Can HOA dues be used to pay legal fees

Started by SN1 • 87 replies • 1471 views

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SN1 (Alabama)
Posts: 7

Posted:

Situation: Two board members confronted a resident that was trying to park a trailer on HOA property. A fight ensued and the police were called. The two board members ended up being charged with assault after video evidence from cameras was turned over to the police. No charges were filed against the resident. The board voted and approved for the HOA to pay for the personal legal fees of the two board members for their criminal defense. The board claims that the two board members were acting on behalf of the HOA on HOA property so that’s why the HOA should pay for their criminal defense.

Does this sound acceptable? Is it even legal? Many residents are furious that they are being forced to pay for the criminal defense of these board members. Please advise!

JoeN6 (Virginia)
Posts: 94

Posted:

Acting on behalf of an Hoa does not include assault on a person . Perhaps an executive session by the board should or could have been commenced then calling a Tow truck to tow away the trailer .

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is a criminal case. Which I would say no. A HOA isn't to be involved in a crime... Plus the HOA insurance is to be used to protect board members in a similar situation but not in crime. The HOA liability insurance would kick in to protect a board member acting on the board's behalf unless that board member does something illegal/criminal.

They sound like they are trying to hide their actions under the HOA umbrella. Hate to tell them but it doesn't cover criminal. It covers things more like rules enforcement like excessive fines etc... There is a line.

Former HOA President

SheliaH (Indiana)
Posts: 6,964

Posted:

What Melissa and Joe said. These homeowners could have called the police (non-emergency) to deal with this instead of throwing hands. If there's video and it shows the board member (or both of them) threw the first punch, I'd say they were on their own.

As for you and your neighbors, you should attend the next board meeting (and write letters or emails before that), making it very clear the board members' behavior was unacceptable and No HOA money should be used to pay their legal expenses. As for the resident who parked in the wrong place, send him or her a violation notice and address that in the usual manner if he refuses to make it right.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By SN1 on 10/20/2023 1:38 AM
Situation: Two board members confronted a resident that was trying to park a trailer on HOA property. A fight ensued and the police were called. The two board members ended up being charged with assault after video evidence from cameras was turned over to the police. No charges were filed against the resident. The board voted and approved for the HOA to pay for the personal legal fees of the two board members for their criminal defense. The board claims that the two board members were acting on behalf of the HOA on HOA property so that’s why the HOA should pay for their criminal defense.

Does this sound acceptable? Is it even legal? Many residents are furious that they are being forced to pay for the criminal defense of these board members. Please advise!

No! and No! Your governing documents may say something about directors not receiving remuneration. Even D&O insurance won't defend a criminal act, will it? The law doesn't give directors the power to break the law. You could demand the board reverse its decision and give them reasons. That's taking association funds for a personal use. Self help is a poor decision.

PhilD1 (Florida)
Posts: 17

Posted:

That does not sound legal at all. Acting on behalf of the HOA does not include assaulting someone. My community had a similar situation, the Board member was removed by the Board and the community did pay any legal fees for them.

SN1 (Alabama)
Posts: 7

Posted:

Here is what our bylaws say about compensation word for word: Compensation - No director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties.

We are assuming the part about "may be reimbursed for his actual expenses incurred in the performance of his duties" is why the board is allowing this even though we don't agree that they were performing HOA duties when they took it to whatever level they did in order to get assault charges filed against them.

I should add that the assault case for both board members is still ongoing. It has been almost a year since the incident occurred and has been kept under wraps by the board. Just a few days ago, they finally confirmed to residents that the incident occurred and that they voted to allow HOA funds to be used to pay for their defense. This all came to light because a few residents got wind of it and started asking questions. We also suspect that they are using our HOA attorney/firm to represent them in the criminal case. Oh and to top it off, one of the board members with charges is running for re-election with the election being held next week.

This just seems like a mess all around and who knows how much this is going to end up costing us.

LoriM15 (Florida)
Posts: 1,009

Posted:

Did the board have directors and operators insurance? If so, a claim should have been filed immediately. They may not have paid but the insurance company should have been aware.

