Board sign Conflict of Interest Agreement?

Hi All

3 member board, 2 new and one from the previous board. I'm one of the new board members that will be appointed to the position of the President at the upcoming board meeting. The second new board member is the person that helped me win the Truck Parking issue. This new member knows and really everyone knows I'm bringing a refiling of the suit for the damage to my unit that was the counterclaim that was dropped near the end of the truck issue. So she has said she has a Conflict of Interest Agreement for us all to sign. I personally will not sign until my Attorney tells me its ok or not. I believe that the State Law and documents basically cover that as being a Breach of Fiduciary Duty.

So looking for thoughts to sign or not to sign!

Thanks, Guy

GUY

Tell her to stop playing a lawyer.

Hi Douglas

I'll see what it has on it Monday at the meeting and let everyone know,

Thanks, Guy

I really don't see an issue with signing a conflict of interest agreement - frankly, I'm not sure why you would even get on the board, knowing this is something you'd have to sign AND you're about to refile your lawsuit against the association. But the others appointed you because you were the only one to step up so...

Can you find another way to fix this issue with your truck once and for all BEFORE you start your board duties? Surely there must be some sort of compromise out there that no one's thought of. As it stands now, if there are three people on the board and you have to step out of the room when this lawsuit is discussed (it will be, as the board has to decide if/how it will respond) - what will happen if one person says X should happen, the other says Y, and they can't break the tie because the third board member (you) can't discuss or vote on the issue at all because you're the one bringing the lawsuit??? That can put the board at a standstill and not be able to discuss anything regarding the association (that's why all of you are there, after all).

I think that it's a law that the Board have some kind of Conflict of Interest statement, a dissolution policy, and a non discrimination statement, all in the bylaws or passed by the Board as a policy.

So SOME KIND of C of I should be adopted by your Board.

Your lawsuit comes under this because you have brought a suit against the very Board you are to become President.

Since it's water under the bridge with the previous board, why are you pursuing it? Do you have damages you want the corporation to now pay?

Hi Sue

Yes, I have probably close to 50 grand in damages not to say the damages to my health. Constant water coming in the side wall, the front wall and the mold issue I have lived in for over two years. Talk about water under the bridge I need it to stop. Oh and my foundation that is sinking and cracking my slab and has destroyed my porcelain tile that goings through half of the first floor. Have a big 8-foot hole in my staircase wall [drywall removed for inspection] all this for over two years...think there should be personal damages too. Going after the old board to pay as much of it as I can.

Thanks, Guy

If there is no requirement in the governing documents or law to sign a conflict of interest agreement, then I think it's a bad idea simply because you cannot make anyone sign it. What happens if half the board refuses to sign it, for whatever reason. Now you have a cloud hanging over those members.

There is always a potential for a conflict when serving on any board. Having a conflict of interest is not a problem as long as you acknowledge it and recuse yourself from voting when a conflict exists.

Suppose you have someone who wants to serve on the architectural control committee and you know he is planning to build a shed in the near future. There would certainly be a conflict of interest but it would be ridiculous to tell him he can't serve on the committee. Unless he votes on his shed application, there is no problem.

You will be elected president by the 3-member board, it is incorrect to say you will be "appointed".

As for signing anything, follow your attorney's advice.

OH,NO. I OBJECT! Even though you are appointed based on a vote of the directors, you are still APPOINTED and should only use that word. Of course, it IS only semantics (depending on what your definition of IS is).

I hope having fun doesn't violate the terms of service.

Hi Augustin

Well, this started in the 2015-16 winter when I noticed that opening the front entry door was almost impossible and notice cracking in the entryway ceramic tile. I went outside to look at the outside of the door with sidelight and found the jamb between the door and the sidelight was rotting out then I looked up above and saw a 1-inch gap coming down one of the t-111 joints that were inline with the damage. So contacted board and they told me everything was my problem. I took them to small claims to pay to replace the door and I lost because I didn't know what I know now. My plans were to sell that summer but I waited for them to replace all the siding on my unit which happened at the end of July. I repaired the door but found that water was still coming in even with new siding. The siding wasn't flashed properly and I told the board that and nothing was done. I couldn't sell with this problem. So a few months later my staircase wall blew out from the stair to the ceiling which is a wall between units. I called the board and they said it was my problem. So I had a foundation engineer come out to look at it and we had to pull the blow out drywall off to see behind it and we found mold and water coming in that wall which had been doing it for years. Finally, I went next door to see if they had a problem and yes they did you could see the water damage on the wall and the slab sinking. So those people called the board and the board contacted the Insurance company. So the Insurance company denied the claim because it was a long time problem from the rotted out siding. I told the board you need to fix the common area and my damages. I told them I would get a Lawyer and sue so that's when they brought the truck suit right before I was going to file. So that is why I had to do a counterclaim. So the truck thing took up all of 2017 with me continuing to send videos of water coming in the unit and let us not forget mold. So My Attorney in January said we need to drop the counterclaim and finish the truck issue so it was no longer part of the counterclaim. Also through this time, more things came out that made my case a very strong and bigger case. So we dropped it before the trail for the truck that I won. Now the new suit is coming next week after me seeing special doctors and my doctor for my health issues. Most of the case will be trying to have the old board members pay for all the damages they have caused. But the Association will and always had to pay to fix all the damages anyway and the damages I will receive will come from the Insurance company. I lost money on the truck suit, medical, time, living like this for years, debt, and plenty more. this is the short version and there's lots more. Oh, and they didn't contact the Insurance company because they said if the lost then they would contact the Insurance company even after me telling them they had 14 days to tender the claim. But by now I'm sure you can see that they hated me! Another reason to drop the counterclaim.

