May 2010
In This Issue:
Association Not Liable for Injury Sustained by Homeowner Who Slipped on Icy Walkway
Association Can Skip Dispute Resolution to Enforce Architectural Guidelines
Architectural Guidelines Still Valid Despite Absence of Written Records
Association Cannot Encumber Condominium without Approval of Unit Owners
No Pet Policy Does Not Violate State or Federal Fair Housing Acts
Declaration Does Not Prohibit Subdivision of Lots
Association Must Pay Owner Damages for Failure to Maintain Common Areas
Fair Housing Act Claims Against Association Dismissed
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Association Not Liable for Injury Sustained by Homeowner Who Slipped on Icy Walkway

Beck v. Holly Tree Homeowners Association, No. 08-1755, U. S. Dist. Ct., E. Dist. Pa., March 1, 2010

Risks and Liabilities/State and Local Legislation: A U.S. District Court in Pennsylvania granted summary judgment to a homeowners association, ruling that the association was protected from liability for an injury sustained by a homeowner who slipped on an icy walkway under Pennsylvania's doctrine of "hills and ridges."

Marilyn Beck owns a townhouse in Holly Tree Estates in Chester Springs, Pa. Holly Tree Homeowners Association is responsible for maintaining the common areas of the development. The association's property manager retains a private contractor to provide snow removal services to parking areas and sidewalks. Around 6 p.m. on Dec. 5, 2005, Beck slipped and fell on the walkway to her townhome as she was going to her mailbox, fracturing her wrist. The curb did not appear to be icy or snow-covered, and she did not see what caused her fall, but felt ice under her feet. She sued the association, its property manager and the snow-removal company, alleging they were negligent in failing to provide sufficient snow and ice removal services.

The association filed a motion for summary judgment, arguing that Pennsylvania's "hills and ridges" doctrine precluded Beck from prevailing in her suit and asserting she had failed to establish that the association had notice of the dangerous condition.

Beck argued that the hills and ridges doctrine only applies in cases where snow and ice forms from natural accumulation following a recent snowfall. She maintained that human intervention by the snow-removal company rendered the doctrine inapplicable.

An employee of the snow removal company was on the premises the day before the incident engaging in snow removal activity. He did not check for snow or icy conditions at the time, and he did not return the next day to check for refreeze, as was his customary practice. Beck contended that his failure to use enough ice-melt resulted in black ice that caused her fall. She argued that because the contractor was on the premises that day, the association could not claim it had no notice of the icy conditions.

The court found that contrary to Beck's argument, the record supported a finding that the hills and ridges doctrine applied. Beck failed to establish sufficient disagreement about material facts to defeat the association's motion.

Pennsylvania law does not impose an absolute duty on property owners to keep their premises and sidewalks completely free of ice and snow at all times. Owners are shielded from liability for slippery conditions that result from ice and snow when the owner has not permitted unreasonable accumulations in ridge or elevations that remain for an unreasonable amount of time. This protection is extended to owners because of the burden it would impose to require one's walkways to be always free of ice and snow in Pennsylvania's climate. Thus, generally slippery conditions are not sufficient to establish liability; a person must prove that dangerous conditions are due to ridges or elevations allowed to persist for an unreasonable amount of time.

The doctrine does not apply if there are localized, isolated patches of ice and conditions in the community are not generally slippery; nor does it apply when the icy condition is caused by a person's neglect, such as a when a defective hydrant, water pipe or drain causes an icy condition.

Beck argued that the black ice was the result of inadequate snow removal activities, and, therefore, could not be an entirely natural accumulation following a recent snowfall. The court, however, held that although there was human intervention by the snow removal contractor, there was no indication that the black ice was a result of his activities rather than a condition incident to the weather. The court found that snowfall immediately prior to Beck's accident tended to favor application of the doctrine, because snow and ice resulting from a recent snowfall are natural phenomena incident to climate.

Beck also failed to establish that the contractor was obligated to leave his truck and physically inspect the area or return the next day to check for any refreeze. The specifications in the service contract provided that, if snow accumulation was less than two inches, the contractor was responsible for checking the property and applying a deicer if icy conditions existed. The contract provided that, when total accumulation was seven inches or less, work would commence within one hour and be completed within 24 hours after snow stopped falling.

Even if the hills and ridges doctrine did not apply, Beck did not show that the association had actual or constructive notice of any dangerous condition. Under Pennsylvania law, a property owner is liable for injuries caused by dangerous conditions only if he or she knows of or reasonably should have known of the condition. Beck failed to show that the association had notice of the icy condition of her walkway. With no evidence that black ice was observable for any significant time period prior to her accident, no reasonable inference could be drawn that the association had constructive notice of the hazardous condition. Absent a showing that the association had notice, it could not be held liable for Beck's injuries.

The court granted summary judgment to the association.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

Association Can Skip Dispute Resolution to Enforce Architectural Guidelines

Bridgeport Community Association, Inc. v. Martin, No. B215166, Cal. App. Ct., March 4, 2010

Architectural Control/Covenants Enforcement: In an unpublished opinion, a California appeals court upheld a ruling in favor of a homeowners association to enforce its architectural guidelines, even though the association did not follow the declaration's procedures for alternative dispute resolution.

