Get 2 months of free community web site hosting from Community123.com!
Wednesday, May 23, 2018
Get 2 months of free community web site hosting from Community123.com!


SBCA: Free education for HOAs and condos on satellite placement issues.
(National Trade Organization)
Helping HOAs, condos and property managers with satellite placement issues since 1986.
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: HOA losses in court couple questions
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
GuyM1
(Ohio)

Posts:222


02/14/2018 8:37 AM  
Hi, All just a few questions about the procedure.

1-When should the Board notify the Association of the loss?
2-Should the Board call a meeting to talk to Association?
a-monies
b-assessments
3-Should the board tell the Association why they lost?
a-Show rulings.
b-Wrongdoings by a few board members.
4-Should the members be able to vote out wrongdoers at the meeting?


Should Association members start a class action suit against the wrongdoing board members personally for Breach of Contract?
MarkM31
(Washington)

Posts:337


02/14/2018 2:09 PM  
Posted By GuyM1 on 02/14/2018 8:37 AM
Hi, All just a few questions about the procedure.

1-When should the Board notify the Association of the loss?
2-Should the Board call a meeting to talk to Association?
a-monies
b-assessments
3-Should the board tell the Association why they lost?
a-Show rulings.
b-Wrongdoings by a few board members.
4-Should the members be able to vote out wrongdoers at the meeting?


Should Association members start a class action suit against the wrongdoing board members personally for Breach of Contract?




Didn't the association know of the lawsuit beforehand? And they aquesed at the least by not acting to stop this. You as a member certainly have a right to call a special meeting as your CC&R's allow, and to ask the board for an explanation.If you can't get enough votes for a special meeting it may be time to take a hint. Have you read your CC&R's? They contain the answer to 2,3 &4.

What would the basis of your lawsuit be?
MelissaP1
(Alabama)

Posts:7294


02/14/2018 3:36 PM  
If you have enough for a class action suit, then you have enough to make changes IN your HOA without going to court. That is enough to vote your current board out. That is enough to change the rules. Suing your HOA is suing yourself and your neighbors. It's a consequence. Would it not be better to avoid court if you all have the power without a court?

The HOA is to disclose the lawsuit. Maybe not all the details. The ruling and amount the HOA has to pay in damages/legal fees is something needs to be disclosed. Also the HOA insurance may be covering this. As for suing the individual board members? I wouldn't do that. Just vote them out.

Former HOA President
GuyM1
(Ohio)

Posts:222


02/14/2018 5:43 PM  
Hi Mark
To your first question, the members and the third board member didn't know that the other two Board members which one of those was the President went to the Attorney and filed the lawsuit. At the Annual Meeting, the board President told the members that they had to bring the lawsuit because of a previous lawsuit from 28 years ago by a member that sued for the board not following the Declarations. Our Annual Meeting is in April so not too far off and there is a court date in March for Attorney fees and damages so I think just wait until April. I have read all CC&R's and have learned a lot over this lawsuit and that is why I won the lawsuit. The two Board member broke the State Law by bringing the suit without a unanimous vote by the board or vote of the members. The President and Secretary said they had voted from a past board, which was a lie and wasn't the board at the time of bringing the suit.
GuyM1
(Ohio)

Posts:222


02/14/2018 5:56 PM  
Hi Melissa
To start off please re-read the last line it says sue the two members Personally which isn't suing yourself or other members but the two wrongdoers. The two board members should foot the bill for breaking State Law on a board must have a unanimous board vote to bring a suit or a member vote. HOA Insurance doesn't cover taking a member to court for a bylaw violation only if a suit is brought against the HOA or Board. Why should members pay thousands of dollars each for those two breaking the law and is a Breach of Contract? The two board members did this on their own and were found to be guilty of the violation by the judge in her ruling.
ArtL1
(Florida)

