SAUSALITO YACHT CLUB MEMBERS FOR FAIR GOVERNANCE

The demurrer to the First and Second Causes of Action is sustained as to Plaintiff Sausalito Yacht Club Members for Fair Governance only, without leave to amend, and is overruled in all other respects. Plaintiffs must file verifications for the individual plaintiffs by no later than September 14, 2026. If the verification of any individual plaintiff is not filed by that day, the Court will enter a further order sustaining the demurrer as to those plaintiffs. The demurrer to the Third Cause of Action is overruled. The motion to strike is denied in its entirety.

Allegations in the Second Amended Verified Petition and Derivative Complaint

Petitioner/Plaintiff Sausalito Yacht Club Members for Fair Governance (“SYCMFG”) is an unincorporated California association suing on behalf of its members individually and derivatively on behalf of the Sausalito Yacht Club (the “Club”), a California mutual benefit nonprofit corporation. Petitioners/Plaintiffs Marisa McArthur (“M. McArthur”), Marge Bottari (“Bottari”), Tammy Blanchard (“T. Blanchard”), Ross Blanchard (“R. Blanchard”), Brian McArthur (“B. McArthur”), and Tina Frank (“Frank”) are current or former members of the Club. Together, SYCMFG and the individual petitioners/plaintiffs will be referred to as “Plaintiffs”.

Plaintiffs allege that leadership of the Club manipulated its member disciplinary process to expel, suspend and reprimand M. McArthur, then the Vice Commodore of the Club who was running for the position of 2026 Commodore as a write-in candidate, and her family and supporters, for the purpose of favoring her rival, Defendant Executive Board Chair Tom Aden (“Aden”), for the position. M. McArthur, her family members, and supporters were disciplined after they used the member roster to send emails promoting M. McArthur’s candidacy. Aden

and Defendant 2025 Commodore Russell Croce (“Croce”) determined that this use violated the Club’s rule against using roster and member emails for “commercial or political purposes.” Following this determination, the Club expelled M. McArthur for life and suspended her mother, Defendant Frank, and her husband Defendant B. McArthur. Plaintiffs Bottari, T. Blanchard, and R. Blanchard, who sent emails endorsing McArthur, also received lifetime expulsions. Aden was ultimately elected for the position and six other candidates chosen by the nominating committee for other positions were elected despite being unqualified. Nineteen of the 20 members subjected to disciplinary charges supported M. McArthur over Aden for Commodore. Two people who raised issues with the process at the Annual Meeting, Cyndi Wheeler and Jock Rystrom, were also disciplined.

The First Cause of Action seeks a writ of traditional mandate compelling the defendants to vacate the expulsions, suspensions and reprimands and to restore Plaintiffs as members in good standing. The Second Cause of Action asserts a derivative claim on behalf of the Club for breach of fiduciary duty, abuse of control, and waste. The Third Cause of Action (mislabeled as the Fifth Cause of Action) seeks declaratory relief.

I. Demurrer

A. Procedural Deficiency

Both Defendants and Plaintiffs fail to comply with California Rule of Court 3.1113(f).

B. Standard

“The function of a demurrer is to test the sufficiency of the complaint as a matter of law, and it raises only a question of law.” (Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1420.) A complaint “ordinarily is sufficient if it alleges ultimate rather than evidentiary facts” (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550), but the plaintiff must set forth the essential facts of his or her case “with reasonable precision and with particularity sufficient to acquaint [the] defendant with the nature, source and extent” of the plaintiff’s claim. (Doheny Park Terrace Homeowners Assn., Inc. v.

Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099 [citation and internal quotations omitted].) Legal conclusions are insufficient. (Id. at 1098–1099; Doe, 42 Cal.4th at 551, fn. 5.) The court “assume[s] the truth of the allegations in the complaint, but do[es] not assume the truth of contentions, deductions, or conclusions of law.” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.)

