## Facts

- Stonecrest’s declaration and bylaws allowed amendment by a two-thirds vote of eligible members; the board could suspend voting eligibility for violations of member duties.
- Board members claimed they began discussing leasing restrictions around summer 2003, but meeting minutes did not reflect such discussions before Bailey’s purchases and leasing activity.
- In June 2004, Barbara Bailey bought a Stonecrest unit as her primary residence; in late August/early September 2004, she bought a second unit intending to lease it.
- Bailey and her real estate agent were not told that leasing restrictions were being proposed when she purchased the units.
- On December 11, 2004, Bailey leased the second unit for one year to an African-American tenant.
- Bailey alleged that after she informed the board president, Lagrit Morris, of the tenant’s race, Morris stated residents might object.
- Bailey alleged a resident called her using racial epithets and said residents objected to “that kind of person” living in the complex.
- Bailey alleged Morris then told her the rental caused an “uproar,” leading to proposals to prohibit leasing.
- The association adopted amendments that prohibited leasing, with a grandfather clause and hardship exception, requiring a two-thirds vote of eligible owners.
- Bailey did not qualify for the grandfather clause because her tenants moved out after short periods; she did not apply for a hardship exception.
- Defendants asserted race-neutral reasons for the amendments, including maintaining property values, reducing rentals, and preserving an owner-occupied community.

## Issues

1. Whether evidence created a triable issue that the leasing-prohibition amendments were adopted with racially discriminatory intent, violating OCGA §§ 8-3-202(a) and 8-3-222.
2. Whether evidence created a triable issue that the board breached fiduciary duties to unit owners in proposing and adopting the amendments.
3. Whether summary judgment was proper on punitive damages and attorney’s fees where the underlying claims were disputed.

## Decision

- The Court of Appeals of Georgia vacated the grant of summary judgment for all defendants and remanded.
- The court held genuine issues of material fact existed on discriminatory intent under the Georgia Fair Housing Act.
- The court held genuine issues of material fact existed on breach of fiduciary duty arising from the same events and the manner of proposing and implementing the amendments.
- Because the underlying claims survived summary judgment, the court also vacated summary judgment on punitive damages and attorney’s fees.

## Legal Principles

- Summary judgment is improper if the record, viewed de novo with reasonable inferences for the nonmovant, shows genuine disputes of material fact.
- Georgia fair-housing discrimination claims may be analyzed using a McDonnell Douglas-type burden-shifting framework: prima facie showing, legitimate nondiscriminatory reason, and proof of pretext.
- Discriminatory intent may be shown by circumstantial evidence, including temporal proximity between protected conduct and adverse action, racially charged statements, and lack of contemporaneous documentation supporting asserted neutral reasons.
- Condominium association board members may owe fiduciary duties to unit owners, including good faith and loyalty; evidence suggesting improper motive or unfair process can create a jury issue on breach.
- Claims for punitive damages and attorney’s fees generally depend on proof of underlying wrongful conduct and should not be resolved by summary judgment when liability-related facts remain disputed.

## Conclusion

The court vacated summary judgment because the timing of the leasing ban, alleged race-related statements, and the absence of corroborating board minutes created jury questions as to whether a facially neutral leasing prohibition was adopted for discriminatory reasons and whether the board breached fiduciary duties, leaving related remedies for further proceedings.


Bailey v. Stonecrest Condo. Ass’n, Inc., 304 Ga. App. 484, 696 S.E.2d 462 (Ct. App. 2010)