Unauthorized Removal of Directors
PATSY J. HARUFF v. SUNLAND VILLAGE COMMUNITY ASSOCIATION
SUPERIOR COURT OF ARIZONA
BY PAT HARUFF
This is a story about small men with huge ego's. This is a story about men with personal agendas. This is definitely a story about Board members on an HOA Board of Directors who have lost their way, no take that back, they never knew the way. These are men who have no clue to the meaning of "fiduciary" or "duty".......these are men who haven't read the CC&Rs/Bylaws of the Corporation they are responsible to operate and even when told what the documents say, they run to the Corporation attorney who hasn't read the documents either or at least doesn't comprehend the words on the paper.
Bottom line is this whole mess was created by people who should never be in a position of responsibility and who have no accountability.......and this case absolutely proves that it is the SYSTEM that is broken and flawed......THIS CASE PROVES THAT THE STATE LEGISLATURES MUST STEP UP TO THE PLATE AND FIX WHAT IS BROKEN.
It all really started about 10 years ago when I moved into my HOA. Now mind you, I came from Northern California and didn't know what an HOA was......another sacrificial lamb. But being a quick study I soon began to see the writing on the wall. It was very obvious to me this HOA had many problems and the biggest one was that the "good ole boy" system was alive and well. No matter what the governing documents say....... the Boards position is, "If you don't like it, MOVE".
So after running for the Board twice (you know those questionable elections) I finally made it (lucky me) on the third try. Now here is where the saga really starts......you must be told that the Manager made it well known that if I were elected he would quit. You see the Manager knows that I see right through him.
I was elected to a three year term on the Board of Directors in January of 2003. In February 2003 without the knowledge of all Board members, the Manager (he didn't leave) and the Board President contacted the HOA attorney to figure out how to remove me.
Fast forward to November 17, 2003, there was a Special Board Meeting held (I didn't go) where 6 members of the 8 members present voted to remove me from the Board of Directors (there are 9 members if anyone is counting). The Resolution to remove me was written up ahead of time and was there for signature......no one except the Manager, the President and the now President had seen this Resolution until November 17, 2003. There also was never a motion to spend the monies on this action and still hasn't been.
I have provided below the language of our Bylaws that govern the removal of Directors and have highlighted the portion applying to me......
The language below is from our documents here in Sunland Village. Section 3 is the language that applies to me as a Director.
OR REMOVAL OF OFFICERS & DIRECTORS
1. Any officer or director
may resign at any time by signing a written resignation and delivering it to
the Secretary or President.
2. Any officer may be
removed from office with cause by a two-thirds (2/3) vote of the whole Board.
Written notice of the proposed action shall be given to the officer by
personal delivery or certified mail. The
officer may request an open hearing before the Board at its next regular
meeting or at a special meeting called for that purpose.
SECTION 3. Any director may be removed from office by a resolution adopted by a two-thirds (2/3) majority vote of the whole Board, if in good faith the resolution recites (a) good cause for removal, (b) absence from three (3) consecutive meetings of the Board without good reasons acceptable to the Board, or (c) that the Board is informed and believes that the director will be unable because of illness or injury to effectively serve as a director, or (d) failure to be a voting member pursuant to Article V (4). Written notice of the proposed resolution shall be given to the director to be removed by personal delivery or certified mail and such director may request a closed hearing on the resolution before the Board. Such hearing shall be held within five (5) business days following such director’s receipt of the notice described herein. If the director who is being removed fails to request a hearing within such time frame, the resolution shall be deemed approved.
So for those of us who can read and comprehend I am sure you have no problem understanding that the very first mistake they made was the Board did not give me "written notice of the PROPOSED resolution". There was NEVER a proposed resolution, there was never a meeting called in order to CREATE a PROPOSED resolution unless it was secret and only by 6 of the 9 members (that's a NO NO).
