An HOA that sued instead of arbitrating lost its claims — then filed for bankruptcy to handle the judgment
An HOA that sued instead of arbitrating lost its claims — then filed for bankruptcy to handle the judgment
2026-09-10 · Florida · Courts
What happened. The Eleventh Circuit issued a published decision arising from a Florida homeowners' association dispute that took an unusual route: the association sued a homeowner over her yard instead of arbitrating, was held to have waived its claims by doing so, and then — facing her costs and fees award — filed for subchapter V bankruptcy reorganisation.
Guan v. Ellingsworth Residential Community Association, Inc., Nos. 21-12969, 21-12971 and 21-13231, was decided on 13 January 2025 and marked [PUBLISH] (Tjoflat, J., with Branch and Luck, JJ.), on appeals from the Middle District of Florida and a bankruptcy proceeding.1
The waiver that started it
The state court awarded the homeowner costs and fees because, as the Eleventh Circuit records it, “Ellingsworth had waived its claims against Guan by suing rather than arbitrating the dispute.”
That is the finding with the widest application. Chapter 720 requires pre-suit dispute resolution for defined categories of dispute under s. 720.311, and an association that goes straight to court can forfeit the very claims it is trying to enforce — and end up paying the owner's fees.
What the Eleventh Circuit decided
The court affirmed in part — upholding confirmation of the association's reorganisation plan and the denial of stay relief — and vacated and remanded the dismissal of the homeowner's abstention appeal.
So the association's use of subchapter V survived, but not every ruling against the homeowner did.
Why subchapter V matters to boards and owners
Subchapter V of Chapter 11 is a streamlined small-business reorganisation route created in 2019. Its availability to a homeowners' association — a non-profit corporation whose income is member assessments — is not something most owners would anticipate.
The practical consequence for a homeowner holding a judgment against an association is significant. A reorganisation plan can restructure that obligation, the automatic stay halts collection, and the homeowner becomes a creditor in a proceeding rather than a judgment holder with execution remedies.
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Related Florida HOA Topics
- Guan v. Ellingsworth Residential Community Association, Inc., Nos. 21-12969, 21-12971, 21-13231 (11th Cir. 13 January 2025) ↩
- Vinci v. Lake Lizzie Reserve Homeowners Association, Inc., No. 6D2024-2646 (Fla. 6th DCA 17 July 2026) ↩
- Boca View Condominium Association, Inc. v. Department of Business and Professional Regulation, No. 1D2025-0718 (Fla. 1st DCA 4 March 2026) ↩
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