There was a huge issue in Miami this year with a very corrupt HOA board that used HOA funds to pay for their legal defense. They got arrested for (among many other things) misuse of funds.

I think you should try to replace the board members and get a group together to hire your own attorney to investigate this.

PhilD1 (Florida)
Posts: 17

Posted:

The only thing I could see making this legal is if the board members that were charged are found not guilty at trial then the argument could be made that they were performing their duties to the HOA and a misunderstanding caused the legal issue. Then their legal fees may be reimbursed after the trial and final verdict. If they are found guilty, no legal fees and they are removed from the board and barred from future elections. Certainly no legal fees paid during the process though.

I still wouldn't be happy about that though, especially if the assault was caught on camera and these two just get lucky with a sympathetic jury.

PhilD1 (Florida)
Posts: 17

Posted:

Quote:

Posted By LoriM15 on 10/20/2023 6:56 AM
Did the board have directors and operators insurance? If so, a claim should have been filed immediately. They may not have paid but the insurance company should have been aware.

There was a huge issue in Miami this year with a very corrupt HOA board that used HOA funds to pay for their legal defense. They got arrested for (among many other things) misuse of funds.

I think you should try to replace the board members and get a group together to hire your own attorney to investigate this.

True, if the resident were to file a civil suit for damages against the association the insurance would be involved, they may have the power to deny or drop coverage because they weren't informed.

I wonder, does Alabama have something like Florida's DBPR that residents can file an HOA/Condo complaint to for investigation to save them the cost of an attorney?

MarkM19 (Texas)
Posts: 1,459

Posted:

SN1,
The way you start your post the 2 board members confronted an owner trying to park on HOA property. That sounds like they were doing HOA business. Then you say a fight breaks out. You did not say anything about the other person involved and assumed the board members were at fault. They actually may be the victims in this fight. Ever seen someone confronted get mad and start a fight? I have many times. They also still could be acting on the boards behave.

Lots missing from this story, and we are just hearing from the OP. Usually the truth is somewhere in the middle. I think the legal system is the best way to sort this stuff out and if they were the aggressors, they should have some liability. They were still in the act of doing a board function when this started. Sounds to me like they may have still crossed a line. Probably not good future board members.

PatJ1 (North Carolina)
Posts: 568

Posted:

Quote:

Posted By MarkM19 on 10/20/2023 7:14 AM
SN1,
The way you start your post the 2 board members confronted an owner trying to park on HOA property. That sounds like they were doing HOA business. Then you say a fight breaks out. You did not say anything about the other person involved and assumed the board members were at fault. They actually may be the victims in this fight. Ever seen someone confronted get mad and start a fight? I have many times. They also still could be acting on the boards behave.

Lots missing from this story, and we are just hearing from the OP. Usually the truth is somewhere in the middle. I think the legal system is the best way to sort this stuff out and if they were the aggressors, they should have some liability. They were still in the act of doing a board function when this started. Sounds to me like they may have still crossed a line. Probably not good future board members.

Police determined, through video evidence, that the assaults were by the Board members. Board members were charged with the crime. It's in the post.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By SN1 on 10/20/2023 6:48 AM
Here is what our bylaws say about compensation word for word: Compensation - No director shall receive compensation for any service he may render to the Association. However, any director may be reimbursed for his actual expenses incurred in the performance of his duties.

We are assuming the part about "may be reimbursed for his actual expenses incurred in the performance of his duties" is why the board is allowing this even though we don't agree that they were performing HOA duties when they took it to whatever level they did in order to get assault charges filed against them.

I should add that the assault case for both board members is still ongoing. It has been almost a year since the incident occurred and has been kept under wraps by the board. Just a few days ago, they finally confirmed to residents that the incident occurred and that they voted to allow HOA funds to be used to pay for their defense. This all came to light because a few residents got wind of it and started asking questions. We also suspect that they are using our HOA attorney/firm to represent them in the criminal case. Oh and to top it off, one of the board members with charges is running for re-election with the election being held next week.

This just seems like a mess all around and who knows how much this is going to end up costing us.

Reimburse of course means the directors have to pay up front, not the association.

