Illinois Appellate Court clarifies Palm decision regarding Association collections

In Lake Point Tower Condominium Ass’n v. Waller, 2017 IL App (1st) 162072, decided on June 28, 2017, the Association filed a forcible entry and detainer action against Defendant to obtain possession of Defendant’s condominium. Subsequently, Defendant filed a motion to dismiss the complaint. Without disputing that the assessments were due, the Defendant alleged that that the Association lacked authority to initiate litigation because the Board failed to vote at an open meeting to approve filing the action, in violation of Section 18(a)(9)A) of the Illinois Condominium Property Act. Defendant argued that the Appellate Court’s decision in Palm required that the Association prove the requisite vote to authorize litigation occurred as an element of its case. The Defendant also claimed that the Association’s meeting minutes showed that the Board had improperly delegated its authority to file litigation for collection matters to the Association’s managing agent.

The Trial Court dismissed the Association’s complaint with prejudice based on the failure to vote at an open meeting to authorize the action. The Court refused to permit the Association to amend its complaint, even though a subsequent meeting was held during which the Board voted to authorize the litigation.

Before the Trial Court dismissed the action, the Board voted at an open meeting to pursue litigation against Defendant, effectively eliminating Defendant’s basis for asserting that the Association did not have authority to file a collections action against her. Defendant cited no case law to support her argument that the Board’s subsequent vote was an improper attempt at ratification or that all declarations must specifically authorize a Board to ratify earlier actions in order for ratification to be effective. Nonetheless, the Trial Court dismissed the Complaint with prejudice.

On appeal, the Appellate Court cited the recent Girard Law Group case, North Spaulding Condominium Ass’n v. Cavanaugh, as well as the Illinois Forcible Entry and Detainer Act to assert that when filing a forcible entry and detainer action, the Association is not required to assert that the Association’s Board voted at an open meeting to initiate litigation. Furthermore, the Appellate Court distinguished the case at hand from the Palm decision, stating that Palm involved the defense of litigation, whereas Lake Point Tower involves collection matters. Citing to Palm, the court further concluded that the Illinois Condominium Property Act did not preclude an Association’s Board from delegating authority to initiate collection lawsuits to the property manager.

The Appellate Court found that the Trial Court erred by dismissing the case with prejudice due to the Board’s failure to approve litigation before filing, as the Association should have been permitted to cure its deficiency and amend its pleadings to reflect that the Board subsequently voted to approve filing the lawsuit at an open Board meeting.

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