Posts:83


02/14/2018 6:17 PM  
Most court records are public record anyway, so the board likely can't keep the members in the dark for long. They may as well come clean and tell the members what happened, what went wrong, and what they plan to do next.
PaulB12
(Virginia)

Posts:38


02/15/2018 9:37 AM  
Posted By GuyM1 on 02/14/2018 5:43 PM
Hi Mark
To your first question, the members and the third board member didn't know that the other two Board members which one of those was the President went to the Attorney and filed the lawsuit. At the Annual Meeting, the board President told the members that they had to bring the lawsuit because of a previous lawsuit from 28 years ago by a member that sued for the board not following the Declarations. Our Annual Meeting is in April so not too far off and there is a court date in March for Attorney fees and damages so I think just wait until April. I have read all CC&R's and have learned a lot over this lawsuit and that is why I won the lawsuit. The two Board member broke the State Law by bringing the suit without a unanimous vote by the board or vote of the members. The President and Secretary said they had voted from a past board, which was a lie and wasn't the board at the time of bringing the suit.




Wow, all sorts of lack of transparency here. GuyM1, try not to put too many details about your situation, if you can, summarize. To get us on the same page just because these two Board members didn't tell the other board members, doesn't mean the other board members are off the hook. You must sue the HOA first, then the insurance kicks in. Then as the case proceeds, you can sue them individually. Most volunteers that join the HOA have umbrella insurance that is an additional to your home coverage, so that will kick in.

I'll try to answer a few questions:

1-When should the Board notify the Association of the loss?
answer, right away, and even if they don't, the lawsuit is always disclosed as new home-buyers come in, that is Law

2-Should the Board call a meeting to talk to Association?
answer, I highly doubt if they will call a meeting plus it would be in Executive anyway, if they haven't been transparent until this point, they definitely will not call a meeting, remember they are still in control

3-Should the board tell the Association why they lost?
answer,county records will show the amount of the judgement rewarded, remember the HOA doesn't have to pay anything, its just a judgement, warrant in debt, they don't have to pay it. Talk to your attorney in filing a judgement lien against the HOA, that will get their attention
a-Show rulings.
b-Wrongdoings by a few board members.
answer, no, people probably don't want to see that many details, the details will come out naturally

4-Should the members be able to vote out wrongdoers at the meeting?
most states its 2/3 membership vote to vote them out, very difficult to achieve this, sometimes suing is the only way...because if you vote them out...nothing will stop them from becoming board members again if no one else volunteer's for the position...voting them out is a temporary solution...lawsuits are on the record and permanent.

I don't think a class action requires a certain percentage of membership, I believe it becomes class action as soon as you have more than one person on the attorney's retainer. So it will say Group of Individuals vs. HOA.

Overall you must talk to your attorney on the next steps, I wouldn't put anything on this forum. Don't worry about the membership and informing them right now, if you have support enough to get others on the retainer, then run it by the attorney. Worry about your money and getting it back.

Mail them a government book from high school. They must understand how voting, transparency and check & balance works.
MarkM31
(Washington)

Posts:337


02/15/2018 10:10 AM  
How big was this lawsuit that was lost, and how many are in the HOA?
GuyM1
(Ohio)

Posts:222


02/15/2018 6:20 PM  
Plaintiffs Attorney put in his brief that they would exceed $18,600 plus court costs and Defendant Attorney fees around $15.000 plus, court costs and Damages. Thinking around $40,000 and there is only 9 units in the HOA.
BenA2
(Texas)

Posts:401


02/15/2018 7:07 PM  
Posted By GuyM1 on 02/14/2018 5:56 PM
Hi Melissa
To start off please re-read the last line it says sue the two members Personally which isn't suing yourself or other members but the two wrongdoers. The two board members should foot the bill for breaking State Law on a board must have a unanimous board vote to bring a suit or a member vote. HOA Insurance doesn't cover taking a member to court for a bylaw violation only if a suit is brought against the HOA or Board. Why should members pay thousands of dollars each for those two breaking the law and is a Breach of Contract? The two board members did this on their own and were found to be guilty of the violation by the judge in her ruling.



