Q. Say an owner spoke to the president and vice president of the board and disclosed his or her health condition. And later on, the president and vice president lost re-election to the board and found out that the owner did not vote for them. Then the president went on a rant and told others of that owner’s condition, including new board members. Is that considered a breach of confidentiality fiduciary duty?
—Curious Unit Owner
A. “Interesting question,” says attorney Donna Zanetti of the firm Leach Johnson Song & Gruchow, which has offices in Las Vegas and Reno. “In Nevada, such conduct may be both a breach of fiduciary duty and a crime. NRS 116.3103 provides that directors are fiduciaries who must act on an informed basis, in good faith, and in the best interests of the association. In considering whether a board member has fulfilled his fiduciary duty, the state may consider whether the board member has acted for reasons of self-interest, gain, prejudice, or revenge. (See NAC 116.405(2)). In this matter, the motivation seems to be revenge.
“NRS 116.31175(4) provides that records of the association related to another unit’s owner are confidential. Health information is not normally a ‘record’ which the association has or keeps with regard to a homeowner, unless the owner has made a request for a reasonable accommodation or modification under the Fair Housing Act. But, if such information is in the association’s files, it is confidential. Board members may discuss otherwise confidential information between themselves in the context of carrying out their duties, and such a privilege would extend to former board members orienting new board members, but not to persons outside the board. Please note also that this confidential information is flowing in one direction: from former board members to current board members. Current board members cannot share confidential information they obtain in the course of performing their duties with former board members.
“However, it is clear from the question that the former board member revealed this information not to bring new board members ‘up to speed’ on pending issues, but because he was angry about losing re-election and blamed this homeowner for the outcome. NRS 116 offers two statutes which may be particularly applicable in this situation. First, NRS 116.311183 prohibits a member of the board from retaliating against another owner for certain actions taken in good faith. Unfortunately, rather than being an open ended prohibition on retaliation, the statute lists 3 particular circumstances: (1) complaining about an alleged violation of the law or governing documents; (2) recommending replacement of an attorney, manager or vendor; or (3) requesting to review the books and records of the association. None of these circumstances is apparent in the facts provided. Second, NRS 116.31184 prohibits a board member from willfully and without legal authority threatening, harassing or otherwise engaging in a course of conduct against another unit owner which causes harm or serious emotional distress (or the reasonable apprehension thereof) or creates a hostile environment. Revealing private information about a person’s health condition for the reasons described in this question could certainly create a hostile environment and serious emotional distress. Any person who violates this statute is guilty of a misdemeanor.”