When Eileen
Breitkreutz filed a request to inspect her condo
association’s financial records six years ago, she had no
idea it would spark six years of litigation and a $395,554
judgment against her.
Now, the registered nurse and single mother is talking to
bankruptcy lawyers to find out whether she’ll be able to
keep her home.
“I don’t know how they can do this. I don’t know why nobody stops them,” Breitkreutz said about the Boca View Condominium Association’s legal fights against her and several other unit owners who have asked to see their community’s books.
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Eileen Breitkreutz, a condo unit owner at Boca View Condominiums, is stuck with a $395,554 legal bill after losing a years-long court battle that began with a request in 2016 to inspect her condo board's financial records. |
Breitkreutz feels it was posted there by association president Diana Kuka as “a warning” to others not to challenge Kuka’s authority.
The South Florida Sun Sentinel emailed three of the association’s Becker attorneys a list of questions raised by residents. The emails also sought an interview with Kuka to ask about the residents’ claims, and to ask why relations at the complex are so contentious. As of this story’s publication date, her attorneys have not answered the questions nor has Kuka agreed to an interview.
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The lien on condo owner Eileen Breitkreutz's home is posted in the mail room at Boca View Condominiums. Breitkreutz is stuck with a $395,554 legal bill after losing a years-long court battle that began with a request to inspect the condo board's financial records. |
The Shefets:
In 2013 and 2014, David and Dganit Shefets, of Harrisburg,
Pennsylvania, transferred ownership of two units to a
company they formed, Cool Spaze LLC, for the purpose of
leasing the units. But the association board refused to
process and approve lease applications, stating the Shefets
did not seek board approval to transfer ownership of the
units. The Shefets sued, contending that the association’s
governing documents did not require approval of sales. That
lawsuit is ongoing, with 348 documents filed through June 3.
In August 2016, Cool Spaze filed a request to inspect the
association’s financial records. The association denied the
request, saying Cool Spaze was not entitled to see the
records because it was not an association member.
The Lepselters: Edward Lepselter, a unit owner and
Realtor with Remax LLC, filed two lawsuits in 2013. The
first suit named Kuka as defendant. Lepselter claimed Kuka
spit on him and called him “white trash” during a board
meeting and denigrated his and his wife Eleanor’s work as
Realtors in communications with other residents and Remax.
Both parties agreed to dismiss the matter after the couple
filed a separate lawsuit against the association.
The second suit, filed less than a month later in small
claims court, sought $1,364 for damage to the couple’s unit
that Leselter said was caused by a broken water pipe that
the association failed to maintain.
In December 2013, a county judge ruled in the association’s
favor in the pipe case, finding the Lepselters were not
entitled to damages because the association had offered to
have its own contractor make the repairs. But in April 2014,
the same judge shot down the association’s claim that its
attorneys were entitled to recover $120,000 in legal fees.
In her ruling, County Judge Sandra Bosso-Pardo wrote that
the $120,000 bill was unsupported by the attorneys’
documentation. “The amount claimed in this case shocks the
court,” the judge’s ruling stated. “In reviewing defense
counsel’s time records it is clear that many entries are
duplicative, unreasonable, unnecessary and excessive.”
After the association unsuccessfully appealed the denial of
their full fee request, Lepselter was ordered to pay about a
third of the original amount — $32,290.
Of 287 filings in the case, fewer than 100 involved the
original complaint and the rest dealt with entitlement to
attorneys’ fees and how much money the association would be
allowed to recover.
On Wednesday, Oct. 12, 2016, Breitkreutz submitted her
request “for myself or my authorized representative” to
inspect and copy association records. She sent the request
to the association’s property manager, Pointe Management
Group Inc., via certified mail as required by state law, and
cited the law’s requirement that the records be made
available within five business days. (A change in state law
now gives associations 10 business days to provide records.)
Records she sought spanned 2014 to 2016 and included annual
operating budgets and reserve budgets, monthly financial
statements, annual audits or reviews, bank statements,
detailed ledgers, receivables for each unit owner, paid
invoices, and invoices for legal representation.
On Friday, Oct. 14, the date the certified letter was
scheduled for delivery, Breitkreutz sent an email to the
property manager that she noted was a follow-up to her
formal request. The email requested an appointment to
inspect the records on any business day during the upcoming
week.