If the HOA has Directors and Officers insurance it would cover suits against individual board members. The cost of the suit to the association might be higher premiums and members refusing to serve on the board for fear of being sued.
GenoS
(Florida)

Posts:2087


02/16/2018 2:35 AM  
Do not forget to review the Indemnification clause, if you have one (most places do) in the governing documents. Those are often obscure but they can be real eye-openers.
TimB4
(Virginia)

Posts:15724


02/16/2018 3:52 AM  
Keep in mind that even if you sue an individual director. If that individual was acting on behalf of the Association with the Boards knowledge and approval, then they are typically indemnified by the Association. If the D&O insurance refuses to pay, then the Association has to pay directly (which means special assessments or increased assessments to pay those bills).

There simply wouldn't be volunteers if the the Association didn't indemnify.

You also must pierce the corporate shield to prove a case against an individual personally. This is often difficult to do.


If you were a party to the legal action, then sometimes it's best to count a win as a win or a lose as a lose and move on. There is a difference between being just and being vindictive.
AugustinD


Posts:902


02/16/2018 6:42 AM  
Guy,

A lawsuit by shareholders/HOA members against their own HOA is what is called a "derivative action." "Class action" does not apply.

Your HOA's Declaration, Bylaws and so on also subject you to contractual terms. Are you running for the Board? Why did you not run earlier? Have you read your governing documents to see how to remove a director? You posted elsewhere that your HOA has only nine units. Campaigning would be a cinch.

If I were the judge and saw you had filed a lawsuit (maybe with a few other HOA members), then I would be asking why you had not exhausted all your remedies under the Declaration and Bylaws before wasting precious court time and taxpayer resources on a lawsuit. This is one reason why typically, lawsuits such as the one you propose generally go nowhere and rightly incur the wrath of judges. The directors you want to sue as individuals are volunteers. The courts do not like deterring volunteers from stepping up via penalizing these volunteers with heavy court costs and damanges.
PaulB12
(Virginia)

Posts:38


02/16/2018 9:10 AM  
Posted By AugustinD on 02/16/2018 6:42 AM
Guy,

A lawsuit by shareholders/HOA members against their own HOA is what is called a "derivative action." "Class action" does not apply.

Your HOA's Declaration, Bylaws and so on also subject you to contractual terms. Are you running for the Board? Why did you not run earlier? Have you read your governing documents to see how to remove a director? You posted elsewhere that your HOA has only nine units. Campaigning would be a cinch.

If I were the judge and saw you had filed a lawsuit (maybe with a few other HOA members), then I would be asking why you had not exhausted all your remedies under the Declaration and Bylaws before wasting precious court time and taxpayer resources on a lawsuit. This is one reason why typically, lawsuits such as the one you propose generally go nowhere and rightly incur the wrath of judges. The directors you want to sue as individuals are volunteers. The courts do not like deterring volunteers from stepping up via penalizing these volunteers with heavy court costs and damanges.





Although I am in favor I making complaints about HOA actions this only works if the actions are not reckless but more of an oversight. An attorney can decide what can be corrected with a bit of paperwork or what needs to be litigated.

Plus a lawsuit accomplishes a lot more, most times the directors will correct their illegal actions and stay on the board. This is exactly the way it went down in a local case. The directors crossed every T and dotted every I after they lost in court. No need for others to step up and volunteer, they realized the mistake and had no choice to become transparent.

I don't believe that cases go nowhere if its already a case, if the attorney is well experienced, the attorney will know right away what needs to be litigated or if it can be solved through the complaint process, which most HOA don't even adopt.
GuyM1
(Ohio)

Posts:222


02/16/2018 9:33 AM  
Hi Paul
Special Meeting was called for next weekend and will be at Law firms office. A discussion of relevant circumstances will take place and the Board will seek input from the owners on how to proceed legally. Options to be considered will include attempted settlement. additional enforcement action, or appeal of the trial courts decision. Members only but the Law firm Attorney will be there but a homeowner can execute a proxy to have someone there for them. Isn't that a double negative? Hey did you write a book?

