CA Ct. Says Protections of “Business Judgment Rule” Require Showing of Reasonable Diligence

CERTIFIED California Appellate Court decision (June 21, 2016)

This case involved an action by a homeowners association (“Association”) against an individual homeowner and pertains to claims relating to actions that she took while serving as an officer and director of Association. Association alleged that the actions in question were contrary to provisions contained in Association’s governing documents and constituted a breach of fiduciary duties that she owed to Association. The director/officer claimed to be ignorant of much of the content contained in Association’s governing documents that was alleged to have been breached and contended that she was protected by the “business judgment rule” and an exculpatory provision that was contained in Association’s CC&Rs.