HOMEOWNER APATHY, ENABLES HOA CORRUPTION
HOMEOWNER APATHY, ENABLES HOA CORRUPTION
Dear Neighbors and associationbusters.com blog readers, our homeowner education and advocacy efforts will today outline the dynamic interplay of various constituents in transforming “an elite community into a rogue HOA” as well as a simple solution for the Royden HOA to implement, to cease this melodrama.
Let us begin with a basic truth, as supported and documented in our various newsletters and blog postings.
The following conclusion is claimed by the 30 year Royden resident, Vice President on the HOA’s founding Board, Royden President (4 years) (Treasurer 1 year). Plaintiff in a 3 year legal battle against the HOA, retired executive with over 30 years of C-Level experience and anti-HOA activist. His CLAIM!!!
THE ROYDEN HOA OF CHARLOTTE NC IS CORRUPT!!!! ENABLED, BY HOMEOWNERS’ APATHY
To substantiate the claim, let us dissect various components of the claim, such as:
CORRUPT-Defined as,,”,guilty of dishonest practices”
ENABLE- Defined as……”giving power to”
HOA COVENANTS- ” Community Association Laws applied to homeowners within the HOA.
BOARD MEMBERS- Resident Volunteers charged to administer the HOA Covenants
DISHONEST PRACTICES-Violations of the HOA Covenants
The corruption, or dishonest practices, arise out of the many Royden Boards, since 2004, repeatedly and knowingly, not following the LAW, defined within the Royden Covenants, as specifically outlined in ARTICLE IV-COVENANT FOR MAINTENANCE ASSESSMENTS………(see associationbusters.com blog for the multitude and accumulating violations.
The scandal, cover-up and corruption, was promulgated by the repeated violations, of the HOA Covenants or LAW, since 2004, by various Boards and Board members. This “corruption” was documented in years of court filings and these newsletters, none of which were ever outlined to, or approved by the Royden homeowners. The HOA, again, without homeowner knowledge or approval, was forced to seek legal counsel…In the Royden case…HORRACK TALLEY et al (Michael Hunter and Keith Nichols, attorneys in charge) representing the HOA’s Directors and Officers Liability Insurance Company.
Once the “corruption” was exposed in multiple court cases, all future boards had to essentially “lie” to the Royden Members, in the fixing of the Annual Assessments,
Thus, because of the Royden Board’s reluctance to properly fix the ongoing Annual Assessments, to Article IV, all future boards AND THEIR ATTORNEYS’ (a trusted relationship) have exposure to a legal claim entitled…..BREACH OF FIDUCIARY DUTY, CONSTRUCTIVE FRAUD!!!!!! Herein defined as:
The elements of a constructive fraud claim are proof of circumstances (1) which created the relation of trust and confidence [the “fiduciary” relationship], and (2) [which] led up to and surrounded the consummation of the transaction in which defendant is alleged to have taken advantage of his position of trust to the hurt of plaintiff. Put simply, a plaintiff must show (1) the existence of a fiduciary duty, and (2) a breach of that duty.
So, here it is, plain and simple…The Royden HOA, with counsel from their Attorney (Horrack, Talley, et al) are obliged to meet their fiduciary duty in the fixing of the Royden Homeowners Annual Assessment, as outlined in Article IV-Covenant for Maintenance Assessments. A simple reading of the Article IV Covenant shows they have breached this responsibility for more than 13 years…….with the clear knowledge of their attorney…..creating a relation of trust and a “fiduciary relationship, as outlined above, that has been detrimental to the interests of the Royden Homeowner…Thus the “LEGAL EXPOSURE” facing the Royden HOA.
But wait….Rinaldi failed in Arbitration, Small Claims Court and in District Court…TWICE!!!!!!…Trying to litigate this claim!!!.WHY!!!!
Here’s where it gets technical…….Across the country, Anti-HOA activists, like Rinaldi, have come to find out that US Courts, do not recognize the rights of homeowners, in a court of Law, when it involves COMMUNITY ASSOCIATION Law…Try calling the State Attorney General or even getting a lawyer to represent a homeowner. There is no venue for relief and no lawyers to handle your case.Rinaldi found this out …….the hard way. (400 hours of legal work, $5K in costs and $6330.00 in sanctions)..The Board filed for sanctions when Rinaldi filed a second lawsuit after the 12(B)(6) loss involving a completely new claim…..The court ruled he was a ” vexatious litigant” and had to pay the HOAs’ legal fees….So much for “due process”..
Rinaldi’s undoing? Remember, from prior newsletters, the legal defense ,claimed by the Royden HOA’s D&O Attorneys titled RULES OF CIVIL COURT PROCEDURE-VIOLATION 12(B)(6)-FAILURE TO STATE A CLAIM UPON WHICH RELIEF COULD BE SOUGHT!!!!-CASE DISMISSED!!!!
