Q&A: HOA attorneys have a duty to retain legal files — and boards have to hold them to it
Question: I’m the newly elected president of my association. Last week at our first meeting, the board decided to terminate the association’s counsel of more than 30 years and get a new attorney. Our new counsel has made two written demands for our association’s files. First our old attorney claimed the files were “archived” and he couldn’t get to them. Then he said he destroyed all records and files 10 years or older.
Our association was never informed our files were being archived, and we never gave him permission to destroy any of our files. The state bar told us they have a statute of limitations on complaints against attorneys. We want our files back! What do we do now?
Answer: The previous attorney’s claim that your files were destroyed without notice and consent is unacceptable and displays an astonishing lack of common sense given his long-term relationship with the board.
Absent some express agreement between an attorney and client, files belong to the clients and they must be maintained safely, confidentially and potentially indefinitely. And while there is no clear-cut rule for how long files must be retained by attorneys in California, every attorney has a duty to return client files on request absent a prior agreement, according to the case Academy of California Optometrists Inc. vs. Superior Court, 51 Cal.App.3d 999 (1975). What’s more, the excuse of destroying old files does nothing to explain his inability to provide more recent records.
In addition to demanding more detailed information from the prior attorney about his inability to produce the records, the board needs to reread the original retainer or “engagement” agreement with this firm. It is not uncommon for such agreements to allow for the destruction of records after a certain period of time, perhaps 10 years, and the archiving after a shorter period. Those terms are typically negotiated at the time the retainer agreement is signed by the client-board. However, there can be ambiguity given that relative timelines are constantly moving. For example, how often is the 10-year period calculated?
Regardless of the conduct of the association’s previous counsel, the homeowner association’s boards were irresponsible over the 30-year span of representation not to demand copies of legal files on a regular basis and pass that on to each successive board. The documents contain the corporation’s knowledge base and undoubtedly include private and confidential information.
At the very least, the loss of association records makes ongoing operations more burdensome and expensive. At its worst, it could lead to legal liability for the association or loss of rights when it is unable, for example, to prove compliance with fair-debt collection practices or to respond to a challenge concerning the validity of a past election — just for starters.
If the association’s retainer agreement was silent on the issues of file retention and your previous attorney cannot provide proof that notice was given to any board regarding the planned destruction of files, then you need to consider taking legal action.
The association’s new attorney is in the best position to advise the board what legal action, if any, is possible. A complaint could be filed with the California State Bar, but there may be statutes of limitation that could jeopardize the association’s ability to sue the attorney or his law firm for malpractice and damages.
For purposes of calculating the statute of limitations, however, your recent discovery of their alleged destruction may be considered the first documented “notice.” That means, the association may be able to bring a claim against the attorney, but it is important that there be no further delays in prosecution.
Zachary Levine, a 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.
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