C. Request for Judicial Notice

Defendants’ request for judicial notice of the Petition/Complaint (Exhibit A), the First Amended Petition/Complaint (Exhibit B), the Second Amended Petition/Complaint (Exhibit C), and the Club’s Rules and Bylaws (Exhibit D), is granted. (Evid. Code §§ 452, 453.) As to Exhibit D, the Court takes judicial notice of the Rules and Bylaws as they are referenced in the Second Amended Complaint and Defendants do not dispute their authenticity. (See Performance Plastering v. Richmond American Homes (2007) 153 Cal.App.4th 659, 666, n.2; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 115-116; Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285, n.3, disapproved on other grounds in Leon v.

County of Riverside (2023) 14 Cal.5th 910; Marina Tenants Ass’n v. Deauville Marina Dev. Co. (1986) 181 Cal.App.3d 122, 130; Salvaty v. Falcon Cable Television (1985) 165 Cal.App.3d 798, 800, n.1; Swiss Park, Inc. v. City of Duarte (1982) 136 Cal.App.3d 755, 758.)

D. First Cause of Action – Writ of Mandate

1. Standing of the SYCMFG

Defendants demur to the First Cause of Action on the ground that Plaintiff SYCMFG lacks standing to seek a writ of mandate. In the First Amended Complaint, this cause of action was asserted by SYCMFG only and the Court sustained the demurrer on the ground that the individuals seeking relief should also be named:

In order to ascertain whether Plaintiff has standing, the Court must look at the specific relief requested in the Complaint. In the First Cause of Action, Plaintiff seeks a writ of mandate compelling Defendants to vacate certain disciplinary actions. (Complaint, ¶¶89-94.) Plaintiff alleges that different levels of discipline were imposed on Plaintiff’s individual members, based on different conduct. (Id., ¶¶64, 65.) The demurrer is sustained as to the First Cause of Action on the ground that it seeks relief for Plaintiff’s various members based on conduct and/or discipline that is specific or personal to those members. The Complaint should also be verified by the individual members as to this cause of action.

Plaintiffs do not address this argument in their Opposition but rather ignore it entirely. The Court sustains the demurrer to the First Cause of Action as against SYCMFG on the ground that it does not have standing to challenge the specific disciplinary actions taken against certain individuals. Those individuals have now been added as plaintiffs and can pursue this cause of action as to the alleged specific harm they personally suffered as a result of the Defendants’ conduct.

2. Named Defendants

Defendants demur to this cause of action on the additional ground that Plaintiffs fail to identify which individual defendants can or should be compelled to reverse decisions or vacate elections. The Court does not sustain the demurrer on this basis. Plaintiffs now identify the Club, the specific boards or committees within the Club whom Plaintiffs contend had responsibility for or control over conduct alleged in the Second Amended Complaint, and individual Club members who Plaintiffs contend engaged in conduct alleged in the Second Amended Complaint.

Defendants argue that it is too confusing to tell who is being sued for what conduct, but the Second Amended Complaint provides adequate factual allegations as to each named defendant for Defendants to proceed. Defendants also contend that some individuals are no longer members of certain boards or committees, but that is a factual issue not appropriate for determination on demurrer. The parties can discern through discovery the specific individuals with the current ability to provide the relief Plaintiffs seek.

Defendants also argue that Defendants Executive Board, Sausalito Yacht Club Flag Officers and Chairs Committee, and Rules Committee cannot be named defendants because they are not separate legal entities from the Club. However, boards and committees, and individuals on those boards and committees, can be named as respondents in a writ of mandamus proceeding. (See Code Civ. Proc. § 1085; Taylor v. Burks (1907) 6 Cal.App. 225, 227-228; State v. Superior Court (1974) 12 Cal.3d 237, 255.)

3. Verifications; Certain Named Plaintiffs

Defendants demur to this cause of action on the additional ground that the individual plaintiffs have not verified the Second Amended Complaint, even though the Court indicated in its prior order that individual verifications were necessary. Plaintiffs concede that the individual Plaintiffs have not filed verifications, but state that they will. They attach the verifications of T. Blanchard and Bottari and state the others will be provided and filed before the hearing. The Court will address this issue at the hearing. To the extent there remain individuals who have not filed verifications by September 14, 2026, the Court will sustain the demurrer as to those individuals.