Having failed in court, Rinaldi has taken to education and advocacy, on behalf of homeowners’ rights, clearly not available through the courts through the use of a blog and newsletters…Google HOA CORRUPTION and nchoalaws.org for more on this subject.
Burdening his case, was the fact that for nearly 3 years, the Royden HOA Board of Directors’ and their attorney, Michael Hunter, of Horrack Talley et al, set out to smear Rinaldi in a campaign the President labeled as “marginalize Rinaldi”. In various member emails and a libelous email from Hunter, the Royden HOA claimed that Rinaldi’s complaint would only incur legal fees that would burden the members. Hunters’ ad hominem attack posited that property values would be hurt by his newsletters and were “inflammatory and defamatory” and “destructive to the fabric of the community”. Imagine, this guy and his law firm allowed the Royden HOA to wage a five year legal battle against a member easement holder, costing over $300,000.00, lost the fight, lost the HOA’s ability to ever upgrade the easement common amenity………and now Rinaldi’s newsletter is “detrimental to the fabric of the community……True HUBRIS and HYPOCRISY!!!!!…unfortunately, the Board was effective….A good friend and adviser is worried our friendship would affect a major client and another neighbor could not find the courage to second his motion at an annual meeting (only 2 attendees). Here the Royden President insisted that all questions had to be seconded??????? Thus Rinaldi’s questions were not answered………Yes!!!!! RUSSIA COMES TO ROYDEN!!!!
So where are we?????? THE ROYDEN HOA WILL TRY TO UNDO ATICLE IV-COVENANT FOR MAINTENANCE ASSESSMENTS!!!!!!! or risk further legal exposure.
One such attempt was made back in 2011, when, one particular board, rife with cash flow shortages and false financial reporting, tried to totally re-do Roydens’ simple NC GS 55A-non-profit association covenants, to a fine imposing, NC GS 47F based covenants,,, Remember Ms. Wiese, the “landscaping Queen” and her attempt to get control of her neighbors landscaping practices!!!!!Fortunately, after a Phase Voting process, yes Phase voting is required for all amendments, ………………..the deviously announced new covenants gambit failed…During the vote, the Board attempted to manipulate the result by extending the deadline and calling individual members who had not voted..
The Royden Board was now faced with meeting the original covenants or continuing the corruption….but HOW WOULD NEW BOARDS ACT????
But wait!!!! The “NEW BOARDS’ would be rigged!……….The lawyers have apparently stipulated, that the original board members of the easement fiasco, serial violators of the covenants, propagating the “EASEMENT LAWSUITS COSTING $300,000.00 TO THE ROYDEN COMMUNITY…..must remain in place, to any extent possible. Thus the likes of Dr. Charlton Owensby, the most egregious serial violator, remain on the Royden Board. Yes, through devious practices such as “sham board nominating practices”, that are brazenly simply rigged Board APPOINTMENTS!!!!. How else can the culture of secrecy be maintained…….The 2017-2018 Annual Assessment was another exercise of corruption!
Now you can see why the Horrack Talley attorneys have fought so hard to have sham nominations/appointments so that offending members of the easement lawsuit fiasco remain on the Royden Boards. Owensby even once set up a sham nomination voting including only Matthew Petchel and Peter Mihaltian (Royden Founding President)….Meanwhile he used proxies, tendered for annual meeting topics, to elect himself and Ms. Gressette. Another serial violator, using the role of SOCIAL DIRECTOR (there ain’t no funds for social in the operating budget per Article IV) to promote such niceties as “catered parties for board members and friends”.
Petchel a so called “new board member”, has since shown his true colors and has failed to record a single Board minute, detailing the extensive legal efforts and court appearances by board presidents such as KC Brechnitz and Jon Nance, or the Sanctions action, for broader homeowners involvement and approval. Educated professionals, all, sucked into a legal quagmire to protect the only winners in the entire HOA drama…Lawyers and their legal fees, using HOA moneys to crush “malcontent” homeowners. Michael Hunter uses the Charlotte Observer to tout his drivel as being helpful to homeowners. While his chief litigator, Keith Nichols crushes them with foreclosure and fine enforcement. Take for example, the good neighbors with the front entrance easement. Royden and Nickols used Royden member’s ill obtained assessments, to attempt to steal their property. It cost them $90,000.00. They won and their moral victory stands as one of the few, in the fight against rogue HOAs’ and their apathetic neighbor’s enablement….but at what cost????Theirs was monetary…..Royden’s was MORAL!!!!!
SO WHAT IS THE SIMPLEST SOLUTION FOR THE ROYDEN HOA! HERE IT IS!
PUBLISH ROYDEN’S CONSOLIDATED COVENANTS!!!!-THEN FOLLOW THEM!
