Poulet v. H.F.O., L.L.C.

Case Date: 09/30/2004
Court: 1st District Appellate
Docket No: 1-03-2109 Rel

SECOND DIVISION
September 30, 2004



No. 1-03-2109

   

LOUIS B. POULET and HOLLY GERACI,
Individually and as Representative of a
Class of All Current and Former Owners of
Union Square Condominium Association,

                    Plaintiffs-Appellants,

                                        v.

H.F.O., L.L.C. and SPECTRUM-HUBBARD LIMITED
PARTNERSHIP,

                    Defendants-Appellees,

(Jerald Lasky and Murray Peretz,

                    Defendants).

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Appeal from the
Circuit Court of
Cook County.











Honorable
David R. Donnersberger,
Judge Presiding.


PRESIDING JUSTICE BURKE delivered the opinion of the court:

Plaintiffs Louis Poulet (Poulet) and Holly Geraci (Geraci), owners ofindividual units in Union Square Condominiums (Union Square), appeal from anorder of the circuit court dismissing with prejudice (1) count II of Poulet'ssecond amended complaint (based on a claim of conversion) and count III (basedon a claim of common law constructive fraud) and (2) Geraci's complaint, in itsentirety, against defendants H.F.O., L.L.C. (H.F.O.) and Spectrum-Hubbard LimitedPartnership (Spectrum),(1) as well as (3) the trial court's denial of their motionto reconsider. On appeal, plaintiffs contend that: (1) the trial court erred indismissing Poulet's counts for conversion and common law constructive fraud withprejudice for lack of standing pursuant to section 2-619(a)(9) of the IllinoisCode of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2002)); (2) thetrial court abused its discretion in dismissing Geraci's complaint with prejudicepursuant to section 2-619(a)(3) of the Code (735 ILCS 5/2-619(a)(3) (West 2002))on the basis that there was "another action pending between the same parties forthe same cause"; (3) the trial court erred in dismissing both Poulet and Geraci'scount I, in which they alleged a violation of the Illinois Consumer Fraud andDeceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq.(West 2000)) (hereinafter "consumer fraud count"), based on the statute oflimitations; and (4) their right to bring an action for common law fraud orwilful misconduct may not be impaired by the declarations, by-laws or otherregulations which have the effect of exculpating such conduct. For the reasonsset forth below, we affirm.

STATEMENT OF FACTS

On November 5, 2001, Todd Cameron, Poulet, Deepak Agrawal, MichaelPetrushansky, Tamara and Thomas Crawford, Adam and Samantha Stolberg, Gregg andMichelle Schwartz and Raymond DeVos (collectively the "Cameron plaintiffs") fileda complaint in the trial court seeking monetary damages on behalf of themselvesand all past and present owners of the condominium units in Union Square locatedat 333 West Hubbard Street in Chicago. The Cameron plaintiffs' complaint wasfiled through their attorney, Peter Geraci, who also owned a condominium unit atUnion Square. The Cameron plaintiffs' complaint, which we mention only brieflyhere,(2) contained various claims of breach of fiduciary duty, fraud and/or certain"construction defects" against H.F.O., the developer of the condominiums;Spectrum, the manager of H.F.O.; Jerald Laskey, president of H.F.O. and officerof Spectrum; Spectrum Real Estate Services, Inc. (Spectrum Real Estate), acorporation which marketed and sold the condominiums; Murray Peretz, a partnerat H.F.O., partner at Spectrum and officer of Spectrum Real Estate; ExelonThermal Technologies, Inc. (Exelon), a corporation that contracted with thedeveloper to install and supply Union Square's heating and cooling equipment; andMerger Construction Services, Inc. (Merger), a company that rehabilitated andconstructed the condominium units. The Cameron plaintiffs also filed a petitionfor a temporary restraining order to stop the above named defendants fromnegotiating with the president of the board of managers of Union Square'scondominium association (Association) and to stop the Association from releasingthe developer from liability without the consent of all the unit owners, but thispetition was subsequently denied.

All defendants except Exelon collectively filed a motion to dismiss,claiming, inter alia, that the Cameron plaintiffs lacked standing to bring theabove claims and that the complaint was "nothing more than a frivolous attemptto interfere with a settlement between the [Association] and the building'sdeveloper." The trial court granted defendants' motion to dismiss, in part, bydismissing with prejudice all counts based on breach of fiduciary duty, one countof fraud against Exelon and one count based on "construction defects" againstH.F.O. and Merger, reasoning that these counts involved "an Association claim,"and, thus, the Cameron plaintiffs lacked standing to bring them. As a result,Exelon and Merger were dismissed from the lawsuit.

