Takiguchi v. Venetian Condominiums Maintenance Corp. ( 2023 )

Filed 4/21/23
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
GUY TAKIGUCHI, D079441
Plaintiff and Respondent,
v. (Super. Ct. No. 37-2021-
00010110-CU-PT-CTL)
VENETIAN CONDOMINIUMS
MAINTENANCE CORPORATION,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County,
Richard E. L. Strauss, Judge. Affirmed.
Weintraub Tobin Chediak Coleman Grodin and Brendan J. Begley for
Defendant and Appellant.
Law Offices of Michael G. Kim and Michael Gene Kim for Plaintiff and
Respondent.
A homeowners association is aptly described as “ ‘a quasi-government
entity paralleling in almost every case the powers, duties, and
responsibilities of a municipal government.’ ” (Cohen v. Kite Hill Community
Assn. (1983) 142 Cal.App.3d 642, 651.) And “[w]ith power, of course, comes
the potential for abuse.” (Ibid.) One form of abuse may occur when
incumbent board directors try to perpetuate their own power by failing to
hold regular homeowner meetings or elections. Corporations Code1 section
7510, subdivision (c) provides homeowners with a judicial remedy to
counteract such conduct in a nonprofit mutual benefit corporation.
Specifically, the statute allows a court to summarily order the corporation to
hold a regular meeting or election if it has failed to do so within specified
time frames.
We here conclude that the trial court properly exercised this statutory
authority by summarily ordering Venetian Condominiums Maintenance
Corporation (Venetian) to hold a meeting for the purpose of counting the 166
written ballots cast for its January 20, 2021 annual member meeting and
election. Substantial evidence supports the trial court’s finding that there
was a quorum present for that meeting. By adjourning the meeting based on
the purported absence of a quorum, Venetian failed to conduct the scheduled
meeting or cover the noticed agenda items, which included counting the
ballots and determining the results. Accordingly, we affirm the trial court’s
order.
FACTUAL AND PROCEDURAL BACKGROUND
A. Venetian’s Bylaws and Election Rules
Venetian is a condominium project with 368 condominium units in the
University Town Center area of San Diego. It is a nonprofit mutual benefit
corporation governed by the California Nonprofit Mutual Benefit Corporation
Law. (§ 7110 et seq.)
Venetian is run by a board of directors with three directors. Its bylaws
require the board to hold regular annual member meetings to elect directors.
The members include all unit owners, with each unit having one vote.
1 All further statutory references are to the Corporations Code unless
otherwise specified.
2
Section 3.04 of the bylaws (entitled “Quorum”) imposes a 51 percent
quorum requirement for annual member meetings, with the percentage based
on the number of units entitled to vote. The bylaws also provide for a reduced
one-third quorum requirement if the higher quorum is not met at the initial
meeting. Specifically, Section 3.04 states in relevant part: “The presence at
any meeting, either in person or proxy, of Members entitled to cast at least
fifty-one (51%) percent of the total voting power of the Association shall
constitute a quorum for any action except as otherwise provided in the
Restrictions. If, however, such quorum shall not be present or represented at
any meeting, a majority of the Members entitled to vote thereat shall have
the power to adjourn the meeting to [a] date not less than five (5) days nor
more than thirty (30) days from the meeting date, at which meeting the
quorum requirements shall be one-third (1/3) of the total voting power.”
Venetian’s board has also adopted election rules, which require the
appointment of an independent, third-party inspector of elections to preside
over elections, receive ballots, count votes, and determine the results. Voting
for directors must be by secret written ballot sealed in two envelopes. The
inspector must provide notice of any election, including the date, time, and
address where written ballots must be returned by mail or handed to the
inspector of elections, and the date, time and location of the meeting at which
ballots will be counted. The envelopes may be opened and the ballots counted
and tabulated only at a properly noticed board or member meeting. Only the
inspector of elections or a designee may open the envelopes and count and
tabulate the ballots.
B. Prior History of Director Elections
Ali Ghorbanzadeh owns 18 units at the Venetian. He was elected to
Venetian’s board of directors in 2008. In 2009, Ghorbanzadeh appointed his
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son Sean Gorban2 to the board. They have controlled the three-member
board continuously from 2009 through at least 2021. Guy Takiguchi was
elected as the third director in 2015.
From 2009 to 2021, the board repeatedly failed to hold annual
elections, either due to the absence of a quorum or for other reasons.
Ghorbanzadeh and his son also targeted opposition candidates Takiguchi and
Elaine Nishime by fining them and trying to exclude their candidate
statements from the ballot packets. Takiguchi successfully challenged these
actions in court several times.
C. January 2021 Meeting and Election
There were three directors on the board in 2020: Ghorbanzadeh, his son
Sean Gorban, and Takiguchi. Ghorbanzadeh’s seat was up for re-election at
the 2020 annual meeting, and there were two other candidates for the seat,
including Nishime. The annual meeting was supposed to be conducted in
November or December 2020, but was delayed until January 2021.
Lisa Schwartz is the owner of The Ballot Box, Inc. (Ballot Box), which
had a contract with Venetian to serve as its inspector of elections. On
December 18, 2020, on behalf of the Venetian board, Ballot Box sent out a
notice of annual homeowners meeting and director election, along with an
agenda and written ballots for the election. The notice was for both an
annual meeting to be held on January 20, 2021 and an “adjourned meeting”
to be held on January 25, 2021. The notice explained the reason for the
adjourned meeting as follows: “As the Association usually does not reach
quorum at the first meeting, an adjournment date is also provided on this
notice. The quorum for any such adjourned meeting is 25% [sic – should be
2 Sean Gorban and his brother Brian Gorban are also referred to in the
record by the last name Gorban-Zadeh.
4
one-third] of the total voting power. The inspector of election will not be
present at the first meeting.”
