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MRE may be Forced to Pay BOTH sides of Legal Fees for Boat Launch Debacle

What a mess

This is the latest.  Funny how the EBlast by our BOD fails to mention this.


Verdict of MRE Boat Launch

MRE loses motion for contempt

The transparency BOD never sought resident approval, gambled with your money and LOST.


Resident files request for Source of Authority to File Motion for Contempt

Another example of our runaway BOD costing residents

DATE:  June 24, 2019

TO:  Board of Directors, Moody River Estates Community Association, Inc.

FROM:  Robert Geltner

SUBJECT:  Source of Authority to File Motion for Contempt of Court in 20THJudicial Circuit Court Case 07-CA-8197

1,  It has been brought to my attention that Mark Adamczyk, Esq., Attorney, has filed on behalf of Moody River Estates Community Association, Inc., a Motion titled “Third Party Plaintiff/Intervenor, Moody River Estates Community Association, Inc.’s, Verified Motion for Contempt Against Mood Development Corporation and/or Motion to Enforce the Final Judgment” dated May 14, 2019 and set for hearing on June 26, 2019.

2.  The Declaration of Covenants, Conditions and Restrictions of Moody River Estates Community Association, Inc. contains Article 3.13 (set forth in full below) which is a prohibition against litigation without “member Approval” except in certain specified instances, none of which appears to apply to the filed motion.

3.13 Member Approval of Certain Litigation. Notwithstanding any other provisions of the Governing Documents, the Board of Directors shall be required to obtain the prior approval of at least a two-thirds (2/3rds) of all classes of the voting interests of the Community Association prior to the payment of, or contracting for the payment of, legal fees to any person engaged by the Community Association for the purpose of commencing any lawsuit, other than for the following purposes:

(A)  the collection of assessments;

(B)  the collection of other charges which members are obligated to pay;

(C)  the enforcement of the Governing Documents;

(D)  the enforcement of the rules and regulations of the Community Association;

(E)  in an emergency, when waiting to obtain the approval of the members creates a substantial risk of irreparable injury to the Association or its members; or

(F)  filing a compulsory counterclaim.

3.  Furthermore, any litigation, even if contemplated by Article 3.13, requires formal action by the Board of Directors at a regularly noticed meeting of the board.  (Even if the subject of the meeting falls into an exemption allowing non-public meetings, the board is still required to post notice of the meeting in accordance with Chapter 720 Florida Statutes.)  (The only times Florida Statutes permit a private, or “Closed” Board Meeting are 1) to meet with the Association’s legal counsel on current or pending legal matters; or 2) to discuss personnel matters.  No other Association business may be discussed at these types of meetings, and they still must be properly noticed in accordance with Florida statutory requirements.)

Otherwise board meetings would be like the historic Star Chambers where those in control can do anything they wanted without transparency or accountability.

4.  Pursuant to Chapter 720, Florida Statutes, I am formally requesting copies of all non-exempt documents that show that the filing of the aforesaid Motion was properly authorized, including, but not necessarily limited to:

proof that a licensed Florida attorney  attended the meeting at which any proposed or pending litigation was discussed by the board (The board cannot have an “attorney-client” meeting, without the attorney present (in person or by phone)

proof that a licensed Florida attorney provided a written opinion that Article 3.13 of the Declaration did not prohibit the filing of this Motion without member approval or proof that member approval was properly obtained;

proof that a licensed Florida attorney provided a written opinion that the filing of the aforesaid Motion without a public board meeting met the requirements of Florida Statute 720.301(2)(a) including proof that the “contents of the discussion would otherwise be governed by the attorney-client privilege”;

proof that a licensed Florida attorney provided a written opinion that the filing of the aforesaid Motion without a public board meeting met the requirements of Florida Statute 720.303(1) which states:

“Before commencing litigation against any party in the name of the association involving amounts in controversy in excess of $100,000, the association must obtain the affirmative approval of a majority of the voting interests at a meeting of the membership at which a quorum has been attained.”

proof of notice of lawful board meeting at which authorization to file the aforesaid Motion was voted upon in the affirmative along with the votes cast;

minutes of the meeting (if not exempt) at which the following occurred:

authorization to file the aforesaid Motion was voted on; 

that expenditure of funds for payment of legal fees was voted on; and, 

that Teresa Silva, President was granted authority to sign said Motion on behalf of the association, etc.

5.  It should be noted that the board of directors does have a fiduciary duty to enforce the governing documents; however, there is no evidence that the current board of directors or any prior board has ever taken action under Article 3.13(C) to enforce Article 8.8 of the Declaration (Governing Documents) relating to the intention of the developer to construct a boat launch as part of the Community Association Common Area.  To be specific, there is nothing in the aforesaid Motion which seeks to enforce against the developer their obligations under Article 8.8 of The Declaration of Covenants, Conditions and Restrictions of Moody River Estates Community Association, Inc. even though the court case in one involving the boat launch.

8.8 Boat Launch. Developer intends to construct a boat launch as part of the Community Association Common Area. The boat launch will be located near a marina that is currently abandoned. In its sole discretion, Declarant may attempt to re-permit such marina for its intended use. HOWEVER, DECLARANT DOES NOT REPRESENT THAT SUCH ABANDONED MARINA SHALL BECOME A MARINA. IF RE-PERMITTED, SUCH MARINA SHALL NOT BECOME A COMMUNITY ASSOCIATION COMMON AREA AMENITY. IT IS THE INTENT OF DECLARANT THAT SUCH MARINA SHALL REMAIN PRIVATE PROPERTY OF THE DECLARANT AND ITS ASSIGNS.

