Is a HOA and its Management Company Liable for Homeowners’ Dispute in California?

The recent decision of Woolard v. Regent Real Estate Services, Inc., decided an appeal following summary judgment in favor of cross-defendants and respondents Regent Real Estate Services, Inc. (Regent), a management company, and Greenhouse Community Association (Greenhouse), a homeowners association.

Regent and Greenhouse were unfortunately dragged into litigation that should have remained between two sets of homeowners–Eric Woolard and Breonna Hall, the defendants and cross-plaintiffs on the one hand, and plaintiffs and cross-defendants Eric Smith and Stacy Thorne on the other.

The trial court properly granted summary judgment to Regent and Greenhouse on Woolard and Hall’s cross-complaint.

On appeal, Woolard and Hall only raise the negligence cause of action, but they failed to establish, or even articulate, a duty of care that was breached by Regent and Greenhouse.

Woolard and Hall were residents at Greenhouse, as were Smith and Thorne. Both were apparently tenants in their respective units.

In 2020, Smith and Thorne filed suit against Woolard and Hall and Regent, among others, for negligence, numerous intentional torts, and premises liability for an incident that occurred on Greenhouse property in December 2019.

According to the complaint: “On December 27, 2019, Eric Smith and Stacy Thorne were at their residence located at Greenhouse Condominiums. Plaintiffs’ next door neighbors, [Woolard and Hall], started an argument with Plaintiffs Smith and Thorne which escalated to a physical altercation.”

Smith and Thorne alleged punching and kicking, assault with a flashlight, and stabbing Smith, allegedly resulting in severe physical, mental, and emotional injuries.

Subsequently, Woolard and Hall filed a cross-complaint and a first amended cross-complaint, naming both Regent and Greenhouse as cross-defendants.

According to them, the physical altercation was the result of long-standing harassment by multiple neighbors.

As to Regent and Greenhouse, Woolard and Hall pleaded causes of action for indemnification, apportionment of fault, general negligence (as to both Regent and Greenhouse) and interference with economic relations (as to Greenhouse only).

They sought general and punitive damages.

In April 2023, Regent and Greenhouse filed a joint motion for summary judgment or alternatively, summary adjudication, on Hall and Woolard’s remaining claims.

Regent contended, “Regent was reasonable in all of its actions as to Hall and Woolard and did not otherwise owe a duty of care to contact police or intervene in the dispute with Plaintiffs.”

Greenhouse argued that “Hall and Woolard cannot prevail on their remaining claims for Indemnification, Apportionment of Fault, Declaratory Relief and General Negligence against Greenhouse, as Greenhouse was reasonable in all of its actions as to Hall and Woolard and did not otherwise owe a duty of care to contact police or intervene in the dispute with Plaintiffs.”

Greenhouse and Regent moved for summary judgment on the remaining claims – negligence only as to Regent, and negligence, indemnification, and apportionment of fault as to Greenhouse.

Robert Griswold, offered as an expert witness on homeowners’ association matters, submitted a declaration stating that neither Regent or Greenhouse had fallen below the standard of care in discharging their duties relating to the instant matter.

Neither Regent nor Greenhouse had an obligation to involve the police on behalf of community members or tenants.

Further, they did not have a responsibility or obligation to intervene and stop acts of physical violence, or to act as peacemaker in the community.

The standard of care for a homeowner association, such as Greenhouse, and a management company, such as Regent, is that neither should or would be expected to intervene in a neighbor-to-neighbor dispute, as a homeowner association or management company is not a security guard or peacemaker for neighbor-to-neighbor disputes.

To the extent any intervention is felt necessary by one of the parties, such intervention would need to come from a combination of the police and/or the legal system, and not from the homeowners association and/or management company.

As such, any alleged failure by Regent and/or Greenhouse to intervene in the neighbor-to-neighbor dispute between Hall and Woolard on one side and Smith and Thorne on the other side does not fall below the standard of care.

