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JM10 (California)
Posts: 503
Posted:
I wondered what people thought about this case:

A pattern of harassment and intimidation against the owners at Ke Nani Kai Condominium on the West End has led to an award for residents Jim and Nancy Bevill of $3.87 million from a Maui jury last Wednesday.

The $3.87 million award is a record judgment in this type of case, according to the Bevills attorney Terry Revere. He described the case as the “the West Molokai version of Lord of the Flies or the equivalent of a John Ford Western where an isolated town is run by a villain and his collection of thugs.” Revere said the intimidation lasted for at least six years and continued even after the lawsuit was filed.

The jury found the condominium association’s board of directors, and its employees and agents violated state condominium laws. They were also found to be engaged in a variety of illegal acts including racketeering, civil conspiracy, gross negligence, malicious prosecution, breach of contract, and both negligent and intentional infliction of emotional distress.

The Bevills moved to Molokai in 2004 from California and soon found themselves the target of threats, harassment and intimidation from unlicensed contractor Frank Maruzio and resident manager Darrel Borling, who hired Maruzio to do work around the complex.

Other Ke Nani Kai residents, including Darryl and Jody Canady and Bob Aldrich, had also complained about the behavior of Maruzio and Borling to the condo’s board of directors. The board’s failure to act on these complaints led to some of the previous board members being named in the Bevill lawsuit.

See link below for full story.

http://themolokainews.com/2012/03/27/ke-nani-kai-residents-receive-3-87-million-jury-award-against-condo-association/
SheliaH (Indiana)
Posts: 6,964
Posted:
I'm sure there's much more to this story, but some initial thoughts:

1. Why is an unlicensed contractor doing ANY work in this community? If he makes a serious mistake, such as doing work that doesn't meet current housing codes, the Association would be on the hook for paying for repairs to fix it, and perhaps a little more if the work was done without the proper permits.

2. It appears the resident manager is the person actually running things - HOA boards need to remember THEY dictate to the property manager what is to be done and the property manager takes care of daily operations. One should expect the property manager to behave with a certain amount of professionalism and decorum - if he or she cannot do this or refuses to, bet another manager!

3. Anyone who reads the stuff on this website knows all too well that things are not always lollypops and roses between HOA Boards and the members at large, and one major reason for that is lack of communication. HOA Boards need to remember they serve on behalf of the members at large, not the other way around, so the first order of business is to LISTEN to what people have to say. It's ok if you disagree - hear the other person out and then explain your position in a calm manner (and be sure to have whatever information is necessary to back it up). If you get several people all complaining about the same person or situation, it's hard to believe that ALL OF THEM are lying - there has to be an element of truth in there somewhere, so bringing a third party may be helpful in sorting it all out.

But whatever you do, take the time to respond to people's concerns - in my experience, I find that if people are at least willing to listen, the other person may feel a little bit better, even if he or she might not agree with what was said. So, if this board has been aware of this contractor and manager's behavior all this time and did nothing, it would appear a recall of some sort is in order.

4. Of course, to do a recall, you need motivated members and some of them need to be willing and able to step up and take over if the recall is sucessful. Apparently, not enough people were motivated (some people will put up with all types of nonsense as long as THEY don't have to get involved personally). And now, they may be on the hook for an expensive judgment because they didn't demand an explanation and response to the complaints.

(although I personally wouldn't hold the rest of the homeowners responsible, just the Board members who apparently didn' the balls to do their job).

5. That said, it's a shame all of this ended in court - why not sue the hell out of the contractor and manager (they might not have any money, but the prospect of being sued may have encouraged them to change their behavior) Unfortunately, we are a society where everyone sues about everything and NO ONE is willing to listen to the other side and find common ground (it's there if you take the time to look). And when peole aren't suing the crap out of each other, they'll resort to gunfire to settle their differences.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JM10 (California)
Posts: 503
Posted:
I know in California there was an attempt form an Office of the Common Interst Development Bureau as a pilot project in the Department of Consumer Affairs to help with dispute resolution.

The bill (AB-567 Common Interest Development Bureau) was passed by the state senate and assembly, but vetoed by our then-governor Arnold Schwarzenegger.

I wondered if people had similar bills/offices in other states.

