New Ruling Could Deter Owners’ Frivolous Claims
The Texas Supreme Court has ruled that an association can qualify as a “prevailing party” entitled to recover its attorneys’ fees under the Uniform Condominium Act (UCA) when it successfully defends against an owner’s claims. More than a dozen states have adopted some version of the UCA.
The owner sued the HOA and its board following a lengthy repair and insurance disbursement process after a hurricane damaged the community. He alleged fraud, civil conspiracy, breach of fiduciary duty, breach of contract, negligence, gross negligence, conversion, and trespass.
Among other things, the owner claimed the association had created a fraudulent scheme to keep insurance payouts from individual owners and shift the repair obligations to them. He also contended that it unlawfully used his air conditioning and violated terms of a previous settlement agreement by giving “preferential parking” to motorcycles, trailers, and boats.
The association filed a counterclaim seeking a declaratory judgment and requested attorneys’ fees under the UCA. The UCA provides that the “prevailing party in an action to enforce the declaration, bylaws, or rules is entitled to reasonable attorneys’ fees and costs of litigation from the nonprevailing party.”
The trial court sided with the association on 12 issues before trial, but the Texas Supreme Court reached a different conclusion:
Association Entitled to Reasonable Attorney’s Fees
Association’s Ultimate Victory Doesn’t Guarantee Attorneys’ Fees Award
Attorney’s Fees Must Be ‘Reasonable’ in Wrongful Foreclosure Action
Owner Owes HOA Attorney Fees After Losing His Lawsuit