Jurisdiction of GA Claim Filed Against HOA

Started by RachelV • 8 replies • 3109 views

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RachelV (Georgia)
Posts: 4

Posted:

I am a board member for an HOA in Georgia (Atlanta Metro Area). One of the residents has filed a claim in magistrate court against 2 current and 1 past board member with 5 allegations related to bylaw infractions, failure to collect assessments, etc. Does magistrate court have the jurisdiction over this type of claim? We are trying to decide if we want to file this as a claim on our D&O policy or defend it ourselves.

SheliaH (Indiana)
Posts: 6,964

Posted:

Apparently the court does have jurisdiction since the case was accepted, but you may want to discuss all this with your association attorney to see what your best option might be. Maybe the attorney can negotiate a settlement to settle the whole thing or perhaps propose alternative dispute resolution, where a third party would hear both sides and either make a decision (usually both sides agree in advance to abide by the decision) or negotiate a settlement. ADR is usually cheaper and more informal that going to court.

I suppose you could file a claim on the D&O policy and let the guy duke it out with the insurance company, but I'd be concerned about the coverage being dropped or premiums being jacked up.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

RachelV (Georgia)
Posts: 4

Posted:

The claim is only for approx $200. However, this person continually harasses the board and claims all kinds of wrong doing. He even expects us to mail everything vs email to him b/c if we say something incorrect he thinks he can get us for mail fraud. Over the years has has cost our HOA several thousand dollars in legal fees but this is the first time he has filed a suit. It would probably be cheaper to settle with him but that would not stop the harassment - it would probably be enough encouragement for him to do it even more. Our annual elections are coming up and he has even claimed that the named defendants need to remove their names from the ballot otherwise he will take this up with the judge as well. We have a bylaw that prevents people with outstanding Covenant Enforcement Proceedings from running for the board - he thinks that his suit qualifies as that (which it does not).

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Rachel

Return bullets with big bombs. Take a gun to a knife fight.

I am not sure how magistrates court works (in SC it is small claims court) in GA, but see if you can up the ante and countersue including legal costs.

Talk to your associations lawyer.

Hope this helps

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By RachelV on 07/30/2012 7:49 AM
I am a board member for an HOA in Georgia (Atlanta Metro Area). One of the residents has filed a claim in magistrate court against 2 current and 1 past board member with 5 allegations related to bylaw infractions, failure to collect assessments, etc. Does magistrate court have the jurisdiction over this type of claim? We are trying to decide if we want to file this as a claim on our D&O policy or defend it ourselves.

If you have come here to this forum to ask whether a court has jurisdiction over a particular claim, you should not be handling this case yourselves. The answer to whether the court has jurisdiction will be found in your state laws, not here.

BTW, the argument that the court has jurisdiction because it allowed the case to be filed is just dead wrong. Anyone can file any kind of complaint in any court. It is not up to the clerk who accepts the case for filing to determine whether the court has jurisdiction. A judge may act on his own to dismiss a case for lack of jurisdiction but in nearly all cases the lack-of-jurisdiction argument must be raised by the defendant.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would defend yourself with a lawyer or a competent board member if you are all comfortable with that. Most of the time a lawer is required to represent the HOA in court. So it's best to go with a lawyer if possible. However, I didn't want to not post about the other option as there are some competent board members who may take on this task. It's just up to the HOA.

It is cheaper to counter sue than to sue. I'd suggest if you hire the lawyer that you all respond in like with your own expenses such as the lawyer fees. The court system can ONLY make you "Whole". It can't make you a "Profit". So counter sue for the legal fees and expenses HOA incurs in your defense. The court ultimately will decide which party is responsible for their legal fees.

Again as I have posted to nuasium...Suing your HOA is suing yourself and your neighbors. So this person has not the concept. Plus I wouldn't settle with him as he will continue this process and believe the HOA has full pockets...It is best to play this out and let them learn their lesson. Don't hide it from the other members. Let them know what their dues are now going for and if someone did win such a large suit, that a special assessment may be required. If you claim this against your insurance then you can expect higher rates or cancellation. Thus making it so your may have to raise dues to cover the higher costs due to this person's actions. You may find some support in allowing the HOA to counter sue this person and being okay with it. Plus future prevention when people get the concept of what they are doing by suing their HOA.

Former HOA President

LawrenceC1 (Georgia)
Posts: 480

Posted:

Rachel,

A couple of things come to mind regarding your issue.

First, your governing documents may allow you to recover court costs as a "specific assessment" against the homeowner. Our documents allows us to do that, and the provision has been upheld by Georgia courts. This avoid having to sue to recover lawyers fees -- you just treat them as any other assessment against the homeowner. If this is the case, you should definitely hire a lawyer and counter sue. The homeowner will be paying for his lawyer, your lawyer, and all court costs. That tends to bring things to a close quickly.

Second, it sounds like the disgruntled homeowner is seeking an injunction against the Association, forcing action on certain Covenant mandates. This is outside the jurisdiction of a magistrate's court in Georgia. For a case to proceed in Georgia magistrates court, there must be a judicially cognizable injury caused by the defendant which falls under the $15,000 limit. Also, any case dealing with "cases respecting title to land" must be handled by the Superior Court as a matter of law. Usually, anything to do with HOA Covenant enforcement falls into that category.

Once you get the courts involved, I strongly recommend getting a competent Attorney involved. You could very easily get yourself into a great deal of trouble if you try to defend this yourself.

KevinK7 (Florida)
Posts: 1,343

Posted:

Does this individual have a point? What are the details regarding this action? Is it possible that the board didn't do everything properly?

I am of the mindset that if you are going to run a corporation that deals with things that a HOA deals with (real estate, property management, etc.), everything needs to be kept in perfect order and while this particular homeowner may be a pain in the butt he may just be helping in keeping the board honest. Sometimes extra scrutiny can be a good thing.

RachelV (Georgia)
Posts: 4

Posted:

This individual tends to be about 3 years behind in his "issues" with the board. In fact 1 of the named defendants in the lawsuit has not served on the board for almost 5 years and never served with myself (only on the board for 2 years). We have even had our lawyer answer his questions to which he does not believe the responses and thinks he knows more than our lawyer about the topics. Our lawyer is one of the best lawyers in the state for HOA as he helped write much of the state legislation on the topic among other qualifications. Most of the problems stem from his incorrect interpretation of the covenants and bylaws and no one can convince him otherwise.

If his scrutiny was productive and current we would have no issue with him questioning our actions. Instead they seem to come from some personal vendetta against the board and past incidents he was involved in.

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