On May 6, 2002, the Cameron plaintiffs filed an amended complaint, alleging"theft of funds," fraud and breach of contract against defendants H.F.O.,Spectrum, Laskey, Spectrum Real Estate, Peretz and Merger. On June 4, defendantscollectively filed a motion to dismiss all counts, arguing that, pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2002)), the Cameron plaintiffs'claims failed to meet the requisite pleading requirements, and, pursuant tosection 2-619(a)(9) of the Code (735 ILCS 5/2-619(a)(9) (West 2002)), the Cameronplaintiffs lacked standing to bring the claims because such claims were based onthe Association's interests. Defendants also filed a motion to disqualify PeterGeraci as the Cameron plaintiffs' counsel, alleging, among other things, that hewas an owner of a unit at Union Square, he had filed a lawsuit against severalformer board members of the Association, alleging that they had squandered theAssociation's funds, and he had personal knowledge of this case that would makehim a material witness. The Cameron plaintiffs subsequently withdrew PeterGeraci as their attorney and substituted attorney John Cashion (Cashion) torepresent them. On June 26, the Cameron plaintiffs filed a motion for leave tofile a second amended complaint, which was denied by the trial court on July 2. On August 19, the trial court stated that the hearing on defendants' motion todismiss would be set for September 12.

On August 21, Geraci (Peter Geraci's wife), through her attorney, Cashion(the same attorney used by the Cameron plaintiffs), filed a complaint, case No.02 L 010724, individually and as a representative of a class of all current andformer owners of units in Union Square, against defendants H.F.O, Lasky, Peretzand Spectrum, alleging claims of consumer fraud, conversion, common lawconstructive fraud and common law fraud. In her complaint, Geraci alleged thefollowing general information: Union Square was composed of 217 dwelling units,some of which had been combined into single dwelling units and were first offeredfor sale in 1996; Geraci had purchased her units directly from the condominiumdeveloper; Geraci and her husband owned approximately three percent of the totalownership in Union Square; and the Association administered Union Square as anagent on behalf of the unit owners.

In support of her counts alleging conversion and common law constructivefraud claims, Geraci alleged the following: prior to the first election of theAssociation's board of managers (the first election), the unit owners paid moneyinto a separate bank account, which was held in the Association's name; theAssociation did not own the funds in the Association's bank account, but rather,each plaintiff had a percentage of ownership interest in the funds; payments fromthe Association's account were to be made solely for maintenance and operatingexpenses of the condominium units; prior to the first election, H.F.O. held andexercised all of the rights, powers and privileges vested in the board ofmanagers; prior to the first election, Lasky and Peretz directed that checks bedelivered from the Association's account solely for the benefit of themselves,H.F.O. and Spectrum; the first election took place in November 1999; several ofthe Association's elected board members were employees or officers of H.F.O. whohad purchased units in Union Square; after the first election, Lasky and Peretz,acting on behalf of H.F.O and Spectrum, again directed that checks be deliveredfrom the Association's account for the benefit of themselves, H.F.O. andSpectrum; there were no records showing the reasons these funds were paid fromthe Association's account; the unit owners demanded that the funds be returned,but no defendant complied with the demand; and defendants at all times owed afiduciary duty(3) that was breached when funds were taken from the Association'saccount.

In support of her counts based on consumer fraud and common law fraud,Geraci alleged that a property report, prepared at the direction of Lasky andPeretz and effective November 1, 1996, made false representations with respectto the common elements, landscaping, courtyard, fire suppression system, storagefacilities and masonry repairs, which generated expenses to the unit owners; thatstatements in the first amendment to the property report were false; that theproperty report and amendments thereto made material representations andconcealed certain facts resulting in the unit owners being required to payadditional assessments; and that the unit owners would not have purchased theirunit had they known that they would be liable for the additional assessments.

With respect to the Cameron plaintiffs, on September 12, the trial courtgranted their motion for voluntary dismissal of certain individual plaintiffs,leaving only Poulet and Deepak Agrawal as plaintiffs named in the litigation. Also, on September 12, the trial court granted defendants' motion to dismiss theCameron plaintiffs' complaint pursuant to section 2-615 of the Code, andplaintiffs Poulet and Agrawal were given leave to file a second amendedcomplaint.

