Problem & Facts

The association’s detention pond overflowed causing damages to property downhill from the pond. The developer built the detention pond in 2007. The owner of the downhill property (who bought in 2012) sued the association in 2013 for damages in excess of $300,000. (Kowalski v. TOA PA V, L.P. and Traditions of Amercia at Liberty Hills Condominium Association, Pa., May 22, 2019). The owner, through expert testimony, claimed $300,000 was the cost to install an appropriate storm water management system. The association filed a third party complaint against the developer. Some of the owner’s claims were dismissed (breach of contract and negligence) because they were past the statute of limitations, but a number ultimately survived including trespass, nuisance and violation of the Storm Water Management Act.

Trial Court

The trial court found in favor of the owner on his trespass claim and against the association but only awarded $1.00 in damages. Both parties appealed various issues.

Appellate Court

Nine separate issues were taken up on appeal, but in the end the appellate court affirmed most of the trial court’s decisions. Included in those affirmed decisions was the dismissal of the breach of contract and the negligence claims because the statute of limitations had run. Not included in those affirmed decisions was the award of $1.00 in trespass damages. The appellate court held that even if you don’t know how many incidents will occur in the future, the association was liable where they increased the quantity or changed the quality of water discharged. The court found that this “continuing trespass” warranted a new trial on damages. The court also found that because the owner could now potentially recover greater damages, the association could also go forward with its indemnification suit against the developer to pay those damages should it lose.

Lessons Learned

1. Lawsuits are expensive and take a long time. Notice this one took 6 years and it’s NOT over;
2. If you have a claim, bring it timely, so that it does not get dismissed because of the statute of limitations;
3. Diverting your water problems to a downhill owner is probably not a good idea without getting some sort of agreement that allows for the diversion; and
4. Had the association hired a qualified engineer right after turnover, it might have noticed these problems, and potentially others. This might have allowed it to recover all of its damages from the developer, not just this water issue. Now, best case, it simply recovers what it owes the downhill owner. So even winning means the association spent more than 6 years (remember this case is not over yet) in a lawsuit to collect money from the developer to pay it to the downhill owner.