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MichaelK11 (Texas)
Posts: 432
Posted:
I'm still interested in views on CoI as it applies to my situation, and to see how other people feel about it as the tables get turned.

My HOA has a dispute with a homeowner regarding a wall he built on an exclusive-use easement he has over HOA land. We are currently engaged in a lawsuit; but before the dispute escalated to this, we had one Director who did not agree with the rest of our BoD about this dispute. Another Director was neutral, and the other Directors pursued this dispute and strongly opposed any disagreement. They decided the one who disagreed had a conflict of interest, because he was "friendly" with the protagonist. That Director said he was not a friend but an associate -- he could count his true "friends" on the fingers of one hand -- but he was considering a possible business venture with the protagonist. That venture never got past the dinner-talk phase.

Our BoD then excluded that Director and he eventually resigned in anger, disgust and high blood-pressure.

Some of you said that the potential business venture was a conflict of interest and some said no. Most seemed to think association or friendship were not an issue. More comments welcome on that, and also on this:

What was not widely known at the time was that the President of the HOA, a realtor, has been the family realtor of the protagonist's next-door neighbor and his son. The neighbor and his son have right of first refusal on the Defendant homeowner's house, through a divorce settlement. The original lawsuit included a cause of action to foreclose on the Defendant homeowner's house.

HOA Pres->Realtor for neighbor family->family ROFR on house->HOA suit to foreclose on house. Is it a Conflict of Interest for the HOA President to be involved in BoD discussions and votes about this lawsuit?
KirkW1 (Texas)
Posts: 1,665
Posted:
First, I don't think knowing or being a friend of a resident makes for conflict of interest.

Now as far as the HOA president goes, I am not sure. At the very least he should have disclosed his relationship and possible benefit from the situation.
GlenL (Ohio)
Posts: 5,491
Posted:
Michael I have read the myriad of posts you have posted on this lawsuit and it wasn't until Frank's post on conflict of interest that your secondhand knowledge of what has allegedly transpired, became replete with carpetbaggers trying to litigate the home away from your so called "tenacious pit bull of an attorney, and his attorney wife who has their own law firm". If they are trying to get him to remove the wall but not seize his home then it's IMO not a conflict of interest.

There is one thing that jumped out at me when I did go back and look at some of your old posts. This whole megillah could have been avoided if this pit bull of an attorney and his attorney wife had the common sense to simply follow the CC&R's and sought ACC approval BEFORE they turned one shovel of dirt instead of assuming they could do as they wish. Even if they have an exclusive use easement that doesn't absolve them from following the rules and as attorneys they should know that better than anyone else in your community including their dastardly neighbor Snidely Whiplash.

Studies show that 5 out of 4 people have problems with fractions
MicheleD (Kentucky)
Posts: 4,491
Posted:
Quote:
Posted By GlenL on 08/23/2009 5:15 AM
Michael I have read the myriad of posts you have posted on this lawsuit and it wasn't until Frank's post on conflict of interest that your secondhand knowledge of what has allegedly transpired, became replete with carpetbaggers trying to litigate the home away from your so called "tenacious pit bull of an attorney, and his attorney wife who has their own law firm". If they are trying to get him to remove the wall but not seize his home then it's IMO not a conflict of interest.

There is one thing that jumped out at me when I did go back and look at some of your old posts. This whole megillah could have been avoided if this pit bull of an attorney and his attorney wife had the common sense to simply follow the CC&R's and sought ACC approval BEFORE they turned one shovel of dirt instead of assuming they could do as they wish. Even if they have an exclusive use easement that doesn't absolve them from following the rules and as attorneys they should know that better than anyone else in your community including their dastardly neighbor Snidely Whiplash.

^^^^^^
What he said.

It seems these characters get nastier and nastier as the story grows. When do we get to the part where they are killing puppies?

We should get Nancy Grace involved.

MichaelK11 (Texas)
Posts: 432
Posted:
Quote:
Posted By GlenL on 08/23/2009 5:15 AM
replete with carpetbaggers trying to litigate the home away from your so called "tenacious pit bull of an attorney, and his attorney wife who has their own law firm". If they are trying to get him to remove the wall but not seize his home then it's IMO not a conflict of interest.
I was hoping for straightforward suggestions about both CoI situations.

I take it then, that you would see no conflict for either the HOA Pres or the Director who thought the dispute was overblown?