On September 19, Poulet, the only remaining plaintiff from the groupcollectively called "the Cameron plaintiffs," filed a second amended complaint,on behalf of himself and all past and present owners of the condominium units ofUnion Square, against defendants H.F.O., Lasky, Peretz and Spectrum, allegingclaims based on consumer fraud, conversion, common law constructive fraud andcommon law fraud. The allegations contained in Poulet's four counts against thesame defendants were nearly identical to the allegations in Geraci's complaintsupporting her same counts based on consumer fraud, conversion, common lawconstructive fraud and common law fraud. The only difference of consequencebetween the two complaints was that Poulet alleged in his complaint that he ownedonly a one-half percent interest in Union Square's total ownership, whereasGeraci alleged that she and her husband owned a three percent interest in UnionSquare's total ownership, and Poulet's complaint, unlike Geraci's complaint,additionally sought declaratory judgment against the Association, requesting,inter alia, a declaration that the Association's board of managers had breachedits fiduciary duty by intending to settle with defendants, that the Associationdid not have the power to release the legal rights and claims of the individualowners without their express consent and that any purported release made withoutthe express consent of the individual unit owners had no legal effect and bedeclared void.

H.F.O., Lasky, Peretz and Spectrum filed a motion to consolidate case No.02 L 010724 (Geraci's case) with case No. 01 L 014154 (Poulet's case), which thetrial court granted on October 15. On November 22, defendants filed a motion todismiss all counts of both Geraci's complaint and Poulet's second amendedcomplaint. Defendants again argued that all counts in Poulet's second amendedcomplaint should be dismissed, pursuant to section 2-619 of the Code, for lackof standing and, pursuant to section 2-615 of the Code, for being insufficientas a matter of law. Defendants argued that the Geraci action should bedismissed, pursuant to section 2-619 of the Code, on the basis that there was"another action pending between the same parties for the same cause."

On May 30, 2003, the trial court entered a memorandum and order ondefendants' motion to dismiss. The trial court first noted that "Poulet's SecondAmended Complaint and Geraci's Complaint contain identical Counts I-V,"(4) anddismissed Geraci's complaint with prejudice pursuant to section 2-619(a)(3) ofthe Code because Poulet's lawsuit constituted "another action pending between thesame parties for the same cause." The trial court stated that, with respect tocount I, the consumer fraud count, and count IV, alleging common law fraud,plaintiffs had standing "because they are alleging that they personally would nothave bought their units had they been aware [of the] misrepresentations. Theseare individual claims, not claims belonging to the Association ***." However,the trial court also found that count I, the consumer fraud count, failed toallege sufficient facts to state a cause of action and was barred by theapplicable three year statute of limitations because the property report, uponwhich the consumer fraud counts were based, was dated November 1, 1996, andplaintiffs alleged no facts to support the applicability of any discovery rule. Thus, the trial court dismissed count I of Poulet's second amended complaintwithout prejudice. The trial court then noted that, with respect to Poulet'ssecond amended complaint, count II for conversion was based on the theory thatdefendants converted funds belonging to the Association, and further noted thatcount III for constructive fraud was based on the theory that defendantscommitted constructive fraud in connection with the Association's funds. Thetrial court stated that, "although the Illinois Condominium Property Act does notvest exclusive jurisdiction in the Association for claims affecting the interestsof the Association or unit owners in common, [citation], the bylaws of theAssociation do," and dismissed counts II and III for lack of standing. The trialcourt also dismissed all claims against Lasky and Peretz because plaintiffs hadfailed to allege any facts to support personal liability against them. Finally,the trial court dismissed without prejudice count IV, alleging a claim for commonlaw fraud, and count V, setting forth class action allegations, without prejudicebased on plaintiffs' failure to allege sufficient facts to state a cause ofaction. (5)

On June 2, 2003, plaintiffs filed a motion to reconsider the trial court'sMay 30 order. On July 8, plaintiffs filed an emergency motion for immediateclass certification and an emergency motion "to prohibit further communicationwith prospective class members and to suspend the effectiveness of any 'opt-out'document already signed by an owner in the condo and for other relief." On July16, the trial court denied plaintiffs' motion to reconsider its May 30 order, butgranted plaintiffs' motion to make an express finding that there was "no justcause to delay enforcement or appeal" of (1) the dismissal with prejudice ofPoulet's counts for conversion and common law constructive fraud and (2) thedismissal of Geraci's complaint in its entirety. Due to the trial court'sfinding that there was "no just cause to delay enforcement or appeal" of theabove dismissals, plaintiffs' emergency motions were stricken without prejudice.

This appeal followed.