Defendants also argue that B. McArthur, R. Blanchard and Frank are not proper plaintiffs because they have served their suspensions, and B. McArthur’s theory of his case and his damages is inconsistent with Club rules. These are fact issues not appropriate for determination on demurrer.

E. Second Cause of Action – Derivative Action

Defendants demur to the Second Cause of Action on the ground that all of the individual plaintiffs are not currently members of the Club and therefore cannot participate in a derivative action. Defendants argue that each of these individuals was suspended or expelled at the time of the filing of the original Complaint and thus not a member of the Club. Plaintiff SYCMFG has never been a member of the Club.

The demurrer is sustained as to SYCMFG, which has never been a member and therefore cannot bring a derivative claim. As to the individual plaintiffs, the Second Cause of Action alleges that “[a]t all relevant times, Petitioners/Plaintiffs were members in good standing of the Sausalito Yacht Club.” (SAC, ¶117.) However, they also allege that M. McArthur, Bottari, T. Blanchard, and R. Blanchard were expelled for life effective November 22, 2025. (Id., ¶¶9, 17- 20.) They allege that B. McArthur and Frank were suspended for six months.

Frank’s suspension was also effective November 22, 2025. (See SAC, ¶22.) Therefore, under these allegations, Frank was a member at the time the original Complaint was filed on November 21, 2025.1 As the allegations do not show that she is not a member currently, she can proceed with the derivative action against the defendants. Further, as to all individual plaintiffs, there are

1 Defendants state in their Reply that Frank has resigned from the Club and is no longer a member as of June 30, 2026. The Court does not consider this statement in ruling on the demurrer. (See Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 229.) In any event, the Court has found that Plaintiffs have alleged sufficient facts to support an exception to the continuous ownership rule.

sufficient facts alleged that an exception to the continuous ownership requirement may apply. In Haro v. Ibarra (2009) 180 Cal.App.4th 823, 836, the court noted that “equitable considerations might apply if the plaintiff was deprived wrongfully of standing.” Here, Plaintiffs allege that they were wrongfully expelled or suspended. This is sufficient to survive a demurrer based on this exception.

Defendants also argue that Plaintiffs are improperly using a derivative claim to recover for their personal damages rather than damages suffered by the Club. Defendants are correct that in paragraph 121, Plaintiffs ostensibly allege harm to the Club but this harm is actually the alleged mistreatment of the individual plaintiffs. (See SAC, ¶121.) However, Plaintiffs also allege damage to the Club. Plaintiffs allege that the Club has been harmed because it had to retain outside counsel and pay attorney’s fees, and that Club assets and funds have been diverted by the individual defendants to pursue a course of action against other members (the plaintiffs) whom they personally perceived as opponents. (Id., ¶¶123, 125.)

Plaintiffs’ prayer for relief also confirms they seek only damages in favor of the Club. (Prayer for Relief, ¶4.) Defendants argue that attorney’s fees and expenses paid by the Club is protected under the business judgment rule, but this is an issue of fact not appropriate for determination on demurrer. (See Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 280 [“The business judgment rule raises various issues of fact, including whether a director acted as an ordinarily prudent person under similar circumstances and made a reasonable inquiry as indicated by the circumstances.

Such questions generally should be left to a trier of fact”] [citation and internal quotations omitted].)

Finally, Defendants argue that Plaintiffs have not sufficiently alleged compliance with Corporations Code Section 7710(b)(2), which provides: “The plaintiff alleges in the complaint with particularity plaintiff's efforts to secure from the board such action as plaintiff desires, or the reasons for not making such effort, and alleges further that plaintiff has either informed the corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the corporation or the board a true copy of the complaint which plaintiff proposes to file.” Plaintiffs have made allegations sufficient to comply with Section 7710(b)(2) in paragraphs 127-130 of the Second Amended Complaint. The demurrer is therefore not sustained on this basis.

