In this case plaintiff/counter-defendant, Lottivue Improvement Association, through a purported board of directors, claimed monetary damages in excess of $100,000 against defendants/counter-plaintiffs represented by Mr. Hirzel.
The plaintiff sought damages for lost dues, damages associated with the cancellation of an insurance policy, and additional damages in the form of legal fees for having to defend a lawsuit brought by a neighboring condominium association. They also sought declaratory relief that the defendants/counter-plaintiffs were not the legal board of directors of the Association.
Mr. Hirzel’s clients sought declaratory and injunctive relief requiring the Association to comply with its articles of incorporation, corporate bylaws, and the declaration of restrictions governing the Lottivue Subdivisions. They also sought declaratory and injunctive relief that the defendants were the legal board of directors of the Association, and that the purported board did not have authority to impose disproportionate assessments in violation of the governing documents. Additionally, Mr. Hirzel sought injunctive relief allowing them to inspect the Association’s books and records.
On February 23, 2015, the court ruled that the Association’s articles of incorporation, bylaws, and declaration of restrictions were enforceable. The court held that the documents could not be amended unless the terms of the Michigan Nonprofit Corporation Act were complied with. On March 27, 2015, the court dismissed plaintiff’s claims and ruled that they were ineligible to serve as directors of the Association as they were not members of the Association. The court also ruled that the purported board had no standing to bring any claims on behalf of the Association.
The court granted summary disposition in favor of the defendants/counter-plaintiffs and granted an injunction seating them as the legal board of directors of the Association. The court further held that the association was required to comply with its governing documents and invalidated an illegal assessment imposed by the purported board.
An article was written about this case in the May 6, 2015 Michigan Lawyer’s Weekly.