Parth

INTRODUCTION

The Palm Springs Villas II Homeowners Association, Inc. (Association)

appeals from a judgment entered in favor of Erna Parth, in connection with actions she

took while simultaneously serving as president of the Association and on its Board of

Directors (Board). The court granted Parth's motion for summary judgment as to the

Association's claim for breach of fiduciary duty on the basis of the business judgment

rule and an exculpatory provision contained in the Association's Declaration of

Covenants, Conditions, and Restrictions (CC&Rs). The court had previously sustained

Parth's demurrer to the Association's claim for breach of governing documents without

leave to amend, finding that the Association failed to allege a cognizable breach.

On appeal, the Association argues that the trial court erred in its application of the

business judgment rule and that there remain material issues of fact in dispute regarding

whether Parth exercised reasonable diligence. We agree that the record discloses triable

issues of fact that should not have been resolved on summary judgment. We therefore

reverse the judgment in favor of Parth. The…