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Talega Maintenance Corp. v. Standard Pacific Corp.

California Court of Appeals, Fourth District, Third Division

April 15, 2014

TALEGA MAINTENANCE CORPORATION, Plaintiff and Respondent,
v.
STANDARD PACIFIC CORPORATION et al., Defendants and Appellants.

Appeal from an order of the Superior Court of Orange County, No. 30-2012-00601360 Gail A. Andler, Judge.

Page 723

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COUNSEL

Newmeyer & Dillion, James S. Hultz and Uliana A. Kozeychuk for Defendants and Appellants.

The Law Offices of Jeri E. Tabback and Jeri E. Tabback for Plaintiff and Respondent.

OPINION

IKOLA, J.

Plaintiff Talega Maintenance Corporation (HOA), a homeowners association, sued two developers for construction defects. The developers, who developed the residential community itself, also developed certain trails adjacent to the housing community. The trails were badly damaged during rains and flooding in 2005 and again in 2010, allegedly as a result of construction defects.

The HOA also sued three former employees of the developers. The employees were appointed by the developers to be members of the HOA’s board of directors at various times since 2003.[1]

The HOA alleges the employee defendants committed fraud, negligence, and breached fiduciary duties in performing their duties as board members. In particular, the HOA contends it is not financially responsible for repairing the trails; the developers are. Yet the developer board members, who comprised a majority of the board, represented that the HOA was responsible and expended HOA funds to investigate and repair the trails.

Page 726

Defendants filed an anti-SLAPP motion[2] pursuant to Code of Civil Procedure section 425.16[3] to strike the fraud, negligence, and fiduciary duty claims, contending they arise from protected statements made at the HOA board meetings. The trial court denied the motion and defendants appeal from that denial. We affirm.

FACTS

The following facts are taken from the complaint and the declarations filed in connection with the anti-SLAPP motion.

Defendant Talega Associates, LLC purchased land for what became a 3, 900 acre master planned community in San Clemente known as the “Talega Project.” Ultimately, more than 3, 500 homes housing more than 9, 000 residents were built. Plaintiff is the homeowners association for the Talega Project. Defendant Standard Pacific Corporation (collectively with Talega Associates referred to as Developers) was a “Guest Builder” that purchased unimproved lots and built separate communities within the Talega Project. The complaint alleges the Developers planned and constructed the Prima Deshecha and Cristianitos Regional Riding and Hiking Trails (the Trails), which are the trails at issue here. Defendants Patrick Hayes, Jerome Miyahara, and James B. Yates (collectively, Developer Board Members) were employees of Talega Associates who were appointed to represent Talega Associates on the HOA’s board of directors. At all relevant times, the Developer Board Members comprised a majority of the HOA’s board of directors.

In approximately 2005, the Trails suffered a partial slope failure as a result of severe rains. By that time, title to a portion of the damaged property had already transferred to the HOA. The Developer Board Members represented that the HOA was responsible to pay for repairs to the property it owned — the allegedly fraudulent statement — and to that end expended over $500, 000 of HOA funds. According to the complaint, however, the Developer Board Members knew, but failed to disclose, that under the relevant controlling documents, the Developers were responsible for the cost of repairs. Further, the Developer Board Members knew, but failed to disclose, that the damages were the result of the Developers’ improper construction of the Trails, as explicitly pointed out to them by agents of Orange County.

In 2010 rains again damaged the Trails. This time, however, the independent board members had formed an executive ...


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