Documentation and Litigation
Clients sometime ask: “Will we get sued if we do this?” Beware of the attorney who answers this with “Yes” or “No”. No attorney can know if or when a client will be sued. People sometimes sue when they shouldn’t. The key is putting your association in a position to defend any claim, frivolous or otherwise. Having the proper documentation really helps a defense and can greatly reduce the time and expense involved.
This may seem simplistic, but it works. First, document corporate actions. Most community associations document board actions with meeting minutes or written resolutions. Second, in addition to documenting the action taken, boards should consider documenting why they are taking the action. Stating the reason for the action helps to minimize future factual disputes regarding the board’s intent or motivation. Third, in addition to documenting the action and why it is being taken, it is very helpful when a board documents the authority they are relying on to take any action.
The level of detail in the documentation may vary. We often assist clients in preparing resolutions that are then adopted by the board. The resolutions document what the association is doing, why they are doing it and their authority for taking the action. There is no rule regarding when a resolution is appropriate but some actions that are more likely to result in litigation than others. There are legal and factual issues that tend to end up on litigation more frequently. Not surprisingly, the more money at issue increases the risk of litigation. There are also issues that tend to evoke emotional responses and are therefore more likely to result in litigation. If you are uncertain as to whether or not a resolution is advisable, then you should probably go with a resolution.
In addition to representing associations in construction defect and insurance claims, we represent clients in contract disputes, governance disputes and general litigation. We use that experience to minimize the risk of our general counsel clients ending up in court.