Dealing with Vexatious Litigants in Community Association Matters

Vexatious litigants bother, embarrass and/or cause legal expenses to the defendant and can be a costly problem in today’s legal system. Vexatious litigation is becoming more common in the realm of community associations and quite often these litigants represent themselves when they file lawsuits against their own association or contest decisions made by the Board of Directors. The result is that sometimes frivolous and expensive litigation occurs that must then be defended by the association’s lawyers.

In many situations, the homeowner’s claims may appear to be meritless. However, association Boards must still address these claims and spend resources defending rather than allocating those monies to other association needs. This may occur even in situations where the association has not been sued. The result can be very frustrating; especially when the Board or management is obligated to deal with someone who may have irrational expectations, is not represented by an attorney and, as a result, is not burdened by costly litigation expenses. An experienced community association attorney can help guide the Board through what can be a lengthy and stressful process.

The most common vexatious litigant in a community association setting is an individual who resorts to lawsuits as a way to harass, intimidate or coerce the Board or their neighbors. Usually, this occurs by repeated filings for damages or equitable relief contained in frivolous or unsubstantiated Complaints. These actions burden the court system and perplex Board Members in their attempt to quickly resolve the situation. Fortunately, many states have enacted legislation, or provide other procedural protections that attempt to stymie vexatious litigants, in general, especially when it comes to frivolous lawsuits. Over time, legislatures and judges have recognized that some parties are so ungovernable that they need to have their access to the court system restricted. Having procedural statutory protections in place allows the courts and other parties to keep the vexatious litigant in check and also provides homeowners’ associations with some line of defense.

Many vexatious litigants share common characteristics in furthering their claims by ignoring adverse rulings and other procedural obstructions. Often these individuals bring redundant actions or claims against their neighbors, management, or the Board and are very persistent in their quest to satisfy their own selfish goals. If courts find that an action is being brought by an improper purpose by a party, there are mechanisms to keep them in check. Judges will often look at the whole history of the dispute and determine whether the conduct is for the sole purpose of delay, harassment or oppression of other parties. This may include filing pleadings or motions that have no merit or conducting excessive or unnecessary discovery to further claims that have no legal basis. These type of litigants create a paradox sometimes because they ignore court orders and rules all the while furthering their self-interested goals. This type of persistent abuse of litigation has caused states, including Michigan, to enact statutes and procedures to combat this problem. Of course, a judge has inherent power to control the actions of abusive litigants by enjoining, restricting or even dismissing such cases and then ordering that sanctions be paid by the offending party. The dilemma for courts is that although judges have an inherent authority, both by common law and through statutes to curtail vexatious litigants, these persons are also citizens that have Constitutional rights to have access to the courts. This creates a challenge for legislatures in defining precisely what constitutes vexatious conduct or proceedings. In Federal Court, there are Rules of Civil Procedure that allow a party to recover costs, expenses and attorneys’ fees on a claim that is determined to be frivolous. In State Civil Court, Michigan allows for the court to award similar costs and fees upon the filing of a motion of a prevailing party in an action if an action or defense is frivolous. An action or defense is frivolous if (1) its primary purpose is to harass, embarrass or injure; (2) the party had no reasonable basis to believe that the facts underlying the legal position were true; or (3) the legal position lacked arguable legal merit. The award can include all reasonable costs actually incurred and any allowed by law or court rule, including court costs and reasonable attorneys’ fees (MCL 600.2591).

In the past, some community association Boards have resorted to, in the worst cases, bringing a separate action for abuse of process which is founded in tort law. Generally, a party alleges these sorts of claims when another party misuses the court process and their actions are not justified by the underlying situation. In the most egregious situations, courts have designated an individual as a vexatious litigant and, by court order, restricted them from filing further actions which results in that individual only being able to appeal the vexatious litigant Order itself. In some situations, the courts will find that the litigant must have the signature of a licensed attorney to file any further actions on their behalf against the same parties for the same or similar claims. Also, courts routinely award costs and attorneys’ fees to the prevailing party when the action is based on a complete absence of a justiciable issue of law or fact. This can be a tricky situation for judges and courts as any restrictions placed upon a person’s right to access the courts must be carefully thought out and must not be unnecessarily restricted. Restrictions prohibiting a litigant who proceeds without an attorney from submitting any further filings might result in what is perceived as a blanket prohibition which is contrary to due process law. In these situations, courts have required that the litigant provide an Affidavit when filing a new action which must be in proper legal form. The Affidavit would state whether the litigant has previously raised the same proposed claims in any other court and whether the pleadings are filed in good faith, are not malicious, and have legal merit. Some courts have actually flagged certain litigants on the court’s electronic filing system as potentially vexatious which allows judges to review the case with a higher level of scrutiny.

The best line of defense for community association Boards is to be proactive and communicative with their member homeowners when these types of situations arise. Often, an association’s governing documents provide adequate remedial measures to fine or prohibit certain offensive actions from occurring in the future. Fines may be graduated for successive offenses in increased amounts and due process is usually afforded the homeowner by the Board holding a special meeting or hearing to determine whether the individual has a defense to his or her offending actions. These type of situations are where an experienced community association attorney can assist management companies and community association Boards.

John D. Gwyn focuses his practice on the representation of community associations, management companies and developers with a particular emphasis on real estate and commercial litigation. He has handled many types of community association related matters including assessment collections, lien foreclosures, bylaw violations, civil rights defense and creditor bankruptcy matters. Mr. Gwyn has gained experience in community association law over the years through his representation of condominium and homeowners associations, as well as individual homeowners, in matters involving real estate, contract, and construction defect litigation issues. His extensive litigation and transactional background provides him with the experience necessary to handle even the most complex legal issues that neighborhood associations may encounter. He may be reached at (734) 261-2400 or jgwyn@cmda-law.com.