HOMEOWNERS KEEP FILING – AND WINNING – STATE AND FEDERAL CIVIL RIGHTS LAWSUITS

The following was sent to me by Marjorie Murray of the Center for California Homeowner Association Law, which is where the link above will take you. This is a piece from their newsletter, which you can subscribe to by going to their web site and following the "Press Room/Newsletter" link on the left side of the page. I do not have any independent knowledge of the case described below, so if you have any inquiries direct them to Marjorie or the attorneys involved in the case.

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SACRAMENTO -- Working through Fair Housing agencies, legal aid groups and private attorneys, homeowners keep filing civil rights lawsuits against their associations – and winning.
In June, the estate of David Donnell settled with Snowshoe Springs Association (Calaveras County) for an undisclosed amount approved by the U.S. District Court Eastern District in Sacramento [Case # CIV S-01-1953 MCE KJM.].
Disabled by lifelong health problems, including epilepsy, Donnell sued Snowshoe in federal court after it tried to foreclose on his home in order to collect about $1200 in late assessments. [Sacramento Bee, Jan 14, 2001.] The board refused his offer – made publicly – to pay his debt in installments.
With the help of Sentinel Fair Housing, Donnell later petitioned the board formally under Fair Housing laws to be allowed to pay in installments. Still the board refused. The board later claimed foreclosure was the only way to force him to pay. The association had no foreclosure policy in place, when it tried to seize his cabin, built by his parents 40 years ago. The Donnell foreclosure would have been Snowshoe’s first.
The Bee article generated the pro bono services of Roseville attorney, Michael L. Johnson, who stopped the foreclosure. Donnell later sued the Association, several board members as individuals, one homeowner not on the board, association attorney, Curtis Sproul, and his law firm Genshlea Chediak & Sproul for trying to seize his home in a nonjudicial foreclosure. KGS Community Services, the debt collection firm hired by Snowshoe and owned by Sproul’s ex-wife, was not named in the suit.
A chief cause of action in the suit was that the defendants violated civil rights statutes by refusing to grant Donnell’s request to pay in installments and then moving to foreclose when it had no policy to foreclose. After the suit was filed, the SSA board adopted a foreclosure policy.
But before his case could come to trial, Donnell died from his disabilities in September 2005 in a Calaveras County hospital. Snowshoe attorneys moved quickly to get the case dismissed. However, Federal Judge Morrison England granted the petition of Donnell’s sisters to let the suit against Snowshoe forward on behalf of his estate.
On the eve of trial, Snowshoe settled out of court in a confidential agreement approved by Judge England. At Snowshoe’s annual meeting in July, property manager Mark Redding said, “The settlement didn’t cost us anything.” However, sources close to the case estimate that, in addition to the settlement money paid to Donnell’s estate, the insurance company alone paid an estimated $250,000 in legal fees to litigate the case. Whether the costs result is higher insurance premiums to Snowshoe – and higher assessments to homeowners -- is unclear. – end --