As posted yesterday, I’m here at the College of Community Associaton Lawyers’ Law Conference; while I’m at the various sessions today, I intend to share some of the highlights.
First up this morning is the first session of the two-morning case law update; there are over 50 cases to be covered. I don’t intend to summarize all of them, but will note some of the highlights. If there are any particularly interesting cases, I’ll follow up with summaries of some of them either here, or on this blog’s parent cite, Utahcondolaw.com.
Starting out with some good news; the speakers are reporting that the “Business Judgment Rule” has been repeatedly reaffirmed. The Business Judgment Rule, simply stated, is that the good faith business decisions of a board, if within the authority granted to the board, will not be unduly scrutinized by the courts. The predictions are for more Fair Housing litigation, more Fair Debt Collection Practices Act and more construction defect cases. I think they’re predicting that one correctly.
In an Ohio case, Gall v. The Mariemount Windsor Square Condominium Association, the court refused an association’s attempt to “correct” an apparently erroneous par value schedule. The lawsuit, which was fought over a change of less than 1%, was brought by an individual who came in third, in an election for two directors.
A California case, Mission Shores Association v. Pheil, involved a California statute which allows a court to reduce the requisite vote for a declaration amendment, wherein 36% of the owners didn’t even participate. A similar result was reached in Fourth La Costa Condominium Owners Association v. Seith. Fourth La Costa also dealt with the problem of lender approval. The court affirmed the association’s mailing, by certified mail, of letters to lenders, in order to get their “consent”.
In the collection realm, a Rhode Island case, Mullowney v. Masopust, rejected a marina condominium’s effort to reallocate assessments. Owners in this condominium had a unit that consisted of a locker; ownership of the locker allowed the use of a boat slip. Some owners (presumably also owners of smaller boats), wanted to change the assessments, and base them upon boat size. The court found the efforts to violate the Rhode Island Condominium Act.
In Association Two Condominium Association, Inc. v. Kliger, a Florida Appelate Court rebuked a law firm for refusing to accept a partial payment on assessments. The case serves as a reminder that courts will not be sympathetic to over-reaching associations and their counsel.
A Wyoming case, Dwan v. Indian Springs Ranch Homeowners Association, Inc., involved architectural restrictions; an association which had approved a non-compliant roof pitch later rejected the same pitch on a garage, proposed for the same lot. Based upon the approval to the house, the court reversed the denial on the garage.
Gleneagle Civic Association v. Hardin, another architectural control case, involved an email exchange regarding the proposed construction of a fence. The owners requesting the fence corresponded by email; the ACC chairs responded by email; ultimately the requesting owners attempted to argue that the email rejections of the proposed fence were valid. The Colorado Appelate Court, reviewing all of the circumstances involving email correspondence, affirmed the validity of the email as a “written denial”.
A Washington case, Lake v. Woodcreek Homeowners Association, dealt with an owners’ conversion of airspace above his garage. The court rejected the conversion of the common area to individual space, without the unanimous consent of the owners, as it altered the owners’ percentage interests in the common areas.
In McMahon v. Pleasant Valley West Association, an owner sued the owner of attacking pit bulls, and attempted to sue the association for failure to exercise reasonable control in failing to control the dogs, due to the known dangerous propensities of pit bulls. The court held that the association had no such duty.