By Miles Buckingham, Shareholder, Nemirow Perez, P.C.
Imagine the worst thing that a Board Member ever wrote or said out loud.
Now imagine that same thing read out loud to a jury. Seem uncomfortable? Remarkably, that is actually preferable to having the Judge tell the jury how communications of the Board were deleted, lost, or destroyed. When documents which should have been preserved were not, the Judge may tell the jury that they should assume that the lost email would have been very, very damaging to the Association. Saying things in writing that are not well thought-out can be very harmful. Deleting evidence can be worse. It is better to avoid the whole situation by being smart, starting now.
Welcome to the world of preserving and producing documents. The law requires the preservation and protection of a broad scope of communications, writings, documents, and materials against deletion, loss, or destruction. That duty exists even outside of actual or threatened litigation. In the face of a likely or threatened claim, the duty to preserve materials grows.
Standard Document Requests
Making association documents open and available for review and inspection facilitates transparency and good governance. Even so, responding to, and meeting the obligation of demands for records can be expensive, onerous, and fraught with potential exposure and liability.
When it comes to record requests for documents reflecting actions taken by the Board without a meeting, virtually everything is fair game. A very ordinary exchange of emails about renewing a contract or a contentious design application may have to be turned over, completely. Now, in lightning-fast emails and texts between Board members, someone inevitably interjects a comment or a joke into the thread. Even if that is embarrassing, in bad taste, all of it- the good, bad, and ugly parts of the exchange are available for an owner to demand and review.
In Colorado, owners have the right and ability to demand quick access to a wide-ranging set of association “records.” Under 38-33.3-317, C.R.S. broad categories of materials can be requested by owners and must be made available in as little as ten (10) days. This law is to be read in conjunction with the association’s document inspection policy, which can promise more information in even less time. See 38-33.3-209.5, C.R.S. A demand for documents need not be made only on the form created by the association for facilitating a request. Instead, a demand for records may be buried within a dozen-page letter of complaint, creating opportunities for claims of illegally withheld information and materials. Everything from owners needs to be read.
The process of obtaining emails or texts for production can be expensive and time consuming. Board members who use emails or text systems which are not dedicated to HOA business find themselves having to surrender access to their personal email accounts, or explaining to employers that their email system will have to be accessed just because the board member could not be bothered to check two different email accounts. In the financial, or medical industries, these intrusions could mean a person’s job.
Having a dedicated email for HOA matters can be invaluable. Dedicated email accounts where the manager has password access or is automatically copied on all emails are even better. A segregated email account prevents your Board from the embarrassment of having their personal matters reviewed for a document demand. And while applications like Boardroom check a lot of boxes, the system is not easily accessible to counsel in case of a suit. There is also the issue of who owns, and is preserving, the data being created by that application. If it disappears tomorrow, so too do the documents the Association is obliged to preserve.
Being able to quickly access, search, and produce records should be a primary goal of any system used by Boards to communicate or share HOA matters. If each member of your Board is not using a dedicated email address which can be accessed, searched, and archived by management (or two members of the Board of Directors) at any time, you have a problem on your hands even though you may not know it for a few years.
Litigation-Based Document Requests
In this era of technology, electronic documents have become the same as hardcopy documents. As such, they must be preserved properly. In lawsuits, a much broader scope of materials can be demanded from managers and the Board. If materials have not been preserved, there is a very real risk of very real consequences from the Court. From the moment that the Association, or any member of the Board or Management have a credible and reasonable belief or expectation that a suit may be filed, any archiving or deletion of communications needs to stop. Not just emails, but all text messages having anything to do with anything even touching an aspect of the suit need to be saved. All emails need to be preserved too. This can take disabling the auto-archiving default processes of an email program used by Board members. Taking affirmative steps to preserve everything in the face of a claim is not enough: Being able to prove that these steps were ordered, and actually taken, is important as well.
What to Do
If your Board of Directors tolerates Board members using personal emails for HOA business, stop that right now. Collect and save the HOA emails the Board members have to date and preserve them all in addition to those communications on a dedicated channel going forward. Create a document retention plan for both non-litigation scenarios, and possible litigation scenarios. Educate your Board members (and managers) as to the level of intrusion which is possible just using the Common Interest Ownership Act. Get them to appreciate that virtually everything that is done as a Board member is open, and available for review. Talk to a lawyer to get help preparing to meet these challenges.