Pre Trial Motion in Julie Nguyen vs Little Orchard Business Park Owners Association| Trellis.Law

On October 23, 2017 a Trial Materials was filed involving a dispute between Julie T. Nguyen, and Little Orchard Business Park Owners Association, Peter Weber, for Writ of Mandate Unlimited (02) in the District Court of Santa Clara County.

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DENNIS KOLLENBORN
State Bar No. 43928
150 Almaden Boulevard
Suite 950
San Jose, California 95113
Telephone: (408) 286-2221

Attorney for Petitioner
Julie T. Nguyen

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA
10

11 JULIE T. NGUYEN, Action No. 17CV317898
12 TRIAL BRIEF
Petitioner,
of Petitioner
13 Julie T. Nguyen
Vv.
14 Trial Date: January 28, 2019
LITTLE ORCHARD BUSINESS PARK Time: 8:45 A.M.
15 OWNERS ASSOCIATION, Dept: TBD
16
Respondent.
17

22
23

28
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
TABLE OF CONTENTS

THE CONDO ASSOCIATION

THE RIGHT OF INSPECTION BY MEMBERS

THE DEMANDS TO INSPECT

THE INSPECTION SUBJECT OF THE PETITION 13

ENFORCEMENT OF THE RIGHT OF INSPECTION BY MEMBERS te 14
CONCLUSION 15

16
17

28
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
TABLE OF AUTHORITIES
Cases

Chantiles v. Lake Forest II Master Homeowners Assn.
(1995) 37 CA4th 914, 45 CR2d 1 14
Cruz v. Sup.Ct. (Advanced Obgyn Med. Grou
(2004) 121 CA4th 646, 650, 17 CR3d 368, 371

Edmiston v. Sup.Ct. (Lagomarsino
(1978) 22 C3d 699, 704, 150 CR 276, 278-279

Farrington v. Fairfield
(1961) 194 CA2d 237, 239, 16 CR 119 14
Hagan v. Fairfield
(1960) 183 CA2d 703, 7 CR 248 14
10
Holm v. Sup.Ct (Misco
11 (1986) 187 CA3d 1241, 1247, 232 CR 432

12 Jara v. Suprema Meats, Inc.
(2004) 121 CA4th 1238, 1263-1265, 18 CR3d 187
13
Koshaba v. Koshaba
14 (1942) 56 CA2d 302, 312, 132 P2d 854 14
15 Most v. First Nat. Bank of San Diego
(1966) 246 CA2d 425, 54 CR 669 14
16
San Diego Unified Port Dist. v. Douglas E. Barnhart, Inc.
17 (2002) 95 CA4th 1400, 1405, 116 CR2d 65, 68
18 Statutes

19 Code of Civil Procedure

20 2017.010

21 2031.310

22 Corporations Code

23 7160 2,3
24 8310

25 8311

26 8320
27 8330

28 8331 14
TRIAL BRIEF OF
Petitioner Julie T. Nguyen I
1 8333 1,2
2 8336 14
3 8337 14
4} Treatises

5 CEB 1, Counseling California Corporations 2d, §3.1
6

15
16

19
20

28
TRIAL BRIEF OF
Petitioner Julie T. Nguyen iii
THE CONDO ASSOCIATION

Petitioner Julie T. Nguyen is the owner of certain real property located at 1859 Little

Orchard St, San Jose, California 95125-1034, Santa Clara County, Assessor's Parcel Number

455-40-020, Legal Description: Lot Number: 2; Subdivision: Little Orchard Business Park; Unit:

5A; TRACT: 7849; City/Muni/Twnsp: San Jose; Map: Or J692 pg 1217 (hereafter referred to

as “the 1859 Little Orchard St Street Property” or “the Unit”). In turn, that certain real property
is a unit identified on the plan in a commercial common interest/condominium development

(hereafter referred to as “the Property”) governed by an association.

Respondent Little Orchard Business Park Owners Association, is a California non-profit

10 mutual benefit corporation and the governing body of the association (hereafter referred to as

11 “the Association’).

