Ok, if button is inside update panel i'm assuming your page is not posting back? if so, then why don't you resolve this using javascript/jQuery on client-side?
<asp:button id="btnId" runat="server" text="Click ME" onclick="btnId_OnClick" onclientclick="HideValidationSummary( $('#ValidationSummary1') );" xmlns:asp="#unknown"></asp:button>
and your jQuery function:
function HideValidationSummary( summaryControl )
{
$( summaryControl ).hide( );
}
or if you want to use javascript not jQuery
<asp:button id="btnId" runat="server" text="Click ME" onclick="btnId_OnClick" onclientclick="HideValidationSummary( 'ValidationSummary1' );" xmlns:asp="#unknown"></asp:button>
and your javascript function:
function HideValidationSummary( summaryControl )
{
document.getElementById( summaryControl ).style.display = 'none';
}
Good luck,
Morgs