As an HOA board member doing your best, we're predicting you're going to cheer the California court's judgment in an unpublished case, Bear Valley Springs Condo v. Pina.
It involves a condo that sued an owner for interfering with the condo's insurance policy—and won.
In this week's tip, we explain the case and discuss our expert's takeaways for boards nationwide.
Here's the background: Shawna Pena bought a condo in the 69-unit Bear Valley Springs Condo Association in 2020, according to the court's factual summary. Her roof covers her unit and another owner's unit.
Within a
year of purchasing, Pena noticed what she believed to be deterioration of her roof and notified the board. The board got an expert, who also noted problems but recommended the roof be replaced in one to two years.
In mid-December 2020, Pena
notified the board: "You are already on notice that I'm going to have leaks." A few days later, she got bids and expert opinions and requested that the board repair her roof.
Pena pressed the board several more times in the last two weeks
of December. On December 29, a condo officer told her that the roof was on the board's radar but that many board members were unavailable during the holidays. Pena responded by stating that she planned to contact the condo association's insurer.
Which she did. The next day.
On December 30, Pena notified the condo's insurance broker and sent along inspection reports and her communications with the board. In her communication, she stated that the condo board
"is being negligent in maintenance of the roof."
In March 2021, the insurer notified the condo association it wouldn't be renewing its policy.
As the condo association searched for new coverage, it was notified by many insurers that they were unwilling to consider insuring because the condo was now considered risky for wildfires. Eventually, the condo found an insurer, but its annual premium was $53,000, nearly three times more than the $18,000 the condo had previously
paid.
The condo association sued Pena for those damages. She defended by arguing that her actions were protected under California's anti-SLAPP laws. Those laws protect free speech, including speech that furthers public discussion on matters
of public interest to the community.
The trial court and appellate court rejected her defense, allowing the case to move forward. The appellate court assessed legal fees to Pena.