Q&A: Disclosing Information About a Shareholder’s Health Condition

Q. Say a shareholder spoke to the president and vice president of the board and disclosed his or her health condition. And later on, the president and vice president lost re-election to the board and found out that the shareholder did not vote for them. Then the president went on a rant and told others of that shareholder’s condition, including new board members. Is that considered a breach of confidentiality fiduciary duty?

— Concerned About a Possible Ethics Violation

A. “It is established law that trustees owe a fiduciary duty to condo owners and shareholders (See Siller v. Hartz Mountain Assoc., 93 N.J. 370 (1983)),” says attorney Henry C. Walentowicz of the Clifton-based firm Celentano, Stadtmauer & Walentowicz, LLP. “Trustees and officers must also comply with the governing documents including the bylaws, although it is doubtful that this issue would be addressed in those documents. Leeds v. Harrison, 7 N.J. Super. 558 (Ch. Div. 1950). In Glen v. June, 344 N.J. Super. 371 (App. Div. 2001), the court held that an attempt to humiliate an owner by piling snow in his driveway was a breach and an award of damages would be appropriate for such a breach. In the circumstance posed by the question, it is not clear if the rant by the president took place while he was still an officer. The medical information, however, was told to him while he was the president. It is a HIPAA violation for a medical provider to disclose health information, which does not apply in this case. Moreover, the shareholder, from the information given, did not expressly communicate the health condition confidentially. In addition, the disclosure does not appear to touch upon the operation, management, or rules of the association or the relationship of the unit owners to same. Perhaps, if the health condition pertained to a condition that would cause the other unit owners to avoid the shareholder, there may be more of a case. Given the facts of this case, I would not consider the disclosure to be a breach.” 

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