Question: I'm a board director at my homeowners association. Last year we had an extremely important board meeting scheduled with an item that would have allowed the board to spend a lot of money we didn't have. Owners didn't want that money spent the way the board wanted to spend it. Just before the meeting when the vote was to take place, one of our key ally board directors — whose vote we desperately needed to defeat this massive spending spree — took ill and ended up in the emergency room. The board sent me to the hospital with a cellphone and instructions to not let him out of my sight. I sat right next to his bed with the cellphone. By the time of that call the ill director was in a coma. The board asked me how the ill director wanted to vote. I told the caller "Hold on. I'll ask him." Then I told the caller "He votes no." No one knows that he was actually comatose at the time of the vote. The board just took my word on it. After he got out of the coma, he said he agreed with how I voted. But I still wonder, was that vote legal?
Answer: The vote was not legal as the ill director did not vote. Because a board director's duties and obligations cannot be delegated, the general rule is that directors must be present at meetings to vote. The exception to that rule is found in Corporations Code section 7211(a)(6), which permits board directors to participate in a meeting through use of a conference telephone provided that each member participating in the meeting can communicate with all of the other members concurrently and each member is provided with the means of participating in all matters before the board.
Here, it appears the vote was not legal as neither of the requirements under Corporations Code section 7211 were present. Your comatose board director could not be heard by all the other participants and he did not have the means of participating in all matters before the board because he was in a coma. The fact that you, as another board director, aided and abetted him places you in a breach-of-duty position as well.
Techniques used by boards to gain approval of individual agendas rarely meet legal standards, but homeowners are predisposed not to challenge such efforts, either because of costs or the likelihood of not prevailing. Those agendas, when implemented, usually satisfy only the board director on whose agenda that item appears, not the entire body of titleholders.
The lesson here is that illegal actions to secure voting results favorable to only a few leave an association and those board directors who engaged in the unlawful activity open to potential liability.
If this board is still in power, the better action is to remove these directors and elect directors who follow the law and listen to owners. Illegal acts are still illegal no matter how laudable the motive.
Zachary Levine, partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian JD, P.O. Box 10490, Marina del Rey, CA 90295 or email@example.com.