F. Third Cause of Action – Declaratory Relief

Defendants demur to the Third Cause of Action for declaratory relief on the grounds that the individual plaintiffs lack standing under the continuous ownership rule and Plaintiffs do not adequately specify the defendants with whom they have a controversy. These arguments are rejected for the reasons discussed above. Defendants also argue that the declaration Plaintiffs seek violates the sections of the Club Bylaws that allow the Club Executive Board and Flag Officers and Chairs Committee exclusive jurisdiction over how the Bylaws and Rules are to be interpreted. This argument also fails. Plaintiffs are entitled to a declaration from the Court regarding the interpretation of the Bylaws as part of their claims that Defendants failed to act in good faith and in a fair and reasonable manner and that the Defendants’ election process was not valid.

II. Motion to Strike

Defendants move to strike allegations in support of the Second Cause of Action regarding harm to the individual plaintiffs. The Court denies this request as these allegations are part of an overall scheme and course of conduct alleged by Plaintiffs. Defendants move to strike allegations in support of the Third Cause of Action based on the same arguments they made in their demurrer. This portion of the motion is denied for the reasons discussed above. Defendants move to strike Plaintiffs’ request for punitive damages on the ground it is not supported by sufficient facts showing malice, fraud or oppression.

The Court denies this part of Defendants’ motion as well. There are sufficient facts alleged to allow Plaintiffs to proceed with their prayer for punitive damages. Finally, Defendants move to strike the request for attorney’s fees. The Court denies this as well, as an award of attorney’s fees is available to plaintiffs in a successful derivative suit if the suit provided a substantial benefit to the corporation. (See Brusso v. Running Springs Country Club (1991) 228 Cal.App.3d 92, 111 n. 7; Fletcher v.

A. J. Indus., Inc. (1968) 266 Cal. App. 2d 313, 320.)

All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.

The Zoom appearance information for September, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1615487764?pwd=Ob4B5J7LLKcpnkxzJjjEOSHNzEGafG.1

Meeting ID: 161 548 7764 Passcode: 502070

If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov

DATE: 09/02/26 TIME: 1:30 P.M. DEPT: H CASE NO: CV0008270

PRESIDING: HON. SHEILA S. LICHTBLAU

REPORTER: CLERK: ALINA ANDRES

IN THE MATTER OF:

SAUSALITO YACHT CLUB MEMBERS FOR FAIR GOVERNANCE

NATURE OF PROCEEDINGS: 1) DEMURRER 2) MOTION - STRIKE

RULING

The demurrer to the First and Second Causes of Action is sustained as to Plaintiff Sausalito Yacht Club Members for Fair Governance only, without leave to amend, and is overruled in all other respects. Plaintiffs must file verifications for the individual plaintiffs by no later than September 14, 2026. If the verification of any individual plaintiff is not filed by that day, the Court will enter a further order sustaining the demurrer as to those plaintiffs. The demurrer to the Third Cause of Action is overruled. The motion to strike is denied in its entirety.

Allegations in the Second Amended Verified Petition and Derivative Complaint

Petitioner/Plaintiff Sausalito Yacht Club Members for Fair Governance (“SYCMFG”) is an unincorporated California association suing on behalf of its members individually and derivatively on behalf of the Sausalito Yacht Club (the “Club”), a California mutual benefit nonprofit corporation. Petitioners/Plaintiffs Marisa McArthur (“M. McArthur”), Marge Bottari (“Bottari”), Tammy Blanchard (“T. Blanchard”), Ross Blanchard (“R. Blanchard”), Brian McArthur (“B. McArthur”), and Tina Frank (“Frank”) are current or former members of the Club. Together, SYCMFG and the individual petitioners/plaintiffs will be referred to as “Plaintiffs”.