The notice of annual meeting stated that due to COVID-19 restrictions,
“the meeting will only be available virtually although members will be
permitted to deliver a ballot or obtain a replacement at the physical location.
Members will not be permitted to remain at the physical location. To join the
meeting and observe the ballot counting, members must use the virtual
platform.” The notice provided members with the necessary information to
join the meeting online or by telephone and identified the physical location as
the complex’s clubhouse. A cover letter sent by Ballot Box along with the
notice advised: “It is important that you participate in this meeting, by
returning the enclosed ballot either by mail or in person at the meeting.”
The notice advised that the election would be for one two-year term on
the board. With regard to the quorum requirement, it stated:
“Representation may be by attendance in person at the meeting, by the
return of a ballot, or by proxy.” The notice provided members with voting
instructions and set a deadline of January 15, 2021 for Ballot Box’s receipt of
any mailed ballots. It further stated: “The envelopes are received and held
by The Ballot Box until they are opened at the meeting. . . . The SECRET
BALLOT envelopes are then opened and the ballots tabulated. The envelopes
are only opened IF a quorum is met.”
The written agenda for the membership meeting included seven agenda
items as follows: (1) “Call to Order”; (2) “Introductions”; (3) “Balloting”
(including “Verification of Quorum” and “Begin Tabulation of Ballots”);
(4) “Board Reports”; (5) “Homeowner Open Forum”; (6) “Election Results”;
and (7) “Adjournment.”
5
Before the meeting, Ballot Box received the mailed ballots and
maintained a ballot receipt list identifying the unit owners from whom it
received them. Schwartz provided a copy of this list to multiple owners and
board members both before and after the scheduled January 20, 2021
meeting. By the time of the meeting, Ballot Box had received 166 ballots.
Venetian’s management specifically instructed Ballot Box not to attend
the regular annual meeting scheduled for January 20, 2021, and only to
attend the adjourned meeting scheduled for January 25, 2021. According to
Schwartz, “[t]he adjourned meeting was specifically chosen and noticed for us
to attend in lieu of the original meeting, to save the Association money from
having us attend 2 meetings.”
The regular meeting was convened virtually on January 20, 2021.
There was no inspector of elections present at the clubhouse or remotely.
Amber Korody, the community manager for Venetian, presided over the
meeting remotely even though she was not the inspector of elections. She
informed the participants that Ballot Box would not be attending “to save us
money.” Korody did not take roll, did not count the members present online
or by telephone, and did not determine the number of units they represented
or whether an owner of those units had already submitted a written ballot.
According to Korody, she called Schwartz during the meeting to
determine the status of the ballots, and Schwartz informed her that based on
the number of ballots received by the voting deadline, she had determined
that a quorum was not met. But Schwartz denied making this
determination. Schwartz explained: “I was not present at the Venetian’s
January 20, 2021 annual meeting and therefore could not and did not rule on
anything that occurred at that meeting.”
6
Korody declared that there was no quorum for the meeting because
Ballot Box had only received 166 ballots, and the quorum was 188. However,
Korody did not include in her count any members who were present online or
by telephone representing units for which no written ballot had been
submitted. After Korody declared that there was no quorum, there was a
motion to adjourn the meeting and move the ballot count to the “adjourned
meeting” previously scheduled for January 25, 2021. Sean Gorban seconded
the motion, and the meeting was adjourned without a formal vote. No one
prepared minutes for the meeting. Ghorbanzadeh later acknowledged that
“people at the meeting were led to believe that there would be a [further]
meeting on Monday [January 25].”
Nishime participated in the January 20, 2021 meeting remotely by
computer and took multiple screenshots of the participants. With one
exception, the screenshots showed only the participants’ screen names, not
their faces. However, Nishime was able to identify eight members who were
present representing 37 units for which no written ballot had been submitted
to Ballot Box. Ballot Box’s ballot receipt list showed that no written ballot
had been submitted for these 37 units. If those 37 units had been counted
along with the 166 written ballots, there would have been a quorum of 203
present at the meeting—exceeding the 188 minimum.
The eight participating members who represented units for which no
ballot had been submitted included Ghorbanzadeh (representing 18 units),
his son Sean Gorban (representing one unit), his other son Brian Gorban
(representing three units), and an ally of Ghorbanzadeh’s who was also
running for the director’s seat, Ben Ariannejad (representing one unit).
Takiguchi asserted that Ghorbanzadeh and his allies did not submit their
ballots “in a deliberate and tactical effort to not reach quorum so they could
7
remain in power another year or two.” Venetian submitted no evidence
refuting this accusation, or disputing that Ghorbanzadeh and his allies
participated in the meeting, or explaining why they did not submit a written
ballot.
On January 22, 2021, two days after the aborted member meeting,
Venetian’s three-member board of directors convened an emergency board
meeting. Ghorbanzadeh announced that the annual membership meeting
had “failed.” He and his son Sean Gorban voted to cancel the “adjourned
meeting” previously scheduled for January 25, 2021 due to the lack of a
quorum on January 20, 2021. Takiguchi voted against the motion. Later the
same day, at the board’s direction, Korody sent a notice to the members
notifying them of the board’s action. The notice stated in relevant part: “On
Wednesday January 20, 2021, there was an attempt to hold the Annual
Meeting of the members for the purposes of holding the Annual Director
Election. Due to a lack of a quorum, the meeting was not held. . . . [¶] As
there was no motion, as required by the governing documents in the Annual
Meeting to reconvene, there could be no reduced quorum for any subsequent
meetings. Therefore, the Board has cancelled the Special Membership
Meeting that was previously scheduled for January 25, 2021.”
