Jury Awards $3.87 Million To Owners In Molokai, Hawaii Condo Dispute

Blog article by David Swedelson, California Condo Lawyer and HOA Attorney, Partner at SwedelsonGottlieb, Community Association Attorneys

We sometimes see community associations that are out of control, treating some of the owners or residents very badly, refusing to make repairs, perform maintenance in or around some owners’ units or homes or worse. As this case out of Hawaii tells us, this type of wrongful conduct can have disastrous results.

According to a news article, a jury awarded Molokai residents and condo owners $3.87 million in general and punitive damages against their condominium association. The couple said they were targets of threats, harassment and intimidation by an unlicensed contractor (who was alleged to have had a criminal record and was hired to do various tasks around the Ke Nani Kai Condominium in West Molokai) and the resident manager.

A small group of condo owners controlled the condominium’s board of directors, and it was claimed that they either directed or condoned the campaign of abuse. The plaintiff owners filed their lawsuit against the Ke Nani Kai Association of Apartment Owners, its board of directors and several individuals. Their attorney said the intimidation lasted for several years and continued even after the lawsuit was filed in mid-2008.

Their attorney was quoted as describing what occurred as “the West Molokai version of ‘Lord of the Flies’ or the equivalent of a John Ford western where an isolated town is run by a villain and his collection of thugs.”

According to the news article (follow this link), the jury found the condominium association’s board of directors, its employees and agents violated state condominium laws. They were also found to have engaged in a variety of illegal acts including racketeering, civil conspiracy, gross negligence, malicious prosecution, breach of contract, and both negligent and intentional infliction of emotional distress.

The plaintiff owners’ attorney said it appears to be the largest monetary judgment of its kind on record anywhere in the country in a case involving an internal dispute among factions of owners in a condominium. “The jury sent a very strong message,” said the attorney. “If you abuse your owners, and engage in anything close to the outrageous conduct that happened here, juries aren’t going to stand for it.”

Do not let this kind of thing happen at your association. It is up to the board to ensure that it does not. Boards should never condone bad behavior directed at any of the owners or residents.

David Swedelson is a condo and HOA law expert. He can be contacted via email at dcs@sghoalaw.com. Have comments? Send them to David.

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