July 2006

Vol. XVI No. 7

Many associations undoubtedly face a problem with vehicles speeding through their communities. The culprits may be owners, relatives, or guests of owners. What can a Florida association do when the roads are owned by the association and not by the county or municipality? Now the law may have caught up with modern phenomenon. An association may be able to bring a claim against the owner, claiming that the speeder is a nuisance!

A Florida appellate court recently ruled that a homeowners= association may proceed with a complaint against an owner based upon the owner=s son=s reckless speeding. In The Meadows Community Association, Inc. v. Russell-Tutty, 31 Fla. L. Weekly D1495 (Fla. 2^nd DCA, May 31, 2006), a homeowner=s association filed a complaint against an owner alleging the owner=s son drove recklessly on the Association=s private roads.

The owner=s son allegedly violated the speed limits repeatedly and engaged in unsafe and reckless driving. The Association filed a lawsuit against the owner. The suit first sought a declaration of its rights under the Association=s restrictions. The Association then sought an injunction to compel the owner to control her son=s reckless driving.

The owner moved to dismiss the Association=s lawsuit asserting that the Association did not have a legal basis for suing. The owner argued that enforcement of traffic laws is the responsibility of law enforcement, not private citizens nor homeowners= associations. The trial court dismissed the lawsuit, but provided no explanation for the dismissal.

Florida=s Second District Court of Appeal reversed the trial court=s decision. The appellate court held that the homeowners= association=s lawsuit stated a legal claim for declaratory and injunctive relief. The appellate court noted that the Association sought interpretation and enforcement of the Association=s declaration of restrictions.

The appellate court further explained that a party seeking a declaratory judgment is usually entitled to a judicial determination of rights. The test allowing a claim for a declaratory judgment lawsuit to proceed is not whether the plaintiff will succeed, but whether the complaint states a legal claim.

AAlthough not a model of clarity, the amended complaint essentially alleged that the Association was in doubt as to its rights under the Association documents and sought an injunction requiring Ms. Russell-Tutty to require her son to comply with the Association=s traffic regulation,@ the court wrote. The Association sought a judicial interpretation of whether its deed restrictions could be interpreted to require the owner to prevent her son from driving recklessly on the Association=s roads; thus, the Association could proceed!

The Meadows decision is important because the decision allows an Association to proceed with a complaint against an owner to force an owner to stop a resident of the owner=s property from speeding on an association=s roads. Although an association may face proof problems when it comes to trial, at least the decision opens the door for a case to be made.

TORTS: OFFICERS CAN NOT HIDE BEHIND CORPORATIONS TO ESCAPE LIABILITY FOR FRAUD

Officers of associations sign many documents in the scope of their duties as officers. What happens if an officer signs a document knowing the document to be false? The officer may face personally liability for his or her actions!

In Home Loan Corporation v. Aza, 31 Fla. L. Weekly D1519 (Fla. 3^rd DCA, May 31, 2006), a Florida appellate court ruled that a corporate officer who committed fraud or negligent misrepresentation while performing duties within the scope of employment as president of a corporation may be held personally liable for her or his conduct. A residential mortgage lender sued the president of a title company and others for fraud and negligent misrepresentation. The lender alleged the president signed the HUD-1 settlement Aclosing@ statement knowing the statement contained false statements.

The trial court dismissed the claims against the president of the title company on the grounds she could not be held personally liable because she signed the documents as Apresident.@ The appellate court reversed the judgment of dismissal and remanded the case to the trial court for further proceedings against the president. The appellate court explained if an officer commits or participates in the commission of a tort, he or she is liable to persons injured.

This decision points out that an officer or director who commits a tort such as fraud can be held personally liable. The officer or director will not be able to hide behind the corporation to escape liability.

In new director orientation meetings the firm frequently summarizes the impact of fair housing laws on community associations. Florida community associations are regulated by fair housing laws at the federal, state and local levels. These laws have expanded beyond the Atraditional@ areas of race, color, creed, national origin and religion. There are many other characteristics or situations that are now regulated by law.

In June the Palm Beach County Office of Equal Opportunity, an agency of Palm Beach County, introduced its website. The site contains significant educational information. Of perhaps greatest interest is a downloadable video which can be accessed through http://pbcgov.com/equalopportunity.

The firm's offices will be closed Tuesday, July 4, 2006 in observance of Independence Day. Happy 4^th of July!!!!!!