12 Respondent Little Orchard Business Park Owners Association is at least subject to
13 certain governing documents including, inter alia, a Little Orchard Business Park Enabling
14 Declaration recorded at Santa Clara County Recorders Office on May 15, 1986 as Document

15 Number 8784174, (hereafter referred to as “the Declaration” or “CC&Rs”), as corrected and
16 amended and Bylaws, as well as the laws of the State of California governing non-profit mutual
17 benefit corporations and common interest/condominium developments.

18 At all relevant times, the Association has been managed by Cornerstone Community
19 Management.

20 THE RIGHT OF INSPECTION BY MEMBERS
21 The accounting books and records and minutes of proceedings of the members and the
22 board and committees of the board, of a mutual benefit corporation, must be open to inspection
23 on written demand on the corporation by any member at any reasonable time. Corp. Code
24 §8333."
25
' The Davis-Stirling Common Interest Development Act, Civil Code §§4000-6150 provides
26
addition provisions as to residential condominium association. Those rules do not apply to
27 commercial and industrial common interest developments, subject to the Commercial and Industrial
Common Interest Development Act Civil Code §§6500 et seq. The Commercial and Industrial
28 Common Interest Development Act have no similar provisions.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
Corp. Code Section 8333 provides,

The accounting books and records and minutes of proceedings of the members
and the board and committees of the board shall be open to inspection upon the
written demand on the corporation of any member at any reasonable time, for a
purpose reasonably related to such person’s interests as a member.

In addition, Corporations Code Section 8330 provides that a member of a non-profit

mutual benefit corporation may either (1) inspect and copy the record of all the members’

names, addresses and voting rights, at reasonable times, upon five business days’ prior written

demand upon the corporation which demand shall state the purpose for which the inspection

tights are requested or (2) obtain from the secretary of the corporation, upon written demand
10 and tender of a reasonable charge, a list of the names, addresses and voting rights of those
11 members entitled to vote for the election of directors, as of the most recent record date for

12 which it has been compiled or as of a date specified by the member subsequent to the date of
13 demand. The demand shall state the purpose for which the list is requested. The membership
14 list shall be made available on or before the later of ten business days after the demand is

15 received or after the date specified therein as the date as of which the list is to be compiled.
16 In addition, Corporations Code Section 7160 provides that a non-profit mutual benefit
17 corporation shall keep, at its principal office in this state, the original or a copy of its articles and
18 bylaws as amended to date, which shall be open to inspection by the members at all
19 reasonable times during office hours. If the corporation has no office in this state, a copy of
20 the articles or bylaws shall, upon the written request of any member, be furnished to such
21 member, as amended to date.
22 If any record subject to inspection is not maintained in written form, a request for
23 inspection is not complied with unless and until the corporation, at its expense, makes such
24 record available in written form. For the purposes of this chapter “written” or “in writing” also
25 includes cathode ray tube and similar electronic communications methods. See Corp. Code
26 §8310. Any inspection under this chapter may be made in person or by agent or attorney and
27 the right of inspection includes the right to copy and make extracts. See Corp. Code §8311.
28 I
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
The corporation may not thwart the exercise of these rights by failing to respond to
proper requests, by sending communications that make further requests futile, or by actions

impeding the inspection process. Jara v. Suprema Meats, Inc. (2004) 121 CA4th 1238,

1263-1265, 18 CR3d 187.

Nor may a corporation simply deny the existence of the records. The corporation is

required to keep: (1) Adequate and correct books and records of account; (2) minutes of the

proceedings of its members, board and committees of the board; and (3) a record of its

members giving their names and addresses and the class of membership held by each. See

Corp. Code § 8320. These minutes and other books and records shall be kept either in written

10 form or in any other form capable of being converted into clearly legible tangible form or in any

11 combination of the foregoing. When minutes and other books and records are kept in a form

12 capable of being converted into clearly legible paper form, the clearly legible paper form into

13 which those minutes and other books and records are converted shall be admissible in

14 evidence, and accepted for all other purposes, to the same extent as an original paper record

15 of the same information would have been, provided that the paper form accurately portrays the
16 record. Id. In addition, as noted above, Corporations Code Section 7160 provides that a non-
17 profit mutual benefit corporation shall keep at its principal office in this state the original or a
18 copy of its articles and bylaws as amended to date.
19 The bylaws further provide,

