State Court dismisses Lawsuit against HOA in Real Property Dispute involving the State of Michigan

Recently, a Circuit Court Judge in Michigan agreed with CMDA that claims made in a lawsuit filed by a group of subdivision homeowners against a neighboring homeowner’s association (HOA) in a pending real property civil action should be dismissed.

The underlying facts showed that a collective of Plaintiff homeowners that reside in a subdivision that borders a lake maintained for many years a private road that courses along a canal to the lake. The road runs next to a five-foot strip of land that separates the roadway from the Western portion of the channel that flows inwards from the lake. On the other side of the canal is a neighboring subdivision maintained by the Defendant HOA where certain individuals reside whose homes are located adjacent to the waterway.

The Plaintiffs contend in the action that the neighboring resident Defendants and the HOA are responsible to maintain the Western portion of the seawall that has allegedly deteriorated over time due to lack of maintenance. As a result, Plaintiffs claim that Defendants’ failure to maintain and repair the seawall has caused damage to the five-foot strip of land, and the private road it abuts, which has deprived them of the use and enjoyment of their respective properties.

In decades past, during the development phase of the Defendant’s subdivision, the original developer granted an express easement to the Defendant lot owners along the canal to use the channel for navigational purposes and to maintain the abutting seawalls. The five-foot strip of land is part of the easement, but was deeded to the State of Michigan as part of a tax sale foreclosure that occurred several decades after the property was developed.

The Plaintiffs’ lawsuit alleges various tort claims for nuisance and negligence as well as declaratory relief. Due to the fact that the State of Michigan now owns the easement, it was sued separately by Plaintiffs in the Court of Claims in Lansing to seek enforcement of its alleged duties and that action is currently pending.

Because the Plaintiffs are not a party to the easement, the State Court ruled that they lack standing to enforce the contractually based easement obligations against the Defendant homeowners. Additionally, because Plaintiffs are not parties to the neighboring HOA’s governing documents, it was ruled that they lack standing to enforce those obligations as well. The HOA argued at hearing that although it collects annual assessment fees from its members to maintain waterways, the funds are limited to controlling aquatic weeds and to dredging of the canals located in the subdivision. Also, that no monies are used for seawall maintenance, as the individual homeowners do so at their own expense. Furthermore, that the seawalls are not considered to be common elements for which the HOA is obligated to maintain, repair or replace.

Early on in the litigation, Plaintiffs sought entry of an Order for Affirmative Injunctive Relief on their equitable claims, including an abatement of the alleged nuisance. The argument was to preserve the status quo considering the current high water levels of the lake and to support their allegations that erosion has compromised the seawall, the stability of the roadway, and the guardrails running along the canal. The Defendants declared that the seawall was never intended to provide subjacent collateral support for the road, but rather to protect navigability of the channel. The Court did not agree with Plaintiffs’ arguments, issuing its opinion that not all of the elements required to allow abatement of the alleged nuisance prior to trial had been established. Therefore, the Court opined that the issuance of a Preliminary Injunction would not preserve the status quo, but instead, would grant Plaintiffs final relief prior to a full hearing on the merits of their claims.

The HOA denied the material allegations of the Plaintiffs’ Complaint in its responsive pleadings and brought a Motion for Summary Disposition on the various issues presented. The Court agreed and dismissed the claims against the HOA, only, with prejudice. The case has drawn media attention and continues to present some interesting factual and legal challenges involving claims based in tort, contracts, and equity.

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.