State v. Kinsella
2011 ND 88
| N.D. | 2011Background
- Mid Am Group, LLC developed Village Homes at Harwood Groves and procured insurance for the property through Auto-Owners.
- A hail storm in 2007 damaged the roof; Auto-Owners paid $215,503.22, with the check issued to Mid Am, Mid Am Group Realty, and First International.
- First International Bank & Trust foreclosed on the remaining units owned by Mid Am in 2008; First International later purchased and then sold the units.
- In 2009, Village Homes at Harwood Groves Condominium Association was formed as successor to the unincorporated association; Mid Am controlled the prior association and was the de facto board of managers.
- Intervener unit owners and the Association sought to determine entitlement to the insurance proceeds; Mid Am contested that entitlement.
- The district court granted summary judgment favoring the Association, concluding the Association has standing and is entitled to the proceeds, and that an attorney lien filed by Mid Am’s counsel had no effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Association has standing to sue for insurance proceeds | Mid Am argues no standing due to lack of ownership in common elements | Association asserts associational standing to protect members’ interests | Association has associational standing and can pursue the claim |
| Whether the Association is entitled to the insurance proceeds | Mid Am contends proceeds belong to mortgagee/losspayee or others; Association not entitled | Rose: documents require proceeds used to repair common roof; Mid Am fiduciary duties support Association entitlement | Association entitled to the insurance proceeds to repair the roof |
| Whether Mid Am’s attorney lien is valid or enforceable | Mid Am argues lien valid under ND law and common fund theory | lien fails statutory requirements and common fund rationale does not apply here | Attorney lien without effect; common fund doctrine not applicable |
| Whether the district court erred in considering the association’s intervention | Mid Am contests intervention as improper | Interventing parties have standing to defend condominium documents | Intervention proper; district court did not err |
Key Cases Cited
- Jablonsky v. Klemm, 377 N.W.2d 560 (N.D. 1985) (condominium association had limited standing in damages action against developer)
- Nodak Mut. Ins. Co. v. Ward Cnty. Farm Bureau, 2004 ND 60 (ND 2004) (associational standing where members would have standing; germane interests)
- Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (associational standing requires prospective relief benefitting members)
- Barbie v. Minko Constr., Inc., 2009 ND 99 (ND 2009) (summary judgment standard; de novo review)
- Ackre v. Chapman & Chapman, P.C., 2010 ND 167 (ND 2010) (standing; personal stake required for remedial relief)
- Lucas v. Riverside Park Condo. Unit Owners Ass’n, 2009 ND 217 (ND 2009) (summary judgment and association standing considerations)
- Breene v. Plaza Tower Ass’n, 310 N.W.2d 730 (ND 1981) (equitable servitudes and notice of restrictions)