Case Law: Artus v. Gramercy Towers Condominium Association
Artus v. Gramercy Towers Condominium Association (2018) – 19 Cal.App.5th 923
Case Summary
The Association sought to amend its bylaws to eliminate cumulative voting. The Association’s Board distributed the secret ballots and sent a two-page letter soliciting membership support for the proposed amendment and providing the Board’s rationale for the amendment. The Association also posted neutral notices in the elevators urging members to vote. At the time, the only complaint made by the plaintiff was that Association materials were used and that members who opposed the proposed amendment were not given an opportunity to post their own messages in the elevators.
The election proceeded and the vast majority of voting members approved the amendment. A month later, the plaintiff filed a lawsuit against the Association alleging, among other things, that the Association did not give all members an opportunity to be heard and that it appointed an interested inspector of elections. The plaintiff also sought preliminary injunctive relief to prevent the implementation of the amendment. In granting the preliminary injunction, the trial court found there was sufficient evidence that the Association: (1) failed to provide equal access to Association communications for those members with opposing views and (2) used Association funds for “campaign purposes” in enclosing the two-page letter with the secret ballots.
Following the issuance of the preliminary injunction, the Association held a second election on the bylaw amendment. The result of the second election was the same as the first election—the membership strongly supported the amendment.
After a three day trial, the trial court found that the plaintiff never asked for equal access to Association media to present an opposing view. (Notably, the plaintiff requested and was granted access in connection with the second election.) The trial court also found that the two-page letter that was enclosed with the secret ballots merely explained the Board’s reasons for proposing the amendment and, therefore, the Board did not violate the prohibition against using Association funds for “campaign purposes.” As a result, the trial court denied the plaintiff’s request for injunctive and declaratory relief, determined that the Association was the prevailing party, and denied plaintiff’s request for statutory fees and costs.
On appeal, the plaintiff argued that the trial court should have granted declaratory relief and that she was entitled to statutory fees and costs because she was successful in obtaining the preliminary injunction against the Association. In affirming the trial court’s judgment and denial of fees and costs, the Court of Appeal concluded that: (1) there was no actual controversy, especially since the Association corrected any perceived deficiencies in the first election by holding the second election; and (2) interim attorney fees and costs were not awardable.
Takeaway
If a member challenges an election based on a claimed violation of the Davis-Stirling Common Interest Development Act, conduct the election again, removing any potential violations.
