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Articles Posted in Association Litigation

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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MichaelHymanFirm shareholder Michael L. Hyman authored an article that appeared as a “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 “Circuit, Appellate Courts Issue Injunction Against HOA to Fix Flooding Problems,” focuses on recent decisions by circuit and appellate courts that illustrate how Florida’s courts will issue mandatory injunctions to force community associations to do their duty to maintain drainage systems.  The article reads:

The case of Coconut Key Homeowner’s Association v. Gonzalez pitted a homeowner against her HOA, which she alleged breached its governing documents by failing to properly maintain the surface water management system for the community. This caused chronic flooding problems in her own backyard whenever it rained and led to significant damage to her home.

Gonzalez sought an injunction to require the association to cure the alleged surface water management violations and stop the flooding problem. A Broward circuit court jury ruled in her favor, concluding that the association breached its governing documents by failing to maintain and operate the surface water management system in the community. However, it concluded that this breach was not a legal cause of damage to Gonzalez, so it awarded no monetary damages.

dbrlogo-300x57The court then conducted a post-trial hearing on whether to issue an injunction against the association. It granted Gonzalez’s motion for a mandatory injunction in accord with the jury’s finding that the HOA’s violations of its own governing documents caused her irreparable harm without an adequate remedy under the law.

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