SN1 (Alabama)
Posts: 7

Posted:

MarkM19, the other resident involved could have very well exchanged heated words with the two board members. We obviously aren't going to have all of the details yet as the case is still making its way through the court system, but the fact remains that there is video evidence of the incident and only the two board members received charges (assault). The resident received no charges. Are we to believe the police/prosecutor got it wrong here? I understand innocent until proven guilty but in the meantime, our HOA is footing the bill for their ongoing defense. I don't recall seeing anything in the bylaws that say our board members are the neighborhood watch and that if something goes awry when they confront someone, that their defense will be covered by our HOA. Would this same privilege be given to residents? Where is the line drawn here.

TerriS6 (California)
Posts: 3,284

Posted:

The two were not acting as the board because there was no quorum. It was not a board decision to prevent the resident from parking the trailer. They were acting as individual residents with no protections.

MarkM19 (Texas)
Posts: 1,459

Posted:

SN1,
I get it and yours and Pat's comments make sense.

I just see that this is a situation where things got out of hand seems fairly quickly. It sounds like the board members had ok intentions and then let their tempers get them into trouble. I guess they will pay the price for the actions. If I was going to play judge and Jury, I personally would say the HOA has limited liability and the rest would be on the 2 members to sort out.

So, I guess HOA members need to look for volunteers with long fuses verses short fuses when electing board members. No one here knows the past of these members. Is the HOA to blame because they elected these people to represent the community?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

From the OP:

The two board members ended up being charged with assault after video evidence from cameras was turned over to the police. No charges were filed against the resident.

I say the HOA should not pay their legal bills as they started it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SN1 on 10/20/2023 1:38 AM

Does this sound acceptable? Is it even legal? Many residents are furious that they are being forced to pay for the criminal defense of these board members. Please advise!

Does it sound acceptable?

In my opinion, no.

Is it legal?
In my opinion, probably.

The two were acting on behalf of the HOA in their capacity as an Officer or a Director.
State statutes and many governing documents typically specify that Directors are indemnified by the Association when acting on behalf of the Association.

Associations should do what is right.
Associations must comply with governing documents and statutes.

This is what D&O insurance is for.

I would strongly suggest that, in addition to paying the bills, the Board remove the individuals from the Board via a recall vote and, at very least, remove them from their officer positions in order to send a message that this isn't how the Association wants their Directors to act. Additionally, expect assessments to go up to pay higher insurance premiums and, perhaps, a special assessment to pay legal bills if the D&O insurance says that they won't cover the incident.

TerriS6 (California)
Posts: 3,284

Posted:

Your board is self-dealing and breaching its fiduciary duty. The charges are not against the association but the individuals.

LoriM15 (Florida)
Posts: 1,009

Posted:

Quote:

Posted By PhilD1 on 10/20/2023 7:10 AM

I have been on the board (and chair) of another non-profit for a really long time. It's in a field where unfortunately people threaten lawsuits frequently or one of the staff may be involved in a legal incident. The very first thing we do, even if there's a whiff of an issue, is inform our D&O carrier. No fooling around at all.

In the OP's case, the person who was allegedly assaulted could not only sue the board members but also the rest of the board and the association. Especially since the board voted to pay their criminal bills. This could also turn into a civil case.

I think the two board members had a major conflict of interest when they were part of the vote to have the association pay for their legal bills. I would have resigned from the board if I had been one of the non-assaulting members or if I wasn't on the board, I would be leading a recall campaign. No board member should be physically "protecting" the association or their property. Complete not appropriate ever - especially over a parking issue.

KerryL1 (California)
Posts: 14,550

Posted:

I firmly agree with those who argue that homeowners should not pay the legal bills of these directors for their physical violence. Board members' duty is to act in the best interests of the association. Their conduct did not do that.

The Board mainly is responsible to protect and maintain the common areas, and the HOA's assets. Billing homeowners for the legal feels have nothing to do with the board's authority or duties.

That the Board voted to use other people's money to pay for their co-directors' sins is despicable, imo. And, I think a conflict of interest.And IF it's true that the Association's HOA attorney also is defending them in their legal woes, is even worse (though improbable)

With Lori, get rid of this Board via recall or a wait for the next election and n vote some off of the Board.

