As part of Morris Sperry's involvement in the drafting and evolution of community association law in Utah, John Morris and others testified on behalf of the Community Association Institute Legislative Action Committee in a house committee hearing opposing a bill aimed at invalidating legally adopted rental restrictions. As he has been for the past several years, John Morris is heavily involved in changes to the law proposed in the 2014 legislative session.
Morris Sperry has more Utah lawyers at the CAI national HOA law seminar than any other firm in the state. The lawyers took four days to learn and talk about cutting edge issues facing community associations along with over 600 community associations lawyers, managers, and insurance professionals from around the country.
In a well attended event, the CAI Chapter put on a mock annual meeting and a panel of experts offered insight into various issues. Quinn Sperry of Morris Sperry moderated and the rest of the team at Morris Sperry acted out a "typical' annual meeting. There were lots of laughs as issues involving comfort animals, defamation, guns, video recorders, obstructive owners, alcohol, meeting notices, and proxies were raised and discussed. It was great training and good fun for everyone who attended.
Here is another example of the need for HOAs to carefully select their D&O policy. A California community association lost its lawsuit against State Farm after State Farm refused to cover a lawsuit against the HOA under the D&O policy because the plaintiffs had not claimed compensatory damages. You might think you have D&O coverage to cover lawsuits against board members and the association, but if the D&O policy does not cover non-monetary claims or limits the type of claims or remedies sought, you may not have any defense. Every community association should check with its agent to make sure the board members understand the scope of coverage for their D&O policy.
A South Carolina jury awarded an owner in a condominium complex $550,000 in actual damages and $340,000 in punitive damages against the board of a condominium association and the association. The association and board members apparently handed out a flyer to owners identifying a sex offender with the same name as an owner in the complex. While the person on the flyer was not the owner in the project, the association and board members continue to say it was even after other owners challenged the claim. One of the board members also apparently called the owner's bank and told a loan officer that the owner was a sex offender. The board was apparently upset that the owner had not paid assessments on time.
Morris Sperry confirmed its 2014 diamond sponsorship of the local CAI Chapter. The local Utah CAI chapter is a tremendous resource for owners and board members. Morris Sperry remains dedicated to the educational mission of the Community Association Institute and is pleased to both sponsor and participate in the chapter.
On November 25, 2013, the Justice Department filed a lawsuit against a Minnesota HOA claiming discrimination under the Fair Housing Act against families with children. A key element of the complaint was a rule against "playing" on the lawn imposed against all owners. The complaint also referenced several association enforcement actions and warnings with references to children and children playing on the lawn. The lawsuit seeks injunctive relief and damages. Morris Sperry has successfully defended associations against similar fair housing act enforcement actions which in Utah are brought by the Utah Anti Discrimination and Labor Division.
John Morris of Morris Sperry and LaMond Woods of Sentry West hosted another fantastic HOA insurance forum that included insurance professionals from around the country. The topics of D&O insurance and Crime Insurance were covered in the first session and key aspects of property insurance were covered in the afternoon session. The Law and Ordinance endorsement so often misunderstood by community associations was fully explained. A local adjuster walked through the complicated analysis of claims and the deductible allocation in Utah law. The many managers in attendance received some of the best HOA insurance law training available in the state. Keep on the lookout for an invitation for next year.
After a five-week trial (yes . . . five weeks), a California Orange County Jury awarded a homeowner in a condominium association $15,000 in damages for exposure to second hand smoke. The lawsuit was brought against the condominium association, the manager, and the tenants. The Plaintiff prevailed on both negligence and nuisance claims against the Association, essentially due to the Association's failure to take sufficient action upon receiving complaints. Following trial, the Court awarded the Plaintiff another $54,000 in attorney fees pursuant to the attorney fee provision in the Declaration. Including costs of defense for a two-year lawsuit and a five-week trial, the total loss to the Association likely exceeded $300,000. This case stands as a good lesson on the shifting attitudes regarding smoking and the Association's need to carefully consider its obligations in the governing documents.
On October 3, 2013, a judge in Missouri ruled that an association's ban on political signs was unconstitutional. In a detailed opinion, the judge applied prior authority from a well known New Jersey case, holding that the community association's ban on political signs did not satisfy constitutional standards. Fortunately for Morris Sperry clients who have engaged us to review or draft their rules, we have been warning about this possibility since the ruling in New Jersey several years ago. If your association's rules ban political signs either expressly or implicitly, call the lawyers at Morris Sperry to help you consider your options with experienced, thoughtful, and balanced advice.