Owner Sues Without Association Approval, Then Sues Association To Recoup His Costs

Sometimes owners strike out on their own and file lawsuits they think their associations should be filing—but does that mean the association has to reimburse them for their legal costs?

The guiding principle regarding action, or lack thereof, is clear in most community associations: The majority rules. Sometimes, though, fired-up owners who disagree with the majority decide to take matters into their own hands.

That’s what happened in a Wisconsin case involving a dispute over ownership of a sewage system that was a common element of his association. For years, a sewer system serving a condo community and at least two other developments was treated like it was a common element of the community. In 2013, though, one of the developments claimed that it and the other development own the system and started charging the condo owners association a fee to use it.

Douglas Larson and a limited liability company collectively own eight units of the 248 in the community. The association wanted to avoid litigation by agreeing to shared ownership and paying the fee. Larson unsuccessfully lobbied to persuade the association to sue. He then filed a lawsuit on his own to obtain a declaration that the condo owners were the sole owners of the sewer system.

Larson’s condo association also was a defendant to the lawsuit. After he was granted the declaration, he asked the trial court for an order directing the association to reimburse him for litigation costs. The trial court turned him down, so he appealed.

Read on to learn by why the Court of Appeals agreed with the trial court and how associations can avoid liability for their members’ legal costs in our article, Association Isn’t Liable For Lone Wolf Owner’s Legal Costs When Owner Sues Without Approval.

Matt Humphrey