Beverly O. Cavaliere, et al., v. Charles Cox, et al

Case Number

25CV00982

Case Type

Hearing Date / Time

Mon, 12/01/2025 - 10:00

Nature of Proceedings

Demurrers (2)

Tentative Ruling

Beverly O. Cavaliere, et al., v. Charles Cox, et al.            

Case No. 25CV00982

           

Hearing Date: December 1, 2025                                                       

HEARING:              (1)       Demurrer to First Amended Complaint by Defendants Charles Cox, Edward Marini, Thomas Harm, Barbara Chalmers, Frederick Clough, Patrick Nielsen, Peter Trabucco

                            (2)        Demurrer to Fifth Cause of Action of First Amended Complaint by Nominal Defendant Carriage Hill Homeowners’ Association

ATTORNEYS:        For Plaintiff Beverly O. Cavaliere: Sara R. Wolk, Zachary Levine, Wolk & Levine, LLP

                                    For Defendant Charles Cox, Edward Marini, Thomas Harm, Barbara Chalmers, Frederick Clough, Patrick Nielsen, Peter Trabucco: Joshua N. Willis, Soltman & Wattles LLP

                                    For Defendant Carriage Hill Homeowners’ Association: Leonard Siegel, Gerald R. Kilroy, Kulik Gottesman Siegel & Ware LLP

TENTATIVE RULING:

(1)       Demurrer to First Amended Complaint by Defendants Charles Cox, Edward Marini, Thomas Harm, Barbara Chalmers, Frederick Clough, Patrick Nielsen, Peter Trabucco: For all the reasons stated herein, the court sustains defendants’ demurrer as to the second cause of action for fraudulent concealment with leave to amend. The demurrer is otherwise overruled. The court denies defendants’ request for judicial notice. Plaintiff shall file her amended pleading on or before December 16, 2025.

(2)       Demurrer to Fifth Cause of Action of First Amended Complaint by Nominal Defendant Carriage Hill Homeowners’ Association: For all the reasons stated herein, the demurrer is overruled.

Background:

On February 13, 2025, plaintiff Beverly O. Cavaliere filed this action in her individual capacity and derivatively on behalf of Carriage Hill Homeowners’ Association (CHHOA) against seven CHHOA directors, Charles Cox, Edward Marini, Thomas Harm, Barbara Chalmers, Fredrick Clough, Patrick Nielsen and Peter Trabucco (defendants), and against the CHHOA as a nominal defendant. The complaint alleges four derivative causes of action against all defendants and nominal defendant CHHOA for: (1) breach of fiduciary duty; (2) fraudulent concealment; (3) accounting; and (4) declaratory relief. The complaint also alleges one cause of action in plaintiff’s individual capacity against the CHHOA for violation of inspection rights.

On April 21, 2025, the CHHOA filed an answer to the complaint denying all allegations therein and asserting fourteen affirmative defenses.

On August 12, 2025, plaintiff filed a first amended complaint (FAC) in her individual capacity and derivatively on behalf of the CHHOA against seven CHHOA director defendants and against the CHHOA as a nominal defendant. The FAC alleges four derivative causes of action against the defendants and nominal defendant CHHOA for: (1) breach of fiduciary duty; (2) fraudulent concealment; (3) accounting; and (4) declaratory relief. The complaint also alleges one cause of action in plaintiff’s individual capacity against the CHHOA for violation of inspection rights.

As alleged in the FAC:

The CHHOA is a non-profit corporation organized under California law and located in the County of Santa Barbara. (FAC, ¶ 2.)

Plaintiff purchased the real property located at 4554 Carriage Hill Drive, Santa Barbara, California 93110, and became a member of the CHHOA in 2019. (FAC, ¶ 18.)

The seven director defendants are or were directors on the CHHOA board. (FAC, ¶¶ 3-9.)  Defendants Cox, Marini, Harm, Chalmers, Clough and Nielsen were directors at all relevant times. (FAC, ¶¶ 3-8.) Defendant Trabucco is a director. (FAC, ¶ 9.) Although serving on the board, defendant Harm, the CHHOA treasurer, lacks standing to be a director because he is not a member of the CHHOA. (FAC, ¶¶ 5, 27.) Defendant Cox is the board president. (FAC, ¶ 26.)

