The Washington Court of Appeals has upheld an arbitration ruling involving a dispute among condominium owners at Kat’s Cove in Ocean Shores. The court confirmed the arbitration award that favored Gregory Hochhalter and others over David Lewis, who had contested the ruling regarding the governance and finances of the condominium association. This decision affects the management of the Kat’s Cove Condominium Association and clarifies the roles and responsibilities of its members.

The case, identified by docket number 60637-2-II, arose from a disagreement among unit owners about control of the condominium association and financial contributions towards its expenses. David Lewis, who formed the Kat’s Cove association in 2007, was involved in a legal battle with fellow owners Gregory Hochhalter, Debra Beech, and Scott Anderson. The court's ruling is significant as it reaffirms the arbitration process as a means to resolve disputes in condominium governance.

Background

The dispute began in November 2018 when Gregory Hochhalter filed a lawsuit against Kat’s Cove and David Lewis to obtain association records. A temporary restraining order was issued in 2019, preventing Lewis from acting as an officer or director of the association. Hochhalter later amended his complaint to seek declaratory and injunctive relief, adding Beech and Anderson as plaintiffs. Lewis counterclaimed for an accounting of the expenses paid by each owner since the association's formation.

As per the Kat’s Cove declaration, disputes among owners were required to be resolved through arbitration. After a series of legal proceedings, the Washington Court of Appeals ruled in July 2021 that the dispute was indeed subject to arbitration. The case then proceeded to arbitration, where an arbitrator issued a decision in November 2024, granting Hochhalter’s requests for relief and denying Lewis’s accounting counterclaim.

The Ruling

The Washington Court of Appeals ruled on November 10, 2026, affirming the trial court's confirmation of the arbitration award while reversing the reduction of attorney fees awarded to Hochhalter. The court stated, "the trial court did not err in confirming the arbitration award, but the trial court erred in reducing the arbitrator’s attorney fee award." The judges involved in the ruling included Judge Maxa, who authored the opinion, along with Associate Chief Judge Price and Judge Cruser.

The arbitrator had determined that Hochhalter was the substantially prevailing party and awarded him attorney fees. However, the trial court had reduced this amount, stating it found the arbitrator's fee determination to be "a little odd" and lacking clarity. The appellate court found that the trial court had no authority to modify the arbitrator’s award, as there was no evident error in the fee calculation.

Impact

This ruling has significant implications for the governance of the Kat’s Cove Condominium Association. By upholding the arbitration award, the court reinforced the importance of arbitration as a method for resolving disputes among condominium owners. The decision clarifies that the arbitrator's findings and awards should be respected unless there is a clear legal error.

The ruling also emphasizes the responsibilities of condominium owners to maintain accurate records of payments and contributions. The arbitrator had expressed concerns about the lack of documentation regarding payments made by Lewis and other owners, which ultimately influenced the decision regarding the accounting counterclaim. This case may serve as a precedent for future disputes involving condominium associations and their governance.

What's Next

Following this ruling, it is unclear whether David Lewis will seek further legal action or appeal the decision to a higher court. The court's opinion does not mention any pending related cases. However, the ruling establishes a clear framework for how disputes within condominium associations should be handled, particularly concerning arbitration and the responsibilities of unit owners.