Washington Courte Condominium Association v. Cosmopolitan National Bank

The Washington Courte Condominium Association (the association) (plaintiff) was created under the state condominium act to facilitate the administration and operation of the Washington Courte Condominium’s common elements. Under the act, nonrecurring common expenses were properly the subject of a special assessment. After serious construction defects were discovered in the condominium’s common areas, the association hired counsel to institute legal proceedings against the developer. The legal action was approved by the requisite number of the unit owners, who signed the agreement retaining counsel. As the litigation progressed, the association determined that a special assessment would be needed to cover the accrued and future costs of the litigation, and it called a special meeting of unit owners to consider the proposed special assessment and provided proper notice. At that meeting, more than the required two-thirds of unit owners approved the special assessment, and a special committee was set up to review and approve bills before they were paid. All the unit owners paid their respective shares of the approved special assessment until months later, when six of the unit owners (the objecting owners) (defendants) stopped paying their shares. The objecting owners, who never sought to rescind or repeal the special assessment, contended that the fees were too high and that they did not like the lawyer nor the way the special meeting was conducted when the special assessment was approved. The association sued the objecting owners for their unpaid shares of the special assessment. The trial court ruled for the association. The objecting owners appealed and argued that the litigation costs were anticipated common expenses under the state condominium act and should therefore have been the subject of the association’s annual budget—not a special assessment.