AidylP1 (California)
Posts: 173

Posted:

As the Board voted to pay for their legal defense as "they were acting on behalf of the Association", now the Association is involved up to their necks and the Association's insurance and their attorneys will get involved.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

"Assault" here may have involved threats but no physical contact.

I cannot say that the board broke any law or violated any covenant when it chose to pay the legal fees for the two board members. Paying for the legal defense of these two directors might amount to reimbursing them for expenses incurred on the job.

I want the whole story.

Meanwhile if the OP does not like it, then elect new directors.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By LoriM15 on 10/20/2023 9:47 AM

I think the two board members had a major conflict of interest when they were part of the vote to have the association pay for their legal bills.

I hope you intended to say if they were part of the vote.

We do not know if they recused themselves or not.

TimB4 (Tennessee)
Posts: 21,059

Posted:

SN,

This wouldn't be an issue of compensation.
You should look for sections of your governing documents that concern Indemnification.

Expecting your Association is incorporated, most are but check to be sure, Alabama Corporate statutes would come into play.

Per Section 10A-3-2.43, the association did have legal ground to choose to indemnify. Your governing documents may have even required it.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By TimB4 on 10/20/2023 9:15 PM
SN,

This wouldn't be an issue of compensation.
You should look for sections of your governing documents that concern Indemnification.

Expecting your Association is incorporated, most are but check to be sure, Alabama Corporate statutes would come into play.

Per Section 10A-3-2.43, the association did have legal ground to choose to indemnify. Your governing documents may have even required it.

"negligence or misconduct in the performance of his or her duty"

But these two were not performing their duties.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/21/2023 3:56 AM
"negligence or misconduct in the performance of his or her duty"

But these two were not performing their duties.

I can see how a board would feel otherwise:

Quote:
Posted By SN1 on 10/20/2023 1:38 AM
Situation: Two board members confronted a resident that was trying to park a trailer on HOA property.
Also it's possible the two board members represented a quorum.

Regardless, as of this writing IMO this is an ethical question, not a covenants or statute question. Without more information, I cannot judge.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By TerriS6 on 10/21/2023 3:56 AM

But these two were not performing their duties.

According to the original posting, yes they were:

Quote:
Posted By SN1 on 10/20/2023 1:38 AM
Situation: Two board members confronted a resident that was trying to park a trailer on HOA property.

Don't get me wrong. The individuals exceeded their authority and, apparently, escalated the situation by assaulting (which could have been a touch, shove or punch) the individual. Rather then getting involved in any physical contact, the individuals should have called the police.

However, the initial incident was that an individual was attempting to use common area to park a trailer (which I expect is not authorized).

Therefore, per statute, the board had the authority to indemnify the Directors/Officers.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TimB4 on 10/21/2023 12:30 PM
The individuals exceeded their authority and, apparently, escalated the situation by assaulting (which could have been a touch, shove or punch) the individual.

Or, depending on Alabama law, it could have been the mere threat of a touch, shove or punch.

There's a reason in some states a person who punches another person is charged with both assault and battery. The assault occurs before the first person even touches the second person.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Good point Elle

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Note: The police can NOT drop charges. That has to go to a judge/courtroom to decide if the charges stick or not. I am of the opinion that once you lay hands on someone, it's no longer a HOA issue but a personal one/criminal act. The HOA stance should have been to put a fine or have it towed. There should not have been a confrontation. Pictures made of the situation and then fined if long term. Short term have it towed and send them the bill.

BTW: We just had a recent issue in a city here in Alabama. A tow truck driver came to repro a truck. The owner confronted the tow truck driver. Told them to get lost. Tow truck driver claimed may have been threatened with a gun. Calls the police. This is when things go off the rails... The tow truck driver instead of leaving the scene or waiting for the police to talk to the person, he backs up to the truck. This is when the owner comes out again yelling at the tow truck driver to put the truck down! Shots are fired. Police kill the owner. They believed he had a gun in his hand. There are protests going on because the camera footage not being released due to investigation.