Bridgeport is an upscale residential community in Valencia, Calif. The community is managed by Bridgeport Community Association, which has responsibility for enforcing CC&Rs, including the architectural guidelines that were written to preserve a high quality appearance in the development, to ensure compatibility of improvements and to enhance the community's overall value.

The declaration contains three specific provisions that prohibit modifications to the outside portions of any unit, except in strict compliance with the architectural guidelines. The guidelines require that all modifications be approved by the association.

James and ReAnn Martin leased a home in Bridgeport from Richard and Rachel Peterson, the owners. The Martins and the Petersons entered into an agreement that the Martins would deal directly with the association concerning any issues regarding the property. The Petersons executed a power of attorney to that effect which was accepted by the association.

In November 2007, the association sued the Martins for violations of covenants and architectural guidelines, alleging they made several modifications to their property without obtaining approval. The association sought an injunction ordering them to remove the unauthorized modifications until they had approval from the association and mandating that they commence no further improvements or landscaping without the association's prior written consent. The association also sought a declaration as to the rights of the parties because the Martins asserted that they did not violate the covenants because they had no force or effect upon them.

The Martins argued that the association breached the declaration by failing to comply with its comprehensive dispute resolution clause. They further asserted they had submitted an architectural plan to the association and that the association's architectural requirements were unreasonable and unenforceable.

The association requested summary judgment, arguing there was no triable issue of material fact and it was entitled to judgment as a matter of law because the undisputed facts showed that the Martins had made modifications to the property without obtaining approval, and the association had the authority to require compliance with the declaration and architectural guidelines.

The trial court found the law to be very clear that injunctive and declaratory relief were proper remedies for failure to comply with governing documents. The Martins admitted they were not in compliance with Bridgeport's governing documents. The court granted the association's motion, ruling that it applied to both the owners and lessees of the property. The court awarded costs and attorney's fees to the association. The Martins appealed.

The association produced evidence that despite the clear requirements of the covenants and multiple requests by the association for the Martins to submit plans for approval, they made unapproved modifications to the property, some of which were still incomplete.

The Martins did not dispute that the property was subject to the covenants, that the prohibitions existed or that the violations had occurred. Instead, they argued that triable issues of fact existed as to the association's compliance with the covenants, remedies available to the association and which rules were applicable. They further argued that the association failed to provide evidence that showed the Martins, who did not own the property, were subject to the covenants.

The Martins contended that the declaration provided that the association was required to provide a "fair, reasonable and expeditious procedure" for addressing violations of the covenants before seeking enforcement through the courts. The declaration provides:

[e]ach Bound Party covenants and agrees to use good faith efforts to resolve claims, grievances, or disputes arising out of or relating to the interpretation, application, or enforcement of the Governing Documents ('Claims') using the procedures set forth in Section 14.3 prior to filing suit in any court.

Section 14.3 describes in detail the dispute resolution process to be followed, and Section 14.4 goes on to state that:

[t]he dispute resolution procedures described in Section 14.3 shall be deemed to satisfy the alternative dispute resolution requirement of [former] Cal. Civ. Code 1354, as applicable.

Former Section 1354, subdivision (b) required that:

Prior to filing of a civil action by either an association or an owner or a member of a common interest development solely for declaratory relief … the parties shall endeavor, as provided in this subdivision, to submit their dispute to a form of alternative dispute resolution such a mediation or arbitration. (stats. 1993, ch. 303, sec. 1)

The Martins argued that summary judgment is improper where an association has failed to follow its own standards and procedures. However, the association pointed out that the alternative dispute resolution process outlined in the declaration was not a mandatory prerequisite to filing suit. The declaration specifies that "[a]ll remedies set forth in the Governing Documents shall be cumulative of any remedies available at law or in equity."

The court found that the association did not violate its own standards and procedures. It noted that the association acted within its authority in seeking an order to compel the Martins to comply with the covenants. The association had already provided the Martins with notice, an informal hearing, and repeated requests for submission of plans. All of its action demonstrated efforts to resolve the matter informally. Given the Martins' continued refusal to submit plans for approval and continued violations of the architectural guidelines, the association's election to proceed with court action was permissible, and its filing of a motion for preliminary injunction demonstrated its position that court intervention was urgently needed. Therefore, the court reasoned that the association was not required to follow the procedures set forth in Section 14.3 of the declaration.

The Martins contended that the association had waived its right to pursue the action because one of its representatives told them that the association would not take any action against them until a dispute over a lot line adjustment was complete. They asserted that the association waived those claims by failing to engage in the alternative dispute resolution process and failing to take action for years after the violations. Because the court noted that the covenants did not mandate the use of the procedures set out in Section 14.3, it found this argument failed.

The Martins then argued that there was a triable issue of fact as to whether the violations still existed and whether they would continue or repeat their wrongful acts. The court, however, found that the trial court's order was not restricted to any specific violations; instead, it mandated that the Martins comply with their obligations under the governing documents. Specifically, they were ordered to remove all unauthorized modifications until they submitted plans and received approval from the association.

The Martins' final argument was that the association should have been denied its request for injunctive relief because it had an adequate remedy at law through the declaration. However, the appeals court observed that it was their own refusal to abide by the covenants that forced the association to commence its court action for injunctive relief.

