Caracci v. Cobblestone Village Condominium Ass'n

927 So. 2d 542, 2006 La. App. LEXIS 627, 2006 WL 782747
CourtLouisiana Court of Appeal
DecidedMarch 28, 2006
DocketNo. 05-CA-784
StatusPublished

This text of 927 So. 2d 542 (Caracci v. Cobblestone Village Condominium Ass'n) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caracci v. Cobblestone Village Condominium Ass'n, 927 So. 2d 542, 2006 La. App. LEXIS 627, 2006 WL 782747 (La. Ct. App. 2006).

Opinion

JAMES L. CANNELLA, Judge.

|gThe Plaintiffs, Frank Caracci and Vincent Caracci, appeal from a summary judgment in a property owners’ condominium dispute which dismissed their suit against individual condominium officers, Anthony Scandialato (Scandialato), Louis A. Heyd, Jr. (Heyd), and Daniel A. Cali, Sr. (Cali) (Defendants). We affirm. .

Frank Caracci owns a condominium unit in Cobblestone Village. Vincent Caracci is his tenant. In September of 2001, the unit sustained water and mold damage, allegedly from defects in the common areas. The Plaintiffs notified the officers of the Cobblestone Village Condominium Association (Association) of the problem. On November 1, 2001, the Association, acting through its Board of Directors (Board), notified the condominium’s insurer, Massachusetts Bay Insurance Company (Massachusetts) of the problems. Subsequently, the insurer hired Quick & Associates, Inc. (Quick) to survey the damage and to issue a report with recommendations.

[sOn May 7, 2002, the Plaintiffs sued the Association, Hanover Insurance Company, Board members, Scandialato and Shelly Stephens, and XYZ insurance company. The petition was later amended to include Massachusetts (the correct insurer and Hanover’s wholly owned and affiliated company), and Board members, Heyd, Cali, Sharon Lemoine (Lemoine), Marie Davis (Davis), and Richard Shephard (She-phard).1 Quick’s report was not completed and submitted to Massachusetts until one year later, September 20, 2002. Shortly after, on October 28, 2002, Massachusetts issued a check to the Association for $67,916.35 to cover the cost of the repairs. The Association then contracted with American Remediation & Restoration (American) to perform the repairs for $72,429.34. The contract, executed in January of 2003, contains an indemnification clause in which the Association agrees to indemnify American for any claims related to the work.2

On February 2, 2005, Scandialato, Heyd and Cali filed for summary judgment under La.R.S. 9:2792.7, the immunity statute for unpaid directors, officers or trustees of a homeowners association. A hearing was [544]*544held in March of 2005. On May 5, 2005, the trial judge granted the motion dismissing movers from the suit.3

On appeal, the Plaintiffs assert that the trial judge erred in granting the motion for summary judgment because there is a disputed issue of material fact regarding whether the individual Defendants are immune under La.R.S. 9:2792.7 by acting in good faith, and without wanton or reckless disregard for the Plaintiffs, and whether they breached their fiduciary duty to the Plaintiffs.

|4The Plaintiffs assert that Scandialato’s, Heyd’s and Cali’s conduct were in bad faith and wanton and reckless, precluding immunity under the statute for damages sustained by the Plaintiffs. The Plaintiffs assert that it is undisputed that Quick did not issue its report for one year, which allowed the mold to grow, causing the damage to become so extensive that the unit became uninhabitable. They argue that Scandialato, Heyd and Cali should have taken action sooner to remediate the mold problem in their unit and were in bad faith and breached their fiduciary duty to the Plaintiffs by failing to consider the defects in Quick’s recommendations that were discovered by their expert and that was provided to them for their review prior to retaining American. They argue that they had a non-delegable duty to investigate the claims of the Plaintiffs’ expert regarding the Quick recommendations in order to guard the interest of the Association members before contracting with American.

The Plaintiffs further argue that Scan-dialato, Heyd and Cali were in bad faith by acting outside the scope of their authority when they violated their own resolution of August 19, 2002 that required unit owner consent before accepting the insurance proceeds for the mold damage. Further, the Plaintiffs contend that they violated the Condominium Declaration and ByLaws and acted outside their authority by granting indemnification to American for claims arising from the contract. The Plaintiffs further contend that they breached their fiduciary duties by filing the injunction against the Plaintiffs.

Scandialato, Heyd and Cali respond that there are no material issues of disputed fact. They contend that the Plaintiffs did not plead willful/wanton misconduct in their petitions, that the allegations in opposition to the motion are legal conclusions, and that the legal standard under R.S. 9:2792.7 is willful and wanton conduct, not bad faith. They assert that the Condominium Declaration and |sBy-Laws allow the Association to enter into contracts for the benefit of the condominium, which implicitly includes the right to indemnify the contractor since the indemnity agreement does not affect the Plaintiffs’ right to sue American. They assert that the Condominium Declaration provides that insurance proceeds are to be paid first to repair damages, with .any excess to be held in trust for the owners.

Scandialato, Heyd and Cali contend that they acted in the best interest of all unit owners. Within two months from the notice of the damage, they notified Massachusetts, which funded Quick as soon as practical to evaluate the problem. The delay in Quick’s report was not their fault because they had no control over the evaluator. Furthermore, as soon as they received the insurance proceeds they hired American to repair the damages. They note that they were forced to file the injunction, further delaying the repairs because the Plaintiffs refused American access to their unit, despite the Con[545]*545dominium Documents that authorize the Association the right to make repairs to the common areas and to enter any unit to make emergency repairs. Thus, the additional delay in attending to the Plaintiffs’ unit was caused by the Plaintiffs own refusal to allow American entry to remediate the mold damage.

La.R.S. 9:2792.7 provides in part:

A. A person who serves as a director, officer, or trustee of a homeowners association and who is not compensated for such services on a salary basis shall not be individually liable for any act or omission resulting in damage or injury, arising out of the exercise of his judgment in the formation and implementation of policy while acting as a director, officer, or trustee of that association, or arising out of the management of the affairs of that association, provided he was acting in good faith and within the scope of his official Junctions and duties, unless such damage or injury was caused by his willful or wanton misconduct.
|fiB. For purposes of this Section, “homeowners association” means any of the following:
(1) A condominium association as defined in the Louisiana Condominium Act, R.S. 9:1121.101 et seq.[ Emphasis added.]

The Condominium Declaration (Declaration) grants to the Association, which is comprised of all unit owners, “all of the powers necessary” to govern, manage, maintain, repair, administer and regulate” the property. Condominium Declaration, Article IV, paragraph 2. It authorizes the Association to make any necessary repairs to the common elements, and to enter individual units to perform emergency repairs. Id. It also requires insurance proceeds received for property damage to be paid to the Association, which shall pay for repairs first and to hold any excess in trust. Condominium Declaration, Article VII, paragraph 2.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Kinchen v. Louie Dabdoub Sell Cars, Inc.
912 So. 2d 715 (Louisiana Court of Appeal, 2005)
Smith v. Our Lady of the Lake Hospital, Inc.
639 So. 2d 730 (Supreme Court of Louisiana, 1994)
Caracci v. Cobblestone Village Condominium Ass'n
877 So. 2d 1000 (Louisiana Court of Appeal, 2004)
Caracci v. Cobblestone Village Condominium Ass'n
888 So. 2d 207 (Supreme Court of Louisiana, 2004)

Cite This Page — Counsel Stack

Bluebook (online)
927 So. 2d 542, 2006 La. App. LEXIS 627, 2006 WL 782747, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caracci-v-cobblestone-village-condominium-assn-lactapp-2006.