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June 2010
Laguna Woods Following the Yellow Book Road
The Salvo Heard Around Laguna Woods and the rest of the Homeowners Association/Common Interest Property Industry
Posted
By CotoBlogzz 06-13-2010
Laguna Woods, CA - It is heretic for homeowners association to go against a property management company – after all, a whole multi-billion dollar industry has been built around the notion that since in a common interest development (CID) community, the board is composed of volunteers who come and go, it is up to the property management company and legal counsel to properly manage the “institutional brain” – that is, directors do mostly what the property management company and or legal counsel dictated. Just pay a visit to the Community Association Industry for a perfect example in support of the premise.
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| Mike Curits- True HOA War Hero | Gail McNulty- Fought Mike tooth and nail | Carol Moore- Pulls the trigger | Stanley Feldstein- Challenged by the CotoBuzz Journal |
Then there is the Homeowners association’s Triple Constraint:
1.
Annual Budget,
2.
The
Property Management Company
3.
Legal
Counsel.
So,
how can a board go from goat to hero in sixty seconds?
How can a board previously characterized as the Gang Who Could Not Shoot Straight become the likes of Johnny Apple Seed
It is
fair to say that the deliberate, courageous action
taken by the Third Mutual Board by filing
a law suit against the property management company PCM,
caught not only most residents of the community by
surprise, but also most observers and community
journalists, including yours truly.
After all, this is the same board that appeared to have taken the infamous Ultimatum like a girl (our term at the time).
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This
is the same board which
called a meeting expressly to remove
Director McDaniel for what can be characterized as
“because
we can” argument, supported by Gary Kessler of
Adams, Kessler. At that meeting,
residents had
to produce their ID cards proving they were Third Mutual
residents, before they were allowed to enter into the
board room. Then, security was all over the
place, in front of the community center (2 guards)
before you entered the building, two more at the
entrance of the board room checking residents ID’s,
two more were in the foyer, and one in the Redwood
room, along with PCM employee’s.
This
is the same board
we characterized
as the Gang Who Couildn’t Shoot Straight and
produced a bottle
throwing incident which led to a lawsuit
certain board members claimed to have won, even
when the judge at every step said otherwise. And what
did residents want and when?
Accountability
and transparency now, according to this letter
to the editor:
As documented by the CotoBuzz Journal:
“So,
who won? In
the case of McDaniel
Vs. The Laguna Woods Village
Third Board of directors, transcripts show that the
Judge admonished the board and states not once, but
twice that Ms. McDaniel had the upper hand – you
would not know it by talking to the Third directors,
who claim a clear victory, pointing to the fact that
Ms. McDaniel is not longer on the board.” –
The CotoBuzz Journal, September 25, 2009
Speculation as to why the hasty action in a successful attempt to remove director McDaniel was rampant: “Might be it be related to the issues raised in the aforementioned letter to the editor, “PCM always threatens that staff will leave if they don’t get raises and bonuses. Do you really believe many employees would quit now? I was on the United Board for two and one half years, and there was NEVER any mention of an incentive policy. No records of it in past minutes either. That is why most residents want more from the Boards and PCM”- The CotoBuzz Journal, March 6, 2009. We have tried to reach the reported drivers of Ms. McDaniel’s removal. Kathryn Freshley and John Paulus, but neither returned email requests for comment.
This
is the same board, which remained silent
during HOA War Hero’s epic effort to recall
the United Mutual board of directors:
“The
Laguna Woods Village’s United Board of Directors
Recall has officially closed this one chapter. While
the recall election of four
seated United Mutual directors, fell
short by approximately 280 votes of the 3,790 ballots
received, Michael Curtis, the leader of the movement
feels the recall effort was very successful, according
to a press release issued today by theLWV
Recall Yes committee. Mr.
“Curtis points to the high turnout of voters
(61.4%), simultaneous reductions across all boards (a
first in LWV 45-year history) of proposed 2010
assessments to 2009 levels, with no reductions in
services and savings the community $1.2M in 2010, and
greater awareness by the boards that any director can
be recalled by the community”.
Not
to mention that this was the first-ever recall effort
in the history of the community, that the board fought
tooth and nail using community resources making the
recall process less than proper and that the results
can be challenged in court, given the recent
precedent-setting Lee
Vs. Stonewood, where the board of directors was
ordered to hold fair elections meeting the spirit and
the law.” - The
CotoBuzz Journal, September 25, 2009
This is the same board, which remained silent during Milt Johns/Hart edict: You must bring your own lawyer (BYOL) if you want to attend a Town Hall Meeting
But wait, there is more – things were so plain to some of us, we even questioned the manhood and intestinal fortitude of certain board members.
Then came Connie Grundke’s Yellow Book: The Yellow Book dated February 17, 2010 is a compilation of all the allegations floating around the community for years, including such items as the Credit Card issue, the Incentive Plan, the Employee Reimbursement Plan, the actions related to PCM/United/GRF against HOA War Hero Mike Curtis, Management Agreement Fee History, Relationship between General Manager Milt Johns and Corporate Counsel and a whole slew of miscellaneous items. For sure we expected the board to say something. We waited, and waited, and waited. Then there was a KPMG audit which seemed to clear all of the allegations contained in the Yellow Book and paint critics largely as “disgruntled residents” - The sucking sound we heard at the time was not the president using a straw to suck up all the oil from the BP Gulf spill, but a collective sound of resignation.
Then late last week BAM! - Third Mutual board seems to have come back to life by filing a law suit against the property management company PCM. What happened? Had the machinations being going all along, and the board keep a tighter lid than the CIA on classified information
Whether the Third board's action was deliberate and courageous, a result of serendipity, the law of unintended consequences, or happenstance does not much matter anymore - the fact is that the Third board did the right thing, and we salute it.
What
happens to PCM now?
What happens to the ardent supporters of PCM
– what do they say about the vicious attack on Mike
Curtis? ? What
about legal counsel?
What about KPMG?
Will the board follow the Yellow Book Road?
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