20 ARTICLE X
BOOKS AND RECORDS
21
10.1 Inspection by Members. The membership register (including
22 names, addresses and voting rights), books of account and minutes of meetings
of the members, of the Board, and of committees shall be made available for
23 inspection and copying by any member of the Association, or by his duly
appointed representative, at any reasonable time and for a purpose reasonably
24 telated to his interest as a member, at the office of the Association or at such
other place within the project as the Board shall prescribe.
25
10.2 Rules for Inspection. The Board shall establish reasonable rules
26 with respect to:
27 A Notice to be given to the custodian of the records by the
member desiring to make the inspection;
28
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
B Hours and days of the week when such an inspection may
be made;

Cc Payment of the cost of reproducing copies of documents
requested by a member.

10.3 Inspection by Directors. Every director shall have the absolute
tight at any reasonable time to inspect all books records and documents of the
Association and the physical properties owned or controlled by the Association.
The right of inspection by a director includes the right to make extracts and
copies of documents, at the expense of the Association.

10.4 Documents provide by Board: Upon written request, the Board
shall, within ten (10) days of the mailing or delivery of such request, provide the
owner of a unit with a copy of the governing documents of the project, a copy of
the most recent financial statement of the Association distributed pursuant to
section 8.7D(1), together with a true statement in writing from an authorized
representative of the Association as to the amount of any assessments levied
10 upon the condominium which are unpaid on the date of the statement, including
late charges, interest, and costs of collection which, as of the date of the
11 statement, are or may be made a lien upon the condominium. The Board may
impose a fee for providing such documents and statement, but in no event shall
12 the fee exceed the reasonable cost to prepare and reproduce the requested
documents.
13

14 Petitioner's purpose in demanding inspection of records is to investigate the financial

15 condition of the association and the propriety of the association’s board activities and of the
16 board members (including duties as a member of any board committee on which the director
17 may serve), and to determine the rights and obligations of Petitioner as it pertains to the

18 Association.

19 Petitioner's purpose in inspecting the membership list includes to enable a timely and
20 cost effective distribution/circulation of materials related to membership interests, and/or

21 solicitation of information related to membership interests, including circulation of a
22 membership petition and/or solicitation of information to investigate the financial condition of
23 the association and propriety of association board’s activities and of the board members
24 (including duties as a member of any board committee on which the director may serve).
25 The rights to inspect records are not to be confused with litigation discovery.
26 The rights to inspect corporate tecords derive from the contractual and legal
27 relationship contained in the Corporation Code, articles, bylaws, etc. See CEB 1, Counseling

28 California Corporations 2d, §3.1. It is a substantive right.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
On the other hand, discovery is a procedural process limited to that provided by statute

during the course of pending litigation. California courts have no inherent power to expand the
methods of discovery beyond those authorized by the Discovery Act. See San Diego Unified

Port Dist. v. Douglas E. Barnhart, Inc. (2002) 95 CA4th 1400, 1405, 116 CR2d 65, 68; Holm

yv. Sup.Ct (Misco) (1986) 187 CA3d 1241, 1247, 232 CR 432; Edmiston v. Sup.Ct.

(Lagomarsino) (1978) 22 C3d 699, 704, 150 CR 276, 278-279; Cruz v. Sup.Ct. (Advanced
Obgyn Med. Group) (2004) 121 CA4th 646, 650, 17 CR3d 368, 371.

Further, there are important limitations to consider ... some contained in the Discovery

Act itself, and others resulting from other laws. The information sought must be (1) “not

10 privileged,” (2) “relevant to the subject matter” of the action, and (3) either itself admissible or
11 “reasonably calculated to lead to the discovery of admissible evidence.” CCP § 2017.010.
12 Production of documents in the course of discovery must be supported with good cause. CCP
13 § 2031.310. There are also limitations on the time when discovery may be sought. Thus, for
14 instance, if a party objects to production and a motion to compel is not filed within 45 days, the
1S ability to compel terminates. A member has no such time limitation, nor can the right to inspect
16 be waived and there is no requirement of good cause.