Thanks
CjC
(Maryland)

Posts:105


02/16/2018 9:38 AM  
Usually the proxy can only name another member. It can not be an outsider.
GuyM1
(Ohio)

Posts:222


02/16/2018 9:49 AM  
Hi CjC
I don't know that but will check it out. We always have let proxies be Family or friends. So I don't know if that works here or not, any thoughts?

Thanks
BenA2
(Texas)

Posts:401


02/16/2018 10:56 AM  
Posted By GuyM1 on 02/16/2018 9:49 AM
Hi CjC
I don't know that but will check it out. We always have let proxies be Family or friends. So I don't know if that works here or not, any thoughts?

Thanks



I think CjC is right about having to give the proxy to a member. More specifically, the general rule is that only a person with voting rights can be given a proxy. Of course, if your governing docs don't specify that proxies are allowed they should not be used.
GuyM1
(Ohio)

Posts:222


02/16/2018 11:38 AM  
Hi Ben
I don't think they do and will look again. Could this be a State law or a Bussiness rule? Well, they have allowed family members to act as long as they have Power of Attorney could this change things?

thanks
AugustinD


Posts:902


02/16/2018 11:54 AM  
Posted By PaulB12 on 02/16/2018 9:10 AM
a lawsuit accomplishes a lot more, most times the directors will correct their illegal actions and stay on the board. This is exactly the way it went down in a local case. The directors crossed every T and dotted every I after they lost in court. No need for others to step up and volunteer, they realized the mistake and had no choice to become transparent.
<

Particularly when the same incompetents achieve a majority time and again, and apathy rules the day, I agree a lawsuit can subsequently cause significant change, for the better, on all levels of board and manager operations.
PaulB12
(Virginia)

Posts:38


02/16/2018 2:47 PM  
Posted By GuyM1 on 02/16/2018 9:33 AM
Hi Paul
Special Meeting was called for next weekend and will be at Law firms office. A discussion of relevant circumstances will take place and the Board will seek input from the owners on how to proceed legally. Options to be considered will include attempted settlement. additional enforcement action, or appeal of the trial courts decision. Members only but the Law firm Attorney will be there but a homeowner can execute a proxy to have someone there for them. Isn't that a double negative? Hey did you write a book?

Thanks





I highly doubt they will decide to pay you back your money especially not in a meeting, nothing would be binding. At this meeting I wouldn't offer any information you have on them, let them volunteer and if possible record and write it down. This meeting may be risky and the opposition maybe trying to fish out information from you.

If nothing happens at this meeting, what you need to do is an attorney demand for records around the time where they said they voted on the suit. Once they refuse the records, which they will. Then you sue the HOA. The complaint will include details of the two board members that messed up and how they tried to cover their tracts. The remaining board member is still liable. So the Derivative suit notice will be for 2 or 3 board members, your attorney would know better.

About your proxy vote, it should be another member, not family or friends even with power of attorney. The court or even the attorney is not going to like that you tried to sway the vote by getting these types of proxies. Let each homeowner do the proxy or come to the meeting to vote. If they are so relaxed on proxy rules, then that needs to be fixed as it will work against you in other situations. Do it by the book, no shortcuts.





GuyM1
(Ohio)

Posts:222


02/16/2018 3:16 PM  
Paul
So the board members would give a proxy to their husband or wife? One board member is single the other two have spouses. The one board member that was on my side was replaced a few months after suit started. She was the one left out of the vote and testified to that in court which the judge ruled the board didn't give this board member a notice of the meeting and didn't have Unanimous vote to bring suit. Really don't think there was really a meeting at all, just think the two agreed to it. I also think I should record the meeting but worried they are going to say no video or recording of the meeting, being that it is at the Law firms office.