The Martins appealed the trial court's award of attorney's fees. The appeals court found the association was properly deemed the prevailing party, and the trial court was required to award reasonable fees.

The trial court's orders granting summary judgment and attorney's fees to the association were affirmed.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Architectural Guidelines Still Valid Despite Absence of Written Records

Clear Lake Riviera Community Association v. Cramer, 182 Cal. App. 4th 459 (2010)

Architectural Control/Covenants Enforcement/Use Restrictions: A California appeals court affirmed a mandatory injunction directing a homeowner to bring his home into compliance with a height restriction, even though the association could not produce documentation indicating when and how the restriction was adopted.

Clear Lake (Riviera) is a common interest development located in Lake County, Calif. The community is subject to CC&Rs that established an architectural control and planning committee. All homeowners in the development are members of Clear Lake Riviera Community Association. The architectural control committee consists of three members appointed by the association's board of directors. It is in charge of reviewing plans for any improvements within Riviera to ensure they comply with the declaration. The committee has the authority to enact height restrictions, as well as other restrictions on size and appearance. The declaration provides that, once plans are approved by the committee, "[a]ctual construction of any improvements … must be in strict conformity with said plans." The committee maintained a set of guidelines that was given to persons who planned to build within the development, along with a copy of the association's bylaws and a checklist for application processing. Among the guidelines was one that limited the height of structures to a maximum of 17 feet above street level or the "control point" of the lot.

In March 2005, Robert and Catherine Cramer purchased a lot in Riviera and drew up plans to build a house. Cramer's plans were approved by the committee. Beneath the approval stamp on each page of the plans, the committee printed "structure height not to exceed 17 feet from control point of lot."

After Cramer completed grading the lot and began installing the foundation, the committee received a complaint from a neighboring homeowner who was concerned that the house would be too tall. The committee met with Cramer to discuss the height restriction. They told Cramer that the house would have to be altered considerably to meet the height requirement, and they recommended further grading to lower the foundation.

The committee sent Cramer notice that the house appeared to depart from the approved plans and noted that the completed structure would violate the height restriction. They sent him a form requesting that he notify the committee if he could not comply, but he did not return the form. After Cramer's foundation was poured, the committee sent a similar form, and again received no response.

When Cramer's house was finished, it differed significantly from the structure depicted on the approved plans. The house exceeded the height restriction by 9 feet and severely impinged on the views of at least two neighboring homes. Cramer requested a variance from the committee, and his request was denied.

In June 2006, the association sued Cramer seeking a declaration he was in violation of the guidelines and the approved construction plans, and an injunction requiring compliance as well as monetary damages. The trial court ruled that Cramer's home had caused irreparable injury to neighboring homeowners, and ordered him to bring his house into compliance with the guidelines. He appealed the ruling.

In his appeal, Cramer did not challenge the trial court's conclusion that his home violated the guidelines, nor did he contend the height restriction was unreasonable. Rather, he argued that the guidelines were never adopted by a duly-constituted committee.

The appeals court observed that the guidelines were distributed to Cramer and other homeowners in printed form at the time they sought to build and were followed by the committee throughout in evaluating applications. Throughout the time in question, the guidelines were believed by committee members to constitute enforceable regulations governing construction at Riviera.

While circumstantial, the court considered that these facts supported a finding that the guidelines were validly adopted. Further support for proper adoption was found in the long history of enforcement since the time the guidelines were instituted and the relative ease with which the association could have repealed the guidelines if there were concerns about the propriety of the adoption or if homeowners were not in favor of enforcement.

The court recognized that there was no direct evidence of the guidelines' adoption, and committee members were unable to locate any document that reflected when and how the adoption took place. However, in the court's opinion, that the association was unable to locate such document, however, did not necessarily support a finding that the guidelines were not properly adopted. It determined that the absence of records regarding the adoption did not outweigh the substantial circumstantial evidence supporting proper adoption. Accordingly, the court found no legal support for Cramer's claim that a common interest association is required to provide direct evidence that its use restrictions are properly adopted in an action to enforce the restrictions.

Cramer also disputed the court's finding that the committee was a valid functioning committee within the scope of the declaration. He pointed to evidence indicating that the official membership of the committee consisted of three persons; yet two other persons purported to act on behalf of the committee and had substantial involvement with Cramer's application. The court, however, concluded that even if the two people identified by Cramer were merely volunteers who assisted committee members, there was no basis to question the trial court's finding that the committee was properly functioning under the terms of the declaration, and Cramer cited no prejudice from the participation of the association members who worked with him to bring his construction plans into compliance with the various rules.

Cramer argued that the trial court abused its discretion in "ordering [them] to tear down their house," which, he contended, was the effect of the mandatory injunction. Instead, he argued, the court should have awarded monetary damages. However, testimony at trial of an expert retained by the association failed to support Cramer's claim that it would be necessary to tear down the house to bring it into compliance with the height restriction.

Explaining that a decision would not be reversed for an abuse of discretion unless it exceeded the bounds of reason or disregarded uncontradicted evidence, the court found no abuse of discretion in the trial court's decision to require compliance with the guidelines rather than award monetary damages. In any event, to defeat an injunction under the hardship doctrine, a person must demonstrate that the encroachment was neither willful nor negligent. There was little question, under the most generous interpretation of the evidence, that Cramer's violation was negligent. This carelessness was further confirmed by the scope of the violation. The Cramers' home did not miss the guideline by any trivial amount, but was 9 feet over the limit.