17 The rights of members to inspect the records of common interest developments (CIDs)
18 is not to be taken lightly. ClDs are provided powers over property owners in many ways
19 equivalent to government, but without the centuries of development of protections. Operations
20 of CIDs have proven to have reoccurring problems in management, control and maintenance.
21 This includes financial mismanagement, control by factions and disregard of processes.
22 THE DEMANDS TO INSPECT
23 On September 10, 2015, Petitioner made her first written demand on Respondent to
24 make available to records for inspection and copying.

25 The Association responded through counsel via a letter dated September 21, 2015,
26 received by email on September 24, 2015. The response stated that the inspection would not
27 be permitted to take place as scheduled and also stated that large number or records would
28 be withheld.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
Petitioner Julie T. Nguyen, in turn responded, through counsel,

Dear Mr. Barnett:

lam in receipt of your letter dated September 21, 2015 (received by email today,
after my call to you earlier today).

By my earlier letter of September 10": my client had requested an inspection to
take place today. 14 days notice was provided and it was indicated that this was
expected to be the first in a series of inspections.

Your letter states that the inspection will not be permitted to take place today, but
may take place on or after October 7, 2015, and also states that large number
or records will be withheld.

Your letter makes reference to Corporations Code Section 8330, as a basis for
your position.

10 Please note first that a request to inspect records, and the request for the list of
names, addresses and voting rights of members was separately stated.
11
The basis for your position is lost upon me.
12
If nothing else, you have failed to consider Article X of the association Bylaws,
13 as well as Corporations Code Section 8333. The inspections requested may
commence upon the request of the member at any reasonable time. Per article
14 X, also note that the membership register is to be available for inspection upon
demand, as well, irrespective of the minimum Code requirements.
15
We are thus quite disappointed in the association's violations of its bylaws and
16 the Corporations Code.

17 In an effort to avoid unnecessary court intervention, we appear for the inspection
on October 15, 2015, at 1:30 in the first of what is expected to be a series of
18 inspections.

19 At that time we demand and expect complete and unfettered access to the
accounting books and records and minutes of proceedings of the members and
20 the board and committees of the board, including:...
21 The Association responded through counsel by providing the membership list on
22 September 28, 2015, and thereafter waiving its previously asserted objections (except as to
23 attorney-client privileged materials) on October 7, 2015.
24 An initial record inspection occurred on October 15, 2015.
25 A series of exchanges then occurred between Petitioner and the Association as the
26 state of the records inspected, including,

27 OI
Next, | have reviewed the existing Association records, and have to admit that I
28 am ata loss to determine what is going on.

TRIAL BRIEF OF
Petitioner Julie T. Nguyen
The Declaration was recorded in 1986.

The purported Bylaws are incomplete, undated and not signed by the Secretary.
In fact, there are no records for at least the first decade, no minutes adopting the
Bylaws, and no known Secretary to sign the Bylaws, and no records creating any
position for the persons that signed the Bylaws.

The purported Bylaws require an annual meeting between May 15th and
June 15th of each year, with notice of such meeting to be provided pursuant to
Section 3.3 of the Bylaws, by first class mail. Board members shall be
nominated by a nominating committee, appointed at least 30 days prior to each
annual meeting. Voting for Directors shall be accomplished by secret ballot. The
Board shall meet at least quarterly.

The records that exist from the late 90s forward are sporadic at best. Some
records seem to start in 1997, but the 1997 records are unsigned, and the 1998
Board members appear from nowhere, and there are no officers.

10 As the Association moved forward, and into the 2000s, there are sporadic
records, including as to notices of nomination of Directions,
11
The last records which were available, the minutes for 2014, are somewhat
12 typical. There purports to have been an annual meeting in November of 2014 (in
violation of the Declaration). There is an agenda, but no meeting minutes. There
13 is an affidavit of election results, that is incomplete and inadequate. There is an
attached list of owners, with a number of items circled but no evidence in the
14 records of any appearance or any ballot for the vote, or of the process for the
nominations. Although my client requested to see all records, there were no
15 ballots in the file for 2014 at the time of the inspection on October 23, 2015. etc
etc.
16
As to the purported hearing notice, while the attachment to the letter from
17 Ms. Ruiz of November 5, 2015 is a fine schedule that asserts it was approved
effective September 8, 2008, the meeting minutes of June 9, 2008 (unsigned)
18 state nothing more than the Board directed the Property Manager to put together
a sample of fines for the Board to review. There are no further minutes for the
19 remainder of that year. The Property manager does not have the authority to
adopt a fine schedule. Nor could | find any evidence of publication of the
20 schedule, annually or at all.

