2009 California Civil Code - Section 1365.7-1365.9 :: Article 3. Insurance

CIVIL CODE
SECTION 1365.7-1365.9

1365.7.  (a) A volunteer officer or volunteer director of an
association, as defined in subdivision (a) of Section 1351, which
manages a common interest development that is exclusively
residential, shall not be personally liable in excess of the coverage
of insurance specified in paragraph (4) to any person who suffers
injury, including, but not limited to, bodily injury, emotional
distress, wrongful death, or property damage or loss as a result of
the tortious act or omission of the volunteer officer or volunteer
director if all of the following criteria are met:
   (1) The act or omission was performed within the scope of the
officer's or director's association duties.
   (2) The act or omission was performed in good faith.
   (3) The act or omission was not willful, wanton, or grossly
negligent.
   (4) The association maintained and had in effect at the time the
act or omission occurred and at the time a claim is made one or more
policies of insurance which shall include coverage for (A) general
liability of the association and (B) individual liability of officers
and directors of the association for negligent acts or omissions in
that capacity; provided, that both types of coverage are in the
following minimum amount:
   (A) At least five hundred thousand dollars ($500,000) if the
common interest development consists of 100 or fewer separate
interests.
   (B) At least one million dollars ($1,000,000) if the common
interest development consists of more than 100 separate interests.
   (b) The payment of actual expenses incurred by a director or
officer in the execution of the duties of that position does not
affect the director's or officer's status as a volunteer within the
meaning of this section.
   (c) An officer or director who at the time of the act or omission
was a declarant, as defined in subdivision (g) of Section 1351, or
who received either direct or indirect compensation as an employee
from the declarant, or from a financial institution that purchased a
separate interest, as defined in subdivision (l) of Section 1351, at
a judicial or nonjudicial foreclosure of a mortgage or deed of trust
on real property, is not a volunteer for the purposes of this
section.
   (d) Nothing in this section shall be construed to limit the
liability of the association for its negligent act or omission or for
any negligent act or omission of an officer or director of the
association.
   (e) This section shall only apply to a volunteer officer or
director who is a tenant of a separate interest in the common
interest development or is an owner of no more than two separate
interests in the common interest development.
   (f) (1) For purposes of paragraph (1) of subdivision (a), the
scope of the officer's or director's association duties shall
include, but shall not be limited to, both of the following
decisions:
   (A) Whether to conduct an investigation of the common interest
development for latent deficiencies prior to the expiration of the
applicable statute of limitations.
   (B) Whether to commence a civil action against the builder for
defects in design or construction.
   (2) It is the intent of the Legislature that this section clarify
the scope of association duties to which the protections against
personal liability in this section apply. It is not the intent of the
Legislature that these clarifications be construed to expand, or
limit, the fiduciary duties owed by the directors or officers.

1365.9.  (a) It is the intent of the Legislature to offer civil
liability protection to owners of the separate interests in a common
interest development that have common areas owned in
tenancy-in-common if the association carries a certain level of
prescribed insurance that covers a cause of action in tort.
   (b) Any cause of action in tort against any owner of a separate
interest arising solely by reason of an ownership interest as a
tenant in common in the common area of a common interest development
shall be brought only against the association and not against the
individual owners of the separate interests, as defined in
subdivision (l) of Section 1351, if both of the insurance
requirements in paragraphs (1) and (2) are met:
   (1) The association maintained and has in effect for this cause of
action, one or more policies of insurance which include coverage for
general liability of the association.
   (2) The coverage described in paragraph (1) is in the following
minimum amounts:
   (A) At least two million dollars ($2,000,000) if the common
interest development consists of 100 or fewer separate interests.
   (B) At least three million dollars ($3,000,000) if the common
interest development consists of more than 100 separate interests.


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