Finally, the appeals court found no evidence that the cost of correcting the violation would be grossly disproportionate to the hardship caused to the association. Although there was no estimate of the total diminution in value caused to neighboring homes by Cramer's violation, one neighbor testified that his home's value had dropped more than $75,000. As previously noted, however, there was also diminution in value to at least one other home with damage that was more difficult to quantify.

The trial court's judgment was affirmed.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Association Cannot Encumber Condominium without Approval of Unit Owners

Duclos v. Marina Pacifica Homeowners Association, Inc., Nos. B213053, B214116, Cal. App. Ct., March 25, 2010

Powers of the Association/Assessments/Attorney's Fees: In an unpublished opinion, a California appeals court upheld a lower court decision prohibiting a homeowners association from encumbering condominium property without the approval of its members.

Clovis Duclos owns a condominium in Marina Pacifica, a 570-unit complex in Long Beach, Calif., that was built in 1973. At that time, the property on which the condominium was built, as well as the marina around which it was developed, was owned by the McGrath Trust. The developers acquired a long-term leasehold interest in the property from the trust, and converted it into smaller individual leasehold interests assigned to each condominium unit. The condominium is governed by Marina Pacifica Homeowners Association.

Duclos bought his unit in 1977. Like other unit owners, he was required to make a monthly lease payment to the trust and to pay an assignment fee to the developers. The lease and assignment provisions included escalation clauses that dramatically increased the rent and assignment fees in 2006 and 2021. The lease term expired in 2041; after that date, condominium owners would, in effect, lose the right to occupy their units.

In the late 1990s, faced with the prospect of escalating lease payments and eventual forfeiture of ownership in the condominium units, the association began negotiations to purchase the property and sought to acquire the developers' assignment fee interest to eliminate the additional monthly payments.

The trust agreed to sell the property for $17 million. The association distributed an information statement to unit owners proposing two special assessments to finance the purchase and acquisition fee. The information statement explained a proposed loan in the amount of $20 million that included establishment of a reserve fund. Ninety-one percent of the owners, including Duclos, approved the special assessments.

The association obtained a 30-year loan in the amount of $22 million at a 9.37 percent interest rate. The special assessments for each unit owner were calculated on a pro rata basis in accordance with the condominium declaration. The association started collecting the special assessments after the loan closed in December 1999. In January 2000, the association notified owners that they could prepay their assessments, allowing each owner to "purchase [his or her] share of the Land … and convert [his or her] leasehold interest into a 'fee simple' interest in the condominium." The owners were instructed how the purchase price would be calculated if they chose to prepay the assessments and the procedures and conditions necessary to effect the prepayment.

In January 2006, Duclos decided to prepay his assessments and paid the association a $550 attorney fee. However, when he reviewed the documents he was required to sign, he objected to a provision that would amend the declaration to give the association power to encumber the property purchased from the trust. He believed this provision would expand the association's powers and was inconsistent with representations contained in the information statement that stated homeowners would have full beneficial unencumbered ownership of the property, either through the association or directly. Consequently, he refused to sign the documents and was unable to prepay the assessments.

Because a majority of owners had prepaid the assessments, the association was able to repay the loan in July 2006. The lender refunded approximately $519,317 to the association, which was deposited into a reserve account. Although the association repaid the loan, it continued to collect the special assessments from those owners who had not prepaid them. The special assessments collected were deposited into the association's general account and used to pay operating expenses.

In 2007, Duclos sued the association, alleging that the association wrongfully attempted to expand its powers to sell or encumber the property without approval of the unit owners. He further alleged that the association's continued collection and use of special assessments after the loan was repaid violated Section 1366.1 of California's Civil Code, which prohibits an association from imposing or collecting assessments that exceed the amount necessary to defray the costs for which they are levied. His third cause of action alleged that the association failed to obtain approval of the unit owners to levy the $550 attorney fee necessary for the prepayment transactions. He requested an injunction prohibiting the expansion of the association's powers. The association moved for summary judgment.

After intensely questioning the parties, the court indicated that the revenue collected from individual owners in excess of the actual cost of the loan was sensibly deposited in the association's building maintenance and repair reserve account, which appeared to be severely underfunded. The court expressed its strong sentiment that Duclos' claim that the association had violated Section 1366.1 was absurd.

With respect to Duclos' claims that the association impermissibly attempted to expand its powers by demanding authority to sell or encumber the property without approval of the members, the association explained that it was required, under California law, to obtain members' approval to sell or encumber property; thus, the language to which Duclos objected had no legal effect. Duclos indicated to the court that he was satisfied if the association agreed to be enjoined from entering any major transaction that would encumber the property without approval of the unit owners.

The court granted summary judgment to the association on all of Duclos' claims except those concerning the wrongful attempt to expand the board's powers. After a bench trial, the court ruled in favor of Duclos on the remaining claims and issued a permanent injunction prohibiting the association from taking any action to sell or encumber the property without approval of the association members. The court ordered the association to pay $7,500 in restitution to Duclos as compensation for the lost investment value of the interest payments he made after his effort to prepay the special assessments. Notwithstanding the restitution, the court determined that the association was the prevailing party for the purpose of awarding litigation costs.

