Tract No. 7260 Assn. v. Parker
10 Cal. App. 5th 24
| Cal. Ct. App. | 2017Background
- Don Parker, a homeowner and former HOA treasurer, requested the HOA’s membership list and other corporate books/records under Corporations Code §§ 8330 et seq.
- The HOA had recently filed suit against Fix the City alleging misappropriation of a corporate opportunity; Fix the City was founded by the HOA’s former president, Michael Eveloff.
- The HOA believed Parker was aligned with Eveloff/Fix the City (evidence: Parker helped approve the transfer, resigned with Eveloff, expedited payment to the law firm that later represented Fix the City, and Parker’s current counsel also represents Fix the City) and denied most of Parker’s inspection request, including the membership list.
- Parker filed a writ petition to compel inspection; the trial court found Parker sought records for an improper purpose and denied access to corporate records but ordered disclosure of the membership list based on § 8331(i).
- Both parties appealed: Parker challenged the sufficiency of the evidence of improper purpose; the HOA argued the court erred to the extent it was barred from challenging access to the membership list.
- The Court of Appeal affirmed denial of access to corporate records (substantial evidence supports improper-purpose finding) and reversed the order requiring disclosure of the membership list (§ 8331 procedures apply only to demands by the “authorized number,” not a single member).
Issues
| Issue | Parker's Argument | HOA's Argument | Held |
|---|---|---|---|
| Whether evidence supported a finding that Parker sought records for an improper purpose | Parker: evidence is mere suspicion; his asserted member-related purposes suffice | HOA: multiple facts support inference Parker sought records to aid Fix the City | Held: Substantial evidence supports the trial court’s finding of improper purpose; denial of books/records affirmed |
| Whether a member’s assertion of one proper purpose defeats proof of an improper purpose | Parker: asserting a proper purpose is sufficient | HOA: actual improper motivations can defeat inspection even if a proper purpose is asserted | Held: A claimed proper purpose does not overcome proof of an actual improper purpose |
| Whether § 8331(i) barred the HOA from challenging Parker’s purpose for the membership list | Parker: § 8331(i) prevents inquiry into purpose once writ sought; applies here | HOA: § 8331(i) applies only when the request is by the “authorized number” of members, not a single member | Held: § 8331(i) applies only to demands by the authorized number; HOA was not barred and could challenge Parker’s purpose; membership list disclosure reversed |
| Whether the HOA waived the argument on appeal that § 8331 does not apply to single-member demands | Parker: HOA raised it too late; appellate change of theory is unfair | HOA: issue is pure law, affects member privacy, and warrants appellate review | Held: Court exercised discretion to consider the HOA’s legal argument on appeal; addressed the statutory interpretation |
Key Cases Cited
- Dandini v. Superior Court, 38 Cal.App.2d 32 (Cal. Ct. App. 1940) (judicial review determines whether inspection purpose is lawful)
- Gilmore v. Emsco Derrick & Equipment Co., 22 Cal.App.2d 64 (Cal. Ct. App. 1937) (speculation alone insufficient to deny inspection)
- WorldMark, The Club v. Wyndham Resort Dev. Corp., 187 Cal.App.4th 1017 (Cal. Ct. App. 2010) (burden and procedures for proving improper use of membership information)
- Private Investors v. Homestake Mining Co., 11 Cal.App.2d 488 (Cal. Ct. App. 1936) (allegation of a proper purpose does not immunize against proof of improper purpose)
- Rodriguez v. Solis, 1 Cal.App.4th 495 (Cal. Ct. App. 1991) (standard of review for legal issues)