Lawyers fee for injunction on member and cost to members

Our previous BOD of 7 years did not build up a reserve for road maintenance in our subdivision or for any legal fees that might occur should a member violate the rules or the covenants. The new BOD is just beginning to build one up but there is not sufficient amount of funds for an injunction (lawyer estimated the cost at appx $2,000 (if he does not contest it).

My question is....Can we take out a loan to cover the cost and bill the violating owner for those cost for the loan so we do not have to have a special assessment for the members who would most likely not approve of the assessment?

There is nothing in our documents that says that we can sue a member (Maine Statutes 13-B does though). There is only one clause in our By-Laws that could possibly be used.... "Section 2. Assessments. Assessments may be levied for paying the costs of PROTECTING, preserving, care and maintenance of the Wilson View Drive."

PROTECTING can include protecting if from liability because he is allowing it to be used for recreational vehicle purposes. Our Road Declaration specifically says that it is for "vehicular and pedestrian travel" only and that it is "for the use and benefit of the 12 members" - not the entire public that he is permitting his property to be used for snowmobiling.

We are confident that we have a good case but it is uncertain if we can charge him for the expenses incurred when he loses.

Thanks,
President of WVDRA

Thank you Larry for your reply. It helped to confirm what I believed but did not want to proceed without additional feedback from others.

However, does anyone believe it would be proper to take out a loan vs. assessing the members for upfront costs?

Has anyone here had to take a member to court?

Let's see if I understand this. You can't come up with the $2k to pursue a lawsuit, so you want to take out a $2k loan. But the lawyer says that $2k will only cover the cost if it isn't contested. So if the snowmobile honcho contests the lawsuit, it's going to cost you more - maybe $5-10k. Are you going to take out another loan?

Or maybe after you've sunk $2k into this, you decide you're not going to spend the extra $5-$10k that your lawyer says will take to bring this to trial. Remember, a judge doesn't award fees unless you go all the way through the process and win. If you settle - No award of fees. If you drop out - No award of fees. And even if the judge finds in your favor - There's no guarantee that she'll award you some or all of your fees.

The other thing I am concerned about is the $2k amount. If the HOs aren't willing to have a special assessment for that small an amount, just think what's going to happen when they learn you borrowed the money and they're going to have to pay off the loan if you don't recover it all.

General rules of thumb that you should consider. A trial is always unpredictable. Less than 3% of all lawsuits ever get to trial. Hmm. Wonder why that is?

Bob, As I said earlier, we are a Title 13B, NonProfit Corporation

You are correct but because it goes through the courts the prevailing party may, and usually does, seek a judgment for his costs, including attorney's fees.

Tim, If the Association applied for a loan in order to go through the courts for his violations, then would that not be a part of the cost that he would have to reimburse the Association for? If that was not paid within a given period of time, then a lien could be attached to his home.....of which he would also have to pay for the cost of that one. I think he would pay because they do have the funds to do so.

As far as looking into the "what ifs" goes, not sure what other "what ifs" there are - other than possibly fining him for letting his so-called "guests" use the road for snowmobiling - which he knows is against the rules.

As far as your association not collecting dues in arrears goes, why are you not placing a lien on his property? We had one member that the previous board allowed to go 3 years without paying a nickel since the day he bought his house. When that board was replaced with a new board, he was told to either pay up within 30 days or a lien was going to be placed on his property along with over $1,000 is accumulated late payment fees. He paid up within a week. Hated us but he paid.

You invite comments NOT about the CCR compliance of an owner driving a snowmobile on your association's (corporately owned ?) road & allowing visitors to snowmobile on his own private property.

Rather it is about authority for your association to borrow the retainer to file for an injunction. You plan to recover it after a confident win.

Your lawyer would be source to confirm if Maine's Title 13B Nonprofit Corporation - section 202 General Powers 1 J " to borrow money" is the statute applicable to you. Its subsection 202-3 confirms the powers without recital necesary in the specific articles issued.

1-Worth considering IF the snowmobiling violates the wording in your CCRs ? Don't expect to look too hard to find judgments treating snowmobiles as "vehicles" eg next door New York Stanton v Lincoln Life (2010) http://law.justia.com/cases/federal/district-courts/new-york/nywdce/6:2009cv06430/75503/32/ Whether in Maine or even in NY or your CCRs maybe they aren't defined as vehicles .

2- Would you and other owners be the lenders ?

Or imagine this question other than at loansharks, payday loaner or Mafia :

"Will you kindly lend us $2K and maybe more ? Not for a major common element building system, but so that with no existing warchest we can slamdunk somebody's snowmobile as a non - vehicle or Need to Protect ?

Security ? : Whatever you as lender can extract from a tiny enclave of 12 properties fighting over snowmobiling, plus the roadbed itself ? our own private homes ?"

What might it cost if contested but you win ? Even contested simple condo pet violations hit $20 K legals and more around here after a win.

A sixteen year fight over a buckshee condo attic has already generated over $2 M in billings.

Winners get 60 % - 70 % of legals if lucky around here.

I would think really hard about this.