Former board member being sued

Started by CathyB3 • 5 replies • 2825 views

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CathyB3 (Texas)
Posts: 7

Posted:

My husband was on the board as VP last year and he is being sued by the new board this year.
They have stated he was not legally elected,in which he was. They also said he misused funds
and his audit came out clean along with the President, and they found no missing funds.

If the board wins the lawsuit, can they take our house if they get a judgement or is it
protected? It is homesteaded.

BrianB (California)
Posts: 2,820

Posted:

IANAL, but you likely have several things going for you that make me say "don't worry"

1) anyone can sue anyone else for anything. doesn't mean they will win
2) If your hubby is innocent, don't worry
3) If he's innocent, but incompetent at doing the board job, then the HOA's own BOD insurance (errors and omissions clause) will cover the damges. Which, oddly enough, means the new board is sueing their own insurance company.
4) there must be damages. what exactly is alleged to have been damaged/taken?

Mostly, I say don't worry about it. Answer the legal papers properly, don't panic, and countersue for defamation, harassment, etc.
If hubby did a decent job on the board, committed no crimes, did nothing wrong, just file the answers with the court as the legal documents come in, and you'll be fine.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Are they threatening to sue or have they served you actual papers? Threats are usually empty and go no where except where fear takes them...If they did serve papers make sure you counter-sue. It shouldn't cost you much money to counter-sue and it doesn't necessarily take a lawyer. You can counter-sue for about anything even the amount they are suing you for or harrassment etc... It's pretty much just a response statement to whatever they send you.

If they haven't followed through with the lawsuit, then you may want to explain to them HOW a lawsuit works when a HOA sues a member...It's just a BAD idea. It cost everyone unnecessary money and aggravation. The money has to come from the HOA's budget to pay for the costs of the lawyer/court costs. If there is not enough money in the budget, then everyone may have to pay a special assessment to cover the costs. If you were to win your countersuit, then a special assesment to pay your judgement may be needed as well. ALL of this coming out of ALL the member's pockets...(Unless you ask to be exempt if you win in court).

It's just a no win situation when lawsuits are involved in a HOA. The board just needs to move on and start as if the HOA is completely new to them. Forget the past and live for the present/future. There is WAAAAY more things to worry about than past acts of previous board members to deal with.

When I stopped being President of my HOA, the people who replaced me said the SAME thing. That I had not turned over records and such...None of it true of course. The records were locked in a closet inside the clubhouse where they had been for over 20 years...I had even straightened them out and reorganized them. They just lied about the records to justify their incompetence in running the HOA. The lie didn't stand up 6 months later. Everyone realized they had ALL the records the whole time but just didn't know what to do with them...Just give it some time and let them get used to the mess they are in. My HOA came back begging me to help them...which I did and continue to do...

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Cathy,

The time to challenge the election was when the election happened. Not a year later. Besides, it was the Board prior to your husband being elected that accepted the votes. Therefore, any issue over the election would be with them and not your husband. You may want to point that specific bit of information out to them if you reply to something they send you.

Providing that all expenditures were approved by the Board (or were used to pay for a contract that was approved by the board) your husband was doing his job.

If you have been served with legal papers - SEEK THE ADVICE OF AN ATTORNEY, preferably someone who knows corporate law, and counter sue for the cost of legal expenses since what he is being sued over were actions done in the performance of his duties as a member of the Board.

If your husband doesn't already have it, obtain copies of all meeting minutes from the year prior to your husband being elected to present. They may contain information that will help defend your husband if needed.

I understand your concern. However, if your husband followed the Associations governing documents and State laws, you should have nothing to worry about. However, depending on the current board, you may need to defend yourself over a frivolous law suit.

As each State has different laws on what assets may or may not be used to collect any judgments, I just don't know about your house issue. However, your attorney should be able to answer that question.

CathyB3 (Texas)
Posts: 7

Posted:

My husband legitimately served on the board and the new board is suing him and
the former president for spending money that was not legitimate. Everything
was accounted for. They can't justify why the money was missing, and they
had an audit and it was all accounted for.

He wants to counter sue them for harrassment, but we need to find a lawyer
on a contingency basis. Do you know of one that will take the case in
San Antonio?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Cathy,

I am unable to refer to you to any lawyers. Typically, the type of case your talking about would not be taken on a contingency basis.

Granted, I don't know all the specifics of the issue but I don't think harassment would be a winnable case as your current board would probably just say that they were trying to find out answers. If you have already been served with legal papers, you should contact an attorney as there may be a time line that needs to be met to respond to the court.

Tim

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