Handling Litigation When Lawsuits Strike Close to Home

No one likes a lawsuit. Whether filing one or finding yourself on the receiving end of one, they can cause stress, anxiety and an upending of daily life. They can be expensive, take months—even years—to resolve, and often result in hurt feelings and ruined relationships. For co-op, condo and HOA board members and residents, the situations are no different, where litigation levied by or against a corporation, association, board or even individual resident can lead to countless sleepless nights for all parties involved. 

Turn to the Experts

Unless your co-op, condo or HOA has achieved some utopian ideal, the day will come when it’s named party to some type of litigation. Chances are that lawsuit will involve something like an ongoing noise complaint between neighbors, construction defects, misbehaving subtenants, or an attempt to collect delinquent payments from a resident. But how does a lawsuit begin? According to attorney Barry Kreisler of Kreisler Law, PC in Chicago, “A suit is initiated with the filing of a written complaint, in which the plaintiff sets forth the facts and legal theories under which he believes he or she should prevail in the suit.” 

When that unwelcome registered letter arrives in the mail and is opened to reveal notice that a lawsuit has been filed, the first thing to do is remain calm. The second thing to do is get in touch with the right people—and whatever the specific issue—the ‘right people’ are the building’s legal counsel and insurance carriers. Should a board find itself named in a lawsuit, “They should notify their attorney and make sure that the case is brought to the attention of the board’s insurance carrier as soon as possible,” says David L. Berkey, a partner at the New York-based law firm of Gallet Dreyer & Berkey, LLP. 

And regardless of whether it’s an individual filing suit against the association or vice versa, just because a complaint has been made doesn’t mean the case is on the express route to court. “In Illinois when a lawsuit is brought against you, you can answer the lawsuit, or you can seek to dismiss it,” explains attorney David Hartwell of the law firm of Penland & Hartwell in Chicago. “If you choose to answer it, it means the two parties are at issue. Or you can seek to dismiss it on two grounds: you can say that the pleading itself is insufficient to allege a cause of action, or you can alternatively seek to dismiss by saying by virtue of an affirmative matter, the lawsuit must be dismissed.”

Surprisingly, Kreisler says most cases are settled before the completion of a trial. “Contested litigation is quite expensive for all parties and is very time consuming. Because trial decisions can be unpredictable, most of the time litigants decide it is to their advantage to compromise their position and settle the case before the conclusion of a trial.”

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