Rumor has it that the tow truck driver was at the wrong house. Plus the owner was black in a relatively mixed neighborhood. The tow truck driver was NOT following protocol. Which is if the police are called, they drop the tow process. Instead he backed his tow truck up to the owner's truck. Basically the person who caused the incident now has an entire city in an uproar demanding the heads of the police officers.

I bring this situation up because of how quickly and badly it is to confront people who perceive are breaking a rule. There are better ways to have had handle this a HOA board members. Which is to follow a policy of fine or tow. No need for a HOA member to have escalated the situation.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

I still am with you on your way of thinking about the directors conduct, SN1.

Individual directors do not enforce the rules or covenants, boards do on behalf of their associations. And they may not try to enforce a rule merely because two directors together may be a "quorum." A quorum only matters in a curly noticed board meeting.

If two directors want to play HOA cops, the most they can do politely remind a resident that he cannot park his, yak, yak, yak. hr the resident refuses, a director calls the tow company is towing is permitted. And/or they write up violation, call the parcel owner to a hearing, etc. And THE BOARD enforces the covenant or rule.

The very idea that individual directors can try to enforce the rules using any personal behavior beyond a request, even if made sharply is incredible. I invite anyone to cite me in any CC&Rs, or anywhere else that an individual director can bully residents, guests, vendors or anyone to enforce rules "on behalf" of the HOA.

With an election very soon, SN1, And agreeing with Lori, get voters together if you can and vote out any incumbents. The Board di not make a decision that was in th best nterwtes of your association when they voted to steal owners dues to pay for their cronies legal woes.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By KerryL1 on 10/21/2023 8:01 PM
I invite anyone to cite me in any CC&Rs, or anywhere else that an individual director can bully residents, guests, vendors or anyone to enforce rules "on behalf" of the HOA.

Are you saying that BillD16 should not have been enforcing rules as the board-appointed "pool monitor" this past summer?

Boards can delegate responsibilities to individual directors.

When an individual director sees common areas being mis-used, and especially if safety is an issue, if he or she wants to remind the perpetrator that this is not allowed so please stop now, I cannot say that I see a problem.

My former condo's pool was shut down and covered for the Fall and winter months. When I was on the board several years ago, one autumn day after sunset, I was walking past the then covered pool. I saw some kids in the pool area jumping and sliding on the cover. They were having a grand old time. I told them they were not supposed to do this and to leave. They did so. I reported this immediately to the condo's security detail, the rest of the board and the manager. The manager reviewed the film footage and sent a warning to the family whose kids were in the pool.

I consider this a safety issue. I would not do anything differently.

AFAIC this forum does not have all the facts for the OP's situation.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By KerryL1 on 10/21/2023 8:01 PM

Individual directors do not enforce the rules or covenants, boards do on behalf of their associations.

Of course, the Association enforces. However, this is typically done via the Officers, Directors, Committee Members or Management Company (if they have one).

Quote:
Posted By KerryL1 on 10/21/2023 8:01 PM

If two directors want to play HOA cops. . .

I don't think that this is fair to those individuals or, for that matter, anyone who happens to be tasked with making first contact for an enforcement action (regardless if that contact is via letter or in person).

Quote:
Posted By KerryL1 on 10/21/2023 8:01 PM

. . . the most they can do politely remind a resident that he cannot park his, yak, yak, yak. hr the resident refuses, a director calls the tow company is towing is permitted. And/or they write up violation, call the parcel owner to a hearing, etc. And THE BOARD enforces the covenant or rule.

I believe everyone who has responded to this thread agrees with that approach.
I also believe that everyone who has responded to this thread agrees that at no time should the individuals have assaulted an owner or guest.
Of course, those of us who have responded do not know the full story - nor have we seen any video.

Quote:
Posted By KerryL1 on 10/21/2023 8:01 PM

I invite anyone to cite me in any CC&Rs, or anywhere else that an individual director can bully residents, guests, vendors or anyone to enforce rules "on behalf" of the HOA.

Bullying is a subjective term.

When I served as Treasure, I had owners who were delinquent express that I was bullying them because I sent a late notice in the mail that included late charges.

