Magallen v. Chandler, et al.

Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761.) “It is well established that the pleadings determine the scope of relevant issues on a summary judgment motion.” (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74; see also State Compensation Ins. Fund v. Superior Court (2010) 184 Cal.App.4th 1124, 1132 [“On a motion for summary judgment or summary adjudication, the pleadings delimit the scope of the issues . . ..”].) On December 3, 2021, Plaintiffs Sonya Pierce, Otis Pierce, and Coco Magallen filed their complaint alleging causes of action for (1) declaratory relief, (2) temporary and permanent injunctive relief, (3) breach of duty, and (4) dissolution of the Wonder Valley Property Owners Association (“POA”).

All causes of action are alleged against POA board members Ron Chandler, Katie Gorman, Jim Sutton, Bonnie Rookus, Debbie Porter,

John Douglas, David Byrd, Virginia Johnson and John Limpus1. On October 19, 2022 plaintiffs filed an amendment to the complaint naming Doe 1 as Regency Property Management. There are no fact allegations specific to Regency Property Management. As such, the allegations as to the actions of defendants generally are also pled as those of the defendant management company. In the time since the complaint was filed the defendants are no longer board members for the POA. (UMF Nos. 6-13, 15.) Additionally, following the election of new POA board members, the POA contract with defendant Regency Property Management was terminated. (UMF No. 17.)

All defendants now move for summary judgment of the complaint or, in the alternative, summary adjudication of each cause of action. Plaintiff’s first cause of action for declaratory relief seeks a declaration of the parties rights with respect to defendants’ authority to act as the board of directors of the Wonder Valley POA (Complaint, ¶¶ 29 (a)-(b), (d)-(g)) and seeks to have sums paid to the management company from POA funds reimbursed to the POA by defendants (Complaint, ¶ 29(c). Defendants assert there is no actual controversy between the parties to support a cause of action for declaratory relief now that they are no longer active board members.

The court agrees. "To qualify for declaratory relief, [plaintiff] would have to demonstrate its action presented two essential elements: '(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to [a party's] rights or obligations."' (Wilson & Wilson v. City Council o Redwood City (2011) 191 Cal.App.4th 1559, 1582.) An actual controversy exists when a judgment can be definitive and conclusive and not merely advisory. (In re Claudia E. (2008) 163 Cal.App.4th 627, 638.)

Any controversy with respect to whether defendants have authority to act on behalf of the POA is moot now that the defendants are no longer members of the board. Similarly, the second cause of action seeks to enjoin further actions by defendants as the board of directors for the POA pursuant to the CC&Rs and/or Bylaws. (Complaint, ¶¶ 35-37.) As defendants are no longer members of the board and not in a position to take action on behalf of the POA, to the extent plaintiffs seek to enjoin such action the cause of action is moot.

Insofar as either cause of action seeks to compel repayment of funds to the POA, defendants assert any such cause of action must be prosecuted as a derivative action on behalf of the POA and not by plaintiffs individually. (Gantman v. United Pacific Ins. Co. (1991) 232 Cal.App.3d 1560, 1567.) Defendants submit as undisputed that the POA is a nonprofit mutual benefit corporation and the action was not brought as a derivative cause of action. (UMF Nos. 1, 20.) Accordingly, defendants have met their burden in demonstrating they are entitled to summary judgment of the first and second causes of action.

The third cause of action alleges defendants breach their duty to POA members and the POA itself by retaining the services of a management company and an attorney, failing to comply with reporting requirements, failing to provide access to records and

1 Defendant John Limpus was dismissed from the action on December 16, 2021.

financial information, failed to comply with the bylaws with regard to assessments and the imposition of liens, and generally disregarded the desires of the members and governing documents. (Complaint, ¶ 40.) Defendants move for summary judgment on the basis that plaintiffs cannot establish any damages from the alleged breaches and any alleged actions taken in defendants’ capacity as members of the board are protected by the business judgment rule. As pled, plaintiffs allege damages from the breaches of duty “in an amount according to proof.” (Complaint, ¶ 42.)

In the course of discovery, defendants requested facts to support plaintiffs’ prayer for damages and plaintiffs responded that they were damaged in having to spend money and time to bring the lawsuit and having paid assessment amounts over the amount stated in the governing documents. (UMF No. 23.) Generally, “attorney fees are not recoverable as costs unless a statute or contract expressly authorizes them.” (California Wholesale Material Supply, Inc. v. Norm Wilson & Sons, Inc. (2002) 96 Cal.App.4th 598, 604.)

The complaint does not include of any contractual or statutory basis for the recovery of attorney fees. "A moving defendant may rely on factually devoid discovery responses to shift the burden of proof pursuant to section 437c, subdivision (o)(2). Once the burden shifts as a result of the factually devoid discovery responses, the plaintiff must set forth the specific facts which prove the existence of a triable issue of material fact." (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590.)

In discovery, plaintiffs assert the basis for attorney fees is that they were incurred for the common good of all members of the POA and do not provide any statutory or contractual basis to support this theory. (UMF No. 24.) Additionally, plaintiffs have responded that they are not seeking damages when asked to produce documents to support damages asserted in the action. (UMF No. 21.) The evidence that has been produced in response to membership assessments paid by plaintiffs include a balance sheet of overdue assessments or no documents at all. (UMF Nos. 26, 27.)

It appears defendants have requested evidence as to what damages are sought by plaintiffs, why they are entitled to such damages, and the extent of damages and have not been provided evidence to support damages caused by the alleged breach of duty that can be recovered. Defendants have met their burden of proof as to plaintiffs’ inability to establish the element of damages based on their factually devoid discovery responses. Plaintiff’s fourth cause of action calls for the dissolution of the POA.

Defendants are no longer members of the board or have any authority to act to dissolve the POA. (UMF Nos. 6-13, 15, 17.) Defendants have demonstrated that the cause of action is moot with respect to defendants and met their burden that they are entitled to summary judgment. Plaintiffs have failed to submit a separate statement opposing the motion at bench demonstrating there is a dispute of material fact to preclude summary judgment. (Code Civ. Proc. § 437c, subd. (b)(3).) As the court has found defendants have met their burden with respect to each cause of action alleged against them, and plaintiffs have not demonstrated a dispute of material fact, the court intends to grant the motion for summary judgment as to the entire

complaint Ron Chandler, Katie Gorman, Jim Sutton, Bonnie Rookus, Debbie Porter, John Douglas, David Byrd, Virginia Johnson, and Regency Property Management.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: lmg on 6-24-26. (Judge’s initials) (Date)

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