The record request was a verbatim copy of one the Shefets
had sent two months earlier and were told would not be
fulfilled because of the Cool Spaze deed transfer dispute.
In a later deposition, Yellin’s partner Ryan Poliakoff (son
of Becker co-founder Gary Poliakoff), acknowledged that
their firm, which also represents the Shefets, looked for
“other concerned owners” to submit the record request. The
Shefets, Breitkreutz later testified, agreed to pay for her
legal representation if the association fought the request.
A short window
Breitkreutz said she fired up her computer on late Thursday
afternoon of the week after she mailed her request and found
an email dated the previous day, Oct. 19, at 5:15 p.m. It
was from the property manager informing her that “the
association is setting your date and time” — less than 24
hours later — “for inspection of records.”
As she looked at the email, Breitkreutz realized the
scheduled day was now and the time — 3 p.m. — had passed.
Quickly she emailed Ryan Poliakoff, one of her two
attorneys: “I just opened this letter and realized the time
has passed. Please advise.”
Thirty minutes later, Poliakoff emailed Becker litigator
Robert Rubinstein, who was handling the request for the
association, and asked to reschedule.
Two minutes later, Rubinstein responded: “I will find out
what other days you can inspect the records and thanks for
letting me know you will do the inspection.”
Ten days later, after two more emails from Poliakoff,
Rubinstein responded, “Ryan, I do not know what to tell you,
other than I have never heard back from the Association and
I do not expect to hear back from them.”
It was clear to Breitkreutz and Poliakoff that the
association had no intention of making the records available
again.
‘It can get very
expensive’
On Dec. 5, 2016, Breitkreutz filed a petition seeking
arbitration by the Department of Business and Professional
Regulation’s Division of Land Sales, Condominiums, and
Mobile Homes.
Arbitration requests are a required first step in disputes
between unit owners and association boards, and arbitrators’
decision, while nonbinding, are typically accepted by unit
owners and associations, says Jan Bergemann, president of
Cyber Citizens for Justice, which bills itself as the
state’s largest statewide property owners advocacy group.
“People don’t want to spend the money [to appeal] because it
can get very expensive,” he said.
In Breitkreutz’s case, the arbitrator found that the
association “willfully denied” her record request by giving
her less than 24 hours’ notice, “thereby failing to give
[her] a reasonable opportunity to inspect its records,”
according to the order issued on April 8, 2017. The
association was ordered to provide Breitkreutz access to the
association’s records within 10 days and pay “the maximum
statutory damages of $500.”
Breitkreutz got neither access to the records nor the $500.
On July 5, 2017, the association sued her in Palm Beach
County Circuit Court. Becker attorney JoAnn Nesta Burnett
filed a complaint asserting that the arbitrator’s decision
“misapprehended the law and the facts.”
In its complaint and in later filings over the following
five years, the association not only argued that it
fulfilled its requirements under state law by granting
Breitkreutz access to the records, it also called into
question her motives for making the record request.
The association argued that it was unknown whether
Breitkreutz was telling the truth when she said she didn’t
open the email scheduling the record inspection until after
it was to have taken place.
The association argued that Breitkreutz purposely missed the
records inspection so she could file her petition for
arbitration and “leverage claims” by her attorneys’ other
clients, the Shefets, in their lawsuit over the deed
transfers.
In another filing, the association claimed the Shefets
enlisted Breitkreutz as a “straw person” to make a record
request identical to the one that they tried to make.
That’s irrelevant, Jonathan Yellin, lead counsel for
Breitkreutz, said in an interview.
As a unit owner, Breitkreutz has a right under state law to
inspect records regardless of the reason, he said. All unit
owners who have requested to inspect the association’s
records “have their own reasons,” he said.
In addition to questioning Breitkreutz’s motives, the
association’s lawyers argued that a handful of factual
errors in her petition for arbitration proved her motives
were unpure. The petition was legally flawed, they said,
because it stated that the property manager received the
record inspection request on Oct. 13 and not Oct. 14. They
also claimed that calling her email a “follow-up” to her
record request was “yet another misrepresentation” because
the property manager received the email before the certified
letter.
The association’s arguments prevailed in a non-jury trial on
Dec. 20, 2018, before Palm Beach County Circuit Judge Donald
Hafele. The judge determined that Breitkreutz had the
responsibility to “carefully monitor her email” during the
five-day response window triggered by her record request.