I agree with your #4. A lot of people do not want to get involved and that can end up costing them in the end as part of the association.
LarryB13 (Arizona)
Posts: 4,099
Posted:
Quote:
Posted By JM10 on 04/11/2012 9:08 AM
I know in California there was an attempt form an Office of the Common Interst Development Bureau as a pilot project in the Department of Consumer Affairs to help with dispute resolution.

The bill (AB-567 Common Interest Development Bureau) was passed by the state senate and assembly, but vetoed by our then-governor Arnold Schwarzenegger.

I wondered if people had similar bills/offices in other states.


Arizona enacted a law about a decade ago placing authority to resolve HOA disputes with the state Fire and Safety department. The courts eventually ruled that this was unconstitutional.

The court's reasoning was that hearing complaints is essentially a judicial function and the state constituton required a separation of the three branches of government. The court noted that many administrative agencies conduct quasi-judicial hearings, but always in the context determining whether a licensee had breached his duties. Since Fire and Safety did not license HOA's (no one in AZ does), it had no constitutional authority to adjudicate complaints about HOA's.
JM10 (California)
Posts: 503
Posted:
Quote:
Posted By LarryB13 on 04/11/2012 9:46 AM
Posted By JM10 on 04/11/2012 9:08 AM
I know in California there was an attempt form an Office of the Common Interest Development Bureau as a pilot project in the Department of Consumer Affairs to help with dispute resolution.

The bill (AB-567 Common Interest Development Bureau) was passed by the state senate and assembly, but vetoed by our then-governor Arnold Schwarzenegger.

I wondered if people had similar bills/offices in other states.



Arizona enacted a law about a decade ago placing authority to resolve HOA disputes with the state Fire and Safety department. The courts eventually ruled that this was unconstitutional.

The court's reasoning was that hearing complaints is essentially a judicial function and the state constituton required a separation of the three branches of government. The court noted that many administrative agencies conduct quasi-judicial hearings, but always in the context determining whether a licensee had breached his duties. Since Fire and Safety did not license HOA's (no one in AZ does), it had no constitutional authority to adjudicate complaints about HOA's.

So you think there's no other solution except the courts unless jurisdiction over licensing was also changed?
JohnC46 (South Carolina)
Posts: 14,265
Posted:
JM

Tough love question here, but is the issue here your issues with your HOA and your attempt/justification/threaten to take such action against them?

As I understand it, you no longer live there but I assume you rent your unit there. Am I correct?
JM10 (California)
Posts: 503
Posted:
The Hawaii case is more intellectual and directional. What would be a solution for the problem if not small claims court (which doesn't handle Open Meeting Act violations) because unlimited/limited civil court action is very expensive.

My feeling is that people just give up and allow boards to prevent them from attending meetings because of the cost. This happened in the Hawaii case where members complained but didn't have the money to even join a joint lawsuit.

So what is the solution? What have other states tried?

If I suggest the bill AB-567 Common Interest Development Bureau, then I want to know if it has been tried in other states and what happened?

In October, we agreed before the small claims court judge to go to mediation. The board has stalled but we hope to meet mid-May.

We no longer live there, however, because of continued problems, we feel that renting will open us up to legal liability issues.

The board has also hindered our attempts to sell the unit. There is the additional problem of full disclosure in California real estate law.

What solutions have other states come up with is my main question. It's easy to complain, but it's better to try and find a constructive action to pursue/recommend.

JimK7 (Hawaii)
Posts: 5
Posted:
Here in Hawaii HOAs are strongly encouraged to use mediation, which falls under the court system. If the parties involved in the Moloka'i dispute had used mediation it would have saved them a lot of money.

According to the Hawaii Revised Statutes, either party could have requested mediation and the other party would be obligated to participate.
JM10 (California)
Posts: 503
Posted:
In California as well, we are encouraged to use arbitration or mediation.

Our CC&R actually requires it.

At a state level, the Davis-Stirling Act provides for Internal Dispute resolution and if the procedure is invoked by a member, the board is not supposed to refuse.

In small claims court, we are asked before the case is called if we will go to mediation (usually for non-technical disputes).

For superior court cases (limited/unlimited civil) it is a requirement.

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