Because the January 25 meeting was cancelled, nobody ever counted
the 166 written ballots that were mailed to Ballot Box. Many Venetian
members were upset by this decision. Fifty-six members representing 15
percent of the voting power signed a petition calling on the board to conduct a
meeting to count the ballots. Schwartz also sent an email to Korody and
Venetian’s counsel stating her “professional opinion” that “it was bad
form/bad faith for the Board” to cancel the January 25 meeting without
counting the ballots. She advised that Ballot Box “would be happy to attend
8
a rescheduled meeting to open and count the ballots so the election may be
completed for the owners of this community.” On behalf of the board,
however, Korody responded to the members’ petition as follows: “Please be
advised that the submitted petition is not appropriate in that the members
cannot hold a meeting to count ballots that were failed as a result of a failed
election.”
D. Trial Court Proceedings
On March 8, 2021, Takiguchi filed a petition against Venetian seeking
a court order under section 7510. The petition argued that there was a
quorum present at the January 20, 2021 annual meeting—counting both the
166 written ballots received by Ballot Box and the 37 additional units
represented by members participating online or by telephone for which no
ballot had been submitted. The petition sought a summary order directing
Venetian to “notice and hold the annual meeting for the sole purpose of
counting the ballots in custody of [Ballot Box] as of January 20, 2021 and
tabulating and certifying the results of that vote as the election results for
the Venetian in 2021.”
In support of the petition, Takiguchi submitted declarations from
himself, Nishime, and Schwartz, copies of Nishime’s screenshots, the 56
member petitions, Ballot Box’s ballot receipt list, Venetian’s bylaws, election
rules, and homeowner directory, the December 18, 2020 notice of annual
meeting and election, and emails written by various participants.
9
Venetian filed a five-page opposition to the petition, but submitted no
defense evidence and made no objections to Takiguchi’s evidence.3
Venetian’s initial opposition acknowledged that under its bylaws and
applicable statutes, the annual meeting required “a quorum of the members
present in person, by proxy, or by submitting a secret written ballot by mail.”
(Italics added.) Venetian nevertheless argued that there was no quorum for
the January 20, 2021 meeting because only “160 ballots were received by the
voting deadline on January 15, 2021, and 185 [sic – should be 188] ballots
were needed to reach a quorum.” Venetian’s opposition did not mention or
dispute Takiguchi’s evidence that there were 37 additional units represented
by members who were participating in the virtual meeting for which no ballot
had been submitted.
At an initial hearing in April 2021, the trial court requested
supplemental briefing on several issues. Represented by new counsel,
Venetian changed its position and filed a supplemental brief arguing that
only the 166 ballots received before the January 20, 2021 meeting counted
towards the quorum; that Venetian did not fail to hold an annual meeting
because the 166 ballots did not satisfy the quorum requirement; and that the
requirements for reconvening the annual meeting with a lower quorum were
not met. Venetian’s supplemental opposition again did not dispute
Takiguchi’s evidence that there were 37 units represented at the January 20,
2021 meeting for which no written ballot had been submitted.
3 Venetian later filed evidentiary objections to some supplemental
evidence submitted by Takiguchi, but the trial court overruled all evidentiary
objections and Venetian has not renewed those particular objections on
appeal. Venetian submitted no evidentiary objections to any of the evidence
submitted with Takiguchi’s original moving papers.
10
At another hearing in June 2021, the court instructed Venetian to
provide the available meeting minutes. Venetian later submitted Korody’s
declaration with attached exhibits, which did not include any minutes of the
January 20, 2021 meeting. Korody’s declaration purported to describe
aspects of the meeting, but again did not dispute Takiguchi’s evidence
regarding the 37 non-voting units represented at the meeting.
After taking the matter under submission, the trial court granted
Takiguchi’s petition. The court reasoned:
“A virtual Annual Meeting was scheduled for January 20,
2021. The Venetian’s quorum requirements are 51% and
33%. (Venetian Bylaws 3.04 . . . .) There are 368 members
of the Association and thus, a quorum is 185 [sic – should
be 188] members. The quorum requirement may be met by
the members present in person, by proxy or by submitting a
secret written ballot. (Corp. Code, § 7512; Bylaws § 3.04
and CC § 5115(d); see also Respondent’s Opposition,
p. 3:12-14.) Here, 160 ballots were received by the voting
deadline . . . with another five or six ballots received
thereafter constituting a total of 166 ballots. Petitioner has
submitted evidence that 37 units were present at the
virtual meeting. (Nishime Dec. ¶23.) Respondent provides
no contrary evidence. Further, Respondent confirms that
no contemporaneous record was made of the meeting by
any of Respondent’s agents. Thus, based upon the evidence
submitted, the quorum requirements were met.”
Accordingly, the trial court ordered Venetian “to hold the annual
meeting for the purpose of counting the ballots in custody of the Ballot Box as
of January 20, 2021.”
DISCUSSION
I
We first consider whether Venetian’s appeal is moot. The January 20,
2021 annual member meeting was for the purpose of electing a director for a
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two-year term to the seat held by Ghorbanzadeh. Because more than two
years have now passed, we asked the parties to brief the mootness issue. In
response, the parties notified us that there was another annual membership
meeting scheduled in November 2022 for the purpose of conducting an
election for the same director’s seat, but the election was unsuccessful
because there was no quorum for the meeting. There has been no successful
election for this seat since the disputed meeting of January 20, 2021.
Because section 4.02 of the Venetian bylaws provides that “all incumbent
Directors shall hold their office until their successors are elected,”
Ghorbandzadeh continues to hold the seat that was the subject of the
January 20, 2021 election, even though he has not been reelected.