After becoming a member of the CHHOA, plaintiff learned that the CHHOA’s board members, who are named as the individual defendants, had developed a scheme to invest association funds, including reserve funds, in various self-directed investment accounts maintained with Vanguard, as well as one or more checking accounts with a community bank in an amount that exceeds the FDIC insurance limit. (FAC, ¶ 18.)

Contrary to the actions of the defendants, standard practice is to deposit member funds in FDIC-insured accounts and to limit the size of those deposits to the coverage provided by the FDIC. (FAC, ¶ 19.) This money belongs to the members and is to be used for their benefit. (Ibid.)

On March 7, 2022, the CHHOA’s board held a regular, monthly meeting and plaintiff attended via Zoom. David A. Loewenthal, Esq., an attorney for CHHOA, also attended to discuss the ongoing investment of CHHOA reserve funds in the stock market rather than in FDIC insured financial products and accounts. (FAC, ¶ 22.)

Mr. Loewenthal advised the board of their obligations as fiduciaries when dealing with CHHOA funds, in particular the reserve fund, and the board’s potential exposure to liability for any loss resulting from risky investments or deposits. (FAC, ¶ 22.) According to plaintiff’s recollection, the resulting minutes do not accurately reflect Mr. Loewenthal’s recommendations or admonitions to the board. (Ibid.)

After the meeting, Mr. Loewenthal wrote a letter to the CHHOA’s board summarizing his recommendations. (FAC, ¶ 23.) Mr. Loewenthal pointed out that Civil Code section 5380, subdivision (a) requires managing agents of the CHHOA to deposit funds only in FDIC-insured accounts. (Ibid.)

Following the meeting with Mr. Loewenthal and receipt of his letter, board president, defendant Cox, represented to the board and the member homeowners that research of an undisclosed nature by an undisclosed party had been done on the subject and the board unanimously voted to continue their risky investment practices. (FAC, ¶ 26.)

At a meeting on April 25, 2022, the board approved an “Amended Investment Policy” despite the apparent lack of any original policy incorporated into the CHHOA’s governing documents. (FAC, ¶ 26.)

At a meeting in 2022, the board referenced losses in the accounts of $94,000 but no documentation has been provided for homeowners to see accurate and complete balances, withdrawals, or deposits to the CHHOA’s accounts. (FAC, ¶ 29.) With one exception, there is no indication of whether these amounts are realized or unrealized. (Ibid.)

In 2023, the board acknowledged that it sold some underperforming ETFs for a realized loss of approximately $53,000. (FAC, ¶ 29.)

The board held a meeting on April 30, 2023, and distributed a one page, barely legible document prepared by defendant Harm, the board’s treasurer, referencing $687,289 of CHHOA reserve funds invested in numerous self-directed Vanguard accounts that were not FDIC insured, as well as $276,178 of CHHOA reserve funds in a checking account at Montecito Bank & Trust, and an undisclosed amount deposited in a checking account with Pacific Western Bank. (FAC, ¶ 27.)

The CHHOA’s directors are fiduciaries who are required to exercise their powers in accordance with the duties imposed by the Corporations Code and an association’s governing documents. (FAC, ¶ 25.) This fiduciary relationship is governed by the statutory standard that requires directors to exercise due care and undivided loyalty for the interests of the corporation. (Ibid.) A director is required to perform their duties in good faith, in a manner such director believes to be in the best interests of the corporation and which such care, including reasonably inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (Ibid.)

An ordinarily prudent person in defendant Cox’s position would not follow the questionable research or advice of an undisclosed party over the advice of the attorney hired to represent the CHHOA. (FAC, ¶ 28.) It is further unreasonable that defendant Cox would not disclose the identity of the person, or persons, involved in this extremely important decision so that the other members of the board, and the members of the CHHOA, can evaluate and vet these individual(s) presumably in control of hundreds of thousands of dollars of CHHOA funds. (Ibid.) Similarly, an ordinarily prudent person would not abdicate their responsibility to the CHHOA and its members and blindly follow the vague and unsubstantiated recommendations of defendant Cox. (Ibid.)

The board’s investment practices impose an unreasonable risk to the members of the CHHOA and their reserve funds without justification or reasonable inquiry and deliberation. (FAC, ¶ 31.) Nothing in the association’s governing documents permit such high-risk investments or deposits in accounts that are not FDIC-insured (or deposits in amounts that exceed FDIC insurance coverage). (Ibid.)

