Arbitration can swallow the records-inspection fee protection, at a cost of $271,375
Arbitration can swallow the records-inspection fee protection, at a cost of $271,375
2026-09-09 · California · Courts
Read this one with its limits attached: the decision below is unpublished and, under California Rules of Court, rule 8.1115(a), may not be cited or relied on in a California court. It is news about how these disputes are resolving, not authority.
Key v. Hidden Hills Community Assn., No. B339444, was filed February 27, 2026 and marked NOT TO BE PUBLISHED. The California Supreme Court denied review on May 27, 2026 (S296107). Presiding Justice Stratton wrote for the Second District, Division Eight.1
The protection at issue
California's records inspection statute contains a deliberate asymmetry. Under Civil Code section 5235(c), a prevailing association ordinarily cannot recover costs from a member unless the court finds the action was frivolous, unreasonable or without foundation. Civil Code section 4955(b) does the same for open meeting claims.
The point of that design is to let an ordinary member enforce inspection rights without risking ruin.
What happened
Sarah Key, an owner in Hidden Hills, petitioned for a writ of mandate against her association. Among other claims she alleged that after her records demands the association produced 202 pages that “do not contain a single document relating to the development project,” and that it refused to let members speak at an architectural committee meeting. She also raised safety concerns about two 1940s-era high-pressure gas transmission pipelines running under the community.
The parties stipulated to arbitrate before JAMS.
The arbitrator declared the association the prevailing party on all six claims — and, on the records and open meeting claims, adopted the association's reasoning that they “satisfy the definition of 'without foundation' and… the definition of 'unreasonable' as well.”
That finding unlocked the fee shift.
The number
The arbitration award was $254,815.53 — $206,351.25 in attorney's fees and $48,464.28 in costs — plus $16,500 in post-award fees and $60 in costs, with 7 percent prejudgment interest. Roughly $271,375 against a member who sought records.
Why the Court of Appeal could not fix it
Key argued the arbitrator exceeded his authority by disregarding the Davis-Stirling Act. The court held it could not reach the question: “Courts may not review the merits of the controversy… or the validity of the arbitrator's reasoning,” citing Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1.
It also upheld the allocation of the arbitrator's own fees as costs, under the JAMS rules and the association's bylaws.
Disposition: judgment affirmed; the association awarded costs on appeal.
What it means for boards, managers and members
The statutory fee shield is only as durable as the forum. This is the transferable lesson, and it is not confined to these facts. Sections 5235(c) and 4955(b) condition a fee award on a finding — frivolous, unreasonable, without foundation. In court, that finding is made by a judge and is reviewable on appeal. In binding arbitration it is made by an arbitrator and, under Moncharsh, is not reviewable for legal error.
The protection has not been repealed. It has been relocated to a forum where getting it wrong has no remedy.
The stipulation is the decision point. The parties here stipulated to arbitrate. That is a choice, usually made early, often for reasons of cost and speed that have nothing to do with fee exposure. A member weighing a records claim and a board proposing arbitration are making a decision about reviewability at the moment they sign, and neither may realise it.
How associations use this is the open question. There is a legitimate reading of this case as good news for boards: a member pursuing meritless records demands can be made to pay. There is also a reading that gives a board pause. An association that routes inspection disputes into arbitration to escape a statutory protection the Legislature wrote for its members is doing something the statute was designed to prevent, and it is doing it to people who will still be its members afterwards.
That is a governance judgment rather than a legal one, and it belongs to the board.
Members should understand the exposure before demanding. The section 5235(c) protection is real in court. A member whose governing documents contain a binding arbitration provision, or who is asked to stipulate to arbitration, should get advice about what that does to the fee analysis before agreeing.
The related point about a claim that was not pleaded
The court noted Key's argument under Civil Code section 5145 was misplaced because no election claim appeared in her notice of claims.
That is a procedural detail with a wider lesson: in arbitration, the notice of claims defines the arbitrator's authority. A theory not raised there may be unavailable later, and the ordinary latitude to amend that exists in litigation may not.
What the Legislature did and did not do this year
Records access was squarely on the agenda in 2026, and nothing passed.
AB 1184, the Homeowner Association Accountability and Transparency Act of 2026, would have made recordings of open board meetings inspectable association records under a new Civil Code section 4941, required minutes to state director attendance and individual votes on operating rules, required executive session litigation minutes to name the case and court, and required the annual budget report to disclose active litigation against the association.
It passed the Assembly 69–0 and the Senate 38–0, and died on August 31 without an Assembly concurrence vote. It cannot return: the two-year session has adjourned.
Two records-adjacent measures did survive to the Governor's desk. AB 739 would make managing agent fee statements an inspectable record under section 5200. SB 1238 would do the same and add manager fee statements alongside a new statutory standard of care. Neither is law; the Governor must act by September 30, 2026.
None of them addresses the arbitration problem this case illustrates.
What to watch next
Whether any 2027 bill takes up the forum question — that is, whether the section 5235(c) and 4955(b) protections should survive an arbitration agreement. Nothing has been introduced, and nothing can be before the 2027–2028 session convenes in December 2026.
In the meantime, boards and members alike should treat a binding arbitration clause in the governing documents as a provision that affects records rights, because on this record it does.
Related California HOA Topics
- Key v. Hidden Hills Community Assn., No. B339444 — slip opinion, Court of Appeal, Second Appellate District, Division Eight (marked NOT TO BE PUBLISHED; not citable under rule 8.1115) ↩
- California Supreme Court, results of the petition conference of May 27, 2026 (S296107, review denied) ↩
- Civil Code § 5235, California Legislative Information — records inspection enforcement and the limit on awarding costs to a prevailing association ↩
- AB 1184, California Legislature — complete bill history (last action August 27, 2026, concurrence pending; no vote before the deadline) ↩
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