Plaintiffs allege that leadership of the Club manipulated its member disciplinary process to expel, suspend and reprimand M. McArthur, then the Vice Commodore of the Club who was running for the position of 2026 Commodore as a write-in candidate, and her family and supporters, for the purpose of favoring her rival, Defendant Executive Board Chair Tom Aden (“Aden”), for the position. M. McArthur, her family members, and supporters were disciplined after they used the member roster to send emails promoting M. McArthur’s candidacy. Aden

and Defendant 2025 Commodore Russell Croce (“Croce”) determined that this use violated the Club’s rule against using roster and member emails for “commercial or political purposes.” Following this determination, the Club expelled M. McArthur for life and suspended her mother, Defendant Frank, and her husband Defendant B. McArthur. Plaintiffs Bottari, T. Blanchard, and R. Blanchard, who sent emails endorsing McArthur, also received lifetime expulsions. Aden was ultimately elected for the position and six other candidates chosen by the nominating committee for other positions were elected despite being unqualified. Nineteen of the 20 members subjected to disciplinary charges supported M. McArthur over Aden for Commodore. Two people who raised issues with the process at the Annual Meeting, Cyndi Wheeler and Jock Rystrom, were also disciplined.

The First Cause of Action seeks a writ of traditional mandate compelling the defendants to vacate the expulsions, suspensions and reprimands and to restore Plaintiffs as members in good standing. The Second Cause of Action asserts a derivative claim on behalf of the Club for breach of fiduciary duty, abuse of control, and waste. The Third Cause of Action (mislabeled as the Fifth Cause of Action) seeks declaratory relief.

I. Demurrer

A. Procedural Deficiency

Both Defendants and Plaintiffs fail to comply with California Rule of Court 3.1113(f).

B. Standard

“The function of a demurrer is to test the sufficiency of the complaint as a matter of law, and it raises only a question of law.” (Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1420.) A complaint “ordinarily is sufficient if it alleges ultimate rather than evidentiary facts” (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550), but the plaintiff must set forth the essential facts of his or her case “with reasonable precision and with particularity sufficient to acquaint [the] defendant with the nature, source and extent” of the plaintiff’s claim. (Doheny Park Terrace Homeowners Assn., Inc. v.

Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099 [citation and internal quotations omitted].) Legal conclusions are insufficient. (Id. at 1098–1099; Doe, 42 Cal.4th at 551, fn. 5.) The court “assume[s] the truth of the allegations in the complaint, but do[es] not assume the truth of contentions, deductions, or conclusions of law.” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.)

C. Request for Judicial Notice

Defendants’ request for judicial notice of the Petition/Complaint (Exhibit A), the First Amended Petition/Complaint (Exhibit B), the Second Amended Petition/Complaint (Exhibit C), and the Club’s Rules and Bylaws (Exhibit D), is granted. (Evid. Code §§ 452, 453.) As to Exhibit D, the Court takes judicial notice of the Rules and Bylaws as they are referenced in the Second Amended Complaint and Defendants do not dispute their authenticity. (See Performance Plastering v. Richmond American Homes (2007) 153 Cal.App.4th 659, 666, n.2; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 115-116; Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285, n.3, disapproved on other grounds in Leon v.

County of Riverside (2023) 14 Cal.5th 910; Marina Tenants Ass’n v. Deauville Marina Dev. Co. (1986) 181 Cal.App.3d 122, 130; Salvaty v. Falcon Cable Television (1985) 165 Cal.App.3d 798, 800, n.1; Swiss Park, Inc. v. City of Duarte (1982) 136 Cal.App.3d 755, 758.)

D. First Cause of Action – Writ of Mandate

1. Standing of the SYCMFG

Defendants demur to the First Cause of Action on the ground that Plaintiff SYCMFG lacks standing to seek a writ of mandate. In the First Amended Complaint, this cause of action was asserted by SYCMFG only and the Court sustained the demurrer on the ground that the individuals seeking relief should also be named:

In order to ascertain whether Plaintiff has standing, the Court must look at the specific relief requested in the Complaint. In the First Cause of Action, Plaintiff seeks a writ of mandate compelling Defendants to vacate certain disciplinary actions. (Complaint, ¶¶89-94.) Plaintiff alleges that different levels of discipline were imposed on Plaintiff’s individual members, based on different conduct. (Id., ¶¶64, 65.) The demurrer is sustained as to the First Cause of Action on the ground that it seeks relief for Plaintiff’s various members based on conduct and/or discipline that is specific or personal to those members. The Complaint should also be verified by the individual members as to this cause of action.