The CHHOA’s reserve is not extra money to be used at the discretion of the board. (FAC, ¶ 32.) This money is necessary for the care and upkeep of the CHHOA and when the board allows those funds to be lost, it will result in additional assessments to the CHHOA’s members to cover expenses. (Ibid.)

Defendants are actively concealing or altering important CHHOA documents to mislead the members about CHHOA’s financial status and the process by which the defendants are managing the members’ money. (FAC, ¶ 57.) Defendants invested the CHHOA members’ money in various instruments that Vanguard itself ranks with risk levels from “1” to “5”, but the defendants hide the amount invested in each level and whether the amount in each instrument is adjusted to address changes in the market. (FAC, ¶ 59.)

Plaintiff has continuously raised concerns about the questionable investment and financial practices of the board. (FAC, ¶ 29.) Regardless, the board refuses to provide further explanation or justification of its practices. (Ibid.)

On July 6, 2023, plaintiff, through counsel, sent a request for resolution, and meet and confer to the CHHOA’s board concerning these issues. (FAC, ¶ 33.) On August 8, 2023, plaintiff and her counsel met with the CHHOA’s president, defendant Cox, defendant Harm, defendant Nielson, and counsel. (Ibid.) The attempt at informal resolution was not successful and mediation was scheduled for April 15, 2024. (Ibid.)

On August 24, 2023, plaintiff, through counsel, made a request to inspect various books and records maintained by the CHHOA. (FAC, ¶ 34.) This request was made by plaintiff in her role as member of the association and to facilitate a more productive meditation. (Ibid.)

The mediation was not successful, and the CHHOA and board failed to produce complete and accurate records requested by the plaintiff. (FAC, ¶ 35.)

Unless enjoined by this court, plaintiff reasonably believes that the board will continue to expose the members of the CHHOA to substantial financial risk and will continue to act without reasonable inquiry or deliberation, and without properly consulting with experts and listening to their advice. (FAC, ¶ 36.) Further, without an order from this court, the defendants will continue to withhold the documents requested by the plaintiff in her role as a member of the CHHOA. (Ibid.)

Plaintiff seeks relief including damages, declaratory relief, equitable remedies, statutory penalties, attorney’s fees and for such other relief the court deems just and proper. (FAC, pp. 16-17.)

On September 4, 2025, Nominal defendant CHHOA filed a demurrer to the fifth cause of action in the FAC for breach of inspection rights on the grounds that the cause of action is barred by the applicable statute of limitation, unsupported by statutory authority, and uncertain. This demurrer is unopposed.

On September 10, 2025, the director defendants filed a demurrer to the first, second and third causes of action on the grounds that each cause of action is uncertain and fails to state a cause of action because they barred by the applicable statute of limitation, among other arguments, and to the third and fourth causes of action on the grounds that grounds that each cause of action fails to state facts sufficient to state a cause of action. This demurrer is opposed by plaintiff.

Analysis:

“Because the function of a demurrer is to test the sufficiency of a pleading as a matter of law, we … assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law. [Citation.] It is error for the trial court to sustain a demurrer if the plaintiff has stated a cause of action under any possible legal theory, and it is an abuse of discretion for the court to sustain a demurrer without leave to amend if the plaintiff has shown there is a reasonable possibility a defect can be cured by amendment.” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.) “The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Payne v. National Collection Systems, Inc. (2001) 91 Cal.App.4th 1037, 1043.)

(1)       Statute of Limitations

Defendants argue that all of plaintiff’s claims are barred by the applicable statute of limitations because her claims accrued at least by 2019. Defendants argue that plaintiff became aware of the board’s investment practices sometime in 2019, which had allegedly been ongoing since 2006, and she did not file this action until approximately six years after obtaining such knowledge.

Plaintiff argues in opposition that her claims did not accrue in 2019 because she did not learn about the investment practices until 2022. Since the complaint in

this matter was originally filed on February 13, 2025, all of plaintiff’s causes of action are within the three-year or four-year statute of limitations, respectively, as identified by the defendants in their moving papers.

“The limitations period, the period in which a plaintiff must bring suit or be barred, runs from the moment a claim accrues. … Traditionally at common law, a ‘cause of action accrues when [it] is complete with all of its elements—those elements being wrongdoing, harm, and causation.’ [Citation.] This is the ‘last element’ accrual rule: ordinarily, the statute of limitations runs from ‘the occurrence of the last element essential to the cause of action.’ ” (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191 (Aryeh).) “If a demurrer demonstrates that a pleading is untimely on its face, it becomes the plaintiff’s burden ‘even at the pleading stage’ to establish an exception to the limitations period.” (Id. at p. 1197.) 

“[I]t is difficult for demurrers based on the statute of limitations to succeed because (1) trial and appellate courts treat the demurrer as admitting all material facts properly pleaded and (2) resolution of the statute of limitations issue can involve questions of fact. Furthermore, when the relevant facts are not clear such that the cause of action might be, but is not necessarily, time-barred, the demurrer will be overruled. [Citation.] Thus, for a demurrer based on the statute of limitations to be sustained, the untimeliness of the lawsuit must clearly and affirmatively appear on the face of the complaint and matters judicially noticed.” (Schmier v. City of Berkeley (2022) 76 Cal.App.5th 549, 554.)

This action filed on February 13, 2025. Plaintiff alleges damages occurred in 2023 when there were realized losses resulting from defendants’ investment practices. (FAC, ¶¶ 29, 51.) If some or all of the alleged damages occurred in 2023, which is a reasonable conclusion based on the face of the FAC, plaintiff’s claims for damages are not time-barred under any of the statutes of limitation asserted by defendants (three years for breach of fiduciary duty, fraud, and declaratory relief, and four years for accounting). (Motion, p. 3, ll. 7-19.) “[O]rdinarily, the statute of limitations runs from ‘the occurrence of the last element essential to the cause of action.’ ” (Aryeh, supra, 55 Cal.4th at p. 1191.)

A reasonable reading of the FAC does not establish notice of the investment practices until March 7, 2022, at which time plaintiff attended a monthly board meeting and was notified via zoom. (FAC, ¶ 22.) Absent an applicable exception, “[a] cause of action invariably accrues when there is a remedy available.” (Baker v. Beech Aircraft Corp. (1974) 39 Cal.App.3d 315, 321.) The FAC does not allege a legal right to bring action at a time that is outside any of the statutes of limitation asserted by defendants.

The untimeliness of the lawsuit does not clearly and affirmatively appear on the face of the complaint and matters judicially noticed. It is not necessary to address the discovery rule or another exception to the ordinary accrual rules under these circumstances. (Aryeh, supra, 55 Cal.4th at p. 1197.) The court, therefore, will overrule defendants’ demurrer as it relates to statute of limitations.

(2)       Damages

Defendants argue the FAC fails to allege any viable damages. According to defendants, without knowledge of the unrealized gains or applicable set offs from the Vanguard accounts compared to an FDIC-insured account, plaintiff cannot allege any damages regardless of a realized loss of $53,000 in 2023. As a result, according to defendants, the entire lawsuit fails as a matter of law.

Plaintiff alleges in 2023 that the CHHOA board “sold some underperforming ETFs for a realized loss of approximately $53,000.00.” (FAC, ¶ 29.) Plaintiff alleges that defendants “caused damages and injury to the CHHOA and its members, including the Plaintiff, in an amount to be proven at trial, but at least as much as $53,000.00 from the realized losses incurred in 2023.” (FAC, ¶ 51.) These allegations of damages are sufficient at the pleading stage.

The court, therefore, will overrule defendants’ demurrer as it relates to the allegation of damages.

(3)       First Cause of Action for Breach of Fiduciary Duty

Defendants argue a homeowner’s association is not precluded from investing funds in securities, even though there may be a risk of loss, unless it is expressly prohibited by the governing documents. Defendants argue that such investments are expressly permitted under the CHHOA governing documents.

Further, defendants argue that Civil Code section 5380 does not apply to a self-managed board, but only to managing agents of a homeowner’s association, and defendants are not managing agents under this statute. According to defendants, section 5380 does not govern the board’s conduct and cannot support a claim for breach of fiduciary duty.

Plaintiff argues the fiduciary duty claim is not wholly reliant on Civil Code section 5380. As argued by plaintiff, there is no requirement to show illegal activity to prove a breach of fiduciary duty. The breach can arise from negligence, fraud, or other conduct inconsistent with a fiduciary’s obligations.

“The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 932.)

