Ruoff v. Harbor Creek Community Association

Martha and Russell Ruoff (plaintiffs) sued the Harbor Creek Community Association (the association) (plaintiff) and individual unit owners (defendants) for negligence after Martha was severely and permanently injured falling down a stairwell in a common area. Martha’s medical expenses up to the date of trial exceeded $750,000. The association carried $1 million in liability insurance. The individual unit owners were tenants in common on the complex’s common areas with each owning a 1/152 interest, and they had delegated the duty of control and management of the common areas to the association. Under the state’s common-interest-development law, the association was required to maintain minimal levels of liability insurance, and residents who owned no more than two units and who served as volunteer officers and directors of the association had conditional immunity from tort liability if the injury-producing negligent act was performed within the scope of association duties, was in good faith, and did not involve willful, wanton, or grossly negligent conduct. The statutory immunity did not extend to the association. The trial court granted summary judgment in favor of the individual owners, finding that the statutory immunity for volunteer association officers and directors should be extended to the individual unit owners and that the court should depart from common-law rule regarding a property owner’s liability because in this case the departure would serve the greater good and result in no substantial detriment to injured third parties. The Ruoffs appealed, arguing that the statutory immunity should not be extended to individual unit owners who, as tenants in common, were burdened with the same nondelegable duties to control and manage their property as were other property owners.