Appellate Victory, $100k+ Fees Awarded in HOA Dispute

Foley & Mansfield recently won a victory for our client, a homeowners association, in the United States Court of Appeals for the Sixth Circuit. The case alleged multiple and varied claims of civil rights violations, conspiracy, and violations of state laws regarding building use. The local township was also a defendant. The Association was represented by attorney Scott Holmes of Foley & Mansfield’s Detroit office.

Following depositions of the plaintiffs and Association board members, the Association filed a motion seeking to dismiss the case because it lacked legal and factual merit, including that the claims were precluded (res judicata) by prior litigation the plaintiffs brought against the Association over the past 10 years, involving the same or similar theories. On February 24, 2017, the U.S. District Court granted the motion and dismissed the plaintiffs’ claims against, finding the claims barred by res judicata.

Following dismissal, the Association filed a motion requesting the plaintiffs and their attorney be held responsible for the attorney fees incurred to defend the lawsuit, arguing that the lawsuit was frivolous and contained false statements. The U.S. District Court granted this motion and entered a judgment against the plaintiffs and their attorney for $105,126.

The plaintiffs filed three separate appeals to the U.S. Court of Appeals for the Sixth Circuit seeking reversal of:

1) the dismissal of their claims, 2) the award of attorney fees, and 3) denial of their post-judgment motion to eliminate or reduce the fee award.

On April 13, 2018, the Court of Appeals ruled against the plaintiffs, affirming each of the decisions of the District Court. The Association is initiating efforts to collect on the judgment it was awarded.