With this level of quality advice, it’s no wonder the L.A. Times‘ readership is declining. The Times got it wrong recently when their HOA advice column responded to a homeowner who had been denied a request to review the association’s legal bills. In their question the homeowner stated that they had asked to review the association’s legal bills and received a response from the association’s attorney denying the request on the basis that the legal bills were subject to the attorney client privilege, and that a member’s right to review association documents does not extend to documents subject to the privilege. The association’s counsel even provided a cite to Smith vs. Laguna Sur Villas Community Assn. (2000) 79 Cal.App.4th 641. In that case, the court discussed how, as a corporation, it is the association who is the client not the individual members. The Court went on to deny homeowners their request to review the association’s attorney bills in that matter.
The Times correctly notes that California Civil Code Section 1365.2 states, “Except as provided by the attorney-client privilege, the association may not withhold or redact information concerning the compensation paid to employees, vendors or contractors.” However, the Times gets it terribly wrong in claiming that “the association may not withhold or redact information concerning the compensation paid to employees, vendors or contractors, including attorneys, who are just another vendor hired by the association.”
Attorneys are not “just another vendor.” Communications with a painter, landscaper, maintenance company or manager are not subject to a privilege that makes them confidential. Communications with attorneys are. This is an important distinction. Civil Code Section 1365.2 specifically excludes documents which are subject to the attorney client privilege from a member’s right of review
The Times relies on Civil Code Section 1365.2(d)(1)(E)(iv) to support their answer that homeowners are entitled to review attorney bills. However, that section only states that, for the purposes of that section, contracts for legal services are not privileged and cannot be withheld from members on the grounds that they are subject to the attorney client privilege. However, a contract for legal services is not the same as a billing statement, which is what the homeowner wanted to review.
Contracts for legal services are simply retainer agreements. They describe the services the attorney will perform and the rate to be charged for such services. Attorney billing statements contain detailed descriptions of the work performed by the attorney. If they were revealed, such statements could be used against the association in any pending litigation or other matters. As the Laguna Sur Villas Community Assn. Court points out, unlike directors, residents owe no fiduciary duties to one another and may be willing to waive or breach the attorney-client privilege for reasons unrelated to the best interests of the association.
The association’s attorney was correct in responding to the homeowner’s request to review the billing statement. The Times just got it wrong.
