Vail condo association settles EEOC complaints for more than $1M

by Deborah Goonan, Independent American Communities

I’m posting this as an update to a 2015 blog,  EEOC files suit against Vail CO condo association, management company

In 2015, EEOC filed a lawsuit against Vail Run Community Resort Association for discrimination and sexual harassment of Mexican employees. In February of 2016, the EEOC concluded that the Association and management company, Global Hospitality Resorts, Inc., also engaged in retaliation, firing female staff members, when the workers complained about the harassment.

The Association and management company then settled with eight former employees for $1.02 million. EEOC will be monitoring and training Association staff on compliance with federal law for a period of 5 years. See below for case details.

Who is going to pay for this settlement? Will any of these costs be passed onto condo timeshare owners? It’s possible! See Are individuals liable when homeowner association is sued? August 15, 2010|By Stephen Glassman and Donie Vanitzian

Question: I am a condominium owner. Our homeowners association is being sued by a former gardener who claims her firing was an act of sex discrimination. What are the ramifications of this lawsuit for me? Will an insurance policy cover me for any financial loss? I also suspect there may be a political battle going on involving the present board, a former board member and the property management company regarding this problem. Who is liable for damages?

Answer: Sex discrimination is a serious charge if it can be proved in court or by some sort of settlement agreement between the affected parties. Generally, liability does not attach to individual owners in a common interest development, but there is always a risk that it might.

Titleholders owning residential deed-restricted units or “single detached dwellings” located in a common interest development, more often than not, also own a fractional interest in the common property owned by the association. Part of this type of ownership means titleholders share in all the liability, including that which may be in excess of any insurance coverage.

The purchase of a home in an association includes the potential liability for damages whether or not they are covered by the association’s insurance policy. Contrary to popular belief, insurance coverage does not pay for “everything.” However, Civil Code section 1365.9 provides that individual homeowners are not liable for tort damages when they are sued solely because they are tenants-in-common, or have common ownership in, the association property, provided that the association carries the minimum insurance coverage specified in that code section.

Depending on your association’s insurance coverage, both the costs of defending the lawsuit and any judgment for liability would be paid but even that can get sticky, with board directors seeking their own coverage and representation in addition to the association policies. Although there is no legal authority for titleholders having to pay such additional costs, in some associations members have been assessed costs related to coverage for individual directors outside the normal insurance protections.

Board members may be defended under the association’s insurance coverage, but if their acts were beyond the scope of their authority, those board members may ultimately have to repay the insurer and pay any damages themselves.

Nothing prevents a plaintiff from naming individual owners in the lawsuit as defendants, although doing so could result in the plaintiff having to pay defendants’ attorneys fees and costs. Any individual owners who are named as defendants will be responsible for their own attorney fees, probably not reimbursed by the association, unless the association votes to pay for the defense of these individuals.

If the association is found liable and is ordered to pay damages and must assess all owners to meet those payments, a titleholder with “excess assessment” or “loss assessment” insurance coverage may have those payments paid by his individual insurance policy. It is the insurer who decides what is and is not covered.

http://articles.latimes.com/2010/aug/15/business/la-fi-associations-20100815

Even if Vail Run were adequately insured, the fact that the Association and management company were found to have engaged in intentional misconduct, is likely to have resulted in insurance company denial of claims, or expectations of reimbursement for any legal defense they provided while defending the Association.

Condo association settles sexual harassment case for more than $1 million

Posted On: Feb. 16, 2016 12:00 AM CST
Judy Greenwald
A Vail, Colorado, condominium association and its management company have agreed to pay more than $1 million to settle an Equal Employment Opportunity Commission national origin and discrimination and sexual harassment lawsuit involving Mexican workers.

The EEOC said in a statement Friday that Vail Run Community Resort Association Inc. violated federal law by allowing a housekeeping manager to sexually harass Mexican female employees, including attempted rape.

The agency said the defendants, which also included management company Vail-based Global Hospitality Resorts Inc. also retaliated against the men and women who complained about the harassment to management and the owner.

 

Read more:

http://www.businessinsurance.com/article/20160216/NEWS06/160219859?template=printart

Additionally, according to Kelsey Ray of the Colorado Independent:

In addition to the monetary damages, the settlement requires that all Vail Run managers undergo semiannual sexual harassment training under the supervision of a Spanish-speaking monitor. All of the company’s equal employment policies will be translated into Spanish, and the victims’ employment records will reflect voluntary resignations, not terminations.
The suit also explicitly forbids the rehiring of [Omar] Quezada, who was convicted of criminal extortion and unwanted sexual contact in 2014 and is currently serving time.

Source: http://www.coloradoindependent.com/157774/sexual-harassment-lawsuit-yields-1-million-for-mexican-immigrants

Here are full details of the case: