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Heritage Woods Homeowners Association, Inc. v. Wisniewski

A-5976-05T3 (N.J. Super. App. Div. 2007) (Unpublished)

COMMUNITY ASSOCIATIONS; ATTORNEY’S FEES —Where community association members bring an action against other property owners to enforce the association’s rules, they may be entitled to attorney’s fees if the association’s organic documents provide for attorney’s fees and if it is found that those individuals were acting on behalf of the association and not merely in their private capacities.

Two homeowners purchased a single family home adjacent to an area that was commonly owned by all property owners in a subdivided development. Use of the common areas was governed by the by-laws of the development’s homeowner’s association. One of the owners, while serving as the association’s president, gained approval from the association to erect a jungle gym and an enclosed fence. This extended the homeowners’ property roughly eighty feet into the common area. Some time later, the municipality notified the homeowners that all of those structures were erected in violation of the law and had to be taken down.

The homeowners’ association brought an action against the homeowners, seeking an order directing the homeowners to remove all of the structures they had erected, and to pay fines and attorneys fees to the association. Instead of filing an answer, the homeowners sought, by motion, to strike the association’s pleadings. The lower court denied the motion and commented that the homeowners’ argument that the members who brought the action were not authorized to do so had no bearing on whether the structures should have been taken down. It denied their request to file a pleading at that point. A separate complaint by the homeowners to prevent the same two members who brought the action against them from participating in the association’s elections was also dismissed. The lower court dismissed an appeal of the final judgment brought by the homeowners because the association’s motion for attorneys’ fees was still pending and the homeowners had not sought leave to file an interlocutory appeal. Following subsequent attempts by the homeowners to have the final order vacated and to obtain a second order to have the structures removed, the lower court issued a third order to have the structures removed within forty-five days of the judgment, after which the homeowners faced daily fines of one hundred dollars and costs for the removal of the structures by the association.

On appeal, the Court rejected all of the homeowners’ arguments and remanded the matter solely for a determination of attorneys’ fees. The Court recognized that the lower court should have addressed the issue of the standing of the association members who brought the action against the homeowners, but found that even if they weren’t duly elected officers of the association they had the right, as individual members of the association, to protest the homeowners’ privatization of common areas. The Court addressed the homeowners’ factual argument as to whether the structures they erected were allowed by law even though they didn’t raise the matter at trial but instead challenged the validity of the claim based on the association members’ standing. The Court found that the homeowners’ structures were in violation of the law because they were erected for a private benefit. The association’s claim for attorneys’ fees was remanded for a factual determination as to whether the association members who brought the action against the homeowners acted as de facto officers of the association. The Court noted that if the association members who brought the action were found to be de facto officers of the association, that attorneys’ fees could be awarded, but not if they were found only to be acting in their private capacities. The Court also noted that while attorneys’ fees are seldom awarded in an action in which a party’s liability was to be established, the by-laws of the association allowed such awards under certain circumstances.

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