Both parties take the position that we should not dismiss the appeal as
moot. We agree that the appeal is not moot. Even though the original two-
year term would have expired by now, the winner of the January 20, 2021
election would still remain in the seat under Venetian’s bylaws because a
successor has not yet been elected. Thus, if the ballots from the January 20,
2021 meeting are counted as directed by the trial court, and Ghorbandzadeh
is determined not to have been the winner, the winner will be entitled to take
his place on the board until a successor is elected. In these circumstances,
Venetian’s appeal is not moot because we would still be able to grant it
effective relief if we were to reverse the trial court’s order directing that the
ballots be counted. (See Lockaway Storage v. County of Alameda (2013) 216
Cal.App.4th 161, 175 [appeal is moot if superseding events make it
impossible to grant appellant any effective relief].)
II
We next consider whether there is sufficient evidence to support the
trial court’s finding that there was a quorum for the January 20, 2021
12
meeting. On appeal, Venetian has once again abandoned its argument that
only the written ballots received by Ballot Box count towards the quorum.
More specifically, Venetian does not contest the trial court’s conclusion that
non-voting units represented by members who personally attended the
meeting online or by telephone count towards the quorum, as well as units
for which a written ballot had been submitted.4 For the first time in its
opening brief, however, Venetian now asserts that the evidence does not
support the trial court’s finding that there were 37 units represented at the
virtual meeting for which no written ballot had been submitted. Although
Venetian did not make this argument in either of its written oppositions to
Takiguchi’s petition, we will decide this issue on the merits because a
sufficiency of evidence claim may be raised for the first time on appeal.5
(Tahoe National Bank v. Phillips (1971) 4 Cal.3d 11, 23, fn. 17.) We review
the trial court’s factual finding of a quorum for substantial evidence, viewing
the entire record in the light most favorable to the finding. (See Bickel v. City
of Piedmont (1997) 16 Cal.4th 1040, 1053.)
Substantial evidence supports the trial court’s finding that there was a
quorum present for the January 20, 2021 meeting. Nishime participated in
4 Because the issue has not been raised on appeal, we express no view as
to whether this is a correct interpretation of Venetian’s bylaws and applicable
provisions of the Corporations Code. We note, however, that Venetian’s
notice of annual meeting similarly stated that for the purpose of the quorum
requirement, “[r]epresentation may be by attendance in person at the
meeting, by the return of a ballot, or by proxy.”
5 Although the sufficiency of evidence issue is preserved for appeal, the
evidentiary objections to Takiguchi’s evidence asserted for the first time in
Venetian’s opening brief are not. These include Venetian’s multiple
objections based on lack of personal knowledge and hearsay. Venetian
forfeited these objections by failing to assert them in the trial court. (Evid.
Code, § 353, subd. (a); Gormley v. Gonzalez (2022) 84 Cal.App.5th 72, 82.)
13
the meeting online and took multiple screenshots of the participants. She
had lived at Venetian for several years, she knew who the owners were and
how many units they owned, and she had the Venetian homeowner directory
with her during the meeting. Based on her observations and screenshots, she
was able to identify the participants by their screen names and compile a list
of them. Moreover, the inspector of elections (Ballot Box) had disseminated
its ballot receipt list, which identified the units for which a written ballot had
already been submitted. Thus, Nishime was able to identify eight members
who were present online or by telephone representing 37 units for which no
written ballot had been submitted to Ballot Box. Counting those 37 units
along with the 166 units for which written ballots had been submitted, there
is substantial evidence to support the trial court’s finding of a quorum in
excess of the 188 minimum.
Venetian argues that Nishime had no personal knowledge of the screen
names used by those who participated in the meeting remotely. For example,
Venetian claims that the screen name “Dr. ali” used by one of the
participants could refer to another owner with the first name Ali, rather than
Ali Ghorbanzadeh. Absent any contrary evidence, however, there was ample
evidence for the trial court to infer that this was Ghorbanzadeh’s screen
name. Ghorbanzadeh was both an incumbent director and a candidate for re-
election with an obvious interest in the meeting. Ghorbanzadeh later wrote
an email purporting to describe what happened in the meeting. Moreover,
according to one of Nishime’s screen shots, the person with the “Dr. ali”
screen name also spoke at the meeting and the trial court could reasonably
infer that Nishime would have recognized his voice from her attendance at
past board meetings. Finally, it would have been a simple matter for
Venetian to submit a declaration refuting the evidence that Ghorbanzadeh
14
participated in the meeting using the screen name “Dr. ali.” But
Ghorbanzadeh submitted no declaration, and Korody’s declaration submitted
on Venetian’s behalf is conspicuously silent on the issue, even though she
presided over the meeting. The trial court could reasonably infer from
Venetian’s failure to present any contrary evidence that Ghorbanzadeh did in
fact participate in the meeting using this screen name. (Evid. Code, §§ 412,
413; Westinghouse Credit Corp. v. Wolfer (1970) 10 Cal.App.3d 63, 69
[adverse inference against party whose declaration did not address material
issues].)
As for the other meeting participants Nishime identified as
representing non-voting units, at least four of them used real first and last
names of known unit owners as their screen names in the meeting. These
included Sean Gorban (one unit), Mike Fani (one unit), Margarita Abagyan
(eight units), and Bahram (“Ben”) Ariannejad (one unit)—whose face was also
shown in the screenshots. Absent any evidence that these people were
imposters, the trial court could reasonably conclude that they were who they
purported to be. Together with Ghorbanzadeh and his 18 units, these
individuals accounted for a total of 29 non-voting units, which was more than
enough for a quorum when added to the 166 ballots received.
Finally, we reject Venetian’s argument that there were no “adequate
safeguards” in place to verify that each person participating remotely was a
member. It was Venetian’s responsibility to have proper procedures in place
to determine who was participating in the meeting and whether there was a
quorum. Venetian deliberately chose not to have the inspector of elections
attend the January 20, 2021 meeting. Venetian also chose not to take roll,
keep minutes or other records, or determine how many units represented at
the meeting had not submitted a written ballot. In these circumstances,
15
Venetian cannot fault Takiguchi for presenting the best evidence available to
prove the existence of a quorum. Taken together, Takiguchi’s evidence and
the reasonable inferences from Venetian’s failure to refute it constitute
substantial evidence to support the trial court’s finding of a quorum.