“A fiduciary duty is a duty to act with the utmost good faith for the benefit of the other party. It can arise from a recognized legal relationship such as guardian and ward, trustee and beneficiary, principal and agent, or attorney and client or from a ‘confidential relationship’ ... founded on a moral, social, domestic, or merely personal relationship. The ‘essential elements’ of a confidential relationship have been described as 1) The vulnerability of one party to the other which 2) results in the empowerment of the stronger party by the weaker which 3) empowerment has been solicited or accepted by the stronger party and 4) prevents the weaker party from effectively protecting itself.” (Thomas v. Regents of University of California (2023) 97 Cal.App.5th 587, 629 (Thomas).)

“[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law. The mere placing of a trust in another person does not create a fiduciary relationship. Whether a fiduciary duty exists is generally a question of law.” (Thomas, supra, 97 Cal.App.5th at p. 629.)

Plaintiff alleges that the CHHOA is a non-profit corporation organized and existing under the laws of the State of California and that the defendants are directors of the CHHOA. (FAC, ¶¶ 2-10.) “[T]the directors of a nonprofit mutual benefit corporation, like the Association here, are fiduciaries who must act for the benefit of the corporation and its members.” (Coley v. Eskaton (2020) 51 Cal.App.5th 943, 958.) “Directors of nonprofit corporations such as the Association are fiduciaries who are required to exercise their powers in accordance with the duties imposed by the Corporations Code.” (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 513.) Plaintiff has sufficiently alleged the existence of a fiduciary duty. (FAC, ¶¶ 2-10, 25, 40-44.)

“Whether the defendant breached that duty towards the plaintiff is a question of fact.” (Marzec v. California Public Employees Retirement System (2015) 236 Cal.App.4th 889, 915.) “The breach of fiduciary duty can be based upon either negligence or fraud depending on the circumstances.” (Ash v. North American Title Co. (2014) 223 Cal.App.4th 1258, 1276.)

Plaintiff alleges that defendants breached their fiduciary duties by engaging in risky financial dealings with CHHOA reserve funds, thereby causing her and the CHHOA monetary damages in 2023. (FAC, ¶¶ 17-32, 51.) According to plaintiff, defendants refused to follow the advice of legal counsel and instead voted to continue their risky investment practices. (FAC, ¶¶ 17-28.) The FAC alleges defendants withheld information from plaintiff pertaining to these investments despite her efforts to ascertain the true nature of the investments. (FAC, ¶¶ 26, 27-28, 36, 56-59.) Plaintiff alleges that CHHOA reserve funds are invested in self-directed Vanguard accounts, without appropriate deliberation, and the risks associated with these investments are not consistent with standard practice for handling CHHOA funds. (FAC, ¶¶ 18-19, 26-27, 31, 45, 47, 49, 59.)

Plaintiff has sufficiently alleged a cause of action for breach of fiduciary duty. The court, therefore, will overrule defendants’ demurrer as it relates to the first cause of action for breach of fiduciary duty. It is not necessary at this stage of the litigation to resolve the parties’ dispute over whether, and to what extent, CHHOA directors may be permitted to invest funds in non-FDIC insured investments. This ruling makes no finding on these issues.

(4)       Second Cause of Action for Fraudulent Concealment

The parties dispute whether plaintiff has alleged the second cause of action for fraudulent concealment with sufficient particularity.

“Fraud, including concealment, must be pleaded with specificity.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843-844.) “[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (SCC Acquisitions Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 864 (SCC Acquisitions Inc.).)

“Less specificity should be required of fraud claims ‘when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ [citation] ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party....’ ” (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.)

Plaintiff alleges that defendants intentionally failed to disclose material facts to CHHOA members, including Plaintiff, regarding the complete and accurate status of CHHOA’s finances. (FAC, ¶¶ 26, 27-28, 36, 56-59.) According to the FAC, defendants are actively concealing or altering important CHHOA documents to mislead the members about CHHOA’s financial status and the process by which the defendants are managing the members’ money. (FAC, ¶ 57.) Defendants invested the CHHOA members’ money in various instruments that Vanguard itself ranks with risk levels from “1” to “5”, but the defendants hide the amount invested in each level and whether the amount in each instrument is adjusted to address changes in the market. (FAC, ¶ 59.)

Plaintiff alleges with sufficient particularity that defendants concealed or suppressed material facts pertaining to the investments and that defendants were under a duty to disclose. “Allegations of the defendant’s knowledge and intent to deceive may use conclusive language ….” (City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803.) “[F]raudulent intent is an issue for the trier of fact to decide.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1061.)

Plaintiff, however, did not allege facts sufficient to establish that she would have acted differently had she known of the material facts that were concealed. A “specific pleading is necessary to ‘establish a complete causal relationship’ between the alleged [fraud] and the harm claimed to have resulted therefrom.” (Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1092.)

