December 20, 2024
Can a Community Association Sue Its Members for Defamation?
Harassment is a reoccurring topic with Homeowners Associations and Condominiums. The Association carries on business, while members of the community communicate about it. When disagreements arise, personal offences are common. When arguments escalate to a certain point, a homeowner may feel that their rights are at risk. The board may view repeated complaints as interference with the conduct of business. These disputes can become personal and reputational. Sometimes managers or volunteer leaders threaten to resign, which could disrupt continuity of operations. Can a Community Association sue its members for defamation? For language to be defamatory, it must have requisite “sting,” resulting in injury of reputation, with such shame or disgrace that renders the person infamous. For Community Associations, applying the law of defamation can be problematic because the parties are required to communicate in matters of business. Someone might identify a duty to point out that someone has shown a lack of trustworthiness.
In a 2023 Court of Appeals of Virginia case, Theodore Theologis sued several fellow homeowners for defamation and conspiracy after they publicly criticized his conduct as the President of Fieldstone Townhome Association, Inc., a 225-lot subdivision in Winchester, Virginia. In July 2020, defendants Daria Collins, Tricia James, Khai Wisler and Mark Weiler wrote a letter to community members, them to vote Mr. Theologis out of office. The Defendants accused Theologis of imposing more stringent policies than those set forth in the covenants and for usurpation of authority. At the special meeting, not enough members voted to remove Mr. Theologis, so he remained as president. Before the December 2020 HOA meeting, Mr. Weiler posted a message on NextDoor, urging members to attend and voice their concerns. Mr. Weiler wrote that, “Theologis is capricious in his enforcement of [HOA] policy (even as he has broken our HOA bylaws)” and that Theologis, “should be leaving the board at that date and you should have more reasonable people on the review board.” Theologis sought one million dollars in damages. He alleged that the defamation injured his professional reputation as a private practice attorney and real estate broker. The Defendants filed demurrers in response, arguing that the July 2020 letter and December 2020 social media post attached to the lawsuit were not defamatory. The Circuit Court agreed and dismissed the case.
On appeal, the Court focused on whether an allegation that someone breached a contract, easement, or covenant is sufficient to be considered defamatory. According to case law precedent, the violation of an easement or restrictive covenant, in itself, does not carry the requisite “sting” that would accompany an allegation of reprehensible conduct. Calling someone a contract breaker, with nothing more, lacks adequate defamatory connotation. This does not mean that accusations of violations of covenants are never defamatory. It means that there must be something more harmful contained in the disparagement. This makes sense, because such disputes are ordinarily resolved by property law, which is suited for resolving such issues on the merits.
The Court of Appeals observed that the context in which the letter and the social media post were made show that they were not defamatory. The purpose of a special meeting to decide if the president ought to be removed from office is to evaluate whether he was fulfilling his legal duties. Questions as to whether he was following the governing instruments are germane to such a meeting. The opinion does not discuss whether the posting of the message on NextDoor meant that the context for that communication was different because it was published to a broader audience than just the voting members of Fieldstone. The Court reasoned that because there was no defamation, there could be no conspiracy to defame. The Court of Appeals affirmed the Circuit Court’s dismissal of the defamation complaint. This appeals case only resolved the defamation issue, not whatever business or property issues that gave rise to the disagreements.
The Theologis case does not address a situation where a member disparages someone regarding a community concern where the allegations are more slanderous. Under Virginia case law, communications between persons on a subject in which the persons have an interest of duty, such as an employment disciplinary deliberations, are protected by Qualified Privilege. Qualified Privilege can be overcome with respect to defamatory statements made by malice. The absence of malice is presumed. If the privileged statement is communicated to persons outside of the protected context, the privilege is lost. Qualified Privilege is different from Absolute Privilege. I discussed that in an October 21, 2021 post, “Absolute Privilege and Damages Caused by False Statements in Legal Papers.”
Qualified Privilege was found in the community association context in a 1995 Missouri case, Century Management, Inc. v. Spring. Certain members of the Walden HOA circulated a document complaining about the way Century Management, Inc. managed the HOA. The letter accused Century of misleading the community about the work they were doing and called for members to put their assessments into escrow instead of sending them to the manager. Century and its managers sued those members for defamation and interference with the management contract. Several defendants called themselves the “Townhomes Liaison Subcommittee.” The Court of Appeals recognized that the homeowners’ statements were protected by Qualified Privilege because they were reasonably calculated to further a matter of common interest. Under Missouri law, Qualified Privilege only protects communications made in a reasonable manner and for a proper purpose. The Court recognized that Qualified Privilege does not protect a deliberate lie. A knowing misrepresentation or reckless disregard for veracity would give rise to a finding of malice that would vitiate the privilege. The court also found that it was not possible for Century to sue these homeowners for tortious interference, because they were party to the same contract. A claim of tortious interference with contract cannot be brought by one party against another party to the same contract.
Not discussed in these cases is the the free speech protections of the state or federal constitutions. In general, a court may not enter an order that restrains a party from exercising their free speech rights. These parties sought money damages. I discussed HOA’s and prior restraints against free speech in a 2017 post to this blog, ”Freedom of Speech is a Hot Topic in Community Associations.”
Can a Community Association sue its members for defamation? It is difficult but they can try. Community Associations are increasingly willing to sue their members for harassment and vice versa. It is possible for officers, directors or managers to be deeply offended by the conduct of a member that does not constitute defamation. Homeowners need to be aware of the law of defamation and qualified privilege when the war of words escalates, so as to avoid mistakenly communicating something that someone may be offended by but may not be protected speech.
Legal Authority:
Theologis v. Weiler, 76 Va. App 596, 883 S.E.2d 241 (2023).
Larimore v. Blaylock, 259 Va. 568, 528 S.E.2d 119 (2000).
Century Management, Inc. v. Spring, 905 S.W.2d 109 (Ct. App. Mo. 1995).
