The lawsuit appears to involve seven named plaintiffs, those plaintiffs' seven community associations, and those seven community associations' community management companies and association law firms. The original complaint suggested that both the named plaintiffs and named defendants were representative of larger classes and might be expanded.
The Amended Complaint asserts claims for:
(1) violation of the FDCPA by defendants arising out of the filing of liens for unpaid assessments and subsequent foreclosure actions;
(2) a declaratory judgment to the effect that restrictive covenants do not create a mortgage or mortgage-like relationship, and the act (or threat) of foreclosure should not be available to community associations for the nonpayment of assessments;
(3) intentional interference with a contractual relationship between owners and their mortgages; and
(4) abuse of process.
Damages sought include actual, compensatory and consequential damages, statutory damages and attorney's fees, and punitive damages.
South Carolina has not adopted a planned community type statute. Plaintiffs argue that the actions or threats of action by community associations and their representatives are not supported by contract or common law. It appears that Plaintiffs are not arguing that Defendants have improperly followed the process, but that there is no legal process to be followed for collection of assessments and that Defendants' actions violate the law and should be stopped. This federal lawsuit and its outcome are relevant to all states where there is no community association statutory scheme as the same allegations could be made elsewhere and a bad decision in South Carolina would impact elsewhere.
Amicus Brief
Status: Order and Opinion, Judgement in a Civil Action
Prior Opinions: Amended Complaint
Brief Author: Marvin Nodiff, Esq.
CAI Amicus Review Panel: Robert Diamond, Esq., Chair of Amicus Committee, Edmund Allcock, Esq. (MA), Marc Markel, Esq. (TX), Karyn Branco, Esq. (NJ), and Steven Sugarman, Esq. (PA)