ANALYSIS

I. Standing

Plaintiffs contend that the trial court erred in dismissing, pursuant tosection 2-619(a)(9), Poulet's count II, which was based on a claim of conversion,and count III, which was based on a claim of common law constructive fraud, withprejudice, finding that plaintiffs lacked standing to pursue these claims becausethey belonged to the Association. Plaintiffs argue that, although Poulet'sallegations supporting his claims for conversion and common law constructivefraud concerned funds taken from the Association's account, Poulet's otherallegations, that the funds in the Association's account were not owned by theAssociation and were the product of each individual unit owner's contribution,conferred to Poulet an individual interest in the claims against theAssociation's account, thus providing him with the necessary standing to pursuesuch claims. Plaintiffs maintain that the decision in Tassen v. UnitedDevelopment Co., 88 Ill. App. 3d 581, 410 N.E.2d 902 (1980), supports theirposition that individual unit owners have standing in a class action to seektheir own individual damages.

H.F.O. and Spectrum (hereinafter "defendants") argue that the Tassendecision is inapplicable to the types of claims brought by plaintiffs in thiscase and that the trial court's dismissal was clearly proper because "[t]heIllinois Condominium Property Act and the Union Square Declaration and By-Lawsdemonstrate that only the Board of Managers on behalf of the Association hasstanding to pursue the type of claims *** sought by Poulet [in his counts forconversion and common law constructive fraud]."

Section 2-619(a)(9) permits dismissal of a claim when "the claim asserted*** is barred by other affirmative matter avoiding the legal effect of ordefeating the claim." 735 ILCS 5/2-619(a)(9) (West 2002); Glisson v. City ofMarion, 188 Ill. 2d 211, 220, 720 N.E.2d 1034 (1999). "The phrase 'affirmativematter' refers to something in the nature of a defense that negates the cause ofaction completely or refutes crucial conclusions of law or conclusions ofmaterial fact contained in or inferred from the complaint[,]" and lack ofstanding is such an "affirmative matter" that is properly raised under section2-619(a)(9). Glisson, 188 Ill. 2d at 220. Our standard of review of an ordergranting a motion to dismiss pursuant to section 2-619(a)(9) is de novo. Glisson, 188 Ill. 2d at 220.

The Condominium Property Act (Act) (765 ILCS 605/1 et seq. (West 1996))governs the affairs of Illinois condominium associations. Board of Managers ofWeathersfield Condominium Ass'n v. Schaumburg Ltd. Partnership, 307 Ill. App. 3d614, 619, 717 N.E.2d 429 (1999); Adams v. Meyers, 250 Ill. App. 3d 477, 488, 620N.E.2d 1298 (1993). The creation and operation of Illinois condominiumassociations is comprehensively regulated by the Act. Board of Managers ofWeathersfield Condominium Ass'n, 307 Ill. App. 3d at 619; Adams, 250 Ill. App.3d at 488. Section 9.1(b) of the Act states:

"Board of Managers' standing and capacity.

The board of managers [of a condominium association]shall have standing and capacity to act in arepresentative capacity in relation to matters involvingthe common elements or more than one unit, in behalf ofthe unit owners, as their interests may appear." 765ILCS 605/9.1(b) (West 2002).

The historical and practice notes accompanying section 9.1 of the Act statethat the Act was amended by the legislature to clarify that the boards ofcondominium associations have standing to sue on all matters that affect morethan one unit. 765 ILCS 605/9.1, Historical & Practice Notes, at 56-57 (Smith-Hurd 1993); Sandy Creek Condominium Ass'n v. Stolt & Egner, Inc., 267 Ill. App.3d 291, 296, 642 N.E.2d 171 (1994). Accordingly, the handful of Illinois casesdealing with section 9.1(b) of the Act have interpreted the section as conferringstanding to condominium associations for certain types of claims involving thecommon elements or more than one unit. See, e.g., Sandy Creek Condominium Ass'n,267 Ill. App. 3d at 296 (a condominium association had standing to pursue anaction against the developer for fraudulently misrepresenting to the unit ownersthat the buildings were constructed in substantial compliance with the plans ofthe condominium and that the buildings were free of defects and constructed ina good and workmanlike manner); St. Francis Courts Condominium Ass'n v. InvestorsReal Estate, 104 Ill. App. 3d 663, 668, 432 N.E.2d 1274 (1982) (a condominiumassociation had standing to challenge an amendment to the condominium declarationmade by the condominium's developer); Tassan, 88 Ill. App. 3d at 596(acknowledging that a condominium association would not have standing to asserta claim for breach of implied warranty of habitability "but for the fact that[section 9.1(b) of the Act] apparently gives the association standing to assertthe unit owners' rights in the common elements").

