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December 30, 2007
Getting Relief in Small Claims Court
I receive many many emails every week from individuals who have a story to tell about their boards, and board members who have a story to tell about other board members or owner misconduct. Some are continuing sagas of perceived misdeeds for many years. Sometimes the person writing to me is right. Sometimes an association has been very poorly managed. Sometimes there actually is theft, misuse of funds, embezzlement etc. Sometimes to get there an owner has to be persistent and enforce their rights to review records via authority in the Civil Code (Section 1365.2 to be specific in California). Likewise, sometimes a resident or owner has engaged in misconduct that is actionable under the law.
Some incidents are one time "fouls". I tend to see this with elections issues. Watch for a blog on this subject in the near future. Elections issues can be brought to small claims court. There are things to know and understand about the processes and ultimate remedies are not yet established as the law has some more or less "open ended" language.
I have had many telephone consultations with individuals (homeowners and board members who find themselves unable to cope with what other board members are doing) and Boards as well, to help them get their arms around problems and have advised many to try their luck in small claims court. Some of the reasons I send people in that direction are: (1) that they cannot really afford to hire an attorney to pursue the issue (and I know of no legal aid society to help them, (2) that I do not know where else to send them; (3) that I feel that they may get help there, if they are willing to do the actual footwork to get there; (4) that their claims are resolvable in small claims court and the remedies are clearly available in the law, and/or (5) that I do not believe they have a good case or are willing to do the footwork necessary to seek out facts that support what they say, and they do not want to believe me, and so I think that "testing" their theories there (in small claims) is the cheapest and least painful way for them to get a reality check.
In California, an individual can ask for damages of up to $7500 in small claims court. An individual can ask for fines of up to $500 each for many violations in the HOA arena, if they can provide proof or adequate information to support their allegations, and an individual can ask for reimbursement of attorneys fees in getting help to prepare a case. A Board can ask for up to $5000 in damages ($2500 if more than 2 claims are filed in a year). An individual or individuals can ask for certain relief with regard to elections that they believe are mishandled.
I am not making any guarantees about success. Success depends on clearly being right, being organized, having believable evidence and/or testimony available, and, I believe, being courteous and respectful of the hearing officer and the other party (no matter how much you might despise them).
Each district small claims court has an advisor that a person can call for free assistance in getting the correct forms completed and preparing a case to take to small claims. The advisors are not advisors on the law itself. But they can help immensely in explaining the process and how to organize the information you want to present. You will need a lawyer to provide you legal opinions and feedback on the pros and cons of your case.
Many boards believe that small claims court judges and hearing officers are biased toward owners. I have seen some "miscarriages" of justice in small claims courts, but not often. Likewise, I have seen serious "miscarriages" of justice in arbitrations. In both procedures, the hearing officer/decisionmaker is not locked into the law. Small claims officers can give orders based on equity or law. Arbitrators can make mistakes that are irreversible. Mostly, I think the hearing officers and judges try to be fair and just need to be properly educated on the subject matter. Plaintiffs and defendants need to provide sufficient backup information and/or testimony to support a cause of action, not just disatisfaction. This rings true for both sides. Being right is not enough. A rambling party can easily lose the hearing officer's attention, or piss them off. Many claimants are simply dissatisfied with their associations or an owner's conduct.
Many owners complain about continuing dire financial straights or large special assessments to pay for shortfalls, underestimation of costs, or deferred maintenance. But that does not mean that they "have a case". Associations are run by volunteers. And mistakes are made, but whether they are "actionable" under the law depends on the extent of the evidence of misdoings, and "proving it up" in court.
I do believe owners are at a disadvantage in that there is no identifiable "plaintiffs' bar" (group of attorneys that exclusively represent owners). That I think is why the legislature in California keeps crafting small claims remedies.
But small claims court is not a place to go and "rag on the judge" about how much you hate the Board, or from the Board perspective, what a pesky troublemaking resident a person is. Its a "mini court" of sorts where decorum, truth, and respect should reside. It's not a legal aid society, and it's not a "split the baby" forum, at least most of the time it is not. I would guess that the party that is "in the right" and that is organized, prepared, on time, respectful, and ready to offer proof of their "cause" has a very good chance of succeeding.
Watch for more blogs on use of small claims for elections issues and collections issues.
Posted by Beth Grimm at December 30, 2007 2:30 PM