Duclos appealed the trial court's grant of summary judgment and its determination that the association was the prevailing party for purposes of litigation costs, and the association appealed the trial court's post-judgment order denying its motion for attorney's fees.

Duclos contended that the association violated the Davis-Sterling Common Interest Development Act ("Act") and engaged in unfair competition in violation of California's Business and Professional Code Section 17200 by continuing to collect the special assessments after the loan was paid off. This section broadly defines "unfair competition" to include unlawful, unfair or fraudulent business acts or practice and unfair, deceptive, untrue or misleading advertising. The appeals court explained the Act to mean, for example, that assessments levied to defray costs of an association's maintenance and management responsibilities may not exceed the cost to the association for providing those services. Associations are prohibited from marking up incurred charges to generate a profit for itself. The court noted that here, the special assessments were part of a complicated transaction with a final cost to each owner that was not readily determinable. Duclos claimed that, even if not illegal, the continued collection of special assessments after the loan was unpaid was unfair. The court found that, although the state of the law on what constitutes unfair business practice in consumer cases is somewhat unsettled, the continued collection of the special assessments did not constitute an unfair business practice. Further, neither Duclos nor other owners suffered real harm by the continued collection of the fees.

Duclos alleged that the association's imposition of the $550 fee to prepay the special assessments constituted unfair competition because it violated the Act, which requires owner approval for "special assessments which in the aggregate exceed five percent of the budgeted gross expenses of the association for that fiscal year. …" However, the court concluded that the fee was not a special assessment within the scope of the Act, and the trial court correctly granted summary judgment to the association.

The appeals court determined that, whether or not the association prevailed on Duclos' primary claims, his recovery of a restitution award was a "net monetary recovery" entitling him to litigation costs as a matter of right. Only his claims that the association impermissibly sought to amend the covenants were intended to enforce the governing documents within the purview of the Act. Because he prevailed on those claims, the trial court correctly found him to be the prevailing party.

The trial court's judgment was reversed to the extent it awarded costs to the association. In all other respects, it was affirmed.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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No Pet Policy Does Not Violate State or Federal Fair Housing Acts

Hawn v. Shoreline Towers Phase I Condominium Association, Inc., No. 09-11797, U.S. App. Ct., 11th Cir., Sept. 22, 2009

Covenants Enforcement/Use Restrictions/Federal Law and Legislation: An association board was within its rights to deny a homeowner's request to have a dog, when the homeowner did not provide sufficient documentation of a disability and the association had a no pet policy.

In 2004, Davis Hawn purchased a condominium unit in Shoreline Towers Phase I, located in Pensacola, Fla. When he purchased the unit, there was a sign on the property that read "No Animals Allowed." Hawn was aware of the sign and the community's no pet policy.

In January 2005, Hawn notified the association by letter that he had acquired a puppy named Booster. In the letter, he referred to Booster as his "pet," "pup" and "companion," but never as a service animal. In the letter, he recommended that the association change Shoreline's policy to permit homeowners to own a pet or to agree to a six-month trial period for such a policy. The association did not respond to his letter.

In June 2006, he sent another letter to the association in which he claimed that he suffered from physical and mental disabilities that stemmed from a debilitating injury that caused pain and restricted mobility. He also stated he had been robbed, kidnapped and assaulted in the past by his friend's stepson who was living in his unit while he was away on vacation. Although the person was subsequently arrested, Hawn said he had become afraid of living alone. His letter also discussed Booster and for the first time referred to him as a "service animal." He requested that Booster be exempted from Shoreline's no pet policy.

In a letter to Hawn in August 2006, the association requested further information in order to consider his request, including documentation supporting his disability claims and the qualifications of the physicians named in his request. The letter concluded "[w]hile the association sympathizes with your situation, at this time we must deny your request to keep a pet in your condominium unit."

In March 2007, Hawn sued the association, seeking monetary damages and injunctive relief under the state and federal Fair Housing Acts. The district court granted summary judgment to the association on all Hawn's claims, finding that he failed to establish that the association knew of his disability; or that the requested accommodation was necessary; or that the "No Animals Allowed" sign evidenced discriminatory intent by the association. Moreover, the court held that the association's conduct failed to rise to a level that would constitute infliction of emotional distress. Hawn appealed.

In addition to disagreeing with the findings, Hawn argued that the court failed to consider documents presented to the association during an investigation conducted by the Florida Commission on Human Relations ("FCHR"), asserting that this evidence was sufficient to provide notice of his disability and the necessity for a service animal.

The court analyzed Hawn's arguments in the context of the federal Fair Housing Act, recognizing that the Florida Fair Housing Act is substantially identical. Hawn alleged that the association violated two provisions of the Act: Section 3604(f)(3)(B) that prohibits the denial of reasonable accommodation necessary to ensure equal opportunity for disabled persons to use and enjoy their dwellings; and Section 3604(c) that prohibits "any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any … discrimination based on … handicap. …"

Hawn argued that his June 2006 letter to the association was sufficient to create genuine issues of material fact about whether the association knew of his disability and the necessity of his requested accommodation. The appeals court disagreed, noting that a duty to make reasonable accommodation must be attended by a meaningful review of the facts, and did not simply spring from the disabled person's desire for the accommodation.

