325 P.3d 341
Wash. Ct. App.2014Background
- Eighteen condo unit owners sued board members and Declarant for breach of board duties, negligence, CPA, negligent misrepresentation, fraud by omission/misrepresentation, and civil conspiracy.
- Trial court dismissed Homeowners' claims as untimely under CR 12(b)(6).
- Homeowners appeal; Respondents cross-appeal on attorney fees.
- Court adopts adverse-domination doctrine to toll accrual; Washington recognizes discovery rule and applies majority- domination approach.
- Court holds board duties extend to current unit owners; independent duties to future owners exist only for certain claims; many claims are governed by the Condominium Act duties.
- Case on remand to resolve which claims are timely and which require further factual development under the discovery rule and adverse-domination framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does adverse domination toll accrual for unit-owner claims? | Homeowners: discovery rule tolls accrual; majority- domination applies. | Respondents: accrual upon resignations; no tolling. | Adverse domination tolls accrual under a majority-test; claims may be timely. |
| Do board duties extend to future unit owners? | Plaintiffs seek freestanding duties to future owners. | Duties arise from WCA to current owners; no freestanding duty to future buyers. | Appointed directors owe no freestanding duty to future purchasers for board-duty and negligent-misrepresentation claims; some fraud/ misrepresentation theories may impose duties. |
| To which claims does adverse domination apply? | Adverse-domination tolls claims broadly. | Adverse-domination should be narrow (fraud only). | Adverse domination applies to breach of board duty of care, CPA, negligent misrepresentation, and fraud claims; not to some negligence or civil-conspiracy claims. |
| Do homeowners have standing and proper pleading versus Derivative-derivation issues? | Homeowners have standing to sue for damages to their units. | Association-derived standing; derivative issues unclear. | Homeowners have standing; damages are individual unit-owner damages, not solely association-derived. |
Key Cases Cited
- Satomi Owners Ass'n. v. Satomi, LLC., 167 Wn.2d 781 (2009) (association claims; damages to unit owners, not the association, are owned by unit owners)
- Interlake Porsche & Audi., Inc. v. Bucholz, 45 Wn. App. 502 (1986) (early treatment of fiduciary-duty accrual issues in corporate context)
- Haberman v. Washington Public Power Supply System, 109 Wn.2d 107 (1987) (duty to third parties may arise beyond privity in fraud cases; foreseeability limits)
- Hibbard v. Estates of Hibbard, 118 Wn.2d 737 (1992) (discovery rule extends to concealment by defendant in tolling accrual)
- Quinn v. Connelly, 63 Wn. App. 733 (1992) (discovery and concealment considerations in professional-malpractice context)