Last Monday, 17 August, the Board held a meeting. As usual, they gave very minimal notice about the meeting (less than 2 minutes within the announcement deadline!) and some of us were excluded from the announcement. The meeting is significant, because the Board took actions that jeopardize our HOA, and our Airpark, and violated your rights. Here is a list:
- The Board approved Jerry as the sole negotiator on the lawsuit against SAEPOA seeking its dissolution.
- The Board ruled that all future votes had to be in writing, and thus meeting motions and votes may no longer be taken.
- The Board voted for an indemnification policy for itself, essentially setting up a legal fund for themselves personally using your money.
The first of these actions should deeply concern you. The last of these actions are clearly illegal (a violation of your rights), and it should be noted that these actions were done in the presence of the Association attorney who is supposed to represent the entire SAEPOA and not just its board.
Most significant item, Jerry being “voted” to the role of sole negotiator for court-ordered mediation in the dissolution lawsuit. This action removes any expectation you may have that the Board will be expected to defend you against the plaintiffs who seek dissolution. In other words, Jerry could negotiate a settlement with the very plaintiffs who want dissolution (arguably his allies), have it entered as a court judgment, and finalize the loss of our HOA before members have any say! The plaintiffs are all former members of Jerry’s “Working Group” that openly stated the objective of dissolving the HOA. The main Working Group members who are not plaintiffs are not so because they are board members, including Jerry, who formed the Working Group. We already know that this Board kept the lawsuit secret for 3 months and then, with minimal notification to SAEPOA members, responded to the lawsuit by urging surrender and immediate dissolution (not a real defense). We know that the Board, led by Jerry here, is arguing against motions to dismiss the suit. We should have no expectation that Jerry will defend the interests of the membership of SAEPOA. The loss of our HOA will be a very significant problem for all lot owners, and the effects will likely linger for many decades — long past when this squabble is forgotten. It is important that we make sure that Jerry and the Board are aware that they cannot take actions that are not allowed by our Bylaws, Covenants, and Articles of Incorporation. They cannot seek such actions through court action either. We must be especially vigilant given that the other two significant actions taken by the board in this meeting (eliminating your vote and giving themselves a legal fund) represent the kind of violation we must prevent.
Now, let’s turn to the unauthorized and void actions. I do not use these terms lightly.
Regarding meeting votes vs. written votes: The Board’s authority comes from the Bylaws, not the other way around. For the Board to order that Bylaws do not apply would be like the U.S. President ordering that the Constitution does not apply. Our Bylaws state the following:
Voting Procedures: Except for annual dues and assessments, which require a two-thirds (2/3) majority, a simple majority of the members present at a meeting will pass a measure. Balloting by mail will be optional except for special assessments and major document changes. …
Our Board has flatly decided that our Bylaws do not apply to your voting rights. This is unfortunately unsurprising since the Board has so far refused to hold any meetings in which members may make motions or hold votes (zero!). Now they are making it formal.
Regarding indemnification: The Board has no authority to indemnify itself against actions by you or anyone else (holding them accountable). There is no provision in the Articles of Incorporation or Bylaws for this either. In fact, last year the Board tried to pass a sweeping indemnification provision that members rejected. (This was the subject of the page-long run-on sentence that the Board drafted.) They know that they do not have the authority to do this. You should, too. They should expect to be accountable to the extent that the law specifies, no more, no less. Any other position requires the approval of the membership – you.
What do you need to do? Come to the dinner meeting this Thursday at 6pm (Suddarth hangar) to discuss this with the neighborhood.
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