Hawn's refusal to comply with the association's requests for reasonable documentation prevented it from conducting a meaningful review and, consequently, it could not have known of his disability or his need for a service animal.

The appeals court was similarly unpersuaded by Hawn's argument that the district court erred by failing to consider the documentation made available in the course of the FCHR investigation. In reviewing the court's order, the appeals court determined that the district court did, in fact, consider such evidence. Because there was insufficient evidence to create any genuine issues of material fact as to the association's knowledge of Hawn's disability, the court concluded that the district court correctly granted summary judgment to the association.

Hawn argued that, unlike a sign that reads "No Pets Allowed," the "No Animals Allowed" sign posted by the association evidenced its intent to bar all animals, including service animals for disabled individuals and was discriminatory in nature. The appeals court found such speculation to be unsupported by the record. The sign had been erected approximately 10 years before Hawn bought his unit, and the court found no evidence that the association ever discriminated against any other handicapped person or that handicapped individuals were discouraged from purchasing units in Shoreline because of the sign.

The court affirmed the district court's order for summary judgment.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Declaration Does Not Prohibit Subdivision of Lots

Renezeder v. Emerald Bay Community Association, Nos. G040657 & G041353, Cal. App. Ct., Feb. 8, 2010

Architectural Control/Use Restrictions/Covenants Enforcement/Powers of the Association: In an unpublished opinion, a California appeals court affirmed a ruling that restrictive covenants did not bar members from splitting their properties and building one single-family residence on each newly created lot.

Emerald Bay is a community located in Orange County, Calif. It is governed by CC&Rs recorded in 1985. The declaration provides that all lots shall be used for private residential purposes, and improvements to each lot are restricted to one single-family home and a garage.

The declaration further provides that no structure may be erected on a lot unless the building plans are approved by Emerald Bay Community Association. The association is vested with general power and authority to govern the business and affairs of the association and all property within its jurisdiction. Included among its powers is the authority to adopt and amend rules and regulations and guidelines for the effective implementation of the restrictions.

In 1991, the association approved an amendment to the architectural regulations that prohibited the board of directors or architectural committee from approving plans for more than one residence on each existing lot. The amendment was sparked by a dispute between the association and a property owner who planned to subdivide his lot. In spite of the amendment, the association ultimately allowed the newly created properties.

Carl Renezeder owns a lot at 105 Emerald Bay that is larger than most other Emerald Bay properties. The property next door to Renezeder is owned by Ed and Susan Gotschall. The Gotschall property was created in 2006. Prior to that time, a particularly large single property, 109 Emerald Bay, was next to Renezeder's property. Orange County approved a plat splitting 109 Emerald Bay into two properties (107 Emerald Bay and 109 Emerald Bay). The Gotschalls applied to the association for approval to construct a new home at 107 Emerald Bay. Several neighbors, including Renezeder, objected to their request. The board approved their request in October 2007. Richard Filanc owns 260 Emerald Bay. In March 2007, the association also granted his request to split his property into two properties.

In June 2007, the association rescinded the 1991 architectural regulations to allow owners to adjust the size of their lots or subdivide their lots to allow two homes on the property where one once stood. The association's resolution, based on advice of counsel, noted that its rule-making authority was limited by provisions set forth in the declaration, none of which restricted subdivision of lots. The omission, coupled with its having permitted subdivision of other lots in the past, resulted in rendering the architectural rule prohibiting subdivision of lots inconsistent and unenforceable.

In September 2007, Renezeder sued the association, seeking judicial declarations that the covenants prohibited the splitting of lots and construction of more than one single-family residence on any lot within the development; and the architectural regulations that prohibited the subdivision of lots were consistent with the declaration and were properly adopted by the association in 1991. Renezeder sought a judicial order directing the association to reinstate the provisions in the architectural regulations that prohibited lot splits and an injunction to prevent the association from approving construction of any residences on lots created in violation of the regulations. The association filed a cross-complaint for declaratory relief, seeking exactly the opposite judicial determinations. The court allowed the Gotschalls and Filanc to become interveners in the suit.

The court ruled in favor of the association, the Gotschalls and Filanc, deeming each to be a "prevailing party." The court concluded that although the declaration clearly prohibited construction of more than one single-family residence per lot, it did not bar association members from splitting their properties and building one single-family residence on each of the newly created parcels. Renezeder appealed the court's ruling and Gotschall and Filanc appealed the court's decision denying them attorney's fees.

The association argued that Renezeder's action for declaratory relief was moot because of an amendment to the declaration adopted in 2009 prohibiting association members or lot owners from partitioning or further subdividing any lot, parcel or real property fee interest in a manner that could result in an increase in the number of lots in the development or the number of single-family residences that could be erected on the affected property. The stated intent of the amendment was to restrict the number of residences and maintain a lower density character in the community. On appeal, the association argued that the amendment rendered Renezeder's action moot.

