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IndieS (Colorado)
Posts: 79
Posted:
Our current HOA Board recently discovered that one of the Board members revealed confidential information to previous Board members, and, in concert with those previous members, instructed our insurance company on how to handle a claim. (The incident that is the subject of the insurance claim occurred when the previous Board was seated but the claim was filed when the current Board was seated.) In the process of instructing the insurance company, the information provided by the one current member and previous Board members has opened the HOA to potential claims of defamation.

The Board has already informed the insurance company of the problem, and has been advised that it needs to take action ASAP to show that it is being proactive in attempting to mitigate the damage.

Holding a meeting during the holidays is next to impossible.

There is nothing in our bylaws indicating a meeting must be held to complete a recall. We do require a 67% majority of the voting homeowners to accomplish the recall.

Must an HOA hold a special meeting to ask the homeowners to vote to remove a Board member?

Our bylaws do indicate that two neutral parties must receive and tabulate the votes, but are silent concerning the manner in which the recall is conducted.

In researching recall elections in HOAs, there is some support for holding these via mail rather than via meetings, to reduce potential conflicts.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I am bit confused. They said to take action. Exactly what action? You are assuming it's to fire the person/board member? Not even sure if the information is all that confidential. Considering that such information may not be to members of the HOA. Unless it's a lawyer/client privilege thing.

For example: Corporations are to inform their shareholders of any lawsuits or negative issues they are experiencing. It's in something called a "Prospectus" that is released to shareholders once a year. A HOA is a corporation but may not have a "Prospectus". They have other things like Meeting notes and/or meetings. The rest of the membership besides board members do have the right to know about the insurance claim or if your engaging in lawsuits.

Usually defamation is handle by the court system NOT insurance. The court rules and then if need be claimed with insurance. It sounds like your HOA is using the insurance lawyers and making this a claim. A little unusual for what is normally done.

As for firing the board member, I believe that can be done within the board itself than membership. Board elect the officer positions within. They can remove them too. So it may be that this is a board decision.

Former HOA President
KerryL1 (California)
Posts: 14,550
Posted:
Please clarify, Indie. Is this director an officer as your topic line suggests??? If so, The board can vote to remove him from the office.

He'd still be on the Board though. This seems like you need your HOA attorney's advice because a recall will take time. Meantime, also clarify your statement that the Board: "...has been advised that it needs to take action ASAP to show that it is being proactive in attempting to mitigate the damage."

I think if it were me & our board, I'd call an emergency executive session to get on the record the remaining board's complete disapproval of the rogue director's behavior. Don't you think you could get a quorum of the Board together??? I'd ask the Board to vote to censure him so this all is in your minutes. State in the strongest possible terms how this directors violated your board's policies and prod cedars or your bylaws or covenants.

I'm wondering why the insurance agent followed the instructions of one director!!??

Maybe Janet will check in as she knows CO law.

KerryL1 (California)
Posts: 14,550
Posted:
I hope, Melissa, Indie will clarify if this directors also is an officer. Also note there is not yet a lawsuit so far as I can tell so need at this time to inform the membership.. "potential claims of defamation" is just that: potential.
IndieS (Colorado)
Posts: 79
Posted:
Sorry -- I meant can the Board member be removed via mailed ballots rather than a meeting (not officer -- I understand that the Board can remove the officer).

An attorney told the Board that it needs to move on this issue ASAP. A memorandum was provided to the insurance company by previous Board members and a current Board member. Included in that memorandum were 1) instructions that the claim was to not to be investigated (not their decision as this was current Board's decision), 2) personal information about the individual who filed the claim which was clearly defamation according to the attorney, 3) attempts to present the previous Board members in a more flattering light. The previous Board members, which included the one current rogue Board member, did not inform the current Board of their action -- the insurance company contacted the current Board regarding the issue. The previous Board was seated when the incident occurred which led to the insurance claim, but only one of these members was on the Board when the claim for damages was actually filed. Attorney indicates that the type of information provided regarding the party who filed the claim can be used by insurance companies to cancel insurance policies, or increase premiums, and that it could form the basis for damages, which is the second prong of a defamation suit.
KerryL1 (California)
Posts: 14,550
Posted:
Sorry---NO need to inform owners.
KerryL1 (California)
Posts: 14,550
Posted:
I would think that IF owners may vote by US mail for directors (as in CA), they'd be able to vote by mail for a recall. That depends on your bylaws and CO law.

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