Finally, Regent and Greenhouse had reasonably responded and investigated any complaints made by Woolard and Hall.

The standard of care for a homeowner association, such as Greenhouse, and a management company, such as Regent, is that if a complaint or alleged violation of the rules is received from a resident, then the complaint is to be investigated and provided with a response. Regent and Greenhouse met this standard of care in investigating and responding to the complaints received from Hall and Woolard.

This is evidenced by the replies to the communications received from Hall and Woolard.

The trial court’s order accepted Regent and Greenhouse’s contention that they had no duty to intervene in the neighbor dispute or prevent the physical altercation between Woolard and Hall on one side and Smith and Thorne on the other.

Duty is a question of law, and Woolard and Hall did not established a legal duty to intervene in a dispute between residents.

The pleadings determine the elements of the cause of action, which in this case, is negligence.

The elements of a cause of action for negligence are duty, breach, causation, and damages.

Duty is an essential element of the tort of negligence.

Duty may be imposed by law, be assumed by the defendant, or exist by virtue of a special relationship.

The existence of a legal duty depends upon the foreseeability of the risk and a weighing of policy considerations for and against imposition of liability.

Regent and Greenhouse contended they acted within the scope of their duties and did not owe Woolard and Hall any further duty; accordingly, they are not liable for negligence as a matter of law, and no triable issues of material fact exist.

The appellate court began by asking just what duty Woolard and Hall seek to impose on Regent and Greenhouse.

Their opposition to the motion to summary judgment specifically disclaimed the notion that they were seeking to impose a duty on Regent and Greenhouse to contact or call the police of make any contact for them or on their behalf, regarding any dispute at all.

Their brief, when discussing this point, did not have much to offer other than pages of boilerplate law on general principles of duty and foreseeability, of which the court was well aware.

They argued that the foreseeability of harm could not have been clearer, but that only begs the question. They spent much time arguing about foreseeability of the harm, but foreseeability alone is not enough.

Further, there is the issue that Woolard and Hall were tenants, but not owners and members of the association.

They are, accordingly, in a very limited relationship with Greenhouse (and Regent as its managing agent). They have no legal standing to maintain a complaint that Greenhouse failed to adequately enforce its own governing documents.

Thus, Greenhouse’s duties to Woolard and Hall are more limited than they would be if they were owners.

In sum, there is simply no law to support Woolard and Hall’s contentions that Regent and Greenhouse had some unspecified duty to do something to prevent what turned into an allegedly violent dispute.

Imposing a duty on homeowners associations or their managing agents to intervene and attempt to resolve disputes between homeowners (or their tenants) would place an untenable burden on these entities.

Run by volunteers, they already have enough (and some would argue too much) authority and responsibility. Associations do not have police powers or subpoena power.

They cannot compel owners, much less tenants of owners, to sit down and work out their differences, and they cannot adjudicate differences except in the limited context of violations of the association’s governing documents.

There was evidence here, in the form of Griswold’s declaration, that the Association properly responded to complaints about violations of governing documents that it received.

Imposing a duty under these facts would leave associations liable for the outcome of such disputes without the tools to prevent them.

This would leave ordinary homeowners holding the bag when special assessments were needed to pay judgments or attorney fees. Regent and Greenhouse played no part in the physical altercation at issue here and should never have been dragged into this dispute.

Accordingly, the appellate court found no existing duty of care was breached and declined to recognize a new duty of care requiring a homeowners association or its management company to involve itself in disputes between homeowners outside the confines of the governing documents.

LESSONS:

1.         The elements of a cause of action for negligence are duty, breach, causation, and damages.

2.         Duty is an essential element of the tort of negligence.

3.         Duty may be imposed by law, be assumed by the defendant, or exist by virtue of a special relationship.

4.         The existence of a legal duty depends upon the foreseeability of the risk and a weighing of policy considerations for and against imposition of liability.