21 Of course, Ms. Ruiz does not have the authority to notice a hearing. If there is
a Board and Bylaws to allow for such a hearing, we will need verification of such.
22
Moreover, Ms. Nguyen asserts that any enforcement action is arbitrary and
23 selective.
24 Ms. Nguyen was encouraged that the letter of November 24, 2015 was
conciliatory and more in tune with recognizing my clients status as a concerned
25 property owner. Ms. Nguyen does, after all, want to be a good agate neighbor.
26 Please advise if a meeting can be arranged, and per the letter of November 24,
2015, requests more time to address the issues raised.
27

28 I
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
On or about August 9, 2017, Petitioner made another written demand on Respondent

Association to make records available for inspection including,
4
The Rules, books records and financial statement of the
association

2 The records of members names, addresses and voting rights. The
purpose of this request is to exercise rights as members, including to prepare a
response to the disputes between member Ms. Nguyen and the association and
to contact fellow members concerning the operations of the association

The request includes, but is not limited to

| Any and all writings/materials which evidence any and all
association documents.

IL Any and all writings/materials which evidence any and all
10 association minutes, bylaws, articles and declarations.
ll Mi Any and all writings/materials which evidence all bank statements,
deposit records and/or canceled checks for all association accounts maintained
12 by the association
13 WV. Any and all writings/materials which evidence all tax returns and
other tax information concerning the association
14
Vv. Any and all writings/materials which evidence statements and
15 ledgers of all receipts and disbursements concerning the association.
16 Vi Any and all writings/materials which evidence all records pertaining
to transactions between Little Orchard Business Park HOA and the association
17 and/or the relationship between Little Orchard Business Park HOA and Dave
Armstrong
18
VIL Any and all records pertaining to transfers of funds between the
19 association and Little Orchard Business Park HOA and its agents.
20 vill Any and all writings/materials which evidence all association
Notices to the members.
21
IX. Any and all writings/materials which evidence all correspondence
22 from and to members concerning the association

23 x, Any and all writings/materials which evidence any ledger sheet of
the association.
24
xi. Any and all writings/materials which evidence reports/accountings
25 concerning the association, as well as disbursements of the association.
26 XIL. Any and all writings/materials which evidence any balance sheet of
the association
27
XIIL Any and all writings/materials which evidence any adoption of rules
28 and schedules
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
Ms. Nguyen further requests a list of names, addresses and voting rights of
members who are entitled to vote for the election of Directors as of the most
recent records date for which that list has been compiled.

The inspection of the records is set for August 15, 2017, 1:30 P.M.

The Association responded through the management company, Tanya Ruiz, the next

day,
4
Concerning your letter of August 9, 2017, the Association will produce all
books, documents and records created after the inspection you personally
conducted pursuant to the document demand in your letter of September 10,
2015. Your letter of August 9th is virtually identical to your inspection request in
your letter of September 10, 2015, excluding only additional items xii and xiii,
which will be produced. Duplicative requests for extensive documentation are
harassment, and are not consistent with the Davis-Stirling Act, the Corporations
Code or the governing documents of the Association.
10
2 Your requested inspection date of August 15th does not comply with the
11 law. The Association will produce the records identified above as required by
Civil Code Sections 4525, 4950, 5210, 5300. Please advise of your availability
12 to visit the Cornerstone office on or after these time allowed by law.

13 Petitioner, in turn, responded through counsel,
14 Tanya:

15 There is no limitation on the number of times records may be inspected. We
expect to inspect all records without limitation based upon any prior inspection.
16
While we disagree re the inspection date, we will inspect on September 14, 2017
17 at 1:30pm.

