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Articles Posted in Association Litigation

MTobacksrhl-law2-200x300The firm’s latest Miami Herald “Real Estate Counselor” column appears in today’s edition of the newspaper and was authored by Michael Toback.  The article, which is titled “Appellate Ruling in Hollywood Case Spotlights Notice Requirements for Condo Association Lawsuits,” focuses on the takeaways for Florida condominium associations from a recent appellate decision that brought an added measure of clarity to the pre-suit requirements for associations bringing legal actions against their unit-owner members.  Michael’s article reads:

. . . The new opinion from Florida’s Fourth District Court of Appeal came in a case that stemmed from a dispute at the Gateland Village Condominium in Hollywood, in Florida.

The association for the community filed a three-count complaint against unit-owner Mary Elizabeth Holly seeking injunctive relief requiring her to make requisite repairs to her unit’s leaking air-conditioning system, which was purportedly causing damage to the building’s roof as well as water intrusion into another unit, and to allow the association to access and inspect her residence. MToback-Herald-clip-for-blog-12-18-22-100x300It also sought damages for breaching the association’s governing declaration by failing to provide it access to the unit and to maintain/repair her air conditioning system.

In response, Holly asserted that the trial court lacked personal jurisdiction due to the absence of service of process, alleging she was not personally served with the summons and complaint. She also alleged that Gateland failed to satisfy prerequisites prior to filing suit required by both Florida law and the condominium association’s own governing documents.

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Nicole-Kurtz-2021-200x300The firm’s latest “Real Estate Counselor” column in the Miami Herald is authored by shareholder Nicole R. Kurtz and appears in today’s edition of the newspaper.  The article, which is titled “Community Association Disputes? Here’s How to Minimize and Avoid Them,” focuses on the most common types of association clashes, the damage they can do, and some of the best approaches for associations to steer clear of them.  It reads:

. . . [F]or most communities to realize the benefits that stem from effective association oversight, some disputes are inevitably bound to arise from time to time. Some of the most typical association clashes involve:

  • Matters arising from compliance with state laws and municipal regulations;
  • Financial issues, including collections, special assessments and reserves;
  • Rule enforcement, including violations, suspensions and fines;
  • Architectural review applications and decisions;
  • Amendments to governing documents;
  • Maintenance of community amenities, and rules governing their use;
  • A perceived lack of transparency, including ineffective communications of association rules, changes and operational procedures to owners and residents;
  • Seemingly inadequate responses to residents’ concerns and complaints;
  • Meetings and their discussions, agendas and notices;
  • Devising, implementing and enforcing new rules and restrictions;
  • Renovations and alterations to the common elements or common areas;
  • Maintenance of the common elements and areas;
  • Board of director election irregularities and concerns;
  • Vendor contracts.

NKurtz-Herald-clip-for-blog-10-9-22-103x300The most effective community association boards of directors understand their business decisions will inevitably lead to disputes from time to time, but they should seek to avoid perceived minor or frivolous disputes whenever possible. They should also try to minimize or avoid significant disputes that may negatively impact the association’s operations and sow discord within the community.

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EvonneAndris-srhl-law-200x300The firm’s latest Miami Herald “Real Estate Counselor” column authored by partner Evonne Andris appears in today’s edition of the newspaper and is titled “The Costs of Community Association Lawsuits, And How to Avoid Them.”  Evonne’s article focuses on the potential impacts of community association litigation, and the benefits of alternative options for resolving association disputes.  It reads:

. . . In such an environment where emotions can run high, boards of directors and the owners they represent should always strive to let cooler heads prevail. While in certain situations litigation is a necessary tool to assist in the governance of a community, it is a tool that should be used with the understanding that escalating conflicts into litigation is almost always detrimental for both sides in association disputes, including those who eventually prevail in the matter.

Litigation is a disruptor of community harmony, and it could lead to very public squabbles that often make the local news. Such coverage can have long-term negative impacts for communities with their indefinite online lifespan via internet searches under a community’s name, making them potentially detrimental for property values.

EAndris-Herald-clip-for-blog-8-14-22-100x300Real estate brokers can also become keenly aware of communities that are rife with conflicts, and they will steer their clients elsewhere. Some lenders will also inquire about pending litigation in their loan pre-approval questionnaires, and they may become reluctant to approve mortgages for prospective buyers in communities involved in potentially significant lawsuits, or in those that regularly attempt to enforce their rules, policies and decisions through litigation as opposed to other forms of dispute resolution.

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When disagreements and disputes arise amongst those who serve on community association boards of directors, emotions can run high in light of the impactful nature of the decisions made by such directors.  However, as association directors are duty bound to act in the best interests of their community and its owners, they should seek to avoid engaging in personal spats and attacks with one another and the owners that could lead to potential legal liabilities for the association.

One of the best examples of the dangers of public rows between association directors and unit owners is now playing out at the Porta Bella Yacht and Tennis Club in Boca Raton (pictured below).  As chronicled in a recent report from www.BocaNewsNow.com, homeowner Samuel Loff filed a lawsuit against the association premised upon an allegation that its board members made inappropriate and inaccurate accusations against him as part of a retaliation campaign.

pbella-300x255The lawsuit alleges that the community’s board of directors retaliated against Loff for an email that he sent to them complaining about security shortfalls and announcing his candidacy for a board seat.  Shortly after his email, the suit alleges that the board began accusing him of making unwanted advances to a female security guard, and it later put those accusations in writing via an email distributed to all the unit owners.

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Jason-Rodgers-Da-Cruz-002-200x300The efforts of firm shareholder Jason M. Rodgers-da Cruz, together with Patrick S. Montoya of the Coral Gables-based law firm of Colson Hicks Eidson, were the subject of a front-page article headlined “This Miami Case Was Too Big For the Courtroom: Organizing Convention Center Trial ‘Like Setting Up a Show’” in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article discusses how it was going to be impossible for all of the jurors, defendants and their legal counsel to safely hold a trial at the Miami-Dade County Courthouse under Covid restrictions for a lawsuit by firm client Latitude on the River Condominium Association against eight defendants over the property’s allegedly faulty fire-sprinkler system.  Even though the case was ultimately settled confidentially before proceeding to trial, the duo’s plans to hold the proceedings in the James L. Knight Convention Center are now serving as a blueprint for remote courtroom proceedings for large multi-party cases with adequate social distancing precautions.  The article reads:

. . . The case, which took more than five years of litigation and multiple hearings, involved a class-action lawsuit brought by Latitude On The River Condominium Association Inc. against eight defendants over an alleged faulty fire sprinkler system with incompatible components.

dbr-logo-300x57Miami-Dade Circuit Judge Jennifer Bailey allowed plaintiffs attorneys Jason M. Rodgers-da Cruz of Siegfried Rivera and Patrick S. Montoya of Colson Hicks Eidson to work with her staff to plan for the massive jury trial. Jury selection was scheduled to start at the end of April.

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Our firm’s other community association attorneys and I have all seen our fair share of disputes arising from unapproved property improvements in South Florida HOA communities over the years. However, the saga involving a diamond design in a homeowner’s driveway at the Equus community just west of Boynton Beach appears to be exceptionally combative, so much so that it drew the attention of the Palm Beach Post.

According to a recent article from the newspaper, the HOA has been trying to have homeowner Barry Rosenthal remove the decorative red diamond design (see photo below) for more than three years. Both parties appear to be very deeply entrenched in their positions.

In its lawsuit, the HOA claims the driveway design “was not in conformity with other approved driveway designs throughout the community.” driveway-diamondRosenthal had it installed as part of his new driveway project in 2017 without obtaining the HOA’s prior approval, and he was subsequently fined $1,000 and lost his usage rights to the community’s amenities, which include tennis courts and a fitness center.

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susanodess-srhl-thumb-200x267-94402Stuart-Sobel-2013-200x300Firm partners Stuart Sobel and Susan C. Odess won a $3.67 million jury verdict in federal court in Miami for the St. Louis Condominium Association, which sued its insurer Rockhill Insurance Co. over a denied claim for extensive damage to the Brickell Key tower caused by Hurricane Irma.  The verdict was filed last Wednesday, June 5, and it is chronicled in an article in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article reads:

. . . the judgment is good news for the association since it stood to get nothing from its insurer, said Stuart Sobel, who was part of the Siegfried Rivera team representing the association.

“I believe in juries, and I am pretty pleased with the results. In light of the alternative where the insurance company basically said, ‘We are not paying any money.’ They said we suffered no damage form Hurricane Irma,” Sobel said.

He said the hurricane churned in the condominium’s vicinity for 24 hours. The building sits on Biscayne Bay east of downtown Miami.
Sobel worked on the case with Siegfried Rivera’s Susan Odess . . .

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Reports of association theft, fraud and embezzlement are no surprise to the South Florida community association attorneys at our firm, but two similar reports on the same day from communities on both the east and west coasts of the country drew our attention.

The media reports of the incidents, which both ran on Thursday, Jan. 17th, are very similar. The one in the Nisqually Valley News newspaper in the state of Washington chronicles how the Clearwood Community Association filed a complaint alleging its former bookkeeper embezzled nearly $300,000. The suit against Dolanna K. Burnett, the former bookkeeper, and her husband claims that she wrote multiple checks to herself and covered it up in the accounting system dating back to 2014.

The newspaper article states Burnett had a previous conviction in 2014 for theft, identity theft and forgery. She used counterfeit refund checks totaling $17,000 while she was working for the Tacoma Health Department and deposited them into her personal account. This information was discovered last summer and taken to the Clearwood Board of Directors, which stood by its decision to retain her and continued to use her as its bookkeeper.

This led to an outcry by the unit owners, eventually prompting a majority of the board members and Burnett to resign from their posts.

By the end of the year, the board hired a forensic accountant and discovered evidence that the former employee had been stealing significant sums from the association’s general account for years. It turned the case over to the county sheriff’s office and filed a civil suit against Burnett.

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Laura-Manning-Hudson-Gort-photo-thumb-120x180-18921An article authored by partner Laura Manning-Hudson is featured as the “Board of Contributors” guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “Permitted Breach of Rules by Association Does Not Create Liability for Resulting Accident,” discusses the takeaways from a recent case involving a community association’s liability for an automobile accident involving parked vehicles on its streets.  Her article reads:

Lack of parking can be an extremely troublesome issue for many South Florida community associations. For HOAs with rules that prohibit on-street parking, the dearth of available spaces for residents and their guests can leave many homeowners feeling stymied and annoyed.

To remedy the angst of its residents, the HOA for the Seminole Lakes community in Palm Beach County decided to forgo its rule against on-street overnight parking. However, that decision nearly ended up causing the association major legal and financial liabilities, which it was only able to avoid after it appealed a jury’s verdict to Florida’s Fourth District Court of Appeal.

dbr-logo-300x57The case of Seminole Lakes Homeowner’s Association v. Esnard arose from a 2013 car accident in the community between the Esnards and another motorist, who rear-ended their vehicle while they were stopped waiting for two trucks to pass between two parked cars on the street. The Esnards, who were injured in the accident and had their car completely totaled, filed suit against the other driver as well as Seminole Lakes on the basis that the community was negligent and had proximately caused their damages by permitting homeowners and their guests to park on both sides of its streets — contrary to its governing documents.

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There are many objections to board service that are often cited by unit owners who are reluctant to serve on their community association’s board of directors. While the time commitment is a prevalent concern, some believe that the post also brings with it an unreasonable level of liability and exposure to lawsuits by disgruntled unit owners.

To quell those concerns, such individuals should recognize that condo associations and HOAs typically carry Directors and Officers Liability Insurance (aka D&O insurance), which serves to defend and protect directors from lawsuits to which they may be exposed. Additionally, directors are also protected by indemnification provisions of the Florida laws governing not-for-profit corporations as well as the articles of incorporation of their association.

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