The court noted that the amendment rendered moot Renezeder's requests for judicial determination that the pre-amendment declaration precluded members from dividing properties to build additional homes and the 1991 architectural regulations were consistent with the declaration. Ultimately, however, the appeal was not moot because of Renezeder's request for an injunction preventing the association from approving construction of any residences on lots created in violation of the declaration and architectural regulations that prohibited lot splits. The amendment appeared not to apply to Gotschalls and Filanc, whose properties were approved for division prior to the amendment. Since they had not begun construction of residences on their lots, Renezeder's action was not moot.

Thus, the court considered whether the association was correct when it concluded it had no authority to stop Gotschall and Filanc from building single-family residences on new, legally subdivided properties. The association contended that the declaration's language suggested that members owning a property large enough to divide into two separate lots could obtain the right to build a single-family home on each lot. The court found this interpretation to be the most reasonable construction of the declaration as a whole.

The trial court awarded attorney's fees to the association, but denied fees to the interveners, Gotschall and Filanc. They appealed the determination, claiming they were prevailing parties in the action and were, therefore, entitled to an award. The appeals court determined that, by virtue of their intervention in an action to enforce restrictive covenants, Gotschall and Filanc became parties to the action. Moreover, they received declaratory relief in their favor and were referred to as prevailing parties by the court in the judgment. The court observed that they could have easily been named as defendants by Renezeder in the action to enforce the covenants, and, had that occurred, they would be entitled to attorney's fees because they would have successfully defended against an attempt to enforce the covenants. The court noted that if the association had lost the action, the interveners would have been adversely affected. Therefore, the court ruled that the trial court abused its discretion in finding that they were barred from obtaining an award.

The court reversed the trial court's order denying attorney's fees to Gotschall and Filanc, but remanded with a reminder that they could not recover fees from Renezeder for duplicative work product or otherwise unreasonable charges.

The trial court's judgment was affirmed. The post-judgment order was reversed.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Association Must Pay Owner Damages for Failure to Maintain Common Areas

Twin Oaks Condominium Association, Inc. v. Jones, No. HHDCV044004140, Conn. Super. Ct., Jan. 22, 2010

Assessments/Association Operations/Covenants Enforcement: In an unreported opinion, a Connecticut superior court awarded damages to a unit owner, finding that the association was negligent in performing its duties under the condominium governing documents.

Rodvald Jones bought a condominium unit in Twin Oaks Condominium that is located in Hartford, Conn. Twin Oaks is managed by Twin Oaks Condominium Association and subject to bylaws and rules. The association hired a property manager to oversee maintenance and repairs and perform general management services. Art Boothby was property manager at Twin Oaks from 1999, when Jones bought his unit, until 2005.

In November 2003, Jones experienced a lack of heat in his unit that also affected other units in the building. He called Boothby to complain, and Boothby sent repairmen to his unit, who performed repairs for which he paid approximately $556. Over the next few months, repairs were made to several other units, and it was discovered that the problems Jones experienced stemmed from the common element heating system that was the association's responsibility to maintain.

When he was unable to reach Boothby by phone, Jones sent three letters to the association, seeking reimbursement of the heating repair bill. After receiving no response, he withheld his monthly condominium fees in March and April 2004 to reimburse himself for the expenditure. He resumed paying his fees in May and made full payments every month until November 2005, when his payment was rejected by the association.

Jones never heard directly from Boothby or the association regarding the unpaid fee. Instead, the association levied penalties in an amount equal to the amount he withheld, as well as late fees. The association charged Jones late fees of $25 a month from January 2006 until January 2009. Jones continued to tender payments to the association, but most of the payments were refused by the property manager.

The association filed a foreclosure action based on delinquent common area charges in the amount of $20,692.32, and Jones filed a multi-count counterclaim. Jones' mortgagor was named a party in the association's foreclosure action. Jones was not privy to communication between the lender and the association that led to the mortgagor's paying off his delinquency and adding the payoff amount to his mortgage balance and the association's withdrawing its foreclosure action.

Jones filed a counterclaim alleging breach of contract, violation of the Common Interest Ownership Act, violation of the Unfair Trade Practices Act, statutory theft, breach of implied covenant of good faith, conversion and negligence.

The court observed that, as a member of the association, pursuant to Conn. Gen. Stat. Sec. 47-243, Jones could not unilaterally exempt himself from liability for paying common area assessments. It found that Jones' decision to pursue a self-help remedy to the dispute by withholding payment of his assessments, precluded him from proving that the association breached their contract because he failed to perform the contract himself.

Jones' second count alleged violations of the Common Interest Ownership Act ("Act") based on the association's failure to timely maintain, repair and make replacements to the common elements and to hold regular annual meetings. The court noted that when a court is called upon to assess the validity of a board's action, it determines whether the action was within the scope of the board's authority and whether it reflects reasonable or arbitrary and capricious decision making. The court concluded that the association's actions, although negligent, did not appear to be founded on prejudice or preference. The court also observed that under the Act, no unit owner may exempt himself from liability for payment of common expenses; therefore, Jones was also precluded from proving that the association violated the Act.

Similarly, his action precluded him from proving the association violated the Connecticut Unfair Trace Practices Act ("CUTPA") because the management activities of the association were not within the purview of the CUTPA and there was no intent to deprive another of property or misappropriate funds for purposes of CUTPA. Jones made no showing that the association acted in bad faith, misappropriated funds or committed conversion.

