Tuesday, June 23, 2015

Some Guidance from Connecticut on Condominium Associations and Fiduciary Duties

Some Guidance from Connecticut on Condominium
Associations and Fiduciary Duties


      A recent different decision from the Superior Court of Connecticut offers some useful guidance with respect to claims brought in condominium associations generally as well as the pleading standards required in order to bring a claim for breach of fiduciary duty. Sires v. Linden Shores Association, 2015 WL 3798173 (Sup. Ct. Conn. May 27, 2015).
      This decision was rendered in the context of a motion to strike numerous counts raised in the complaint. The factual background of the dispute is not recited in the opinion.
      Apparently, counts 1 through 12 and 22 alleged, at least in part, claims against individual members of the association for “acts or omissions in connection with their membership on the Board of Directors of Linden Shores Association Inc.” On the basis of Connecticut General Statutes § 47-253(b), these counts were dismissed. Presumably, the language that is relied upon in this ruling is that “An action alleging a wrong done by the association, including an action arising out of the condition or use of the common elements, may be maintained against the association and not against any unit owner.” What is curious about this strike is whether the claims in this nature are derivative or direct is not addressed, i.e., is the claim against the individuals in their capacity as unit holders or against them in their capacity as directors.
      With respect to a claim that, apparently, a fiduciary duty individually owed to unit holders had been violated, the court found that no such duty existed. Rather:
A condominium association upholds a duty of care and loyalty [to] all unit holders collectively but owes no fiduciary duty directly to any individual unit holder, such as the plaintiff.
This determination is consistent with that of the Kentucky Supreme Court in 1400 Willow Council of Co-Owners v. Ballard.
      With respect to a claim of breach of fiduciary duty against the property manager, the court determined that the requirements for pleading a cause of action for breach of fiduciary duty had not been satisfied. Specifically, there had been no demonstration that there existed a fiduciary relationship between that property manager and the plaintiffs.

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