‘Most boards are happy’ to provide records
Travis Moore, Florida-based lobbyist for the national
industry trade group Community Associations Institute, said
the Boca View hostilities are not typical of communities
across Florida.
“Most boards are happy to facilitate access to documents,”
Moore said by email. “Yes, sometimes the logistics
associated with record inspections become cumbersome. In
some cases, owners request record access for sport, spite or
simply to rile up the leadership and that leads to a
plethora of complaints to DBPR but those instances represent
a tiny fraction as record inspections take place every day
among Florida’s 50,000+ associations.”
Bergemann, of the unit owners’ advocacy group, says the way
it should work is, “The member making a request would get a
phone call: ‘How about coming in at 10 a.m. tomorrow?’”
Whatever the reason, that’s not the way it works at Boca
View Condominiums.
The Becker lawyers began their efforts to collect attorneys’
fees in June 2019, six months after the judge ruled against
Breitkreutz.
Citing testimony by Breitkreutz and Yellin that the Shefets
were paying her attorneys, the association filed a motion in
September 2019 to have the Shefets named as parties to the
suit so they could be billed for the fees. The Shefets
objected, saying they had no formal written agreement to
indemnify Breitkreutz.
Judge Hafele ruled that the association waited too long. The
Shefets could not be added to the suit six months after his
final ruling, he said.
The association appealed and lost. In all, it spent more
than two years trying to hold the Shefets responsible for
their fees.
On May 18, 2022, six years after Breitkreutz sent her
request to inspect the association’s financial records,
Hafele issued a judgment ordering Breitkreutz to pay the
association’s $395,554 legal bill for 1,234 hours that the
Becker team spent litigating the case. Those hours were
billed through February 2022 and included time spent in the
unsuccessful two-year effort pursuing fees from the Shefets.
Hafele’s ruling found that the $395,544 billing was
“necessary and reasonable” in light of the amount of
litigation required by Breitkreutz’s team’s “aggressive
defensive posture.”
In an email, Yellin said Breitkreutz should not have been
billed for the association’s pursuit of fees from the
Shefets. “How is it fair to award fees against a party that
had nothing to do with a post-judgment wild goose chase that
failed miserably?” he asked. “Shouldn’t the award of fees be
limited to the efforts taken by the prevailing party that
were actually successful?”
Two days later after the ruling ordering Breitkreutz to pay
all of the fees, the association filed a demand for a
detailed accounting of all of her assets and liabilities,
including tax returns, general ledgers, customer invoices,
vendor contracts, deeds, bank statements, stock
certificates, and broker statements.
Another record request
On Feb. 6, 2019, two months after Breitkreutz’s court loss,
Eleanor Lepselter filed her own request to inspect the
association’s financial records. Yellin would be her
authorized representative, Lepselter’s request stated. Eric
Estabanez, Boca View’s property manager, responded by
stating that only Lepselter or Yellin, and not both, would
be allowed to inspect the records.
Yellin and Lepselter both showed up at Estabanez’s office
for the scheduled inspection and were again told only one
would be allowed into the room with the records.
In an email to Estabanez filed in court, Yellin wrote that
Kuka, the association president, her brother Igly Kuka and
the board’s vice president and treasurer Giuseppe
Marcigilano “took turns coming out, trying to intimidate us
into giving up this fight, refusing to allow me to inspect
the records.”
Yellin recently recounted, “I wasn’t going to allow [Lepselter]
to go into that room by herself with them.”
In a pattern recalling Breitkreutz’s case, Lepselter filed a
complaint with DBPR and requested arbitration.
The association was wrong, the arbitrator ruled, in its
interpretation of a clause in state law that says records
must be made available to “the member or the authorized
representative of such member.” Clearly, the arbitrator
ruled, the language was written “in anticipation that a
member and her attorney would review the records together.”
The association was ordered to pay $500 in damages and make
the records available “immediately ... and at all times in
the future.”
Lepselter got neither. On Jan. 9, 2020, the association
filed suit against her to overturn the arbitrator’s ruling.
The suit said the arbitrator “misapprehended the law,” and
that Lepselter’s record request was “fatally flawed” and
made in “bad faith” on behalf of Cool Spaze.
Two and a half years and 236 filings later, the lawsuit
remains open.