A lightning strike, $1.1 million, and a condo question Arkansas courts still have not answered
A lightning strike, $1.1 million, and a condo question Arkansas courts still have not answered
2026-09-09 · Arkansas · Courts
Lightning destroyed one of the three buildings at a Hot Springs condominium regime, the insurer paid out more than $1.1 million, the owners voted not to rebuild — and Arkansas law still does not say who gets the money. The Arkansas Court of Appeals affirmed the case on procedural grounds and said so expressly: “we affirm without addressing the merits.”1
That makes Boerner v. Richard an unusual thing to report — a decision whose significance is what it did not decide. Anyone who has been told the Arkansas rule on this is settled has been told wrong.
What happened at Stonybrook
Stonybrook Chateau Horizontal Property Regime in Hot Springs consists of three buildings, six apartments each. On May 22, 2022 lightning struck Building A and the resulting fire and water damage made it a total catastrophic loss. Nationwide tendered the policy limits of $1 million, plus a further $147,688.41 for cleanup and miscellaneous costs.
At a special called co-owners meeting the members voted unanimously not to rebuild Building A. A few weeks later a second meeting was held to decide what happened to the insurance money. This time the vote split: ten of the eighteen co-owners across all three buildings voted against giving the proceeds exclusively to Building A's owners. The majority position was that Building A's owners would receive only “a portion of the indemnity equal to the percentage representing the basic value of that owner's apartment as set forth in the Master Deed.”
Building A's owners sued in Garland County Circuit Court for a declaratory judgment under Ark. Code Ann. § 18-13-118, part of the Arkansas Horizontal Property Act.
Two orders, in opposite directions
The circuit court first ruled for Buildings B and C. Its July 2023 order found that the master deed and bylaws controlled, that “the buildings in Stonybrook are owned by the Regime” and that “[t]he apartment owners only own from the sheetrock in on their respective units.” Building A's owners were entitled to the basic value of their apartments at the master deed's percentage rate — six payments totalling $255,510.00 — and from those individual payments “the delinquent dues and assessments shall be deducted.” The balance of the $1,041,588.23 held in the court's registry went back to the Regime.
Building A's owners then retained new counsel and moved under Rules 59 and 60 for reconsideration, a new trial, and to vacate the judgment. They argued the precedent submitted was contrary to Arkansas law; that the opposing posttrial brief asserted facts not in evidence — property values said to be in a 1974 master deed, an assertion that Building A's owners carried separate fire coverage and were “essentially double dipping,” and unspecified delinquent dues on property that no longer existed; and that a new trial was needed to resolve questions still in dispute, including their own continuing ownership status. The circuit court granted that motion. Buildings B and C appealed.
Why the merits were never reached
The appellants argued the merits at length — the bylaws, the Horizontal Property Act, why the original order had been right. It did not matter, because of a rule of appellate practice that decides more association cases than any doctrine of property law.
The circuit court had granted the motion in a blanket ruling, without specifying which of the three grounds it accepted. Under Corbitt v. Arkansas Game & Fish Commission (2023), “[i]n issuing a blanket ruling … a circuit court is deemed to have accepted all arguments advanced by the prevailing party,” and “when a circuit court bases its decision on more than one independent ground and the appellant challenges fewer than all those grounds on appeal, we will affirm without addressing any of the grounds.”
The appellants had attacked only the “contrary to Arkansas law” ground. They “notably failed to address on appeal any of these independent grounds.” So: affirmed, merits untouched.
What is actually unresolved
The open question is a live one for every Arkansas multi-building condominium regime: when one building is a total loss and the co-owners vote not to rebuild, does the insurance money follow the destroyed units, or does it belong to the regime as a whole?
Three subsidiary premises appear in the circuit court's first order and were recorded by the Court of Appeals without endorsement — which is exactly why they should not be quoted as Arkansas law:
- that the regime, not the unit owners, owns the buildings;
- that unit owners “only own from the sheetrock in”;
- that delinquent dues and assessments may be netted out of an owner's distribution — including, on these facts, dues attributed to a building that had burned down.
Each of those is contestable, and none has been affirmed on the merits by an Arkansas appellate court.
What it changes for Arkansas boards and owners
The master deed is doing the work the statute is not. Arkansas's Horizontal Property Act dates from 1961 and, as the insurance provisions at §§ 18-13-117 to -119 show, it is short. Where a regime's master deed allocates proceeds by “basic value” percentages, that language may well decide the outcome before the Act is ever consulted. Boards of multi-building regimes should know what their own instrument says about a partial total loss — before the loss.
The vote not to rebuild is the moment of maximum exposure. At Stonybrook the decision not to rebuild was unanimous; the fight was entirely about the money that decision released. A regime that votes not to rebuild without first resolving the distribution question has converted an insured loss into litigation among its own members.
Netting delinquencies against a distribution is unsettled. The circuit court permitted it. No appellate court has approved it. An Arkansas association that deducts claimed arrears from an insurance distribution is acting on an untested theory.
And the appellate lesson stands on its own. Where a circuit court rules without stating its reasons, an appellant must challenge every ground the prevailing party advanced. Attacking the strongest one and ignoring the rest loses the appeal without a word being said about who was right.
What to watch next
The case went back for a new trial. Whether it produces a second appeal — this time on a record that squarely presents the § 18-13-118 question — is the thing to watch. Until an Arkansas appellate court reaches it, the allocation of insurance proceeds after a total loss in a multi-building regime is an open question governed, in practice, by whatever the master deed happens to say.
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