III
Venetian contends that the trial court exceeded its statutory authority
by directing that ballots cast for the January 20, 2021 annual meeting be
counted. According to Venetian, even assuming that there was a quorum for
the meeting, section 7510, subdivision (c) is only “future-looking” and does
not give a court authority “to count ballots from a prior meeting.” Venetian
argues that an order directing that completed ballots be counted may be
issued only “via a regular civil action that affords discovery and other due
process, not in the summary proceedings that section 7510 and 7511
contemplate.”6 This is an issue of statutory interpretation, which we review
de novo. (Lopez v. Ledesma (2022) 12 Cal.5th 848, 857.)
Section 7510 governs meetings of nonprofit mutual benefit
corporations, including their place and time, frequency, and remote
participation. Subdivision (b) provides: “A regular meeting of members shall
be held on a date and time, and with the frequency stated in or fixed in
accordance with the bylaws, but in any event in each year in which directors
are to be elected at that meeting for the purpose of conducting such election,
and to transact any other proper business which may be brought before the
meeting.”
6 Although Venetian did not make this argument in the trial court, we
exercise our discretion to consider it on appeal because it presents a pure
question of law based on undisputed facts. (Howitson v. Evans Hotel, LLC
(2022) 81 Cal.App.5th 475, 489.)
16
Section 7510, subdivision (c) provides for a summary judicial remedy if
the corporation fails to hold a regular meeting or written ballot within
specified time frames. It states: “If a corporation with members is required
by subdivision (b) to hold a regular meeting and fails to hold the regular
meeting for a period of 60 days after the date designated therefor or, if no
date has been designated, for a period of 15 months after the formation of the
corporation or after its last regular meeting, or if the corporation fails to hold
a written ballot for a period of 60 days after the date designated therefor,
then the superior court of the proper county may summarily order the
meeting to be held or the ballot to be conducted upon the application of a
member or the Attorney General, after notice to the corporation giving it an
opportunity to be heard.” (§ 7510, subd. (c).)
By its terms, this summary remedy is available in two different
circumstances: (1) if the corporation is required by subdivision (b) to hold a
regular meeting and “fails to hold the regular meeting” within the specified
time frames, or (2) “if the corporation fails to hold a written ballot” within 60
days of the designated date. (§ 7510, subd. (c).) If either of these conditions
is present, the court “may summarily order the meeting to be held or the
ballot to be conducted . . . .” (Ibid.)
We begin by considering whether the statutory phrase “fails to hold a
written ballot” includes failing to count ballots cast by members in an
election, and whether the court’s statutory authority to order “the ballot to be
conducted” includes ordering that completed ballots be counted. (Corp. Code,
§ 7510, subd. (c).) On this issue, the literal meaning of the statutory
language is arguably susceptible to differing interpretations. On the one
hand, to “hold” or “conduct” a ballot could conceivably be construed narrowly
to mean only allowing members to cast votes in an election—but not counting
17
the completed ballots. On the other hand, the statutory language could
reasonably be interpreted more broadly to include counting the ballots as an
inherent part of conducting any election. (See, e.g., Elec. Code, § 15702
[defining word “vote” as used in the California Constitution to include “all
action necessary to make a vote effective,” including “having the ballot
counted properly and included in the appropriate total of votes cast”].)
When the language of a statute is ambiguous and reasonably
susceptible to more than one meaning, we look to a variety of extrinsic aids to
resolve the ambiguity, including the ostensible objects to be achieved, the
evils to be remedied, legislative history, public policy, and the statutory
scheme of which the statute is a part. (DiCampli-Mintz v. County of Santa
Clara (2012) 55 Cal.4th 983, 992.) Our ultimate objective is to construe the
statute in a way that most closely comports with the apparent intent of the
Legislature, with a view to promoting rather than defeating the general
purpose of the statute and avoiding an interpretation that would lead to
absurd consequences. (People v. Rubalcava (2000) 23 Cal.4th 322, 328.)
Although the legislative history is silent on the issue,7 one evident
purpose of section 7510, subdivision (c) is to provide a quick judicial fix when
an existing board is unfairly retaining its own power by prolonging its
existence without holding regular member meetings or elections. The statute
seeks to prevent this by providing a summary remedy for members to compel
the corporation to hold regular meetings and elections when it fails to do so.
7 The Legislature enacted section 7510 in 1978 as part of Assembly Bill
No. 2180, a lengthy bill that added the Nonprofit Corporation Law (§ 5000 et
seq.), the Nonprofit Mutual Benefit Corporation Law (§ 7110 et seq.), and the
Nonprofit Religious Corporation Law (§ 9110 et seq.). (Stats. 1978, ch. 567,
§ 6 (1977-1978 Reg. Sess.).) We have examined the available legislative
history and found nothing that sheds light on the question before us.
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This purpose is best served by interpreting the statute to permit a court
to order completed ballots to be counted. Counting the ballots is a necessary
part of conducting any bona fide election. An essential purpose of the
required member meetings and ballots is to elect directors—and directors
cannot be elected unless the ballots are counted. (See § 7510, subd. (b)
[referring to regular member meetings “in which directors are to be elected”];
§ 7513, subd. (e) [“Directors may be elected by written ballot under this
section . . . .”].) Thus, an essential purpose of the law—to provide a quick and
efficient mechanism for members to prevent directors from perpetuating their
own power—favors construing the trial court’s statutory authority to order a
“ballot to be conducted” to include counting the completed ballots. (§ 7510,
subd. (c).)
Venetian’s contrary interpretation would provide a virtual roadmap for
easy evasion of the statute. For example, a board of directors could retain its
own power and circumvent the statutory remedy simply by holding an
election and allowing members to vote, but then locking the ballots away in a
file cabinet without counting them. “We will not adopt ‘[a] narrow or
restricted meaning’ of statutory language ‘if it would result in an evasion of
the evident purpose of [a statute], when a permissible, but broader, meaning
would prevent the evasion and carry out that purpose.’ ” (Copley Press, Inc.
v. Superior Court (2006) 39 Cal.4th 1272, 1291–1292 (Copley Press).)
A remedial statute should be liberally construed to effectuate its object
and purpose, and to suppress the mischief at which it is directed. (Leader v.
Cords (2010) 182 Cal.App.4th 1588, 1598.) A remedial statute is one which
provides a means for the enforcement of a right or the redress of a wrong.
(Id. at p. 1597.) Section 7510, subdivision (c) is a remedial statute because it
provides a judicial remedy for members of a mutual benefit corporation to
19
redress the corporation’s failure or refusal to conduct required meetings or
elections. As a remedial statute, it must be liberally construed to effectuate
its basic purpose and prevent evasion.
We therefore conclude that the trial court’s statutory authority to order
“the ballot to be conducted” includes counting the completed ballots. (§ 7510,
subd. (c).) “[F]rom the perspective of both statutory language and practical
consequences, [Venetian]’s narrow interpretation is not the more reasonable
one, and would not produce reasonable results that most closely comport with
the Legislature’s apparent intent.” (Copley Press, supra, 39 Cal.4th at
p. 1296.)
For similar reasons, we also conclude that the trial court’s order is
authorized by the language of the statute permitting it to “summarily order
the meeting to be held” if the corporation “fails to hold the regular meeting”
within 60 days after the date designated. (§ 7510, subd. (c).) Venetian
noticed an annual member meeting for January 20 and January 25, 2021.
The notice of meeting was accompanied by a meeting agenda, and the agenda
items included tabulating the ballots and determining election results. But
the January 20, 2021 meeting was adjourned without covering any of these
substantive agenda items, and the January 25, 2021 meeting was cancelled
and never rescheduled. As a result, Ghorbanzadeh remained in office even
though Venetian did not actually conduct a meeting to count the completed
ballots for his expired term.
Construing the statutory language liberally to achieve its objectives, we
conclude that Venetian “fail[ed] to hold the regular meeting” that was
scheduled for the purpose of counting the ballots and determining the
election results. (§ 7510, subd. (c).) Adjourning a meeting immediately after
calling it to order—without covering any of the substantive agenda items—is
20
the functional equivalent of not holding the meeting at all. For this reason,
the trial court had authority to “summarily order the meeting to be held” for
the purpose of completing the previously noticed agenda items, including
counting the ballots and determining the results.8 (§ 7510, subd. (c).)
IV
Finally, Venetian argues that the trial court’s order “disenfranchises”
members who might have cast a ballot at the January 20, 2021 meeting if it
had not been adjourned prematurely. This argument is forfeited because
Venetian did not make it in either of its briefs opposing Takiguchi’s petition
below. (Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d
412, 417.) Even if it were not forfeited, however, there is no evidence to
support it. Under Venetian’s instructions for the election, written ballots
could be returned only by mail to Ballot Box or in person at the clubhouse at
the time of the meeting. Venetian submitted no evidence that any member
was present at the clubhouse to deliver a written ballot and prevented from
8 In fact, the legislative scheme suggests to us that the Legislature
intended the statute to apply when a regular meeting is not conducted
because of the absence of a quorum. The statute specifically provides that
when the corporation fails to hold a regular meeting and the court summarily
orders the meeting to be held under section 7510, subdivision (c), the
corporation’s usual quorum requirements will not apply. Section 7510,
subdivision (d), provides in relevant part: “The votes represented, either in
person (or, if proxies are allowed, by proxy), at a meeting called or by written
ballot ordered pursuant to subdivision (c), and entitled to be cast on the
business to be transacted shall constitute a quorum, notwithstanding any
provision of the articles or bylaws or in this part to the contrary.” (Italics
added.) We see no reason why the Legislature would have decided to
override the corporation’s usual quorum requirement unless it contemplated
that regular meetings and elections might not be conducted because of the
absence of such a quorum. We need not decide this issue, however, because
we conclude that there was substantial evidence to support the trial court’s
finding of a quorum.
21
doing so at the time of the meeting. On the contrary, Ghorbanzadeh himself
stated that Takiguchi “was the only one at the Clubhouse” and “[t]he rest of
the interested members had joined in.” Takiguchi had already submitted a
written ballot by mail. Thus, the record does not support Venetian’s
argument that anyone would be disenfranchised by the trial court’s order
directing that the submitted ballots be counted.
DISPOSITION
The trial court’s order is affirmed. Takiguchi shall recover his costs on
appeal.
BUCHANAN, J.
I CONCUR:
DATO, J.
