Lake Forest Property Owners’ Association v. Smith

The Lake Forest Property Owners’ Association (the association) (plaintiff) appealed from a declaratory judgment in favor of condominium association members (the association members) (defendants) that the association lacked the authority to cast certain votes at its annual meeting to elect board members and amend the bylaws to increase monthly dues. Association bylaws gave the developer or its successor the authority to vote on association matters based on the number of acres owned in the development. The association argued that by virtue of its exercise of an option to purchase the common facilities in the condominium development from the developer, it became the developer’s successor in interest in lots that the developer retained after the sale for purposes of being entitled to cast votes in association matters. The association members argued that after the developer sold the common facilities to the association, the developer merged with its parent corporation, and the parent corporation became the developer’s successor in interest to those lots. Several times the purchase agreement between the developer and the association referred to the developer and its successors without mentioning the association as its successor. The trial court concluded that the association was not the developer’s successor in interest as that term was used in the bylaws defining association voting rights.