Election Results Stand Despite Members’ Disapproval
Board elections have the potential to cause a stir within community associations. They can become highly competitive, requiring campaigning or other gestures by candidates. Owners who aren’t happy with the outcome might protest, either acting displeased or escalating things to the point where they call for a new election. But just because owners are unhappy with something in the community doesn’t mean that it’s automatically wrong. This is especially true when homeowners disapprove of a board election in their community association; that dissention doesn’t automatically invalidate the results.
That was what two planned community homeowners in a recent case learned after protracted litigation concerning a board election. There, the homeowners complained about the election and qualifications of the people elected to the board of the association. They became concerned when the developer of the community, in accordance with the bylaws of the association, turned over certain common areas of real property to the association. The bylaws required that members of the association board resign and a new election be held by members of the association after that happened. However, that was not done. The homeowners’ asked a circuit court to enjoin the board members from any further action until a new election was held in accordance with the bylaws. The circuit court ordered a new election, which was subsequently held. However, the homeowners didn’t agree with the manner in which the election was conducted and continued to dispute the legitimacy of the newly elected board. The homeowners sued the association and the board of directors as officers of the association and in their individual capacities.
A Kentucky appeals court ruled in favor of the association and board members. The court noted that the homeowners alleged that actions taken by the officers of the association after the court-ordered election were invalid, since the homeowners didn’t agree with the election process. The court, however, determined that the election was in accordance with the association bylaws, and it approved the election and its results. “While the [homeowners] may not like the process or the campaigning by the various board members, they are nonetheless bound by the final results,” the court concluded.
The court also pointed out that state law may allow a lawsuit for injunctive relief against the association as a corporation, but it does not allow an action against individual officers of a nonprofit organization, since the association’s fiduciary duty is to the association and not to individual owners. Therefore, any claims against the board members individually were dismissed [Thompson v. Lake Cumberland Resort Cmty. Ass’n, October 2017].