22
J. O’Rourke, dissenting.
I respectfully dissent. The trial court in this case issued an order under
Corporations Code section 7510 (section 7510) that defendant and appellant
Venetian Condominiums Maintenance Corporation (Venetian) hold an
annual meeting for the purpose of counting ballots collected by an election
inspector for its January 2021 annual membership meeting. In its ruling, the
court found a quorum was reached by the members present at a previously
noticed annual meeting that was adjourned for a claimed lack of quorum. If
the court ordered Venetian to hold a new annual meeting because it never
conducted its annual meeting in 2021, the order is erroneous because under
section 7510, Venetian’s quorum requirement is irrelevant. At a meeting
ordered under that statute, any voting members who appear constitute a
quorum and those members are entitled to elect directors at that meeting. If
the court’s order is that Venetian must reconvene the annual meeting that
took place in January 2021 so as to count the ballots collected at that time,
the court acted without authority under section 7510 because the summary
remedy under that statute comes into play only when a meeting has not
taken place at all. When a meeting has occurred and a faulty election has
been conducted, the preconditions to section 7510 are absent. In any case,
the court erred. The majority—stretching the statute beyond its bounds to
give homeowners a truncated remedy for perceived abuses of power by
homeowners associations—have compounded the court’s error. Plaintiff and
respondent Guy Takiguchi’s remedy was not via summary relief under
section 7510, but to seek a mandatory injunction under Code of Civil
Procedure section 526 in a lawsuit contesting the election’s validity, affording
the parties the protections and process associated with such a proceeding.
The majority recognizes that section 7510, subdivision (c) sets forth a
summary judicial remedy. Section 7510, subdivision (c) provides: “If a
corporation with members is required by subdivision (b) to hold a regular
meeting and fails to hold the regular meeting for a period of 60 days after the
date designated therefor or, if no date has been designated, for a period of 15
months after the formation of the corporation or after its last regular
meeting, or if the corporation fails to hold a written ballot for a period of 60
days after the date designated therefor, then the superior court of the proper
county may summarily order the meeting to be held or the ballot to be
conducted upon the application of a member or the Attorney General, after
notice to the corporation giving it an opportunity to be heard.” (§ 7510, subd.
(c).)
The statute allows a court to grant relief in two circumstances: when a
corporation required by subdivision (b) to hold a regular meeting “fails to hold
the regular meeting” within specified time frames, “or if the corporation fails
to hold a written ballot” within a specified period of time. (§ 7510, subd. (c);
see People v. Perez (2021) 67 Cal.App.5th 1008, 1015 [use of word “if” signifies
a statutory condition]; Mel v. Franchise Tax Board (1981) 119 Cal.App.3d
898, 908, fn. 10; Hassan v. Mercy American River Hospital (2003) 31 Cal.4th
709, 715 [courts must give ordinary and usual meaning to words used in
2
statutes].)1 Because section 7510 sets out a summary proceeding for limited
injunctive relief, its provisions must be strictly construed. (Accord,
Dr. Leevil, LLC v. Westlake HealthCare Center (2018) 6 Cal.5th 474, 480
[holding with respect to unlawful detainer statutes]; see also Bawa v.
Terhune (2019) 33 Cal.App.5th Supp. 1, 5 [same].) “ ‘The statutory
requirements in such proceedings “ ‘must be followed strictly’ ” ’ ” and “ ‘relief
not statutorily authorized may not be given . . . .’ ” (Dr. Leevil, at p. 480;
Bawa, at p. 5.) Thus, it is only when either condition is met does the court
have authority to “summarily order the meeting to be held or the ballot to be
conducted” upon a proper application and notice to the corporation. When, as
in this case, the meaning is clear, “ ‘there is no need for construction and
courts should not indulge in it.’ ” (Mutual Life Ins. Co. v. City of Los Angeles
(1990) 50 Cal.3d 402, 413.)
No reading of the court’s order saves it under a proper interpretation of
section 7510. As stated, the court ordered Venetian “to hold the annual
meeting for the purpose of counting the ballots in custody of [Venetian’s
election inspector] as of January 20, 2021.” If the court ordered Venetian to
1 Venetian’s meeting was conducted in part via electronic video screen
communication. Subdivision (f) of section 7510 permits meetings to be held
in such a manner under specified conditions, including that the “corporation
implements reasonable measures . . . to provide members and proxyholders,
if proxies are allowed, a reasonable opportunity to participate in the meeting
and to vote on matters submitted to the members, including an opportunity
to read or hear the proceedings of the meeting substantially concurrently
with those proceedings . . . .” Effective January 1, 2022, the Legislature
amended subdivision (f) of the statute to, among other things, add another
prerequisite for conducting a membership meeting by electronic
transmission, namely that the corporation implement reasonable measures
“to verify that each person participating remotely is a member or
proxyholder, if proxies are allowed.” (§ 7510, subd. (f), as amended by Stats.
2022, ch. 617, § 61.) Any order that Venetian hold a regular membership
meeting would require it to engage in such reasonable verification methods.
3
conduct a new annual meeting, the order cannot stand properly viewing
subdivision (c) of section 7510 in context with subdivision (d) of the statute.
(See Orange County Water Dist. v. Alcoa Global Fasteners, Inc. (2017) 12
Cal.App.5th 252, 300 [statutory language must be examined in the context of
the statutory framework as a whole in order to determine its scope and
purpose and to harmonize the various parts of the enactment].)
Subdivision (d) comes into play when the court orders a meeting or a
written ballot take place “pursuant to subdivision (c) . . . .” Subdivision (d)
provides: “The votes represented, either in person (or, if proxies are allowed,
by proxy), at a meeting called or by written ballot ordered pursuant to
subdivision (c), and entitled to be cast on the business to be transacted shall
constitute a quorum, notwithstanding any provision of the articles or bylaws
or in this part to the contrary. The court may issue such orders as may be
appropriate including, without limitation, orders designating the time and
place of the meeting, the record date for determination of members entitled to
vote, and the form of notice of the meeting.” (§ 7510, subd. (d), italics added.)
When ordering a new annual meeting to be held under subdivision (c),
the quorum is specified in subdivision (d). It is not for the trial court to
determine whether a quorum is met under association rules, as the court did
here. The statute specifies that for any court-ordered meeting or ballot, a
quorum is reached by the votes represented and entitled to be cast
notwithstanding the corporation’s bylaws, articles, or other parts of the
Corporations Code pertaining to nonprofit mutual benefit corporations. To
interpret section 7510 as permitting a trial court in a section 7510,
subdivision (c) summary proceeding to judicially determine whether a
quorum was reached under an association’s bylaws or rules renders
subdivision (d) “ ‘meaningless or inoperative’ ” (Hassan v. Mercy American
4
River Hospital, supra, 31 Cal.4th at pp. 715–716; see also Citizens for a
Responsible Caltrans Decision v. Department of Transportation (2020) 46
Cal.App.5th 1103, 1119) contrary to settled principles of statutory
construction.
