Category Archives: Litigation

California – U.S. Supreme Court Denies Review of Affordable Housing Law, for now

California Building Industry Ass’n v. San Jose – Denial of Cert

The U.S. Supreme Court refused review of the California Supreme Court decision in the case California Building Industry Association vs. San Jose, leaving the  California Supreme Court decision in place.

The case (and related decisions) has important implications for issue that remains “unsettled” under the Takings Clause of the U.S. Constitution.

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District of Columbia – Ruiz v. Millennium Square Residential Association

Ruiz v. Millennium Square Residential Association

On January 13, 2016, the United States District Court for the District of Columbia issued an order upholding an arbitration provision contained in the recorded Bylaws of Millennium Square Residential Association in NW Washington, DC.

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Missouri – Busch Properties, Inc. v. National Union Fire Ins. (8th Cir., February 24, 2016)

Busch Properties, Inc. v. National Union Fire Ins., No. 14-3699 (8th Cir. 2016)

Busch Properties, Inc. filed suit against its insurer, NationalUnion Fire Insurance Company, after National Union denied coverage for Busch’s expenditures to remediate mold in the Kingsmill Resort condominium that Busch managed in Wiliamsburg, Virginia.

Through contractual arrangements (with all unit owners and the unit owners association), Busch paid for all required upkeep and maintenance of the condominium units.  After mold growth was found behind vinyl wallpaper, Busch began to remediate the mold growth.

Before Busch began mold remediation efforts, Busch obtained the written consent of individual unit owners, without admitting liability for the mold growth or a release of claims, to enter the Units and perform work which would likely have been the responsibility of individual unit owners under the condominium instruments.

National Union denied coverage because it concluded that Busch was not legally obligated to make the repairs.  The 8th Circuit Court of Appeals had to determine, under Missouri law, whether National Union could lawfully deny coverage under the policies that provide coverage if Busch “become[s] legally obligated to pay as damages for liability imposed upon the Insured by law,” “becomes legally obligated to pay by reason of liability imposed by law,” or incurs “liability assumed by the Insured under contract.”

The district court concluded that there was no coverage for the mold remediation payments and Busch appealed, arguing that National Union should pay the cost of mold removal.

The 8th Circuit Court of Appeals affirmed the district court’s conclusion that Busch’s payments for mold remediation are not covered under its policy with National Union because its legal obligation to remediate the mold did not spring from “liability imposed by law,” but instead resulted from a voluntary, contractual obligation.

Even though decided under Missouri law, the Busch decision reminds us of the importance to carefully consider maintenance, repair and replacement responsibilities as set out in the recorded condominium instruments.  And, associations must weigh the benefits (economies of scale and uniformity) and potential burdens (loss of insurance coverage or potential challenge for ultra vires acts) before undertaking additional responsibilities that are normally borne by individual unit owners.

Because every set of recorded condominium instruments and every insurance policy are different, the application of law to each community association differs.  As always, contact an experienced attorney for advice and counsel.

New Jersey – In re Rones

Whispering Woods Condominium Association, Inc. v. Rones (New Jersey – Bankruptcy)

The decision of the U.S. District Court for the District of New Jersey to reverse an earlier, published decision from U.S. Bankruptcy Court for the District of New Jersey has national consequences in limited super-priority lien states.

Continue reading New Jersey – In re Rones

California – Ziani Homeowners Ass’n v. Brookfield Ziani LLC

Ziani Homeowners Ass’n v. Brookfield Ziani LLC

Movants-appellants Ali Fadavi, Shadi Ghazi, Pamela Bacha, Mary Roll, Jenna Pearce, Joe Pearce, Michael Ehsani, Robert Glass, and Rocheda Reid appealed an order denying their motion to intervene in the underlying lawsuit on the grounds it was not timely. Brookfield Ziani LLC (Brookfield) constructed a condominium development in Newport Coast.

Illinois – Henderson Square Condo. Assoc’n v. LAB Townhomes, LLC

Henderson Square Condo. Assoc’n v. LAB Townhomes, LLC

Henderson Square Condominium Association sued the developers, alleging: breach of the implied warranty of habitability, fraud, negligence, breach of the Chicago Municipal Code’s prohibition against misrepresenting material facts in the course of marketing and selling real estate.

Oregon – Florence condos subject of lawsuits

Florence condos subject of lawsuitsFLORENCE – The residents of two Old Town condominium buildings have filed separate suits against the project developers, claiming sloppy construction left the structures vulnerable to the coast’s copious rain and caused massive water damage. Residents of the Bridgeport Landing condominium are seeking $2.5 million in damages, and buyers of the Stillwater Condominiums have asked for $2.1 million.

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New York – Onetti v Gatsby Condominium (2013 NY Slip Op 07568)

Onetti v Gatsby CondominiumDecided on November 14, 2013Tom, J.P., Mazzarelli, Freedman, Richter, Feinman, JJ. 11069- 11070-450493/12 11071 [*1]Fabian A. Onetti, et al., Plaintiffs-Respondents-Appellants, v The Gatsby Condominium, et al., Defendants-Appellants-Respondents, Intell 65 East 96, LLC, Defendant-Respondent, Omer Realty, LLC, et al., Defendants. Wilson Elser Moskowitz Edelman & Dicker LLP, White Plains (Joseph A.H.

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New York – Board of Managers of The Lenox Grand Condominium v. DSW Lenox LLC (2013 NY Slip Op 07548)

Board of Mgrs. of the Lenox Grand Condominium v DSW Lenox LLCThe main reason that plaintiff increased common charges effective May 2012 was legal fees in this action and in a derivative action brought by DSW. As DSW acknowledges, it failed to argue to the motion court that plaintiff may not advance board members’ cost for defending themselves in the derivative action.

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