Why lawyers don’t want to sue homeowner associations on contingency
Los Angeles Times
By: Donie Vanitzian
15 October 2016
For more than two years, I’ve experienced nothing but
problems with my homeowner association board and management. They are
uncooperative and obstructive. After eliminating all my administrative
remedies, I now believe the only way to fix these serious problems is
to sue them.
I’ve interviewed three attorneys, but each is requiring a retainer of
at least $20,000. Realizing I don’t have enough money to sue the board
and the association, I asked each attorney to take the case on a
contingency basis. No attorney would agree to that.
I then asked if they would represent me “pro bono” and was told I don’t
fall under that category. Why won’t an attorney take my case pro bono
or on contingency?
Pro bono help on behalf of individuals is typically for
disadvantaged groups, those who are poor, disabled or elderly. The
cases also tend to involve problems that have common patterns of fact
that lawyers with adequate resources can handle efficiently.
Because owning real property generally implies one is not poor,
homeowner association cases typically don’t fit such a blueprint. And
association-related problems tend to have unique issues and facts that
require more time and money than pro bono organizations are prepared to
Contingency cases are a familiar phrase to the public because of
personal-injury cases stemming from a car accident. Such cases are
often referred to as “pure contingencies” because the lawyer pays
everything, in exchange for getting up to 45% of any settlement or
Lawyers decide to take personal injury cases provided liability is
reasonably clear and the opposition is an insurer or other solvent
party who can pay. Because there is an extensive body of data known to
lawyers and insurers regarding the range of compensation afforded most
kinds of injuries, these factors simplify the handling of personal
injury cases and make them more attractive.
several levels of case evaluation
As you can see, several levels of case evaluation are undertaken before
a lawyer takes a case on contingency because there must be a reasonable
likelihood of success in order to justify risking months or years of
work without compensation.
When an owner sues in homeowner association-related cases, the
advantages inherent in many personal-injury cases are rarely present.
Homeowner versus association cases — like business contract breaches,
divorce and failed partnerships — are usually very complex.
Predictably, these cases involve substantial paper documents, computer
records and multiple people acting over a significant period of time.
Moreover, the law defining fault and providing damages may be uncertain
The lawyer’s evaluation of time and expense has to account for taking
multiple depositions, potential discovery battles to get records and
documents, possibly poor record-keeping by the client, changes in the
law and unpredictable judges and juries. Then there are boards that
litigate and defend to the extreme even if it makes no economic sense —
just to prove a point with a particular case and send a message to
other owners thinking about suing.
Whether a homeowner is suing the association or the board itself, both
are indemnified so an owner is effectively suing the association’s
insurance company. Though that would seem attractive to an attorney
seeking ample resources to pay a judgment, it also can unduly protract
a client could fail to cooperate, or abandon the case
Finally, a client could render all the lawyer’s efforts for naught by
failing to cooperate, or by abandoning the case because it’s too much
work or stress. Many prospective plaintiffs fail to consider how much
of their own time will go into a case, even with an attorney.
The lawyer must consider all these variables and make a cost-benefit
analysis in deciding whether to risk taking a contingency case.
Ultimately, the decision comes down to the likelihood of success in
obtaining — and collecting — on a favorable settlement or court award
versus the hours likely to be expended.
Ultimately, even the best cases have at most a 70% to 80% chance of
success. And even if a case is successful, the potential award must be
great enough for a lawyer to make it worthwhile, something very
difficult to determine. Unsurprisingly, few lawyers take on business or
homeowner cases contingently.
Occasionally some cases are handled as partial contingencies, which
allows attorneys to reduce legal fees. Still, clients must pay some
expenses and a substantial retainer because final costs typically total
in the thousands of dollars.
In the end, what might at first seem like a “good case” to a lay
person, when carefully scrutinized, rarely is. The law may not provide
enough leverage to adequately right the wrong at issue, at least not
The unhappy reality of modern life is that legal machinery doesn’t
exist to compensate people for every unkind, improper or evil deed done
to them in life, let alone in a homeowners association.
Michael Krieger, a Los Angeles lawyer
practicing business contract, technology and intellectual property law,
co-wrote this column. Vanitzian is an arbitrator and mediator.
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