In the instant case, Poulet's allegations of conversion and constructivefraud, which concerned the mishandling of funds in the Association's account,were obviously matters involving more than one unit within Union Square, and,thus, it is clear that, pursuant to section 9.1(b) of the Act, the Associationhad standing to act in a representative capacity for the individual unit ownersand to assert the claims of conversion and common law constructive fraud allegedin Poulet's complaint. However, the issue in the instant case is whether theAssociation had exclusive standing to assert such claims, thus barring plaintiffsin the instant case from bringing them.

With respect to a condominium association's funds, the issue of whetherclaims of conversion and common law constructive fraud belong exclusively to thecondominium association presents a matter of first impression in Illinois. Plaintiffs rely heavily upon the Tassan decision for the proposition thatindividual unit owners have standing to seek their own individual damages in aclass action. In Tassan, seven condominium owners brought a class action, onbehalf of themselves and all past and present owners of the condominium units,for breach of an implied warranty of habitability and breach of express warrantyagainst, among others, United Development Company (United), the company whichdeveloped and sold the condominium units to the individual owners. Tassan, 88Ill. App. 3d at 584. The allegations in the plaintiffs' count for breach of anexpress warranty referenced statements that were made in the individual contractsfor sale of the units. Tassen, 88 Ill. App. 3d at 585. The plaintiffs alsoalleged, in support of both of their claims, several defects within the buildingthat affected the common areas and the individual units. Tassan, 88 Ill. App.3d at 584-85. The plaintiffs further alleged that, as a result of the defects,they would suffer pecuniary damage because the condominium association wouldspend money to repair the defects, which, in turn, would be assessed to them asmembers of the association. Tassen, 88 Ill. App. 3d at 585. The trial courtdismissed both counts on grounds irrelevant to standing issues. Tassan, 88 Ill.App. 3d at 585.

On appeal, United argued that the plaintiffs lacked standing to bring theiraction because they were attempting to assert the rights of the condominiumassociation, rather than their own, individual rights, and that only theassociation could assert those rights. Tassan, 88 Ill. App. 3d at 595. Thus,the Tassan court had to address whether a condominium association had exclusivestanding to bring claims of breach of an implied warranty of habitability andbreach of an express warranty. Tassan, 88 Ill. App. 3d at 595. The Tassen courtacknowledged that section 9.1 of the Condominium Property Act gave condominiumassociations the power to bring an action on its own behalf (Tassan, 88 Ill. App.3d at 595-96), but noted:

"The difficulty with United's argument is thepresumption that the plaintiffs are attempting to assertrights of the association rather than their ownindividual rights. *** These rights of ownership aroseas a result of the individual contracts for sale betweenUnited and each individual buyer. *** In both [counts],it is the contract between United and the individualbuyers that created these warranties.

Hence it is not the association's rights that arebeing asserted here but the contract rights of eachindividual purchaser of the condominium units. Ifanything it is the association who would have nostanding in this action but for the fact that theamendment to section 9.1 of the Condominium Property Actapparently gives the association standing to assert theunit owners' rights in the common elements. We findnothing in the Condominium Property Act that indicatesan intent on the part of the legislature to transfer theunit owners' contract rights to the condominiumassociation.

Hence, we hold that plaintiffs have standing tobring this action." Tassan, 88 Ill. App. 3d at 596. We find Tassan distinguishable from the instant case. Tassan held thatindividual condominium unit owners could bring a class action for claims ofbreach of an implied warranty of habitability and breach of an express warrantythat were based on the individual contracts for sale of the condominium unitsagainst a developer of the condominium. Tassan, 88 Ill. App. 3d at 596. Thus,Tassan dealt with individual contract rights. We agree that "[s]ection 9.1 ofthe Act does not in any way deny an individual unit owner the right to assert anindividual contract right." St. Francis Courts Condominium Ass'n, 104 Ill. App.3d at 667. However, in the instant case, Poulet, in counts II and III of hissecond amended complaint, did not attempt to assert any individual contract rightthat arose out of an individual contract for sale of a unit. Rather, Poulet'scounts II and III involved claims for conversion and common law constructivefraud in connection with funds in the Association's account. Poulet allegedthat, both before and after the election of the first board of managers, Laskyand Peretz, acting on behalf of H.F.O. and Spectrum, directed funds to be paidfrom the Association's account for the benefit of themselves, H.F.O., andSpectrum. Thus, unlike the issue presented in Tassan, which involved individualcontract rights, the question presented in the instant case is whether theAssociation had exclusive standing to bring claims of conversion and common lawconstructive fraud that related to the mishandling of funds in its own account.

