797 N.W.2d 316
N.D.2011Background
- Mid Am developed Village Homes at Harwood Groves and recorded condominium documents on May 24, 2005; the unincorporated association formed and Mid Am acted as de facto board and insured the property through Auto-Owners.
- A hail storm on September 12, 2007 led to an insurance claim of $215,503.22 for roof damage.
- In October 2007 First International foreclosed on the units Mid Am owned; by 2008 judgment, First International acquired the remaining units and later sold them to Adams Development Corp.
- November 20, 2008 Auto-Owners issued a settlement check to Mid Am, Mid Am Group Realty, and First International; in 2009 First International sued to claim the proceeds.
- In 2009 the condominium owners and Intervener Plaintiffs obtained standing to intervene; the district court ultimately held the Association (as successor to the unincorporated association) is entitled to the insurance proceeds.
- The district court also held Mid Am was the de facto board with fiduciary duties to repair the roof, and that an attorney lien claimed by Mid Am had no effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Association has associational standing to sue | Mid Am argues lack of standing based on Jablonsky | Association lacks ownership interest in common elements | Association has associational standing |
| Whether the Association is entitled to the insurance proceeds | Association enforces covenants to repair and use proceeds for roof | Mid Am retains entitlement under mortgage terms | Association entitled to insurance proceeds |
| Whether the attorney lien is valid or enforceable | Lien valid under ND law | Lien fails statutory requirements and common fund theories do not apply | Attorney lien invalid; lien has no effect |
Key Cases Cited
- Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (associational standing for prospective relief; standing depends on individual members)
- Nodak Mut. Ins. Co. v. Ward Cnty. Farm Bureau, 2004 ND 60, 676 N.W.2d 752 (ND 2004) (requirements for associational standing; members’ standing suffices)
- Jablonsky v. Klemm, 377 N.W.2d 560 (ND 1985) (condo association not real party in interest in damages case; standing limits)
- Ackre v. Chapman & Chapman, P.C., 2010 ND 167, 788 N.W.2d 344 (ND 2010) (standing as a function of concrete injury and relief sought)
- Barbie v. Minko Constr., Inc., 2009 ND 99, 766 N.W.2d 458 (ND 2009) (summary judgment standards and de novo review)