Thanks
PaulB12
(Virginia)

Posts:38


02/16/2018 3:30 PM  
Posted By GuyM1 on 02/16/2018 3:16 PM
Paul
So the board members would give a proxy to their husband or wife? One board member is single the other two have spouses. The one board member that was on my side was replaced a few months after suit started. She was the one left out of the vote and testified to that in court which the judge ruled the board didn't give this board member a notice of the meeting and didn't have Unanimous vote to bring suit. Really don't think there was really a meeting at all, just think the two agreed to it. I also think I should record the meeting but worried they are going to say no video or recording of the meeting, being that it is at the Law firms office.

Thanks




I'm not sure we're on the same page. The board member will get his/her single membership vote doesn't matter if they give it to their spouse, they will get one vote for that household. All your other details about bad governing will be in the suit. Your main goal right now is to make it to this meeting and see what happens. I don't see any issue with audio recording especially since it appears to be an open meeting of residents and its not executive session, they will object but try anyway otherwise you better take good notes. Perhaps you can change the venue so the attorney can't hide behind the no recording excuse.
BenA2
(Texas)

Posts:401


02/16/2018 3:44 PM  
Posted By GuyM1 on 02/16/2018 11:38 AM
Hi Ben
I don't think they do and will look again. Could this be a State law or a Bussiness rule? Well, they have allowed family members to act as long as they have Power of Attorney could this change things?

thanks



It is possible there could be something in the state law allowing for proxies but I think it would be unusual. Robert's Rules of Order says that you should not use proxies unless it is specifically authorized in your bylaws.
GuyM1
(Ohio)

Posts:222


02/16/2018 4:20 PM  
Heres what I found

Proxy is stated in the Quorum definition which states if a proxy can be used that the meeting can only be about business to be considered. A proxy holder couldn't vote only members can.



GuyM1
(Ohio)

Posts:222


02/16/2018 4:27 PM  
Just found this

Section 7. Proxies. Any member may be represented at a
meet1ng of members or vote thereat, and execute consents, waivers, and releases. and exercise any of his other rights by proxy or proxies appointed by a writing sig|ned by such Person
TimB4
(Virginia)

Posts:15724


02/17/2018 10:01 AM  
Posted By CjC on 02/16/2018 9:38 AM
Usually the proxy can only name another member. It can not be an outsider.




Completely depends on Statutes and governing documents.

In VA, we can name anyone we desire to be our proxy representative.
GuyM1
(Ohio)

Posts:222


03/07/2018 9:57 AM  
UPDATE
Meeting of the members and the Attorneys happened which the Attorneys were trying to get the Association to file an appeal.One of the units is in a Trust which the Person that is the caretaker of that trust was there. This person is a prominent Attorney in Ohio which basically started asking questions which the HOA Attorneys seemed to get angry with and were told this Litigation shouldn't have gotten this far, should have been dropped. So I had to leave this meeting so the others could talk about a settlement which one was done. At this meeting, all three members resigned but with April meeting coming up they were talked into staying till then. So the board said they wouldn't do any more work but pay bills and set up Special Meeting for their resignation and basically show the financial status of the Association. Last year are Landscaper that also takes care of snow removal too closed his business right before winter and didn't finish fall cleanup. So they hired someone to do the snow only and would take bids at the beginning of the year for the contracts, now they are saying they won't do them that the new board can which leaves us without a landscaper till sometime in late May. To me, this board is causing more headaches for the rest of us and running away from what they caused! I think I may get on the Board but after the new suit comes out they may not want me on the board.
TimB4
(Virginia)

Posts:15724


03/07/2018 2:53 PM  
Guy,

Thanks for the update.

Sorry you are going through this.

You may want to talk to the individual who is the trustee about serving on the Board with you.

