In 2016, the Court of Appeal released its opinion in Palm Springs Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal. App. 4th 268, causing much discussion in the common interest development industry. The Court of Appeal reversed the trial court’s grant of summary judgment in favor of defendant Erna Parth, finding that there was a material issue of fact whether Mrs. Parth “acted in an informed basis and with reasonable diligence” and was therefore protected from liability by the “Business Judgment Rule.” The Court of Appeal reviewed the alleged actions taken by Mrs. Parth, which included authorizing contracts, hiring an unlicensed contractor, signing promissory notes, and terminating the management company, all without board approval. She also signed a contract with a security company even though the Board had voted to obtain bids from other security companies. The Court of Appeal remanded the case to the trial court for further proceedings.    Read the article………………………………….