Although our independent research reveals no case in Illinois that hasdealt with this specific issue, we find Siller v. Hartz Mountain Associates, 93N.J. 370, 461 A.2d 568 (1983), instructive. In Siller, the Supreme Court of NewJersey addressed the issue of whether a condominium association had exclusivestanding to bring certain claims involving the common areas and facilities(6)against a developer. Siller, 93 N.J. at 380. The plaintiffs, the individualunit owners of the condominium, (1) filed a complaint against the developer ofthe condominium, alleging defects in the units, common areas and facilities and(2) sought a temporary restraining order against their two condominiumassociations (collectively, "the associations") to prevent the associations fromconsummating a settlement with the developer that related to the individual unitowners' claims. Siller, 93 N.J. at 372-73. More specifically, the plaintiffsalleged, inter alia, that there had been a settlement offer between the developerand the associations on behalf of the unit owners and that the associations hadno authority to settle the claims against the developer. Siller, 93 N.J. at 372-74. The trial court denied the temporary restraining order, dismissed all countsagainst the developer and allowed the developer and the associations to settle. Siller, 93 N.J. at 373. The owners appealed, and the appellate court affirmedthe trial court's decision. Siller, 93 N.J. at 373.

The Siller court noted that New Jersey's Condominium Act (N.J.S.A. 46:8B-1through -38) was an act which recognized the new form of ownership in realproperty, in which the individual unit owner enjoys a fee simple title andexclusive ownership of his individual unit, while retaining, as a tenant incommon, an undivided interest in the common elements. Siller, 93 N.J. at 375. The Siller court further noted that New Jersey's Condominium Act provided, amongother things, that the association will administer and manage the condominium,collect funds from unit owners for common expenses, maintain accounting recordsand "enter into contracts, bring suit and be sued." Siller, 93 N.J. at 375-77. The Siller court found that the statutory provisions of New Jersey's CondominiumAct conferred standing to the association to institute legal action "on behalfof the unit owners for damages to common elements caused by third persons." Siller, 93 N.J. at 378. The Siller court then considered whether an associationmay have an exclusive right to sue, and stated:

"Obviously the unit owner has an interest inclaims against the developer arising out of damages toor defects in the common elements. However, theassociation has been charged with and delegated theprimary responsibility to protect those interests [byNew Jersey's Condominium Act, which states that theassociation shall be responsible for the maintenance,repair and replacement of the common elements]. So longas it carries out those functions and duties, the unitowners may not pursue individual claims for damages toor defects in the common elements predicated upon theirtenant in common interest. The Condominium Actcontemplates as much. ***

It would be impractical indeed to sanctionlawsuits by individual unit owners in which theirdamages would represent but a fraction of the whole. ***A sensible reading of the statute leads to theconclusion that such causes of action belong exclusivelyto the association ***.

This is not to say that a unit owner may not acton a common element claim upon the association's failureto do so. In that event the unit owner's claim shouldbe considered derivative in nature and the associationmust be named as a party. ***

The unit owner may also sue the developer onbehalf of the association irrespective of its governingboard's willingness to sue during the period of timethat the association remains under the control of thedeveloper. ***

The unit owner, of course, does have primaryrights to safeguard his interest in the unit he owns.*** Moreover, defective conditions in the commonelements may also result in injury to the unit owner anddamages to his personal property and the unit. Forexample, a faulty roof may result in personal propertydamage in the unit. The unit owner's right to maintainan action for compensation for that loss against thewrongdoer is not extinguished or abridged by theassociation's exclusive right to seek compensation fordamage to the common element." Siller, 93 N.J. at 380-82.

Accordingly, the Siller court held that the owners lacked standing to sue thedeveloper for damages based solely on their tenant in common interests, but theowners could still, in certain situations, bring their individual claims againstthe developer. Siller, 93 N.J. at 383-84.

We also find instructive the Supreme Court of Virginia's opinion in Frantzv. CBI Fairmac Corp., 229 Va. 444, 331 S.E.2d 390 (1985). In Frantz, acondominium association and one owner of a unit in the condominium (collectively,"the Association") filed a complaint in the trial court against the developer,alleging in count I that the developer had violated certain provisions of theVirginia Condominium Act (Code