Berding | Weil Community Association ALERT Newsletter
Legal News and Comments for Community Association Boards and Managers Issue #67 • April 2011
Who's the Client?
by James O. Devereaux, Esq.
The question sometimes comes up, usually from a homeowner or group of homeowners, concerning who the attorney representing the association in a matter actually represents. Some years ago, the California Court of Appeal provided a clear answer.
“Condominium associations may bring construction defect lawsuits against developers without fear of having to disclose privileged information to individual homeowners. Like closely held corporations and private trusts, the client is the entity that retained the attorney to act on its behalf.”
(Smith v. Laguna Sur Villas Community Association (2000) 79 Cal. App. 4th 639)
That means the attorney's client is the association – the incorporated or unincorporated entity; not the Board of Directors and not the association's members either collectively or individually.
In Laguna Sur Villas a group of homeowners, upset by what they thought was a “runaway budget for expenditures” in an association's construction defect lawsuit, demanded to see the work product and legal bills of the association's attorneys in the lawsuit. The association declined to provide those materials on the basis of the attorney-client privilege. A lawsuit ensued raising a number of issues including the right of the demanding homeowners to have access to information and documents that were subject to the attorney-client privilege. The trial court ruled in favor of the association on that question, holding that the privilege was held by the corporation. On appeal, the Court of Appeal agreed, stating:
“The court correctly held [the association] was the holder of the attorney-client privilege and that individual homeowners could not demand the production of privileged documents, except as allowed by the [association's] board.”
As noted by the appellate court, corporations are “persons” under California law, have their own separate legal identity and enjoy the benefit of the attorney-client privilege. Under the California Evidence Code, a client is a person who consults a lawyer for the purpose of retaining the lawyer. The term “Person” includes a corporation and may also include an unincorporated organization when the organization rather than its individual members so consults with a lawyer.
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