When I served on the board of my previous association, we had one owner claim enforcing the covenants by sending notices and finally calling them before the board and threatening monetary penalties was elder abuse.

Personally, I don't think my above examples were bullying. However, legally, bullying can be almost anything (see earlier link). Therefore, it is subjective to those on the receiving end.

The individuals in question may have simply gone to this individual to discuss the issue and it went sideways.
We don't know what happened.
We don't know if the individual is a repeat offender.
We actually know very little about the situation other then the initial circumstances, that police were called and the directors were cited.
So, to call it bullying is, in my opinion, a bit extreme.

Quote:
Posted By KerryL1 on 10/21/2023 8:01 PM

With an election very soon, SN1, And agreeing with Lori, get voters together if you can and vote out any incumbents. The Board di not make a decision that was in th best nterwtes of your association when they voted to steal owners dues to pay for their cronies legal woes.

Personally, I don't know how I would have voted.
I certainly would want to know a lot more before I made the decision to indemnify or not.
It's also possible that the board didn't really have a choice.
Statutes allow indemnification. However, it is unknown if the governing documents require it or not as that question was asked but not answered.

Since the individuals were acting on behalf of the Association, I do think I would have voted to find out if the issue would be covered by the D&O insurance before making any final decision.

Regarding Voting the bums out of office (so to speak) it only really works if there are people willing to take their place and do the work.
Many who vote solely on one issue may win but discover that the work is more then they really wanted.

I would certainly recommend gathering support and prevent those two individuals from continuing to serve on the board.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By KerryL1 on 10/21/2023 8:01 PM
I still am with you on your way of thinking about the directors conduct, SN1.

Individual directors do not enforce the rules or covenants, boards do on behalf of their associations. And they may not try to enforce a rule merely because two directors together may be a "quorum." A quorum only matters in a curly noticed board meeting.

If two directors want to play HOA cops, the most they can do politely remind a resident that he cannot park his, yak, yak, yak. hr the resident refuses, a director calls the tow company is towing is permitted. And/or they write up violation, call the parcel owner to a hearing, etc. And THE BOARD enforces the covenant or rule.

The very idea that individual directors can try to enforce the rules using any personal behavior beyond a request, even if made sharply is incredible. I invite anyone to cite me in any CC&Rs, or anywhere else that an individual director can bully residents, guests, vendors or anyone to enforce rules "on behalf" of the HOA.

With an election very soon, SN1, And agreeing with Lori, get voters together if you can and vote out any incumbents. The Board di not make a decision that was in th best nterwtes of your association when they voted to steal owners dues to pay for their cronies legal woes.

Very well said....and I didn't mean to suggest that forum hit squads were OK. 😊

TerriS6 (California)
Posts: 3,284

Posted:

Quorum not forum.

SN1 (Alabama)
Posts: 7

Posted:

I was not able to find anything in our bylaws or covenants that reference indemnification. Is there other wording I could look for?

We do not know if the two board members recused themselves from the vote. The board isn’t telling us and there are no meeting minutes. We also don’t know if all board members saw the video. One of the board members that has the charges is the President and he was the one who facilitated having the cameras installed about a year ago. I don’t know if others on the board have access or not to recordings. Since the video was evidence requested by the police, it’s possible other board members were not allowed to view it.

Some residents have heard that one of the reasons the board decided to pay for the legal expenses is because they felt that would be better than submitting a claim against insurance because then rates would be raised. This is hearsay because the board won’t answer questions. This has me concerned after reading the many comments on here that said insurance should have at least been notified of the incident.

We have 7 board members, 4 of whom were actually elected. The other 3 were appointed when others resigned. And now since this incident has come to light, our Vice President just resigned.

JamesB37 (California)
Posts: 351

Posted:

Quote:

Posted By MelissaP1 on 10/21/2023 7:01 PM
Note: The police can NOT drop charges. That has to go to a judge/courtroom to decide if the charges stick or not.

Wrong again. It is up to the District Attorney's office, who will decide if and what charges are filed:

"In Alabama, the decision of whether to file criminal charges in a court of law is made by the district attorney. The district attorney is the chief prosecuting officer of a judicial district in Alabama. They are responsible for representing the state in criminal cases and deciding which cases to prosecute.