In the seventh count of Jones' counterclaim, he argued that a duty of care exists between unit owners and the association based on contractual obligations contained in the condominium governing documents and the Act. The association argued that it performed prudently and reasonably.

The court considered that the question of whether the association owed Jones a duty of care was the pivotal issue, because there could be no actionable negligence unless a cognizable duty of care existed. Relying upon the Act and case law in several other states, the court determined that a unit owner's relationship with a condominium association is similar to a landlord-tenant relationship with regard to common areas, and that such a relationship involves the same duty of care as that owed to an invitee. The court concluded that the association owed Jones a duty of care, and it breached that duty in a number of ways. First, it failed to hold annual meetings as required in the bylaws. Second, it failed to provide notice and hearing before initiating the foreclosure action and denied Jones his right to appeal the board's decision as required under the declaration. Finally, it breached its duty by failing to properly maintain the roof and heating system as required in the declaration. The court noted that problems with the roof leaking were attributable to the common elements of the roof, not individual units. Problems with the roof were raised at the association's 2001 annual meeting. At that meeting, Boothby indicated that the roof to Jones' building needed to be replaced. The roof was not actually replaced, however, until 2005. The court found that the association's conduct relating to the common elements fell below the legal standard established to protect others against unreasonable risk of harm. The court found a causal relationship between the association's failure to properly maintain and repair the heating system and the losses Jones incurred.

Likewise, there was a causal relationship between the association's failure to properly maintain and repair the roof and water damage to Jones' unit. The evidence demonstrated that the association set in motion a chain of events that led to Jones' losses. The association failed to comply with its governing documents, and its conduct was a substantial factor in bringing about Jones' losses for roof repairs and decreased sale value of his unit. The court found that Jones was entitled to recover fair, just and reasonable damages.

The court entered judgment for the association on all of the counterclaims except for negligence. As to that claim, the court entered judgment and an award of damages to Jones, but his request for attorney's fees was denied.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Fair Housing Act Claims Against Association Dismissed

Wood v. Briarwinds Condominium Association Board of Directors, No. 09-12704, U.S. App. Ct., 11th Cir., March 3, 2010

Federal Law and Legislation/Use Restrictions: A condominium owner failed to prove that the association discriminated against him by refusing to amend use restrictions and provide unreasonable access to recreational amenities.

Denny Wood sued Briarwinds Condominium Association pursuant to the federal Fair Housing Act. The district court dismissed several of his claims and granted summary judgment in favor of the association on his two remaining claims. Wood appealed.

The appeals court noted it is unlawful to discriminate against any person because of a handicap. Wood either abandoned or failed to allege any violation of the act in his discrimination claims. The appeals court upheld dismissal of his other claims, including: inaccessibility of pool furniture; inaccessibility of community picnic tables and grills; the association's failure to allow him to install a heat pump in the pool; and the use of speed bumps in the parking lot. He did not allege that the association refused his offer to modify any of the property conditions at his own expense, other than the lack of a pool heater, which does not constitute discrimination under the act. Further, the appeals court determined that the district court correctly dismissed Wood's claim that the design of the guest parking spaces were discriminatory, because he did not have standing to bring the claim.

The appeals court also noted that it is unlawful under the act to coerce, intimidate, threaten or interfere with any person in the exercise or enjoyment of any right granted or protected under the act. However, Wood failed to allege conduct that rose to the level of coercion or intimidation. He alleged only that he was violated and retaliated against when his van, which was leaking oil, was towed, and a board member complained that he violated pool rules by using a mask and snorkel in the pool. The same board member assessed fines against him for the oil leak and took pictures of him. However, Wood failed to demonstrate any relationship between the complaints and his protected activity under the act. Therefore, the court found that the district court correctly dismissed his claims.

Wood asserted that the district court erred in dismissing his breach of contract claim, alleging that the association violated previous contractual agreements dictating the size of his parking space, but the association argued that the issue was moot, because it had reconfigured the parking space to meet his specifications. However, the association presented no evidence at trial of the modification. Moreover, the appeals court concluded that the district court failed to adequately address the breach of contract claim. Wood's complaint sought to enforce a prior settlement agreement that he contended the association breached. The appeals court, consequently, vacated and remanded dismissal of this claim for determination of whether the claim was, indeed, now moot or, if not, the reason it was dismissed.

Wood then argued that the district court granted summary judgment to the association in error on grounds that the statute of limitations had run out. The act provides that a person may sue "not later than two years after the occurrence or the termination of an alleged discriminatory housing practice." The statutes of limitations begin to run when facts supporting the cause of action are apparent to a reasonably prudent person similarly situated. The appeals court observed that Wood was aware of all the physical attributes of Briarwinds about which he now complained for more than two years. Accordingly, the court affirmed that both claims were barred.

Finally, Wood appealed the district court's denial of his motion to appoint counsel for himself. The appeals court explained that the district court has broad discretion when deciding whether to appoint counsel, and should only appoint counsel in exceptional circumstances. Because Wood failed to establish any exceptional circumstances that would justify the appointment of counsel, particularly when he primarily alleged straightforward claims concerning wheelchair accessibility, the appeals court found that the district court did not abuse its considerable discretion in denying his motion.

The appeals court affirmed the district court's order in part, vacated in part, and remanded in part.

©2010 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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