Tim
PaulB12
(Virginia)

Posts:38


03/07/2018 3:31 PM  
Could you back track a bit, the directors bought a lawsuit, which they paid how? from your yearly budget? They lost, now they have a $18k defense legal fee's judgement for losing the lawsuit correct?

You want to collect your defense fee's? and you want the directors to pay for its plaintiff fee's without special assessments?

Either way, this is a derivative suit waiting to happen, you need to talk to your attorney and file the notice. Then you can sue each director individually. It's a bit tricky because suing them individually may only get your defense fee's back not the plaintiff fee's, either way, a settlement might come around fast.

Also, it doesn't matter if you are on the board or not unless you want to use the HOA's insurance if they counter sue. And they can't kick you off the board if you volunteer on the annual election meeting. Only the membership can remove you at that point. I would also try to hint at them getting Umbrella homeowners insurance, so once you sue them individually, the umbrella insurance will kick in.

It also doesn't matter if they picked up a past lawsuit, the current directors acted reckless, they are responsible. Past/present/future they can still be sued and held responsible.
GuyM1
(Ohio)

Posts:222


03/07/2018 5:17 PM  
Hi Tim
The Trust Lawyer has a firm in Ohio and Florida and he spends most of his time in Florida. We have the old board member that help me in the case because she was on the board at the time of Litigation. So she is going to be on the board and the new owner next to me that bought his unit after litigation had started which he has a good case against the old owner. So it will be those two for sure and either one other unit owner or myself.I believe the soon old board is figuring out if I get on the board I can find all the Insurance companies denial letter, meeting with minutes and emails between board members that will then be available to me. The board set the Special meeting date and a few days later they sent out an email stating that one member couldn't make that date but the next weekend would be good. So they sent out a new email asking to change the date. Which I wrote back and told them I was leaving on the day after meeting and couldn't make that next date. I think one of the board members can't make it and they want all of them there to keep me off the board. We have nine units and three positions to fill. So the three board members are going that leaves six, the person in the trusted house can't and that leaves five, one older gentleman said he did his time years ago and doesn't want on the board so that leaves four. The other gentleman travels a lot for work and is the one that would be against me if they talk him into it. So here is how it ended HOA Attorneys ended up lowering their fee to $11,500 and my Attorney settled for $4000 plus I pay no assessment from the suit. So after I found out that the Association paid $10,000 already and only $1500 plus the $4000 equals $5500 for assessment which I believe the whole amount should be assessed to put money back into the reserve fund. But in Ohio, you don't have to do that. Why my Attorney only received $4000 is most of his work was on my countersuit which we dropped to bring a much bigger and Personal lawsuit now that this is done. I even wonder if the board will show up at the meeting after being served with the new suit.
GuyM1
(Ohio)

Posts:222


03/07/2018 5:32 PM  
Hi Paul
They are saying they paid from the budget and the Reserve fund is intact. This I can't believe because we usually don't have that much money left at the end of the year from the operating budget. So I think they took money out of the Special reserve fund and there is money in there but not the full amount which I think should be replaced by assessment.

New suit coming which is for all the damages to my unit that I have lived with for over 2 and a half years which will include all that you mention. They will be held accountable.

Can you tell me about this Umbrella coverage? I have Assessment loss of $25,000 which is the highest my Insurance company will go. I think I have heard of the Umbrella coverage from all my google searches but if you can give me websites or any info that would be great.

Thanks
JohnC46
(South Carolina)

Posts:7503


03/08/2018 5:42 AM  
Posted By CjC on 02/16/2018 9:38 AM
Usually the proxy can only name another member. It can not be an outsider.




Incorrect. Typically any person can be named the proxy holder be they an insider or an outsider.
PaulB12
(Virginia)

Posts:38


03/08/2018 9:11 AM  
Posted By GuyM1 on 03/07/2018 5:32 PM
Hi Paul
They are saying they paid from the budget and the Reserve fund is intact. This I can't believe because we usually don't have that much money left at the end of the year from the operating budget. So I think they took money out of the Special reserve fund and there is money in there but not the full amount which I think should be replaced by assessment.

