A judge has thrown out a $5 million mold lawsuit filed by a unit owner at Harborview Condominiums against the owners’ association and the property management company.
Baltimore City Circuit Court Judge Lawrence Fletcher-Hill granted summary judgment to the association and Zalco Realty Inc. in the lawsuit filed over leaking water and mold at the luxury condo tower. Fletcher-Hill ruled from the bench in February, followed by a memorandum opinion that was written in March but released on Monday.
“Although we were confident of having the facts on our side, this lawsuit has been a distraction and unnecessary expense for the building over the past two years,” said John Cochran, president of the association and a retired construction lawyer, in a prepared statement. “So we are very pleased that the judge has dismissed all of the plaintiffs’ claims without even needing to go through a trial.”
Plaintiff Paul G. Clark was represented by Steven D. Silverman, managing partner of Silverman, Thompson, Slutkin & White LLC, who was unavailable for comment on Tuesday. Clark has filed a motion to have Fletcher-Hill reconsider his ruling, a step many litigants take before filing an appeal.
Richard Magid, with Whiteford, Taylor & Preston LLP in Baltimore, was co-counsel for defendants Zalco and Harborview in the case.
“They are very pleased. It was a difficult matter for the association, a nonprofit that was being sued for millions of dollars,” Magid said. “It pitted neighbor against neighbor, caused anxiety and impacted sale prices.”
The lawsuit centered on allegations of fraud pertaining to a resale certification given to Clark before he bought the unit. Clark bought the 27th-floor dwelling for $1.15 million from John Erickson, founder of the retirement communities that bear his name, in October 2009.
Clark, president of a Bethesda computer security company, claimed that Zalco and the condo association knew about persistent leaking and mold issues at the site but did not disclose them to him in the resale certificate. Resale certificates provide buyers with pertinent information regarding the property and are required 15 days before closing.
Clark had claimed that the problems at Harborview were documented in reports dating to June 2008.
He argued that the certificate should have indicated the association was planning to spend $5 million to repair “extensive” water infiltration problems. The board had not approved the capital expense, and under Maryland law only approved expenses must be included on the certificate.
Fletcher-Hill ruled that the association and Zalco met their obligations regarding disclosures and the resale certificate, and were not in violation of the Maryland Consumer Protection Act.
The issue of including approved expenses versus planned ones was central to a recent Maryland Court of Appeals decision that could have had a major impact on the Harborview case — if it had not been withdrawn. In MRA Property Management, Inc. v. Armstrong, written by now-retired Judge Joseph F. Murphy Jr., the court ruled that potential property damage needed to be disclosed even if there was not a citation for a health or building code violation.
The Armstrong case was decided on Oct. 25, 2011, by a 5-2 vote. After the opinion was issued, MRA Property Management filed a request for reconsideration, which the court granted in December.
The MRA case was reargued in the Court of Appeals on March 1, with no opinion issued as yet.