Bailey v. STONECREST CONDOMINIUM ASS'N

696 S.E.2d 462, 304 Ga. App. 484, 2010 Fulton County D. Rep. 1992, 2010 Ga. App. LEXIS 554
CourtCourt of Appeals of Georgia
DecidedJune 18, 2010
DocketA10A0579
StatusPublished
Cited by23 cases

This text of 696 S.E.2d 462 (Bailey v. STONECREST CONDOMINIUM ASS'N) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bailey v. STONECREST CONDOMINIUM ASS'N, 696 S.E.2d 462, 304 Ga. App. 484, 2010 Fulton County D. Rep. 1992, 2010 Ga. App. LEXIS 554 (Ga. Ct. App. 2010).

Opinion

Blackburn, Judge.

Barbara Bailey sued Stonecrest Condominium Association, Inc., the members of the Association’s Board of Directors (Lagrit Morris, John Monteith, Leona McMichael, Harold Brown, and Brenda Clark-son), and the Association’s management company (Today American Management, Inc.) (collectively “defendants”), claiming that amendments to the Association’s Bylaws that prohibited leasing constituted racial discrimination in violation of OCGA §§ 8-3-202 (a) and 8-3-222 of the Georgia Fair Housing Act and that the Board breached its fiduciary duties in proposing those amendments. Following the trial court’s grant of summary judgment in favor of defendants as to all of Bailey’s claims, she appeals, arguing that questions of material fact remain as to whether defendants’ actions constituted racial discrimination, whether the Board breached its fiduciary duties, and whether she is entitled to recover punitive damages and attorney fees. For the reasons set forth below, we find that genuine issues of material fact exist as to whether the defendants passed the amendments with a discriminatory intent and therefore vacate the grant of summary judgment and remand the case for further action consistent with this opinion.

*485 Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c); Britt v. Kelly & Picerne, Inc. 1 “On appeal from the grant or denial of a motion for summary judgment, we review the evidence de novo, and all reasonable conclusions and inferences drawn from the evidence are construed in the light most favorable to the nonmovant.” McCaskill v. Carillo, 2

So construed, the evidence shows that the Declaration of Condominium and Bylaws for Stonecrest Condominium Association were initially recorded in 1984. Pursuant to the Declaration’s own terms, Stonecrest could amend its Declaration and Bylaws by obtaining approval of any amendments by two-thirds of those members eligible to vote. However, the Bylaws also provided that a member’s eligibility to vote could be suspended by the Board of Directors of the Stonecrest Condominium Association if the member were in violation of any duties imposed by the Declaration and Bylaws. According to members of the Board, sometime around the summer of 2003, the Board began discussing the possibility of amending the Bylaws to include a restriction on unit owners’ ability to lease their property. The discussions arose out of a growing concern among the Association members that an increase in the number of units being rented might have a detrimental effect on property values. Specifically, the members feared that property values would be affected because of the perception that rental units are typically not maintained as well as owner-occupied units and because an increase in rental units could result in higher interest rates for potential buyers, thereby reducing the marketability of all units. However, the minutes from the Board’s meetings from 2003 through 2004 do not mention such discussions.

In June 2004, Bailey purchased a Stonecrest condominium to use as her primary residence. In late August or early September 2004, she purchased a second unit for the purpose of leasing it. At that time, neither Bailey nor her real estate agent was informed that leasing restrictions were being proposed. On December 11, 2004, Bailey entered into a one-year lease agreement with Kimberly Ragland, an African-American woman with a small child, for the second unit. Shortly before Ragland moved into the unit, Bailey informed Lagrit Morris, who served as the president of Stonecrest Condominium Association’s Board of Directors at that time, that she had found a tenant. When she informed Morris that the tenant was a young African-American woman, Morris responded that she *486 thought that might be a problem because she was unsure how other residents would receive an African-American woman. Several days later, on the night that Ragland moved into the unit that Bailey had leased to her, Bailey received a telephone call from Claire Jackson, another Stonecrest resident, during which Jackson used racial epithets to complain about Bailey’s new tenant and stated that unit owners did not want that kind of person living there. The next day when Bailey telephoned Morris to express her concern about Jackson’s telephone call, Morris reminded her of their earlier conversation and further stated that Bailey’s renting her unit to an African-American had gotten other unit owners into an “uproar” and that some owners were skeptical of minorities based on the fact that a previous African-American owner had his unit foreclosed upon a few years earlier. During this same conversation, Morris told Bailey that because of Bailey’s tenant, amendments to the Bylaws that would prohibit the leasing of units were being proposed.

On February 19, 2005, the Board sent a letter to the Association members, reminding them of the upcoming annual meeting and informing them that amendments to the Bylaws that would restrict leasing were being proposed. The letter stated that the purpose of the lease restriction was “to preserve the character of the condominiums as predominantly owner-occupied, and to comply with the eligibility requirement for financing in the secondary mortgage market.” The letter further stated that the leasing restriction would “prevent units from being bought as investment property and [would] keep the appreciation value of our units intact.” On February 28, 2005, approximately 80 to 90 Association members attended the annual meeting. Bailey and others spoke in opposition to the amendments. Others spoke in favor of the amendments; however, the only person whom Bailey could specifically recall stating that the amendments should be passed to keep out minorities was Jackson. Association members also discussed including a grandfather clause, which would allow owners who were leasing units at the time the amendments became effective to continue doing so, and a hardship exception, which would allow owners to lease their units based on certain financial considerations and Board approval. After the discussions were concluded, more than the required two-thirds of the Association members voted to adopt the amendments, including the lease restriction with its grandfather clause and hardship exceptions.

Earlier that same month, Bailey’s tenant, Ragland, informed Bailey that she had been offered a job that would require her to move to another city, and therefore she needed to break her lease. Ragland never told Bailey that she was subjected to discrimination while residing at Stonecrest and cited only her new job as the reason for her move. Although Bailey leased the unit to another tenant for a *487 short time, that tenant also moved. Consequently, when the amendments became effective in August 2005, Bailey’s unit was not being leased, and thus she could not take advantage of the grandfather clause.

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Bluebook (online)
696 S.E.2d 462, 304 Ga. App. 484, 2010 Fulton County D. Rep. 1992, 2010 Ga. App. LEXIS 554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bailey-v-stonecrest-condominium-assn-gactapp-2010.