Thanks, Guy

Don't sign $hit ever, the law already covers conflict of interest and fiduciary duty, no need to sign anything since the law for carrying out your duties is already in place.

As for the conflict of interest, I see none because you can recuse yourself from voting on your own lawsuit or meetings that involve your suit.

There is also a derivative suit that you can file. This way you can recover the fee's associated with the lawsuits from before and perhaps even the damage that were neglected and put demand the fee's from the other former directors that you had to spend and was not paid by the HOA insurance. So you give them a 3 month notice to pay the fee's if they don't in 3 months, then you sue each former member to recover your fee's. This derivative suit has nothing to do with the HOA or its affairs, you would be going after each former member.

That's true, I'm not sure on all the details of this situation but the derivative can be worded in a way where GUY does represent the interests of the HOA due to the actions of the directors, the directors fought a case and they lost, so I'm assuming the insurance paid some of these fee's. The remaining fee's, Guy should talk to his attorney and see if he can go after the directors with the derivative.

Secondly, damages to the property (and more importantly other members property), if the covenants state the HOA was governed to address these issues, he should file the new suit and derivative notice on the former directors in which by Guy represents the HOA stating irreparable harm was caused to the HOA by the actions/neglect/gross negligence of the former directors that is if the damage spread to other properties. I'm not always for derivative suits anyway since they are hard to prove but its more of tactical advantage into convincing the other directors to find a suitable settlement.

Like you said, a difficult situation especially since the insurance has already denied the claim. I think the other two board members will have to handle this. It can be done with out a conflict of interest especially since no one else seems to want to volunteer.

My money says GuyM1's attorney will say a derivative claim is neither consistent with statutory law nor case law and is not viable. That is, if this strategy is even on GuyM1's attorney's radar.

Hi Sue

D & O Insurance will cover board member personally if they don't Breach any of its duties. This Board Breached so many that they will be held personally liable for them. The flashing is from a Contractor not installing siding properly which I notified the board with videos and pictures. So their Duty was to have it investigated and to stop the damages over two years ago. Mold has been mentioned to them several times without investigation. Concrete slab and footer cracking and lifting damaging to my property. Staircase wall blowing out from longtime water leak with mold. So most going on over two years and nothing was done and I have to live with it. So do you think they Breached their Duty? Association and Insurance don't cover for this Breach! Think I have any rights? Think Insurance will pay out for board member wrongful acts?

What would you do?

Thanks, Guy

I agree.

Hi All

Just some news on what I'm doing as the President. I've done a lot of little things but here are some of the big things...I think!

The front siding on the entry door wall that the contractor installed and has leaked sense 2016. I called the Contractors Insurance company and put in a claim. Today an Adjuster called and asked me the story on it. So after telling her what has gone on she was so sorry for this happening and everything will be taken care of. I did get mold into the issue and she assured me that that would be investigated and if there is it will be handled also. So looking at repairing the siding and flashing. Replace my entry door and remove my kitchen cabinets to remove drywall and inspect for damage and mold. You get the idea. I'm going to try and get some damages for me living with this for over two years with the more than likely mold issue.

I also called the Association insurance company adjuster for that other units damage from the same contractor and asked how the subrogation was going and they said the sent out two letters and never heard back. I said why wouldn't the other insurance company get back to you? Well, it seems the EX only gave them the Contractors name and number. This is where they were sending the letters. So I said I have the Insurance company for the contractor. so went to the city and picked up all the paperwork on the contractors Bond and permit. So now they can go after the contractor's insurance.

So back to the talk with the contractor insurance companies adjuster. I ask her was there another claim from one of the other units and she said no. Well, she does now and said she would get the Association deductible back and to get her the Allstate claim number. So now the adjuster from the contractor's insurance will be talking to the Association insurance companies subrogation team.

Back to talking to the Association insurance adjuster to find out why they weren't told the contractor's insurance companies name. Why would the EX go to our insurance and not the contractor's insurance? Looking into that!

Why didn't the EX go to the contractor insurance for mine...would have stopped the other units damage because I would think that would show he wasn't a good contractor.

Think this helps my suit and maybe the other members will trust me to do the right thing by them.

Association Insurance bill came and WOW went up like 33% Who's to blame?

Thanks,
Guy