Tract No. 7260 Assn., Inc. v. Parker

Substantial evidence supported the trial court’s finding that a member of a nonprofit mutual benefit corporation sought the corporate records for an improper purpose, and since he requested the records as a solo member of the corporation, the corporation was not required to seek a court order barring him from accessing them; rather the burden of seeking court relief lay on him.  Under Corp. Code 8330(b) and 8333, a member of a nonprofit mutual benefit corporation has the right to inspect the corporation’s membership list and financial records.  However, the member may do so only for purposes related to his interest as a member of the corporation.  The corporation may refuse access to its records on the ground that the member seeks them for an improper purpose unrelated to his interest as a member of the corporation.   If a single member demands access to the corporate records on his own, he bears the burden of seeking a court order compelling production if the corporation has refused his request.  However, if 5% or more of the members jointly request inspection, the burden is on the corporation to seek a court order barring inspection, and the corporation must file that suit within 10 business days of the request.  Here, substantial evidence supported the trial court’s finding that Parker sought the corporate records for an improper purpose.  Since he requested the records as a solo member of the corporation, the corporation was not required to seek a court order barring him from accessing them; rather the burden of seeking court relief lay on Parker.

California Court of Appeal, Second District, Division 8 (Sortino, J., sitting by assignment); March 24, 2017; 2017 WL 1101407

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