In the recent case of Quail Lakes Owners Association v. Kozina (2012) 204Cal.App.4th 1132, the Third District Court of Appeal found that a single member of a community association cannot assert the due process rights of other association members resulting from insufficient notice of a court proceeding to obtain approval for a CC&R amendment.
In Quail Lakes, the Association filed a petition with the court for approval of an amendment to its CC&Rs in accordance with Civil Code § 1356 (“Section 1356”). Section1356 allows an association to obtain approval for an amendment to its CC&Rs with majority approval where its CC&Rs require supermajority approval. In addition to the majority approval requirement, Section 1356 requires associations seeking a court- ordered amendment of their CC&Rs to meet other requirements, including the requirement to provide the association’s membership with 15 days notice of the court hearing on the petition. Such notice allows members who oppose the amendment to present their objections to the court.
After failing on its first attempt to gain court approval of a CC&R amendment, the Association was allowed to file a second petition to address certain deficiencies in the first filing. Homeowner Vladimir Kozina, who opposed the first petition, filed opposition to the second petition claiming that the Association failed to provide sufficient notice of the hearing on the petition to the membership. Kozina’s opposition included declarations of three members who claimed to not have received sufficient notice. The court granted the Association’s petition, and Kozina appealed.
On appeal, Kozina argued that the hearing on the second petition violated due process because the notice allowed only four days from the mailing of the notice until the date members were required to file opposition. Kozina pointed out that those four days included a weekend. The court noted that Kozina had no difficulty filing his opposition within the timeframe provided, and was therefore not prejudiced. However, Kozina argued that other owners were also prejudiced by the timing of the notice. The court ruled that Kozina did not have standing to assert the due process rights of any other association members. The court further ruled that a party to a lawsuit may not representthe interests of third persons who are not involved in the case.
First, Kozina argued that he was entitled to represent the interests of the othermembers based on associational standing; however, the court pointed out that the Association is the de facto representative of its members, and Kozina was not claiming to represent any subgroup within the Association. Rather, he was attempting to assert the rights of members who may or may not have opposed the petition if they were provided with earlier notice. The court noted that any members who fell into that category could have achieved standing for themselves by moving to vacate the court’s order granting the petition.
Second, Kozina compared his representation of other members’ interests to a shareholder derivative lawsuit. A derivative lawsuit is one where a shareholder brings a lawsuit on behalf of the corporation when the corporation itself fails to so. The court rejected this argument on the basis that Kozina was only challenging the court’s order granting the petition – not any act or omission by the Association.
Third, Kozina also challenged the order granting the petition because the trial court failed to make factual findings within the order itself. The court found that the court’s order granting the petition sufficiently detailed each of the requirements for granting a petition pursuant to Section 1356, and that nothing in Section 1356 required the court to recite the evidence supporting each finding.
Given the number of community associations subject to supermajority approval requirements to amend their CC&Rs, petitions filed pursuant to Section 1356 have become more commonplace. Due to the contentious nature of these petitions when they are opposed, it is important to be aware of all decisions that may impact an association’s success in obtaining an order to amend its CC&Rs. Decisions such as Quail Lakes continue to define the legal requirements for petitioning the court for approval of a CC&R amendment.