New suit coming which is for all the damages to my unit that I have lived with for over 2 and a half years which will include all that you mention. They will be held accountable.

Can you tell me about this Umbrella coverage? I have Assessment loss of $25,000 which is the highest my Insurance company will go. I think I have heard of the Umbrella coverage from all my google searches but if you can give me websites or any info that would be great.

Thanks




I'm still a bit confused on where the directors got money from to bring the suit. If it came from a reserve they setup, then I don't see much you can do to fill it back up, if your attorney's fee's were paid from it, let it be. Now if they setup an illegal reserve fund or in anticipation of the lawsuit, then you have something.

Either way, I'm not talking about your Homeowners umbrella(PUP)coverage, I'm saying it maybe wise for the other directors to get the umbrella coverage, that way instead of trying to garnish their wages, the other director's umbrella insurance will pay you, most likely they already have the umbrella policy (its pretty cheap), so no need to press the issue on them, they probably bought the coverage when they lost. Because remember the derivative suit shifts liability from the HOA to the directors themselves. They acted so reckless, they better have money or insurance to pay you back.

The documents you mentioned are available to you if you are a board member or not. But if you volunteer for the board in the next meeting, then you can be removed by the other directors until the next annual election, I think its better to volunteer during the annual election. You may have to check your ByLaws, if it's a special meeting of the members and you volunteer, then you can't be removed so easily.

GuyM1
(Ohio)

Posts:222


03/11/2018 7:01 AM  
I made a new thread on this if you would like to respond to your thoughts.

Hi All
Well after losing the Truck parking suit the Board all are resigning. So the Board set up a Special Meeting to resign and to vote on a new Board. So this date was set and sent to all members. A few days later the President sends out a an email stating that 1 member can't make it that weekend and would it be ok to change the date to the following weekend? Well, so I replied that I couldn't make that next weekend due to me flying out the day after the first scheduled date for the meeting.In the next email to me, they said they wanted everyone there and did I check my calendar. In that email, it seemed that they were confused if I was saying which date would be good. So I emailed them back and said the first scheduled date is the one I could make and not the second. So I received another email that stated that they changed the date to the second requested date by one member. Which I replied, how can you give another member precedence over another? Their reply was that they took the majority over me not being able to make the next date. I replied you took a vote without giving me notice of a meeting to vote? They replied no vote just to the majority and thought I could call into the meeting? I replied Why can't the other member call in and leave the first scheduled meeting intact? They asked was I going to Volunteer to be on the Board? I didn't reply to that it just told me my suspicions where right that they want to keep me off the Board.The point is that it mattered that that other person had to be there but didn't matter if I was there. My belief is the Board doesn't want me to be able to go through documents that they would never give me that would show the wrongs done by this Board. They are Manipulating the meeting to have me not be able to get on the Board. I think it may be one of the board members that can't make it which will leave them short votes to keep me out. Also in the last reply from the board, it turned into two people can't make the scheduled meeting which I think it's husband and wife which still only have one vote they're just using it's two people. Funny thing is I ask why can't the other person call in just like your asking me to?
PaulB12
(Virginia)

Posts:38


03/12/2018 8:42 AM  
Remember they are still in control, so they can do as they please when it comes to calling the meeting. Obviously they setup the meeting in conflict with your schedule. This is retaliatory and thus violates Retaliatory and Discriminatory laws. The board knows that if they schedule a meeting and you can't make it, that is your problem because technically they did give you an opportunity to appear. When courts looks at this, they will favor the board, unfortunate as that is. I'm sure they don't need your vote to setup a meeting, that's written in the By-Laws and usually needs a majority vote of the board members to call a special meeting.