Plaintiffs do not address this argument in their Opposition but rather ignore it entirely. The Court sustains the demurrer to the First Cause of Action as against SYCMFG on the ground that it does not have standing to challenge the specific disciplinary actions taken against certain individuals. Those individuals have now been added as plaintiffs and can pursue this cause of action as to the alleged specific harm they personally suffered as a result of the Defendants’ conduct.

2. Named Defendants

Defendants demur to this cause of action on the additional ground that Plaintiffs fail to identify which individual defendants can or should be compelled to reverse decisions or vacate elections. The Court does not sustain the demurrer on this basis. Plaintiffs now identify the Club, the specific boards or committees within the Club whom Plaintiffs contend had responsibility for or control over conduct alleged in the Second Amended Complaint, and individual Club members who Plaintiffs contend engaged in conduct alleged in the Second Amended Complaint.

Defendants argue that it is too confusing to tell who is being sued for what conduct, but the Second Amended Complaint provides adequate factual allegations as to each named defendant for Defendants to proceed. Defendants also contend that some individuals are no longer members of certain boards or committees, but that is a factual issue not appropriate for determination on demurrer. The parties can discern through discovery the specific individuals with the current ability to provide the relief Plaintiffs seek.

Defendants also argue that Defendants Executive Board, Sausalito Yacht Club Flag Officers and Chairs Committee, and Rules Committee cannot be named defendants because they are not separate legal entities from the Club. However, boards and committees, and individuals on those boards and committees, can be named as respondents in a writ of mandamus proceeding. (See Code Civ. Proc. § 1085; Taylor v. Burks (1907) 6 Cal.App. 225, 227-228; State v. Superior Court (1974) 12 Cal.3d 237, 255.)

3. Verifications; Certain Named Plaintiffs

Defendants demur to this cause of action on the additional ground that the individual plaintiffs have not verified the Second Amended Complaint, even though the Court indicated in its prior order that individual verifications were necessary. Plaintiffs concede that the individual Plaintiffs have not filed verifications, but state that they will. They attach the verifications of T. Blanchard and Bottari and state the others will be provided and filed before the hearing. The Court will address this issue at the hearing. To the extent there remain individuals who have not filed verifications by September 14, 2026, the Court will sustain the demurrer as to those individuals.

Defendants also argue that B. McArthur, R. Blanchard and Frank are not proper plaintiffs because they have served their suspensions, and B. McArthur’s theory of his case and his damages is inconsistent with Club rules. These are fact issues not appropriate for determination on demurrer.

E. Second Cause of Action – Derivative Action

Defendants demur to the Second Cause of Action on the ground that all of the individual plaintiffs are not currently members of the Club and therefore cannot participate in a derivative action. Defendants argue that each of these individuals was suspended or expelled at the time of the filing of the original Complaint and thus not a member of the Club. Plaintiff SYCMFG has never been a member of the Club.

The demurrer is sustained as to SYCMFG, which has never been a member and therefore cannot bring a derivative claim. As to the individual plaintiffs, the Second Cause of Action alleges that “[a]t all relevant times, Petitioners/Plaintiffs were members in good standing of the Sausalito Yacht Club.” (SAC, ¶117.) However, they also allege that M. McArthur, Bottari, T. Blanchard, and R. Blanchard were expelled for life effective November 22, 2025. (Id., ¶¶9, 17- 20.) They allege that B. McArthur and Frank were suspended for six months.

Frank’s suspension was also effective November 22, 2025. (See SAC, ¶22.) Therefore, under these allegations, Frank was a member at the time the original Complaint was filed on November 21, 2025.1 As the allegations do not show that she is not a member currently, she can proceed with the derivative action against the defendants. Further, as to all individual plaintiffs, there are

1 Defendants state in their Reply that Frank has resigned from the Club and is no longer a member as of June 30, 2026. The Court does not consider this statement in ruling on the demurrer. (See Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 229.) In any event, the Court has found that Plaintiffs have alleged sufficient facts to support an exception to the continuous ownership rule.

sufficient facts alleged that an exception to the continuous ownership requirement may apply. In Haro v. Ibarra (2009) 180 Cal.App.4th 823, 836, the court noted that “equitable considerations might apply if the plaintiff was deprived wrongfully of standing.” Here, Plaintiffs allege that they were wrongfully expelled or suspended. This is sufficient to survive a demurrer based on this exception.