The district attorney has a great deal of discretion in making this decision. They will consider a number of factors, including the evidence against the suspect, the severity of the crime, and the public interest."

TerriS6 (California)
Posts: 3,284

Posted:

Here is the conundrum for the short-sighted confused board:

Board is paying directors' defense because they were "acting on behalf of the association."

When the civil suit comes, the board will be stumbling over themselves rushing to correct the record. Knowing the association already claimed responsibility, plaintiff will ask for a lot more money. Then the board will claim the directors were acting on their own and it will offer evidence that they had no authority.

TerriS6 (California)
Posts: 3,284

Posted:

And woe for the association if the victim is a senior citizen.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This is why a HOA carries insurance for their board members. However, it does NOT cover if the board member is in the wrong or criminal acts etc... This is a criminal case. A civil case is different and separate. The HOA's insurance lawyers may show up in court to represent the HOA, but expect to possible lose the case or the insurance policy.

Former HOA President

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By MelissaP1 on 10/22/2023 9:24 AM
This is why a HOA carries insurance for their board members. However, it does NOT cover if the board member is in the wrong or criminal acts etc... This is a criminal case. A civil case is different and separate. The HOA's insurance lawyers may show up in court to represent the HOA, but expect to possible lose the case or the insurance policy.

Likely it will be both and the evidence in one case can be used in the other case.

KerryL1 (California)
Posts: 14,550

Posted:

Drat, I do seem to choose lousy words. Perhaps “ordering” would have been more suitable than “bullying.” But that’s not the main point. The point is the directors exceeded their authority.

The Board treasurer, of course, may demand that individual owners pay their dues and threaten late charges. But that office is BOARD-approved. An ARC may demand that an owner comply with the HOA’s ARC requirements and threaten fines. But that Committee is Board- approved. The accusation of “elder abuse” was aimed at the Board, which was enforcing the covenants via due process.

BillD had authority over many aspects of the pool in his HOA because he was appointed by THE BOARD.

I strongly doubt that either of these two directors had “been tasked” by the Board or had been “delegated” by the Board to do anything special about violations they see that’s beyond what any other director or resident does.* I agreed the directors could have demanded compliance sharply, and even threatened the resident with towing or a hearing & fines. We don’t know if they even tried that. Ah, yes, from BillD’s Texas pool-duties posts, some posters insist that yelling at someone close to their face is “assault.”

So, Someone needs to cite to me in their documents where individual directors are permitted to enforce--using conduct beyond sharply ordering alleged violators to cease--the governing documents, IF not assigned and approved by the Board. We don’t know the two directors' first words to the alleged violator.

However the interaction started, it ended with the directors going beyond their job description.

*Yesterday in my building’s elevator an older lady got on the 2nd pool-area floor. She was wearing a towel wrapped around her wet bathing suit and was barefoot. I’ve never seen this violation. I was so surprised that I blurted, “Oh, we must all wear footwear and coverups in the common areas outside of the pool. There was a broken light bulb [on this floor] once, so it can be dangerous..” She sort of muttered, “Oh, I see,” and got off.

Now, I felt like bellowing, “Whaddya thing this place is? A Motel-6?” Someone else might have snarled, “Don’t you know your wet bathing suit is dripping and can cause slip hazards!!!??? What’s wrong with you!”

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By SN1 on 10/22/2023 7:53 AM
I was not able to find anything in our bylaws or covenants that reference indemnification. Is there other wording I could look for?

From Alabama statutes,

Section 10A-3-2.43 - Power to indemnify directors or officers
Each nonprofit corporation shall have the power to indemnify any director or officer or former director or officer of the corporation, or any person who may have served at its request as a director or officer of another corporation, whether profit or nonprofit, in which it owns shares of capital stock or of which it is a creditor, against expenses actually and reasonably incurred by him or her in connection with the defense of any action, suit, or proceeding, civil or criminal, in which he or she is made a party by reason of being or having been such director or officer, except in relation to matters as to which he or she shall be adjudged in the action, suit, or proceeding to be liable for negligence or misconduct in the performance of his or her duty; and to make any other indemnification that shall be authorized by the governing documents of the nonprofit corporation, vote of the board of directors, or resolution adopted after notice by the members entitled to vote.