18 Please confirm the date and time, and that the records to be inspected will not
be limited to those created after the inspection conducted pursuant to the
19 document demand in my letter of September 10, 2015.
20 Failure to produce all records lawfully subject to inspection will result in a Petition
for Writ of Mandate.
21

22 The Association responded through the management company, Tanya Ruiz, the next
23 day, stating an intent to limit access to the records.
24 Neither you nor your client have shown good cause for reexamination of the
Association records. There is no legal right for repeated inspections. The
25 duplicated form letter you sent shows that the request is unjustified and for the
purposes of causing cost and inconvenience to the Association.
26
However, the Association will permit one further re-inspection of the records
27 requested in your letter on the date you propose (9/14/17). Please be thorough
so that a third request for the same documents will not be made and legal
28 proceedings by the Association can be avoided.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen
Petitioner, in turn, again responded through counsel,

We will see you on the 14th.

Then we will come as often as we may like. Good cause is not required, and
records may be inspected as often as we may like.

The Association again responded through the management company, Tanya Ruiz, the

next day, continuing in its stated intent to limit access to the records.

The 14th is reconfirmed.

Little Orchard reserves all of its rights concerning future inspections of the same
documents by Ms. Nguyen or her representative. Duplicative inspections are
unreasonable and burdensome.

10 A record inspection occurred on September 14, 2017.

11 The record inspection was attended by Mr. James Roberts and Ms. Sharmi Shah,
12 attorneys for Petitioner. Both had prepared for the inspection. It was apparent in a matter of
13 minutes that the records made available for inspection were grossly incomplete. There were
14 no corporate governance documents for any period after 2010. There were no declarations,
15 bylaws, or articles.

16 Having determined that there was an existing material non-compliance, Counsel did not
17 delve further into what else may be missing at that time. Counsel brought to Ms Ruiz’ attention
18 that there were substantial records missing, and that Petitioner wanted a complete inspection
19 of the records in context, not a piecemeal inspection. Ms Ruiz indicated she would have to
20 speak to "Bill" that owner of the management company and get back to us.
21 These events were confirmed in an email later that same day,

22 Tanya,

23 As you know, | arrived for the inspection today as agreed. With me was my
associate, Sharmi Shah. Both of us had prepared for the inspection.
24
It was apparent in a matter of minutes that the records made available for
25 inspection were substantially incomplete. There were no corporate governance
documents for any period after 2010. There were no declarations, bylaws, or
26 articles. There were no financial records for 2017. Given the obvious lack of
records, we did not delve further in to what else may be missing at this time.
27
We brought to your attention that there were substantial records missing, and
28 that we wanted a complete inspection of the records in context.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 10
You indicated you would have to speak to "Bill" that owner of the management
company and get back to us.

We would like to accomplish this inspection asap, with all records available.

A short exchange followed,

Jim,

| disapprove with the charactorizaiton (sic) implimented (sic) in your message.
| was unaware that you were in need of Bylaws or Articles, and I am certain you
received the information during your first inpsection (sic). If | would have known
| could have showed you were to find that information within our file cabinets.

Please clarifiy (sic) regarding "corporate governance documents".

10 Tanya's email both confirmed that not all records were provided, and that the evidently
11 missing records were a subset to be found in a filing cabinet or Association records, not
12 provided.

13 Tanya,

14 As we specifically mentioned the Articles and bylaws, your email is of concern.

15 It is also of concern that your email is a selective.
16 In any event, the request to inspect the records was not in any way limited. We
asked to see everything without limitation, and it is clear that less than everything
17 was there. At the very least, we now know there are filing cabinets with more
records in it at the time we came for the inspection, not made avaiable (sic) to us.
18
When can we see all of the books and records of the Association?
19

20 The Association next responded through Bill Forrester,
21 Jim,

22 As | am the owner of Cornerstone; | am replying to you on behalf of Tanya.
23 1 It my understanding that both you and your client are in possession or
have been previously provided with the corporate and governing documents. If
24 you wanted to view copies during your inspection process all you had to do was
ask. We found no reason to take time and remove them from the files when we
25 knew you had copies.

26 2 All files that we have in our possession for Little Orchard were available
for your inspection on September 14, 2017. The only documents that were not
27 on the conference room table were those that were in our file cabinets or soft
copies on the computer server. Again, we felt it was an unnecessary waste of
28 time to remove all the files/documents from the files, just to replace them. Upon
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 11
your follow-up visit/inspection, if that is what you want (all documents removed
from our filing cabinets), we will accommodate you. But, | must comment that
you will be the first one in 20+ years to make this request. As far as the soft
copies on the computer server, you must admit that it would be great waste of
natural resources to print out copies of the monthly financial statements,
insurance policies, etc., just to make a mound of paper on the conference room
table.

3 We are not trying to impede your inspection; we just trying to be
responsible to both you, your client, the HOA. The excessive hard copies is a
great waste of paper and natural resources that will then get dumped into the
land fill.

Re-schedule your inspection with Tanya, outline what you want to have in hard
copy, and if you want my staff to empty the Little Orchard file drawers. We are
here to comply; not impede.

10 Petitioner, in turn, again responded through counsel,

11 Bill,

12 We did ask. Please read our requests and email exchanges with Tanya.

13 | have no idea what you are talking about as to a filing cabinet. One was not
mentioned when were there for the inspection. We were specifically told there
14 were no more records on site and that you would have to be contacted to
determine where they were.
15
Again, when can we come and see ALL of the books and records.
16
Does October 5, 2017 at 1:00pm work.
17

18 A series of emails led to an actual inspection,

19 To Bill Forrester

20 | do not see that there was a response to this.

21 From Bill Forrester

22 You just sent the message late Friday afternoon.

23 To Bill Forrester

24 It is correct that the email was sent Friday pm, 3 days ago. What is the
response? Can you confirm October 5, 2017 at 1:00pm?
25
From Bill Forrester
26
Thursday October 5, 2017 at 1:00pm will work.
27
By 5:00pm Monday October 2, 2017, please advise if you require that we emp
28 the filing cabinets that contain Little Orchard documents, and if you want our sta‘
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 12
to print all records that we have in "soft storage". Records in "soft storage"
generally consist of insurance policies, yearend financial statements, yearend
general ledgers, basically files that take a lot of physical storage space. Our"soft
storage" is all part of our process of moving to the electronic (soft) storage of files
and records. Otherwise, they are available just for the asking and printing.
To Bill Forrester

Confirming October 5h at 1:00pm.

Prefer the hard copies be made available all at one place at one time, so that we
can work with the records in context.

Not sure, in reading your emails, what exactly is in the "soft storage." Are their
emails? We would like to see the emails.

How large are the data folders? Can it simply be copied onto one or more CDs?
10 THE INSPECTION SUBJECT OF THE PETITION?
ll A record inspection occurred on September October 5, 2017.
12 Exhibit 23 to the Declaration of Mr. Roberts submitted with the Petition is a Spreadsheet
13 of what was provided and not provided for last inspection.
14 At least the following records were not provided for inspection:

15 A All annual meeting minutes prior to 2011;

16 B All annual meeting reports prior to 2011;

17 Cc All Board minutes for the year 2013;

18 Federal tax returns for the years 1994, 1995, 1996, 1999, 2001, 2002, 2003,

19 2006, 2008, 2010, 2011, 2012, 2013;
20 State tax Returns for 2003, 2006, 2010, 2012, 2013;
21 All budgets before 2015;

22 Financial statements for 2009, 2011;

23 Meeting agendas for 2003, 2004, 2007, 2009, 2011, 2012, 2013, 2014, 2015;

24 Meeting minutes for 2001, 2002, 2007, 2010.

25 Ml

27
? Given the state of the records, it is possible a page or two was missed in this description, but
28 it is believed that the following substantially set forth the records.
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 13
There is, of course, cause to believe more records were likely not provided given the

history of recalcitrance of the association.

ENFORCEMENT OF THE RIGHT OF INSPECTION BY MEMBERS

On a corporation's refusal of a lawful demand for inspection, the Superior Court may

enforce the right of inspection with just and proper conditions. Corp. Code §8336.

A proceeding in mandate is an appropriate remedy to enforce a right to inspect

corporate records. See Chantiles v. Lake Forest |! Master Homeowners Assn. (1995) 37 CA4th

914, 45 CR2d 1; Most v. First Nat. Bank of San Diego (1966) 246 CA2d 425, 54 CR 669;

Hagan v. Fairfield (1960) 183 CA2d 703, 7 CR 248; Farrington v. Fairfield (1961) 194 CA2d
10 237, 239, 16 CR 119.

li If good cause is shown, the court may appoint one or more competent inspectors or
12 accountants to audit the books and records kept in California, to investigate the property, funds,

13 and affairs of the corporation, and to report thereon in any manner that the court may direct.

14 Corp. Code §8336. The Court may order that all expenses of an investigation be paid or

15 shared by the corporation. Id. In ordering the expenses of an investigation to be paid or

16 shared by a corporation, the court may exercise expeditious and timesaving methods. See

17 Koshaba v. Koshaba (1942) 56 CA2d 302, 312, 132 P2d 854. For instance, a court acted
18 properly in fixing the amount of an audit, making it a preferred charge against the corporation.
19 Koshaba v. Koshaba (1942) 56 CA2d 302, 311-312, 132 P2d 854.

20 Furthermore, if the court finds the failure of the corporation to comply with a proper

21 demand thereunder was without justification, the court may award the member reasonable

22 costs and expenses, including reasonable attorneys’ fees, in connection with such action or

23 proceeding. Corp. Code §8337.

24 Where the corporation seeks to object to the demand for the membership list, it has 10

25 days to file a petition with the superior court, or the right to object is waived. Corp. Code

26 §8331.

27 /

28 I
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 14
CONCLUSION

Based upon the foregoing and as set forth in the Petition, Petitioner requests that

(1) Respondent make available to Petitioner, in written form, for inspection and the making of

extracts therefrom, the corporation’s accounting books and records; the minutes of proceedings

of the shareholders, the minutes of proceedings of the board, and the minutes of proceedings
of the committees of the board; the corporate bylaws; records of the names, addresses and

holdings of members, etc. as describe in the Petition and (2) appointment of one or more

competent inspectors or accountants to audit the books and records of the corporation and

investigate the property, funds and affairs of the corporation and to report thereon in such

10 manner as the court may direct, with such expenses of the investigation or audit to be paid by

11 the Corporation.

13 pateo: _ /— 23-19
Dennis Kollenborn, Esq.
14 Attorney for Julie T. Nguyen

17
18

23
24

28
TRIAL BRIEF OF
Petitioner Julie T. Nguyen 15
PROOF OF SERVICE

(Federal Express)
STATE OF CALIFORNIA, COUNTY OF SANTA CLARA

lam employed in the County of Santa Clara, State of California. | am over the age

of 18 and not a party to the within action; my business address is 150 Almaden Boulevard,
Suite 950, San Jose, California.

On January 24, 2019, | served the document described as TRIAL BRIEF of
Petitioner Julie T. Nguyen in this action by:

By placing a true copy thereof in a post office, mailbox, subpost office, substation,
10 or mail chute, or other like facility regularly maintained by the United States Postal Service
11 for receipt of Express Mail, in a sealed envelope, with Express mail postage paid, or by
12 deposit in a box or other facility regularly maintained by an express service carrier, or
13 delivered to an authorized courier or driver authorized by the express service carrier to
14 receive documents, in an envelope or package designated by the express service carrier
15 with delivery fees paid or provided for.
16 The name(s) and address(es) of the persons served as shown on the envelope are
17 as follows:

18 Mr. Norman LaForce
LAW OFFICES OF CHRISTIAN B. GREEN
19 555 12th Street
Suite 600
20 Oakland, CA 94607
21 Executed on January 24, 2019, at San Jose, California.
22 | declare under penalty of perjury under the laws of the State of California that the
23 above is true and correct.
24
Co
25 Signature
26

Case Info

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Helen E. Williams Track Judge’s New Case

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Document Filed Date

January 24, 2019

Case Filing Date

October 23, 2017

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Trial Materials: Julie Nguyen vs Little Orchard Business Park Owners Association

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