Defendants also argue that Plaintiffs are improperly using a derivative claim to recover for their personal damages rather than damages suffered by the Club. Defendants are correct that in paragraph 121, Plaintiffs ostensibly allege harm to the Club but this harm is actually the alleged mistreatment of the individual plaintiffs. (See SAC, ¶121.) However, Plaintiffs also allege damage to the Club. Plaintiffs allege that the Club has been harmed because it had to retain outside counsel and pay attorney’s fees, and that Club assets and funds have been diverted by the individual defendants to pursue a course of action against other members (the plaintiffs) whom they personally perceived as opponents. (Id., ¶¶123, 125.)

Plaintiffs’ prayer for relief also confirms they seek only damages in favor of the Club. (Prayer for Relief, ¶4.) Defendants argue that attorney’s fees and expenses paid by the Club is protected under the business judgment rule, but this is an issue of fact not appropriate for determination on demurrer. (See Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 280 [“The business judgment rule raises various issues of fact, including whether a director acted as an ordinarily prudent person under similar circumstances and made a reasonable inquiry as indicated by the circumstances.

Such questions generally should be left to a trier of fact”] [citation and internal quotations omitted].)

Finally, Defendants argue that Plaintiffs have not sufficiently alleged compliance with Corporations Code Section 7710(b)(2), which provides: “The plaintiff alleges in the complaint with particularity plaintiff's efforts to secure from the board such action as plaintiff desires, or the reasons for not making such effort, and alleges further that plaintiff has either informed the corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the corporation or the board a true copy of the complaint which plaintiff proposes to file.” Plaintiffs have made allegations sufficient to comply with Section 7710(b)(2) in paragraphs 127-130 of the Second Amended Complaint. The demurrer is therefore not sustained on this basis.

F. Third Cause of Action – Declaratory Relief

Defendants demur to the Third Cause of Action for declaratory relief on the grounds that the individual plaintiffs lack standing under the continuous ownership rule and Plaintiffs do not adequately specify the defendants with whom they have a controversy. These arguments are rejected for the reasons discussed above. Defendants also argue that the declaration Plaintiffs seek violates the sections of the Club Bylaws that allow the Club Executive Board and Flag Officers and Chairs Committee exclusive jurisdiction over how the Bylaws and Rules are to be interpreted. This argument also fails. Plaintiffs are entitled to a declaration from the Court regarding the interpretation of the Bylaws as part of their claims that Defendants failed to act in good faith and in a fair and reasonable manner and that the Defendants’ election process was not valid.

II. Motion to Strike

Defendants move to strike allegations in support of the Second Cause of Action regarding harm to the individual plaintiffs. The Court denies this request as these allegations are part of an overall scheme and course of conduct alleged by Plaintiffs. Defendants move to strike allegations in support of the Third Cause of Action based on the same arguments they made in their demurrer. This portion of the motion is denied for the reasons discussed above. Defendants move to strike Plaintiffs’ request for punitive damages on the ground it is not supported by sufficient facts showing malice, fraud or oppression.

The Court denies this part of Defendants’ motion as well. There are sufficient facts alleged to allow Plaintiffs to proceed with their prayer for punitive damages. Finally, Defendants move to strike the request for attorney’s fees. The Court denies this as well, as an award of attorney’s fees is available to plaintiffs in a successful derivative suit if the suit provided a substantial benefit to the corporation. (See Brusso v. Running Springs Country Club (1991) 228 Cal.App.3d 92, 111 n. 7; Fletcher v.

A. J. Indus., Inc. (1968) 266 Cal. App. 2d 313, 320.)

All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.

The Zoom appearance information for September, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1615487764?pwd=Ob4B5J7LLKcpnkxzJjjEOSHNzEGafG.1

Meeting ID: 161 548 7764 Passcode: 502070

If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov