Owner Not Entitled to $700,000+ Reimbursement from the HOA

This case involved a dispute between a condominium owner (“Owner”) and his owners association (“Association”) over Owner’s right to be reimbursed for litigation expenses that he incurred in a dispute with neighboring developments over the ownership of a sewer system that Association believed was part of its common area components.

In 2013, the president of one of the neighboring associations informed Association that the neighboring association owned a portion of the sewer system and that it intended to charge Association a fee for use of the sewer system. Owner and Association disagreed over how to handle the claimed ownership of the sewer system. Association wanted to resolve the matter without litigation by agreeing to shared ownership and some payment by Association to the neighboring association. Owner wanted to litigate the issue with the neighboring association, but he was unable to persuade Association to take that course of action so he took it upon himself to commence an action against the neighboring association to establish that Association was the sole owner of the subject sewer system. Owner prevailed in that litigation and obtained a declaration from the court that Association was in fact the sole owner of the sewer system. It followed that the sewer system was a “common element” of Association.

After prevailing in the litigation with the neighboring association, Owner sought reimbursement of the expenses that he incurred in the litigation from Association based on his contention that all unit owners are responsible for the expenses relating to Association’s common elements. Owner reasoned that through his efforts in taking on the litigation in which he prevailed, Association was benefited by the declaratory judgment that established Association as the owner of the sewer system and accordingly, all of the owners constituting the members of Association should share in the expense. The trial court ruled: