Rivera v. Henricks
Appellant is a homeowner and shareholder of the Tustin Woods Homeowners Association (the HOA), a nonprofit corporation. Pursuant to Civil Code section 1363, subdivision (a), the HOA manages a common interest development consisting of five units. Respondents (the Henricks) were members of the HOA board of directors and owned two of the five units in the common interest development.
When Rivera suspected the Henricks were not paying their association fees, he demanded an audit of the HOA finances and requested the Henricks produce the HOA financial records for his inspection. The Henricks did not meet Rivera's demands, so he filed a lawsuit against the HOA and the Henricks asserting derivative causes of action for an accounting, negligence, and breach of fiduciary duty. What followed was a series of demurrers and amended complaints, culminating in a third amended complaint alleging individual causes of action against the Henricks alone for declaratory relief, negligence, and breach of fiduciary duty.
The trial court sustained the Henricks' demurrers to the third amended complaint without leave to amend. Court affirm as to the first cause of action (declaratory relief) because a claim based on Civil Code section 1365.2 can be made only against the HOA. Court affirm as to the second cause of action (negligence) and third cause of action (breach of fiduciary duty) because they alleged only derivative claims, and Rivera failed to comply with Corporations Code section 7710, subdivision (b)(2).
Comments on Rivera v. Henricks