HOA Boards Cannot Force a Suiting Homeowner to Sue All Other Owners for the Board's Actions
May 15, 2023 12:05
On May 12, 2023, my clients Chris and Roxana Kappmeyer prevailed in the Texas Supreme Court, reversing trial and appellate courts which, in a clear abuse of discretion, sided with an HOA.
The Kappmeyers sued their HOA because the HOA's board, without any vote by the homeowners generally, gave itself vast new powers. The Kappmeyers, when they bought their land, never signed up for an all-powerful HOA with assessment, rule-making, and foreclosure powers, so they sought to have the board's "amendment" to the deed restrictions declared unenforceable against them. However, the HOA, no doubtwishing to avoid having the merits of the dispute addressed, asked the trial court to require the Kappmeyers to sue all 700 other homeowners before being allowed to proceed. That would cost in the range of $100,000 in administrative costs. Yet the trial court agreed with the HOA and ordered the Kappmeyers to sue 700 people or else have their case dismissed. The court of appeals did too.
The Texas Supreme Court reversed. It held that an HOA has to prove which other homeowners actually claim an interest in a lawsuit before forcing a plaintiff to sue other owners. It also held that an order requiring that all homeowners be sued is an unfair financial burden on a homeowner seeking to have his or her own rights protected.
Over the years, I've on several occasions had HOA's try this move, seeking, basically, to keep homeowners from ever seeking justice by making it so expensive that it's effectively impossible. In most cases, the HOA has never pressed the issue because it means that every homeowner the HOA represents has to go get a lawyer to defend a lawsuit they never asked to be involved with. The HOA in this case, however, dug in its heels. The Kappmeyers hung in there, though, fighting at every level to prevent HOA's from doing this again when it's clear there are few if any other homeowners who wish to be sued for the actions of their HOA board.
The Kappmeyers sued their HOA because the HOA's board, without any vote by the homeowners generally, gave itself vast new powers. The Kappmeyers, when they bought their land, never signed up for an all-powerful HOA with assessment, rule-making, and foreclosure powers, so they sought to have the board's "amendment" to the deed restrictions declared unenforceable against them. However, the HOA, no doubtwishing to avoid having the merits of the dispute addressed, asked the trial court to require the Kappmeyers to sue all 700 other homeowners before being allowed to proceed. That would cost in the range of $100,000 in administrative costs. Yet the trial court agreed with the HOA and ordered the Kappmeyers to sue 700 people or else have their case dismissed. The court of appeals did too.
The Texas Supreme Court reversed. It held that an HOA has to prove which other homeowners actually claim an interest in a lawsuit before forcing a plaintiff to sue other owners. It also held that an order requiring that all homeowners be sued is an unfair financial burden on a homeowner seeking to have his or her own rights protected.
Over the years, I've on several occasions had HOA's try this move, seeking, basically, to keep homeowners from ever seeking justice by making it so expensive that it's effectively impossible. In most cases, the HOA has never pressed the issue because it means that every homeowner the HOA represents has to go get a lawyer to defend a lawsuit they never asked to be involved with. The HOA in this case, however, dug in its heels. The Kappmeyers hung in there, though, fighting at every level to prevent HOA's from doing this again when it's clear there are few if any other homeowners who wish to be sued for the actions of their HOA board.