Members vs Directors

All,

I came across an article from an attorney titled Are You Being Reasonable, or Are You Harassing Your Association? It May Turn Expensive..

The article briefly describes the outcome of legal action an Association took against it's main complaining member.

I simply thought it was an interesting article and wanted to share.

And now the lady’s on the hook for $34,929.59. If she can’t afford to pay it, she’ll have to negotiate a payment plan, file an appeal which will require more time and perhaps using a real attorney this time (and now she’ll have to pay attorneys fees), sell some of her assets to pay off the judgement, face garnishment of her wages – or just declare bankruptcy.

Too bad no one suggested alternative dispute resolution – although I doubt she’d even consider it. The lady alleged fraud and all sorts of stuff – did she ever specify what the defendants allegedly did or provide proof? I also note the court ordered her to get a mental health evaluation at one point (apparently, she didn’t, because she was later found in contempt of court). Sometimes you have to step back and consider what else is going on - it may not be an issue of "the board is corrupt/incompetent" or "that homeowner is several French Fries short of a Happy Meal and needs a hobby."

Make no mistake – sometimes legal action IS necessary, but I’ve always felt lawsuits are the nuclear option. File if nothing else has worked, and even then, you’d better win if you’re going to go through all that trouble. You increase your chances when you plan, craft your argument and gather together what you need. Don’t go into court and pull stuff out of your ass – it won’t end well.

Here is the appeals court ruling, from August 2014: http://law.justia.com/cases/north-carolina/court-of-appeals/2014/14-135.html . On page 3 at the bottom, the Court documents serious questions about the plaintiffs' mental competence:

~~~
After a hearing on defendants’ motion for injunctive relief before the trial court in March 2011 during which Jordan and plaintiffs appeared “disoriented, distracted, and unresponsive to the Court’s inquiries,” Jordan was ordered to undergo a mental evaluation. Following Jordan’s refusal to submit to a forensic screening, in May 2012 the trial court entered an order finding Jordan to be in contempt of court. On appeal, this Court, by per curiam opinion, upheld the order of the trial court. See State v. Jordan, No. COA12-1264, 2013 N.C. App. LEXIS 736 (July 16, 2013).
~~~

People may proffer that the HOA won here. But the disputes between the plaintiffs and the HOAs had been going on since 2005. I think all the aggravation for the HOA was so costly that other lessons need to be considered. Dealing with HOA residents who appear to be mentally disturbed is a challenge. Maybe this is especially so in HOAs that are more affordable for lower income folks, or for parents seeking a place for their son or daughter to reside.

Good point.

I wonder whether instead, the typical HOA litigant will figure his or her tax dollars pay for him or her to get justice, so shucks yes, he or she is going to court.

Attorneys are less expensive these days as well.

Shelia, good comments. In this day and age where some folks are high income through largely luck, I can see how the mentally ill may inhabit all manner of HOAs, from HOAs with lower income folks to HOAs with higher income folks. I recall a case BobD4 or someone else cited where a couple of California HOA members, both attorneys, tied up the courts for years over basketball playing. The appeals court dressed down the two attorneys.

How many HOA pro se cases are won by the pro se party? Given the amateurism of the typical HOA board, I would imagine it's north of 33%.

What I think is more likely to happen is that legislatures will amend their respective HOA and Condo statutes to say that any dispute occurring must first go to ADR. Or legislatures will set up a special state commission to deal with HOA disputes, to take some of the load off the courts. (Does such a commission exist in any state right now?)

The news talks about ADR happening more and more often with corporations whose contracts with others say the first recourse legally, after the letters of demand have been sent and declined, shall be ADR.

This story is one that hits close to home for me. I had dinner last night with a former Board member and his wife from my former association. First, let me say that he might be considered a person that has harassed the association over the past few years. Well, it appears a lot has transpired in the year and half since I moved out.

He is currently a Board member who has been denied access to all records. I have been told that the association is going to be sending me a final “cease and desist” demand, their fifth BTW. After that they are planning to take me to court. Now they tried in September of 2016, but the brief they were going to file has already been proven to be false and without merit. I was also told that the president and vp formed an executive committee without two of the board members notified that such a vote was to take place. The CCRs has a provision that any litigation the association pursues that is expected to cost $2500.00 or more much be voted on by a majority of the members. I have an email from the former attorney that such litigation would cost the association at a minimum of $50,000. The Board has that same email. The Executive Committee raised the dollar amount from the $2500 to $9000, WITHOUT the vote of the members.

The hypocrisy of this is the MC, which is supposed to be a large reputable management from and the attorney is a partner in the firm that many posters on this site reference for California law. I also advertise on their site. What I heard last night and what two individuals have been allowed to do is far more serious than anything I have dealt with or seen on this site. The charges would fill volumes.

What am I going to do? Once they hit the $2500.00 mark, I will counter sue for $7M, $5M of general liability and $2M of Director and Officers Insurance. I have the names and address of all 317 owners of the community. I have the email addresses of 250 of the owners. Each owner will be notified by mail of the lawsuit their association and the two board members are taken against me. A email will also be sent to list I have which will also include a copy of the lawsuit. The association will be given two choices, either recall the three rogue board members, have them signed a notarized letter they can NEVER serve on a Board or committee in the future, fire the MC and fire the law firm, OR face the prospect of a $7M settlement. This to go with the pending $20M lawsuit that has already been filed against them by another party.

What concerns me is that the attorney is knowingly going forward with a case after it has been proven the two board members and MC have lied to her and continue to lie.