.03(a)(1) and (a)(2). The Court concluded that, under 1363.03(a)(1), the Board and its members should not be treated differently than any other members of the HOA. Therefore, by using its own media to endorse a particular viewpoint, which it did repeatedly in the newsletter and in the materials accompanying the ballots, the Board subjected itself to the provisions of subdivision (a)(1). The Court found that it was undisputed that board members were “members” of the HOA and that, when enacting the statute, the Legislature was particularly concerned that opposing viewpoints other than those of the Board be heard. Furthermore, the Court held that a “plain English” definition of the term advocacy encompasses the actions of the Board in using its own media to further its position. Thus, having engaged in advocacy and being members of the HOA, the Board was required to permit other members of the HOA equal access to this media. Since the evidence established that the Board, on at least one occasion, refused to print an article opposing the amendments in the newsletter, the Board’s action violated subdivision (a)(1).

The Court then turned to section 1363.03(a)(2). The Court looked to the text of subdivision (a)(2) which applies to any “campaign…for purposes reasonably related to the election.” The Court determined the term “campaign” to be broader than a single election in this particular instance. Indeed, The Court noted the somewhat unique facts of the Board holding multiple elections in short succession and even tying the elections together by stating that elections would continue to be held until the amendment passed. Consequently, the Court found that the “campaign” encompassed all three elections. Therefore, because of the evidence that a member was forced to pay to use the clubhouse for a “town hall meeting” before the December, 2010 election and another member was refused permission to use an outdoor common area for a political rally before the April, 2011 election, there existed sufficient evidence that subdivision (a)(2) had been violated.

Finally, the court noted that under section 1363.09, a violation of election rules in 1363.03 “may” result in voiding the election, but the statute it did not say that it “shall” result in a voiding of the election. Hence, although the judgment was reversed, the case was sent back to the trial court for consideration of whether the results of the election should be voided.

COMMENT

This case confirms that if an HOA or its Board take any position at all in favor of or against a particular issue in an election, they will need to be careful to assure that equal access to opposing viewpoints are given, or risk voiding any election.

For a copy of the complete decision see:

http://www.courts.ca.gov/opinions/documents/G046891.PDF

Topics:  Bylaws, Equal Access, Homeowners' Association, Right to Vote

Published In: Business Organization Updates, Civil Remedies Updates, General Business Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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