The lawsuit, as filed last October, contained a cause of action for lien and foreclosure; in April the HOA removed that cause of action.
Quote:
There is one thing that jumped out at me when I did go back and look at some of your old posts. This whole megillah could have been avoided if this pit bull of an attorney and his attorney wife had the common sense to simply follow the CC&R's and sought ACC approval BEFORE they turned one shovel of dirt instead of assuming they could do as they wish. Even if they have an exclusive use easement that doesn't absolve them from following the rules and as attorneys they should know that better than anyone else in your community including their dastardly neighbor Snidely Whiplash.
I agree with that, and I don't think their hands are clean in this matter. Since a huge number of other homeowners have done similar (not asked permission first), I don't think spending $100,000 or so of our money on a lawsuit is really smart. Since the ACC chair came out when they were 10% into building and asked them nicely to submit and ACC application (but not to stop), and they nicely complied, I think that's moot. No one told them to stop until they were 50% to 90% done, and the HOA took more interest in the easement issue.

I really wanted to get more feedback on the two CoI cases -- one or the other or both.

Chee, just when you think it's safe to go back in the discussion forum.
GlenL (Ohio)
Posts: 5,491
Posted:
Michael I gave you a straight answer - If they are trying to get him to remove the wall but not seize his home then it's IMO not a conflict of interest. That and five dollars will get you a small cup of coffee; I am at a loss to just what you want. The story keeps growing from the retaining wall lawsuit to the BOD rigging the election to keep you off the Board to how the minutes read to now conflict of interest.

Do you want us to agree that your BOD is a bunch of doodoo heads?
Do you want us to agree that the lawsuit was unfounded?
Do you want us to agree that the whole thing is caused by the neighbor who covets the property?
And if we do then what?

If your BOD has raised assessments to pay for the lawsuit and the majority of your fellow homeowners yawned and said OK. Then it is OK with the majority of the homeowners and until you change that, then nothing we say here matters a lick. The remedies are in your documents and in your hands. Somewhere in there will be how to call a special meeting, how to recall and replace the Board or specific member.

Do you remember the story of Chicken Little? Depending on the version, the moral changes; in the "happy ending" version, the moral is not to be a "Chicken", but to have courage. In other versions the moral is usually interpreted to mean "do not believe everything you are told". In the latter case, it could well be a cautionary political tale: The Chicken jumps to a conclusion and whips the populace into mass hysteria, which the unscrupulous fox uses to manipulate them for his own benefit, sometimes as supper.

If I were you I would just make sure I'm not being used by the pit bull to do his dirty work.

Studies show that 5 out of 4 people have problems with fractions
KirkW1 (Texas)
Posts: 1,665
Posted:
I find it interesting how some people always find that the HOA is always in the right. They ignore that while the ACC approval was after the fact, it was in fact granted before the law suit started.

Michael, understand that some people will ALWAYS believe in the strictest enforcement of the CC&Rs to include any and all litigation at any and all cost to protect what they believe is sanctity of the documents.

The big thing is that you must keep in mind that everyone has a set of warts if you look deep enough. And when a protracted fight comes about skeletons come out of the closet and warts grow in size.

In my opinion, the whole thing has been blown out of proportion. It is very possible that the HOA president saw an opportunity to get some land for his client to sell. But I would point out that the "right of first refusal" would not apply should the land get foreclosed. That contract is between the current owner and the person with the right and would pass away with the loss of land.

I would also note that should the HOA have foreclosed on the home then they would have had to pay to remove the wall before they could have resold the land.
MichaelK11 (Texas)
Posts: 432
Posted:
Quote:
Posted By GlenL on 08/23/2009 7:09 AM
Michael I gave you a straight answer - If they are trying to get him to remove the wall but not seize his home then it's IMO not a conflict of interest.
Thank you for the straight answer from prior post; I acknowledged that and asked further; you said a lot more than just that. I am trying to focus on these CoI issues.

Yes, the dispute is a complicated mess that's been going on for a while. I'm trying not to rehash the entire dispute in this thread.

Since you bring up the elections, seven of eleven nominees were kept off the ballot; I was just one of them.

I understand the basic political issues, as well as the mechanics for various actions.

Since you ask what I want, I would prefer you go along with my desire to keep this thread on-topic.