The court, therefore, will sustain defendants’ demurrer as to the second cause of action for fraudulent concealment with leave to amend. Plaintiff must allege facts sufficient to demonstrate that she would have acted differently had the allegedly concealed investment practices and related information been disclosed and how the suppression of material facts proximately caused damage.

(5)       Request for Judicial Notice

Defendants ask the court to take judicial notice of two documents: (1) Minutes of the Board of Directors Meeting of the Carriage Hill Homeowner’s Association, on September 26, 2022 (RJN, Ex. A), and (2) the Assembly Committee on 22 Judiciary Analysis of AB 1101, date of Hearing, May 4, 2021 (RJN, Ex. B).

As to Exhibit A, the FAC does not incorporate or reference a meeting occurring on September 26, 2022. Moreover, defendants did not sufficiently demonstrate that the documents attached as Exhibit A “are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subd. (h).) The court does not have “sufficient information to enable it to take judicial notice of the matter” and will therefore deny defendants’ request for judicial notice as to Exhibit A. (Evid. Code, § 453, subd. (b).)

Exhibit B appears to be legislative history pertaining to a statutory provision cited in the FAC. However, the court did not address the parties’ dispute on this issue because it was not pertinent to the court’s ruling on whether a claim for fiduciary duty had been alleged in the FAC. “Although a court may judicially notice a variety of matters [citation], only relevant material may be noticed. ‘But judicial notice, since it is a substitute for proof [citation], is always confined to those matters which are relevant to the issue at hand.’ [Citation.]” (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063.)

The court, therefore, will deny defendants request for judicial notice.

(6)       Demurrer to Fifth Cause of Action by Nominal Defendant CHHOA

Nominal defendant CHHOA argues that the fifth cause of action for violation of right to inspect records against the CHHOA is barred by the one-year statute of limitation provided in Civil Code section 4955. “A member of an association may bring civil action for declaratory or equitable relief for a violation of this article by the association, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues.” (Civ. Code, § 4955.)

Plaintiff’s fifth cause of action asserted in her individual capacity against the CHHOA is based on Civil Code section 5205. (FAC, ¶¶ 70-71.) “The association shall make available association records for the time periods and within the timeframes provided in Section 5210 for inspection and copying by a member of the association, or the member’s designated representative.” (Civ. Code, § 5205, subd. (a).)

“A member may bring an action to enforce that member’s right to inspect and copy the association records. If a court finds that the association unreasonably withheld access to the association records, the court shall award the member reasonable costs and expenses, including reasonable attorney’s fees, and may assess a civil penalty of up to five hundred dollars ($500) for the denial of each separate written request.” (Civ. Code, § 5235, subd. (a).)

Civil Code section 4955 applies to “civil action to enforce … rights pursuant to this article,” which refers to Article 2, Board Meeting (Civil Code sections 4900-4955).

Civil Code sections 5205 and 5235, upon which plaintiff’s fifth cause of action relies, are contained in Article 5, Records Inspection (Civil Code sections 5200-5240). Accordingly, the statute of limitations in Civil Code section 4955 asserted by the CHHOA (applicable to Article 2) does not apply to plaintiff’s inspection claims pursuant to sections 5205 (contained in Article 5).

The fifth cause of action against the CHHOA for violation of inspection rights is not uncertain because plaintiff sufficiently describes when she requested the records through counsel, the records she requested, and what records were provided in response to her requests. (FAC, ¶¶ 70-72.)

Moreover, while some of the requested records appear outside the scope of “association records” under Civil Code section 5200, subdivision (a) and the timeframes set forth in sections 5205 and 5210, some of the records requested by plaintiff appear to fall within the definition of agency records under this statute, such as general ledger transactions, check registers, financial statements, interim financial statements, and balance sheets. (Civ. Code, §§ 5200, subd. (a), 5205, subd. (a), 5210, subds. (a)-(b); FAC, ¶ 71 [“4. ... monthly statement[s] … 9. … General Ledger Transactions … 10. … financials, including but not limited to, Balance Sheet … Check Detail Report …”].) “It is error for the trial court to sustain a demurrer if the plaintiff has stated a cause of action under any possible legal theory ….” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.)

The court will, therefore, overrule the CHHOA’s demurrer to the fifth cause of action for violation of right to inspect records.