You'll have to check the state laws about calling in or video conference.

You should send a notice that you prescribe to be nominated to the board once they step down. Remember you will only be a board member until the next election, may be better just to wait for the elections.

Technically you don't need to be on the board to get the documents you want. File a demand as a member written by an attorney. HOA will say no. Send another demand letter by your attorney. They will say no again. Try again, and they will schedule and cancel. File the lawsuit and derivative notice.
JanetB2
(Colorado)

Posts:3959


03/13/2018 3:07 AM  
Posted By BenA2 on 02/15/2018 7:07 PM
Posted By GuyM1 on 02/14/2018 5:56 PM
Hi Melissa
To start off please re-read the last line it says sue the two members Personally which isn't suing yourself or other members but the two wrongdoers. The two board members should foot the bill for breaking State Law on a board must have a unanimous board vote to bring a suit or a member vote. HOA Insurance doesn't cover taking a member to court for a bylaw violation only if a suit is brought against the HOA or Board. Why should members pay thousands of dollars each for those two breaking the law and is a Breach of Contract? The two board members did this on their own and were found to be guilty of the violation by the judge in her ruling.



If the HOA has Directors and Officers insurance it would cover suits against individual board members. The cost of the suit to the association might be higher premiums and members refusing to serve on the board for fear of being sued.


Insurance might not cover the BOD members if there was any violation of fudiciary duty. BOD members cannot blatantly themselves violate the governing documents and then expect the insurance to cover their transgressions.
GenoS
(Florida)

Posts:2087


03/13/2018 2:26 PM  
Posted By JanetB2 on 03/13/2018 3:07 AM
Insurance might not cover the BOD members if there was any violation of fudiciary duty. BOD members cannot blatantly themselves violate the governing documents and then expect the insurance to cover their transgressions.

With a generous indemnity clause they sure can. All that's needed is a claim by the director being sued that he or she thought he or she was acting in the best interests of the association. That triggers the indemnity clause in our Articles of Incorporation which says the HOA as a whole would pay the director's legal expenses including judgments, fines, amounts paid in settlement, if he "acted, even though negligently, in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association."

There's an escape clause which says no indemnification will be made for cases where such person is adjudged to be liable for gross negligence or misfeasance or malfeasance. Sounds expensive.

I'm sure our indemnity clause was written by the developer 30 years ago with that developer's best interests in mind.
JanetB2
(Colorado)

Posts:3959


03/13/2018 9:43 PM  
Posted By GenoS on 03/13/2018 2:26 PM
Posted By JanetB2 on 03/13/2018 3:07 AM
Insurance might not cover the BOD members if there was any violation of fudiciary duty. BOD members cannot blatantly themselves violate the governing documents and then expect the insurance to cover their transgressions.

With a generous indemnity clause they sure can. All that's needed is a claim by the director being sued that he or she thought he or she was acting in the best interests of the association. That triggers the indemnity clause in our Articles of Incorporation which says the HOA as a whole would pay the director's legal expenses including judgments, fines, amounts paid in settlement, if he "acted, even though negligently, in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association."

There's an escape clause which says no indemnification will be made for cases where such person is adjudged to be liable for gross negligence or misfeasance or malfeasance. Sounds expensive.

I'm sure our indemnity clause was written by the developer 30 years ago with that developer's best interests in mind.


Hmmm ... NOT if the COURT already found them in violation. Per the OP above as noted and also potentially noted on other threads::

The two Board members broke the State Law by bringing the suit without a unanimous vote by the board or vote of the members.

If a prior court already has found the BOD violated the CCR’s and State Laws ... Potentially they are not covered if any was for Fudiciary Duty. That is one item which many insurance companies will not cover or provide for if the BOD members violate. The BOD members have already been found guilty of bringing a suit in violation of the documents. Documents which are written and filed and which they are aware of and have or should have read.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > HOA losses in court couple questions



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement