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Non-Profit D&O

A violation of bylaws, failure to maintain accurate financial records, misappropriation of funds—these are just a few examples of common D&O claims and lawsuits that are often brought against non-profit organizations.

The attorneys in Marshall Dennehey’s Non-Profit D&O Practice Group are experienced in defending boards of directors and individual board members when their alleged actions or decisions necessitate legal intervention. We represent all manner of non-profit organizations, including condominium, homeowner and property owner associations, as well as social and recreational clubs.

We defend these entities against alleged wrongful acts or omissions, errors, misstatements, or violation of state or federal law that allegedly denied members of certain rights and privileges. In addition to defending claims brought by association members, we also defend the non-profit organizations and their boards against claims brought by non-members, including disputes with contractors asserting breach of contract or fraud or claims by non-members that they have been discriminated against in violation of state or federal law.

Because our clients are often employers, we frequently defend employment-related issues that may arise during such litigation, including discrimination, harassment and wrongful termination asserted against the organization or its board.

Our attorneys handle these matters across our 19 offices in seven states. In every engagement, we work with clients to find creative solutions to resolve disputes and, when warranted, provide legal representation through trial.

Results

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Successful Defense of High‑Profile Condo Board Election Challenge as Court Dismisses Claims With Prejudice

Summary Judgment Obtained for a Homeowners’ Association

We secured summary judgment for a homeowners’ association. The plaintiff owned an apartment in a planned community and sought to drill a hole through the exterior wall of the building to vent an HVAC unit. The HOA denied his request, and the plaintiff asserted claims of negligence and breach of the duty of good faith and fair dealings, alleging that the HOA treated him unfairly by denying his request. Despite providing numerous photos of other holes through the exterior wall of the building, the plaintiff admitted during his deposition that they did not know whether the HOA had ever permitted another unit owner to drill a hole in the exterior wall. We successfully argued that the plaintiff could not put forth any evidence demonstrating unfair treatment, or that the request had been denied in bad faith. 

Thought Leadership

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Case Law Alerts

Florida Court Addresses Association Liability for Damage to Common Elements

November 3, 2026

A Florida Appellate Court from the Fourth District Court of Appeal ruled that a condominium association may be responsible for repairing damaged common elements even when the damage originates within another owner's unit. This case involved a condominium owner whose unit sustained repeated water leaks, sewage intrusion, and mold damage, including a leak caused by a bathtub in the unit above. The trial court granted summary judgment for the association, finding that the association had no duty to repair because the leak originated within another unit. On appeal however, the Court reversed. The Appellate Court held that the association’s duty to maintain and repair common elements does not depend on who caused the damage. Under the condominium declaration and Florida’s Condominium Act, the association remains responsible for repairing damaged common elements. The court also noted that an association may be able to seek reimbursement from an individual unit owner if the governing documents permit it. However, the potential responsibility of the unit owner does not necessarily eliminate the association’s duty to make the required repairs. The decision serves as a reminder that condominium claims require careful consideration of the source of the loss, the location and classification of the damaged property, the association’s governing documents, and the association’s response to the damage. This case was remanded for further proceedings to determine whether the damaged areas were common elements and whether the association’s failure to repair contributed to additional damages.

Case Law Alerts

Florida Appellate Court Clarifies the Limits of Condominium Director Immunity

July 21, 2026

A Florida appellate court ruled that a trial court erred in its decision to dismiss a condominium association's lawsuit with prejudice. The King David of Sunny Isles Condominium Association brought a lawsuit against two former board directors. The association alleged that the directors breached their fiduciary duties, violated the condominium's governing documents and the Florida Condominium Act, and engaged in improper financial and governance practices, including failing to maintain financial records, improperly suspending a unit owner's voting rights, and allowing the use of an association-issued debit card. The trial court dismissed the complaint, finding that the association failed to allege compliance with a bylaw requiring approval from 75% of the membership before filing suit and concluding that any amendment would be futile. Under Florida law, directors and officers of non-profit organizations are generally protected from personal liability for monetary damages regarding organizational management, policy, decisions, or omissions. However, this immunity is not absolute. On appeal, the court held that dismissal with prejudice was improper because defects related to pleading a condition precedent are generally curable through amendment. More significantly, the court emphasized that while condominium directors are typically protected from personal liability, allegations involving the improper use of an association-issued debit card could fall within statutory exceptions to that immunity if properly pleaded. Florida courts generally allow plaintiffs an opportunity to amend defective complaints unless it is clear that no amendment could state a valid cause of action and this decision serves as a reminder of that. The case was ultimately remanded to allow the association to amend its complaint and proceed with the litigation.

Firm Highlights

MD Selected a 2027 Best Law Firm in Multiple Practice Areas by Best Lawyers

News

Marshall Dennehey Named a 2027 Best Law Firm in Multiple Practice Areas by Best Lawyers®

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

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Result

Summary Judgment Obtained in Insurance Coverage Case

Four Marshall Dennehey Attorneys Selected 2026 “Top Lawyers” by Delaware Today Magazine

News

Four Marshall Dennehey Attorneys Selected 2026 “Top Lawyers” by Delaware Today Magazine

Thought Leadership

Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

Thought Leadership

Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.

Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.

Marshall Dennehey Welcomes Special Counsel David Farkouh and Michele P. Rannie to New York City Office

News

Marshall Dennehey Welcomes Special Counsel David Farkouh and Michele P. Rannie to New York City Office

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case