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The HOA Legal Mind Shooting the Messenger or Biting the Hand?

Posted By CotoBlogzz January 4, 2011

Laguna Woods Village, CA – In the series The HOA Legal Mind, A Terrible Thing to Waste, we feature abusive common interest development boards use legal resources mostly to support the boards’ self-preservation instincts, rather than benefit the residents.  This case is slightly different.  It pits a service provider and disgruntled ex-employees, but there is a common denominator – the residents still lose out.

 In a  memorandum dated January 20, 2009. Milt Johns, Professional Community Management (PCM) vice president in a classic case of the tale wagging the dog -  the service provider issuing an ultimatum to the Third Mutual board of directors  "respectfully requests the directors to adhere to the following conditions.”

The demand in essence turns the employer-employee rules around, by having the service provider dictate what the board can and cannot do as in "Directors will agree to not breach the management agreement by performing any work of the managing agent, eg. Preparing RFQs/RFPs to solicit proposals from banks, law firms, lien and collection companies, etc.", presumably not going out to bid for property management services either.  The ultimatum to the board also prescribes a chain of command.  "To assist the Directors to this end, and effective immediately, and until further notice, any contact between the Directors of Third and PCM shall be restricted to only the PCM Executives (currently Jerry Storage, Jane Price, Kurt Rahan and Russ Ridgeway".  However, Mr. Johns will be "very happy to ease these restrictions once the roles of the Directors and PCM as management agent have been reconciled to the mutual satisfaction of both parties," according to  the memorandum.

 

 

 

       

File photos:  Left, Milt Johns, then PCM general manager.  Right, security team making sure seniors do not become unruly during open board meetings.

 

It is fair to argue that the ultimatum delivered by Johns to the Laguna Woods' local governance was not a unilateral decision, but a message delivered  with full knowledge and approval of PCM.  And if not, when the ultimatum became public knowledge, why did the property management company did not react?

 

 

On late January 2010 PCM  fires Johns and names Jerry Storage as Johns' replacement.  Storage  “... is noted as one of the industry’s most respected experts and is fully equipped to uphold the PCM standard of excellence. In addition, Jerry’s diplomacy will assist our boards of directors to achieve the goals set out for their community.” says  PCM's CEO Donny Disbro, in a press release officially announcing Johns' departure.

United Mutual president Gail McNulty in a state of suspension of disbelief, thinks the allegations about misdeeds and corruption  lobed at Mr. Johns are untrue, although  she has full knowledge of the infamous ultimatum.  Bea McArthur claims that the John's firing has to do with not following the contract  and in " in the opinion of others." Implies she has no opinion.

Fast forward to December 30, 2010  where in  case no. 30-2010-00380231 filed in the Superior Court of Orange County, Mr. Johns cross-complains and alleges among other things, breach of contract, age-base discrimination, wrongful termination, breach of fiduciary duty and emotional distress.  The defendants named in the case are PCM, Russ Disbro, Donny Disbro, Paul Hoommissen, Third Mutual, GRF and the law firms of Jackson Demarco Tidus Peckenpaugh and  Much Shelist Freed Denenberg.

 The HOA Legal Mind a Terrible Thing to Waste:

So, how would you catalogue this installment of the HOA Legal Mind a Terrible Thing to Waste:  Shooting the Messenger or Biting The Hand That Fed You?  In any case, if you are a Laguna Woods Village resident, you lose.

Did we mention that Mr. Johns cross-complaint in a Bell-isimo claims that he should not only be PCM’s CEO but also earn a base salary of $275.000 per year. Plus benefits plus 20% of PCM earnings before income tax?  Guess who was to pay for such largesse?

 

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PCM General Manager Mr. Johns blames the Orange County Register (OCR). not being truthful and making up stories. Laguna Woods residents have video taped similar allegations from Mr. Johns dozens of times over the last 5 years. For more: Click here for the rest of the story
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June 2, 2009 Golden Rain Foundation annotated board Meeting - as Board President denigrates fellow director and cancer patient Michael Curtis, while defending property management company's actions  Click here for the rest of the story.. 
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June 2, 2009 Golden Rain Foundation annotated board Meeting - Milt Johns blames the Orange County Resister   Click here for the rest of the story.. 
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February 10, 2009 United Mutual board meeting V0 - Annotated  video clip uses Adobe® Clip Notes® - pdf format - download, then press play - roughly 15 MB

 

February 10, 2009 United Mutual board meeting V1 - Annotated video clip uses Adobe® Clip Notes® pdf format - download,  then press play - roughly 16 MB

 

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