See https://casetext.com/statute/code-of-alabama/title-10a-alabama-business-and-nonprofit-entities-code/chapter-3-nonprofit-corporations/article-2-substantive-provisions/division-d-entity-specific-powers-limitations/section-10a-3-243-power-to-indemnify-directors-or-officers

You asked if what the board did (in indemnifying the directors) is legal. I believe it is.

If an owner wanted to sue to stop this indemnification, then so far, I do not like the owner's chances.

I will say this: If a director threw a punch and the physical injury is obvious, this would change my thinking on all this. If a director shoved someone, without obvious physical injury, I would want a lot more details before judging this. On the one hand, I do not want people playing cop. On the other hand, the police and DA's nationwide have made it clear for years that they have to prioritize the crimes they go after. The typical police response to a HOA dispute is for the police to say that the HOA's remedy lies in civil court.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/22/2023 8:28 AM

Board is paying directors' defense because they were "acting on behalf of the association."

When the civil suit comes, the board will be stumbling over themselves rushing to correct the record. Knowing the association already claimed responsibility, plaintiff will ask for a lot more money. Then the board will claim the directors were acting on their own and it will offer evidence that they had no authority.

If the civil suit comes. It's not cheap to bring suit. The risk of losing is present. The risk of not winning one's attorney fees is present.

And when it turns out that the owner trying to park the trailer on common area, say, called a director a racist epithet, and the director got in the owner's face, accidentally spitting on the owner and so causing an assault, things will get interesting.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By SheliaH on 10/20/2023 5:40 AM
These homeowners could have called the police (non-emergency) to deal with this instead of throwing hands.

I believe the probability that the police would have said this is a civil matter, and so the police were powerless to do anything, is 100%.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/22/2023 3:17 PM
Posted By TerriS6 on 10/22/2023 8:28 AM

Board is paying directors' defense because they were "acting on behalf of the association."

When the civil suit comes, the board will be stumbling over themselves rushing to correct the record. Knowing the association already claimed responsibility, plaintiff will ask for a lot more money. Then the board will claim the directors were acting on their own and it will offer evidence that they had no authority.

You who always insist on stating the facts make up a complete fiction just to be contrary.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Posted By ElleN on 10/22/2023 3:31 PM
Posted By SheliaH on 10/20/2023 5:40 AM
These homeowners could have called the police (non-emergency) to deal with this instead of throwing hands.

I believe the probability that the police would have said this is a civil matter, and so the police were powerless to do anything, is 100%.

Did you read the original post?

BillD16 (Texas)
Posts: 971

Posted:

Quote:

Oy vey …

Due to recent personal experience, I’m with Tim and ElleN on this: insufficient data for a meaningful answer. I’m sitting here thinking “golly, it must be nice to serve on a Board that has my back!”

I don’t know Alabama law, but yes, in some states assault ican involve just getting in someone’s face.

Also: just saying “there’s video that shows it!” is not the definitive statement of proof that many people think it is. I’ve got video of someone getting in my face - and some people just don’t see why I was unhappy about it. Plus video often does not include audio, and the actual words make a big difference for some people. And while I’d like to think the police have experience interpreting video, they may or may not have gotten it right, and I’ll tell you for sure that it can take some skill and practice to accurately determine what was going on.

And yeah ‘accidental spit’ is a BFD to me these days. The 14 day incubation period was ‘tense’.

I’m not at all certain about the HOA paying for a legal defense in this instance. But I think it’s important to note that there are at least 2 or 3 three sides to this story.

I won’t drone on about it: insufficient data for a meaningful answer.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By TerriS6 on 10/22/2023 5:35 PM

You who always insist on stating the facts make up a complete fiction just to be contrary.

The purpose of my hypothetical was to counter your hypothetical. All's fair.

Your other post failed to recognize that SheliaH was speaking of calling the police before doing anything else.

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