Now on November 19 the Board had the Secretary deliver to me the RESOLUTION (execution papers). My attorney then wrote a letter to Jackson White Law firm attorney James Tanner (hot shot) telling them they made a mistake and could not do what they did........the testosterone then began to flow. My attorney also attempted in this letter to determine what the "good cause" was they claimed since they never stated it. James Tanner, the hot shot attorney wrote back and told us that "we do not have to give reasons for good cause". OK!!!
So after waiting a respectable time for the Board to come to their senses and seeing they wouldn't, Jerry and I were off to court for a TRO. While in the Judges chambers sitting quiet as a church mouse as she read the application the Judge said to Jerry, they have stated "good cause", what are the reasons? Jerry had wisely included Mr. Tanner's letter, you know the one that said "we don't have to give reasons" and he pointed to it........it took only a few seconds for the Judge to read it and with a flourish of the pen as she signed her signature said, "OH REALLY". TRO granted and we were instructed to come back on December 22 for a 15 minutes hearing to set trial.
December 22........9:00 am. My HOAs attorney "demanded" that the hearing be given right now......Judge Reinstein was visibly annoyed and stated "I don't have time for this right now", the HOA attorney still insisted so the Judge asked Jerry, is it ok with you. Jerry stated, "I have my client here, OK with me".....so the Judge said, come back at 3 PM.
Back at 3 PM........Jerry put me on the stand and then the Board Secretary (who had come with me for support). The best though was when the Board President and the now Board President were on the stand and there own attorney kept pressing them for the reason I needed to be removed. They finally blurted out the reason, "We can't control her". I thought Jerry was going to do a jig on the plaintiffs table.
I must tell you here that when my husband was told of their reason, "WE CAN'T CONTROL HER", his remark was, "HA, I'VE BEEN MARRIED TO HER FOR 46 YEARS AND CAN'T CONTROL HER".....just a little humor.
My Preliminary Injunction was granted by the Judge right then and there........oh and one fact, don't know if it matters, just some trivia. The judge was Judge Peter Reinstein of the Glassel trial.
So everything was done except the Permanent Injunction.......my attorney felt they would come to their senses and come to him then and say, OK we want to drop this now. But oh no, the file churner hadn't taken enough of the homeowners money and the testosterone was still present. Nothing happened until April and then all of a sudden the HOA decided to open it again........at that point both Jerry and I said, enough is enough and we filed for the WHOLE enchilada, Permanent Injunction and Summary Judgment.
My HOA requested Oral Argument (more $$$$) which was held on June 30......
The biggest joke of all was that Jackson White with James Tanner as the attorney representing my HOA actually argued against my receiving my attorney fees and cost because, are you ready.....
"THIS DID NOT ARISE OUT OF CONTRACT"
So there is the story of egos, testostorone and bad legal advice.......but who know what might happen next. Though finally, maybe the homeowners are awake or at least it sounds that way and 4 of the 6 left will be gone from the Board, the Manager fired and all 6 men responsible for this will be sued and made to pay from their own pocket.
Oh, I forgot to tell you that earlier in an answer to us regarding the contract thing, my HOA had admitted in court papers that this "was a contract"........great legal minds, these HOA Attorneys.
Yes I have been through hell and much stress, especially with the possibility that even though right, I could have lost and my husband and I would have had to pay the over $40,000 in legal costs.......what a waste of energy and time.
AND IN THE END, WHO REALLY SUFFERS FOR THIS?
But I will tell all of you, I never said a word last session about this lawsuit but I fully intend to make an example of the abuses these Boards, Managers and HOA Attorney's do........this whole thing only made the Attorneys well paid!
Oh, and I forgot, in case you haven't figured it out.....I am still a Board member!
Coalition of HomeOwners for Rights and Education
"If you really want to understand something, try to change it".....unknown
Copyrighted © 2004 By Pat Haruff -- All Rights Reserved
The article or parts thereof can't be republished without the written consent of Pat Haruff!