Bailey v. Stonecrest Condominium Association

Barbara Bailey (plaintiff) bought a Stonecrest condo as her primary residence and a second to rent out. Neither Bailey nor her agent knew that the Stonecrest Condominium Association (codefendant) was considering leasing restrictions. When Bailey told association board president Lagrit Morris (codefendant) that Bailey had found an African American tenant, Morris said residents might object. Resident Claire Jackson called Bailey, used racial epithets, and said other residents objected to that kind of person living there. The next day, Morris said Bailey’s rental had created an “uproar,” resulting in proposals to prohibit leasing. Two-thirds of the residents voted to restrict leasing, with a grandfather clause and hardship exception. But Bailey’s tenant, and a second tenant, moved out after a short time, so Bailey did not qualify for the grandfather exception, and she did not apply for a hardship exception. Bailey sued the association, several board members, and the property management company, claiming that the bylaw amendments constituted racial discrimination in violation of Georgia state law and that the board breached its fiduciary duties in proposing them. The association countered that the amendments had been proposed before Bailey bought her condos, but the relevant board meeting minutes made no mention of them. The trial court granted the association summary judgment. Bailey appealed.