Since you ask what I want, I am not interested in people simply agreeing with my point of view; I am looking for opinions and ideas -- especially to point out things I may not have considered. While I have a strong opinion about this CoI matter, and while I'm sure you believe you know my thoughts, even while distrusting (but for some reason caring about) the veracity of the scenario I presented, I'd rather (since you ask what I want) you answer my actual question, instead of going on to second guess me.

Since you ask what I want, I would also like to hear more from the nice people who were posting in this forum last night. I don't know whether their absence indicates they are bored with this, or if I posted too late when they were leaving, or if they are scared off by the heckling.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Michael,

I suggest you google "definition of conflict of interest" and go from there. Usually one does not exist unless the person with the purported conflict stands to gain monetarily from the transaction or action.
MichaelK11 (Texas)
Posts: 432
Posted:
Looks like this is all I'm going to get.

Conflict is presumed to arise if the person stands to gain or may potentially stand to gain in substance, whether monetarily or substantial gift.

What I think about these two CoI issues is:
• They are both technically potential conflicts.
• So, they both should require disclosure.
• The existence of a potential conflict does not dictate that a conflict exists; it requires disclosure and review -- the remaining Directors are tasked to determine if an actual conflict exists, and how to handle it. It's not just a question of whether the realtor intends to make a profit from the lawsuit or the business associate intends to keep his potential partner safe so they can invest together. It's about whether there judgment may be clouded, subject to question, or perceived to be compromised.
• That determination should be made, based on consistent and equitable consideration of the nature of the conflict, not on whether including or excluding a Director serves a political agenda (by gaining or removing votes as one pleases). Such matters should be handled at arms-length and apolitically.
• I'm not sure whether the realtor's interest and the possible business associate's interest are very similar cases; I had hoped to get some input here.
• In my opinion, they are about the same level of conflict – possible and worth considering, but somewhat remote and probably not prohibitive.
• One was disclosed and one was not; both should have been.
• One resulted in exclusion; the other was not even raised.
• The one that was raised started out as, "you like this guy and we don't, so you are biased and we are not; therefore, we don't have to deal with you." That is clearly not a conflict (and no one here posted that it might be remotely so). I think that makes suspect the handling of the disclosed potential conflict; in fact the attitude was that his viewpoint and politics were not consistent with the other Directors on an important issue, so something must be wrong. (Pretty much what The Heckler said.)
• I am more interested in the comparative handling of these potential conflicts than whether either was handled correctly as an isolated case.
• There is a commonly accepted principle that when one side in an argument sets a standard, the other side can then accept and insist on the same standard without further defending it. They need only point to the first side's assertion when the tables are turned – it automatically becomes an "agreed" standard.
• Our BoD set a standard by excluding the Director for this particular conflict. Some might disagree if that standard was correct. But those who made that decision have no standing to argue against applying that standard when the shoe is on the other foot. They have all the votes (100%, now), but no merit.
• I think when any organization uses CoI issues in a partisan manner and cannot hold them at arm's length from the tasks and disputes at hand and other political matters, then they have bigger problems than any member's potential conflict of interest.

In the absence of further input to this subject, that's what I think.

(Based on Glen's comments, perhaps he thinks the HOA Pres did have a conflict of interest, because she tried to remove the wall and take the home via this lawsuit. This is more a technicality than an accusation of what was in her mind. As I said above, the point of CoI is not that someone intends to commit a crime, but that the elements exist for appearance of conflict and possible distraction of judgment.)
MichaelK11 (Texas)
Posts: 432
Posted:
Thanks to all who contributed their opinions, suggestions and experiences to these threads.

These are all helpful.
SusanW1 (Michigan)
Posts: 5,202
Posted:
How does a board "exclude" a director?

Do you mean they asked him to abstain from voting on any motion that dealt with this issue? While that is a request, they can NOT prevent 9deny) a board member from voting unless COI is proven. Which - from your description - is an after the fact association.

MichaelK11 (Texas)
Posts: 432
Posted:
Quote:
Posted By SusanW1 on 08/26/2009 3:10 PM
How does a board "exclude" a director?

Do you mean they asked him to abstain from voting on any motion that dealt with this issue? While that is a request, they can NOT prevent 9deny) a board member from voting unless COI is proven. Which - from your description - is an after the fact association.
Sorry for the delay in responding. I could suggest possible ways this could happen, but I'm trying to get more details on this particular situation.

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