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Inc. v. Parker

California Court of Appeals, Second District, Eighth Division

March 24, 2017

TRACT NO. 7260 ASSOCIATION, INC., Defendant and Appellant,
v.
DON PARKER, Plaintiff and Appellant.

         APPEAL from a judgment of the Superior Court of Los Angeles County No. BS155027. James C. Chalfant, Judge. Affirmed in part and reversed in part.

          Wheeler & Associates and David C. Wheeler for Defendant and Appellant.

          Wilson Keadjian Browndorf, Marc Y Lazo and Charles K. Stec for Plaintiff and Appellant.

          SORTINO, J. [*]

         A member of a nonprofit mutual benefit corporation requested inspection of the corporation's membership list, and other books and records. The corporation refused, and the member brought a petition for writ of mandate to compel inspection. The trial court agreed with the corporation that the member sought the inspection for an improper purpose, unrelated to his interest as a member of the corporation. As a result, the court denied the petition with respect to the books and records. However, the court concluded the corporation did not timely challenge the request for the membership list as required by statute, and therefore ordered the list disclosed. Both parties appeal. We conclude: (1) substantial evidence supports the trial court's finding that the member sought the information for an improper purpose; and (2) the corporation's challenge to disclosing the membership list was not barred by statute. We therefore reverse that part of the court's judgment requiring disclosure of the membership list, and otherwise affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         Don Parker is a member of Tract No. 7260 Association, Inc., a nonprofit homeowner's association (the “HOA”). This action arises out of his request for inspection of the HOA's membership list and other records. As far as the HOA is concerned, though, the action also arises out of a dispute the HOA has with another entity known as Fix the City.

         Parker used to be the treasurer of the HOA. When Parker was treasurer, a man named Michael Eveloff was the President. Eveloff created Fix the City. According to the HOA, it had been granted the right to control a substantial amount of money. However, Eveloff convinced the HOA board to transfer that money to Fix the City, which used it for purposes which were of no use to the HOA. The HOA is now suing Fix the City for usurping its corporate opportunity. The HOA believes that Parker is aligned with Eveloff and Fix the City, and that he sought access to the membership list and other HOA records to use them against the HOA in the dispute with Fix the City.

         A. Parker's Request

         On January 29, 2015, the same day that the HOA filed suit against Fix the City (the “HOA/Fix the City” action), Parker requested seven categories of corporate information from the HOA, including its membership list. He stated legitimate reasons for which he sought the information. For example, he stated that he wanted to inspect the HOA's books to make certain the HOA was following generally accepted accounting principles. He explained that he sought the membership list for possible communications with the members to ascertain whether there have been corporate misdeeds.

         Parker sought the information under Corporations Code sections 8330 et seq.[1] Requests under those sections may be made by “[a]ny member” of the corporation (§ 8330, subd. (b)(1)) or by the “authorized number of members” (§ 8330, subd. (b)(2)). When the corporation has less than 1000 voting members, the “authorized number” is five percent of voting power. (§ 5036.) As we shall discuss, different procedures apply depending on whether a single member, or the authorized number of members, is making the request. Parker made his request as “the undersigned member, ” and signed it as “Homeowner - Tract 7260.” He did not state that he was acting for the authorized number of members, nor did he suggest that he had written authorizations from members holding sufficient voting power.

         B. The HOA Largely Denies the Request

         There is no serious dispute that the HOA did not fully comply with Parker's request. A representative of the HOA met with Parker briefly and let him review certain of the documents he had sought - but not all of them, and not the membership list.

         C. Parker Files his Petition

         On April 6, 2015, Parker filed a petition for writ of mandate, seeking an order compelling the HOA to allow him to inspect and copy the membership list and the other books and records he had sought. As in his written request for inspection, Parker asserted he had a right to inspect “in his capacity as a member” of the HOA. The HOA answered the petition, arguing that Parker has no right to inspect, because he sought the information for an improper purpose.

         D. The HOA Fails to Have the Cases Related

         On May 27, 2015, the HOA filed a Notice of Related Case, in order to relate this case (Parker's writ petition) to the HOA/Fix the City action. In its notice, the HOA argued that Parker was seeking inspection in this case in order to give Fix the City an unfair advantage in the HOA/Fix the City case. Parker opposed relation on both procedural and substantive grounds. On June 24, 2015, the court in the HOA/Fix the City case denied relation, stating that the writ petition must be ...


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