Lauriedale Association, Ltd. v. Wilson

The Lauriedale Homeowners Association (the association) (original plaintiff) was created to manage the 328-unit Lauriedale Condominium complex in San Mateo, California. The association sued numerous persons and entities involved in developing the condominium (collectively, the developers) (defendant) who it believed were responsible for defects in the condominium’s common area. The developers responded to the complaint with an answer and cross-complaint for total or partial equitable indemnity against various contractors and subcontractors who were allegedly responsible for the defects, as well as against more than 700 persons who were or had been condominium unit owners who allegedly had misused their property. One of the unit owners, Scott Wilson (plaintiff), challenged the indemnity claim, alleging that (1) the indemnity claim violated public policy; and (2) because equivalent relief was being sought by the developers through their affirmative defenses in the answer and crossclaim, the crossclaim would unnecessarily create a conflict between Wilson and the association. The association conceded that it would be responsible for any portion of the damage caused by past or present unit owners. The trial court agreed and entered judgment for Wilson, and the developers appealed. On appeal, the developers argued that (1) they could not get equivalent relief through their affirmative defenses because they would not be able to use the negligence of past or present unit owners as a defense to a claim brought by the association against them; and (2) because associations frequently sue individual members for things such as damage to a common area, their crossclaim would not interfere with the relationship between the unit owners and the association.