Owner Sues to Terminate Membership in HOA and Recover Damages and 30 Years of Fees Paid to HOA For Failure to Provide Member Services

In this action, a homeowner (“Owner”) filed suit against her homeowner’s association (“Association”) for breach of contract (Association’s Declaration) because Association refused to take action against Owner’s neighbor for constructing a residence on the property adjacent to Owner’s property that did not conform to Association’s architectural restrictions. In her action, Owner sought: (i) an order terminating Owner’s membership in Association because of Association’s alleged failure to provide member services; (ii) a judgment for damages for the alleged diminution in the value of her property; and (iii) a refund of all fees Owner had paid to Association which dated back to 1987.

Owner’s complaint contained a cause of action for rescission of her contract with Association based on her claims that she relied on promises that induced her to become a member of Association and to continuously pay her membership fees. Association contended that its decision to approve the challenged building plan on the neighboring property was protected by the business judgment rule.

The trial court granted Association’s motion to dismiss Owner’s complaint pursuant to a finding that the complaint failed to state a cause of action. To prevail on such a motion, the moving party must show that a material fact as alleged in the complaint is not a fact at all and show that no significant dispute exists regarding the fact. In ruling on such a motion, the court must accept as true the facts alleged in the complaint and in submission filed in opposition to the motion to dismiss. The complaint cannot be dismissed when the facts stated are sufficient to make out a cause of action.

The appellate court stated that: