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Verna v. The Links at Valleybrook Neighborhood Association, Inc.

371 N.J. Super. 77, 852 A.2d 202 (App. Div. 2004)

COMMUNITY ASSOCIATIONS; ELECTIONS—A community or homeowners’ association’s role is to conduct its elections and count votes, not campaign or advertise against a candidate or disparage an otherwise eligible candidate even if there is an ongoing dispute between the association and the candidate.

A homeowner owned a townhouse in a planned unit development governed by a neighborhood association. The owner was a self-employed electrician, which required him to use a large commercial van. He kept it parked in his driveway. The van’s appearance troubled the association because the association’s governing documents barred parking commercial vehicles without prior written consent of the board of directors of the association. The van had commercial license plates, a magnetic commercial sign on its side, and a roof rack holding several ladders and PVC tubing.

The owner contended that the association did not have the authority to prevent him from parking in the street because the municipality had recently passed an ordinance turning roads within the development into public streets. The lower court held that although an association may not enforce its own traffic regulations, it does have the power to regulate parking. The Appellate Division affirmed, concluding that the ability to regulate parking is similar to a neighborhood scheme created by deed restrictions. Such a scheme, as a matter of contract, may impose greater limits on an owner’s use of property than governmental restrictions.

While this was being litigated, the owner decided to run for the association’s board of directors. Once he publically expressed this desire, the board quickly imposed parking fines on him. Then, the board held that the owner was not in good standing and was ineligible to vote until he paid the fines and signed an agreement that he would no longer park his commercial van on the association’s property. The board also sent a candidate audit to all unit owners, including a description of every candidate’s past or current violations of the association’s rules, whether the violations were resolved, and whether the candidates were in good standing and entitled to vote. The owner with the van lost the election and then claimed that this audit was unauthorized by the governing documents. He sought to void the election. The association argued that it was not necessary for the association’s governing documents to specifically authorize such an audit. The lower court agreed and dismissed the case, basing its decision on one of the association’s bylaws which stated that the board had “the power to do all things incidental and necessary to the accomplishment of” its other enumerated powers.

The Appellate Division reversed, holding that circulating the audit exceeded the board’s powers. A board’s actions incidental to conducting an election are only those steps necessary to the casting and counting of votes. The Court reasoned that since the outstanding parking fine did not bar the owner’s ability to run, there was no legitimate reason for the association to sponsor an advertisement about it. Furthermore, the fact that the board had never previously issued such an audit demonstrated its ulterior motives. Regardless, the Court held that the owner was not entitled to a remedy other than declaratory relief. Since board members were only elected to one-year terms, it would have been pointless for the Court to require a new election when subsequent elections had already taken place. Furthermore, no monetary reward could be given because the position had no monetary value.

The owner also claimed that he was defamed by the candidate audit. The lower court dismissed the claim, concluding that he was a public figure who failed to provide evidence of actual malice. The Appellate Division affirmed, holding that by running in an election, the owner “had thrust himself into a spotlight” and he could then be viewed as a public figure. Candidates for public office, even if they fail to win, take on the role as public figures for the limited purpose of their candidacy. Regardless of the slight inaccuracy of the amount owed by the property owner, the audit did not convey a defamatory meaning. The assertion that the owner was not in “good standing” was simply an opinion about his eligibility to vote. The only time such a statement could be defamatory would be if it implied specific assertions of underlying objective facts that were false, which was not the case here.

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