6.  I look forward to the receipt of the requested information within the statutory fulfillment period, that is, “within 10 business days after receipt by the board or its designee of a written request” Florida Statute 720.303(5).


MORE Real Estate Worries for MRE

Additional Information Received from Real Estate Expert

NOTE:   According to this February 23, 2018 real estate article it’s wise to disclosure what you know.  

  • Important:  Expect most major lenders to say no. A key factor contributing to many buyers’ attitudes toward litigation is the mortgage lender they’re planning to use. If you’re selling a condo, pending litigation means Fannie Mae and Freddie Mac won’t purchase the mortgage in the aftermarket, making the condo nonwarrantable – so most major banks won’t approve the loan.  “Certainly the big banks, like a Wells [Fargo], will just say nope – no chance,” Gross says. A lender may also turn down a loan for a single-family house due to pending litigation if the lawsuit threatens or calls the value of the property into question.  https://realestate.usnews.com/real-estate/articles/how-to-sell-your-home-when-your-hoa-is-involved-in-a-lawsuit


Useful Link to View MRE Litigation

Please Educate Yourself

To see all case information, please go to the  Lee county clerk of courts webpage.  This is the link:  https://matrix.leeclerk.org    Then, used case search engine.  07-CA-008197.   Scroll down into 2019 to see recent events.  Please keep yourselves appraised of what is happening.  The BOD sure is not going to keep you informed.

The word on the street is that Mood Development has already spent in excess of $3M on this case and it has gone on for over a decade.  They have near limitless resources.

Your BOD elected to spend over $18K antagonizing Mood Development without notifying residents.  Now, our BOD and Lawyer are fighting against Mood Development's local lawyers, Meritage's local lawyers and Mood Development's Litigators from Sarasota.  



Local Real Estate Expert Weighs In

Troubling Information Regarding the Value of your Home

If you want to stop litigation before there is a 2/3 vote taken then I suggest mentioning at the next meeting that if sellers and/or their Realtors willfully fail to provide various items of information and documents to a prospective purchaser they could be  liable to the purchaser of the property for actual damages. (Civ. Code § 4540.)  Therefore, they must disclose pending litigation.  I would imagine most buyers would look elsewhere to live.  

Sellers need to disclose pending litigation because the outcome could affect property value.   It’s up to the Seller to contact the HOA to learn of pending litigation.  KW many not have to disclose info to a buyer because the HOA is not party to the transaction but KW needs to give the info to the Seller (resident) so the seller can give it to the buyer. https://findhoalaw.com/transfer-disclosures-escrow-documents/

There has been much discussion on this topic on the NET but it’s my understanding the BOARD and Community Managers have a duty to disclose to residents when the decision is made to use reserve funds or to temporarily transfer moneys from the reserve fund to pay for litigation and the association must notify the members of the association of that decision in the next available mailing to all members.  In addition, the Board/HOA needs to make  available an accounting of those expenses. “Unless the governing documents impose more stringent standards, the association shall make an accounting of expenses related to the litigation on at least a quarterly basis. The accounting shall be made available for inspection by members of the association at the association's office.”   “  http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/92863/view/topic/Default.aspx

Another statement on the following website:  http://condolawguru.com/2012/08/notice-of-lawsuits-in-an-hoa-what-must-be-disclosed/  “I think matters of substance- threats of lawsuits against the association would qualify as substantive, that could affect owners’ rights and property value and it must be disclosed to HOA members.  Perhaps discussions between the board and the association attorney would be privileged but not litigation or threats of litigation. Those are *not* privileged.”    This caselaw was mentioned:  Ostayan v. Nordoff https://caselaw.findlaw.com/ca-court-of-appeal/1240269.html

Anyway, what residents needs to be made aware of is the possibility that a Seller/their Realtor could be sued for not disclosing pending litigation.  Underwriters view pending litigation very problematic. Can you imagine paying top dollar for a home (with boat launch access) only to learn later of pending litigation that sent home values plummeting and/or later prohibited dock access.  You bet people will get sued.  And, lets not forget that if a buyer is aware of pending litigation and doesn’t tell the mortgage officer, I suspect the buyer could be charged with mortgage fraud.  

Secondly, how does pending litigation, assessments affect refinances and HOA credit ratings?  Read on:   http://www.hoatalk.com/Forum/tabid/55/view/topic/postid/146602/Default.aspx

This is what needs to get posted to ND or discussed amongst neighborhood committee members and at a Board meeting. This is very troubling.

AND MORE........

I would think it’s safe to state that a loan officer, in all states, release contingencies based on information provided.  And, sellers must advise buyers that an HOA may enter litigation because pending litigation is something an underwriter would need to review because pending litigation has an effect upon the desirability and possible value of the property.  Also, owners looking to refi have to do the same thing if they don’t want to be involved in mortgage fraud litigation.


Residents Strike Back

Residents Demand Residents Vote

BOD is trying to stop residents from having any say over this expensive litigation.  


BOD Enters Litigation Without 2/3 Vote of Residents

BOD has defied our Governing Documents and have decided to gamble with your money.

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BOD apparently lose tax exempt status

More financial issues

After hearing several rumors, a search on the IRS database shows MRE are not listed as a tax exempt entity.  

How much is this costing all residents?