The Washington Court of Appeals recently held that an association’s board of directors was validly constituted and properly passed bylaw amendments, so the board (and the management company as the board’s agent) had the authority to charge and collect fines and fees. Parker Estates Homeowners Ass’n v. Pattison, No. 47402-6-II, 2016 WL 7468226, at *1 (Wash. Ct. App. Dec. 28, 2016)
In the case, Parker Estates sued the Pattisons for unpaid association dues, fines, and fees. The Pattison’s claimed that the board of directors for Parker Estates had more members, and members that had served longer, than allowed by the bylaws. They argued that, as a result, the board could not invoke the authority under the association’s governing documents to amend the bylaws or collect fines and fees. In addition, the Pattisons argued that the board had used improper procedure to amend the bylaws.
The appeals court reversed the trial court decision and held that the board of directors was properly formed, the procedure used to amend the bylaws was proper, and the board had authority to collect delinquent dues, fines, and fees.
Specifically, the court found that: with the governing documents silent on amendment of bylaws, the Washington Nonprofit Corporation Act provided a default rule that only a quorum of the directors, not the entire membership, was required for amendment; and when there was no quorum of the membership for election of board members, the appointed board members could serve out the rest of a “term”, meaning, until new board members could be duly elected.
The court also emphasized that it “afford[s] great deference to an organization’s interpretation of its Bylaws” and “homeowners associations must be given room to interpret and apply their own governing documents as long the result is neither arbitrary nor unreasonable.”