All Royden members should note the following
1)The Royden Covenants have been consolidated and no longer take up one inch documents, as prior attachments to this newsletter have made clear.
The Royden HOA involves three separate subdivision HOAs’ that are simple, basic documents. with total control by homeowners
2) The only function or role of any Royden Board is the maintenance,…yes only maintenance of the front entrances or common amenities…FULL STOP!!!!
3) The covenants of 1987, founding date, and 1994, merger date, continue to be applicable to Royden Residents only superseded by Local and State Laws. No changes required.
No current day changes to Community Association law, since 1987, have any impact on Royden residents!!!NADA…ZIP,,,Do not believe any Royden Board that tells you otherwise. It’s a ruse.
4)Annual Assessments do not include provisions for Legal Fees. These, if any, must be approved , in advance, through the Special Assessments Covenant in Article IV….each year!
6)Sham elections of 3 nominees, three open seats must stop and term limits must be applied.(Notes to Owensby ,Gressette and Wiese)
5)Year end, May 31, Fiscal Reserves or Cash and Cash Equivalents must be “equal to” 10% of the operating/maintenance budget or around $3,000.00…
Not $35,000.00 as under Owensby and in 2017. The Royden HOA has never had any need, nor ever will have a need for higher fiscal reserves than $3,000.00.
These funds just attract misappropriation, as been seen in the past, with estimated cash shortfalls of between $4,000.00 to $20,000.00
6) Annual Assessments can only be used for Common Amenities MAINTENANCE;;;Social spending and associated insurance risk cannot use Assessment monies,
7)Royden Boards’ must publish all minutes for open transparency, particularly all architectural review committee approval and avoidance of subterfuge practices. (M. Petchel must avoid covering-up the corruption!)
8) All amendments must be voted upon, by phase I/II, III and IV with 2/3 majority and must meet NC Law (Please note”Ben Pleune…a lawyer no less)
9) All financial Statements must include a Cash Flow statement that reconciles to the prior year’s bank balances and GAAP(Please note;;;Ben Pleune…the check book challenged treasurer)
10) All Board members and nominees should sign a “statement of compliance” asserting that they have read the Covenants and that they will abide by them under board meeting run according to Robert’s Rules.
Again, Royden Covenants do dot require any changes. Members should note that Rinaldi, as President, back in 2004, prepared Consolidated Covenants. This 32 page document consolidated all of the language, every last word of the three original subdivision covenants, into a single document. The Royden Board needs to simply confirm that the document represents NO CHANGES to the original documents, and publish them to every Royden resident. Full Stop!
THEN…..Future Royden Boards’ must….drum roll……. SIMPLY FOLLOW AND ABIDE BY ARTICLE IV-Covenant for Maintenance Assessments……FINI!!!!!!
What about FILING A D&O CLAIM TO RECOVER DAMAGES FOR ROYDEN MEMBERS!!!
THE FUNDING THE ENTRANCE REDESIGN SOLUTION———-
Dr. Owensby (President) and the Treasurers’ violations, to the Article IV-Special Assessments covenant, over a three year period, between 2006-2009, cost Royden members over $300,000.00. By colluding with the Horrack Talley and D&O Attorneys and not reporting, monthly legal fees. for over 3 years, and by issuing false financial reports, for over three years, Dr. Owensby and Horrack Talley, clearly are the targets for a comprehensive, and even landmark..Breach of Fiduciary Responsibility-Constructive Fraud Lawsuit.
The claim could be filed on behalf of all Royden Homeowners, who paid improperly fixed annual assessments, for over 10 years.(Ten Year Statute of Limitations applies).
A present day, adverse impact of this easement folly, is that Dr. Ownsbys’ Boards’, extensive and brazen violations ,of the Article IV-Covenant for Maintenance Assessments, resulted in Royden LOSING the Easement Lawsuit with a more stringent easement agreement and thus losing control of any future front entrance re-design. ORBS MATTER!!!!…
This gambit would require an involvement level of just ONE MEMBER!!!!!! Here’s why…If just one member, using Rinaldi’s extensive files, steps forward, and files the subject lawsuit….and WINS!!!!! Lawyers will be standing in line to help other residents with the D&O claim…and the potential for a redesigned front entrance………At this point….A VERY LONG PUTT. Given the NC Court systems historical hindrance to enforcement of HOA Laws but more importantly……..Homeowner APATHY, As one resident has noted…Royden neighbors have more money, than sense!…Just write the small check…and MOVE ON!!!!!
We end as we began….HOMEOWNER APATHY ENABLES HOA CORRUPTION!!!
“we may not be able to stop our government leaders from lying to us, but we’ll be damned if we let our neighbors lie to us”
The vexatious litigant,…….associationbusters.com
“All that is necessary for evil to triumph is that good men do nothing” ,,,Sir Edmond Burke