Association Prevails on Retaliation Claim

April 19, 2017
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Associations often make the news for incidents that reflect poorly on them, or that end in liability. But not every lawsuit against an association is a cautionary tale for a manager and board of directors. A recent New Mexico case highlights what often happens when a litigious member brings a frivolous claim.

There, a homeowner in a planned community that was situated on a lake witnessed an employee of the community’s hired landscaping company spraying fumes without wearing protective clothing or a face mask. The homeowner complained to the association and made a report to the state’s department of agriculture, regarding “an environmental and public health incident.” According to the homeowner, the board of directors and management staff had willfully failed to take any safety precaution to prevent this incident.

The homeowner later claimed that the association’s management retaliated against him because of his association with and advocacy on behalf of the adversely affected African-American landscaping employee. Specifically, the homeowner said that the board and management have “conspired among each other” to subject him “to a pattern of racially-motivated retaliatory acts consisting of intentional refusal to provide [him] with contractual services he has under the association’s by-laws.” The retaliatory acts included failure to maintain or landscape the homeowner’s property. The homeowner sued under Section 1981 for “refusing to provide contractual services,” premised upon his assertion that intentional failures to provide contractual services to him were motivated by an intent to retaliate against him, because of his statutory protected objections to what he reasonably perceived was a racially motivated violation of the African-American employee’s contractual rights.

The board and association’s management staff asked a trial court to dismiss the claims. A New Mexico trial court ruled in favor of the association. The trial court noted that Section 1981 “encompasses a complaint of retaliation against a person who complained about a violation of another person’s contract-related right.” To state a claim of retaliation under Section 1981 the plaintiff must, at the outset, show: (1) that he engaged in protected opposition to discrimination; (2) that a reasonable person would have found the challenged action materially adverse; and (3) that a causal connection existed between the protected activity and the materially adverse action.

But the trial court said that the homeowner’s claim didn’t satisfy the first requirement, and therefore his Section 1981 retaliation claim against the association and management staff couldn’t survive. The complaint failed to allege the violation of another person’s contract-related right and that such violation was race-based. The complaint did not, as it must, identify an impaired contractual relationship, or even allege a contractual relationship with the African-American employee and defendant.

Such facts are necessary to demonstrate that the homeowner engaged in protected opposition to race-based discrimination—that is, that he was retaliated against for complaining about the violation of another person’s contract-related right [Muller v. Pearson-Chavez, February 2017].