Anyone can sue an HOA, and it can cost homeowners millions

Lamplight Village at Centennial Springs HOA must pay $20 million awarded to Plaintiff in personal injury lawsuit involving playground equipment

By Deborah Goonan, Independent American Communities


Many housing consumers don’t understand the hidden risks of buying into a mandatory membership homeowners,’ property owners,’ condominium, or cooperative association.

One substantial risk is that owners and shareholders assume financial liability for legal expenses of their association, whether the HOA sues or finds itself as a named Defendant in a lawsuit.

And although your HOA might carry an insurance policy for $1 or $2 million to cover legal verdicts in favor of a Plaintiff that sues for damages, that policy may prove to be grossly inadequate.

For example, take a look at the following article about the Lamplight Village at Centennial Springs HOA in Las Vegas. When a teen resident was injured by a poorly maintained swing set in 2013, and sustained a traumatic brain injury, he sued the swing set manufacturer and the HOA.

According to the summary of the court report by CVN, the jury agreed with Plaintiff’s arguments that the HOA knew the play equipment was deficient, yet it neglected to pay for a maintenance plan recommended by the installer. The HOA also failed to provide its own maintenance services for the swing set.

The result was the failure and breakage of a metal bar, and an accident that caused the head injury of Carl Thompson.

Ultimately, a jury awarded Thompson $20 million dollars, which includes $10 million in punitive damages.

But since the association’s insurer, Community Association Underwriters (CAU), only provides $2 million in legal liability coverage, the HOA of Lamplight Village is now legally obligated to pay $18 million. And, of course, the HOA will turn to its homeowner members, who will be required to pay special assessments or increased monthly assessments or both.

CAU has been in business since 1989. Based in Newtown, Pennsylvania, the company provides insurance specific to association governed communities in 30 states.

According to one source, Lamplight Village consists of 205 homesites. Doing some quick math, dividing an $18 million financial obligation among 205 lots yields nearly $88,000 per homesite. That does not include interest, if the debt is financed and paid over several years.


Of course, Lamplight HOA is likely to appeal, but it seems unlikely that the verdict will be reduced to $2 million.

Centennial Springs was also in the news in October 2017, when homeowners met with Las Vegas City Council member Michelle Fiore, to discuss the fate of Pop Squires Park, slated for redevelopment as an apartment community. A concerned citizen and retired veteran was escorted from the unorthodox and contentious meeting, when he dared to speak to Fiore about the park. Fiore refused to allow Randall McGlade to speak, because he is not a member of the Village at Centennial Springs HOA. McGlade resides in an adjacent neighborhood.

Shortly after that meeting, in November, the playground in Pop Squires Park was dismantled and carted away, much to the disappointment of adjacent homeowners, who had hoped to negotiate a deal with the new owner of the property that includes the park.

Given the details of the Carl Thompson lawsuit, as presented by CVN, it appears that the playground equipment at Pop Squires Park could have posed similar risks of personal injury.



Homeowners Association Hit With $20M Verdict Over Faulty Swing Set

Posted by David Siegel on Feb 16, 2018 11:28:29 AM

Las Vegas – A Nevada state court jury slapped a homeowners association with a $20 million verdict on Thursday, including $10 million in punitive damages, in a lawsuit filed by a teenager who suffered a traumatic brain injury when a swing set’s metal bar broke and landed on his head.

The jury found the Lamplight Village at Centennial Springs Homeowners Association responsible for injuries sustained by Carl Thompson in 2013. Thompson sued in 2014 claiming that the accident caused his persistent headaches, memory loss, movement problems with his right arm and a substantially increased risk of developing dementia. He accused the HOA of failing to adequately inspect and maintain their playground.

The verdict far surpasses the HOA’s highest pretrial settlement offer of $125,000, according to Thompson’s attorney Sean Claggett of the Claggett & Sykes Law Firm. Claggett told Courtroom View Network that offer increased to $2 million, the maximum policy limit under coverage provided by Lamplight’s insurer, Community Association Underwriters, after the jury heard closing arguments.

Lamplight argued that Thompson’s injuries were not as severe as he described, and that a property management company was responsible for maintenance of the neighborhood’s playground, not the homeowners association. An attorney for Lamplight did not respond to a request for comment.

The full trial was webcast live and recorded gavel-to-gavel by CVN.

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