The “without limitation” language in the remainder of section 7510,
subdivision (d) does not authorize the relief given by the lower court, as
Takiguchi maintains. In Johnson v. Tago, Inc. (1986) 188 Cal.App.3d 507,
the Court of Appeal addressed nearly identical language in section 600 of the
General Corporation Law relating to shareholder meetings.2 The court
agreed that the sentence at issue “is ‘concerned with the mechanical aspects
of holding the annual shareholders meeting.’ ” (Johnson v. Tago, Inc., at
p. 515.) “The judicial power to ‘issue such orders as may be appropriate’ is
reasonably construed as referring to caretaking details and procedure
involved in such a meeting. It cannot be construed as a license for courts to
trespass upon substantive matters confided to the directors and shareholders
of a corporation.” (Ibid.)
If the court’s order was that Venetian must count ballots collected at
the duly noticed and conducted January 2021 annual meeting (a quorum
having been met), it is still not authorized by section 7510. When a meeting
has taken place or a written ballot held, the preconditions to section 7510
summary relief have not occurred.
2 Section 600 of the General Corporation Law vests courts with the
authority to summarily order members to hold a meeting. It “grants the trial
court power to order an annual meeting if one has not been scheduled in the
ordinary course of events.” (Johnson v. Tago, Inc., supra, 188 Cal.App.3d at
p. 515, italics added; see also Legis. Com. com., Deering’s Ann. Corp. Code,
§ 600 (2009 ed.) p. 13 [“subdivision (c) [of section 600] authorizes the superior
court upon application of a shareholder to summarily order the meeting to be
held” so as “[t]o provide prompt relief in the event an annual meeting is not
held”].)
5
The majority characterizes section 7510 as remedial (Maj. opn., ante,
at p. 20) so as to engage in broad judicial construction and conclude the
statutory authority of a court to order “the ballot to be conducted” includes
counting previously collected ballots. (Maj. opn., ante, at p. 20.) Section 7510
is no more remedial than any injunction. The relevant question is whether
the statute gives the court authority to proceed as it did, and even with a
remedial statute, “liberal construction can only go so far.” (Soria v. Soria
(2010) 185 Cal.App.4th 780, 789, distinguishing Leader v. Cords (2010) 182
Cal.App.4th 1588.) “The rule that a remedial statute is construed broadly
does not permit a court to ignore the statute’s plain language . . . .” (Even
Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015)
61 Cal.4th 830, 842; see Quarry v. Doe I (2012) 53 Cal.4th 945, 988 [citing
cases for proposition that “rule of liberal construction of remedial statutes
‘does not mean that a court may read into the statute that which the
Legislature has excluded, or read out that which it has included’ ”]; Meyer v.
Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 645 [“A mandate to construe a
statute liberally in light of its underlying remedial purpose does not mean
that courts can impose on the statute a construction not reasonably
supported by the statutory language”].) Courts do not have the authority to
rewrite legislation “to ‘ “conform to [a party’s] view of what [the law] should
be.” ’ [Citations.] . . . “ ‘[U]nder the guise of construction, a court should not
rewrite the law, add to it what has been omitted, omit from it what has been
inserted, give it an effect beyond that gathered from the plain and direct
import of the terms used, or read into it an exception, qualification, or
modification that will nullify a clear provision or materially affect its
operation so as to make it conform to a presumed intention not expressed or
6
otherwise apparent in the law.’ ” ’ ” (Soto v. Motel 6 Operating, L.P. (2016) 4
Cal.App.5th 385, 393.)
Under its plain terms, section 7510, subdivision (c) authorizes the court
only to summarily order a “ballot to be conducted” when one has not taken
place previously. That the Legislature did not intend in section 7510 to
permit a court to summarily order the counting of collected ballots for a
previously held meeting is evidenced by other provisions of the chapter in
which it refers to ballots being “counted.” Section 7513, which addresses
actions of a nonprofit mutual benefit corporation without a meeting, states in
part: “Ballots shall be solicited in a manner consistent with the requirements
of subdivision (b) of Section 7511 and Section 7514. All such solicitations
shall indicate the number of responses needed to meet the quorum
requirement and, with respect to ballots other than for the election of
directors, shall state the percentage of approvals necessary to pass the
measure submitted. The solicitation must specify the time by which the
ballot must be received in order to be counted.” (§ 7513, subd. (c), italics
added.) The Legislature knows how to reference “count[ing]” ballots, but
deliberately did not use that term in section 7510, which only permits the
court to summarily order a ballot be “conducted” when one has not taken
place at all. (See Merriam-Webster Unabridged Dict. Online (2023),
[as of
April 11, 2023] [defining “conduct” as the “act, manner, or process of carrying
out (as a task) . . . .”].) “ ‘When the Legislature “has employed a term or
phrase in one place and excluded it in another, it should not be implied where
excluded.” ’ ” (People v. Buycks (2018) 5 Cal.5th 857, 880; see also Hicks v.
E.T. Legg & Associates (2001) 89 Cal.App.4th 496, 507.)
7
In short, the trial court’s power under section 7510 does not encompass
declaring quorums or ordering ballots collected in previously held meetings to
be counted. The statute does not permit the remedy imposed by the court.
Because the trial court lacked authority to grant relief under section 7510, I
would reverse the order.
O’ROURKE, Acting P.J.
8