1-888-800-1042
Kaman Cusimano Logo

Condo | HOA Lawyers

Defamation Claims by Directors and Officers Against Members – What you Need to Know

Need to Know:

  1. Unit Owners and association members often say mean and rude things about Board members, even though those Board Members are volunteers. 
  2. For a Board Member to have a viable claim for defamation the Board member must recognize that the courts view them as limited public figures, which means they MUST be able to allege and prove that.
    • The defendant published a false and defamatory statement about the plaintiff, and
    • The statement was made with actual malice, i.e., with knowledge the statements were false or with what amounts to conscious disregard of their falsity.

McCoy v. Johnson, No. 1 CA-CV 21-0676, (Ariz. Ct. App. Dec. 8, 2022) (Not for Publication)

Facts: Plaintiffs, 3 prior board members, sued a homeowner for defamation alleging the homeowner:

  1. Falsely claimed in a social media post that people were not included in the selection committee for the Board management committee because they were not members of a certain church; and
  2. Yelled at a Board meeting in response to a question “Because you’re a MORMON, that’s why you’re a damn …” (The opinion does not state what follows the word “damn”).

The plaintiffs, former board members, challenge the dismissal of their defamation claims against a homeowner. 

Trial Court: The court granted the Defendant’s motion to dismiss finding that the “Plaintiffs were limited purpose public figures ‘by reason of their service on the Board’ … [and that the] statements, as alleged in the complaint, were ‘statements of opinion, not actionable as defamation.’” The Plaintiffs appealed.

Arizona Court of Appeals: The Plaintiffs claimed that the trial court erred by finding them “limited purpose public figures” because of their service on the Board; by not finding that the Arizona Planned Communities Act Planned_Communities_Act.pdf (azre.gov) excluded them from being governmental entities; and because the application of the trial court decision would imply that any person sitting on a private board would then be a limited public figure. The Court of Appeals shot down each of these defenses by holding that:

  1. The law throughout the United States “suggests that private board members can become limited purpose public figures. See Agar v. Judy, 151 A.3d 456, 478 (Del. Ch. 2017) (‘When individuals seek to serve as directors of an organization, they meet the second rationale for public figure status.); Gulrajaney, 885 A.2d at 504-05 (rejecting the plaintiff’s argument that his status as a condominium association board candidate did not make him a limited purpose public figure because the association was ‘a private development with a private governing body’).” By voluntarily participating in the election process to the board, Plaintiffs had joined in an “activity calculated to lead to public scrutiny;”
  2. The Planned Communities Act’s policy statement that “all meetings of a planned community … be conducted openly” provided sufficient notice to the Plaintiffs that members would speak and that “activities and decisions” of public concern would be discussed by the community. Smith v. A Pocono Country Place Prop. Owners Ass’n, 686 F. Supp. 1053, 1058 (M.D. Pa. 1987) (“[W]hile the controversy in question may not be of national or even state-wide importance, it is a public dispute of concern to residents of the local community, especially members of the Association.” (citation omitted)); and
  3. The trial court’s decision does not imply that “any person who sits on any elected private board would be a ‘limited public figure.’” First, other caselaw suggests persons elected to private boards can, under circumstances not relevant here, become limited purpose public figures. See Agar, 151 A.3d at 478-79 (citing cases). Second, private business boards differ from HOA boards because our legislature has extended some First Amendment-type protections to HOA members that corporate shareholders, for example, may not enjoy. See A.R.S. §§ 33-1804, -1808

The Court of Appeals also found that it could decide as a matter of law whether a person is a public figure and that the Plaintiffs complaint failed to allege facts “to show the statement contained objectively verifiable statements of fact relating to [the Plaintiffs] that could convey a defamatory meaning.” In support of its holding affirming the trial court, the Court of Appeals cited several other cases from California, Minnesota, New Jersey, and Wyoming that have determined that board members in a large homeowners’ association can be treated as limited purpose public figures.

Categories

Three bars icon gold

Recent blog Posts

Three bars icon gold

Partner Nicholas Meinert Presents at Northern Ohio CAI Chapter on the Corporate Transparency Act

On June 14, 2024, Partner Nicholas Meinert presented to the Northern Ohio Chapter of the ...
Read More →

Partners Dan Miske and Lydia Chartre presented at Wisconsin’s Chapter of CAI on reserves and lending

On May 23, 2024, Partners Dan Miske and Lydia Chartre presented a webinar for the ...
Read More →

Strengthening Community Associations: The Vital Role of a Comprehensive Assessment Recovery Policy and Procedure

Community associations are founded on principles of shared responsibility and collective maintenance. From maintaining common ...
Read More →

Partner Nick Meinert presented at OLCA’s Spring Conference

Partner Nicholas Meinert gave a presentation at the 2024 Ohio Lake Communities Association’s Spring Conference. ...
Read More →