Condo Media - April 2011 - 38

COVER STORY

“You only have to pick up a newspaper to see examples of ways in which associations could get themselves into hot water in a hurry,” Cannan says. (See related sidebar, page 36.) Of all the possible exposures, libel is probably the biggest concern for community associations. The risk of saying something that infuriates or offends someone else (and triggers a libel suit) certainly exists with conventional com-

have had an expectation of privacy regarding the published material,” the court added, noting that “the potential audience was vast.” Although relatively few associations have ventured into the social networking arena, that is likely to change, some industry executives believe. Melissa Garcia, an attorney in the Denver, Colo., law firm HindmanSanchez, says many communities are finding that

The risk of saying something that infuriates or offends someone else (and triggers a libel suit) certainly exists with conventional communications platforms, but those risks are magnified on social networking sites.
munications platforms, such as Web sites and e-mail, observes Stephen Marcus, a partner with Marcus, Errico, Emmer & Brooks. But those risks are magnified on social networking sites, such as Facebook, he says, because these platforms typically encourage broad participation and open communication, and the information posted on them “can be catapulted instantly into cyberspace, increasing both the audience and the association’s potential liability.” Highlighting that concern, a California appeals court ruled recently that comments made in a blog were not subject to privacy protections and could be reprinted elsewhere without the blogger’s permission. In this case, a college student wrote at length, and in disparaging terms, in her MySpace blog about her hometown. A reader (the principal of the high school the student had attended) sent the comments to the local newspaper, which published them as a letter to the editor. The student sued, claiming that her blog was a private forum. The court disagreed, ruling (in Moreno v. Hanford Sentinel Inc.) that posting the comments on her blog “made [them] available to any person with a computer, and thus opened [them] to the public eye. … No reasonable person would Facebook, in particular, allows them to convey information, encourage owner involvement and build community far more effectively than Web sites, newsletters or e-mail. Garcia, who is pioneering the use of twitter in her law firm, predicts that social media communications will eventually replace other communications tools. “Younger residents, in particular, spend far less time today surfing the Web or reading their e-mail. But they live on Facebook and Twitter,” Garcia notes, and increasingly, “this will be the only way to reach them.”

A Brave, New, Scary World
That prospect excites social media enthusiasts like Garcia, but it makes insurance industry executives like Joel Meskin, vice president in charge of community association products for McGowan & Company Inc., more than a little nervous. Of all the Internet-based communications technologies, he says, “social media scares me the most. I understand the ideological value of social media,” he adds. “But I haven’t been convinced of its practical value to community associations. It’s a wonderful concept in a perfect world. But as an association, board member, your duty is to manage

the corporation. There is absolutely no upside that outweighs the potential down side of having an association-sponsored Facebook page or Twitter account.” Meskin believes the downside is the outsized liability risks social media sites create. “Board members don’t always have the most perfect judgment in the world,” he notes. “They don’t always think before they speak — or write.” Meskin described one recent incident in which an association board president, “who usually had the patience of Job” finally had all he could take from a resident, who appeared at every board meeting and criticized everything the board did. After one particularly contentious session, the president Googled the gadfly and found that his CPA license had been revoked and that he had several ethical investigations pending against him — information the board member shared via e-mail with all 240 association residents. The gadfly, predictably, has filed a libel suit. It isn’t the possibility of a large award, should the association lose this suit, that most concerns insurers, Meskin says; it’s the cost of defending these actions, regardless of how they are resolved. In this case, “we can debate whether the allegations are true, but we’ll still have to pay the litigation costs.” “People will always sue the deep pockets,” he points out. So when one owner sues another for something said on a social media platform (or an interactive Web site), even if the association has all the appropriate disclaimers and regulations governing content, Meskin says, “they will almost certainly sue the association as well.”

Are You Covered?
This raises the obvious question about whether association insurance policies will cover these actions. The answer is: perhaps, but not necessarily. And if existing policies do provide coverage now, Meskin predicts, they probably won’t for much longer.

CONDO MEDIA • APRIL 2011

Condo Media - April 2011

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